T2IB2428–Full SD REPORT.indd

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					Palabora Mining Company Limited

        Sustainable Development Report 2009
Palabora Mining Company Limited
Sustainable Development Report 2009


                                                                                                      Our business
2    Mission statement
2    2009 in summary
3    From the Managing Director
5    Our history and geology

Our business
8    Underground operations

8    Concentrator operations
10   Copper processing
11   Magnetite manufacture
11   Vermiculite operations
11   How we make a difference

Corporate governance

14   Our commitment
14   Application
14   Board of directors
16   Executive committee
16   Internal control
17   External auditors

17   Financial director

17   Risk management
18   Business continuity plan
18   Insider trading
18   Worker participation and affirmative action
18   Code of ethics

                                                                                                      Health and safety
Our economic contribution
22   Objective 1
28   Objective 2

Our social contribution
32   Objective 3

Our health and safety contribution
38   Objective 4
42   Objective 5

Our environmental contribution
46   Objective 6
55   Objective 7

Our community development
58   Community development

                                                   Palabora sustainable development report 2009   1
Mission statement

Palabora Mining Company Limited extracts and beneficiates copper, magnetite and vermiculite from its mines in the
Limpopo Province. It is the primary aim of the Company, a member of the worldwide Rio Tinto group, to achieve excellence
in  all aspects of its activities and to develop the Company’s resources and assets in a socially and environmentally
responsible way for the maximum benefit of its shareholders, employees, customers and the community in which
it operates. It is the Company’s firm belief that efficient and profitable operations go hand-in-hand with high quality
products and comprehensive and effective safety, health and environmental protection programmes.

2009 in summary

We are committed to reduce our impact on
the environment. We operate by managing
our activities in an environmentally
responsible manner.
• No retrenchments during the tough 2009

• The Lost Time Injury Frequency Rate decreased from 0,33 in 2008 to 0,29 in 2009

• Palabora Executive Committee continued to provide a clear strategic direction for safety improvement

• As at end of 2009, Palabora has attained 42 per cent HDSA at professional and management level

• Substantial progress continued to be made towards concluding a potential BEE transaction

• Magnetite production increased almost 46 per cent, compared with the previous year

• Paid off debt in the amount of 80 million rand

• The estimated present closure obligation cost for direct costs as at 31 December 2009 was 433 million rand
  (current market value), where the total projected cost (TPC) estimate is 494 million rand

• Declared a dividend of 300 million rand to shareholders

• Palabora retained its ISO 9001 and 14001 certification in 2009

• Sales of products decreased by 6 per cent

• Copper ore production of 31 652 tonnes per day was slightly lower compared to 2008 (32 232 tonnes per
  day) year on year.

2      Palabora sustainable development report 2009
From the Managing Director

We have set a clear path towards increasing
the economic and social value from mining

I am delighted to submit my second report as Managing         Underground ore processed was 11,1 million tonnes at a
Director of Palabora Mining Company.                          head grade of 0,67 per cent, which was slightly below the
                                                              11,64 million tonnes at 0,69 per cent processed in 2008.
This is our tenth sustainable development report,             Proportion of underground ore processed through the
summarising both achievements as well as the                  autogenous milling circuit was limited to 73 per cent as
disappointments we had in overcoming the challenges           compared to 80 per cent in 2008 following the recurring
we have set ourselves. Over the last ten years we have set    failures on one of the auto mills motors. The motor failures
a clear path towards increasing the economic and social       contributed to a 9 per cent decline relative to 2008 in both
value from mining what is ultimately a finite mineral         mechanical availability and mill running time.
resource, while minimising the adverse.
                                                              Overall recovery and concentrate grade from underground
Safety performance in 2009 continued to be challenging.       ore, including tap-off material, was 87,3 per cent at 31 per
While overall we are proud of our safety culture and          cent copper which was comparable to 2008 performance of
leadership at Palabora, we did experience a fatal accident    87,9 per cent at 30,3 per cent copper. Tap-off material is
during March. Palabora is saddened by the fatality and        mainly dolerite rich pebbles screened from the autogenous
management continues to focus its efforts to ensure a safe
                                                              mills and has been stockpiled for later reprocessing through
working environment by increasing management visibility
                                                              the conventional circuit.
and continued engagement and education of the work force
about accepting personal responsibility towards safety.
                                                              Combined magnetite production was increased by 46 per
                                                              cent to 2,84 million tonnes from 2,0 million tonnes in
With safety interventions and continued dedication at
                                                              2008 with 88,6 per cent of the total production destined
all levels, all injuries reduced significantly by 50  per
                                                              for export iron ore market. The remaining 323 921 tonnes
cent compared to the previous year (21 in 2009 vs
                                                              of magnetite, which was in line with 2008 production of
43 in 2008). The All Injury Frequency Rate (AIFR) reduced
                                                              321  000 tonnes, was produced mainly for domestic coal
from 0,88 in 2008 to 0,50 in 2009. Our safety leadership
                                                              washery to satisfy steady domestic demand. Furthermore,
has progressed to the point where we no longer
measure  ourselves only on Lost Time Injuries (LTIs) but      the first shipment of 30 000 tonnes dense medium
rather on any injury requiring medical treatment. Strong      separation magnetite was exported in the third quarter to
supervisory leadership is fundamental to improving            meet the growing demand of overseas coal washery.
safety and this is where focus is firmly embedded in
2010.                                                         Production of new anode copper totalled 65 937 tonnes, a
                                                              decrease of 13 per cent from the prior year.
The net profit for the year decreased from 720  million
rand in the previous year to 284 million rand, or 587 cents   Cathode production of 69 387 tonnes was 8,6 per cent lower
per share for 2009 compared with 1  489  cents per share      than the previous year, but higher than anode supply due
in 2008. Headline earnings per share also decreased from      to a reduction in working capital from a minimum number
                                                              of sections in operation. Rod production for 2009 was
                                                                                                                                 Sustainability report

1  493 cents per share in 2008 to 598  cents per share in
2009. Palabora’s profit in 2009 is pleasing in light of the   47 551 tonnes.
global economic downturn.

                                                              The impact of HIV/AIDS is being felt in Palabora and
Operationally, the underground division demonstrated          Phalaborwa as is the case in the rest of the country. The
a sustained delivery of 31 652 tonnes per day of              effects, though difficult to quantify due to the confidentiality
production. A total of 11,54 million tonnes were hoisted,     and stigma that still surrounds the disease, include
a slight decrease over 2008 tonnages. The copper grade        absenteeism, reduced productivity, loss of personnel and
remained constant at 0,67 per cent copper. During the         increased direct and indirect costs. It is realised that there
year, 6,3 million tonnes of surface stockpile material was    are no quick fixes for the pandemic. The Company does
reclaimed and delivered to the concentrator crushing          not discriminate against HIV positive employees. These
facilities for reprocessing.                                  employees are supported by counselling, emotional support

                                                                   Palabora sustainable development report 2009             3
From the Managing Director continued...

and vitamin supplements in addition to their medical           commodity cyclical volatility, economic turbulence and
aid programmes. Medical aid is 50  per cent subsidised         physical depletion of the mineral or production resources
by the Company. Through the medical aid programmes,            on individuals, regions or local economies.
employees have access to HIV treatment and many of them
return to productive work whilst they stay on treatment.       The SLP is driven by the following key pillars:
During 2009 there was an average of 80 known positive
employees still fit and working. Employees that are too sick   (a)   Proactive management and addressing of impacts that
to continue working and are not responding to treatment,             could be caused by mine closure;
are assisted by the medical and pensions departments to go     (b)   Provision of opportunities for the development of
on a disability pension via the Company pension fund and             employees;
the Company’s disability insurers.                             (c)   Capacity building which incorporates portable skills;
Once again, we are pleased to announce that we have            (d)   Local economic development or community develop-
retained both our ISO 9001 and 14001 certification during            ment.
                                                               On 19 March 2009 Palabora lodged its application for
Although corporate social investment has a short               the conversion of “old order mining rights” to “new order
history in South Africa for many companies, it has             mining rights” with the Department of Mineral Resources
been a fundamental force in driving social change. Our         (DMR) in Polokwane along with the SLP, mining works
social investment arm, the Palabora Foundation, has            programme and environmental management plan.
been involved in development of the local communities
since 1986 and continues to do so with the objective of        On 30 April 2009 Palabora signed and submitted a
supporting the holistic development of disadvantaged           Transaction Framework Agreement (TFA) bearing the
people and their communities. We support the holistic
                                                               signatures of its Broad Based Black Economic Empowerment
development of disadvantaged people and communities
                                                               (BBBEE) partners to the DMR. Under its BBBEE transaction
by working with all stakeholders.
                                                               (the transaction), Palabora will sell 26 per cent of its
                                                               operations to a broad based BEE group comprising employees,
Palabora is committed to reducing its impact on the
                                                               the community and key individuals. A significant feature of
environment in which it operates by managing its activities
                                                               the transaction is its focus on community development.
in an environmentally responsible manner. A  summary
of the targets and actual performances of key indicators
                                                               Culminating a key-stakeholder consultation process
and the main impacts on the environment for 2010 are
                                                               that Palabora has undertaken since 2007, it signed
disclosed in our sustainable development report.
                                                               the TFA with the five tribes of the Ba-Phalaborwa
Palabora is committed to complying with the Mineral            community. A community trust to be held for the benefit
and  Petroleum Resources Development Act, 2002 (Act            of Makhushane, Selwane, Maseke, Mashishimale, and
No 28 of 2002) (MPRDA). The purpose of the MPRDA               Majeje tribes will acquire 10 per cent of the equity in a
is amongst other things to transform the mining and            newly formed, special purpose subsidiary of Palabora,
production industries in South Africa. In order to ensure      which subsidiary will acquire all or an appropriate part
effective transformation in this regard, the Act requires      of Palabora’s business under the transaction. The host
the submission of the Social and Labour Plan (SLP) as a        communities will not be required to contribute upfront
pre-requisite for the granting of mining or production         equity for their stake in the subsidiary of Palabora as
rights. The SLP requires applicants for mining and             the transaction is being vendor-financed by Palabora.
production rights to develop and implement comprehensive       Palabora believes it has set up a meaningful BBBEE
Human Resources Development Programmes including               transaction to achieve the “Spirit and Letter” of the law.
Employment Equity Plans, Local Economic Development
Programmes and processes to save jobs and manage
downscaling and/or closure.

The above programmes are aimed at promoting employment
and advancement of the social and economic welfare of all      Matt Gili
South Africans whilst ensuring economic growth and socio-      Managing Director
economic development. The management of downscaling
and/or closure is aimed at minimising the impact of            29 April 2010

4       Palabora sustainable development report 2009
Our history and geology

Some two billion years ago, a series of
violent eruptions gave rise to the Palabora
Igneous Complex

  A mobile rock breaker uses its hydraulic hammer to break an oversized
  rock into smaller pieces. There are only six of these machines in the world.

Some two billion years ago, a series of violent volcanic            copper mine and associated processing plants produced
eruptions, which took place over a period of millions of            over 2,7 million tonnes of copper.
years, gave rise to a rich body of minerals, which became
known as the Palabora Igneous Complex. The unique ore               During the early 1990s, the Company embarked on a series
                                                                    of feasibility studies on underground mining. In 1996, it
body outcropping at a small saddleback hill, later to be
                                                                    announced that it would proceed with the development of
called Loolekop, contains a unique variety of minerals:
                                                                    an underground block caving mine with a production rate
copper, phosphates, magnetite, uranium, zirconium, nickel,          of 30 000 tonnes per day.
gold, silver, platinum and palladium. Two other volcanic
pipes nearby contain vermiculite and phosphate. Smelting            Products
of copper iron occurred in the district prior to the discovery.     The primary product of the Company is copper rod. Joint
We know, from artifacts found in the area, that copper of           products include magnetite and by-products include nickel
remarkable purity was produced in the Phalaborwa area as            sulphate, anode slimes and sulphuric acid. The Industrial
early as the eighth century. Development of modern mining           Minerals division produces and markets vermiculite.
activity started at the beginning of the 20th century when
                                                                                                                                   Sustainability report

several geologists noted the occurrence of the phosphate            Operations
bearing mineral, apatite, in the vicinity of Loolekop.              The copper operation comprises an underground mine, a

                                                                    concentrator, a copper smelter with anode casting facilities
                                                                    and an associated acid plant, an electrolytic refinery
Palabora Mining Company Limited extracts and
                                                                    tank house, a rod casting plant and joint- and by-product
beneficiates copper and vermiculite from its mines in
                                                                    recovery plants.
the Limpopo Province. The Company was incorporated
in South Africa in August 1956. It is South Africa’s only           The vermiculite operation comprises an open pit mining
producer of refined copper. The process of mining of the            operation and recovery plant. Overseas subsidiaries in
Company’s copper ore body commenced in 1956. During                 the United States of America, the United Kingdom and
the 1960s, 1970s and 1980s, the Company’s open pit                  Singapore perform the marketing of vermiculite.

                                                                          Palabora sustainable development report 2009        5
Our business
Our business

Underground operations                                          operation. Visualisation software, running on Windows XP
The block-cave method of mining                                 2003, allows transfer of data to office systems to prepare
Block-caving is a safe and cost effective method of             statistics or manage information.
underground mining as it utilises natural stresses to break
the rock. Caving has propagated fully through the vertical      Concentrator operations
extent of the ore body. Fragmentation continues to improve      Underground ore stream
as the height of draw increases, and gradual fining of the      From the underground mine, ore that is less than
material is expected into the future.                           300mm in size is conveyed to two stockpiles that feed
                                                                two separate, autogenous wet grinding circuits, each
A fleet of 15 secondary breaking units ensures that             comprising a 9,75m diameter tumbling mill rotated by
ore flows continually through the draw points on the            two 3,5MW drives. Large particles impact and break
production level, treating all blockages, hang-ups and          smaller  ones, leading to the liberation of the copper
oversize rocks. From here the caved material is loaded by       sulphides from carbonatite and magnetite, and the
a fleet of 17 Load Haul Dump units (LHDs) and hauled to         formation of slurry of ore and water.
one of the four primary underground crushers. The ore is
conveyed from here to the production shaft for hoisting to      Mill products are sized by vibrating screens to produce
the surface and further processing.                             coarse feed to the pebble crushers, an intermediate fraction
                                                                for recycle and fines for pumping to centrifugal classifiers
Mine life expansion                                             (cyclones). Particles finer than 0,3mm report to the cyclone
Current planning is to extend the cave westward with an         overflow and are removed from the circuits as primary
additional three cross cuts and/or to start a twin decline to   milling product at up to 30 000 tpd and the coarse cyclone
access the ore body lower down.                                 underflow product is also recycled. Cyclone overflow from
                                                                both circuits is then pumped 1,5km to the secondary milling
Hoisting                                                        plant, where the ore is further ground to less than 0,15mm
Two friction winders with integrated motors and a skip          using steel balls in up to five parallel 1,2MW milling
payload of 32 tonnes each operate in the production shaft.      circuits. Secondary milling has been applied since 2003 to
In the service shaft the main winder is also a friction         improve liberation and recovery of copper on higher grade
winder with a 36 tonnes payload cage, large enough to           underground ore by reconfiguring existing equipment.
accommodate the largest item of equipment working
underground. A Mary-Anne winder is provided for ad hoc          Chemicals are added to allow separation of the copper
personnel access.                                               sulphide particles from the carbonatite and magnetite
                                                                particles by froth flotation. A xanthate collector is metered
Crushing and conveyors                                          into the slurry and absorbs preferentially onto to the copper
Four double toggle jaw crushers, able to crush ore at an        sulphide particles to make them water repellent. Frother is
average rate of 750 tonnes per hour, feed onto four short       also added to generate a stable froth. The stream is then
loading belts, where tramp steel is removed. These, in turn,    divided between parallel rows of flotation cells. Each row
feed a 1,29km long, 1 050mm wide conveyor belt taking the       contains several agitators to maintain suspension and to
ore to the production shaft.                                    disperse air into the slurry. As the air bubbles rise to the
                                                                surface of the cells, the water repellent copper mineral
Ventilation and refrigeration                                   particles attach preferentially to the bubbles and form a
An 18 MW ammonia refrigeration plant artificially cools         stable froth which continuously overflows into launders.
the intake air to the underground workings. It is designed
to ensure that the underground reject temperature will not      The process is then repeated twice more to recover almost
exceed 27,5°C (wet bulb).                                       90 per cent of the feed copper into only two per cent of
                                                                the feed weight to produce a 32 per cent copper sulphide
Process control                                                 concentrate which is then pumped to the dewatering
Thirty Programme Logic Controllers (PLCs), linked to            plant. Since 2003, product from the autogenous mills has
10 operator stations, provide all the control functions         been processed by two flotation plants, in series, to boost
throughout the mine. An integrated information network          recovery from higher grade underground ore. Slurry that
enables operators at the surface control room to monitor        did not report to the final froth concentrate forms the feed
and direct the activities of the entire underground             to the magnetic separation plant.

8       Palabora sustainable development report 2009
Our business continued...

The business unit planning process
The high-level business unit planning process is as follows:

   Rio Tinto                                                                                                     Plan          PRC review
    context                                                                                                  consolidation    and approval


 Business unit

  BU Context & Target Setting                  BU Tactical Planning           BU Financial Planning

         BU            BU 2 year                 Marketing      Production              Financial
      strategy          forecast                   plan            plan                   plan
                                                                                                              BU Review       Tracking and
                                                                                                             and approval       reporting
     NPV and
                       Orebody                    HSE &        Maintenance                      Updated
    value driver                                                               Capital plan
                        review                 Support plan       plan                           NPV

 Corporate Functions

                              activities and

Conventional process route                                                   magnets are used for three stages of upgrading to produce
The transition to underground mining has made available                      up to 5 000 tpd of 98 per cent pure magnetite concentrate.
50 000 tpd of conventional crushing, milling and flotation                   The concentrate is separated into two sizes by a rising
capacity. Copper and magnetite are recovered on behalf                       current of water (elutriation).
of Foskor (a neighbouring mining company) by toll-
processing 20 000 tpd of marginal ore from stockpiles from                   On average, 600 tpd of magnetite fines report to classifier
the open pit operation and from Foskor’s stockpiles. The                     overflow, which is thickened, filtered and stockpiled prior
conventional process route is also applied to underground                    to shipment to domestic heavy media consumers who
ore available in excess of autogenous milling capacity and                   use it  for upgrading coal. The majority of the magnetite
to Palabora’s legacy surface stockpiles.
                                                                             reports to a classifier underflow and is then pumped
                                                                             either to drying paddocks for railing and export, or to large
Dewatering, magnetite production and tailings
                                                                             magnetite storage dams, depending on sales commitments.
                                                                             Export magnetite is used for iron and steel production.
Concentrate slurry is pumped to thickeners, vacuum disc
filters and a coal-fired rotary dryer that successively remove
                                                                                                                                                 Sustainability report

water to reach eight per cent residual moisture. Dryer                       After magnetite removal, underground ore tailings flows
                                                                             to three parallel 90m diameter tailings thickeners for local
                                                                                                                                                     Our business

product is weighed by a belt scale and sampled before
conveying to the smelter receiving shed.                                     water recovery and re-use, while the combined underflows
                                                                             are pumped to various points around the perimeter of a
Flotation tailings from both autogenous and conventional                     large tailings dam. The dam wall is maintained at a higher
circuits are pumped to the magnetic separation plant,                        level by a beach of coarse solids. Fines flow to the central
where rotating drum magnets extract 16 per cent by weight                    pond, where clear water is decanted by a siphon and stored
of magnetite from the tailings slurry. Nine triple drum                      in a return water dam for re-use in the process.

                                                                                  Palabora sustainable development report 2009               9
Our business continued...

Copper processing                                                Steam is generated in the waste heat boilers used to heat
Smelter operations                                               the secondary combustion air of the reverb furnace and
Dried copper concentrate is blended with fine quartz             the primary air for the coal pulverisers. The excess steam is
flux, and then charged into a single, fixed, continuous,         utilised to drive a 9,6MW turbo generator.
reverberatory furnace, which operates at a temperature of
approximately 1 400°C. The furnace is fired with pulverised      Off gas from the converters is passed through a dedicated
coal. In the reverberatory furnace, copper concentrate,          electrostatic precipitator (one for each converter) where the
reverts, flue dust and the quartz flux is smelted. The           dust is removed. The gas is then treated in a single contact
resulting melt separates into two layers in the hearth           sulphuric acid plant to produce sulphuric acid of 98 per
section of the furnace. The heavier matte layer contains the     cent grade.
wanted copper but there is also an unwanted upper slag
layer. The slag is skimmed off periodically via skim bays        The dust collected in the electrostatic precipitators is
and launders into large pots, which are transported by           blended with the reverberatory furnace charge.
rail, and dumped on the large on-site slag stockpile.
                                                                 Copper refinery
The matte, at this stage, contains approximately 40 to           In the Copper Refinery Tank House Building, anodes
46  per cent copper, the balance containing amounts of           produced in the smelter are prepared and placed in large
iron and sulphur. It is tapped off and transferred via tap       cells containing an acidified solution of copper sulphate
holes and open launders into matte ladles. The ladles            controlled at a temperature of 720°C. Thin sheets of pure
are then transferred by rail and overhead crane to one of        copper, called starter sheets, are suspended between the
three batch wise operated tilting converter furnaces, where      anodes to act as cathodes, and a direct current is applied
hot air is blown through the matte. Both the iron and            which causes the copper ions to be transferred from the
the associated sulphur are oxidised. Silica flux is added,       anodes to the cathodes by electrolysis. Re-agents are added
forming an iron rich slag, which is once again skimmed off       to the electrolyte to aid settling of insoluble impurities to
and returned to the reverberatory furnace. Once all of the       the bottom of cells during electrolysis, and also to enable
iron has been removed, further air blowing without silica        smooth plating of pure copper on the cathodes. The settled
oxidises the rest of the sulphur, and ultimately produces        impurities are collected periodically as the by-product,
blister copper that is approximately 95 per cent pure. The       anode slimes. The main soluble impurity is nickel, which
process is exothermic and the excess heat is used to melt        is removed by bleeding off a small stream of electrolyte
reverts and copper scrap.                                        to the nickel plant continuously. The cathode produced
                                                                 is 99,99 per cent copper and is sold directly in bundles or
The blister copper is then transferred to one of three anode     converted into rod wire at the rod casting plant.
furnaces. In the anode furnaces, the last traces of sulphur
are removed by blowing air through the molten metal.             Copper casting
Finally, hydrocarbon fuel is injected into the furnace           Approximately 90 per cent of the cathode produced is
to remove any last traces of oxygen. This last process           stored on site, awaiting further processing. It is delivered by
brings up the copper concentration to approximately              forklift and elevated access road to the nearby casting plant,
99,5 per cent.                                                   where the cathode is melted in a gas fired furnace and cast
                                                                 into copper rod coils.
The molten copper is then cast into copper anodes using
a single rotating anode casting wheel. The anodes are            Tailings
removed into two water quench tanks and from there into          Process waste, or tailings in slurry form, is treated on site
sorting racks. The anodes are allowed to cool and are then       using several thickeners, hydro-separators, to separate out
transferred by internal train to the copper refinery.            most of the solids from the water. The water is treated and
                                                                 recycled via various mill return water reservoirs, whilst the
Off gas from the reverberatory furnace passes through the        concentrated slurry is then pumped to the various large on-
two waste heat boilers, a balloon flue and is finally cleaned    site tailings dams. Here, the solids deposit whilst the clean
in a single, dry, electrostatic dust precipitator. The  flue     water is allowed to settle before being siphoned off and
dust is returned to the reverb furnace. The off gas is either    re-circulated as raw water via a large return water dam. From
discharged directly to atmosphere via a 152m high concrete       this dam, the water is recycled back into the process using
stack, or is treated in the on site gas scrubbing plants. Once   large, electrically driven, vertical turbine barge pumps.
scrubbed, these gases are then released into the atmosphere
via a 70m high clean gas stack. The off gas is only routed to
the gas scrubbing plant when the precipitator is offline.

10      Palabora sustainable development report 2009
Our business continued...

Magnetite manufacture                                           environmental impacts, i.e. sulphur dioxide and dust
Current magnetite production is a by-product of the copper      emissions, water consumption and effluent, mineral
operations and as such is recovered from the Concentrator       and non-mineral waste, energy consumption, associated
flotation tails stream by magnetic separation. About 15 per     greenhouse gas emissions and cultural heritage, will be
cent by weight of magnetite is removed by ‘cleaning’ and        managed ensuring responsible land stewardship and
‘recleaning’ the magnetic concentrate from the first stage.     sustainable development, throughout the global framework
The latter results in the upgrading of magnetite to 66 per      rollout.
cent Fe (greater than 95 per cent magnetite). This upgraded
magnetite is then subjected to elutriation, to generate         To achieve this Palabora will:
medium and coarse grade products. The medium grade is
the DMS product and the coarse grade is sold as a blend         • Conduct its operations with due regard to South African
feed to iron- and steelmaking customers.                          legislation, standards and other requirements relevant to
                                                                  the business in terms of safety, health and environment
Vermiculite operations                                            (SHE);
Products                                                        • Train and hold employees and contractors accountable
The vermiculite mine is situated on the same property             for performance within their areas of responsibility
at the north of copper open pit. This is an open cast pit         pertaining to safety, health and potential environmental
operation consisting of several shallow pits in the same          impacts, ensuring high quality products and services;
area. The mining operation involves drilling and blasting       • Manage risk by implementing systems to identify,
the ore to a depth of 50m. Ore is loaded and hauled with          assess, monitor and control standards, and by reviewing
trucks to a nearby surface plant for processing.                  performance. These are to be documented, maintained
                                                                  and audited, and certification is to be retained where
The primary circuit of the vermiculite plant consists of a        applicable;
crushing, screening drying process. Once dried the ore is       • Seek continual improvement through a framework of
screened and classified into five grades of product. A series     setting and reviewing SHE objectives and targets, and
of winnowers separate the flake from the rock to ensure           assessing and reporting SHE performance;
that the final products meet the required specification.        • Provide a structure and responsibility to facilitate
                                                                  effective SHE management, to contribute effectively to
How we make a difference                                          the Company’s business;
While Palabora has its own directorship and management,         • Communicate this policy to employees, contractors and
it is also governed by high level strategic policies from Rio     visitors to ensure their understanding of their obligations
Tinto, the major shareholder, that provide context and            in respect of this policy;
guidance for Palabora’s strategic planning, management          • Maintain open communication with all stakeholders
and operating practices.                                          including employees, contractors, communities, and
                                                                  government and non-government organisations on
For example, Palabora operates within Rio Tinto standards         SHE issues and contribute to the development of sound
for occupational health and safety, environment and               legislation;
financial practices. Palabora also operates within Rio Tinto    • Protect the environment (both the natural systems
guidelines on “The way we work”, human rights, corporate          on site as well as the responsible consumption of
governance and business ethics.                                   natural resources) and prevent pollution in which the
                                                                  activities are conducted, and restore the environment
Palabora is committed to providing a safe and healthy work        to an acceptable land use when disturbance cannot be
environment, ensuring sound environmental management,             avoided, ensuring sustainable biodiversity; and
and supplying good quality products and services. This is       • Maintain a plan for eventual closure of Palabora’s
achieved with continual improvement of business practices         operation including management of social and
and prevention of pollution as well as complying with             environmental impacts, estimates of closure costs and
                                                                                                                                Sustainability report

relevant legislation, regulations and other requirements,         financial provision, and consultation and co-operation
and ensuring an enlightened workforce. Palabora’s                 with local communities and other stakeholders.
                                                                                                                                    Our business

                                                                     Palabora sustainable development report 2009         11
Corporate governance
Corporate governance statement

Our commitment                                                     Mr Clive Latcham resigned as a non-executive director of
Palabora Mining Company Limited, a company incorporated            the board, with effect from 31 July 2009. With effect from
in South Africa under the provisions of the Companies Act,         1 August 2009, Mr Lindsay Kirsner was appointed as a non-
1973, as amended, has been listed on the JSE since 1956.           executive director of the board.
Palabora and its subsidiaries (the Group) are committed to
the principles of openness, integrity and accountability           Mr Philip J Robinson resigned as an alternate non-executive
advocated in the King Report on Corporate Governance for           director of the board, with effect from 18 September 2009.
South Africa 2002 (King II) and comply with the additional         With effect from 1 April and 21 September 2009, Mr Coen
governance requirements of the JSE and various other               Louwarts and Mrs Jo-Ann S Yuen were appointed as
legislative requirements. Accordingly, the board continues         alternate non-executive directors respectively.
to take careful note of the recommendations contained in
the King II report, as a minimum standard. A great deal of         At 31 December 2009 the Palabora board was constituted
the Group’s practices continue to be aligned with these            as follows:
requirements. The board has identified three areas where
strict compliance with King II would add little or no value
                                                                    Directors                                    Alternate directors
and where alternative workable systems existed:
                                                                    1.   Clifford N Zungu                                         –
• Executive directors’ remuneration, which is determined                 (Chairman)
  according to the holding company’s (Rio Tinto plc) scales         2.   Matthew D Gili                                           –
  of remuneration;                                                       (Managing Director)*+
• Directors’ appointments, which are influenced by
                                                                    3.   Charles A Asubonten+                                     –
  the two major shareholders; Rio Tinto plc and Anglo
  American plc; and                                                 4.   Shelley Thomas                                           –
• Evaluations and risk management, which are managed by             5.   Johan C Posthumus                                        –
  the Company’s executive committee. The responsibility
                                                                    6.   Kay S Priestly+                            Jo-Ann S Yuen^/
  for risk management still lies with the board.
                                                                                                                  Coen H Louwarts#
By supporting the King II recommendations, the board has            7.   Lindsay W Kirsner^                      Coen H Louwarts#/
demonstrated its commitment to conduct the affairs of                                                               Jo-Ann S Yuen^
the Group with integrity and in accordance with generally
                                                                   * Executive directors   +American   ^ Australian   # Dutch
accepted corporate practices. The board places strong
emphasis on achieving the highest level of financial
                                                                   The following changes occurred since 31 December 2009:
management, accounting and reporting. The financial
                                                                   Mr Charles A Asubonten’s secondment contract as Chief
statements are prepared in accordance with International
Financial Reporting Standards. The board will be addressing        Financial Officer from Rio Tinto to the Company ended
the challenges of the King III recommendations and other           on 31 December 2009. With effect from 1 January 2010,
new legislative requirements during the 2010 financial year.       Mr  Marshall Bruce Snyder was appointed in the interim
                                                                   as acting Chief Financial Officer whilst a comprehensive
Application                                                        recruitment process for a suitable candidate is undertaken.
Although the King II recommendations are generally
applied to all entities in the Group, it is specifically adopted   The board assessed its composition, experience and skill
by Palabora Mining Company Limited, the Company, as                and decided to recruit three independent non-executive
the subsidiaries are not material in size. Specifically, the       directors. Two people have been appointed as independent
directors report on the matters that follow:                       non-executive directors as detailed below, with a search for
                                                                   the third director currently underway.
Board of directors
The Company has a unitary board structure. The board               With effect from 11 January 2010, Mr Ray Abrahams
meets on a quarterly basis, retains effective control over the     and Ms Francine Ann du Plessis were appointed as
Company and monitors executive management. The board               independent non-executive directors. Mr Abrahams joins
was comprised of seven directors, two executives, three non-       the  Company with significant practical experience in
executives and two independent non-executive directors.            operations, design, construction, maintenance and projects
                                                                   within the mechanical engineering fields of opencast mining,
Mr George Negota resigned as a non-executive director              petrochemical, utilities and manufacturing industries.
and Chairman of the board, with effect from 24 March 2009.         He is a member of several professional organisations
                                                                   including the Institute of Directors, Engineering Council of
With effect from 24 March 2009, Mr Clifford Zungu was              South Africa, Black Management Forum and Future Leaders
appointed as interim Chairman of the board.                        Forum. He holds a BSc (Mech Eng) from Wits University,

14      Palabora sustainable development report 2009
Corporate governance statement continued...

He is a registered professional engineer and also holds                    at periods of notice exceeding one year and requiring
Government Certificates of Competency in Mining and                        payment of compensation. No director holds any shares
Factories from the Departments of Labour and Minerals                      beneficially or non-beneficially, directly or indirectly in the
and Energy respectively. Ms Du Plessis joins the Company                   Company and there are no share option schemes.
with extensive experience as a director. She has held several
positions as director as well as serving on board committees               A third of the directors are subject to retirement by rotation
in many listed and non-listed companies including SAA                      and re-election by shareholders each year in accordance
(Pty) Limited, KWV Limited, Sanlam Limited, Naspers                        with the Company’s articles of association. In addition, all
Limited. She was admitted as an Advocate of the High Court                 directors are subject to re-election by shareholders at the first
of South Africa (Cape Town) in 1994 and she was a Senior                   annual general meeting following their appointment. The
                                                                           appointment of new directors is approved by the board as a
Lecturer at the University of Stellenbosch, Department
                                                                           whole. The names of the directors submitted for re-election
of Accounting, Faculty of Commerce and Department
                                                                           are accompanied by sufficient biographical details in the
of Commercial Law, Faculty of Law in 1985 to 1993.
                                                                           notice of the annual general meetings to enable shareholders
Ms  Du Plessis is a qualified Chartered Accountant and
                                                                           to make an informed decision in respect of their re-election.
holds B Comm (Hons) (Taxation), LLB, and B Comm (Law)
degrees from the University of Stellenbosch.                               The board retains full and effective control over the Group
                                                                           and monitors the executive management. The board is
W J (Bill) Abel (59) was appointed a non-executive director                responsible for the adoption of strategic plans, monitoring
on 5 February 2010. He is currently Group Head of Mining                   of operational and financial performance and management,
for Anglo American. Mr Abel has extensive South African                    approving capital expenditure, succession planning as well
and international surface and underground mining and                       as the determination of policies and processes to ensure
project experience in a number of commodities. Mr Abel                     the integrity of the Group’s risk management systems
is a Fellow of the Southern African Institute of Mining                    among other duties. These responsibilities are set out in
and Metallurgy (SAIMM) and holds a BSc (Min Eng) from                      the approved board charter, which is reviewed annually.
London University and an MBA from Wits University.                         The directors believe that they have adhered to the terms
He is a registered professional engineer and also holds                    of reference as articulated in the board charter for the
Government Certificates of Competency in Coal and Metal                    financial year under review.
Mines from the Department of Minerals and Energy.
                                                                           Details of attendance by directors at board meetings during
There are no contracts of service between any directors and                the financial year ended 31 December 2009 are set out
the Company or any of its subsidiaries that are terminable                 below:

 Name of director                  23 February 2009              23 April 2009                30 July 2009          26 November 2009
 G N Negota                                  P                         NAD                        NAD                       NAD
 C N Zungu                                   A                             P                        P                         P
 J C Posthumus                               P                             P                        P                         P
 S Thomas                                    P                             P                        P                         P
 M Gili                                      P                             P                        P                         P
 C A Asubonten                               P                             P                        P                         P
 K Priestly                                  P                             P                        P                         A
 C H Louwarts                      NAD (Attended by                        P                        P                         P
                                                                                                                                               Corporate governance

 C J Latcham                                 P                             A                        A                       NAD
 L Kirsner                                 NAD                         NAD                 NAD (Attended by                   P

A = Absent with apology   P = Present   NAD = Not a director at the time

                                                                                Palabora sustainable development report 2009             15
Corporate governance statement continued...

All directors have access to the advice and services of           Induction and education
the company secretary, who is responsible to the board            Palabora recognises that the induction of new directors,
for ensuring that board procedures are followed and for           as well as the ongoing education of all directors, is
ensuring compliance with procedures and regulations of a          critical to ensure that they are kept up to date with new
statutory nature. Directors are entitled to seek independent      developments and that they are able to effectively discharge
professional advice concerning the affairs of the Group at        their responsibilities within the Company’s governance
the Group’s expense, should they believe that course of           structure as well as the legislative framework under
action would be in the best interest of the Group. Non-           which it operates. During the year, the directors received
executive directors’ remuneration is recommended by               briefings and presentations by an independent adviser on
either the company secretary or chief financial officer, after    the new Companies Act and the King III. In  addition, the
consultation with independent advisors on fees prevailing         directors received an updated directors’ manual containing
in comparable local companies.                                    duties and responsibilities of directors, revised JSE listings
                                                                  requirements and other relevant legislative updates.
Independence of directors
The board considers two of its non-executive directors            In-committee meetings
independent. These directors demonstrate complete                 During the year under review the board held in-committee
independence in character, judgement and action in                meetings immediately following the four board meetings.
fulfilling their duties. During the year under review, the
executive directors with the support of Rio Tinto proposed        Executive committee
a BEE transaction for Palabora that would include the             The board delegates the day-to-day management of the
three HDSA directors (Messrs Negota and Zungu and                 business of the Group to the managing director assisted
Ms  Thomas). Mr Zungu declined to participate in the              by the executive committee. The committee meets weekly
BEE transaction as he wished to remain an independent             to review operations and performance, develop strategy
non-executive director. Mr Negota and Ms Thomas                   and policy proposals for consideration by the board and
expressed interest in participating in the transaction            to implement its directive. Members of the executive
and as such, recused themselves at the meeting held               committee at present comprise: the managing director, the
on 23 February at which meeting their participation               interim chief financial officer and six general managers
was discussed. Subsequent to the meeting, Mr Negota               for underground and vermiculite operations; concentrator;
resigned from the board. Ms Thomas expressed interest in          copper processing and magnetite; human resources;
participating in the transaction by entering into a separate      safety, environmental and quality; and sales, marketing
deal with the Consortium led by George Negota (former             and logistics. The company secretary attends all executive
Chairman) post the conclusion of the transaction. Ms              committee meetings.
Thomas continued to recuse herself from all discussions
relating to the BEE transaction and was excluded from             Details of attendance by members of the BAC during the
receiving any information relating to the transaction.            financial year ended 31 December 2009 are set out below:

 Name of director                  28 January 2009           15 April 2009           29 July 2009        18 November 2009
 S Thomas                                  P                        P                      P                       P
 J C Posthumus                             P                        P                      P                       P
 C N Zungu                                 P                      NAM                    NAM                     NAM

A = Absent with apology     P = Present   NAM = Not a member at the time

Internal control                                                  assets. The systems include a documented organisational
The Group maintains systems of internal control over              structure and division of responsibility, established
financial reporting and over safeguarding of assets against       policies and procedures, and the careful selection, training
unauthorised acquisition, use or disposition, which are           and development of staff. Internal auditors monitor the
designed to provide reasonable assurance to the board of          operation of the internal control system and report findings
directors regarding the preparation of reliable published         and recommendations to management and the BAC.
financial statements and the safeguarding of the Company’s        Corrective actions are taken by management to address

16       Palabora sustainable development report 2009
Corporate governance statement continued...

control deficiencies and other opportunities for improving         which could give rise to material adverse reputational
the system as they are identified. The board, operating through    considerations are also considered to be unacceptable risks.
its audit committee, provides oversight of the financial           Management has outlined the risks below.
reporting process. There are inherent limitations in the
effectiveness of any system of internal control, including the     There may be additional risks unknown to Palabora and
possibility of human error and the circumvention or overriding     other risks, currently believed to be immaterial, could turn
of controls. Accordingly, even an effective internal control       out to be material. These risks, whether they materialise
system can provide only reasonable assurance with respect          individually or simultaneously, could significantly affect
to financial statement preparation and the safeguarding of         the Group’s business and financial results. The following
assets. Furthermore, the effectiveness of an internal control      areas of risk have been identified and will continue to
system can change with circumstances.                              receive management attention:

The Group assessed its internal audit control system as at         BEE/Mining Charter
31  December 2009 in relation to the criteria for effective        On 30 April 2009, Palabora signed and submitted a
internal control over financial reporting and other                Transaction Framework Agreement (TFA) bearing the
control areas as set out in the Rio Tinto internal control         signatures of its Broad Based Black Economic Empowerment
questionnaire. Based on its assessment, the Group believes         (BBBEE) partners to the DMR in Polokwane. The negotiations
that, as at 31 December 2009 and at the date of this report, its   to finalise terms of the agreement have entered final stages
system of internal control over financial reporting and over       and the new structure is projected to be concluded during
safeguarding of assets against unauthorised acquisitions,          2010. One of the key challenges has been to source and
use or disposition, met those criteria.                            secure high level HDSA individuals in key leadership
                                                                   positions. Palabora has been successful in developing these
External auditors                                                  individuals and we currently have an HDSA percentage of
The Company auditors are appointed by the board on the             42 per cent in senior roles.
recommendation of the BAC and ratified by shareholders.
The Company auditors’ performance and independence                 Plant, machinery and equipment
is regularly monitored by the BAC. The non-audit work              Management are monitoring and actively seeking solutions
performed is periodically reviewed and approved by the             to improve efficiencies in the smelter and rod casting plant.
BAC. The audit partners are rotated every five years.
                                                                   Surface subsidence and ore reserves
Financial director                                                 No increase in surface subsidence was experienced during
The BAC has, for the period under review, considered and           2009. Continuing movements and failure on the north wall
satisfied itself of the appropriateness of the expertise and       is normal as the cave is mined at a rate of 110mm per day.
experience of the chief financial officer.
                                                                   Rio Tinto’s Technical Evaluation Group completed a study
Risk management                                                    on the integrity of the Western wall stability with regards
The board is responsible for the total risk management             to the impact of mining the Western extension on the
process within the Group. The executive committee is               Foskor infrastructure. The report will be used to make a
accountable to the board and has established a group-wide          final decision on the risk if the reserves from the Western
system of internal control to manage significant Group             extension are extracted using block-caving methods. The
risks. This system supports the board in discharging its           locked-in reserves could add approximately two and a half
                                                                                                                                   Corporate governance

responsibility for ensuring that the range or risks associated     years to the current Life of Mine.
with the Group’s operations are effectively managed in
support of the creation and preservation of shareholder            An Order of Magnitude study on Lift II is currently being
wealth.                                                            conducted with a target completion date set for July 2010.
                                                                   Drilling into the Lift II ore body has restarted after being
The management of risk encompasses all significant risks,          stopped towards the end of 2008.
including operational risk, which could undermine the
achievement of business objectives. The board has approved         HIV/AIDS
the level of acceptable risk and requires that operations          HIV/AIDS continues to be a real issue with death in service
manage and report in terms thereof. Issues and circumstances       rising during 2009. Palabora acknowledges HIV/AIDs as

                                                                        Palabora sustainable development report 2009         17
Corporate governance statement continued...

a workplace issue and that it is impacting significantly        Worker participation and affirmative action
the Ba-Phalaborwa Municipality in which Palabora                The Group employs a variety of participative structures on
operates. Palabora believes that a healthy workforce and        issues which affect employees directly and materially and
good management of community relationships is vital for         is committed to complying with the Employment Equity
business success and that this is consistent with Palabora’s    Act. These participative structures are further developed
other contributions to sustainable development. Palabora        and adapted from time to time to meet variations in
in conjunction with the Palabora Foundation operates a          operational requirements and to accommodate changing
combined workplace and community HIV/AIDS strategy              circumstances. Management and employee representatives
that demonstrates Palabora’s commitment to the good             meet in formal and informal forums at Company and
health of employees and contractors, and the communities        operational levels to share information and to address
in which it operates. Palabora will continue to maintain the    matters of mutual concern.
HIV/AIDS and Health training programme as well as the
voluntary counselling and testing programme and the free        Code of ethics
condom distribution programme. The full time HIV/AIDS
                                                                The Group has developed and promulgated a formal
and health educator will continue to play a pivotal part in
                                                                written code of ethics. In accordance with this objective,
this programme.
                                                                the code of ethics has been circulated throughout the
                                                                Group to provide a clear guide to the conduct expected of
Business continuity plan
                                                                all employees in their dealings with each other and with
On an annual basis, the executive committee reviews a
                                                                the Group’s stakeholders. All employees of the Group
business plan for the following year. Forecasts are also
                                                                are required to maintain the highest ethical standards to
prepared for the subsequent four years. The plan takes into
                                                                ensure that the Group’s business practices are conducted
account key performance indicators, plan assumptions and
                                                                in accordance with high standards and expectations. The
key value drivers, costs and capital, risks and opportunities
                                                                Group is committed to the highest standards of integrity,
and key performance areas. The business plan is reviewed
by the board at the last board meeting of the year. On the      behaviour and ethics in dealing with all its stakeholders,
basis of this annual review, the board has recorded that it     including its shareholders, directors, managers, employees,
has a reasonable expectation that the Company and the           customers, suppliers and the society at large. The Group
Group have adequate resources and the ability to continue       participates in a Rio Tinto Speak-OUT system for the
in operation for the foreseeable future. For these reasons,     anonymous reporting of unethical or risky business. It is
the financial statements have been prepared on a going          the responsibility of the chief financial officer to oversee
concern basis.                                                  compliance with the code of ethics. All breaches of ethical
                                                                behaviour are consistently and fairly dealt with under the
Insider trading                                                 Group’s disciplinary code and appropriate disciplinary
No employee may deal directly or indirectly in Palabora         action is taken. As well as being dealt with under the
ordinary shares on the basis of unpublished price-sensitive     disciplinary code, all cases of fraud or theft are reported to
information regarding its business or affairs. No director or   the South African Police Service for further action.
officer of the Company may trade in these shares during a
closed period determined by the board. Closed periods are       The board is of the belief that ethical standards are
operated prior to the publication of the interim and year       being met and supported by the abovementioned ethics
end results. Where appropriate, the closed period is also       programme.
extended to include other sensitive periods. In terms of
the JSE Listing Requirements, details of any transactions by
directors in the shares of the Company are required to be
advised to the JSE for publication through SENS. There were
no director dealings during the year.

18      Palabora sustainable development report 2009

ABET      Adult Basic Education and Training            PROTEC        Programme for Technological Careers
AIDS      Acquired Immune Deficiency Syndrome           SENS          Securities Exchange News Service
AIFR      Average Injury Frequency Rate                 STLF          Senior Term Loan Facility
BAC       Board Audit Committee                         TFA           Transaction Framework Agreement
BBBEE     Broad Based Black Economic Empowerment        UASA          United Association of South Africa
BEE       Black Economic Empowerment                    VO            Vermiculite Operations
CCMA      Council for Conciliation, Mediation and       VOD           Vermiculite Operations Dump
                                                        VODT          Vermiculite Operations Dump Tailings
CSDP      Central Securities Depositary Participant
DMR       Department of Minerals Resources
EBIT      Earnings before interest and tax
EE        Employment Equity
EU        European Union
FSB       Financial Services Board
IAS       International Accounting Standards
IFRIC     International Financial Reporting
          Interpretation Committee
IFRS      International Financial Reporting Standards
HDSA      Historically Disadvantaged South Africans
HIRA      Hazard Identification and Risk Assessment
HIV       Human Immunodeficiency Virus
KING II   King Reported on Corporate Governance of
          South Africa 2002
LED       Local Economic Development
LHD       Load Haul Dump
LME       London Metal Exchange
LOM       Life of Mine
LTI       Lost Time Injury
LTIFR     Lost Time Injury Frequency Rate
MTC       Medical Treatment Cases
                                                                                                                  Corporate governance

MQA       Mining Qualification Authority
NGO       Non Governmental Organisations
NUM       National Union of Mine Workers
PCBC      Personal Computer Block Caving
PP&V      Palabora Phosphate and Vermiculite

                                                              Palabora sustainable development report 2009   19
Our economic contribution
Our economic contribution

Objective 1

Maintain the underground mine and improve
the operations
Underground                                                    impact on temperatures in the Western part of the mine.
The good safety performance of 2009 with an all injury         The increased production in the Western section of
frequency rate (AIFR) reduction from 1,03 to 0,55 was          the mine and the possibility of restarting the Western
marred by the fatality of Michael Smith, a contractor, on      extension will place a high priority on completing at least
21 April 2009. The significant reduction in AIFR was due to    one horizontal spray chamber. This will improve efficiency
an excellent safety improvement plan and the new Palabora      of the chilled water distributed from surface to this site,
Safety Strategy implemented during the year. Eight injuries    until the underground refrigeration plant is commissioned
were incurred during the year, which is lower than the         in the last quarter of 2010.
eighteen incurred in 2008. Once again the lost time
injuries were of relatively low severity but were completely   A change is evident in the overall geometry of the North
preventable. The focal aspects of the Safety drive were        wall failure. No new tension cracks were observed along the
on leadership behaviour with regard to interaction and         outer failure reach some 250m from the crest. Failure self-
managing from the workforce.                                   buttressing continues to have a significant stabilising effect
                                                               and only limited draw related movement is anticipated on
Palabora has both an objective within the Environmental        the Eastern wall. The upper failure surface in the North
Management Programme Report as well as a licence               wall has dropped some 100-120m. The failure surface is
requirement in the Integrated Water Use Licence to ensure      dropping in a vertical motion, roughly equivalent to the
the long-term and sustainable clean up of all riparian         block cave draw rate.
habitats including Loole Creek and Plant Stream. To this
effect, the Loole Creek clean-up project commenced in          On the underground infrastructure, crusher pads were
2009. This was to remove contaminated material from the        reconstructed six times during the year. All drains in the
water course as part of a longer-term remediation objective.   cave were refurbished to a more efficient standard, all tags
This project will be completed in 2010.                        recessed and water sprays installed. Cross Cut 1 roadway
                                                               was fully refurbished during 2009.
The underground division demonstrated sustained
delivery of 31 652 tonnes per day of production. A total of    The Western extension project was deferred in October
11,55  million tonnes were hoisted, a slight decrease over     2008 due to the economic downturn. Subsequent to the
2008 tonnages. The decrease in hoisted tonnes was due to       recovery observed in the second half of 2009, a decision
the north winder drum failure. The copper grade achieved       was made to revisit this project and the Lift II Exploration
was 0,67 per cent compared to 0,69 per cent in 2008. The       programme during the course of 2010.
surface operation realised 6,3 million tonnes of stockpile
material reclaimed and delivered to the concentrator           Concentrator
crushing facilities for re-processing.                         Safety
                                                               Overall Concentrator safety performance showed a marginal
Operationally, the performance from the cave continues         improvement in all injuries from six in 2008 to five in 2009.
to improve. Increased mobile equipment availability            However, the LTIs sustained in 2009, which were similar to
and a general awareness on the possible impact of the          the previous year, further highlight the need to continue
open pit waste have compelled the underground team to          working on developing safe leaders and safe employees
focus closely  on proper draw control principles. Other        through visible safety leadership, coaching and supervisor
improvements include the use of two LHDs in one crosscut       development.
to attain the required sector 4 split and a continued use
of oversize treating philosophy where a rock breaker           Copper production
and a loader operate in the same production crosscut           Underground ore processed was 11,1 million tonnes at a
simultaneously to improve productivity.                        head grade of 0,67 per cent, which was slightly below the
                                                               11,6 million tonnes at 0,69 per cent processed in 2008.
Ventilation conditions in the underground are still on a       Proportion of underground ore processed through the
continuous improvement trend and cooling cars installed        autogenous milling circuit was limited to 73 per cent as
in the Western section of the mine had a major positive        compared to 80 per cent in 2008 following the recurring

22      Palabora sustainable development report 2009
Our economic contribution continued...

failures on one of the auto mill motors. The motors failures    stockpile material by contract re-mining, to augment the
contributed to a 9 per cent decline relative to 2008 in both    current arising magnetite in order to fill available trains.
mechanical availability and mill running time.
                                                                In addition to the rail-based organic growth model being
Overall recovery and concentrate grade from underground         pursued for the iron ore export business, Palabora has
ore, including tap-off material, was 87,3 per cent at 31 per    entered into a study with IMBS to establish the feasibility
cent copper which was comparable to 2008 performance of         of using Palabora magnetite resource as a primary feed
87,9 per cent at 30,3 per cent copper. Tap-off material is      for iron-making in Phalaborwa. This study on alternative
mainly dolerite rich pebbles screened from the autogenous       iron-making technologies will conclude the fit for purpose
mills and has been stockpiled for later re-processing           technology to be trialled on a plant scale.
through the conventional circuit.
                                                                Copper processing
                                                                Safety and environment
Copper in concentrate delivered to the smelter was
                                                                The copper processing division sustained 5 LTIs and two
82  564  tonnes and reflected a 4 per cent decline relative
                                                                MTCs in 2009, compared to 6 LTIs and 8 MTCs in 2008.
to 2008 as a result of a 48 per cent reduction in the volumes
                                                                AIFR decreased from 0,91  to 0,59 as a result of the late-
of low grade copper reclaimed from the dewatering ponds.
                                                                2008 Safety pledge, the 2009 Safety Strategy implemented
New Palabora copper in concentrate of 69 955 tonnes             in mid-year and a focus on full investigation of near-
represented 85 per cent of the total copper in concentrate      misses (Significant Potential Incidents). The reduction in
delivered to the smelter as compared to 83 per cent in 2008.    AIFR was achieved despite a major focus on the prompt
                                                                and complete reporting of all incidents. Despite a renewed
Excluded from ‘new’ Palabora copper in concentrate              emphasis on contractor management, 2 LTIs and one MTC
above, smelter reverb furnace bottoms and high grade            were suffered by smelter maintenance in shutdown work.
slag materials containing 11 110 tonnes of copper were          Smelter operations had only a single MTC, while Refinery
also processed as a blend with underground ore. The             operations maintained the improving trend seen in the
metallurgical performance of this material was 81 per cent      second half of 2008, and Engineering services maintained
recovery and 33,7 per cent copper grade as compared to          a zero AIFR for the year, as in 2008.
83  per cent recovery and 31 per cent copper concentrate
grade in 2008. This material contributed an additional          The number of instantaneous, hourly and daily exceedances
8 978 tonnes of copper in concentrate to the smelter.           at station 2 increased with respect to the new air quality
                                                                guidelines, primarily due to water-cooled converter hoods
On behalf of Foskor, 5,89 million tonnes of low copper          coming to the end of their useful lives. Fugitive emissions
bearing ore at 0,12 per cent copper were processed on a toll    and gas stream dilution both increased, leading to poor
milling basis as compared to 3,4 million tonnes in 2008;        conversion at the acid plant, which was exacerbated by
with copper price participation provisions to Palabora’s        unstable converter operation. Sulphur capture fell from
account. The copper recovery and concentrate grade of this      66 per cent to 55 per cent, and production was curtailed to
material was increased to 52,2 per cent and 28 per cent         manage community impact. Some neutralisation of product
                                                                acid with carbonatite was necessary to control high stocks
respectively from 49,6 and 27,1 per cent in 2008.
                                                                due a continued poor market for acid, compounded by
                                                                reduced offtake by the Sasol plant, with its eventual closure
Magnetite production
                                                                in October. New markets for acid have been developed to
Combined magnetite production was increased by 46  per
                                                                replace this long-term baseload customer.
cent to 2,8 million tonnes from 1,95 million tonnes in 2008
                                                                                                                                Economic contribution

with 88,6 per cent of the total production destined for the
                                                                Smelter production
export iron ore market. The remaining 323  921  tonnes          Production of new anode copper totalled 65 937 tonnes, a
of magnetite, which was in line with 2008 production of         decrease of 13 per cent from the prior year. Revenue loss
321  000 tonnes, was produced mainly for domestic coal          was partially offset by a further reduction in the volume
washery to satisfy steady domestic demand. Furthermore,         of purchased concentrates from 30 662 tonnes in 2008
the first shipment of 30 000 tonnes dense medium                to 12  609 tonnes in 2009. Import concentrate quality
separation magnetite was exported in the third quarter to       fell below  expectations and ceased altogether in the last
meet the growing demand of overseas coal washery.               quarter as Zambian export controls on unbeneficiated
                                                                product took effect. Overall recoveries decreased from
Improved rail logistics to the ports of Maputo and Richards     95 per cent in 2008 to 92 per cent in 2009, as a result of
Bay continues to support the reclaim and reprocessing of        returning contaminated matte to the concentrator, rather

                                                                     Palabora sustainable development report 2009         23
Our economic contribution continued...

than holding it as a smelter stock of low-grade reverts. The    breakthrough issues, as well as fouling with high calcium
combination of low first pass recovery and high copper          levels derived from the new mouldwash used in the anode
price made import economics marginal, while a lack of           casting section. A barite mould wash is now being trialled.
blister availability of appropriate quality prevented its use
in place of concentrate. Anode production in the first half     Engineering services
met expectations, but competition for boiler contractor         Workshop utilisation improved further in 2009, and
slots forced both planned statutory waste heat boiler           availabilities of the light vehicle fleet, cranes and
shutdowns into the second half for a weak finish to the         locomotives were maintained at 2008 levels, despite
year. The reverb and waste heat boiler number 1 shutdowns       minimal replacement of light vehicles. Palabora is
were completed on scope and on schedule, but the waste          reviewing its surface fixed plant asset management systems
heat boiler number 2 and acid plant shutdowns ran over by       by benchmarking with other Rio Tinto operations and by
seven and ten days respectively.                                a planned engagement with Rio Tinto Asset Management.
                                                                This is aimed at better aligning work done with maintaining
Burner tips were lost on the reverb furnace on one occasion     productive capacity.
and three converter end-wall failures were experienced,
mainly as a result of magnetite and temperature control,        Marketing, sales and logistics
but also because longer blowing times per cycle were            Copper prices steadily recovered from a level of US146c/lb
required at lower matte grades. Powerhouse operations           since January 2009 to US317c/lb in December 2009. The
did not cause significant loss of production, beyond the        average copper prices finally averaged at US233c/lb for
statutory boiler outages.                                       2009, as compared with US315c/lb in 2008. The South
                                                                African Rand strengthened by 25 per cent during the year.
Due to a strong focus on working capital reduction, reverts
and Palabora concentrate in excess of immediate capacity        As copper concentrate stocks built up during the annual
were sold. Sulphuric acid production decreased from             smelter shutdowns, advantage was taken of the high copper
112 802 to 89 932 tonnes, due to lower copper production        prices and a total of 10 366 tonnes of copper in concentrate
and sulphur capture.                                            was sold during 2009 in the form of high and low grade
                                                                copper concentrate, as well as copper reverts. Other copper
Refinery production                                             sales of 4 438 tonnes in the form of cropped bar, copper
Cathode production of 69 387 tonnes was 8,6 per cent lower      skulls and starter sheets were sold to maintain continuous
than the previous year, but higher than anode supply due to     cash flow and take advantage of high copper prices.
a reduction in working capital from a minimum number of
sections in operation.                                          Local rod sales were 7 per cent lower compared with rod
                                                                sales in 2008. Total local rod production was 44 846 tonnes
Current efficiencies averaged 83 per cent for the year,         compared to 49 700 tonnes in 2008. One major customer
but improved through the year to 87 per cent in the final       continued to operate its own rod casting plant whilst
quarter, despite uneven anode supply during the second          another plant was closed and the tonnages allocated
half and measures to minimise inventory to maintain             to Palabora for rod production. Export rod increased to
supply to the rod plant.                                        3 598 tonnes from 2 254 tonnes in 2008.

Rod production for 2009 was 47 551 tonnes. The new              Sale of copper cathode was 23 790 tonnes, of which 79 per
casting furnace has remained prone to burner plugging and       cent was sold into the local market.
hangups, despite its much better fuel efficiency. An expert
from the furnace design company has revised operating           For 2009, total local sales of finished copper products
protocols during an extended site visit and in the final        amounted to 78 per cent of total sales volumes.
quarter Deloitte consulting group completed an in-depth
process improvement engagement to improve reliability and       Reduced sections in operation in the Refinery rendered
capacity and minimise re-work. Low cathode availability         revenue of 140 million rand from 89 tonnes of anode slimes
during the second half was made up by purchased cathode         in 2009, compared to 148 million rand from 105 tonnes in
to maintain market commitments. This cathode was                2008. High gold and silver prices contributed to minimising
processed at acceptable margins and improving good work         the impact of reduced volumes. Nickel sulphate sales were
rates in the final quarter.                                     370 tonnes in line with reduced nickel sulphate production
                                                                due to quality related issues.
Anode slimes production fell 5 per cent to 90 tonnes for
2009, while nickel sulphate production was relatively           Magnetite sales tonnes increased by 35,3 per cent to
unchanged at 431 tonnes (hexahydrate crystal basis). The        2,5 million tonnes during 2009. A total of 301 848 tonnes
new ion exchange process ramped up towards expectations         of  South African coal washing magnetite was sold
in the second and third quarters, but on-specification output   compared to 342 900 in 2008. Magnetite destined for the
was badly affected in the fourth quarter by copper and iron     iron and steel industry in China increased by 45,3 per cent

24      Palabora sustainable development report 2009
Our economic contribution continued...

to 2,3  million tonnes. Revenue growth from magnetite            below plan. Shipments from port at 145 893 tonnes were
continued to be strong on the back of strong iron ore            17,7 per cent below plan;
pricing. Contract pricing was linked to benchmark iron ore     • Demand from the market slowed during the latter part of
prices and freight sharing which contributed to magnetite        the year due to the international economic crisis; and
revenue of 1 512  million rand compared to 789 million         • Packing of vermiculite containers was relocated to site
rand from magnetite in 2008.                                     during June 2009, due to liner shipping opportunities
                                                                 from Maputo, resulting in significant savings in supply
Vermiculite sales revenue were three per cent lower              chain costs.
compared to 2008. Revenue was below plan due to the
strong Rand/dollar exchange rate which had a negative          Magnetite
impact on revenue. Although the economical market              • A total of 2,3 million tonnes of magnetite was dispatched
climate was weak, total consolidated vermiculite sales were      locally to customers and port, whilst 2,3 million tonnes
                                                                 were exported mainly to China;
four per cent above plan.
                                                               • Additional railing capacity was secured from Transnet
A vermiculite product profit of 40,9 million rand was
                                                                 Freight Rail (TFR) and by the third quarter of 2009
generated during 2009 compared to a product profit of
                                                                 the supply chain capacity had exceeded magnetite
75,2  million rand during 2008. The decrease in profit
                                                                 production due to production constraints resulting in
was mainly due to the stronger exchange rate and stock           TFR withdrawing excess capacity; and
variation, offset by higher sales volumes.                     • Both Maputo and Richards Bay ports have maintained
                                                                 planned berthing systems to improve vessel performance
Logistics                                                        and continued refurbishment programmes initiated
During 2009, total products moved from site were                 in 2008. Richards Bay port will dedicate a berth to
2,9 million tonnes, while 2,5 million tonnes were shipped        magnetite, in quarter one of 2010, once the 801 berth
from ports. The breakdown of tonnages is as follows:             upgrade project is complete.

Vermiculite                                                    In addition to the tonnages indicated above, significant
• A total of 164 582 tonnes of vermiculite was dispatched      concentrates and reverts tonnages were also moved to and
  to local customers and to port, which was 12,6 per cent      exported from Richards Bay during 2009.

Group financial analysis

For the year ended                                                         31 December 2009         31 December 2008

Net profit for the year                                                          R284 million               R720 million
Basic earnings per share                                                           587 cents                 1 489 cents
Earnings before interest, tax, depreciation and amortisation
(EBITDA)                                                                       R1 128 million              R1 308 million
Headline earnings (note 14)                                                     R289 million                R721 million
Headline earnings per share (note 14)                                               598 cents                 1 493 cents
Excess cash (excluding hedge) (note 28)                                        R1 292 million               R555 million
Dividend per share (declared)                                                       620 cents                    82 cents

Net profit                                                     • A decrease of 26 per cent in other by-products sales
The net profit for the year decreased from 720 million rand      of 62  million rand from 238 million rand in 2008
in 2008 to 284 million rand in 2009, or 1 489 cents per          to 176  million rand in 2009, mainly due to reduced
share in 2008 compared with 587 cents per share for 2009.        industrial demand for sulphuric acid; and
                                                                                                                                 Economic contribution

Headline earnings per share also decreased from 1 493 cents    • A decline of 13 million rand in sales due to vermiculite
per share in 2008 to 598 cents per share in 2009.                sale volumes decreasing by 3 per cent from 188 825 tonnes
                                                                 in 2008 to 183 264 tonnes in 2009.
Sales revenue
Sale of goods decreased by 352 million rand (6 per cent)       These decreases were partially offset by:
to 5  831 million rand in 2009, mainly as a result of the
following:                                                     • An increase in sales of 395 million rand as a result of
                                                                 higher magnetite sales volumes. In 2009 magnetite sold
• Lower average copper prices realised which resulted in         were 2  569 thousand tonnes, a 35 per cent increase
  a decrease of 1 320 million rand in sales (the realised        compared with 1 899 thousand tonnes in 2008;
  average copper price was 231 USc/lb in 2009 compared         • Higher magnetite and vermiculite prices increased sales
  with 317 USc/lb in 2008);                                      by 319 million rand and 24 million rand respectively.

                                                                   Palabora sustainable development report 2009             25
Our economic contribution continued...

  Magnetite prices increased due to changes in terms of sale   • Employee costs increased by 84 million rand, an
  from Freight-on-Board (FOB) to Cost-Freight-Insurance          increase  of 12 per cent. Although a hiring freeze of
  (CFI)/Cost-Freight-Rail (CFR) for exported magnetite;          non-critical positions was imposed, the annual salary
• Higher realised copper premiums increased revenue by           increase and retention strategies introduced during the
  145 million rand;                                              previous financial year impacted on the costs;
• A marginal increase in cathode and copper rod sales          • Depreciation expense (a non-cash charge) increased
  volumes from 75 594 tonnes in 2008 to 76 673 tonnes            by 81 million rand compared with the 2008 year,
  in 2009 contributed an additional 83 million rand in           representing a 17 per cent increase from 470 million
                                                                 rand in 2008 to 551  million rand in 2009. This is
  revenue; and
                                                                 attributed to the additions during the second half of
• The weakening of the average SA Rand/US dollar
                                                                 2008 and during the current year, as well as an escalated
  exchange rate for the year from 8,26 in 2008 to 8,33 in
                                                                 depreciation factor based on the lower copper yield as
  2009 increased sales by 77 million rand.                       was assessed in the annual ore reserve statement at the
                                                                 end of the previous year; and
The Group achieved an average realised selling price (post     • Increases in power tariffs. The 27 per cent tariff increase
hedge) for copper rod and cathode of R36 307 per tonne           by Eskom in July 2009 increased costs by 38 million rand.
(2008: R40 426) and R44 249 per tonne (2008: R40 433)
respectively.                                                  Changes in inventory and finished goods and work in
                                                               progress of 210 million rand in 2009, compared with a
The sales revenue was further positively impacted              credit of 240 million rand in 2008, resulted in an increase
by lower  realised hedging losses resulting from the           of 450 million rand in cost of sales.
contractual  reduction in the swap settlement terms from
42  thousand tonnes of copper in 2008 to 22 thousand           The Group saved 509 million rand on supplementary
tonnes in 2009. This resulted in a 1 031 million rand          copper concentrate purchases due to the lower copper
reduction in the swap settlement costs in 2009.                prices paid in addition to the 44 per cent reduction in
                                                               volumes  purchased of 8 569 tonnes in 2009 compared
Production and sales volumes                                   with 15 396 tonnes in 2008.
Copper cathode produced for sale decreased 9 per cent from
75,9 thousand tonnes in 2008 to 69,4 thousand tonnes
                                                               The Group achieved earnings before interest, income
in 2009. Copper sales volumes increased 2,3 per cent           tax expense, depreciation and amortisation (EBITDA) of
from 85 thousand tonnes in 2008 to 87 thousand tonnes          1 128 million rand in 2009 compared with 1 308 million rand
in  2009.  Magnetite sales volumes increased 35  per cent      in 2008. EBITDA is calculated by adding depreciation and
from 1 898 thousand tonnes in 2008 to 2 568  thousand          amortisation charges to the profit before net finance costs
tonnes in 2009. Acid sales volumes decreased 22 per            and tax as reported on the face of the income statement.
cent from 109  thousand tonnes in 2008 to 85 thousand
tonnes in 2009.                                                Selling and distribution costs
                                                               Selling and distribution costs increased by 599 million
Cost of sales                                                  rand. The increase in the selling and distribution costs
The Group adopted a cost containment and cash flow             from 587 million rand in 2008 to 1 185 million rand for
preservation strategy in response to the world economic        2009 is mainly as a result of higher magnetite volumes
recession. Discretionary spending was curtailed and            sold, the change in magnetite shipping terms from FOB to
new labour recruits restricted to critical areas only. The     CFI/CFR and increased freight and railage-to-port rates.
total Group cost of sales increased by 13 per cent, from       Administration costs increased by 44 million rand.
2 761 million rand in 2008 to 3 106 million rand in 2009.
The increase in cost of sales was largely impacted by:
                                                               The Group’s earnings before interest and tax (EBIT) was
                                                               577 million rand compared with 838 million rand in 2008,
• An increase in cathode purchased. In light of production
                                                               a decrease of 261 million rand.
  difficulties faced during the second half of the year,
  7  085 tonnes of cathodes were purchased at a cost of        Net finance cost
  343 million rand (2008: 753 tonnes of copper cathode         Net finance cost increased by 116 million rand due to
  at a cost of 49 million rand), of which 6 231 tonnes were    higher foreign exchange losses on revaluations of financial
  converted into rod and 854 tonnes were sold directly;        instruments, primarily cash and cash equivalents. As the
• Increased plant maintenance costs. Plant breakdown-          exchange rate weakened the value of our dollar/rand
  related expenses increased repairs and maintenance           denominated cash balances declined.
  costs by 8 per cent to 645 million rand in 2009 compared
  with 595 million rand in 2008. This was a result of          Income tax
  smelter breakdowns, failure on one of the auto mill          The effective tax rate increased from 13,3 per cent to
  motors and a breakdown of the north winder drum;             37,4 per cent in 2009 mainly as a result of the tax legislation

26      Palabora sustainable development report 2009
Our economic contribution continued...

changes (Royalty Act) that impacted the recognition of           This coincided with the change in the philosophy for
deferred tax on the State share in 2008.                         the management of capital to a cash flow based system.
                                                                 An  investment committee reviews all the applications for
Cash flow                                                        capital funding and the available capital is then allocated to
For the year ended 31 December 2009, the Group recorded          where it is deemed to give the best returns, but also taking
net cash inflows of 745 million rand compared with net cash      into account all relevant statutory requirements.
outflows of 175 million rand in 2008, mainly due to lower
dividend and tax payments, pension fund surplus received,        Top capital expenditure projects for 2009 were:
decrease in investing activities due to the postponement
of non-critical capital projects until market conditions         • Western extension development of the underground
improve, and lower repayments on borrowings.                       mine – 27,6 million rand;
                                                                 • Replacement of 3 LHD loaders for the underground mine
Cash generated from operations during the year totalled            – 23,5 million rand;
1  073 million rand. After receiving the pension surplus         • Increasing the capacity of the tailings complex and
of 241 million rand, tax payments of 253 million rand,             improving the stability of the existing tailings dam walls
funding the dividend payments of 119 million rand, net             – 15,2 million rand;
investing activities of 111 million rand, repayment of           • Various projects to improve the quality of the stockpiled
borrowings of 80  million rand, net interest payments of           magnetite and to increase the loading capacity –
6 million rand and excluding exchange losses of 97 million         13,5 million rand; and
rand, the closing cash position was 1 395 million rand           • First phase of the refurbishment of the waste heat boilers
(compared with 747 million rand in 2008).                          – 10,8 million rand.
Capital investment of 132 million rand was primarily spent
                                                                 Projects that are directly related to the improvement of
on the underground mine (65 million rand), concentrator
                                                                 safety, health and the environment totalled 8,5 million
(24  million rand) and the smelter (26 million rand). The
                                                                 rand. A total of 19,9 million rand was spent on two projects
main capital costs spent in 2009 for the underground mine
                                                                 to manufacture and install sheave wheels and winder rope
related to committed development costs of the Western
Extension (27 million rand), replacement of four  LHDs
(15 million rand) and winder costs (14 million rand). The
                                                                 Some of the above mentioned projects continue into 2010.
concentrators’ main capital projects for 2009 consisted
of the construction of the south paddock tailing dams
                                                                 The capital budget for 2010 totals 224 million rand of
(10  million rand), remedial work at the dams (6 million
rand) and improvements to the Magnetite load out and             which the major portion is allocated to sustaining capital.
booster station (5 million rand), whilst the smelter’s capital
costs consisted of statutory replacements of waste heat          Major capital projects planned for 2010 are as follows:
boilers one and two. The net cash outflow was offset by
other investing activities of 22 million rand.                   • Replacement of 3 LHD loaders for the underground mine
                                                                   – 24 million rand;
The 80 million rand used in financing activities was for the     • Second phase of the waste heat boiler refurbishment –
final repayment of the senior term facility.                       15,6 million rand;
                                                                 • Sulphuric acid plant repairs – 30 million rand;
Net cash                                                         • Refurbishing of dust removal equipment – 12 million
Net cash increased from 555 million rand in 2008 to                rand; and
1 292 million rand in 2009 as a result of an increased           • A total of 89 million rand is allocated to completing
emphasis on preserving cash through dedicated focus on the         projects that commenced before 2010.
working capital management and efficiency programme.
                                                                                                                                  Economic contribution

The Company finally received the employer’s portion of           A total of 14,5 million rand was made available for the
the pension fund surplus in October 2009, amounting to           improvement of DMS (Dense Media Separation) magnetite
241 million rand.                                                production rate and additional drying capacity for the
                                                                 increased production rate.
Summary of capital expenditure – 2009
The actual total capital spent for 2009 was 153,2 million        The amount of 36 million rand for the exploration drilling
rand compared to 311 million rand in 2008. The total             or to determine the available ore reserves for a second lift
capital planned for 2009 was reduced from an initial             in the underground mine is included in the operating cost
250 million rand to 154 million rand due to the impact of        budget of the Underground mining division.
the global financial crisis.

                                                                      Palabora sustainable development report 2009          27
Our economic contribution continued...

Objective 2

Improve the vermiculite operation and grow
the magnetite business
Background                                                      vermiculite product is cleaned to remove excessive fines
Vermiculite is the geological name given to a group of          and grit. The product is dispatched in bulk or in bags.
hydrated laminar minerals, which are aluminium-iron             Product parcels are transported by rail from the mine site
magnesium silicates and have the appearance of mica in          to the ports of Richards Bay and Durban, from where it is
its natural state. Vermiculite is used in a wide variety of     exported to the United States, Europe, Asia, Australia and
applications, for example as a growth medium for plants,        the United Kingdom.
as an absorbent to contain hazardous spills, to replace
asbestos in fireboards and to make asbestos free brake          Product safety and fibre management
shoes. Vermiculite is chemically inert and, because of its      Palabora maintains a strict fibre management programme to
nature, provides a safe alternative to a number of more         ensure that no fibrous minerals are mined and delivered to
hazardous materials commonly used in industry. At current       the processing plant. All geotechnical and mining personnel
consumption, Palabora Phosphate and Vermiculite (PP&V)          are trained to recognise fibrous minerals. Should any of
pit has proven vermiculite ore reserves for at least another    these be observed, the mining process is stopped in that
18 years, and an additional 20  years for the Vermiculite       area and the planning section informed immediately. The
Operations Dump, Vermiculite Operations Dump Tailings           material in the particular mining block is then classified
and Copper Vermiculite pits combined. Palabora has              as waste and discarded according to the Palabora waste
recently developed a vermiculite mining model for the           management policy. All final product shipments are also
PP&V ore body, which can be utilised for comprehensive          sampled and inspected for fibrous minerals, according to
short- and long-term planning.                                  internationally recognised methods, before they leave the
                                                                mine. Palabora vermiculite undergoes stringent internal
Production process                                              testing to ensure that it is free from any harmful materials.
Vermiculite ore is mined from an open cast mine after           Independent third party sampling and testing of Palabora
it has been drilled and blasted. The ore is loaded and          vermiculite is also conducted on a regular basis.
transported by truck to the vermiculite processing plant,
where the ore is dried and the vermiculite separated from       Safety
the waste. Dried ore is fed into the processing plant through   The vermiculite team achieved 2 000 000 man hours,
a network of conveyor belts and is progressively screened       LTI free on 27 January 2010. This was a remarkable team
into different sizes before the vermiculite is separated        achievement considering the number of contractors
from the host rock by winnowing. After separation, the          employed and the 45 month build up to accomplishing this

     A group of miners return to the cage after a long shift.

28         Palabora sustainable development report 2009
Our economic contribution continued...

target. This success was driven by the implementation and        2008 with 88,6 per cent of the total production destined
following of a comprehensive safety strategy. The current        for export iron ore market. The remaining 323 921 tonnes
approach is to make safety not just a goal but an embedded       of magnetite, which was in line with 2008 production of
value system, a way of life.                                     321  000 tonnes, was produced mainly for domestic coal
                                                                 washery to satisfy steady domestic demand. Furthermore,
Vermiculite performance in 2009                                  the first shipment of 30 000 tonnes dense medium
Production of 193 541 saleable tonnes was 2 per cent ahead       separation magnetite was exported in the third quarter to
of plan for the year. Grades produced were large at 12 per       meet the growing demand of overseas coal washery.
cent, fine at 13 per cent and superfine at 3 per cent. The
ore body produced less material in some of the coarser           Improved rail logistics to the ports of Maputo and Richards
fractions resulting in a shortfall. The strong demand for        Bay continues to support the reclaim and reprocessing of
coarser grade vermiculite continues to exceed production         stockpile material by contract re-mining, to augment the
capacity and placed an increased strain on supply chain          current arising magnetite in order to fill available trains.
stocks in meeting customer demands.
                                                                 In addition to the rail-based organic growth model
A vermiculite product profit of 40,9 million rand was            being pursued for iron ore export business, Palabora has
generated during 2009 compared to a product profit of 75,2       entered into a study with IMBS to establish the feasibility
million rand during 2008. The decrease in profit was mainly      of using Palabora magnetite resource as a primary feed
due to the stronger exchange rate and stock variation, offset    for iron-making in Phalaborwa. This study on alternative
by higher sales volumes.                                         iron-making technologies will conclude the fit for purpose
                                                                 technology to be trialled on a plant scale.
Magnetite business
Combined magnetite production was increased by 46 per
cent to 2,84 million tonnes from 195 million tonnes in

                                                                                                                                Economic contribution

  99% pure copper being poured from the anode furnace into anode casting
  moulds on a big revolving wheel. About 240 tonnes of pure copper is cast
  per session and this amounts to approximately 800 anodes in total.

                                                                      Palabora sustainable development report 2009        29
Our social contribution
Our social contribution

Objective 3

Develop the potential of employees and
On 19 March 2009, Palabora lodged its application for         employee. 91,7 per cent of Palabora’s work force comes from
the conversion of “old order mining rights” to “new order     Ba-Phalaborwa.
mining rights” with the DMR in Polokwane along with its
SLP. Palabora is still awaiting approval thereof. However,    In order to effectively compile and implement the Palabora
the implementation of the SLP began in 2009.                  SLP, relevant and up-to-date socio-economic information
                                                              on the characteristics of employees, including their
The SLP is made up of six sections being:                     dependents, and affected communities, was gathered.
                                                              The Baseline Socio-Economic Trends Survey (BSETS) was
(i) The Preamble;                                             undertaken from 15 September to 26 September 2008.
(ii) Human Resource Development Programme made up
      of:                                                     The purpose of the BSETS was to:
      (a) Skills Development plan
      (b) Career path plan                                    1.    Determine the background socio-economic details and
      (c) Mentorship plan                                           dynamics of the Palabora workforce;
      (d) Internship and bursary plan                         2.    Determine the socio-economic characteristics of the
      (e) Employment Equity plan                                    environments surrounding the mine, and primary
(iii) Local-Economic Development Programme:                         labour sending areas; and
      (a) Social and economic background information          3.    Establish an accurate baseline to assist in the
      (b) Socio-economic impact of the operation on the             implementation of the SLP.
          mine community
      (c) Infrastructure development, poverty eradication     The BSETS primarily consisted of:
          and welfare creation projects
      (d) Measures to address housing, living conditions      1.    One-on-one socio-economic questionnaire interviews
          and nutrition                                             with a representative sample of employees (permanent
      (e) Procurement                                               and core contractor) at the operation, which formed
(iv) Programme for managing downscaling and retrench-               part of a broad socio-economic survey of Palabora’s
      ment:                                                         internal environment (mine);
      (a) Establishment of a future forum                     2.    An analysis of LED strategies, plans and initiatives in
      (b) Mechanisms to save jobs and avoid a decline in            the Limpopo Province, Mopani District Municipality
          employment                                                (MDM) and Ba-Phalaborwa Local Municipality (BPLM);
      (c) Mechanisms to provide alternative solutions and           and
          procedures for creating job security where job      3.    A detailed consultation process with stakeholders from
          losses cannot be avoided                                  Palabora, Phalaborwa, BPLM and MDM.
      (d) Mechanisms to ameliorate the social and economic
          impact on individuals, regions and economies        The bulk of the information was gathered by means of a
          where retrenchment or closure of the mine is        questionnaire survey with employees at Palabora and
          certain                                             a regional socio-economic analysis of the communities
(v) Financial provision for implementation of the SLP; and    affected by the mine.
(vi) Undertaking by the managing director and chairman of
      the board.                                              The questionnaire covered the following aspects:

Major indicators                                              •    Demographic background information of employees;
As at the end of December 2009, the Company’s actual          •    Socio-economic background information;
employment strength stood at 2 021 permanent and              •    Skills training and experience;
181  fixed term employees, making a total of 2 202. The       •    Employee household details;
average age of employees at the end of 2009 was 41,0          •    Housing and accommodation;
with an average length of service equating to 8,9 years per   •    Perceptions and concerns;

32      Palabora sustainable development report 2009
Our social contribution continued...

• External socio-economic environment;                             • Putting systems and performance indicators in place;
• Surrounding and labour sending communities; and                  • Implementing and reporting on the progress of SLP
• LED activities and the IDPs.                                       initiatives;
                                                                   • Measuring the sustainability and effectiveness of the
The survey data were captured into a customised electronic           SLP on employees and communities;
database, which was set up in a user friendly manner               • Engaging with stakeholders;
so that the personal and socio-economic information                • Integrating core contractors; and
could be easily accessed for further assessments, project          • The SLP will be implemented over a five year period
implementation, skills training and LED initiatives.                 (2009 – 2013), after which a new plan and target will
                                                                     be set.
Palabora has assessed and analysed the findings of the BSETS
and developed detailed action plans and projects for its SLP.      Employee Value Proposition
The results of the BSETS will be made available to the DMR         The Employee Value Proposition (EVP) that was introduced
and to the BPLM and MDM for integration into their IDPs.           in June 2008 as well as the emphasis placed by management
The data from the BSETS have been used to inform each              to retain scarce skills has resulted in a positive downward
section of the SLP and the formulation of detailed action          trend in labour turnover.
plans for its implementation, i.e. the findings from the BSETS
have informed the implementation of the Palabora SLP.              Labour turnover statistics
                                                                    Role                2007            2008           2009
A detailed consultation process was undertaken with
                                                                    Artisans             23%            13%             8%
stakeholders (Ba-Phalaborwa local municipality, unions,
employees, and core contractors) for the compilation of the SLP.    Professional         42%            19%             8%

Primary focus of the SLP                                           Employee relations
The SLP action plans are applicable to the permanent               The labour relations climate remained cordial in 2009
employees and core contractor employees of Palabora. The           despite the tough business and economic conditions during
primary focus areas of the SLP are:                                2009 including the changes to the NUM branch leadership
                                                                   and the 2010 Solidarity wage negotiations.
•   Increasing literacy/numeracy;
•   Implementing career development;                               With the support of the unions and employees, the Company
•   Providing skills development opportunities;                    successfully implemented the employee engagement
•   Mentoring Historically Disadvantaged South Africans            survey actions identified during the 2008 Rio Tinto global
    and empowerment groups;                                        engagement survey. These survey actions are critical for the
•   Providing study grants, bursaries, scholarships, learner-      business to position the value proposition necessary to sustain
    ships to employees and the community;                          the business, ensure its competitiveness and prominence
•   Increasing HDSA participation in management;                   regarding safety, business leadership and attraction and
•   Increasing women’s participation in mining;                    retention of talent. The implementation of the historic
•   Fostering enterprise development;                              multi-year wage agreements with both NUM and Solidarity
•   Alignment with the IDPs of BPLM and MDM;                       continued successfully although under severe pressure by the
•   Implementing local economic development projects,              adverse higher CPI. On the other side, collective participation
    which focus on basic services and infrastructure, poverty      and engagement with organised labour in various forums
    eradication and welfare creation;                              such as Employment Equity, Skills Development and HIV/
•   Improving housing and living conditions of employees;          AIDS continued productively.
•   Providing access to adequate basic services and housing;
                                                                                                                                     Social contribution

•   Providing access to primary health care;                       Employment equity and women in mining
•   Ensuring healthy nutrition;                                    At the end of December 2009, the HDSA at professional
•   Increasing the participation of HDSAs and communities          and management level was 42 per cent, which is 2 per cent
    in procurement opportunities;                                  above the base target of 40 per cent required by the Mineral
•   Continuing HIV/AIDS awareness programmes and                   and Petroleum Resources Development Act/Mining Charter.
    Voluntary Counselling and Testing (VCT);                       Concerted efforts and focus was also made to progress
•   Transforming Palabora in line with the Mining Charter;         females into the business which resulted in the number of
•   Maintaining and establishing training centres;                 female employees in the business increasing to a historic
•   Initiating a Future Forum (FF) with management and             9,3 per cent. However, the Company prioritised female
    employees;                                                     employment in core mining roles, employment of the
•   Committing adequate funds for the SLP initiatives;             disabled and the numerical expectations by government.

                                                                        Palabora sustainable development report 2009           33
Our social contribution continued...

     Soon-to-be assistant chefs gather around their day’s work in a state-of-the-art training kitchen. By the end of their six-
     month course, their skills will enable them confidently to take up employment at local lodges and hotels, some of which
     have a policy to recruit from the Palabora Foundation’s pool of Food Production and Cooking graduates. Others may use
     their training as a springboard to further studies, eventually graduating as fully-qualified chefs.

The chart below shows the Company’s progress and                                             Training and development
standing on HDSA at professional and management levels.                                      Training and organisational development
                                                                                             Focus was maintained on collaborative systems to underline
                                                                                             and form the basis for globally compliant capability
  HDSA at professional and management levels                                                 development practices in the business. Activities centred
                                                                                             •   Integration of revised “The way we work” and “Leading
                                                                                                 at Rio Tinto” programmes into training programmes;
                                                                                   4 2, 0%
                                            4 1, 5%

                                                                4 1, 5%

                                                                                             •   Participation in national and sector talent management
                                                                                                 and skills development forums and groups to assure
      30                                                                                         knowledge of current practices and objectives;
                                                                                             •   Revised and newly implemented systems and processes
                                                                                                 to drive mentoring, coaching and development of
      20                                                                                         talented employees, as well as employees with potential
                                                                                                 for accelerated development in terms of the social and
                    1 7, 1 %

                                                                                                 labour plan;
                                                                                             •   Graduate development continued in alignment with Rio
                                                                                                 Tinto, with revised structures to include regional talent
       0                                                                                         management in future;
                  20 0 7                2008                   Jan            De c           •   Design of the new Rio Tinto Front Line leadership
                 aver a ge            a v e r a ge            2009           2009
                                                                                                 Development Programme, to merge with the EMEA
                               A ct u a l             H DSA t a r ge t ( 4 0 % )                 programme;
                                                                                             •   Continued capacity and relationship building with
                                                                                                 organised labour and collaborative forums to foster a
                                                                                                 sound and positive skills development environment;

34         Palabora sustainable development report 2009
Our social contribution continued...

•   Close relationships with the Palabora Foundation
    continued in the following areas:
    • Design of new and enhancement of existing skills
       development structures;
    • Support for community based ABET training
       initiatives; and
    • Inclusion in safety leadership training for the
       development of Foundation leadership;
•   ABET training saw most Palabora candidates passing to
    next levels, and a successful World Literacy day function
    was hosted by Palabora;
•   Support of the Social and Labour Plan development
    initiatives also saw the initiation of a Palabora core
    contractor forum which showed great progress in terms
    of people development amongst contractor groups; and
•   Continuation of secondary school scholarship
    programme, aligned with Foundation/ Palabora talent
    development programmes, saw the first four Grade 12
    graduates, with excellent results.

Rio Tinto Capability Development initiatives
impacting on Palabora human capital development                        A new graduate of the Skills Development programme
plan                                                                   receives his award in the graduation ceremony that
•   Global banding – final alignment of internal bands with            marks the end of his training and the beginning of his
    global benchmarks, and the implementation of global                new career in the building trade.
    bands to supervisor level; and
•   Talent management – the maintenance of a database,
    and personal development plans for people with
    potential and/or specialist and integration of Business
    Unit and functional HR Reviews.

                                                                                                                                     Our social contribution

    Gilbert Pilusa (mechanic) completes a module on basic English instruction as part of his ABET training course
    requirement. The course is a certified adult education qualification in basic maths and English skills, as well as life
    orientation, metallurgy and basic engineering. There are currently 109 people on the course but the mine offers this
    to all employees and allows them to complete the course during allocated work hours. On average the course takes
    approximately two years to complete and so far there has been a 100% pass rate. The ABET training has been a critical
    part of the mines employee development programme.

                                                                         Palabora sustainable development report 2009           35
Our safety and health contribution
Our safety and health contribution

Objective 4

Prevent all injuries and occupational illness
The safety performance showed a significant improvement          at Palabora is accountable for his or her own safety. The
during 2009. The top-down drive and commitment from              collective goal for all of the above is zero.
management and their teams in terms of safety has resulted
in increased safety awareness amongst the other work force,      To achieve this goal in 2010, Palabora will drive a more
including contractors and suppliers.                             hands-on approach in terms of safety leadership with
                                                                 emphasis of the four pillars of our 2010 strategy namely:
During 2009, Palabora embarked and improved on several
high level safety initiatives in order to improve its safety     1.   Safe Leaders
performance which included but was not limited to:               2.   Safe Employees
                                                                 3.   Safe Practice
                                                                 4.   Safety Recognition
• Semi Quantitative Risk Assessment (SQRA)
• Strategic Process Safety Risk Review                           Visible Felt Leadership and portraying genuine care towards
• Refinement of the Disaster Management and Recovery             employees and contractors in order to foster mutual respect
  methodology                                                    and trust will also be high on the agenda.
• On-site Palabora Safety Improvement Plan and Strategy
                                                                 To drive a culture of zero tolerance for unsafe acts and
Due to the effective implementation of the corrective            conditions, we will ensure that all employees and contractors
actions identified during the SQRA, Palabora managed to          comply with our 2008/9/10 safety improvement plan and
achieve a risk reduction of 12 per cent for 2009 versus a        strategy described in the diagram below. We recognise that
target of 10 per cent per annum. Of significance is that         all stakeholders are keen to see our success and we will be
Palabora reduced its SQRA identified risk by 30 per cent of      communicating frequently on the progress of our safety
a possible 35 per cent reduction over a two year period.         performance.

Emphasis was placed on the reporting of injuries which
brought about an improved correlation between the
different classes of injuries in terms of numbers as for Birds
triangle, to 1:2:6 referring to LTI, MTC and FAC respectively.

Medical Treatment and First Aid Cases saw decrease
and  increase respectively in 2009 versus 2008 (MTCs –
9 in 2009 vs. 27 in 2008 and FACs – 111 in 2009 vs. 95
in 2008).

The Lost Time Injury Frequency Rate decreased from
0,33  in 2008 to 0,29 in 2009. The All Injury Frequency
Rate decreased significantly from 0,88 in 2008 to 0,50  in
2009 as a result of the reduced reported number of medical
treatment cases.

Palabora is optimistic that with commitment, dedication
and participation of all role players in its safety efforts,
it will be able to attain a targeted additional 20 per cent
reduction in all injuries during 2010.

The safety of our employees
The safety and health of Palabora employees and contractors
is a core value of the Palabora business and of paramount
importance to the Palabora management team.

We firmly believe all injuries and occupational illnesses
as well as safety incidences are preventable. Everyone

38      Palabora sustainable development report 2009
Our safety and health contribution continued...

 A safety and production meeting before the shift starts work. This meeting is
 used to discuss safety procedures and production targets, as well as to update
 on all and any changes to the operations underground. SHEQ is a critical
 part of any mine, and constantly revisiting safety procedures keeps the
 accident rate low (AIFR 0,88).

         Lost time injury frequency rate from January 2006 – December 2009







               Jan 08
               Feb 06
               Mar 06
               Apr 06
               May 06
               Jun 06
               Jul 06
               Aug 06
               Sep 06
               Oct 06
               Nov 06
               Dec 06
               Jan 07
               Feb 07
               Mar 07
               May 07
               Jun 07
               Jul 07
               Aug 07
               Sep 07
               Oct 07
               Nov 07
               Dec 07
               Jan 08
               Feb 08
               Mar 08
               May 08
               Jun 08
               Jul 08
               Aug 08
               Sep 08
               Oct 08
               Nov 08
               Dec 08
               Jan 09
               Feb 09
               Mar 09
               Apr 09
               May 09
               Jun 09
               Jul 09
               Aug 09
               Sep 09
               Oct 09
               Nov 09
               Dec 09

     Progressive all injury frequency rate from January 2006 – December 2009

                                                                                                                                 Safety and health contribution




               Jan 06
               Feb 06
               Mar 06
               Apr 06
               May 06
               Jun 06
               Jul 06
               Aug 06
               Sep 06
               Oct 06
               Nov 06
               Dec 06
               Jan 07
               Feb 07
               Mar 07
               May 07
               Jun 07
               Jul 07
               Aug 07
               Sep 07
               Oct 07
               Nov 07
               Dec 07
               Jan 08
               Feb 08
               Mar 08
               May 08
               Jun 08
               Jul 08
               Aug 08
               Sep 08
               Oct 08
               Nov 08
               Dec 08
               Jan 09
               Feb 09
               Mar 09
               Apr 09
               May 09
               Jun 09
               Jul 09
               Aug 09
               Sep 09
               Oct 09
               Nov 09
               Dec 09

                                                                             Palabora sustainable development report 2009   39
Our safety and health contribution continued...

Lost time injury history by month from 2003 to                                 Palabora is fully aware of such potential health risks in
2009                                                                           the  business and maintains a staff of four employees in
                                                                               the Occupational Hygiene and Radiation section to support
             2003 2004 2005 2006 2007 2008 2009                                the business to ensure that the health of workers is not
     Jan       0      3       2          0         1           0          0    adversely affected. Levels of temperature, ventilation,
                                                                               noise, illumination, dust, hazardous substances, gases
     Feb       1      1       1          1         0           1          1
                                                                               and radiation are monitored and in high exposure areas,
     Mar       2      1       4          2         0           3          2    programmes of measurement, control and risk reduction
     Apr       2      0       2          2         4           2          1    are in place. Four levels of control are recognised, namely
     May       0      0       1          1         1           1          0    eliminating the risk, controlling the risk at source,
                                                                               minimising the risk, and as a last resort and in so far as risk
     Jun       2      0       0          0         0           1          1
                                                                               remains, providing personal protective equipment (PPE).
      Jul      2      4       3          2         2           0          1
     Aug       1      2       3          2         0           2          3    All employees and contractors undergo pre-engagement
     Sep       1      2       0          5         1           3          0    medical examinations to ensure fitness to work. This
                                                                               is followed by regular risk based medical examinations
     Oct       3      0       0          0         2           2          1
                                                                               during employment and an exit medical examination when
     Nov       1      0       1          2         0           0          1    leaving the company.
     Dec       2      1       5          1         4           1          1
 Totals       17      14     22      18            15         16          12   There were no cases of occupational diseases reported
                                                                               during the year.

                                                                               Dust and gas
                                                                               The control of dust and gas exposures on site follows
 Lost time injury history by month from 2003 to 2009                           the guidelines set by the DMR. The low occurrence of
                                                                               occupational lung disease amongst the existing workforce
     25                                                                        confirms that effective controls are in place. These controls

                                                                               • Re-entry which is observed after blasting;

     15                                                                        • Regular wetting down of material before loading,

                                                                                 shovelling or hauling is initiated;


     10                                                                        • Watering down of dirty roads to reduce liberation of
                                                                                 airborne pollutants;
                                                                               • Capturing dust at source by means of wet scrubber and
                                                                                 bag house systems; and
                                                                               • Atomised water sprays at tipping points to prevent
              2003   2004   2005   2006      2007       2008       2009          airborne dust.

                                                                               Where engineering control is not possible, areas are
                                                                               demarcated as respirator zones. Pictograms are posted
Occupational health                                                            at entry and exit points of process plant areas and entry
Occupational diseases are defined as those diseases                            is prohibited unless employees are wearing approved
or ill health conditions which are primarily caused by                         respiratory equipment. Employees and contractors are
exposure to physical, chemical, biological, ergonomics                         issued with respiratory equipment free of charge.
and psychological agencies in the workplace. Typical
diseases include diseases of the lung (asbestosis, silicosis),                 Regular planned maintenance of controls continued during
diseases of the skin (dermatitis), diseases of the musculo-                    the year to ensure correct functioning of relevant extraction
skeletal system (back problems, white finger), diseases of                     and ventilation systems.
the ear (mainly noise induced hearing loss), as well as less
tangible diseases such as work related stress, fatigue and                     The DMR has issued a milestone programme for silicosis,
ergonomic conditions.                                                          which has the final objective of no more new cases

40          Palabora sustainable development report 2009
Our safety and health contribution continued...

of silicosis  occurring amongst previously unexposed             • The DMR has also issued another milestone programme
individuals. We believe the milestone is achievable.               for noise induced nearing loss, which has an objective
                                                                   that by 2013 the total noise emitted by all equipment
Hazardous substance control                                        installed in any workplace must not exceed a sound
Data sheets for all hazardous substances on site are available     pressure level of 110 dB(A) at any location in that
on the Company electronic network. Hazard sheets contain           workplace;
all relevant information about a particular substance            • After December 2008, the hearing conservation
including flammability, toxicity, medical and pollution            programme implemented by the industry must ensure
precautions (16 Point Material Safety Data Sheet MSDS).            that there is no deterioration in hearing greater than
Safety appointees are, in terms of the Mine Health and Safety      10 per cent amongst occupationally exposed individuals;
Act, required to ensure that material safety data sheets           and
are available for all hazardous substances in their area  of     • Palabora will be evaluating opportunities in 2010 to
responsibility at point of storage and use. The database is        see which equipment that exceeds the 110 dB(A) can
continually being reviewed and approximately 50 per cent           be either replaced or engineered in such a manner to
of all the MSDSs are now up to date from suppliers and are         reduce the noise levels to be less than 110 dB(A).
electronically available.
                                                                 Radiation control
Requests for the purchase of all new substances are              Hazard assessments have been carried out by Palabora’s
forwarded, together with material safety data sheets, to         own radiation protection officers and, where necessary,
the SHEQ Department for approval, prior to the substance         external radiation experts (RPS). These assessments
being allowed on site.                                           determine the areas within the mine and community
                                                                 that require radiation controls. Ways to reduce radiation
Noise                                                            levels and, ultimately, employee and civilian exposure,
The Occupational Health and Safety Act, No 85 of                 are constantly being sought and the ALARA (as low as
1993 requires that controls be put in place where the            reasonably achievable) principle is followed.
maximum noise level exceeds 82 dB(A). Routine noise
surveys are carried out throughout the mine property and         Radioactive scrap and equipment is prevented from leaving
where noise levels are found to be in excess of this limit,      the mine and strict monitoring is undertaken to ensure
appropriate measures are taken to reduce the high level of       levels are below the required limits. Effective control is
noise at source. Where this is not practicable, a Hearing        maintained by cleaning contaminated equipment at a
Conservation Programme, as required by the DMR as per            dedicated scrap and decontamination facility on the mine.
SABS 083 code of practice, becomes applicable. Personnel in      Continuous analysis of all the export products is conducted
the affected areas are provided with custom made hearing         to ensure legal compliance.
protection devices, and pictograms are also placed at all
entrances to these areas to warn employees and visitors.         The Radiation Protection Programme and its procedures
The entire mining operations have been divided into noise        at Palabora were reviewed in 2009 and all outstanding
zones and have been demarcated accordingly.                      issues were resolved and submitted to the National Nuclear
                                                                 Regulator (NNR) during the year. A risk assessment for the
Ongoing programmes of employee awareness education,              Palabora work force was conducted during the year which
engineering controls and issuing of custom made hearing          was also submitted to the NNR for approval.
protection devices are in place. Another programme is
                                                                                                                               Safety and health contribution

in place to ensure the maintenance of all custom made
hearing protection.

                                                                     Palabora sustainable development report 2009        41
Our safety and health contribution continued...

Objective 5

Minimise the spread of HIV and AIDS
The impact of HIV/AIDS continues to be felt in Palabora        confidential counselling. Important to note is that he does
and Phalaborwa as is the case in the rest of the country.      HIV plus general health and wellness education. This reduces
The effects, though difficult to quantify due to the           any stigma that could be attached to his job that could
confidentiality and stigma that still surrounds the            otherwise have prevented employees from talking to him.
disease, include absenteeism, reduced productivity, loss       He also counsels persons with conditions like hypertension,
of personnel  and increased direct and indirect costs. It is   diabetes, obesity, substance dependence and stress.
realised that there are no quick fixes for the pandemic.
                                                               Peer Group Educator programme
The Company does not discriminate against HIV positive         The Company has a group of approximately 55 trained
                                                               peer  group educators. This small but enthusiastic team is
employees. These employees are supported by counselling,
                                                               doing outstanding work. They operate under the leadership
emotional support and vitamin supplements in addition to
                                                               of the Peer Group Educator (PGE) committee and the full
their medical aid programmes. Medical aid is 50  per cent
                                                               time Health and HIV educator. The committee’s role is
subsidised by the Company. Through the medical aid
                                                               to provide leadership and vision to the PGEs in a way
programmes, employees have access to HIV treatment and
                                                               that will enhance the HIV and AIDS programme, thereby
many of them return to productive work whilst they stay on
                                                               contributing to the sustainable development and growth
treatment. During 2009 there was an average of 80 known
                                                               of the Company. The main function of PGEs is to give five
positive employees still fit and working. Employees that
                                                               minute HIV talks and one-on-one awareness discussions at
are too sick to continue working and are not responding
                                                               shop floor level. They have monthly activities on which they
to treatment, are assisted by the medical and pensions
                                                               compile reports that are submitted to the HIV and Health
departments to go on a disability pension via the Company
                                                               Educator. Monthly meetings are held where progress,
pension fund and the Company’s disability insurers.
                                                               problems and new initiatives are discussed.
Palabora believes that only sustained education and
awareness will eventually pay off to prevent the spreading
                                                               Summary of awareness programmes
of more infections. To this end, the Company has several       • All Company training sessions also incorporate an HIV
ongoing initiatives.                                             awareness module;
                                                               • HIV slogans have been displayed on the safety board at
HIV and AIDS steering committee                                  the mine entrance as well as on pay slips;
The committee consists of members of Palabora                  • The company supported the HIV Candle Lighting Day,
management, the Human Resources Department, the                  which was presented by the community HIV initiative.
Medical Department, the Palabora Foundation and the              This is an annual event to remember those infected and
Community HIV Programme as well as NUM’s full time               affected by HIV as well as those who have passed on due
shop steward and Solidarity’s secretary. The unions were         to conditions related to it. The Company is always invited
incorporated after the HIV and AIDS steering committee           to the candle lighting event: the managing director and
resolution not to create a separate or subordinate forum         some of the employees attended;
to this one. The committee co-ordinates plans and reviews      • Palabora commemorated the World AIDS Day on
progress on a regular basis.                                     1 December 2009. The Peer Group Educators arranged
                                                                 for an industrial theatre for awareness on the World Aids
HIV and AIDS education and awareness                             day. A local theatre group, ‘Entangeni Entertainment’
This is the main aim of the Company’s HIV activities. The        performed an HIV play called, ‘the Shadow’. The play
Company believes that every employee should have access          was about the challenges of HIV in the community with
to the right HIV information so as to empower them to            regard to risky sexual behaviour, the silence about HIV
protect themselves and to know how to handle the disease         and the community solidarity required for overcoming
at a personal level and in the community. To achieve the         these negative attitudes.
highest level of awareness, the following is maintained:         Custom branded lunch cooler bags were handed to the
HIV and health education                                       • Voluntary counselling and testing is continuously
The company has a full-time position for an HIV and health       advocated and available free of charge for employees
educator. This incumbent occupies himself by increasing          and contractors. VCT outreaches were also done by
awareness, giving talks and lectures mine wide at safety         visiting some departments like Vermiculite operations,
meetings, contractor inductions and other gatherings. He         Underground and the Refinery. In the months that these
is a skilled educator and has suitable office facilities for     areas were visited the uptake was significantly higher.

42      Palabora sustainable development report 2009
Our safety and health contribution continued...

Summary of prevention programmes                                  • HIV treatment: The Company facilitates access to ARV
• Condom distribution: Condoms are supplied at strategic            treatment for all employees by a 50:50 subsidised
  locations all over the mine and co-ordinated by the HIV           medical aid for all employees. The available medical
  educator and the PGEs;                                            aid options have HIV programmes where a patient can
• STI treatment: All employees belong to a medical aid and          register to obtain up-to-date support, care and HIV
  STIs are now treated by the general practitioners of the          treatment. There are a number of employees on ARV
  employees; and                                                    treatment through these programmes.

HIV and health related statistics
                                             2003        2004         2005        2006      2007        2008       2009
 HIV voluntary tests                          56          309          284         453       726        826        1 718
 Number of condoms issued each year         34 600      19 300       59 600       57 600    64 200     64 000     70 000
 People reached by HIV talks                3 656        2 766        2 445       3 287     2 497       3 101      2 183
 during generic induction
 People reached by HIV talks at              492          286          831         962       458        260            154
 sectional SHEQ meetings
 Audio-visual audiences                      699         5 287        4 174       5 072     4 700       5 941      5 035
 People reached by HIV presentations         N/A         1 015         850         885       280        4 467      5 805
 by Training Officers
 People reached by general health           1 045         998          353         674       515        624            883
 topics at sectional SHEQ meetings
 People reached by health counselling        N/A          118          103         119       114        149            90
 sessions and other health problems

                                                                                                                                  Safety and health contribution

  Dr Van Tonder looks at a digital X-ray of an employee’s chest. The clinic has
  recently upgraded (2008) to a digital X-ray machine which makes the process
  of reading, sending and receiving X-rays much easier.

                                                                        Palabora sustainable development report 2009         43
Our environmental contribution

                                 Sustainability report
Our environmental contribution

Objective 6
Minimise the environmental impacts of Palabora’s
operations through optimal usage of resources
Minimise the environmental impacts of Palabora’s operations through optimal usage of resources
Palabora, forming part of the Rio Tinto group, is committed to reducing its impact on the environment in which it
operates by managing its activities in an environmentally responsible manner. Palabora has incorporated the Rio Tinto
Environmental Policies and Standards into the site Safety, Health, Environmental and Quality (SHEQ) policy and the
standards and procedures that guide the operations in how to manage and limit the impacts on the environment. This
ultimately contributes towards a sustainable approach to the way natural resources are used and undisturbed aspects are
conserved for future generations.

The following table is a summary of the objectives and targets with actual performances of key indicators and the main
impacts on the environment for 2009.

 OBJECTIVES                                  CEILINGS 2009              ACTUAL 2009              CEILINGS 2010
 Air Quality: Reduce SO2 and dust
 emissions to atmosphere
 • SO2 annual ground level                        15ppb                     16ppb                     <15ppb
   concentrations at Station 2
 • Sulphur Capture (overall)                      >77%                       56%                       >77%
 • kg SO2 emitted to atmosphere per                294                       908                        294
   tonne Cu anode produced
 • Total tons SO2 emitted to                     30 282                    52 967                     26 460
   atmosphere during year                    <75 μg/m3/day              1 exceedance              <75 μg/m3/day
 • Dust level at Station 7 (PM10)            <40 μg/m3/year             21 μg/m3/year             <40 μg/m3/year
 Water Management: Reduce fresh
 water intake and increase recycle
 • Fresh water consumption/intake               15Ml/day                 15,2Ml/day                 15Ml/day
   (Ml) – excluding rainfall impounded          5 475/year               5 587/year                 5 475/year
 • Recycled water                                24 126Ml                 37 390Ml                   28 293Ml
 Greenhouse gas emissions for Copper                                                               Targets 2013
 Operations; Reduce GHG emissions
 per tonne of Cu
 • Electricity consumption (MWh)                <687 184                   650 304                   <767 481
 • Total greenhouse emissions (tonnes
   CO2-e)                                        886 579                   922 957                  1 089 713
 • Total energy use (GJ)                        5 934 771                 5 645 313                 6 671 217
 • Energy Efficiency Value (GJ per                 72,9                      81,3                      68,5
   kt new Cu cathode; 2008 is the
   baseline year)
 Non-mineral waste management:                  See table 1               See table 1               See table 1
 Reduce amount of waste to be
 disposed and increase recycle
 Land stewardship: Keep land                 Disturbed: 0 ha           Disturbed: 3,6ha          Disturbed: 0 ha
 disturbances to a minimum and             Rehabilitated: 17 ha       Rehabilitated: 0 ha     Rehabilitated: 17 ha to
 rehabilitate areas once available                                        signed off                 sign off
 Not to have significant environmental       Category III – 0           Category III – 0          Category III – 0
 incidents                                   Category IV – 0            Category IV – 0           Category IV – 0
 Public complaints: Minimise impact                <5                         30                       <15
 on local community
 ISO 14001 certification: Ensure a                Retain                   Retained                   Retain
 credible operational Environmental
 Management System is in place            ISO 14001 certification   ISO 14001 certification   ISO 14001 certification

46     Palabora sustainable development report 2009
Our environmental contribution continued...

Air quality                                                                           been delivered and will be installed on converter No. 3 in
Sulphur Dioxide (SO2)                                                                 Quarter 1 2010. The second hood is expected to be delivered
During the Copper smelting process, sulphur contained in                              in the second quarter 2010 and installation thereof will be
the Copper concentrate is transformed from a solid to the                             scheduled for converter No. 2 in the third quarter 2010.
gas sulphur dioxide (SO2).

Over the years Palabora has been able to control its SO2
                                                                                       Total sulphur capture
ground level concentration and SO2 emissions, however,
over the past two years it is evident that maintaining
this performance has been a challenge for the ageing
infrastructure requiring above normal maintenance and
replacement. The capturing of the waste product, which are                                              80                                                     81     83

off gases from the smelting process, has underperformed                                                                                                 75
                                                                                                                     71                72
                                                                                                              68               69                68                          66

                                                                                       Perc en t a ge
during 2009 as critical equipment failed, requiring                                                     60
substantial capital injection to replace the gas capturing and
conversion infrastructure for the production of sulphuric                                               40
acid in order to continually improve sulphur capture by
means of capturing the off gases (utilising a waste product)
from the smelting process for producing sulphuric acid in
order to continually improve sulphur capture.








Palabora’s main aim is to ensure that SO2 emissions
to the environment remain below the Department of
Environmental Affairs (DEA) annual guideline limit of                                                                       Act ua l          Tot a l sulph ur ca pt ure

19ppb. Palabora has set itself an internal limit of 15ppb
and has a contingency plan in place to ensure that the                                Minor gas leaks and certain plant equipment are repaired
above DEA guideline limit is adhered to. Some of the
                                                                                      either on-line or when opportunity maintenance allows.
measures include halting production when conditions
require it.
                                                                                      During August and September 2009 the acid plant was
                                                                                      taken off line for a major shutdown.

 SO2 GLC (Sulphur dioxide ground level concentrations at Station)                     Activities included in the shutdown were replacing of
                                                                                      sections of corroded ducting, cleaning and levelling of
                                                                                      acid distribution troughs inside the drying and absorption
                                                                                      towers and replacement of corroded piping, replacement of
                                                                                      the 98 per cent acid cooler and SO2 blower outlet bellow,
                                                                               15     repair of gas leaks at the pre-heater and No. 2 catalyst inlet
                    14     14
 Mean (pp b)

                                     13                                 13            and the identifying and blanking-off of leaking tubes in
               10                                         11     11                   No. 1 and No. 2 cold heat exchangers.

                                                                                      During 2009 the daily guideline limit of 48ppb was
                5                                  6
                                                                                      exceeded 47 times between ambient monitoring stations 2
                                                                                      (Molengraaf street south of town) and 6 (light industrial area
                                                                                      in Phalaborwa), compared with the 34 daily exceedances
                                                                                                                                                                                         Environmental contribution

                                                                                      recorded in 2008. 23 of these exceedances occurred in the








                                                                                      first quarter of 2009. Various factors contributed to these
                                  St a t i o n 2            Ceiling                   exceedances such as the emissions from the converter
                                                                                      aisle, stack and low conversion efficiencies at the acid
                                                                                      plant. Ground level concentrations then continually
Although sulphur capture has been increasing steadily over
the years, 2008 and 2009 saw a considerable decline in                                improved with each quarter of 2009 and can be attributed
sulphur capture, with the 2009 average at 56 per cent. A                              to operations being more proactive and shifting the focus
total of 52 967 tonnes of SO2 was emitted to the atmosphere                           to not exceeding hourly limits (by interrupting operations
in comparison to 40 406 tonnes during 2008. The lower                                 whenever it is predicted that the limit might be reached).
sulphur capture is attributed to high fugitive emissions in                           Copper production was interrupted for a total of 401 hours
the converter aisle due to leaks in the primary hoods on                              during 2009 to minimise exceedances of ground level
No. 2 and 3 converters. The first new primary hood has                                concentrations.

                                                                                                        Palabora sustainable development report 2009                                47
Our environmental contribution continued...

As Palabora continually strives to improve its impact on                                                   sulphur dioxide and dust) and an impact modelling study
ambient air quality by means of improved engineering                                                       for each pollutant.
methods, maintenance and administration of its
processes, various improvements are planned for 2010.                                                      The transfer of results and methodology thereof to the
Such improvements include conducting opportunity                                                           Palabora personnel will take place early during 2010. The
maintenance when possible to repair gas leaks, repair of gas                                               ADMS 4 dispersion model (Cambridge Environmental
leaks in the converter area during downtime for refractory                                                 Research Consultants) was used to predict the contribution
repairs, the scheduling of a major project to refurbish the                                                of Palabora’s emissions to ground-level concentrations
reverberatory furnace waste heat boilers (over the next two                                                of the various pollutants concerned. The model provides
years – with phase one having been completed), upgrading                                                   predicted ground level concentrations for the highest
and improving the collection efficiency of the existing                                                    hourly and daily values in any one year and also for the
reverberatory precipitator (commencing in the second                                                       annual average concentration. These values can then be
quarter of 2010), identification of gas emission sources                                                   compared to the appropriate legal standards or guidelines
from the reverberatory furnace, converters and acid plant                                                  for corresponding averaging periods. In this case, standards
and development action plans to resolve issues in the                                                      for SO2, PM10 and dust fall-out proposed by SANS and
short, medium and long term, operational controls are                                                      published for adoption in South Africa were used.
being focused on eliminating and minimising emissions,
the installation of three new primary converter hoods (in                                                  A dust fall-out programme commenced in June 2009. The
Quarters 1,3 and 4 in 2010), requesting capital expenditure                                                objectives of the monitoring programme are to determine
for the phased upgrade of the converter precipitators,                                                     the exposure of populations in the residential, agricultural
conducting a base case study to identify the main focus                                                    and industrial settings near Palabora’s operations; to
areas for the SO2 gas and dust issues in order to comply                                                   identify threats to natural ecosystems; to determine
with the new legislation requirements ( all proposals will                                                 compliance with local, provincial and national standards;
be evaluated and assessed to determine the way forward in                                                  to provide objective inputs for air quality management,
order to comply with legislation and ensure that we protect                                                both for the Company and government; to aid source
our community and environment).                                                                            apportionment; and for trend qualification, to identify
                                                                                                           future problems or progress against management/control
With the exception of the upgrading of the existing                                                        targets. Seven Stockholm gauges have been placed at
reverberatory precipitator, all other improvements planned                                                 various locations within Palabora Mining Company, Kruger
for 2009 were assessed, addressed or completed.                                                            National Park and the Hans Merensky Hotel and Spa. In
                                                                                                           addition to these gauges, results from another four gauges
A project was undertaken during 2009 to investigate                                                        are shared with Foskor. The stations are categorised as
the impact of the Palabora Mining operations on the                                                        background, residential, industrial and source stations. The
ambient air quality in the vicinity. The project consisted                                                 short timeframe for data collection and analyses does not
of a baseline assessment (ambient meteorological data,                                                     yet allow for trending or reporting.

 T o n n e s o f C O 2 emit t e d p e r t onn e of Cu cat hod e p r od uc e d

                           700 000                                                                                                                                 13,5

                           600 000                                                                                                                                 12,5

                           500 000                                                                                                                                 11,5
 Carbon dioxide (tonnes)

                           400 000                                                                                                                                 10,5

                           300 000                                                                                                                                 9,5

                           200 000                                                                                                                                 8,5

                           100 000                                                                                                                                 7,5

                                0                                                                                                                                  6,5
                                       2001              2002             2003              2004           2005            2006         2007   2008       2009

                                     CO2 emitted related to electricity      CO2 emitted related to Fuel          Cu Cathode produced
                                     Ceiling tonnes CO2/t Cu                     Actual tonnes CO2/t Cu

48                            Palabora sustainable development report 2009
Our environmental contribution continued...

                                                                                                                        Greenhouse gases
 Co 2 emitted as a result of electricity consumption                                                                    Adhering to Rio Tinto policies, Palabora is committed to
                                                                                                                        reducing its impact on climate change, by assessing and
                                                  3% 1%                                                                 reducing its greenhouse gas emissions as opportunities
                                        7%                                                                              arise.
                                                                                                                        A total of 922 957 tonnes of CO2 were released into the
                                                                                                                        atmosphere compared to the 916 031 tonnes in 2008. The
                                                                                      61%                               decrease in copper production resulted in poorer efficiencies
                                                                                                                        in the fossil fuels used in the smelting and refining
                                                                                                                        processes. Marginal ore containing <0,2 per cent copper
                                                                                                                        grade was crushed and milled during the year and thereby
                                                                                                                        slightly increased electricity consumption. Less fossil fuel
                                                                                                                        was used in the tail end of the copper process, however it
                                                                                                                        was not enough to result in the desired efficiencies for the
         M in in g             C o n ce n t r a t o r                    Sm e l t e r            Re fin ery             fuels used (see Fig. 3).
                                           VO                            Other

                                                                                                                        640 549 tonnes of CO2 were released as a result of the
                                                                                                                        indirect purchase of electricity from our electricity supplier
 CO 2 emitted as a result of fossil fuel consumption
                                                                                                                        Eskom (see Fig. 4). The balance was due to the use of various
                                                                                                                        fossil fuels such as coal, diesel and heating fuels used in the
                                                                                                                        smelting process (see Fig. 5).
                                             3% 3%
                                    9%                                                                                  Figure 6 shows the total energy use per tonne of copper
                                                                                                                        produced and in particular the decline in efficiency of
                                                                                                                        energy use. Once more it must be noted that the energy used
                                                                                                                        for the production and sale of magnetite (which increased
                                                                                                                        by 42 per cent from 2007 to 2008) increased by 45 per cent
                                                                                                                        from 2008 to 2009. This is included and reported against
                                                                                                                        copper production.

                                                                                                                        Palabora developed a Climate Change Programme in 2006
                                                                                                                        for 2007-2009. Energy saving projects identified during
                                                                                                                        an external energy review have been incorporated into
         M in in g             C o n ce n t r a t o r                    Sm e l t e r            Re fin ery
                                                                                                                        the plan. The plan is driven by the Energy and Emission
                                             VO                          Other
                                                                                                                        Reduction Committee established in 2006. The replacement
                                                                                                                        of the ursaco furnace in the Rod Casting plant continued to
                                                                                                                        show a reduction in the consumption of LPG in the new
 Energy use per ton of Cu produced                                                                                      furnace during 2009 reduced greenhouse gas emissions by
                                                                                                                        another 10 per cent (29 per cent compared with the use of
     6 400 000                                                                                                     90   propane gas in 2007 in the older furnace).

     6 200 000
                                                                                                                        Ambient dust
                                                                                                                                                                                          Environmental contribution

                                                                                                                        Dust is generated throughout the mining process. Several
     6 000 000
                                                                                                                   80   programmes have been put in place to either prevent dust
     5 800 000                                                                                                          from becoming airborne or to alleviate the environmental

                                                                                                                        impact of dust.
     5 600 000
                                                                                                                        Tailings dam walls have been capped with vermiculite
     5 400 000                                                                                                          waste material, as it has proven to be an adequate growth
                                                                                                                        medium where topsoil is absent. The 17 ha of land
     5 200 000                                                                                                     65
                                                                                                                        rehabilitation done on the copper and vermiculite tailings
                     2 00 1

                               2 00 2

                                         2 00 3

                                                       2 00 4

                                                                2 00 5

                                                                             2 00 6

                                                                                        2 00 7

                                                                                                 2 00 8

                                                                                                          2 00 9

                                                                                                                        dams were seeded in the first quarter of 2008. This work
                                                  GJ                        GJ/t Cu
                                                                                                                        was not in a condition to be signed off as rehabilitated since
                                                                                                                        2009 was a very dry year. This aspect will be reassessed in

                                                                                                                             Palabora sustainable development report 2009           49
Our environmental contribution continued...

2010 once the vegetation is acceptable according to the         previously disadvantaged communities. Eleven species
targets set for rehabilitated areas. Water carts are used to    listed as Category 1 species in the Conservation of
spray gravel roads and haul roads on a daily basis so as to     Agricultural Resources Act and also the National
reduce the dust from these roads whilst dust suppressant        Environmental Management Biodiversity Act, are controlled
is sprayed on inactive tailings dam areas prior the onset       on site. The eradication programme is implemented
of the August to October windy season. The growth in the        according to management sectors focusing on the water
magnetite business involved the hauling of magnetite over       courses where higher levels of infestation are recorded. An
a few kilometres and dust control was very managed on           alien species that is currently being eradicated on site is the
these haul roads. The vermiculite mining haul road was          smelter bush. Invasive alien plants have been identified as
applied with dust-a-side which also proved to be successful     one of the urgent serious threats for continued availability
in reducing the amounts of dust normally generated from         of water resource and biodiversity.
this source.
                                                                Palabora continued to be an active member of the
Dust control systems such as electrostatic precipitators,       Phalaborwa Alien Plant Committee, which is a collective
extraction fans, bag houses and scrubbing towers are in         forum, including representatives from the surrounding
place in the process plants and the efficiency thereof is       industries, local government, Provincial and National
ensured through the regular maintenance and testing             authorities, the Kruger National Park as well as non-
of system effectiveness. The upgrading and repairing of         governmental organisations. A collective approach to alien
these systems at the Smelter complex have already been          plant eradication in the greater region and the sharing of
mentioned above.                                                information results in more effective eradication methods
                                                                of undesired plants being carried out at this forum.
The main dust source is the tailings dam complex.
Ambient dust levels such as Particulate Matter 10 micron        Waste management
(PM10) are monitored on a continuous basis at station 7,        At various stages in the mining and beneficiation process,
which is down wind of this source on the edge of the            mineral and non-mineral waste is generated. Palabora
residential areas of Phalaborwa. This gives an indication of    aims to manage the waste generated in an environmentally
the respirable component of ambient dust blown towards          responsible manner in order to prevent pollution and
the community. The ceiling of <75 μg/m3/day was exceeded        reduce its impact on the environment.
on one occasion, during August.
                                                                Waste has been classified in terms of type and risk and
The climatic conditions when the limit was exceeded were        an entrenched waste-recycling programme resulted in the
very dry and the wind speed was up to 10,28 m/sec. No           following waste streams being recycled during 2009:
community complaints were received from Phalaborwa
town residents relating to high dust levels during 2009.        • Process waste such as tailings and waste rock is
                                                                  quantified and deposited in designated areas in order to
The community complaint from Lulekani residents (reported         facilitate possible future use;
via the local municipality in 2008) regarding dust from the     • Used oil is recovered for recycling and is then used in the
gravel road on the eastern perimeter of Lulekani from Pompey      timber felling industry;
gate to Lulekani Stadium, was resolved. Trucks transporting     • Hazardous waste is drummed and disposed of by a
the silica from Pompey Silica mine now use tarred surface         registered contractor at a nationally approved H:H landfill
through the town eliminating this dust source.                    site. This is mainly comprised of used grease, fluorescent
                                                                  tubes and chemical waste from the laboratory;
The average PM10 for 2009 measured at 20.91 μg/m3/year          • Clean metal scrap is recovered for recycling;
against the ceiling of <40 μg/m3/year.                          • Domestic waste is disposed of on a registered GSB
                                                                  landfill site (General Waste, Small landfill, No significant
Alien plant control                                               leachate produced);
Palabora has an extensive alien plant eradication               • Wood waste is recovered for recycling and delivered to
programme which has been implemented for over                     local communities when possible;
15 years, and the maintenance programme is effective in         • Sewage effluent is treated at three registered effluent
keeping the spread of alien plants in check. The need for         treatment plants situated on site and is recycled back to
sustainable control of invasive alien plants is a legislative     the process via the return water tailings dam;
requirement with multiple benefits for sustainability           • Plastic recovered from the Palabora landfill site is
beyond environmental protection. The control of invasive          recycled; and
alien plants provides a unique opportunity for enabling         • Bulk copper concentrate bags are re-used off-site
employment and business development opportunities to              (2 000 bags per month).

50      Palabora sustainable development report 2009
Our environmental contribution continued...

 Mineral waste                        2002       2003        2004         2005       2006       2007        2008       2009
 Copper tailings (million t)          11,2        14,1       11,7          8,2        9,3        10,5       14,7       13,40
 Slag (kt)                            256         231        239          228         226        196        242         213
 Vermiculite waste rock (kt)         2 898       2 130      1 462         962         786        828       1 217       2 595

 Non-mineral waste         2002       2003       2004        2005         2006       2007        2008       2009       Target
 Oil recycled (kl)         155         187        142            145       206        235        287         210        230
 Wood recycled (t)         125         68          47            37        57          64         48         36          40
 Metal recycled (t)       2 660       3 174      4 164       3 259        2 728      2 617      2 673       2 245      3 300
 Domestic waste (t)       1 663       1 267       789            751       699        675        605         565
 Hazardous waste (t)           36      28          50            57        39          44         48         42
 Ash (t)                 No data     No data     2 808       2 569        2 648      3 607      3 752       2 836

Water management                                                   The Rio Tinto target for fresh water consumption is a 6%
Palabora has closed loop water circuit i.e. all fresh and mine     reduction by 2013, from the 2008 baseline. This equates to
effluent water used is reused resulting in zero discharge          320Ml reduction by 2013.
from the mine. Two point source discharges were reported
during the year (5 November 2009 and 14-17 December                The main change in the recycling of water for 2009 was
2009). The December discharge was as a result of a heavy           to change the intake water used in the underground
storm event (91,7mm of rain fell within three hours) which         refrigeration process from raw water to gland (process)
could not be contained. Both events were reported to the           water. This project was not completed in 2009. The revised
Department of Water Affairs (DWA). 488mm of rainfall was           plan is to complete the work in Q2 2010.
recorded at Palabora during the 2009 calendar year. The
53 year average is 510mm.                                          During 2009 Palabora developed a dynamic, electronic
                                                                   surface water balance model. The model was implemented
On 16 October 2009, Palabora Mining Company received               to facilitate the operational water management on a season-
their Integrated Water Use Licence from the DWA.                   to-season basis, short-term water management planning as
Compliance reporting has commenced and will be done as             well as long-term water management planning providing
per the licence requirements.                                      predictive capability to closure.

Palabora was not able to maintain a reduced level of fresh         Palabora hopes to achieve the following goals through the
water intake from the local water board in 2009. 15,2 Ml/          use of the water model:
day (see Fig. 7) was used against the ceiling of 15Ml/day for
2009. This excludes on average 2,41Ml/day exported to the          • Improve control of water supply/demand and allow
Hans Merensky Estate for irrigation purposes. Additional             reconciliation of losses;
water for the Foskor circuit was used to ensure water              • Evaluate impacts of possible changes to reticulation
quality requirements for the Foskor process were met. The            design on the water balance;
total fresh water import component for 2009 was 5 587Ml            • Evaluate opportunities for efficiency or “fit for use”, and
with an additional 3 474 Ml of impounded rainfall. An
                                                                                                                                    Environmental contribution

                                                                     aid in the setting of targets;
additional 3 048 Ml of poor quality water from groundwater         • Ensure compliance with Rio Tinto Environment Standard
dewatering and seepage capture was also used in the
                                                                     on Water Use and Quality Control;
process. A total of 37 390 Ml was recycled from the main
                                                                   • Improve the management of risk in relation to discharge
return water tailings dam in the various processes that
                                                                     in breach of licence conditions; and
can use the poorer quality water. This amount increased
                                                                   • Facilitate annual environmental reporting.
substantially because of the new use for the slurrying of
magnetite with barge water in the Return Water Tailings
Dam (RWTD).

                                                                       Palabora sustainable development report 2009            51
Our environmental contribution continued...

        The historical fresh water intake at Palabora









                     1994   1995   1996   1997   1998   1999   2000       2001     2002       2003   2004   2005   2006   2007   2008   2009

                                                               Act ua l           Ta rget s

Biodiversity                                                                     in ‘elephant incidents’ throughout the study area where for
Palabora experienced drought conditions up until the start                       example vehicles have been damaged and one speculates
of the 2009/10 rainfall season. This drought did not appear                      that this may be due to increased elephant densities and
to affect the fauna in any significant way as very few deaths                    reduced availability of resources and resulting in elevated
were recorded due to these dry conditions. The presence of                       stress levels. As in the previous 19 years, feeding class ratios
water on site had the usual attraction for the larger bulk                       are skewed with high proportions of bulk grazers (including
grazers, in particular elephant breeding herds that for the                      hippo and buffalo – acceptable limits) and mixed feeders
first time roamed large parts of the property that has not                       (including elephant – high) while selective grazers occur in
seen these herds before. The veld condition assessment                           critically low proportions.
conducted annually in the Cleveland reserve indicated that
for the second season running there would be grazing stress                      Woody density varies across the different areas, with
through the winter. Tree damage by elephants reached                             fluctuations broadly corresponding to ‘wet’ (decreased
extreme proportions in quarter four and as soon as the                           density) and ‘dry’ (increase in density). Woody density
first rains fell in November the majority of the elephants                       increased to 2003/04 levels on Palabora. The tree canopy
returned to the Kruger National Park.                                            cover for Palabora continued to decline gradually (for the
                                                                                 third year running). The decline is not steep but will be
                                                                                 monitored given the importance of canopy to palatable
The perennial composition and cover (distance) measures
                                                                                 productive grasses. The relatively stable tree canopy cover
declined markedly following the close to drought 2008/09
                                                                                 indicates that the larger trees provide most of the canopy,
season. The cover (tuft) declined marginally. There is
                                                                                 with the smaller less established trees, where most of
currently a moderate-high proportion of perennial grasses
                                                                                 the seasonal increases and decreases in density occur,
while the cover (tuft and distance) can be said to have
                                                                                 contributing relatively little. Palabora has embarked on a
declined (smaller tuft sizes much further apart). At best
                                                                                 ‘big tree’ study to determine the impact of elephant on trees
the perennial composition and cover will probably be
                                                                                 larger than 5m. This study was started in 2006/07 and the
maintained, depending on expected rainfall in the next                           results will be presented once we have sufficient data to
season. Fortunately the game at Palabora can move to                             pick up any trends.
other areas.
                                                                                 The Palabora bird monitoring programme continued in
The stocking rate of the larger herbivores is slightly above                     2009 with the additional feature of linking the sightings
the upper guideline. Because the system is effectively an                        with global positioning. The surveys were conducted every
“open” one, with access to riverine vegetation and free                          two months and quarterly Coordinated Waterbird Counts
movement of animals between Palabora and neighbouring                            (CWAC). Palabora participated in its 10th Annual Rio Tinto
properties, the mobile species elephant and buffalo (hence                       Bird Watching Day where 222 bird species were identified.
the lower prey stocking rates) and assumed that the hippo
population will graze on both sides of the rivers. The                           Palabora continues to be involved in the Ground Hornbill
possibility for game movement means that the need for                            project where a nesting site has been successfully used by
active management is reduced. There has been an increase                         a family of Southern Ground Hornbills to encourage the

52                 Palabora sustainable development report 2009
Our environmental contribution continued...

population growth of the red data species in the area. The             Environmental Management System
Southern Ground Hornbill family group returned to the                  Palabora has a well established Environmental Manage-
nest again in 2009 and have successfully raised their fourth           ment System (EMS) developed in line with the requirements
chick in consecutive years. Previous years’ chicks, now sub-           of the ISO 14001 standards. On an annual basis, the mine
adults, continue to actively take part in feeding the latest           confirms its certification status through independent
addition to the family. The second chick that hatched in               external auditors. The mine has since retained certification
2008 was recovered by Endangered Wild Life Trust (EWT).                and is continually improving the systems by addressing
This now sub-adult will soon be big enough to be released              areas of concern raised by the auditors. The EMS forms
into the wild.                                                         the basis of implementing the SHE Policy. Key to the
                                                                       success of implementation, effectiveness and continual
Rehabilitation                                                         improvement of the systems are addressed in the form of
A target of 17,2 ha was anticipated for rehabilitation in              reviews conducted on an annual basis. Areas requiring
2009. This figure was mostly comprised of the capping and              improvement are addressed in the form of corrective
grassing of the copper tailings dams’ slopes. Due to poor              actions included in the mine environmental management
species composition and germination the rehabilitation                 plans.
efforts for 2009 were unsuccessful and require further
attention in 2010. Additionally, magnetite remining has                Incidents
resulted in the re-disturbance of rehabilitation due to                A total of 106 environmental incidents were reported
the ramping up of production for this project. The focus               during 2009, which was more than double that recorded
for rehabilitation efforts in 2010 will be associated with             in the previous year. Forty-nine of these incidents were
copper tailings dams’ slopes and 3 ha of rehabilitation on             related to high sulphur dioxide levels (daily exceedances
the vermiculite tailings dam.                                          of the 48ppb guideline limit for ambient conditions) in the
                                                                       community as measured by the strategically positioned
The maintenance fertilisation planned for 2009 was                     monitoring stations. The root causes of these incidents are
not conducted because of a very dry season and was                     covered under the air quality – sulphur dioxide section.
consequently postponed to 2010.                                        The balance of the incidents reported in 2009 were mostly

                                                                                                                                      Environmental contribution

  Cattle egrets roosting along the banks of the Olifants River, seen
  from a tourist cruise that is one of the many tourism operations
  nurtured by the Palabora Foundation.

                                                                           Palabora sustainable development report 2009         53
Our environmental contribution continued...

hydrocarbon related with a few chemical spills and these             species, two are introduced species. Eight species of bird
were all promptly cleaned up, limiting the impact on the             were recorded for the first time since 2000.
                                                                   Community engagement
Most of the non-gas incidences were caused by mechanical           Palabora engages with a number of external stakeholders
failure, valve failure, negligence, and lack of inspection prior   who are either interested in or affected by Palabora’s
to the commencement of activities, lack of communication,          activities. Our stakeholder engagement process allows us
poor planning and lack of training.                                to understand the concerns, needs and priorities of the
                                                                   communities associated with the operations as well as
Environmental training and awareness                               regulators’ expectations. Palabora is an active member
In terms of general awareness for employees and                    of the Phalaborwa Environmental Community Forum,
contractors, ongoing induction programmes and awareness            which is a collective forum, including Sasol and Foskor.
campaigns were held at the mine. Palabora also revised its         The purpose of this forum is for community members to
environmental management training material which is                voice their concerns regarding mining’s possible impact
included as part of the mine induction programme for new           on the environment and the community. One public
employees and contractors.                                         meeting was held in quarter four of 2009.

Some of the key awareness campaigns conducted at
Palabora and neighbouring communities include:

• Water Week – with specific focus on water saving tips
  and pollution prevention;
• Arbor Week – Palabora Mining Company, Palabora
  Foundation together with Foskor, Birdlife South Africa,
  Kruger National Park and Sefapane Lodge jointly hosted
  the 2009 National Arbor Week celebration. The event
  took place at Lulekani Community Hall. The purpose
  of the event was to focus attention on the importance
  of trees, to encourage the community to plant trees
  and take care of the existing trees. In addition Palabora
  visited four schools and donated trees to raise more
  awareness on tree planting and good environmental
  practices;                                                         Learners at a remote rural school in Maseke take
• Environmental Clean-up Campaign – Palabora                         a break from their studies.
  hosted the 2009 Environmental Clean-up Campaign
  in partnership with Ba-Phalaborwa Municipality and
  Birdlife South Africa, as part of raising awareness and
  changing public perceptions on waste management and
  pollution prevention. This involved seven schools from
  the Phalaborwa town. The waste and garbage that was
  collected and captured into data sheets was submitted
  to Ba-Phalaborwa Municipality for inclusion into the
  National Statistics as well as comparison to previous
  years; and
• Rio Tinto Birding Event – took place with as much
  enthusiasm as in previous years. The event took place
  on the mine site of Palabora Mining Company and
  the adjacent Cleveland game reserve, in partnership
  with Rio Tinto and Birdlife South Africa as well as
  Palabora Foundation. Both the school’s birding and the
  employees-community event took place in October.
  A  total of 222  birds were recorded, a record for the
                                                                     A kudu bull stands stock still in
  Palabora Mining Company (and possibly even for the
                                                                     the afternoon sun.
  global Rio Tinto event). Of the 222 birds spotted, nine
  are endemic to Southern Africa, eight near-endemic

54      Palabora sustainable development report 2009
Our environmental contribution continued...

Objective 7
Prepare for closure in order to leave behind a
safe and environmentally acceptable site and
an economically self sustaining community

Closure Management Plan
Palabora’s aim is to prepare for closure in order to leave
behind a safe and environmentally acceptable site and an
economically self-sustaining community.

Palabora updated the Closure Cost Estimate component of
the Closure Management Plan in 2009 and the estimated
Present Closure Obligation (PCO) cost for direct costs as at
December 2009 was 863,2 million rand where the Total
Projected Cost (TPC) estimate is 873 million rand. The
revised Life of Mine plan, which projects 2016 as the date
for the copper stream to cease operating, was used for these

The financial provision in the Rehabilitation Fund as at
31 December 2009 was 360,4 million rand (current market
                                                               Miners discuss the blockage in the draw point in
value). A contribution of 2,81 million rand was made to
                                                               front of this Elphinstone 1700g LHD.
the Rehabilitation Fund at the end of 2009 after receiving
approval from the DMR.

 The TPC estimate was updated to reflect December 2009
 money terms and is as follows:
 Rehabilitation                          228 million rand
 Infrastructure removal                  146 million rand
 Monitoring                                11 million rand
 Employee benefits                       321 million rand
 Other                                   167 million rand
 Total                                    873 million rand                                                             Environmental contribution

                                                               Miners coming off shift.

                                                                 Palabora sustainable development report 2009     55
Our community development

                            Sustainability report
Community development

As Nelson Mandela once said, “Education is
the most powerful weapon which you can use
to change the world”. The Palabora Foundation
has taken this advice seriously for over twenty
years, changing the world for people in one
small part of South Africa

 Early learning centres provide a strong foundation for lifelong learning. By
 investing in these centres and other education institutions, the Palabora
 Foundation creates a pool of well-educated community members who will sustain
 community development long into the future.

58    Palabora sustainable development report 2009
Community development continued...

We support the holistic development of disadvantaged              To achieve their Communities Relations core business
people and communities by working with all stakeholders.          objective, Palabora will:

A shared vision towards community self-                           • Ensure that all Palabora and Foundation employees have
empowerment                                                         a common understanding of the policy;
Rio Tinto has made a strategic policy commitment to               • Seek adherence to this policy by the contractors and
contribute to sustainable development. This commitment              suppliers providing services to Palabora and the
has been characterised by leadership of the Global Mining           Foundation;
Initiative and efforts to build sustainable development           • Use the Integrated Development Plan as a cultural and
thinking into all aspects of the Group’s activities. More           socio-economic database of the communities within
specifically, Rio Tinto has developed a sustainable                 which Palabora and the Foundation operate;
development policy, which is “To ensure our businesses,           • Establish an ongoing consultation process that promotes
operations and products contribute to the global transition         consensus in the community towards a common vision
to sustainable development”.                                        and actions aimed at continuous improvement;
                                                                  • Evaluate the effectiveness of current programmes and
The approach taken by this diverse group has been to                initiate appropriate new programmes;
encourage the development of local solutions whilst taking        • Develop the necessary skills of Palabora and Foundation
account of, and bringing together, each operation’s particular      employees to deal effectively with communities
economic, community and environmental factors.  While               relations;
there is no universal “one size fits all” template, there has     • Integrate the communities policy into the Company’s
been a need for more specific policy guidance as the basis          long-term objectives and corporate plans, and establish
for moving forward.                                                 quantifiable and appropriate reporting arrangements;
Each Rio Tinto business is required to develop its business       • Strive towards best practice, at all times, through
case for contributing to sustainable development by:                information exchange with other Group companies and
                                                                    authoritative sources.
• Determining what the global transition to sustainable
  development means to the business – the risks and               Palabora’s policy on human rights is based on its support
  opportunities;                                                  for the United Nations Declaration of Human Rights,
• Engaging with stakeholders and examining what measures,         and enshrined in the South African Constitution. The
  targets and reporting requirements are necessary;               Company’s approach to local communities is set out in its
• Finding ways to include sustainable development                 Communities Policy and follows the Rio Tinto policy as
  principles in business plans and decision making; and           stated in “The way we work”.
• Investigating how social, environmental, economic and
  governance issues can be integrated.

Rio Tinto’s reputation as a leader in this area brings benefits
in interactions with host governments and communities.
There are also risks, however, and it is essential that Group
performance leads, or at least matches, this reputation in        M D Gili
practice. The local actions of each Rio Tinto business unit       Managing Director
will influence the Group’s overall reputation, hence the need     Chairman – Board of Trustees – Palabora Foundation
to embed sustainable development principles (outlined in
the Mining and Minerals Sustainable Development report)
into “The way we work”.
                                                                                                                              Community development

Our sustainable development is
more than lip-service

                                                                      Palabora sustainable development report 2009      59
Community development continued...

We, the undersigned, representing community stakeholders as specified below, certify that this Communities Relations
report for 2009 is a true and fair reflection of Palabora’s communities’ socio-economic initiatives and programmes in the
50 kilometre radius around Phalaborwa during the period under review.

 Name                      Organisation                                                         Signature

 J W Bayana                Ba-Phalaborwa Municipality, Director, Community Services

 I Masekwameng             National African Federated Chamber of Commerce,
                           Limpopo Chairman

 G Mhlongo                 Greater Phalaborwa Principals’ Association

 S Kudze                   The Rotary Club of Phalaborwa

 M R Peta                  Maphutha L Malatji District Hospital, Chief Executive Officer

 Kgoshi: A Malatji         Makhushane Traditional Authority

 Mmakgoshi: MC Shai        Mashishimale Traditional Authority

 Kgoshi: M Ntsanwisi       Majeje Traditional Authority

 Kgoshi: A Malatji         Maseke Traditional Authority

 Kgoshi: TP Malatji        Selwane Traditional Authority

 G Mudunungu               Ba-Phalaborwa Municipality, Mayor

 K Ntshaveni               Ba-Phalaborwa Municipality, Municipal Manager

 Z Smit                    Phalaborwa Chamber of Business, Chairman

60        Palabora sustainable development report 2009
Community development continued...

 “Phalaborwa” or “Palabora”?
 Prior to the establishment of the Palabora copper mine, geologists used the simple spelling “Palabora” when referring to the
 igneous ore body complex in the area. The copper mining venture was subsequently registered as Palabora Mining Company.

 Shortly afterwards, in the 1950s, a staff member of Foskor applied to the Place Names Commission to register the name
 of the small settlement town as “Phalaborwa”. In Sotho, this is the spelling for a word meaning “better than the south”.
 The name refers to the early migratory movements of local tribes in the area who moved south, later returning to the
 area for its better living conditions.

Foundation purpose                                                   • To minimise the impact of HIV and AIDS in the
“Sustainable Development at the Palabora Foundation means              community;
meeting the needs of the present without compromising the            • To facilitate tourism promotion initiatives to grow
ability of future generations to meet their own needs.”                tourism and promote BEE in tourism related projects;
                                                                     • To provide ABET language, literacy, numeracy, and end-
Purpose                                                                user computing classes to enable the Foundation and
To assist local communities to be self-reliant through sustainable     mine employees to access career and job opportunities;
development programmes.                                              • To move towards creating a sustainable Foundation.

We achieve this by                                                   Mission
Working in partnership with communities within a                     The Foundation’s mission is to promote and support
50 kilometre radius of Phalaborwa in the fields of:                  the holistic development of disadvantaged people and
                                                                     communities. We also believe in initially retaining operational
• Education:                                                         involvement in the projects we undertake. All our projects
  • INSET in maths, science and environmental education              aim to develop the communities they serve to the point where
  • Learner support programmes                                       ownership of a project can be progressively transferred to
  • Early childhood education                                        them, once sustainability through community capacity has
• Skills development training                                        been established.
• Business development
• Community health (HIV and AIDS)                                    In all its work, the Foundation takes a long-term view of
• Enterprise development                                             community development and strives, in partnership with
                                                                     communities, to encourage the growth of the following:
So that
The Foundation facilitates the establishment of a pool of
                                                                     • A significant pool of technically skilled, educated and
skilled people in local communities who can contribute to
                                                                       literate people;
the further development of the communities.
                                                                     • An efficient community management structure;
                                                                     • Community pride and loyalty; and
Strategic objectives of the Palabora Foundation
                                                                     • Leaders who epitomise these qualities, who are able
• To assist Rio Tinto Palabora Mining Company to meet the              to lead and manage wisely, and are committed to the
  socio-economic requirements of the Closure Statement;
                                                                       welfare of their people.
• To market and brand Rio Tinto Palabora Mining
  Company’s sustainable development programmes to
  local, provincial and national stakeholders;                       Non-discriminatory and neutrality principle
                                                                     The Foundation applies and promotes the principle of non-
• To assist Rio Tinto Palabora Mining Company to meet
  the requirements of government legislation and policy,             discrimination and it aims to serve the whole community
  including the MPRDA and Mining Charter;                            by adopting a neutral stance on ethnic, political and
                                                                     religious issues whilst serving as a bridge builder in society.
• To assist provincial government to improve the education
                                                                                                                                       Community development

  and skills base within the surrounding community by                No political or religious projects receive funding from the
  implementing education and skills training programmes;             Foundation.
• To provide business linkages and advice to emerging
  businesses from formerly disadvantaged communities;                Board of trustees and management
• To grow the economy of Ba-Phalaborwa by creating                   The Palabora Foundation was established in 1986 and
  entrepreneurial opportunities through enterprise                   is an independent educational trust registered with the
  development initiatives in association with the mines              Master of the High Court (Registration No IT 1035/87).
  and local businesses;                                              The Foundation is a non-profit organisation in terms of the
• To facilitate the implementation of local economic                 Non Profit Organisation Act of 1977 (Registration number
  development projects from the Integrated Development               003-920) and also a National Skills Fund accredited
  Plan in partnership with the Ba-Phalaborwa Municipality            provider (Provider ID 708). The Palabora Foundation
  and other stakeholders;                                            board of trustees meets quarterly to review the work of the

                                                                          Palabora sustainable development report 2009           61
Community development continued...

Foundation and the trustees’ executive committee receives      Internal auditors
a written report on a monthly basis.                           SAB & T was appointed as the internal auditor for 2008/2009.
                                                               The internal audit focused on the Director’s Office,
Chairman                                                       Information Technology, HIV and AIDS, and Education
M D Gili December 2008 to December 2009                        (INSET). Recommendations are being implemented to
                                                               improve processes and systems.
Executive trustees
M D Gili                                                       Details of attendance by the trustees at board meetings
P A McCallum                                                   during 2009 are set out below.
M C Letsoalo

Non-executive trustees                                          Name of trustee            4 May       Jul     29 Oct   9 Dec
M R K Segabutla                                                 M R K Segabutla             A           A        A       A
B M Masete                                                      B M Masete                   P          P        P       A
I Masekwameng
                                                                I Masekwameng                P          P        P       P
Mr M D Gili was elected chairman of the board of trustees       M D Gili                     P          P        P       P
for another term at the annual general meeting on
                                                                P A McCallum                 P          A        A       A
29 October 2009.
                                                                M C Letsoalo                 P          P        P       P
The board of trustees delegates the day to day management      A – Absent with apologies         P – Present
of the Foundation to the director of the Foundation assisted
by the finance manager and programme heads.                    Attorneys
                                                               Brink Cohen Le Roux were the attorneys for the Foundation
Management                                                     in 2009 and will continue as legal advisors in 2010.
M C Letsoalo      Director Palabora Foundation
M Reynecke        Acting Finance and Administration
                                                               Investment portfolio
                  Manager (January to 5 October 2009)
                                                               The Palabora Foundation investment portfolio is with
L V Mphadzha      Finance and Administration Manager
                                                               Allan Gray Limited. It once again performed to reasonable
                  (1 October to December 2009)
                                                               expectations during 2009 and stabilised towards the end of
                                                               the year. The market value of the Palabora investment fund
                                                               is 212 million rand with a book value of 175 million rand as
A Strauss
                                                               at 31 December 2009.
Trustees audit committee, governance and controls
The board of trustees’ audit committee (TAC) was               The national investment performed better than in 2008.
established in January 2003 and is an important element        Financial statements are presented to the board of trustees
in the trustees’ system of governance and control. The         on a quarterly basis and to the executive committee monthly.
TAC has adopted a formal written TAC charter. The TAC          These statements are also presented to the trustees’ audit
meets quarterly prior to the board of trustees’ quarterly      committee for approval. The gross budget for projects and
meetings. Numerous improvements are continually being          programmes for 2010, amounting to 32,63  million rand,
made every year to the governance and control procedures       was presented to the board of trustees on 29 October 2009
by the Foundation management team to ensure that high          and approved.
standards of governance are implemented and maintained.
                                                               The additional rollover capital expenditure of 5,4 million
The members of the TAC were:                                   rand was also approved at the trustees’ meeting on
C Lane           Superintendent Inventory – Palabora           29  October 2009. The additional rollover capital will be
B Masete         Non-executive trustee                         used to complete some of the Foundation’s infrastructure
J v Jaarsveld    Financial Manager Reporting – Palabora        commitments and delayed operational activities in the
                                                               following areas:
Secretariat                                                    • Phelang eating facility: complete, retention to be
A Strauss                                                          finalised;
                                                               • Road paving for Leboneng and Rixile Education Centres:
External auditors                                                  complete, retention to be finalised;
PricewaterhouseCoopers Inc was appointed as the external       • Rixile library entrance: complete, no retention;
auditor for the year 2008/2009. An excellent audit report      • Selwane Thusong Community Centre: complete,
was received for the year 2008. PricewaterhouseCoopers             retention to be finalised;
was also appointed to conduct the 2009 audit of financial      • Mashishimale clinic: construction to start in 2010; and
statements.                                                    • Maseke staffroom: construction to start in 2010.

62      Palabora sustainable development report 2009
Community development continued...

                                                                                                                     Palab or a Foun d at ion hist or ical op er at ing cost s
 Total gross budget by area for 2009
                                                                                                                     ver sus p lan (1 9 9 7 - 2 0 0 9 )

                                                  20%              Administration                                           35

                                                  29%              Education
                                                       2%          Bursaries
                                                       3%          Community projects                                       25

                                                       1%          ELC                                                      20
                                                       4%          Business development
                                                       8%          HIV/AIDS
                                                                   Awareness Campaign
                                                       4%          Local economic development
                                                       2%          Monitoring and evaluating                                 5
                                                       8%          Skills













                                                       5%          Capital
                                                  14%              Additional capital and
                                                                   approved expenses                                                                              Operating costs                                   Plan

Figure 1                                                                                                            Figure 3

  Donations to the Palabora Foundation (1986 - 2009)
                                           0,016 8,6

                                                                   0,034 6,8






















































                  Actual                                Planned
                                                                                                                                                                                                                                                               Community development

Figure 2

The safety representatives at all the sites have regular                                                            Regular safety audits and inspections have been conducted
weekly and monthly safety meetings with the full                                                                    at all Foundation sites during the year, and all findings
time safety officer. The safety officer focuses on safety                                                           reported and corrected where necessary. Satisfactory fire-
inductions for all the new skills trainees, employees and                                                           fighting drills and evacuations also took place at each
contractors. No lost time injuries occurred during 2009.                                                            centre throughout the year. Alcohol testing took place on a
The total hours worked without injuries up to the end of                                                            regular basis at all Foundation sites with one positive result
November 2009 amounted to 1 076 303. The Foundation                                                                 (a visiting community member) in 2009.
exceeded two targets for injury free working hours in
March and September 2009.

                                                                                                                            Palabora sustainable development report 2009                                                                                  63
Community development continued...

                                                             Partnerships are emerging as the most efficient way for
                                                             the Foundation to become involved in social development
                                                             programmes and projects in the area. Palabora, Foskor
                                                             Limited and Sasol Nitro are the major funders of the
                                                             Programme for Technological Careers (PROTEC). These
                                                             three companies also fund the Phelang HIV and AIDS
                                                             Community Programme in partnership with JOHAP/Oxfam,
                                                             the Department of Health and Social Development, the
                                                             National Development Agency and the National Lottery.

                                                             By accessing expertise and sharing resources and skills,
                                                             partnerships can provide mutual benefit whilst also giving
                                                             projects the critical mass and momentum they require
  The Palabora Foundation’s state-of-the-art Technokidz      for success. Over the years the Foundation has become
  computer centres provide an important educational tool     a partner with provincial and local government, other
  as well as enabling the learners to become familiar with   local companies, NGOs and communities in its efforts to
  computer technology.                                       improve the education and skills base, fight the high rate of
                                                             unemployment in the region, reduce the impact of HIV and
                                                             AIDS and stimulate local economic development.
Information technology
The Foundation’s IS&T department assisted with providing     The Foundation works with Ba-Phalaborwa Municipality
a connection to the rural Selwane community library          within the framework of the Integrated Development
project, co-developed by the Palabora Foundation and         Plan (IDP) in line with government requirements.
Ba-Phalaborwa Municipality. Selwane is located nearly        Sincere thanks are due to our local government partner,
40 kilometres away from any major telecommunications         Ba-Phalaborwa Municipality, and to all those that have
                                                             helped the Foundation succeed in making our communities
provider and has severely limited local services. The
                                                             more self-reliant.
library now has Internet and email access and, with the
municipality’s IP telephony, the facility to connect voice
communication to their internal network.
                                                             Education is widely recognised as the primary tool for social
                                                             and economic transformation. Nations and communities
PROTEC, Technokidz and Master Maths network projects
                                                             use their education systems to enhance economic growth
initiated in 2008 continued to serve the communities’
                                                             and their quality of life. Education is the first step in
youth by providing computerised facilities for learners
                                                             eliminating poverty, and high quality education is also
during 2009. All the PROTEC Internet centres’ computers      necessary to advance the democratic transformation of
and monitors were upgraded with new LCD technology           South Africa to combat sexism, racism and other forms
to replace the ageing CRT screens with better visuals and    of discrimination. One of the legacies of apartheid was
more power savings, modernising the centres further          poor education amongst the majority of the citizens of
and improving performance. The replaced systems were         the country, which impeded the development of technical
donated to the Frans du Toit Master Maths centre to boost    skills.
its maximum capacity to reach more local learners with its
highly successful programme.                                 In 2009 education, once again, continued to receive the
                                                             largest share of CSI funding overall, at 30 per cent.
Human resources
The Foundation staff complement stood at 103 at the end      Mathematics and science education is high on the
of 2009, of whom 51 were full time, 50 were part time        agenda  for corporate and government funding as a
contract employees and two were secondments.                 result of critical technical skills shortages in the country.
                                                             It is thus  important  that that the programme for the
A new Financial Manager was appointed on 1 October 2009,     recapitalisation of the further education and training
following the end of the previous incumbent’s secondment     colleges continues as planned and that additional
period.                                                      resources are diverted to this sector. South Africa’s overall
                                                             performance at school level in mathematics and science
Recognition of partnership arrangements                      education has been consistently poor.
The Foundation has a number of important partners
including the European Union, various departments in         Limpopo Province is one of the three poorest provinces
the Limpopo provincial government, non-governmental          in the country, and the major focus of the Foundation’s
organisations (NGOs), industrial and commercial              education initiatives is to upgrade mathematics and
corporations, Ba-Phalaborwa Municipality and private         science education in the rural and semi-rural schools. Some
individuals.                                                 of the schools are under-resourced, with limited learning

64      Palabora sustainable development report 2009
Community development continued...

  Small children from the Chuchekani primary Eco school
  busy weeding their veggie garden. The children are
  encouraged to learn about nature and healthy eating.
  This school is one of the many local schools that the
  Palabora foundation supports with teacher training, as
  well as maths and science development programmes.

materials and school equipment; some lack electricity and      implementing their new skills. The teachers themselves are
have high learner to educator ratios.                          delighted with their progress and one commented that she
                                                               no longer has to worry about unannounced visits like her
In tackling these challenges, the Palabora Foundation runs     colleagues who are not in the project.
two major programmes: teacher development and learner
support.                                                       To check the effectiveness of the programme, the
                                                               INSET team measures the learners’ performance in the
Teacher development programme                                  project schools. The systemic evaluation shows that the
In-Service Education for Teachers (INSET) aims to improve      learners achieve significantly higher marks than their
curriculum practice and delivery through developing            counterparts who have not received the benefits of the
effective teachers of mathematics and science in order to      INSET programme.
impact significantly on learner achievement at school level.
This is provided to teachers of numeracy, mathematics and
science in Grades R to 6. The Foundation’s INSET programme      Comparison of project learners’ results with national average
emphasises subject content mastery, teaching and learning
knowledge and skills, and classroom organisation and               60

The new INSET programme was introduced in 2008.
The  Foundation reduced the programme’s schools to
15 to enable a focused approach. In 2009 they added
18 more schools, bringing the total to 33 primary schools
and 96 teachers. The rationale remains to ensure that
the selected teachers and schools receive specialised and
focused input.

The two groups attended teacher development workshops
separately in 2009. The 18 new schools were offered
                                                                                                                                         Community development

                                                                          Term 1         Term 2             Term 3   National Average
modules on theories of learning and the new approach
                                                                                   Numeracy       Science        Maths
to teacher development (as conducted for the first group
during 2008), while the 2008 group was given subject           Figure 4
content workshops focusing on selected Learning Outcomes
and Assessment Standards.                                      Foundation Phase (Grade R to 3)
                                                               In 2009, 30 Foundation Phase teachers from the project
The programme has resulted in a range of new materials         schools attended five content workshops that incorporated
being made available to the teachers, such as three-           mathematics acquisition processes they had learned about
dimensional shapes constructed by the teachers during a        in 2008. Following the workshops, the Foundation Phase
workshop. The INSET Coordinators observe the teachers          Coordinator visited the teachers in their classrooms to
in their classrooms regularly to ensure that they receive      enhance their confidence in implementing the content
appropriate support and guidance, and that they are            knowledge and new approaches they had learnt in line with

                                                                    Palabora sustainable development report 2009                    65
Community development continued...

the INSET quality assurance and monitoring objectives. The      A successful workshop took place in Polokwane in July.
Coordinator observed 113 lessons and held pre- and post-        The focus was on helping Mathematics educators to
observation meetings.                                           use Microsoft Excel to draw different types of graphs.
                                                                Casio donated the most recent Casio82fxplus calculator
The learners’ mathematics language and vocabulary have          to each  participant and one Casio82fxplus emulator to
gradually improved over the year. Some teachers are still       the Palabora Foundation Coordinator. Others present
struggling to implement the new approach to teaching,           to support the initiative were Patrick Resehwete, the
although the teachers have changed their attitudes towards      national project manager from South African Mathematics
classroom visits.                                               Foundation (SAMF), and Sophia Molope, Senior Education
                                                                Specialist (SES) from Gauteng Department of Education
During school support visits, the Foundation Phase              (e-learning section).
Coordinator identified a weakness in feedback and
reporting skills in many teachers. These skills are important   Intermediate and Senior Phase General Science
to the success of the teacher development programme, so         (Grade 4 to 9)
the Palabora Foundation held a mini workshop to address         In 2009, teachers from 33 schools attended five science
the problem.
                                                                workshops that were run in response to the findings of the
                                                                systemic evaluation report. The report said that:
Intermediate and Senior Phase Mathematics
(Grade 4 to 9)
In 2009, 32 Grade 6 mathematics teachers from 32 project        • Learners were unable to name resources to be used when
schools attended workshops that were run in response to the       performing a simple experiment;
findings of the systemic evaluation report. The workshops       • Teachers ignore the involvement of learners when they
covered learning theories, the Palabora Foundation’s              plan for an investigation or experiment;
new approach to teacher support, and subject content for        • Learners were only involved by watching the teacher
Learning Outcome 5 (Data Handling). The teachers were             demonstrating to them how the experiment is performed;
shocked when taken through the systemic evaluation              • Learners are not even given the opportunity to touch the
report and agreed to take up the challenge of addressing          resources; and
the findings.                                                   • They were told about the results instead of conducting,
                                                                  observing and communicating the results among
After the workshops, the Intermediate and Senior Phase            themselves and with the teacher.
Coordinator conducted school support visits to ensure
quality classroom practice. The Coordinator observed            After the workshops, the Coordinator conducted school
105 lessons.                                                    support visits to ensure quality classroom practice. The
                                                                Coordinator observed 105 lessons.
All of the project schools received the Assessment Resource
Bank (ARB) as part of the Department of Education’s             Poor planning is one of the factors that impeded teachers
Foundation for Learning Campaign. The Coordinator               in properly implementing the curriculum. The Department
went through the ARB content activities dealing with two        of Education within the district has provided the schools
Learning Outcomes in great detail because the teachers          with the Learning Area Framework and the Work Schedules
were not presenting these topics adequately due to lack of      in the General Education and Training (GET) band. The
familiarity with the content.                                   Palabora Foundation always assists teachers with preparing
                                                                lesson plans, organising the classroom and managing and
FET mathematics teachers supported by DST                       understanding the terminologies embedded in the National
This project, which began in 2006, forms part of the            Curriculum Statement.
Department of Science and Technology’s (DST) National
System of Innovation, in collaboration with the Palabora        Intermediate and Senior Phase Technology
Foundation, the Department of Education, and the                (Grade 4 to 7)
Association for Mathematics Education of South Africa           At the end of 2009, 31 primary schools in Lulekani and
(AMESA) as the implementing agent.                              Namakgale received Grade 4 to 7 technology kits and tools
                                                                worth thousands of rand. The Foundation conducted a
The project aims to increase the number of people from          technology teacher needs analysis, which confirmed that
historically disadvantaged communities in mathematics,          teachers were tackling the Technology syllabus without any
science and technology careers. The vehicle to achieve this     of the equipment required by national curriculum policy.
objective is to develop and support a group of quality FET      The policy requires that learners build structures and
mathematics teachers in each province.                          demonstrate processes. The majority reported that they
                                                                do not teach sections of the syllabus, such as Systems and
The Palabora Foundation Mathematics Coordinator has             Control, due to lack of equipment.
been managing the Limpopo group of 15 FET teachers and
two facilitators. Three of the teacher participants are from    To address their needs, the Foundation ran a weekend
Phalaborwa schools; two of these are Master Maths and           workshop from 4 to 6 December 2009 and came up with
Technokidz facilitators at Rixile Education Centre.             the idea and donated technology “starter” kits.

66      Palabora sustainable development report 2009
Community development continued...

  The Palabora Foundation runs the World Wildlife Fund’s Eco-Schools project in Ba-Phalaborwa.
  This Eco-School in Namakgale produces enough vegetables to feed all its learners and some of the
  families in the surrounding area. This provides vital nutritional support to the disadvantaged as
  well as teaching the learners and educators about the value of caring for the environment.

The starter kits will enable the schools to teach sections of     Microsoft Excel. At the end of five years teachers should be
the syllabus that they have previously omitted due to lack        able to search for teaching and learning material such as
of facilities.                                                    example lesson plans and network with teachers from other
                                                                  schools or countries.
Computer training for teachers
The Department of Education’s deputy director general             Environmental education
of system planning and monitoring, Firoz Patel, told              The purpose of the programme is to create and raise awareness
The Teacher that 550 million rand per annum over five             of environmental and sustainable development issues through
years will be handed to the provinces for the provision           carbon footprint reduction and environmental programmes
of laptops. This comes in the wake of Education Minister          for the community, educators and learners.
Naledi Pandor’s mantra that schools must provide quality
education. “She [Pandor] realises that quality education is       Biodiversity partnerships
often elusive and that the computer can catapult one over         WWF Eco-Schools project
the tedious development route,” said Patel (Mail & Guardian,      The Palabora Foundation Eco-Schools programme of 2009
                                                                                                                                  Community development

3 April 2009).                                                    achieved 87 per cent success, with 12 schools out of 13
                                                                  successfully completing the course. The annual assessment
In support of this plan by the Department, the Palabora           of portfolios of evidence took place on 3 November 2009 in
Foundation lost no time in testing the Active Touch               Haenertsburg. The results were as follows:
programme to train teachers how to use personal computers.
Over 200 teachers responded to the advertisement for the           Achievement                           Number of schools
computer training course but the Foundation was only
able to accommodate 60 of them for a three-afternoon               International Big Green Flag                   3
workshop.                                                          Gold Certificate                               2
                                                                   Silver Certificate and Green Flag              1
During the workshop the teachers learnt basic skills from
using a keyboard and mouse to creating score sheets on             Silver Certificate                             6

                                                                       Palabora sustainable development report 2009         67
Community development continued...

Two schools failed the assessment this year despite previous achievement and assistance from the programme. One school
had been affiliated with the Department of Forestry but joined the Foundation-supported schools towards the end of the
second school term.

Limpopo Eco-Schools performance (2009)

                                                                                                                Sum of
                                                                                                             Flag, Gold
                                                                                                    Inter-   and Inter-
 Supporter/node       Registered Submitted        Bronze        Silver      Green         Gold    national     national
 DEDET                        19          11                                    4            6           0           10
 Lapalala                     18          18             7          2           3            6           0            9
 Independent*                 23          19             4          7           5            1           2            8
 Bird Palabora
 Foundation                   13          11             1          5           1            1           3            5
 Bochum                         8          6             3          0           1            2           0            3
 Grasslands                     7          7             4          1           1            1           0            2
 DWAE                         19          15             7          4           1            0           0            1
 Wildlife Trust                 3          1             1          0           0            0           0            0
 Pfukani                        4          2             0          1           0            0           0            0
 Delta EEC
 (Ga-Kobe)                      5          1             0          0           0            0           0            0
 Municipality                   2          2             1          1           0            0           0            0
 Total                       121          98            28         21          16           17           5           38

*Supported by regional coordinator                            Mopani District Municipality chose Chuchekani to host
                                                              the Sanitation and Health Week 2009 celebration on
Eco-Schools win prizes                                        26 May. The purpose of the celebration was to encourage
Eco-Schools are encouraged to keep up their good work by      rural communities to take care of their sanitation. This
winning everything from cash to radios, and Phalaborwa        recognition was a great achievement for the hard-working
schools did well in 2009 with help from the Palabora          Eco-School. Over 100 people attended including the
Foundation.                                                   Honourable Mayor, Cllr Gloria Mudunungu (then Valoyi).

Phalaborwa Primary School won 4 thousand rand in prize        Back in the March round of competitions, Rethusitswe
money when they took first prize in the Young Inspirational   received a bicycle and a DVD player as first prize,
Farmer competition sponsored by the Department of             Chuchekani received a bicycle as a second prize and
Agriculture.                                                  Lulekani Primary School received a DVD player as a third
Chuchekani Primary School won first place in the Carbon
Foot Print Management project competition and won a           On 20 March learners from various Eco-Schools attended
nursery worth 10 thousand rand after they submitted a         a Little Eaglet workshop, ringing of birds and a birding
successful nursery project proposal. The nursery will be      guided tour around the wetland at Sefapane Lodge, which
built in the school yard.                                     was a very informative and exciting outing for the learners
                                                              from disadvantaged backgrounds.
In July, 12 schools participated in the Limpopo State of
Schools Environment 2009. Two Eco-Schools, Makhushane         The Foundation would like to thank BirdLife South Africa
and St. Patrick Mathibela, obtained second and third          and the World Wide Fund for Nature of South Africa
place in the Drawing category and another Eco-School,         Eco-Schools programme for their selfless contribution to
Rethusitswe, came second in the Report category.              the success of eco-schools in Phalaborwa.

68       Palabora sustainable development report 2009
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Kruger to Canyons Birding Route                                   project. This creates employment opportunities for the
The Kruger to Canyons Birding Route project is an eco-            community members as well as promoting environmental
tourism development project for the benefit of birds, their       awareness.
habitat, and communities through responsible avitourism.
This programme is a BirdLife South Africa initiative and is       The Kruger to Canyons Birding Route currently employs
jointly funded by Rio Tinto Palabora Mining Company and           three full time staff, two on contract, who manage the
Rio Tinto plc.                                                    development, implementation and marketing of the
                                                                  birding route. In line with the targets set by the Palabora
The project provides a high-demand tourism product in             Foundation, the route has received broad coverage in
the local and international avitourism market, enabling the       the media during 2009, including representation at
Ba-Phalaborwa and Maruleng municipal areas to compete             international and national tourism events. The route was
effectively against other regions in South Africa. The            profiled on SABC national TV news in March and was
Department of Trade and Industry commissioned a report            featured in an environmental awareness TV programme,
on birding tourism in South Africa in 2009. Collectively, the     50/50, in April.
report said, avitourists spend an estimated 927 million to
1,725 billion rand on birding trips, support services and         School governance and management
equipment annually.                                               The purpose of the programme was to improve levels of
                                                                  governance and management in schools.
The project launched a “vulture restaurant” in January
2009 at Grietjie Private Game Reserve, which is proving           The Foundation continued to conduct workshops to
popular with tourists. There is also a series of new bird         capacitate School Governing Bodies (SGBs), school
hides at various dams and waterways, known as the                 management teams (SMTs), Representative Councils of
Phalaborwa Wetland Collection. Three bird hides were              Learners (RCLs) and Teacher Liaison Officers (TLOs) in the
completed by September 2009: Ba-Phalaborwa Nursery                first quarter of 2009 for local schools.
Dam Hide, Sasavona Bird Hide and Hans Merensky Golf
Estate Bird Hide.                                                 The programme came to an end in April 2009. The
                                                                  Social Impact Assessment findings revealed that the
The project’s local community development achievements in         Department of Education now has competent staff to run
2009 included the launch of a carbon footprint management         the programme and does not need the Foundation’s help.

                                                                                                                                Community development

   Technokidz and PROTEC students need to be dedicated to their studies to meet the rigours of the course, which
   requires them to work at weekends and in the school holidays as well as after school.

                                                                       Palabora sustainable development report 2009       69
Community development continued...

The remaining budget, which was allocated to training            The Foundation’s learner support programmes are aimed
workshops, was returned.                                         at increasing the skills base in mathematics, science and
                                                                 language in the area. Prior to the programmes’ launch
Municipal community libraries                                    by the Foundation, only a handful of learners from the
In the past historically disadvantaged communities have          Phalaborwa district used to obtain the necessary symbols
had access neither to community libraries and library            annually to proceed to tertiary education in order to pursue
programmes nor to competitions for learners and educators        scientific and engineering careers.
at local schools. In 1987/8 the Foundation built and
equipped two community libraries at its education centres
                                                                 Programme for Technological Careers (PROTEC)
in Namakgale and Lulekani, which provide a valuable
                                                                 The Phalaborwa PROTEC branch (which is managed by
service to primary, secondary and tertiary learners. These
                                                                 the Palabora Foundation) was established on 17 March
well equipped, air conditioned facilities provide a venue
                                                                 1998 by the three major companies in Phalaborwa:
where students from crowded and often non-electrified
homes can study and have access to relevant books and            Rio Tinto Palabora Mining Company Limited (PMC),
other printed and electronic media.                              Foskor Limited and Sasol Nitro. These three companies
                                                                 remain the major funders of the Phalaborwa PROTEC
On 30 June 2004 the libraries were officially handed over        programme. The board members comprise a diverse group
to the Ba-Phalaborwa Municipal Manager with a cheque             of representatives from local companies, institutions
for 1,2 million rand to cover the operating costs of the         and associations. The board members come from the
libraries for a two-year period after handover. This allowed     Limpopo Provincial Department of Education, Lepelle
the Ba-Phalaborwa Municipality to budget for these               Northern Water, the Phalaborwa Chamber of Business,
costs after July 2006. In 2007 the Foundation donated            Eskom, GAGE Specialists, Gears Technologies, Mopani
2,5 million rand, as part of its 20th anniversary celebration,   FET College, the Ba-Phalaborwa Municipality, Standard
for the Ba-Phalaborwa Municipality to purchase books for         Bank, the Greater Phalaborwa Principals’ Association and
the libraries in the two townships, Lulekani and Namakgale.      Professional Careers Consultants. The parents association
                                                                 from the Leboneng and Rixile Education Centres also serve
The Foundation also committed to uplifting and revamping         on the PROTEC Phalaborwa board.
infrastructure for the community skills and education
resources centre facilities in the two townships during 2007
                                                                 The PROTEC programme completed its eleventh year of
and 2008. Alongside these upgrades the village of Selwane
                                                                 operation in 2009, aiming to provide a source of high
40 kilometres away, one of the mine’s labour-source areas,
                                                                 capability students for Palabora, other local companies
was allocated 2,8 million rand for a library, which was
                                                                 and industries, and the province. Learners who complete
completed by the Foundation in 2009.
                                                                 Grade 9 from the Technokidz programme move on to
The Foundation has a standing agreement to provide               the PROTEC in Grade 10 and spend three years on the
50 thousand rand for the replacement and updating of             programme. In 2009, the programme admitted 70  new
books in the three libraries.                                    Grade 10 learners. There were, on average, 175 to
                                                                 180 learners on the PROTEC programme during 2009.
Learner support programmes
The purpose of the learner support programmes is to              The learners who are selected to join this programme attend
provide a pool of high capability learners who can go on to      extra lessons in the afternoons and during school vacations
further their studies in scientific and technological careers    to prepare them for (mainly) scientific, engineering,
at tertiary institutions.                                        technological and accounting careers. Site visits are organised
                                                                 to local industries and Grade 11 learners attend a one-week
South Africa has a dire shortage of school leavers with          residential leadership course in July at the Schoemansdal
appropriate symbols at the higher grade in mathematics           Environmental Education Centre. For most of these formerly
and science to proceed to those careers where the country        disadvantaged students this is the first time that they
is experiencing skills shortages, such as engineering,           have had exposure to such extra-curricular activities. The
science, technology and accountancy. Until 2004 there was
                                                                 course provides training on various activities, for example
a gradual decline at national level in numbers of higher
                                                                 public speaking, interviewing, communication, problem
grade passes in mathematics and science but various
                                                                 solving, and how to conduct a meeting. The report from the
initiatives by the provincial and national education
                                                                 principal of the Schoemansdal Environmental Education
departments and the private sector are gradually
improving this scenario. This is a significant contributing      Centre on the 2009 learners’ achievement was once again
factor in many companies not being able to achieve their         most complimentary and encouraging. The Foundation was
employment equity targets in areas where there are skills        commended on the excellent achievement and behaviour of
shortages: there are insufficient technically qualified          learners. One learner obtained a distinction for the course
school leavers from formerly disadvantaged communities.          and 11 learners were awarded a “B” symbol pass.

70      Palabora sustainable development report 2009
Community development continued...

  The Palabora Foundation’s Tele-Teach centres rely on satellite communications to
  provide a high-quality educational programme to learners in deep rural areas who
  cannot travel to the main educational centres.

Number of PROTEC and Master Maths learners as                    Master Maths (M2)
at November 2009                                                 The Foundation’s Master Maths programme encourages
Leboneng Education Centre                                        learners with potential to take pure mathematics.
                                                                 Approximately 500 high school learners attend extra
      Grade               PROTEC             Master Maths        mathematics lessons in the afternoons, evenings and
        10                   33                          38      during school holidays at three interactive computerised
        11                   33                          44      Master Maths centres. The Master Maths programmes are
                                                                 designed to follow the South African core mathematics
        12                   30                          18      curriculum, and the OBE lessons are competency based,
       Total                 96                         100      allowing learners to study at their own pace. Three qualified
                                                                 tutors work in each of the centres in the afternoons to
Rixile Education Centre                                          assist learners with problems and to help with homework
                                                                 and tutorials. The performance of many of the learners
      Grade               PROTEC             Master Maths        has increased dramatically over the years and many have
        10                   29                          28      gone on to study technical subjects at tertiary institutions.
                                                                 During the past seven years the Grade 12 pass rate has been
        11                   35                          14
                                                                 well above the national average.
        12                   23                            3
                                                                 Tele-Teach schools
                                                                                                                                 Community development

       Total                 87                          45
                                                                 In 2009 the Palabora Foundation decided to extend the
PROTEC matric results 2009                                       Master Maths programme to its three rural Tele-Teach
The PROTEC Phalaborwa branch has produced excellent              schools (Matome Malatjie, Maphokwane and Makikele) in
matric results for ten consecutive years. In 2009 the            the Ba-Phalaborwa area. These schools are situated in the
PROTEC learners obtained a near-perfect pass rate, with          Maseke, Mashishimale and Selwane villages respectively.
75 per cent of the matriculants achieving Bachelor passes,       The move is a great relief for these communities because
17 per cent obtaining Diploma passes and two per cent            the learners with potential and interest in mathematics will
obtaining Higher Certificate passes. The handful of learners     no longer have to travel long distances to access the Master
who achieved at a lower level will write a supplementary         Maths computer facilities that were previously available
examination in March 2010. The branch also obtained              only at the Leboneng, Rixile and Frans du Toit Master
11 distinctions in mathematics and one learner achieved a        Maths centres.
distinction in both mathematics and science.

                                                                      Palabora sustainable development report 2009         71
Community development continued...

The extension of the programme necessitated each centre         in the PROTEC programme with more zeal and enthusiasm,
receiving 15 new thin client computers and upgraded             having obtained a solid foundation in mathematics and
software before loading the Master Maths programme.             natural science.
Teachers were trained in Master Maths and workbooks
for learners were delivered to the schools. The new Master      It is envisaged that when the first group of Technokidz
Maths centres will start operating when the schools reopen      learners reach Grade 12 (in 2011) we will be producing
in 2010.                                                        100  per cent Bachelor passes, which will enable the
                                                                learners to gain access to universities and pursue a degree
In 2009 the three schools together achieved a 70,7 per cent     course in mathematics, science or engineering.
pass in Grade 12 mathematics. The Foundation is confident
that, with the introduction of Master Maths, the centres will   Bursaries
perform better than in 2009.                                    Palabora bursaries
                                                                Palabora awarded four 2009 PROTEC Grade 12 students
                                                                with bursaries to study for various degree courses in 2010.
 Mathematics results in Tele-Teach schools (2009)               They were Jessica Luphondo for Accounting, Thabang
                                                                Chirwa for Electrical Engineering, Vukosi Mabaso for
     100                                                        Mechanical Engineering and Kabelo Rathupetsane for
      90                                                        Mining Engineering.
                                                                Foskor Limited bursaries
                                                                Foskor Limited will be interviewing learners in due course
                                                                to allocate their bursaries for 2010.
     30                                                          Grade 12 PROTEC Phalaborwa tertiary fields of study
     10                                                                                       59%    Engineering

      0                                                                                       10%    IT
              Makikele     Matome Malatjie   Maphokwane                                       10%    Health
                            Results (%)                                                       12%    Commerce
                                                                                               4%    Arts
Figure 5
                                                                                               5%    Other

A junior PROTEC programme called Technokidz was
launched in May 2008 with the purpose of extending the
duration of the Learner Support Programme from three            Figure 6
years to five years so that the Foundation’s learners can
achieve even better Grade 12 results. The Technokidz
                                                                AMESA Mathematics Olympiad
programme focuses on three significant learning areas:
                                                                In a collaborative effort, the Palabora Foundation,
mathematics, natural science and English.
                                                                the Department of Education and the Association for
                                                                Mathematics Education of South Africa (AMESA) coordinate
The Foundation developed the infrastructure at both Rixile
                                                                the AMESA Limpopo Mathematics Olympiad. The purpose
and Leboneng Education Centres in 2008 to accommodate
                                                                of Olympiads is to improve access to mathematics education
30 learners each in Grade 8 and 9 classes with a total
                                                                and instil love for the subject.
enrolment of 120 learners. A state of the art computer
laboratory with 30 modern computers was installed at both
                                                                The Olympiad is run in three elimination rounds: first round
centres. The mathematics component is offered through the
                                                                at school level, second round at district level, and the final
Master Maths programme. The mathematics programme
                                                                round at provincial level. The competition is also divided
uses software franchised by Master Maths in Cape Town.
                                                                into three categories: primary schools (level 1), Grade 8 and 9
                                                                (level 2) and Grade 10 to 12 (level 3). In 2009, 9 419 learners
The programme has been so successful that the learners
                                                                from 127 schools in Mopani participated in the first round.
who completed their first or second year were evaluated
                                                                This number is a 38 per cent increase in participation over
by external examiners and found to be way ahead of their
                                                                the 2008 figure.
counterparts at school. Their communication abilities have
also increased so that they can continue with their studies

72         Palabora sustainable development report 2009
Community development continued...

First round participation by Mopani District
learners                                                             Participation of Phalaborwa schools (2006 – 2009)

                            Grade          Grade                     2 500
   Year       Primary        8-9           10-12            Total
   2006        1 684         550           1 046            3 280    2 000

   2007        3 975        1 058          1 700            6 733
                                                                     1 500
   2008        3 695         914           2 216            6 825
   2009        5 791        1 839          1 789            9 419
                                                                     1 000

 Number of participants for first round participation                  500
 in AMESA Mathematics Olympiad (2006 – 2009)

 10 000                                                                        2006             2007             2008             2009
  9 000                                                                               Level 1          Level 2          Level 3
  8 000
                                                                    Figure 8
  7 000

  6 000                                                             Eskom Expo for Young Scientists
  5 000                                                             The Department of Science and Technology aims to
  4 000
                                                                    increase the participation of our youth in the fields of
                                                                    science, technology, engineering and mathematics (STEM)
  3 000
                                                                    through local, regional and national expositions. Eskom
  2 000                                                             Expo for Young Scientists is an exposition, or a science
  1 000                                                             fair, where learners in Grades 5 to 12 have a chance to
                                                                    submit projects about their own scientific investigations.
                2006      2007          2008         2009           The science expo is conducted at three levels – local,
                                                                    regional and national – and is managed by a committee of
                                                                    dedicated teachers.
Figure 7
                                                                    The Palabora Foundation is the sponsor of the local science
                                                                    expo in the Ba-Phalaborwa municipal area and the regional
There was an increase of 253 Phalaborwa learners taking             science expo in Mopani District. It is through the Palabora
part in the Mathematics Olympiad, with 2 856 learners in            Foundation’s sponsorship that we have seen an increase in
2009 compared to 2 603 in 2008. The Olympiad involved               the number of learners following the science, technology,
learners from 25 primary, three independent and seven               engineering and accountancy streams. This is proven
secondary schools.                                                  by the database of learners who have been through the
                                                                    PROTEC and Master Maths programmes sponsored by
Participation of Phalaborwa schools (2006 – 2009)                   the Foundation.

   Year       Level 1      Level 2        Level 3           Total   The 2009 national science expo took place on 2 to 3 October
   2006        1 169         278               478          1 925   2009. Eighteen projects (twenty learners) represented
                                                                    Mopani region at the Eskom National Expo in Pretoria
                                                                                                                                              Community development

   2007        1 253         443               740          2 436
                                                                    and obtained four gold medals, two silver medals and
   2008        1 472         340               791          2 603   five bronze medals. A learner from Matome Malatji High
   2009        2 313         259               284          2 856   School (Maseke village, Ba-Phalaborwa) won herself a
                                                                    laptop and a trip to Reunion Island to represent South
                                                                    Africa in June 2010.

                                                                    National Science Week
                                                                    The Palabora Foundation was unable to subsidise National
                                                                    Science Week activities in 2009 due to budget constraints
                                                                    in the immediate aftermath of the global economic crisis.

                                                                        Palabora sustainable development report 2009                     73
Community development continued...

Early Childhood Education                                       Skills development training
The Bambanani Early Learning Outreach (ELO) Trust               The purpose of these programmes is to provide short, job-
is registered as a non-profit organisation with the             related skills training courses to unemployed youth in
Department of Social Development. Bambanani oversees            Building and Civil Construction (Construction Masonry
and reaches out to 63 pre-schools in very disadvantaged         and Construction Carpentry), Clothing Production, and
communities. There are 199 educators working at these           Food Preparation and Cooking. This enables trainees
sites and 2 865 pre-school children benefit from their
                                                                to seek employment in the formal and informal sector,
education. Bambanani currently has 20 educators on
                                                                to start their own businesses, or to further their studies
the outreach training programme who are completing a
                                                                with Further Education and Training institutions.
basic certificate in Early Childhood Development (ECD)
Level 1 Pre-School Training and another 20 educators on         The training aims to assist provincial government with
ECD National Certificate Level 4 training.                      their implementation of education and skills training
                                                                programmes in the area to improve the education and skills
The Bambanani ELO Trust concentrates on developing              base within the surrounding communities.
strategies and resources that support parents, teachers
and communities in their task of providing for the needs        Those registering for the courses pay a nominal fee, making
of young children. The Foundation has an ongoing                training affordable. The Foundation heavily subsidises the
partnership with Bambanani and has provided them with           courses. Trainees attend for a period of six months. Short
a vehicle for the coordinator, financial services and built     courses are also offered in Food Preparation and Cooking,
them a centre for administration and training worth             Construction Masonry (tiling only) and Construction
2,4 million rand in 2008.                                       Carpentry.

Bambanani aims to drive and spread awareness of                 The Foundation’s Training Instructors attended
programme and resource development, and service                 compliance courses, as required by the Sector Education
delivery for young children. It also advocates for the          and Training Authorities (SETAs). One Training Instructor
improvement of educational services for young children          attended facilitator and assessor courses and was found
and their families.                                             competent in both. Two assistant Training Instructors
                                                                were sent for assessor courses recently. They have
The aims of Bambanani outreach are to:
                                                                completed their portfolios of evidence and are now
                                                                waiting for feedback.
• Uplift and develop early childhood educare;
• Promote the physical, intellectual, emotional and spiritual
  wellbeing of parents and pre-school children in the rural     The Skills Development department was audited for
  communities in and around Ba-Phalaborwa;                      compliance in preparation for institutional accreditation.
• Provide each child in the Namakgale area with two years       The department attended to the identified gaps. A follow-
  of pre-primary education; and                                 up audit was conducted, confirming that all the gaps were
• Instil a sense of hope in the lives of the community of       fully closed. James Holmes and Stuart Thompson applied
  Namakgale through the provision of an excellent ELC           for scope extension with the Construction Education
  which covers all the seven development areas that             Training Authority (CETA) and the Tourism, Hospitality and
  ensure the future growth of children.                         Sport Education and Training Authority (Theta).

Bambanani believes that both individuals and corporates         The Foundation bought accredited learner materials in
should bring restoration and transformation by caring for       Building and Civil Construction (Construction Carpentry,
the poor and vulnerable.                                        Construction Masonry) from ABC Developers in Polokwane.
                                                                The Foundation has discussed mutual and long-term
The formative years of a child’s life are the basis for all     partnership with ABC Developers in the skills development
future learning. Children must be prepared in all seven         of the community. The discussions will be concluded early
crucial developmental areas:                                    in January 2010. Learner materials for Food Preparation
                                                                and Cooking are being developed, to be completed in the
•    Emotional
                                                                first semester of 2010.
•    Intellectual
•    Mental
•    Spiritual                                                  The Foundation bought and installed the Learner
•    Moral                                                      Management System (LMS), a database specifically designed
•    Physical and social development                            to capture learner information. It will be used across all
•    Growth                                                     skills programmes as it is based on the guidelines provided
                                                                by the SETAs for learner information capturing, storage
Bambanani visits the pre-schools on a regular basis.            and retrieval.
They are provided with educational support and advice,
assistance is given to children with learning disabilities,     A total of 210 trainees registered for full time courses and
the pre-schools are assisted with registration support and      105 registered for part time courses in 2009. A total of three
grants, and parental involvement is encouraged.                 trainees were registered for short courses.

74       Palabora sustainable development report 2009
Community development continued...

Number of trainees (2003 – 2009)

                             Clothing             Clothing
                           Production           Production
                             (Sewing)       (Sewing) Rixile Food Preparation           Construction         Construction
 Year                 Leboneng Centre               Centre        & Cooking               Masonry             Carpentry
 2003                                79                  75                   90                  16                    87
 2004                                58                  42                   80                  20                    85
 2005                                48                  32                   91                  21                    73
 2006                                43                  32                   92                  19                    36
 2007                                41                  22                   88                  30                    71
 2008                                42                  20                   90                  27                    59
 2009                                27                  20                   96                  54                    121
 Totals                             338                 243                  627                 187                    532

Clothing Production is continuing to experience fewer          received certificates at a formal certificate award ceremony
trainees registering for the course. The drop in numbers       hosted by Rio Tinto Palabora Mining Company. Learners
could be associated with a high number of people already       who passed were also given an incentive of R585 per
trained within the surrounding areas.                          subject they passed.

Admission of part time learners from Foskor Limited on         The Foundation is looking at plans to enable learners who
portable skills courses contributed to the increased numbers   pass ABET Level 4 to continue with further training in
of trainees trained in Construction Masonry and Carpentry      professional skills development to enable them to access
in 2009. Portable skills training is a requirement obliging    better working opportunities in the Foundation, at the
all mining and other companies to provide alternative skills   mine, and elsewhere.
to employees; this is to enable them to continue to earn a
living outside a mining environment should the economic
environment result in excessive job losses due to global
market conditions.

The hospitality group, Forever Resorts, absorbed six former
learners from Food Preparation and Cooking by offering
them permanent jobs as assistant chefs and waitresses.
Sefapane Lodge also offered permanent jobs to four of the
former learners from the same section. The Food Preparation
and Cooking trainees received ad hoc experiential training
from Kruger National Park as needed during 2009.

Illanga Construction absorbed three former “best learners”
who completed in the first semester of 2009.
                                                                 Criselda Kananda, inspirational guest speaker at the
                                                                 Palabora Foundation’s HIV/AIDS Candlelight Memorial.
                                                                                                                              Community development

The opportunities provided by these various companies to
Palabora Foundation learners is an outcome of a stakeholder
engagement process, in which the Foundation reached an
agreement with local companies that they should take           Ba-Phalaborwa HIV and AIDS comprehensive care
advantage of and source prospective employees from the         and management programme
pool of people trained locally by the Palabora Foundation.     The purpose of the programme is to use an effective HIV and
This would provide working opportunities to residents of       AIDS management system to minimise the impact of HIV
Ba-Phalaborwa and reduce chronic unemployment.                 and AIDS in the community. We achieve this by educating
                                                               communities to change social behaviour, and we monitor
ABET classes continued very well in 2009 with seventeen        incidences and trends in order to measure the effectiveness
learners passing the June examinations. ABET learners          and impact of the programme.

                                                                   Palabora sustainable development report 2009          75
Community development continued...

HIV and AIDS in Africa receive significant international        study in 2001, funded by the Nelson Mandela Children’s
attention and donor funding to alleviate AIDS. Despite          Fund, to determine the impact of the pandemic in the
this, it is still a pandemic out of control in sub-Saharan      area.
Africa. South Africa has the second largest number of HIV
positive people in the world although it is estimated that      The Phelang Community Centre is located in the premises
the prevalence rate varies considerably between provinces.      adjacent to the Foundation’s main administration offices
                                                                in Namakgale, at the former Palabora family clinic. This
The high levels of HIV prevalence pose many challenges          project facilitated the establishment of community support
to companies including protracted illness, loss of critical     structures in 16 electoral wards and on approximately
skills, absenteeism from work and death; this has a serious     20 farms, with around 150 active volunteers working with
impact on recruitment and retention of employees                the Foundation, the Department of Health and Social
and career progression planning. Many companies have            Development, other NGOs and local government. The HIV
comprehensive workplace HIV policies and programmes             and AIDS Support Group continues to meet on a monthly
in place offering a full range of services to employees and     basis for capacity building purposes and to plan and review
some extend their influence beyond the workplace into the       progress of their work on HIV and AIDS related issues at
community and the supply chain.                                 these sites.

A number of programmes support government’s overall             Voluntary counselling and testing services
efforts to address the problems, targeting specific concerns.   Rapid, client/provider initiative voluntary counselling and
These include the South African Tuberculosis Control            testing (VCT) is used as the strategy in prevention of HIV and
Programme and the National Strategic Plan for 2007 to           AIDS and behaviour modification. Educational activities at
2011. The implementation of the plan is severely hampered       schools are to encourage pupils to undergo rapid testing
by the skills shortage of health care professionals, which      so that they know their status and, for those not sexually
the government is trying to address.                            active, to delay their sexual activity.

Major companies play a significant role in communities;         Prisoners on remand are visited weekly for VCT services.
not just where they are physically based, but also further      Clients who test early and know their status are able to live
afield where their employees and their families may             longer and keep their CD4 count above 200 (an essential
reside. HIV and AIDS has become a critical business issue       criterion in living healthily with HIV); with good nutrition
and, as such, has woven itself into all development plans       and medical consultations for any opportunistic infections,
and projects. An indirect consequence of HIV and AIDS is        their potential lifespan is extended.
that a company’s investment in human capital is at risk
of being lost or significantly depleted, and this has an        In 2009, 803 community members underwent VCT
impact.                                                         (455 males and 348 females); 107 tested positive. At the end
                                                                of 2009, there were 2 068 clients receiving antiretroviral
Palabora has its own comprehensive, site based HIV and          treatment (ART); 558 males, 1 384 females, 64 girls and
AIDS programme for company employees and contractors,           62 boys).
which includes education and awareness training,
voluntary counselling and testing (VCT) and affordable          The availability of ARTs makes it easier for people to
access to antiretroviral therapy (ARVs) for employees and       demand VCT services. Pregnant women are encouraged to
their spouses. Senior management took the view that there       access VCT services.
was a lack of health care facilities and capacity within
the government health care structures to address this           Clients with a CD4 count below 200 are guided on available
pandemic in the community. Palabora therefore initiated         ARV services in the hospital. The volunteers from the
the programme as one of its three pillars to support            support group do home visits to encourage family support
sustainable development – the other two being education         and minimise the stigma associated with HIV and AIDS in
and skills development, and business and local economic         families.
development – and solicited other partners to participate
in the programme.                                               Clients identified as family treatment supporters receive
                                                                adherence counselling. They are educated on treatment
Palabora initiated negotiations for a private/public sector     literacy as well as the side effects and how to overcome
partnership to address the challenge of the pandemic            them.
jointly in the community. The Ba-Phalaborwa HIV and
AIDS awareness programme was initiated in the area at           Clients are screened for tuberculosis prior to commencement
the beginning of 2001 and has been funded by Palabora,          of ARVs. Those already on treatment monitoring receive
the Limpopo Province Department of Health and Social            home visits which include a pill count to prevent treatment
Development, Foskor Limited, Sasol Nitro, Oxfam                 defaulters. Substance abuse is discouraged to avoid poor
Australia, the National Development Agency and the              drug efficiency. Clients who miss treatments are followed
National Lottery. The project commenced with a baseline         up with a visit.

76      Palabora sustainable development report 2009
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Beneficiaries (2006 – 2009)                                                           Partners
                                                                                      The Phelang programme is an excellent example of a
 Beneficiaries                     2006         2007         2008        2009         partnership between the private sector and local and
 HIV and AIDS                                                                         provincial government. Partnerships have emerged as the
 Support Group                      510             682        733         601        most efficient way for the Foundation to become involved
 Orphans and                                                                          in social development programmes and projects in the
 vulnerable children              2 058        2 496         3 046       4 002        area. By accessing expertise and sharing resources and
                                                                                      skills, partnerships can provide mutual benefit whilst
 Communities:                                                                         also giving projects the critical mass and momentum they
 education                        18 765 48 151 19 030 21 835
                                                                                      require for success.
 education                        9 641        3 190         1 320       1 172        The programme is designed based on the informed needs
 High transmission                                                                    of the community. The programme is open to the wider
 areas: awareness                                                                     community and all employees at companies in the area.
 lectures                          5 388       2 601         3 640       4 093        The programme offers a well balanced and holistic range
 Total                            36 362 57 120 27 769 31 703                         of services, has high levels of support from the community,
                                                                                      and is recognised by provincial government as an example
Educational visits in 2009                                                            of best practice in the province.
Community peer group educators conduct door to door
home visits and visit high transmission areas such as                                 The Palabora Foundation’s partners are:
taverns every Friday. They provide information about
sexually-transmitted infections including HIV and AIDS,                               •   Ba-Phalaborwa communities
and they encourage people to undergo VCT. They also
                                                                                      •   Department of Health and Social Development
encourage safe sex and positive use of condoms and
femidoms, give practical demonstrations of condoms using                              •   Department of Agriculture
teaching models, and distribute condoms on a monthly                                  •   Department of Home Affairs
basis to all high transmission areas and public places. The                           •   Department of Education
condom usage is monitored by the volunteer responsible for                            •   Department of Safety and Security
each specific area.                                                                   •   Department of Defence
                                                                                      •   Local and district municipalities
Educational visits to workplaces reached 150 employees                                •   Community-based organisations
during 2009. The group distributed 821 540 male condoms
and 2 445 femidoms.                                                                   •   SABC radio stations
                                                                                      •   Private sector

  O r p h a n s a n d v u ln er a b le child r en a ssist ed (2 0 09)



                                                                                                                                                               Community development



             Jan            Feb          Mar          Apr          May         Jun         Jul       Aug            Sep       Oct        Nov        Dec

             Child grants           Foster grants           School exemption     Care dependency   Birth certificates     ID documents     Food parcels

Figure 9

                                                                                            Palabora sustainable development report 2009                  77
Community development continued...

The Ba-Phalaborwa HIV and AIDS comprehensive care and              Mopani District Honourable Executive Mayor addressed
management programme is funded by the following donors:            communities from five municipalities on stigma
                                                                   and discrimination reduction, small scale vegetation
•    Rio Tinto Palabora Mining Company                             gardens to improve livelihoods, and encouraged
•    Sasol Nitro                                                   men to go for HIV testing and youths to abstain. Six
•    Foskor Limited                                                HIV Ambassadors gave educational messages on the
•    Oxfam Australia                                               importance of nutrition, ARV adherence, partnership,
•    Department of Health and Social Development                   the referral system, treatment supporters, and orphans
•    Mopani District Municipality                                  and vulnerable children. On behalf of partners, Rio
•    Ba-Phalaborwa Municipality                                    Tinto Palabora Mining Company’s Managing Director
•    Khutso Khurhula Organisation                                  reminded the attendees that the Company has kept
                                                                   its promise never to give up its social responsibility to
Challenges and solutions                                           support Ba-Phalaborwa communities;
Challenges:                                                      • There was a World AIDS Day event at Maseke village
                                                                   with the theme “Universal Access and Human Rights”.
• Deaths caused by individual ill discipline on antiretroviral     The Honourable Mayor gave a keynote address on
  treatment, self-deregistration from treatment, clients           the importance of access to comprehensive care,
  not adhering to antiretroviral treatment and defaulting          management, treatment and support services, human
  when they feel better;                                           rights, and the individual’s responsibility. An HIV and
• Men are still in denial about disclosing their HIV status;       AIDS Ambassador encouraged those present to access
• There are now more pregnancies while on antiretroviral           health services for a better life and to know their HIV
  treatment;                                                       status, as it is their responsibility;
• Substance abuse;                                               • Eleven HIV and AIDS Support Group ExCo members
• Lack of information on ARVs is strongly correlated to            and their facilitator underwent three days’ training
  age and level of education: adherence in older people is         on Communication and Public Speaking. The same
  poor;                                                            group had a further three days’ training on Planning,
• Male adults tend to access VCT services only when very           Monitoring, Evaluation and Report Writing; and
  sick; and                                                      • Phelang Community Centre received visits from
• Female awaiting-trial prisoners do not respond to HCT            258 community members (86 males and 172 females)
  services.                                                        seeking information for school assignments, and for
                                                                   information and learning.
                                                                 Small scale economic development projects
• Ongoing adherence counselling on antiretroviral                Community enterprise development is the very important
  treatment;                                                     process of empowering, capacitating and providing
• Promote educational awareness on the importance of             capability to small businesses that are running ad hoc
  disclosure and the risk of re-infection;                       outside a framework and environment that provides
• Campaign for awareness of reproductive health (contra-         no basic business training and support. The Palabora
  ceptives) and negotiation of safer sex; and                    Foundation’s Business Development Centre (BDC) is an
• Intensive promotion of educational awareness on                accredited service provider under the Department of Trade
  antiretroviral therapy and TB treatment adherence to           and Industry’s (DTI) small enterprise development agency
  older people to improve their knowledge.                       (SEDA). The BDC provides business training, coaching and
                                                                 support to Small Medium and Micro Enterprises (SMMEs)
2009 highlights                                                  under this banner. The Foundation always strives to ensure
• The local community radio station has a weekly one-            that surrounding communities sustain their livelihoods
  hour phone-in programme for the HIV and AIDS                   by providing capacity building to small scale economic
  Support Group, Community Peer Educators, Bana Pele             development projects.
  Programme, Advocacy Team and the Programme Officer
  to educate communities;                                        In 2009 the Foundation was asked to fund two small
• The 26th International AIDS Candlelight Memorial               scale community projects in two of the five villages in the
  event was held in partnership with SABC radio stations,        Ba-Phalaborwa municipality. The projects were:
  spreading educational messages to the entire nation.
  Thobela FM provided live broadcast crossover. This             • Makhushane Youth Piggery Project; and
  year’s theme was “Together, we are the solution”.              • Etekeng Batubatse Cooperative (Mashishimale).

78       Palabora sustainable development report 2009
Community development continued...

The projects went through a screening process to evaluate        The project has experienced vandalism, when a forty-
the business idea and the viability of the residents’            metre power cable was stolen. The Foundation replaced the
proposed projects. The Foundation applies a model that           cable, and the project is up and running again. The project
allows it operational control for a period of two years and      ordered new stock of chickens and received delivery late
the implementation of an exit strategy for one year. The         in 2009.
nominated project receives three years of overall business
mentoring. This is to ensure that that the project continues     Other projects
to improve after the Foundation’s exit.                          Palabora Foundation continued to support other small
                                                                 scale community projects that were experiencing
The Foundation assisted the communities to develop a             difficulties by offering them financial and mentoring
business plan and a project management plan, and entered         support. Titirheleni Community Garden experienced
into a partnership with the Department of Agriculture            floods in 2008. The water pump was damaged and the
and the Department of Health and Social Development.             project bought a new one, which also broke. The project
A  technical team was established to ensure effective            requested assistance from Palabora Foundation, who
support to the projects. The Foundation, other stakeholders      bought a new water pump with pipes.
and the community members from each project entered
into a memorandum of agreement. This was to ensure each          Mponeng Poultry, a successful project initiated by the
party would take its obligations seriously. It also ensured      Palabora Foundation in Selwane village, experienced
that the Foundation had the option of redeploying the            a challenge with getting electricity run to the project
resources within the community should failure occur due          site’s fowl runs. The Foundation’s Skills Development
to squabbles or lack of commitment by project members.           programme worked with the project and with the
                                                                 Department of Agriculture to provide funding to ensure
Makhushane Youth Piggery Project                                 that the site is electrified. The problem has been solved
The piggery is a project set up by 14 youth project members
                                                                 and the project is now doing a roaring trade selling live
who were trained by the Department of Agriculture.
                                                                 chickens and eggs.
The project used to be run within Makhushane village.
The Department of Agriculture advised the Traditional
                                                                 Business Development programmes
Authority that the project should be moved outside the
                                                                 The purpose of the programme is to empower the
village and be incorporated with the Mogoboya Farmers’
                                                                 Small, Medium and Micro Enterprises/Black Economic
Association. The Mogoboya Farmers’ Association project is
                                                                 Empowerment (SMME/BEE) sector with relevant training,
plagued by elephants entering their farm and feeding on
                                                                 mentoring, and counselling opportunities to enable
their produce. The land has been left unattended due to
                                                                 business capacity.
this problem and the Youth Piggery Project will be a better
farming option.
                                                                 The purpose of the department in the past year was to
                                                                 achieve the following:
The pig sheds were built and roofing was completed
in March 2009. The project ran into difficulties that
                                                                 • Assisting SMMEs/BEEs to establish their own businesses
the Foundation and the Department of Agriculture are
currently trying to resolve to ensure continuity of the            through counselling, business advice and training, and
project in 2010.                                                   assisting with tendering and market linkages;
                                                                 • Providing capacity to existing businesses to maintain
Etekeng Batubatse Cooperative                                      and promote new market share;
                                                                 • Creating linkages with local SMMEs/BEEs to tender for
                                                                                                                               Community development

This project was set up by a group of nine people (six females
and three males) who were trained by the Department of             contracts at local companies and mines;
Agriculture in egg production. The Palabora Foundation is        • Working with and encouraging networking between
supporting the project in partnership with the Department          other organisations active in the same industry; and
of Health and Social Development.                                • Specialised skills transfer programmes in 2009.

The project setup included fencing all round for two hectares,
drilling for water, setting up the water tank, installing an
electric water pump and pipes, and electrifying the project
(through Eskom) in 2009. The Foundation built the fowl
runs with the assistance of the Department of Health and
Social Development.

                                                                     Palabora sustainable development report 2009        79
Community development continued...

Year to date statistics (2009)
 Month                                        Jan                Feb            Mar                      Apr          May           Jun
 Training                                     0                  20             20                        22           39           43
 Counselling                                  67                 113            94                       144          101           121
 Creating linkages                            2                   4              8                        15           21           13
 Jobs created                                 11                 43             143                      166          151            1
 After care                                   2                   4              4                         4           7            10
 Month                                        Jul                Aug            Sep                      Oct         Nov/Dec       YTD
 Training                                     11                 19             14                        88           0            276
 Counselling                                  70                 13             43                        24          179           969
 Creating linkages                            12                 21             23                        12           6            137
 Jobs created                                 54                 62             29                        44           71           775
 After care                                   8                  13              7                         9           6            74

     Business Development statistics (2009)





               Jan       Feb            Mar         Apr         May       Jun         Jul                Aug   Sep          Oct   Nov/Dec

              Training         Advice                Linkages          Jobs                 After care

Figure 10

Enterprise Development                                                    Company to implement the requirements of the B-BBEE
The Enterprise Development department has adopted an                      scorecard to ensure that local communities get the benefits
approach to creating more equitable economic growth                       they are due from this piece of legislation.
in South Africa. It is an integrated, multi-disciplinary
approach aimed at poverty alleviation through pro-poor                    Enterprise Development will be accountable for:
economic growth. It involves supporting sustainable
economic activities in the municipalities and integrating                 • Eco-tourism projects
the second economy into the first economy.                                • Community projects
                                                                          • Social and Labour Plan (SLP) projects
Enterprise Development is the new name adopted for the LED
and Tourism section in August 2009. This change has come                  Enterprise Development is responsible for the development
about as a result of the mining BEE charter. The Palabora                 of a model to support Local Economic Development and
Foundation will work with Rio Tinto Palabora Mining                       supplier development in Ba-Phalaborwa.

80         Palabora sustainable development report 2009
Community development continued...

This entails providing assistance and support to the            in line with constitutional requirements and the relevant
Ba-Phalaborwa Municipality in terms of the economic             legislative framework. The adoption of the 2009/10 IDP is
development of local communities and business develop-          an undertaking by the Municipality to:
ment. The Foundation is also charged with enhancing
an LED-enabling environment and is assisting the                • Implement the IDP as the principal strategic planning
municipality to develop Ba-Phalaborwa to achieve the              instrument; and
vision of it becoming the “jewel of wildlife tourism”.          • Adhere to the vision, mission, values and objectives of
This, in turn, will assist and support the broad economic         the Municipality.
development initiatives of the Ba-Phalaborwa Municipality
and capacitate historically disadvantaged women and
                                                                Local economic development and strategy
youth through skills development programmes.
                                                                The Enterprise Development department at the Foun-
                                                                dation is assisting Palabora to meet the requirements
Enterprise Development can be found to achieve any or all
of the following objectives:                                    of the Social and Labour Plan and the Palabora Closure
                                                                Statement in line with the Minerals and Municipal
• Promoting local and regional economic development             Legislation to stimulate local economic development in
  goals;                                                        the Ba-Phalaborwa Municipality. It has also assisted the
• Alleviating poverty and assisting those who are               Ba-Phalaborwa Municipality with identifying various
  disadvantaged;                                                community projects and assisted with implementing the
• Facilitating the transition to a market economy; and          IDP and some local LED projects in the area.
• Promoting democracy and the development of civil
  society.                                                      Some of the following projects were identified in the
                                                                2008/2009 IDP document and the Foundation provided
Small businesses still struggle to grow in local economies      them with support over a period of two years. The
and a lack of skills in the SMME sector is one of the crucial   Foundation will continue to support projects that have
barriers to growth and success. This poses many challenges      been identified in the 2009/2010 IDP document.
for local economic development in municipalities.
                                                                Community projects
Ba-Phalaborwa Municipality IDP and
                                                                Etekeng Batubatse Cooperative (Mashishimale)
LED meetings
                                                                Makhushane Youth Piggery (Makhushane)
The Foundation’s Enterprise Development (ED) department
                                                                Majeje Bakery (Majeje)
works very closely with both the LED and IDP departments
within the Ba-Phalaborwa Municipality on tourism issues         Mponeng Poultry (Selwane)
and the revitalisation of Bollanoto as a sustainable tourism
information centre with commercial activities.                  Social and Labour Plan
                                                                Marula Beneficiation (all areas)
The Foundation’s ED department follows the policy of            Waterbok Farm Project (Selwane)
the Provincial Growth and Development Strategy, and the         Electrification of Extension 1 (Ba-Phalaborwa)
LED business plan that it follows is the official Integrated
Development Plan (IDP) of the Ba-Phalaborwa Municipality.       Eco-tourism
LED is a concept that comprises a series of programmes          Flea market and rest station (on the R71 road)
such as tourism, infrastructure, sanitation, housing and        Freedom and memorial precinct (Namakgale)
water.                                                          Bollanoto Tourism Information Centre (Phalaborwa)

The strategic objectives of the Foundation’s work in this
                                                                                                                            Community development

                                                                Bollanoto Tourism Information Centre
area are:                                                       The Enterprise Development department manages
                                                                the Tourism Information Centre on behalf of the
• To add value to the activities of the Ba-Phalaborwa LED
                                                                community. The office again had a very successful year,
  Forum and other subsidiary LED fundraising initiatives,
                                                                managing a number of projects focused on marketing the
  to promote BEE businesses and to integrate them into
                                                                Ba-Phalaborwa municipal area as a preferred tourism
  the mainstream economy; and
                                                                destination. To date the Foundation has provided funding
• To assist Ba-Phalaborwa Municipality to draft business
  plans for LED projects to attract LED funding and             to Open Africa for the three Rixile Routes’ development:
  Limpopo Province local government funding.
                                                                • Culture to Kruger
The IDP is a planning tool through which the municipality       • Kruger to Canyons
is able to commit resources and measure its performance         • Bush to Beach

                                                                    Palabora sustainable development report 2009      81
Community development continued...

The Phalaborwa community website (www.phalaborwa.org.za)        similar articles. The items have been very well received in
is currently sponsored by the Foundation. All Ba-Phalaborwa     the tourist market and are often bought as corporate and
businesses and tourism operators have been listed on the        promotional gifts at conventions, conferences, and so on.
website. The site is now managed by the Bollanoto Tourism
Information Office and allows the community access to           Hi-Kurile is a registered cooperative with twelve members;
promote tourism to Phalaborwa.                                  they are rural women based in Lulekani. With the
                                                                expansion of the cooperative this number is expected
The following targets were achieved in 2009:                    to increase to more than twenty. In the past Hi-Kurile
                                                                has contracted people from the local community to
• Attendance at various tourism indabas and exhibitions,        assist with large orders when capacity is a constraint.
  in partnership with Limpopo Tourism and Parks, to             Hi-Kurile produces and sells products monthly to the
  promote tourism to the town;                                  value of approximately 30 thousand rand, or a turnover of
• Involvement with the Mopani District Municipality with        300 thousand rand per year.
  the following regional projects and tourism initiatives:
  • Local Tourism Association (LTA)                             All members receive extensive training through the
  • Regional Tourism Association (RTA)                          Foundation in all aspects of the technical skills and in small
  • Kruger to Canyon Biosphere Region                           business administration. The Foundation also sponsors
  • Kruger to Canyons Birding Route                             premises and supervision coordinators.
  • The Valley of the Olifants
  • Rixile Routes with Open Africa;                             The specific objectives of this project are the creation of
                                                                additional employment and to enhance skills.
• The tourism centre is manned by a tourism officer and
  a trainee student on a tourism learnership programme,         Impact of buildings constructed in 2008
  whereby the student both receives practical experience        The two townships of Namakgale and Lulekani, which
  with local tourism product owners and attends tourism         are located within about 15 kilometres of the town of
  management training courses;                                  Phalaborwa, are home to some of the best-resourced
• The Foundation was successful in managing the                 education and skills development centres in the province
  European Union (EU) tourism grant from the Depart-            of Limpopo.
  ment of Local Government and Housing and has been
  identified by the EU as one of the preferred service          The new buildings have completely transformed the
  providers and implementing agencies in the Limpopo            landscape and the face of socio-economic development
  Province; and                                                 amenities for communities within a 50 kilometre radius of
• As a result of networking at tourism shows and indabas,       Phalaborwa.
  Ba-Phalaborwa has received favourable coverage in the
  following national magazines: Skyways, Leisure Wheels,        The new buildings brought new opportunities for the local
  Country Life, SA 4x4, Caravan & Outdoor Life, Limpopo         communities. There are places for learning activities that
  Tourism & Leisure, Tour News and SA Travel Guide.             were never possible before the expansion, such as:

Phalaborwa Community Radio Station (101.5FM)                    • A state of the art e-learning mathematics room for Grade
The Phalaborwa Community Radio Station was finally                8 and 9 learners;
awarded a four year community broadcasting licence in           • An e-learning centre to provide literacy and numeracy
2007. The Foundation has been supporting the Community            classes for employees of the mine and the Foundation;
Radio Station since 2005 with the provision of a fully          • A spacious and well-equipped toy library for use by rural
equipped broadcasting studio and donations in relation to         early childhood centres for providing educare;
the station’s operational costs.                                • A local self-contained and self-sufficient screen printing
                                                                  operation run by 11 rural women who produce exquisite
In 2007 the Foundation evaluated the status of the radio          garments with traditional patterns and wildlife prints
station and declared it to have been sufficiently well funded     for the local and international market; and
as to be self-sustainable. A memorandum of agreement            • A state of the art, adequately-equipped skills development
has been signed between both the parties, as the donated          centre that trains local people, providing them with the
equipment was subject to certain terms and conditions.            capability to seek employment successfully in the local
                                                                  tourism and hospitality environment.
Hi-Kurile Craft Cooperative
The Hi-Kurile Cooperative has been in business since            The elements of success in local schools and the increase
1996 and manufactures export quality textile articles           in the number of people with qualifications in an area of
such as bags, table and kitchenware, writing files and          skill can only be ascribed to the presence of these newly

82      Palabora sustainable development report 2009
Community development continued...

constructed and equipped structures and the effective use       Community Development Forum
of these by the Foundation and its staff to make a difference   The Foundation, together with the Traditional Royal
that counts in the Ba-Phalaborwa community.                     Councils, has created a new structure with a high-level
                                                                representative body involving Royal Councils, community
Consultation                                                    development associations/trusts and community members
                                                                to form a Community Development Forum (CDF). This
Consultation takes place on a regular basis in the
                                                                committee meets once a month to receive reports and
community and the Foundation represents Palabora
                                                                deliberate on matters of community capacity building and
at many different structures within the community.              socio-economic development (SED).
Ba-Phalaborwa Municipality is a partner with the
Foundation on many programmes, and regular consultative         This committee replaces the previous Community
meetings, both formal and informal, are held with local and     Development Committees (CDCs) which were found
provincial government officials, including the municipal        to be ill-focused when it came to putting together and
manager, his staff and ward councillors.                        implementing a community development strategy. This
                                                                committee has oversight and participates in rolling out all
                                                                SED projects including those allocated for local economic
The Foundation is respected by the community for the
                                                                development (LED) under the Social and Labour Plan (SLP)
developmental role it plays, and the director of the
                                                                and Broad-Based Black Economic Empowerment (B-BBEE).
Foundation is also a member of a number of technical            The Municipality’s LED manager is part of this committee.
committees within local government. There are occasions
where local government has requested the Foundation             Depending on the nature of the programmes, the Foundation
to take the initiative on development projects. The             also consults and works with provincial government and
Foundation is also well represented on provincial task          NGOs at various levels.
teams and working groups involved in implementing
national government policy on growth and development.           The Foundation director and programme heads participate
                                                                in planning projects, determining priorities and updating
                                                                the communities on the implementation of current and
Stakeholders include local and provincial government,
                                                                past projects. Some projects and programmes have a
local communities, the Chamber of Business, the newly           board of management or a steering committee comprising
established Local Tourism Association, traditional tribal       Foundation staff, community members and provincial and
authorities, and officials from the government’s education,     local government representation. The local and regional
agriculture and health departments.                             media, including Phalaborwa Community Radio Station, are
                                                                also used to communicate programmes and achievements
In order to ensure that the principles of mutual respect,       to local communities.
active partnership and long-term commitment exist between
Palabora and neighbouring communities, consultation
remains key in deciding which projects and programmes
should be implemented in the communities. Community
relations programmes, implemented through the Foundation,
reach out to many communities within a 50 kilometre radius      M C Letsoalo
of the mine and, at times, further afield.                      Director Palabora Foundation
                                                                                                                              Community development

                                                                    Palabora sustainable development report 2009        83

Registered office
1 Copper Road, Phalaborwa 1389
website: www.palabora.com

Postal address
PO Box 65, Phalaborwa 1390

Mine address
1 Copper Road
Phalaborwa 1389
PO Box 65, Phalaborwa 1390
website: www.palabora.com

Transfer Secretaries
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg 2001

Postal address
PO Box 61051, Marshalltown 2107

84     Palabora sustainable development report 2009
                             website: www.palabora.com
86   Palabora sustainable development report 2009

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