Social and Relationship Capital

Mining activities make a significant contribution to the national economy and create financial opportunities for the local economies in which they operate. Pan African Resources recognises its responsibility to be a socially responsible corporate citizen.

Why communities are material to Pan African Resources

As employers and valuable contributors to the nation’s economy, Pan African Resources has a key role to play in South Africa’s transformation journey and a moral obligation to deliver meaningful direct and indirect social benefits for local communities. Through local community investments, we support initiatives that benefit communities and promote their sustainable development. Understanding and proactively managing the impacts of mining on communities is integral to the success of our operations.

Management Approach

Pan African Resources operates mines in the Barberton and Evander regions of the Mpumalanga province of South Africa. Each of our operations has developed programmes aimed at optimising the benefits we offer communities by creating shared value, while at the same time anticipating and mitigating any potential negative social impacts of our activities. Our approach centres on:
◗ building strong relationships with community members and leaders
◗ upholding fundamental human rights
◗ investing in meaningful community upliftment and empowerment projects
◗ catalysing sustainable development
◗ respecting cultures, customs and values
◗ engaging in open and inclusive dialogue.

We recognise that continuous stakeholder and community engagement is key to cultivating a safe and healthy environment for all. We are working towards building better relationships with our communities over time and inviting those stakeholders to engage with us through established community forums about the issues they experience, so that we can take steps to resolve these collaboratively. Our mine representatives attend monthly and quarterly community forum meetings to address community concerns.

The community steering committee, established by the Elikhulu team to represent Evander Mines and all relevant community stakeholders, continues to engage with the Evander community to address grievances and concerns. Mine representatives attend monthly and quarterly human settlement and LED meetings of Govan Mbeki Municipality.

The Mining Charter and Social and Labour Plans

The Mining Charter and social and labour plans The Mining Charter III sets out targets for the mining industry in terms of social development and community upliftment. We comply with the requirements of the MPRDA and submit annual progress reports on our SLPs to the DMR. To minimise any negative social impacts from our mining operations, we monitor, measure and manage our social and economic impact in line with approved SLPs.

All SLP processes are conducted through recognised municipal structures and we review our SLP spend regularly, based on our available financial resources and legislative requirements. In the 2019 financial year, no fines or sanctions were received for non-compliance with social or economic laws and/or regulations.

Corporate Social Investment

Corporate and social responsibility is the group’s overall contribution to society, including its role as social investor, employer and capacity builder. We continue to drive various community-focused development projects in the areas and communities in which we operate. The group also promotes responsible supply chain management by encouraging our suppliers to support LED projects where possible.

Corporate social investment and local economic development

The group has maintained its contributions to CSI, LED projects and bursaries as required by legislation. The group spent USD1.9 million (2018: USD1.1 million) on CSI, LED projects and bursaries.

Illegal Mining

Illegal mining activities are a constant challenge at all Barberton mining facilities, particularly in and around the mountain range separating Fairview Mine and Sheba Mine. During recent years, the influx of illegal immigrants from neighbouring countries to the Barberton region, especially from Lesotho, Mozambique and Zimbabwe, has led to a significant increase in the number of foreign nationals being arrested for illegal mining at Barberton Mines. In addition, it has also been found that local youths are increasingly abandoning their education to join the illegal miners in their illicit activities.
During the 2019 financial year, we focused on clamping down on illegal mining to assist in addressing these social challenges. As a result, 2,900 suspected criminals have been arrested for the theft of gold-bearing material and other commodities such as copper cable and scrap metal at Barberton Mines and Evander Mines. We recognise, however, that this is an ongoing issue that has to be constantly monitored. We will continue to work with our security contractors and the South African Police Service to inhibit illegal mining and criminal activities and limit their impact on the safety and moral fibre of local communities and our operations.

Supporting our Communities Through Our Transformation Trusts

Pan African Resources’ investment in communities through the group’s transformation trusts amounted to USD1.3 million for the current financial year (2018: USD1.0 million). This included contributions from gold mining operations and suppliers.
Wherever possible, the group promotes responsible and ethical supply chain management by encouraging suppliers to support local economic development. Barberton Mines and Evander Mines encourage their suppliers to contribute up to 1% of their contract value to these trusts.
The objective of these trusts is to improve the quality of life of the local community, create jobs and promote socio-economic development.
The BMTT is facilitating an innovative small enterprise development programme for entrepreneurs in the community. This will assist existing small, medium and micro-sized enterprises (SMMEs)in the immediate communities surrounding Barberton Mines to grow and become regionally competitive, self-sustainable businesses.
The BMTT is also in the process of establishing a business development hub to provide support for small enterprises. The hub will provide a host of services typically required by any developing business that wishes to provide services to Barberton Mines and other businesses or industries in the region. The initiative will identify up to 100 community-based businesses and coach them through a four-phase development plan.

Preferential Procurement

Our primary procurement objective is to control costs, achieve savings and manage inventory across operations through decentralised sourcing. In addition, we are committed to increasing spend with black-owned and black-women-owned businesses, as well as uplifting the communities where we operate through proactive projects and strategic sourcing.
Our operations promote responsible and ethical supply chain management by encouraging suppliers and contractors to support local economic development through the employment of community members and sourcing local products where possible.
Contributions by suppliers to our transformation trusts also count towards their BBBEE scorecard achievements.

LOOKING AHEAD

We will continue focusing on youth and small enterprise development, while proactively managing community expectations through ongoing engagement and education