Introduction

Our economic impacts are both of a direct and indirect nature. Our mission is to grow and build our portfolio of high quality assets and to enable our shareholders to realise a superior total return on their investments and to improving the quality of life of current and future generations through the integration of economic prosperity, social development and environmental protection.

 

Additionally, we support the ICMM’s Resources and Economic position paper and acknowledge that mineral resources have the potential to promote economic development and contribute to poverty reduction.   Additional information on our financial performance can be obtained from our 2009 Annual Report.

 

The global economic downturn

We remain one of the lower cost producers of PGMs and have recently taken a number of significant actions to improve operational performance, achieve cost savings and preserve cash, to help mitigate the impact of the global economic downturn. These steps include a major restructuring programme at our core operations at Marikana, a renewed emphasis on low cost production and an extensive cash conservation programme across the business, specifically as follows:

Elimination of non-value-adding ounces:   We have ceased production from our higher unit cost operations, specifically at our opencast operations at Marikana and at our Baobab Shaft at Limpopo, which has been placed on care and maintenance. As part of these actions, we have completed a significant restructuring and retrenchment programme at our Marikana operation.

Change of mechanisation strategy:   We are in the process of switching from mechanised to hybrid mining at a number of our shafts, with conventional stoping supported by mechanised development.

Cost reduction, performance improvement and capital rationing: Approximately 7,000 full time employees and contractors employed at the Company exited as at 30 September 2009. The cost savings relating to this headcount reduction amounted to US$90 million for 2009.   Additionally we have implemented a number of programmes across our operations to improve performance going forward. In addition, capital expenditure programmes at the Limpopo Phase Two Project and Akanani were placed on hold.  As part of our restructuring programme, we have also significantly curtailed our exploration activities.

Simplification of organisational structure with clear accountability:   We have implemented a new simplified management structure which enhances focus and accountability, giving the operations more ownership of the functions required to ensure efficient and effective delivery. The Company’s new simplified management structure places the operational management emphasis firmly in South Africa.

 

We have also taken action to improve its financial flexibility, including not paying a final dividend for 2009 and refinancing US$575 million of existing facilities to maintain the aggregate quantum and lengthen significantly the tenure of the Company’s facilities.

 

Impacts of the downturn on sustainable development

In 2009, the Company’s profitability and cashflows were negatively impacted by the global economin downturn.   Consequently management initiated a major restructuring programme during the year, resulting in the voluntary separation and forced retrenchments of employees.   This impacted on our progress towards increasing the number of HDSA and gemale employees within the Company and retaining key skills within the workforce.   Futhermore, due to the adverse change in our financial situation, we will not achieve our tartets to construct houses and undertake hostel conversions by 2011.   Additionally, the completion date of a number of environmental and social projects have been extended in an attempt to reduce operational expenditure. However we have taken steps to ensure that this will not have a material impact on the business, our compliance or impacts to the environment or communities where we operate.   Despite the impact of the global economic downturn on our financial flexibility, we have not deviated from our belief in the business case for sustainable development and the associated business benefits.   Furthermore, we remain fully committed to the values of our Charter and our commitments within the Safety and Sustainable Development Policy.  Further information on the effect of the economic downturn on each of these sustainable development aspects have been provided within the body of this report.

 

Direct economic impacts

The 2009 Annual Report details all direct economic risks, opportunities and key strategies on our economic performance.

 

Operational performance

In 2009, our total platinum production amounted to 683,359 oz and our total PGMs produced amounted to 1,267,529 oz.

 

Economic performance

We recognise that as a leading global producer of PGMs, a finite resource, the impact our business has on the economic conditions of our stakeholders including employees and communities is extremely important. The value added statement for Lonmin Plc as at 30 September 2009 depicts our direct economic impact.

 

Value-added statement for Lonmin Plc as at 30 September 2009
	2009 US$ million	2008 US$ million	% Variance
Net cash generated Customers, consumers and investment income Cash received for products Cash return on investment	1,138 3	2,270 13	(50) (77)
Suppliers [1] Cash payments for materials and services purchased Cost of borrowings	(488)   (34)	(445)   (23)	10   48
Net cash flows	619	1,815	(66)
Cash distributed Human capital (salaries and benefits) Social capital - Donations - Other community projects Government taxes Directors remuneration Shareholders distribution Cash retained for sustainable growth	499 6.2 0.5 5.7 55 7 - 52	557 7.3 0.7 6.6 245 9 186 811	(10) (15) 100 (14) (78) (22) (100) (94)
Net cash distributed	619	1,815	(66)

1 We have a 30 day policy on services and procurement.

2 Inclusive of salary and administrative costs.

 

Payments to government

Neither the South African nor United Kingdom governments are present in the Company’s shareholding structure. The Extractive Industries Transparency Initiative is a coalition of governments, companies, civil society groups, investors and international organisations that aims to strengthen governance by improving transparency and accountability in the extractive sector. The Extractive Industries Transparency Initiative has a robust yet flexible methodology that ensures a global standard is maintained throughout the different implementing countries.   We are one of 37 companies from the oil, gas and mining industry that supports and actively participates in this initiative. By committing to support the initiative, we have submitted an International-Level Company Self Assessment form and commit to reporting publicly on an annual basis, any payments made to government. Government taxes in 2009 amounted to US$55 million.

 

Assistance from government

In 2009, the Company received a skills development grant, amounting to US$ 2.4 million from the Mining Qualifications Authority on evidence of the execution of our training programmes.  

 

Our employees

In 2009, the Company employed a combined total of 21,623 employees and 10,497 contractors. Where possible, we employ persons from our local communities. Employees, including executive Directors, received salaries to the value of US$499million.

 

Our shareholders

Indirect economic impacts

We, as a Company have both positive and negative economic impacts at a local, regional and often national level, examples including creating wealth through local market presence and community development and the impact of our workforce on the availability of housing and our physical impact on the environment.   Within this report we have reported on the significance of these impacts and where relevant, in the context of external benchmarks, such as international standards and protocols. We identify and assess our indirect impacts through amongst others, baseline assessments, needs analysis, stakeholder surveys and environmental and social impact assessments.

 

Indirect economic impacts are defined as intangible benefits that emanate from the secondary effects of capital investment, mine development and employment in the local community. We are committed to local employment, developing local suppliers and investing in local infrastructure to stimulate and attract further economic development in the areas where we operate. Our Social and Labour Plans provide for opportunities for employee and community development as aligned with the local government development plans. Risks associated with non-compliance to these plans may include compromised stakeholder relations, penalties and even temporary closure.

 

Preferential procurement

We support the transformation programmes of the South African government to address previous inequalities and to create stability and prosperity for all. A key component of transformation is enhancing the participation of HDSA companies, and in particular our local HDSA companies, in the procurement chains of our operations, in terms of consumables, services and capital.

 

As part of our Social and Labour Plan, we have set targets to increase our total procurement spend with HDSA suppliers to 60% by 2009, 63% by 2010, 64% by 2011 and 65% by 2012. In 2009, we have achieved and exceeded the 2009 target, with a 66.64% HDSA procurement spend.   In 2009, our HDSA procurement spend was US$523 million and our spend as from 2007 amounts to US$1,310 million.   Our procurement strategy targets HDSA companies and where this is not possible, we encourage existing suppliers to form partnerships with HDSA companies and to capacitate these companies. Aligned with our vision to create stable and economically independent communities, we are also focusing on developing supplier opportunities for local HDSA community members residing in the GLC.

 

The GLC supplier development programme

Although we have exceeded our target to increase our total discretionary spend with HDSA suppliers to 50% by 2009, the achievement of this target has not resulted significantly in the empowerment of the local community to our satisfaction, as HDSA suppliers from the metropolitan areas of Johannesburg and Pretoria have primarily benefited from this policy. To this end, we have also focused on developing the social and economic standing of local communities residing within the GLC through local supplier development. In 2007, we commenced with an initiative with the International Finance Corporation ( IFC), the duration of which is over a period of three years. The strategic objective of this programme is to tap the entrepreneurial skills of communities who reside in the GLC and develop 60 locally owned supply companies, thirty of them sustainable during the next three years and award them with contracts from the Company at a value exceeding US$44.5 million.   In addition to the geographical location of the supplier as well as the HDSA status, factors that influence our supplier selection include costs, financial credibility, environmental performance and social performance. The intent of this programme is to promote sustainability by contributing significantly to the development of the communities through enhancing knowledge, skills and entrepreneur development of the communities and community self reliance.   The basis for success is for these suppliers to extend their services, not only to other mining organisations in the regions, but also to non-mine related customers.

 

Thirty months have lapsed since the commencement of the local supplier development programme. The programme has been successful with 215 contracts to date being awarded to 34 local suppliers, to the value of US$31.5 million in the disciplines of construction, ore and concentrate transport, training and catering. In 2009, 0.8% of total discretionary spend on goods, materials and services or an amount of US$6.6 million was spent on GLC suppliers.   In 2009, 117 additional contracts and orders were awarded to local suppliers. In order to identify opportunities within the GLC, we have conduct business landscape assessments during which available and potential businesses were identified and assessed – to date we have identified more than 200 potential suppliers who have registered companies of which the majority require development prior to participating in the programme. The supplier development programme has identified three ways of matching potential suppliers in the GLC with business opportunities, namely:

§          100% GLC owned companies. This is the preferred approach although it is often not possible due to a shortage of existing companies and skills;

§          100% GLC owned companies as sub contractor. This approach is to enable GLC companies, the opportunity to develop their skills and gain practical experience;

§          Joint ventures. The majority of established businesses will entertain joint ventures with GLC suppliers, affording them the opportunity to promote their own black economic empowerment and to be accepted as suppliers of services or products to the Company.

 

The programme requires, in order to be successful a range of partners, including training institutions, financial institutions and community groups. In order to develop the GLC companies in the most effective manner, in 2009, we established an incubation centre, thus providing a structured process for training, support and monitoring of these suppliers and potential suppliers.

   

Infrastructure development

We also have indirect economic impacts on the communities where we operate through our social development programmes, which encompass capital investment in public infrastructure development, education and health programmes. The social development programmes are aligned with the requirements of our Social and Labour Plans that are in turn aligned with the Integrated Development Plans of the municipal areas in which we operate. In 2009, US$2.6 million was spent on community infrastructure development projects of which the significant projects are outlined. Please refer to page78 for further information on these programmes.

 

Infrastructure development expenditure in 2009
Project	Lonmin Investment
North West water and sanitation project Water and sanitation ( Eastern Cape) Silindini bridge ( Eastern Cape) Health care delivery School facilities upgrade Personal computer laboratories Agisanang farming project Itireleng community co-operative	US$781,795 US$61,179 US$336,485 US$34,734 US$769,805 US$14,987 US$532,722 US$24,244

 

The Platinum Group Metals market

Product responsibility

We endeavour to undertake our mining and processing activities in an environmentally and socially acceptable manner, which in turn gives rise to a responsible product. We are committed to responsible product design and promoting the use, reuse, recycling and disposal of our products and where relevant, assess the health and safety impacts of the life cycle of our products. Our Company values and policy commitments underline our approach to marketing and selling of our products; we choose our customers based on their business ethics and sustainable development values and approach and relate to our customers as partners.

 

Accountability for product responsibility ultimately resides with our CEO. Although aspects relating to product quality are managed by the Executive Manager Marketing, the responsibility for product management, and training and awareness thereof, lies within each operational unit contributing to the lifecycle of our products.

 

Product classification and labelling

We are a founder member of the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) PGM consortium and strive to adhere to the codes and practices in respect of product classification and labelling adopted by the consortium. We actively participate and attend forums and submit and share data relating to the content and chemical composition to promote responsible distribution and management of our material. For more information on REACH and our participation in this regard, please refer to page 69.

 

Whilst there are no legislative requirements for our products, service information and labelling, information regarding the content of all of our material, particularly with regards to substances that may result in an environmental or social impact, is provided upon delivery to our customers.

 

Customer satisfaction

Although no external auditing in respect of customer product complaints is conducted at this stage, we have a comprehensive internal product concern monitoring process that is strictly adhered to by all stakeholders.   In terms of customer health and safety, there are no material health or safety complications related to the final product produced and marketed by the Company. Although the health and safety impacts of our post production product in its various stages of the life cycle has not been formally assessed, consistent efforts are made to address all health and safety issues as they relate to our products.

 

We assess our customer’s satisfaction on our final products through annual surveys in which our customers provide feedback and a rating in respect of their product satisfaction.   Our performance in terms of delivery, product quality, responsiveness, communications, labelling and packaging is assessed. Although the ratings from the annual surveys are confidential, we have performed well as per the results of these surveys.   We respect the privacy of our customers and to this end, we have confidentiality agreements in place with all our customers. No complaints regarding breaches of customer privacy or losses of data were recorded in 2009.

 

In 2009 there were no incidents of non-compliance with voluntary codes concerning the health and safety impacts of products and services. Due to the business-to business nature of our niche customer base, we assess compliance to voluntary codes with our customers in the form of structured discussions.   No incidents of non-compliance with regulations were reported in 2009. No incidents of non-compliance with regulations or voluntary codes concerning marketing communications, advertising, promotion or sponsorship were reported in 2009.   Our sales are largely business to business and as a result no definitive codes are followed for the purposes of marketing communications, promotions and sponsorships. Additionally in 2009, no fines were received in respect of non-compliances in the process of the provision and use of the product.

 

Five incidents of non-compliance with voluntary codes involving slight discrepancies in the composition of impurities contained in the product were reported in 2009. We responded and managed the concerns accordingly.

 

Product research and development

We seek to promote the use of PGMs and promote beneficiation within the South African context. To this end, we supply financial support for research and development efforts of our current customer base with a primary directive to find new applications for PGMs and opportunity to bring the ideas and concepts into the South African landscape for the benefit of the South African community and workforce. we were a key founder of the Platinum Beneficiation Committee in 2007 and continue to participate in the shaping of the beneficiation policies and developments within our industry.   We will continue to support and seek opportunities to create value and growth for the people of South Africa through its product streams.

 

Product promotion

We are particularly mindful of the fact that the jewellery industry is a key demand sector within the PGM consumption arena, yet one that is significantly impacted by the metal price and believe therefore that extra attention and promotional activity is needed to sustain this very important segment of the platinum industry.   We have been a primary sponsor to the Platinum Guild International for the past 10 years and 2009 was no exception. In 2009, the j ewellery industry embraced the new lower prices and as an industry the jewellery industry become the one shining light in an otherwise challenging environment, validating our firm belief that our support and activity within the jewellery industry is well placed and should continue unabated. As such we were the primary sponsor for the six consecutive year of the Platinum Collection Design Innovation Awards.

 

Introduction

Our economic impacts are both of a direct and indirect nature. Our mission is to grow and build our portfolio of high quality assets and to enable our shareholders to realise a superior total return on their investments and to improving the quality of life of current and future generations through the integration of economic prosperity, social development and environmental protection.

 

Additionally, we support the ICMM’s Resources and Economic position paper and acknowledge that mineral resources have the potential to promote economic development and contribute to poverty reduction.   Additional information on our financial performance can be obtained from our 2009 Annual Report.

 

The global economic downturn

We remain one of the lower cost producers of PGMs and have recently taken a number of significant actions to improve operational performance, achieve cost savings and preserve cash, to help mitigate the impact of the global economic downturn. These steps include a major restructuring programme at our core operations at Marikana, a renewed emphasis on low cost production and an extensive cash conservation programme across the business, specifically as follows:

Elimination of non-value-adding ounces:   We have ceased production from our higher unit cost operations, specifically at our opencast operations at Marikana and at our Baobab Shaft at Limpopo, which has been placed on care and maintenance. As part of these actions, we have completed a significant restructuring and retrenchment programme at our Marikana operation.

Change of mechanisation strategy:   We are in the process of switching from mechanised to hybrid mining at a number of our shafts, with conventional stoping supported by mechanised development.

Cost reduction, performance improvement and capital rationing: Approximately 7,000 full time employees and contractors employed at the Company exited as at 30 September 2009. The cost savings relating to this headcount reduction amounted to US$90 million for 2009.   Additionally we have implemented a number of programmes across our operations to improve performance going forward. In addition, capital expenditure programmes at the Limpopo Phase Two Project and Akanani were placed on hold.  As part of our restructuring programme, we have also significantly curtailed our exploration activities.

Simplification of organisational structure with clear accountability:   We have implemented a new simplified management structure which enhances focus and accountability, giving the operations more ownership of the functions required to ensure efficient and effective delivery. The Company’s new simplified management structure places the operational management emphasis firmly in South Africa.

 

We have also taken action to improve its financial flexibility, including not paying a final dividend for 2009 and refinancing US$575 million of existing facilities to maintain the aggregate quantum and lengthen significantly the tenure of the Company’s facilities.

 

Impacts of the downturn on sustainable development

In 2009, the Company’s profitability and cashflows were negatively impacted by the global economin downturn.   Consequently management initiated a major restructuring programme during the year, resulting in the voluntary separation and forced retrenchments of employees.   This impacted on our progress towards increasing the number of HDSA and gemale employees within the Company and retaining key skills within the workforce.   Futhermore, due to the adverse change in our financial situation, we will not achieve our tartets to construct houses and undertake hostel conversions by 2011.   Additionally, the completion date of a number of environmental and social projects have been extended in an attempt to reduce operational expenditure. However we have taken steps to ensure that this will not have a material impact on the business, our compliance or impacts to the environment or communities where we operate.   Despite the impact of the global economic downturn on our financial flexibility, we have not deviated from our belief in the business case for sustainable development and the associated business benefits.   Furthermore, we remain fully committed to the values of our Charter and our commitments within the Safety and Sustainable Development Policy.  Further information on the effect of the economic downturn on each of these sustainable development aspects have been provided within the body of this report.

 

Direct economic impacts

The 2009 Annual Report details all direct economic risks, opportunities and key strategies on our economic performance.

 

Operational performance

In 2009, our total platinum production amounted to 683,359 oz and our total PGMs produced amounted to 1,267,529 oz.

 

Economic performance

We recognise that as a leading global producer of PGMs, a finite resource, the impact our business has on the economic conditions of our stakeholders including employees and communities is extremely important. The value added statement for Lonmin Plc as at 30 September 2009 depicts our direct economic impact.

 

Value-added statement for Lonmin Plc as at 30 September 2009
	2009 US$ million	2008 US$ million	% Variance
Net cash generated Customers, consumers and investment income Cash received for products Cash return on investment	1,138 3	2,270 13	(50) (77)
Suppliers [1] Cash payments for materials and services purchased Cost of borrowings	(488)   (34)	(445)   (23)	10   48
Net cash flows	619	1,815	(66)
Cash distributed Human capital (salaries and benefits) Social capital - Donations - Other community projects Government taxes Directors remuneration Shareholders distribution Cash retained for sustainable growth	499 6.2 0.5 5.7 55 7 - 52	557 7.3 0.7 6.6 245 9 186 811	(10) (15) 100 (14) (78) (22) (100) (94)
Net cash distributed	619	1,815	(66)

1 We have a 30 day policy on services and procurement.

2 Inclusive of salary and administrative costs.

 

Payments to government

Neither the South African nor United Kingdom governments are present in the Company’s shareholding structure. The Extractive Industries Transparency Initiative is a coalition of governments, companies, civil society groups, investors and international organisations that aims to strengthen governance by improving transparency and accountability in the extractive sector. The Extractive Industries Transparency Initiative has a robust yet flexible methodology that ensures a global standard is maintained throughout the different implementing countries.   We are one of 37 companies from the oil, gas and mining industry that supports and actively participates in this initiative. By committing to support the initiative, we have submitted an International-Level Company Self Assessment form and commit to reporting publicly on an annual basis, any payments made to government. Government taxes in 2009 amounted to US$55 million.

 

Assistance from government

In 2009, the Company received a skills development grant, amounting to US$ 2.4 million from the Mining Qualifications Authority on evidence of the execution of our training programmes.  

 

Our employees

In 2009, the Company employed a combined total of 21,623 employees and 10,497 contractors. Where possible, we employ persons from our local communities. Employees, including executive Directors, received salaries to the value of US$499million.

 

Our shareholders

Indirect economic impacts

We, as a Company have both positive and negative economic impacts at a local, regional and often national level, examples including creating wealth through local market presence and community development and the impact of our workforce on the availability of housing and our physical impact on the environment.   Within this report we have reported on the significance of these impacts and where relevant, in the context of external benchmarks, such as international standards and protocols. We identify and assess our indirect impacts through amongst others, baseline assessments, needs analysis, stakeholder surveys and environmental and social impact assessments.

 

Indirect economic impacts are defined as intangible benefits that emanate from the secondary effects of capital investment, mine development and employment in the local community. We are committed to local employment, developing local suppliers and investing in local infrastructure to stimulate and attract further economic development in the areas where we operate. Our Social and Labour Plans provide for opportunities for employee and community development as aligned with the local government development plans. Risks associated with non-compliance to these plans may include compromised stakeholder relations, penalties and even temporary closure.

 

Preferential procurement

We support the transformation programmes of the South African government to address previous inequalities and to create stability and prosperity for all. A key component of transformation is enhancing the participation of HDSA companies, and in particular our local HDSA companies, in the procurement chains of our operations, in terms of consumables, services and capital.

 

As part of our Social and Labour Plan, we have set targets to increase our total procurement spend with HDSA suppliers to 60% by 2009, 63% by 2010, 64% by 2011 and 65% by 2012. In 2009, we have achieved and exceeded the 2009 target, with a 66.64% HDSA procurement spend.   In 2009, our HDSA procurement spend was US$523 million and our spend as from 2007 amounts to US$1,310 million.   Our procurement strategy targets HDSA companies and where this is not possible, we encourage existing suppliers to form partnerships with HDSA companies and to capacitate these companies. Aligned with our vision to create stable and economically independent communities, we are also focusing on developing supplier opportunities for local HDSA community members residing in the GLC.

 

The GLC supplier development programme

Although we have exceeded our target to increase our total discretionary spend with HDSA suppliers to 50% by 2009, the achievement of this target has not resulted significantly in the empowerment of the local community to our satisfaction, as HDSA suppliers from the metropolitan areas of Johannesburg and Pretoria have primarily benefited from this policy. To this end, we have also focused on developing the social and economic standing of local communities residing within the GLC through local supplier development. In 2007, we commenced with an initiative with the International Finance Corporation ( IFC), the duration of which is over a period of three years. The strategic objective of this programme is to tap the entrepreneurial skills of communities who reside in the GLC and develop 60 locally owned supply companies, thirty of them sustainable during the next three years and award them with contracts from the Company at a value exceeding US$44.5 million.   In addition to the geographical location of the supplier as well as the HDSA status, factors that influence our supplier selection include costs, financial credibility, environmental performance and social performance. The intent of this programme is to promote sustainability by contributing significantly to the development of the communities through enhancing knowledge, skills and entrepreneur development of the communities and community self reliance.   The basis for success is for these suppliers to extend their services, not only to other mining organisations in the regions, but also to non-mine related customers.

 

Thirty months have lapsed since the commencement of the local supplier development programme. The programme has been successful with 215 contracts to date being awarded to 34 local suppliers, to the value of US$31.5 million in the disciplines of construction, ore and concentrate transport, training and catering. In 2009, 0.8% of total discretionary spend on goods, materials and services or an amount of US$6.6 million was spent on GLC suppliers.   In 2009, 117 additional contracts and orders were awarded to local suppliers. In order to identify opportunities within the GLC, we have conduct business landscape assessments during which available and potential businesses were identified and assessed – to date we have identified more than 200 potential suppliers who have registered companies of which the majority require development prior to participating in the programme. The supplier development programme has identified three ways of matching potential suppliers in the GLC with business opportunities, namely:

§          100% GLC owned companies. This is the preferred approach although it is often not possible due to a shortage of existing companies and skills;

§          100% GLC owned companies as sub contractor. This approach is to enable GLC companies, the opportunity to develop their skills and gain practical experience;

§          Joint ventures. The majority of established businesses will entertain joint ventures with GLC suppliers, affording them the opportunity to promote their own black economic empowerment and to be accepted as suppliers of services or products to the Company.

 

The programme requires, in order to be successful a range of partners, including training institutions, financial institutions and community groups. In order to develop the GLC companies in the most effective manner, in 2009, we established an incubation centre, thus providing a structured process for training, support and monitoring of these suppliers and potential suppliers.

   

Infrastructure development

We also have indirect economic impacts on the communities where we operate through our social development programmes, which encompass capital investment in public infrastructure development, education and health programmes. The social development programmes are aligned with the requirements of our Social and Labour Plans that are in turn aligned with the Integrated Development Plans of the municipal areas in which we operate. In 2009, US$2.6 million was spent on community infrastructure development projects of which the significant projects are outlined. Please refer to page78 for further information on these programmes.

 

Infrastructure development expenditure in 2009
Project	Lonmin Investment
North West water and sanitation project Water and sanitation ( Eastern Cape) Silindini bridge ( Eastern Cape) Health care delivery School facilities upgrade Personal computer laboratories Agisanang farming project Itireleng community co-operative	US$781,795 US$61,179 US$336,485 US$34,734 US$769,805 US$14,987 US$532,722 US$24,244

 

The Platinum Group Metals market

Product responsibility

We endeavour to undertake our mining and processing activities in an environmentally and socially acceptable manner, which in turn gives rise to a responsible product. We are committed to responsible product design and promoting the use, reuse, recycling and disposal of our products and where relevant, assess the health and safety impacts of the life cycle of our products. Our Company values and policy commitments underline our approach to marketing and selling of our products; we choose our customers based on their business ethics and sustainable development values and approach and relate to our customers as partners.

 

Accountability for product responsibility ultimately resides with our CEO. Although aspects relating to product quality are managed by the Executive Manager Marketing, the responsibility for product management, and training and awareness thereof, lies within each operational unit contributing to the lifecycle of our products.

 

Product classification and labelling

We are a founder member of the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) PGM consortium and strive to adhere to the codes and practices in respect of product classification and labelling adopted by the consortium. We actively participate and attend forums and submit and share data relating to the content and chemical composition to promote responsible distribution and management of our material. For more information on REACH and our participation in this regard, please refer to page 69.

 

Whilst there are no legislative requirements for our products, service information and labelling, information regarding the content of all of our material, particularly with regards to substances that may result in an environmental or social impact, is provided upon delivery to our customers.

 

Customer satisfaction

Although no external auditing in respect of customer product complaints is conducted at this stage, we have a comprehensive internal product concern monitoring process that is strictly adhered to by all stakeholders.   In terms of customer health and safety, there are no material health or safety complications related to the final product produced and marketed by the Company. Although the health and safety impacts of our post production product in its various stages of the life cycle has not been formally assessed, consistent efforts are made to address all health and safety issues as they relate to our products.

 

We assess our customer’s satisfaction on our final products through annual surveys in which our customers provide feedback and a rating in respect of their product satisfaction.   Our performance in terms of delivery, product quality, responsiveness, communications, labelling and packaging is assessed. Although the ratings from the annual surveys are confidential, we have performed well as per the results of these surveys.   We respect the privacy of our customers and to this end, we have confidentiality agreements in place with all our customers. No complaints regarding breaches of customer privacy or losses of data were recorded in 2009.

 

In 2009 there were no incidents of non-compliance with voluntary codes concerning the health and safety impacts of products and services. Due to the business-to business nature of our niche customer base, we assess compliance to voluntary codes with our customers in the form of structured discussions.   No incidents of non-compliance with regulations were reported in 2009. No incidents of non-compliance with regulations or voluntary codes concerning marketing communications, advertising, promotion or sponsorship were reported in 2009.   Our sales are largely business to business and as a result no definitive codes are followed for the purposes of marketing communications, promotions and sponsorships. Additionally in 2009, no fines were received in respect of non-compliances in the process of the provision and use of the product.

 

Five incidents of non-compliance with voluntary codes involving slight discrepancies in the composition of impurities contained in the product were reported in 2009. We responded and managed the concerns accordingly.

 

Product research and development

We seek to promote the use of PGMs and promote beneficiation within the South African context. To this end, we supply financial support for research and development efforts of our current customer base with a primary directive to find new applications for PGMs and opportunity to bring the ideas and concepts into the South African landscape for the benefit of the South African community and workforce. we were a key founder of the Platinum Beneficiation Committee in 2007 and continue to participate in the shaping of the beneficiation policies and developments within our industry.   We will continue to support and seek opportunities to create value and growth for the people of South Africa through its product streams.

 

Product promotion

We are particularly mindful of the fact that the jewellery industry is a key demand sector within the PGM consumption arena, yet one that is significantly impacted by the metal price and believe therefore that extra attention and promotional activity is needed to sustain this very important segment of the platinum industry.   We have been a primary sponsor to the Platinum Guild International for the past 10 years and 2009 was no exception. In 2009, the j ewellery industry embraced the new lower prices and as an industry the jewellery industry become the one shining light in an otherwise challenging environment, validating our firm belief that our support and activity within the jewellery industry is well placed and should continue unabated. As such we were the primary sponsor for the six consecutive year of the Platinum Collection Design Innovation Awards.

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