Strengthening Stakeholder Relationships

Pan African Resources (PAR) has established itself as a leading mid-tier gold producer, committed to sustainability and safety while maximising value from mineral deposits. A cornerstone of its success lies in fostering ethical, transparent, and constructive relationships with stakeholders, including engagement with local communities, governments, investors, and suppliers. Through continuous and meaningful engagement strategies, the company is well-positioned to deliver significant long-term value.

Over the years, these stakeholder relationships have been integral to promoting responsible, environmentally friendly, and socially equitable mining practices. Additionally, by cultivating positive stakeholder partnerships, Pan African Resources (PAR) has unlocked new growth opportunities, mitigated risks, and enhanced its competitive edge as a mid-tier gold miner.

This article explores how PAR strengthens its relationships with communities, suppliers, employees, and regulatory bodies as part of its commitment to sustainable mining practices.

Key Takeaways:

• A glimpse of what PAR is doing to ensure sustainable mining and corporate governance
• Understanding what PAR is doing to safeguard and strengthen trust from stakeholders
• A closer look at PAR sustainability efforts aimed at protecting the environment
• Why PAR is committed to strengthening supplier relations

Table of Contents

• Partnerships for Progress: Strengthening Stakeholder Relationships
  • Key Takeaways
  • Commitment to Responsible Mining and Corporate Governance
  • Building Trust with Local Communities and Governments
  • Collaboration for Environmental Sustainability
  • Strengthening Supplier Relationships for Operational Efficiency
  • Fostering Sustainable Stakeholder Relationship Value
  • Conclusion: Moving Forward Together

Pan African Resources has embraced responsible and sustainable mining practices to differentiate itself from competitors and ensure long-term success and mining longevity. The company is committed to meeting and exceeding Environmental, Social, and Governance (ESG) compliance standards, which are becoming the cornerstone of sustainable mining.

The mid-tier gold miner strives to leave a positive legacy through responsible mining and improved reporting. Its approach to climate change is informed by international and local regulations, as well as global goals such as the King IV Report on Corporate Governance, The Paris Agreement, the Kunming-Montreal Global Biodiversity Framework, GRI standards, and GHG Protocols. These frameworks hold mining companies accountable for their carbon footprint and encourage them to minimise the impact of operations on land, water, and air quality.

Their dedication to sustainability goes beyond compliance, involving collaboration with experts to implement conservation and sustainability initiatives that benefit all stakeholders. For instance, PAR has championed the use of solar energy at its Barberton and Evander mines, while promoting water recycling and resource recovery at its Mogale Tailings retreatment (MTR) operations. These efforts have helped the company reduce its reliance on the constrained national grid, cut electricity costs, and significantly lower its carbon footprint. PAR is constantly expanding its renewable energy footprint through wheeling agreements with other producers as well as feasibility studies with plants at its other operations and aims to obtain 50% of its energy requirements from renewable energy sources by 2030.

As part of its commitment to responsible governance, the company conducts regular reviews and audits of its mining operations to assess critical impacts and risks to stakeholders, further implementing measures to address them. These evaluations also aid in identifying and engaging with stakeholders affected by the business, fostering ongoing dialogue and mutual understanding.

Source: Pan African Resources

The mining industry has historically contributed to significant environmental and social issues, including erosion, acid drainage, mining waste, and biodiversity loss, all of which jeopardise the livelihoods of local communities.

PAR has set itself apart by prioritising sustainable mining practices that address stakeholder needs while safeguarding the environment. Through its robust ESG strategy and framework, the company fosters a sense of inclusion, builds trust within communities, and maintains its social license to operate.

By identifying new business opportunities and investing in essential infrastructure such as schools and clinics, PAR has successfully established trust with local communities. Its initiatives demonstrate a commitment to mitigating the negative social impacts of mining activities while fostering long-term collaboration.

Another segment of its ESG strategy is that PAR employs 90% of its workforce from local communities where its gold mining projects are located. These employment opportunities have significantly boosted local economies and social well-being by promoting family living (instead of using migrant labour and hostels), reinforcing the company’s reputation as an organisation that prioritises community growth and development and gives back to those involved in every operation and project.

Corporate social investments further strengthen PAR’s productive relationships with stakeholders. For example, the company contributed R7.5 million toward building modern school infrastructure at Barberton’s Sheba Primary School and renovated classrooms and facilities at the Ngwake Primary School. They added vital amenities such as a dining hall, kitchen, classrooms, restrooms, assembly shelters, and fencing.

In addition to education, PAR has innovatively leveraged the rising demand for blueberries by converting 15 hectares of fallow mining land in Barberton into productive farmland. This initiative not only created over 200 seasonal jobs but also exemplifies the company’s commitment to creating sustainable economic opportunities that benefit local communities. Together, these efforts promote trust, collaboration, and mutual benefits, ensuring strong and enduring stakeholder relationships.

Source: Pan African Resources

PAR has embraced a holistic environmental strategy that strives to ensure sustainable gold production while reducing its ecological footprint. Part of the effort entails prioritizing the preservation of diversity and vital natural resources like air, water, soil, flora, and fauna.

As part of its efforts to lower its carbon footprint, PAR has invested heavily in renewable energy. The company was the first in its sector to construct and commission a grid-tied utility-scale solar plant, generating 10MW of power at its Evander Mines. This facility meets approximately 30% of the power requirements for the Elikhulu Tailings Retreatment Plant and reduces CO2 emissions by over 26,000 tons annually. A second solar plant, generating 8.75MW in Barberton, is expected to deliver cost savings of approximately US$2.4 million based on current tariffs.

PAR’s bid to reduce its reliance on the national grid, which is usually unreliable due to frequent outages as a result of ageing infrastructure, has also received a significant boost. In June, the company secured a $19.4 million green loan facility that it can use to increase the renewable energy generation capacity of its solar plants at Evander and Barberton, as well as consider a new facility at MTR.

Beyond renewable energy, PAR places a strong emphasis on water conservation. The company ensures compliance with water use license conditions and recycles underground mine discharge water for reuse in surface operations. Barberton Mines employs an efficient closed-loop water recycling system, while Evander Mines’ water treatment plant has reduced municipal water withdrawals, leading to cost savings and a smaller environmental footprint.

Through these initiatives, PAR demonstrates how environmental sustainability can align with operational efficiency and stakeholder trust, reinforcing its reputation as a responsible and forward-thinking gold producer.

PAR has continuously reiterated its commitment to understanding and considering the legitimate needs, interests, and expectations of its local suppliers. The company’s top management maintains clear and open communication with the suppliers to ensure effective engagement that supports the vision of creating long-term value while addressing the needs of different stakeholders.

A key component of this strategy is the local sourcing of goods and services, building strong relationships with surrounding communities and reinforcing the company’s social license to operate. In 2023, PAR sourced 37% of its mining goods from small and medium-sized businesses, underlining its commitment to supporting local economies.

The company’s enterprise and supplier development programs at Barberton and Evander Mines provide essential support to local suppliers, enabling them to comply with the standards required by mining companies and sustain and grow their businesses. One notable success story is Nosamukelo (Pty) Ltd, led by Lydia Peterson in Evander. Lydia’s home-based sewing business outgrew her space, prompting Evander Mines to assist her in finding a larger location in a nearby shopping centre. Additionally, she was enrolled in the mine’s supplier development program, equipping her business with the tools and resources needed to scale further.

By prioritizing local suppliers, PAR not only reduces procurement costs but also contributes to regional economic development and industrialization, creating further potential downstream employment. Furthermore, the company has forged strategic partnerships with suppliers who ensure the quality, price, and availability of materials, enhancing operational efficiency while reinforcing its reputation as a responsible mining operator.

Pan African Resources hit a new milestone in 2024 as its gold production increased by 6.2% to 186,039 ounces. The increase came as the company benefited from operational improvements and optimization initiatives. Consequently, its revenue increased by 16.8% to US$373.8 million, resulting in a profit of $78.8 million. The company ended the fiscal year with $90.8 million in net cash from operations, providing the financial strength to reinvest in its mining activities and deliver value to shareholders.

In light of these results, PAR has reiterated its commitment to returning value to stakeholders and shareholders. The company has already proposed a $26.8 million sector-leading dividend at the end of the 2024 financial year, translating to $1.20946 per share held.

Additionally, it has made investments in initiatives and development projects that have positively impacted community stakeholders and the sustainability of the business. These initiatives include programs for health and wellness, education, agriculture, school and health infrastructure aimed at fostering stakeholder relations. It is also engaged in skills development, youth and women’s employment, biodiversity and conservation, energy and climate change, and water management, affirming its sustainability standards.

The success of any mining company lies in how effectively it relates to and engages with its stakeholders, including governments, suppliers, investors, and local communities. For PAR, stakeholder engagement goes beyond building relationships – it is about understanding stakeholder needs, addressing concerns, and creating shared solutions that drive long-term sustainability and value.

PAR stands out as a mid-tier gold mining company committed to responsible and sustainable mining. By carefully managing its environmental and social impacts, cultivating opportunities, and fostering collaboration, the company is leaving a positive legacy while safeguarding its stakeholders’ interests. This approach not only enhances operational success but also positions PAR as a leader in responsible and sustainable mining practices for the entire industry.