KHUTALA COLLIERY

JUNE 2017Mining Right Reference Number: MP 30/5/1/2/2/118 MR

SOCIAL AND LABOUR PLAN FOR SOUTH32

Table of Contents Abbreviations 6

1. INTRODUCTION AND PREAMBLE 8

1.1 Introduction 8

1.2 Preamble 8

1.3 Mining Methodology 9

1.4 Current and Expected Workforce 9

1.5 Local Recruitment 9

2. HUMAN RESOURCE DEVELOPMENT PLAN 12

2.1 Introduction 12

2.2 Skills Development Plan 12

2.2.1 Education and Training 12

2.2.2 Learnerships 15

2.2.3 Core Business Skills Programme 17

2.2.4 Portable Skills Training 18

2.2.5 Hard to Fill Vacancies 20

2.2.6 Career Progression Plan 21

2.2.7 Mentorship Plan 22

2.2.8 Bursary Plan and Graduate Development Programme (Internship) 23

2.2.8.1 Full Study Bursaries 23

2.2.8.2 Study Assistance 23

2.2.9 Internship Programme (Graduate Development Programme) 25

2.2.10 Employment Equity Plan 25

2.2.11 Employment Equity Strategies Applied at Khutala Colliery 26

a) Capacity Building (Talent Pool Development) 26

b) Fast Tracking 27

2.2.12 Participation of Historically Disadvantaged South Africans 27

2.2.13 Women at the Mine 28

3. LOCAL ECONOMIC DEVELOPMENT PROGRAMME 30

3.1 Introduction 30

3.2 South32 Transformation Strategy 30

3.3 Socio-Economic Background Information 30

3.5 Local Economic Development Planning 37

3.5.1.1 Integrated Development Planning: Nkangala District Municipality 37

3.5.2 Integrated Development Planning: Emalahleni Local Municipality 37

3.6 Stakeholder Engagement and Management Plan 38

3.7 Socio-Economic Impact of the Mine in the local Communities 39

3.8 Infrastructure Development, Poverty Eradication and

Welfare Creation Projects 40

3.8.1 Infrastructure Development and Poverty Alleviation Programmes 40

3.9 Housing and Living Conditions 41

3.10 Health Care and Nutrition Plan 41

3.11 Procurement Plan 42

3.11.1 Enterprise Development 43

4. Downscaling and Retrenchment 45

4.1 1 Introduction 45

4.2 Future Forum 45

4.3 Communication with Authorities 46

4.4 Mechanisms to Avoid Job Losses 46

4.5 Provision of alternative solutions and procedures for creating

job security where job losses cannot be avoided 46

4.6 Mechanisms to ameliorate the social and economic impact on

individuals, regions and economies where retrenchment or closure of

the operation is certain 47

4.7 Post Closure Planning 48

4.8 Social and Labour Plan (SLP) Communication 48

5. Financial Provision 50

5.1 Financial Provision 50

5.2 Financial Provision for Human Resource Development

Programmes (Regulation 46 (e)(i)) 50

5.3 Financial Provision for Local Economic Development

Programmes (Regulation 46(e)(ii)) .. 51

5.4 Financial Provision for Management of Downscaling and

Retrenchment (Regulation 46(e) (iii)) 51

6 Undertaking 53

Addendum A: Labour Sending Areas 54

List of Table

Figure 1: Map indicating the location of Khutala Colliery 9

Table 1: Local Recruitment Undertaking Summary 9

Table 2: Labour Sending Areas at Khutala Colliery as at 28 February 2017 10

Table 3: Occupational Distribution of Khutala Colliery’s Workforce for Five (5) Years

(FY 2018 to 2022) 10

Table 4: Adult Basic Education and Training Undertaking 13

Table 5: AET Targets at Khutala Colliery (FY 2018 to 2022) 13

Table 6: Form Q – Functional Literacy at Khutala Colliery as at 28 February 2017 14

Table 7: Learnerships Undertaking 15

Table 8: Section 18.1 Learnership Targets for Khutala Colliery (FY 2018 to 2022) 16

Table 9: Section 18.2 Learnership Targets for Khutala Colliery (FY 2018 to 2022) 17

Table 10: Core Business Skills Programme Undertaking 18

Table 11: Projected Core Technical and Non-Technical Business Skills Training

Targets at Khutala Colliery (FY 2018 to 2022) 18

Table 12: Projected Artisan Training Targets for Khutala Colliery (FY 2018 to 2022) 19

Table 13: Portable Skills Undertaking 19

Table 14: Portable Skills Training at Khutala Colliery (FY 2018 to 2022) 20

Table 15: Community Portable Skills Training at Khutala Colliery (FY 2018 to 2022) 20

Table 16: Form R- Hard to fill vacancies 21

Table 17: Career Progression Undertaking 21

Table 18: Employees with Individual development plans 22

Table 19: Mentorship Undertaking 23

Table 20: Mentorship Target Table: 23

Table 21: Bursary Undertaking 24

Table 22: Targets for Child of Employee Bursary Programmes at Khutala Colliery

(FY 2018 to 2022) 25 Table 23: Targets for External Bursary Programmes

at Khutala Colliery (FY 2018 to 2022) 26

Table 24: Summary of Employee Study Assistance Targets at Khutala Colliery

(FY 2018 to 2022) 27

Table 25: Feedback on Internship/Graduate Development Programme Undertaking 28

Table 26: Internship/Graduate Development Programme Targets at Khutala Colliery

(FY 2018 to 2022) 28

Table 27: Employment Equity Undertaking 29

Table 28: Form S: Employment Equity Statistics at Khutala Colliery as at

28 February 2017 30

Table 29: Development of HDSA’s into Management 31

Table 30: HDSA’s in Management Targets for Khutala Colliery (FY 2018 to 2022) 32

Table 31: Women at the Mine 33

Table 32: Targets for Participation of Women in Mining at Khutala Colliery

FY 2018 to 2022) 34

Table 33: Socio-Economic Profile of Surrounding Region – Population 37

Table 34: Socio-Economic Profile of Surrounding Region - Dwelling Type 37

Table 35: Socio-Economic Profile of Surrounding Region - Toilet Facilities 38

Table 36: Socio-Economic Profile of Surrounding Region – Water Provision 38

Table 37: Socio-Economic Profile of Surrounding Region - Refuse Removal 39

Table 38: Socio-Economic Profile of Surrounding Region - Energy Source used for Cooking 39

Table 39: Socio-Economic Profile of Surrounding Region - Energy Source used for Heating 40

Table 41: Socio-Economic Profile of Surrounding Region – Education 41

Table 42: Socio-Economic Profile of Surrounding Region – Employment 41

Table 43: Socio-Economic Profile of Surrounding Region – Individual Income 41

Table 44: Sectorial Employment within the Surrounding Region in 2011 42

Table 45: IDP Priority Issues and Objectives for Nkangala District Municipality 43

Table 46: Record of Stakeholder Engagement 45

Table 47: Five Year Project Summary Plan for Local Economic Development Projects

of Khutala Colliery 48

Table 48: Housing and Living Conditions Undertaking 49

Table 49: Health Care and Nutrition Plan Undertaking 50

Table 50: Background on Preferential Procurement Undertaking 51

Table 51: Targets for HDSA procurement at Khutala Colliery (FY 2018 to 2022) 52

Table 52: Downscaling and Retrenchment Undertaking 54

Table 53: Strategic Action Plan to Establish Future Forum 55

Table 54: Strategic Action Plan to Communicate with the Authorities 55

Table 55: Mechanisms to Avoid Job Losses Undertaking 56

Table 56: Provision of Alternative Solutions Undertaking 56

Table 57: Mechanisms to Ameliorate the Social-Economic Impact Undertaking 57

Table 58: Strategic Action Plan to Communicate the Social and Labour Plan 58

Table 59: Summary of Financial Provision for Key Elements of Khutala Colliery’s SLP over the

Five (5) Year Period (FY 2018 to 2022) 60

Table 60: Summary Breakdown of Human Resources Development Five (5) Year Budget for

Khutala Colliery (FY 2018 to 2022) 60

06

Abbreviations

ABBREVIATION MEANING

AET Adult Basic Education and Training

BEE Black Economic Empowerment

CV Curriculum Vitae

DACE Department of Agriculture, Conservation and Environment

DMR Department of Mineral Resources

DoL Department of Labour

DTI Department of Trade and Industry

EE Economic Empowering

EIA Environmental Impact Assessment

ELM Emalahleni Local Municipality

FY Financial Year

GET General Education and Training

HDSAs Historically Disadvantaged South Africans

HET Higher Education and Training

HRD Human Resources Development

HRDP Human Resources Development Programme

ICDP Individual Career Development Plan

IDPs Integrated Development Plans

JV Joint Venture

LED Local Economic Development

LEDP Local Economic Development Programme

MPRDA Minerals and Petroleum Resources Development Act (no. 28, 2002)

MQA Mining Qualifications Authority

NDM Nkangala District Municipality

NQF National Qualifications Framework

NSDP National Spatial Development Perspective

PGDS Provincial Growth and Development Strategy

RSA Republic of South Africa

SETA Sector Education and Training Authority

SLP Social and Labour Plan

SMMEs Small, Medium and Micro Enterprises

TBC To Be Confirmed

UIF Unemployment Insurance Fund

VCT Voluntary Counselling and Testing

WIM Women in Mining

WSP Workplace Skills Plan

SECT

ION 1

SECTION 1INTRODUCTION TOAND BACKGROUND

INFORMATION ON THE OPERATION

08

1. INTRODUCTION AND PREAMBLE1.1. Introduction

This Revised Social and Labour Plan (SLP) is submitted by South32 SA Coal Holdings Propriety Limited in compliance with the requirements of the Mineral and Petroleum Resources Development Act of 2002 (MPRDA), to operate with an approved Social and Labour plan for the live of the mine, as referenced in the Khutala Colliery’s Mining Right issued under DMR reference MP 30/5/1/2/2/118 MR. This SLP has been compiled in terms of the Mineral and Petroleum Resources Development Act of 2002, and sets out the social and labour programmes to be in place for the life of the mining right.

The objectives of the SLP (section 41 of the Regulations) are to:

• Promote economic growth and mineral and petroleum resources development in the Republic (Section 2 (e) of the (MPRDA); • Promote employment and advance the social and economic welfare of all South Africans (Section 2 (f) of the MPRDA); • Ensure that holders of mining or production rights contribute towards the socio-economic development of the

areas in which they are operating as well as the areas from which the majority of the workforce is sourced (Section 2 (i) of the (MPRDA); and

• To utilise and expand the existing skills base for the empowerment of HDSA and to serve the community.

1.2. Preamble

Name of Company: South32 SA Coal Holdings Propriety Limited

Name of Colliery: Khutala Colliery (“herein referred to as Khutala”)

Name and address of miningright holder Physical Address:

South32. 39 Melrose Boulevard Melrose Arch Johannesburg 2076

Postal Address: PO Box 61820, Marshalltown, 2107

Contact Person: Jaison Rajan

Telephone Number: ((013)– 648 5001

Email Address: jaison.rajan@south32.net

Location of Mine: Khutala is located in the Emalahleni Local Municipality (ELM) within the Nkangala District Municipality (NDM) in the Mpumalanga Province. Ogies is situated 11 kilometres North East of the Colliery and Kendal is approximately 15 kilometres North West. Witbank is the nearest major centre and is located 55 kilometres to the North East of Khutala

Commodity: Coal

Life of Mine: 30 years

Financial Year: 30 JuneAny reference in this document for the period 1 July 2017 to 30 June 2022 refers to FY2018 – FY2022.

Reporting Period: July to June as per financial year

09

Figure 1: Map indicating the location of Khutala Colliery

1.3 Mining Methodology

Khutala Colliery is a predominantly underground coal mine situated approximately 100km east of Johannesburg, and 50km from Witbank in the Witbank Coal basin and is situated on the Bombardie Cologne coalfields, which feature five coal seams.

At Khutala No2, 4 and 5 seams are suitable for mining at approximately average depth of 100m, 80 and 50mrespectively. No2 and 4 seams are dedicated to supply Kendal Power Station with No 5 Seam, a high-grade metallurgical coal, has been earmarked for future export.

Underground reserves are mined by employing the mechanical board and pillar method of mining. Coal is transported to surface via a network of conveyor belts systems of variable capacities.

1.4 Current and Expected Workforce

Khutala is currently at steady status with a total labour force of one thousand six hundred and eight-four (1,684) employees in permanent positions (Table 3). The mine foresees a slight increase of 5% in the total labour force numbers over the five SLP period. Khutala Colliery remains committed to continue the focus on preferential recruitment from their local host communities (currently at 90%) as outlined in Section 1.5 below.

1.5 Local Recruitment

Table 1: Local Recruitment Undertaking Summary

Undertaking: Khutala is committed to the development and transformation of the affected communities within which it is operating. In order to achieve this, Khutala has a strong focus on the recruitment anddevelopment of local community members, with an emphasis on the development of the previously unskilled and unemployed members of the affected communities.

Summary Khutala’s skills development programmes have been aligned in such a manner that unskilledemployees (especially from the local areas) have opportunities for career development.

010

Table 2: Labour Sending Areas at Khutala Colliery as at 28 February 2017Sending Areas Count %

Local (Nkangala District) 1521 90.30%In Province Employment 85 5.04%Inter ProvincialEmployment

78 4.63%

Total: 1684 100%

Table 3: Occupational Distribution of Khutala Colliery’s Workforce for Five (5) Years (FY 2018 to 2022

OPERATION WORKFORCE PLAN

Current Labour

FY 2018

FY 2019

FY 2020 FY 2021 FY

2022

Top management (f) 0 0 0 0 0

Senior management (e) 9 10 10 10 10 10

Professionally qualified and experienced specialists and middle management (d)

90 107 107 107 107 107

Skilled technical and academically qualified workers, junior management, supervisors, foremen and superintendents (c)

717 769 769 769 769 769

Semi-skilled and discretionary decisions making (b)

868 892 892 892 892 892

Unskilled and defined decision making (a) 0 0 0 0 0 0

TOTAL PERMANENT 1684 1778 1778 1778 1778 1778

Non- permanent 0 0 0 0 0

TOTAL 1684 1778 1778 1778 1778 1778

011 SECT

ION 2

SECTION 2HUMAN RESOURCE

DEVELOPMENT

012

2. HUMAN RESOURCE DEVELOPMENT PLAN2.1 Introduction

The Human Resources Development (HRD) strategy for Khutala focuses on talent and performance management mechanisms, in conjunction with a competency-based career development programme and centrally managed graduate, bursary and Learnership programmes for permanent employees. Portable Skills, Literacy and Numeracy training are of further significance in the integrated HRD programme geared towards ensuring effective business operations as well as accredited and transferable skills training amongst the workforce.

2.2 Skills Development Plan

Khutala implements skills development programmes that focus on equipping employees with skills to enhance their progression at the colliery and the mining industry in general, as well as their development in respect of other sectors of the economy.

The objectives for skills development are: • Developing and growing the existing internal talent pool to meet current and future business needs with a strong emphasis on transformation and redressing past practices; • Establishing a pool of skilled workers that can potentially fulfil the Company’s hard-to-find skills and transformation requirements; • Allowing new entrants into the labour market to gain relevant work experience; • Improving the quality of life of employees; and • Providing portable and lifelong skills opportunities to improve and enhance employees’ economic independence.

Khutala complies with the requirements of the Skills Development Act and will continue to submit the Operation’s Workplace Skills Plan (WSP) annually, as required by the Act. South32 has registered all of its mining operations with the relevant Sector Education and Training Authority (SETA), i.e. the Mining Qualifications Authority (MQA), and undertakes to continue to contribute towards Skills Development Levies.

Key strategic plans within the Skills Development Plan for Khutala are outlined in the following sections: • Education and Training, including Adult Basic Education and Training (AET); • Learnerships; • Skills programmes; • Portable skills programmes; and • Hard-to-fill vacancies.

2.2.1 Education and Training

The current literacy rate at Khutala Colliery is 74% (Ref. Table 6: Form Q), with an identified AET need of a total of eighty-seven (87) employees. Khutala’s AET programme is a key initiative to ensure lower skilled employees can access future career development opportunities such as artisan and learnership programmes. Khutala has committed a total budget of 5.4 million rand to ensure that the AET programme can be provided on a full-time basis, offering AET levels 1 to 4, facilitated by suitably qualified and accredited service providers. The colliery will strive to provide eligible employees access to the relevant AET programme; through the following mechanisms: • Linking AET to various skills programmes; • Unions as ambassadors; and • In-house recognition for achievements (graduation ceremony).Khutala’s HRD will monitor enrolments in the respective levels of AET monthly and quarterly and continue reporting through existing mechanisms. In addition to monitoring progress, Khutala’s HRD will conduct individual sessions with identified AET candidates (below AET Level 4) to inform them of the benefits of obtaining an AET Level 4 qualification. Candidates opting not to be part of the AET programme will be requested to provide a written submission to the HRD management providing reasons for not participating in the programme.

013

Table 4: Adult Basic Education and Training UndertakingUndertaking: Khutala undertakes to assist in improving the foundations for skills development by increasing the

literacy rate through participation in AET. The Company will focus on providing education andtraining opportunities through AET training from Pre - AET to AET level 4.

Summary

Employees at Khutala will be assessed on a continuous basis within the development andperformance management process to ensure that the minimum entry levels are achieved.Furthermore, AET training will be utilized as one of the mechanisms to achieve the minimum level of entry to other skills development. Once the objectives have been reached as set out, the skills development programme will focus on providing higher training opportunities through thesuccessive NQF levels.

ResponsiblePerson

Strategic Action Timeframe

HRDSuperintendent

Develop a detailed programme to provide ABET to those employees who are still eligible for ABET.

Annually

HRDSuperintendent

Develop a detailed programme to increase the number of participants in NQF Level 1 training, and expand the training to higher levels.

Annually

HRDSuperintendent

Discussion with the Unions about their perceptions on the proposed ABET and NQF programmes, and recording their suggestions.

Annually

HRDSuperintendent

Ensure that an annual WSP/ATR is compiled and monitor progress. Annually

The current AET need at Khutala outlined in Table 5 below, was derived from the information reported in Form Q (Table 6) below, is three hundred and eight-one (381). The strategy Khutala is going to follow will be as follows; to focus on individuals age 55 years and younger, including those targeted and identified to further their studies in AET and this amounts to the total as in Table 5 below of a total of 204 (Two Hundred and Four). The individuals over the age of 55 years who still wants to do AET will not be excluded but they are not our focus area for the next 5 years. Form Q will be updated at the end of each reporting cycle of the Colliery and submitted to the DMR. Details of the AET programmes provided for the following years, and the beneficiaries thereof, will be included in the Workplace Skills Plans (WSPs), which will be updated and submitted once a year to the MQA and integrated into the SLP.

Table 5 below provides a detailed breakdown of the AET need on each level, however the AET need is not a true reflection of the operations educational levels as some employee’s educational levels have not been captured on the database, however efforts are being made to ensure that all employees educational levels are accurately reported. The targets for AET for the next five years are outlined in Table 5 below and are based on the resources available at the mine to enable employees to attend AET classes

Table 5: AET Targets at Klipspruit (FY 2018 to 2022)

Employees AET Need

2018 2019 2020 2021 2022 Total

Pre-AET 148 22 15 0 0 0 37

AET Level 1 0 6 9 12 8 7 42

AET Level 2 95 6 9 12 10 9 46

AET Level 3 68 6 7 10 10 9 42

AET Level 4 70 6 5 9 9 8 37

Total No. of AET Enrolments

381 46 45 43 37 33 204

Total Budget R803 530 R989 930 R1 423 200 R1 227 342 R1 037 980 R5 481 982

014

Table 6: Form Q – Functional Literacy at WMC Colliery as at 28 February 2017

BAND NQF LEVEL OLD SYSTEM

Male Female Total

Afri

can

Col

ored

Indi

an

Whi

te

Afri

can

Col

ored

Indi

an

Whi

te

Mal

e

Fem

ale

General Education

and Training

No Schooling 26 1 140 8

Grade 0 / Pre school 0 0

Grade 1/ Sub A 0 0

Grade2/ Sub B 0 0Grade 3/ Std1/AET 1 94 1 94 1

Grade4/ Std 2 0 0Grade 5/ Std 3/ AET 2 68 1 68 0Grade 6/ Std 4 0 0Grade 7/Std 5/AET 3 70 70 0Grade 8/ Std 6 1 1 0 0

1 Grade 9 /Std 7/ AET 4 / N1 General Edu- cation and Training Certificate / Some NationalCertificates

26 26 0

Further Education

and Training

2 Grade 10/ Std 8/ N2 Some Certificates / Some National Certificates

95 3 30 49 3

3 Grade 11/ Std 9/ N3 Some Certificates / Some National Certificates

70 3 1 212 42

4 Grade 12/ Std 10/ N4 Further Education and Training Certificates / National Certificate: Vo- cational / National Senior Certificate / Some other National Certificates

118 33 18 1 638 113

HigherEducation

and Training

5 2 year National Diplomas / 1 year Higher Certif- icates / N4, N5 & N6 National Certificates

699 9 2 176 159 2 21 210 47

6 3 year National & Higher Diplomas / Some other 2-3 year Diplomas / Advanced Certificate

93 4 39 26 4 75 21

7 3 year Degrees / Higher or Ad-vanced Diplomas

43 21 22 5 40 11

8 4 year Degrees and Honour’s Degrees

33 1 2 25 25 3 3 1

9 Master’s degrees 3 1 3 5 1 0 210 Doctorates 4 1 0 0

Total 1160 6 4 245 241 2 1 25 1415 269

015

2.2.2 Learnerships

A learnership is a registered and accredited learning programme that includes practical work experience as well as theoretical studies, thereby integrating both workplace and institutional learning. Learnerships enable learners to work towards a qualification whilst being employed. The purpose of the learnership programme is to equip new and future employees with skills to assist them in undertaking their responsibilities more efficiently and which may allow their progression into other positions at Khutala, when opportunities arise.

The specific Learnership programmes offered will continue to be informed by both the skills requirements of the colliery (in line with the WSP, Hard-to-Fill Vacancies and the business plan) as well as the forecasted skills scarcity within the mining industry over the next five (5) years (as per the MQA’s Sector Skills Audit). • Candidates for the Learnership programmes will continue to be identified and selected through the agreed recruitment and selection policy/process of Khutala. • Each Learnership programme is a set programme, consisting of a theoretical and a practical component. • Khutala will continue to budget annually for the Learnership programmes (Ref Tables 8 & 9). • Appropriately trained mentors will be appointed for each learner at Khutala. • Systems will be developed and implemented to record and monitor Khutala compliance in terms of its progress to achieve the envisaged Learnership targets for annual SLP reporting purposes. • Accreditation to be in place through MQA for all Learnership Programmes.

On successful completion of the Learnership programme, the learners will be placed on a three (3) month probationary period at the Colliery where appropriate vacancies exist. Should vacancies not be available at Khutala, other South32 collieries will be approached to determine suitable placement opportunities. As the placement of learners is dependent on vacancies at the operation, it is not possible to guarantee the successful placement and/or promotion of learners on completion of their Learnership programme.

Undertaking:The provision for learnerships within the Colliery is aimed at addressing current andfuture skills and competency needs in terms of the Career Pathing structure andManpower process. Khutala undertakes, and will continue to facilitate access to learnerships for identified individuals based on an employment ratio of 80:20 HDSAs to non-HDSAs.

Summary: The objective of the learnerships being offered at Khutala is to equip new and future employees with skills to assist them in undertaking their responsibilities more efficiently and which may allow their progression into other positions at the Colliery. The learnership programmes offered at the Colliery are informed by the skills requirements at the Col-liery (in line with the WSP and business plan), the skill requirements of the core contractor companies and the MQA’s Sector Skills Audit. Each learner will be allocated a mentor, who will meet with the learner on a regular basis to review progress and provide support with respect to performance issues. As a mechanism to address the objective ofincreasing the pool of available labour, learners will be recruited, based on a strategy of maintaining a 4:1 ration between artisans and learners.

Responsible Person

Strategic Action Timeframe

HRDSuperintendent

Align the programme with WSP and hard-to-fill vacancies (Form R) Annually

HRDSuperintendent

Ensure proper mentors are trained and assigned for learners, and that the learners receive the necessary exposure for development

Annually

Table 8: Learnerships Undertaking

016

Table 8 below indicates the envisaged enrolment targets for the identified Learnership programmes for Khutala for the next five (5) years. The established targets have been based on the current pass rates of the programme and are cognisant of the lengths of the training programmes.

Table 9 to follow includes the envisaged enrolment targets for the identified Learnership programmes to be offered to host community members for the next five (5) years. The established targets have been based on the current pass rates of the programme and are cognisant of the lengths of the training programmes.

New

Tar

get

Enro

lmen

t

Pass

Out

New

Tar

get

Enro

lmen

t

Con

tinua

tion

Pass

Out

New

Tar

get

Enro

lmen

t

Con

tinua

tion

Pass

Out

New

Tar

get

Enro

lmen

t

Con

tinua

tion

Pass

Out

New

Tar

get

Enro

lmen

t

Con

tinua

tion

Pass

Out

Auto Electri-cian

3 years 0 1 0 0 0 0 1 0 1 0 0 0 1 0 1

Boilermaker 2 Years 4 1 1 4 0 4 1 0 1 4 0 4 1 0 1

Diesel Me-chanic

3 years 3 2 0 3 0 3 2 0 2 8 0 8 2 0 2

Electrician 3 years 6 3 1 6 0 6 3 0 3 6 0 6 3 0 3

Fitter 3 years 10 3 1 10 0 10 3 0 3 10 0 10 3 0 3

InstrumentMechanician

3 years 5 0 0 5 0 5 0 0 0 5 0 5 0 0 0

Mining 18 months

17 0 4 12 0 12 0 0 0 12 0 12 0 0 0

Total 45 10 7 40 0 40 10 0 10 45 0 45 10 0 10

45 10 43 13 48 13Budget

New

Tar

get E

nrol

-m

ent

Pass

Out

New

Tar

get E

nrol

-m

ent

Con

tinua

tion

Pass

Out

New

Tar

get E

nrol

-m

ent

Con

tinua

tion

Pass

Out

New

Tar

get E

nrol

-m

ent

Con

tinua

tion

Pass

Out

New

Tar

get E

nrol

-m

ent

Con

tinua

tion

Pass

Out

Fitters 3 years 10 3 0 10 0 10 3 0 3 10 0 10 3 0 3

Electricians 2 Years 8 3 0 8 0 8 3 0 3 8 0 8 3 0 3

DieselMechanics

3 years 6 2 0 6 0 6 2 0 2 6 0 6 2 0 2

Boilermakers 3 years 1 1 0 1 0 1 1 0 1 1 0 1 1 0 1

Instrument Mechanics

3 years 5 0 0 5 0 5 0 0 0 5 0 5 0 0 0

AutoElectrician

3 years 2 1 0 0 0 2 1 0 1 0 0 0 1 0 1

Total 32 10 0 30 0 30 10 0 10 30 0 30 10 0 10

32 42 30 10 30 10Budget

Table 5: Section 18.2 Learnership Targets for Khutala Colliery (FY 2018 to 2022

017

2.2.3 Core Business Skills Programme

Core Business Skills Programmes play an essential part in equipping all employees with the skills and required competencies to successfully execute their employment responsibilities. The objective of Core Business Skills Training is to provide the required knowledge and skills to enable employees to successfully and safely perform their roles and as such the Colliery will continuously align its core business skills training to the requirements of all aspects of the operation. Khutala core business skills training encompasses both underground and opencast operator training.

Table 10: Core Business Skills Programme UndertakingUndertaking: Core Business Skills Training is a core element of ensuring that employees are productive, capable

and competent in the delivery of their daily duties. Khutala will undertake to conduct a training needs analysis to ensure the alignment of core business skills to the competency, developmental areas as well as core mining safety needs of the job to its employees.

Summary

During the recruitment of the workforce individual-specific training is planned based on the outcomes of the skills analysis. The core business skills training that will be provided by Khutala will be aligned to the needs analysis as well as support the inherent business production needs.

ResponsiblePerson

Strategic Action Timeframe

HRDSuperintendent

An on-going assessment of employees to be done to identify where gaps remain and continuous evaluation against business needs and developmental plans.

Annually

HRDSuperintendent

Comprehensive skills training plans with targets, budgets and timeframes (in line with commitments made in the SLP) and the business plan to be established.

Annually

HRDSuperintendent

Employees to be assed in terms of skills and competency gaps resulting in employee competency profile.

Annually

Table 11 to follow provides the targets and associated budget for the core business skills training programmes offered to employees at Khutala.

Table 11: Projected Core Technical and Non-Technical Business Skills Training Targets at Khutala Colliery (FY 2018 to 2022)

Training Course FYI 2018 FY1 2019 FYI 2020 FYI 2021 FYI 2022

Strata Control 1 320 320 290 240 200

Strata Control 2 134 134 134 134 134

Res-Q-Pack 1080 1080 1080 1080 1080

Machine Licenses 680 680 680 680 680

Total 2214 2214 2184 2134 2094

Budget: R 4 529 600 R 4 982 560 R 5 480 816 R 6 280 867 R 6 631 787

018

The Artisan training programmes at Khutala and associated targets and budgets are presented in Table 12 below

2.2.4 Portable Skills Training

Khutala intends to offer access to non-mining related skills development programmes for those individuals who may be affected by downscaling and retrenchment. Access to the potential training programmes will be provided six (6) months prior to any pending retrenchment exercise at Khutala for the remaining life of the operation and will be communicated to affected employees through the Future Forum.

Table 11: Projected Core Technical and Non-Technical Business Skills Training Targets at Khutala Colliery (FY 2018 to 2022)

Artisans Skills Training Programmes

FYI 2018 FY1 2019 FYI 2020 FYI 2021 FYI 2020 Total (FY 2018 to 2022)

Maintenance of Flameproof Equipment

3 3 3 3 3 15

Bearing Maintenance 5 5 5 5 5 25

Confined Spaces 12 0 12 0 12 36

Working at Heights 10 10 10 10 10 50

Proximity DeviceSystem

12 12 12 12 12 60

RS Logics / Instrumentation

Maintenance

5 5 5 5 5 25

Gas Safety 10 10 10 10 10 50

Mining Support Machinery Maintenance

10 10 10 10 10 50

Medium Voltage 48 48 48 10 10 164

Machinery Operator Training

130 100 50 50 50 380

Production Machinery Maintenance

85 85 60 50 50 330

Slinging and Lifting Practices

120 120 120 120 120 600

Total Artisan Skills Training

Enrolment

450 408 345 285 297 1785

Total Budget R4 684 833 R5 153 315 R5 668 864

R6 235 511 R6 859 062 R28 601 585

019

Table 14 offers an overview of Portable Skills initiatives the mine envisages as part of their training and development initiatives

Table 7: Portable Skills Undertaking

Undertaking:Khutala is dedicated to providing opportunities in training and development, thereby increasing theirmarketability in the open labour marketing in the possible event of retrenchment and mine closure. Furthermore, the mine is committed, not only to equip and prepare employees for the open labour market, but simultaneously providing the opportunity to obtain NQF credits towards a NationalQualification.

Summary

Provision of portable skills to employees during the life of the mine in accordance with the skills development plans and workforce planning particularly non-mining related skills. Ramp-up of portable skills training in the last two years of life of mine, or six (6) months prior to when downscaling becomes inevitable. Such portable skills must have an impact beyond the company and provide for sustainedemployability and will, wherever feasible:(a) Build on employees’ existing skills and be recognised nationally;(b) Enable employees to manage their careers by addressing identified skills gaps; and(c) Supplement existing skills with business-related training where appropriate.

ResponsiblePerson

Strategic Action Timeframe

HRD Superintendent

A Skills Development Forum has been established and will focus on overseeing the implementation of the skills development programmes aligned to the Human Resource Development Programme (HRDP), which will be reviewed on a monthly and annual basis.

Ongoing

HRDSuperintendent

Continue to publicise portable skills training programmes amongst theemployees.

Ongoing

HRD Superintendent

Report and monitor employees that may be close to retirement and target for portable skills non-mining.

Ongoing

Table 8: Portable Skills Training at Khutala Colliery (FY 2018 to 2022)

Training Course FYI 2018 FY1 2019 FYI 2020 FYI 2021 FYI 2022 Total (FY 2018 to 2022)

Skills Programme:Operate Mining Machinery

53 35 38 42 42 210

Mining Competent A 12 18 20 22 24 96

Mining Competent B 34 42 45 48 50 219

Blasting Certificate 21 21 21 21 21 105

Safety Rep training 15 12 8 8 12 55

Coaching and Mentoring 30 17 15 12 12 86

License to Supervise 6 6 6 6 6 30

First Aid Training 108 108 108 108 108 540

Fire Fighting 320 320 320 320 320 1600

Total 599 579 581 587 595 2941

Budget: R 1 145 680 R 1 260 248 R 1 386 272 R 1 524 900 R 1 677 390 R 6 994 490

020

2.2.5 Hard to Fill Vacancies

Khutala Colliery reported several vacancies which the complex experience difficulty in finding suitable candidates to fill those positions. The vacancies reported in Table 16 were experienced during the period assessed and not necessarily falls within the twelve (12) month or longer definition as set out in the MPRDA requirements. However, Khutala Colliery is reporting those vacancies as they are still important to address due to the importance of that skill to be available locally and to aid the local recruitment initiatives of the Colliery.

Table 9: Community Portable Skills Training at Khutala Colliery (FY 2018 to 2022)

Training Course FYI 2018 FY1 2019 FYI 2020 FYI 2021 FYI 2022 Total (FY 2018 to 2022)

Drivers License 20 20 20 20 20 100

Certificate 35 35 35 35 35 175

Total 55 55 55 55 55 275

Budget: R 1 000000 R 500 000 R 500 000 R 500 000 R 500 000 R 3 000 000

Table 9: Community Portable Skills Training at Khutala Colliery (FY 2018 to 2022)

Occupational level Job title or vacancy Main reason for inability to fill the vacancy

Intervention

Top Management

Senior Management All Categories Limited HDSAexperience and qualified potential in the market

Internal Development plans

Professionallyqualified andexperienced

specialist and mid management

Supt. Maintenance, Supt. Production, Planning &

Surveying.

Lack of experienced qualified skill in the

market

Internal Development plans

Skilled technical and academically qualified workers,

junior management, supervisors

Underground Surveyors & underground Auto Electricians

Lack of experienced qualified skill in the

market

Internal Development plans

Semi-skilled anddiscretionary decision

making

021

2.2.6 Career Progression Plan

The career progression plan aims to illustrate a career path for employees, indicating possible routes to move or change from one role or position to another within a specific discipline through defining competencies such as skills and experience required by the various job categories. Khutala’s training and development programmes then become a mechanism through which the required competencies are developed. The movement could either be to a position on the same level or a position on a higher level. The path of career progression could also be applied during selection and recruitment, training and development, as well as talent management. Some of the performance requirements of this standard are that:• A formal review of the talent pool occurs every six (6) months at the colliery, Customer Sector Group functional and South32 talent reviews;• Succession plans are in place for all key roles, and nominated successors are rated based on readiness and suitability; and• Talent pipeline gaps are identified and plans are in place to address the shortfalls.

Through this process, individuals with talent and potential are identified, verified and discussed at departmental and operational talent forums at the colliery. The information is then forwarded to regional talent forums for different functional areas, where individuals with emerging talent are discussed in terms of development plans and possible transfers within South32. The performance management system currently in place at Khutala, whereby employees are assessed against specific performance measures, forms an integral part of the talent management process.

Table 10: Career Progression UndertakingUndertaking: Khutala undertakes to actively promote career progression and succession opportunities among its

employees and refine the Career Progression Programme. A career management system has been implemented and is in line with the South32 Career Management Programme. This programme forms the basis on which on-going career path development will continue for relevant employees at the colliery. The colliery’s training and development programme is the mechanism through which the required competencies are developed and results either into positions on the same level or a position on a higher level. Furthermore, career management committees have been established and identify and monitor the colliery’s talent pool to facilitate appropriate skills development for employees in order to meet the operations business plan as well as to ensure individuals at all occupational levels are developed in respect of their skills.

Summary

Khutala has further established a talent management system to facilitate performancemanagement, whereby employees are assessed against specific performance measures. The Career Progression Programmes will be linked to the skills development programmes, mentorship programme and employment equity programmes. Mechanisms will be implemented for individuals to have the opportunity to progress from lower skilled levels into higher skilled working levelsincluding management levels, should job opportunities arise and positions become vacant. The career progression plan will ensure that the qualifications, aspirations, developmental needs, and potential capabilities of all employees are accounted for in line with the needs of the Company’sbusiness needs. Khutala, will furthermore, ensure that their employees are mentored according to their career path requirements on a regular basis in order to facilitate progression within the Company

ResponsiblePerson

Strategic Action Timeframe

HRDSuperintendent

Workshops to be held internally, in order to update and implement the career progression plans which will include specific job titles of employees, relevant job level, race, gender and envisaged future positions with clear action plans and time frames detailing how the implementation will take place.

Continuous

HRD Superintendent

Talent pool to be reviewed and aligned to employment equity requirements of the SLP

Continuous

HRDSuperintendent

Skill shortages and employment equity needs to be aligned, to fast-tracking plans for succession of HDSAs and women identified, with potential, from theestablished talent pools, in order to fill higher skilled and managerial positions within short time frames.

Continuous

HR Department South32 has developed a Leadership Development programme for employees on Paterson D level and above which will be rolled out over the five-year period

Continuous

022

2.2.7 Mentorship Plan

Khutala defines mentoring as the transfer of experience and attributes from a mentor (an experienced, more senior employee either from Khutala or from another operation) to a protégé (junior employee with less experience in the relevant field of expertise) with the intention of improving the competencies of the protégé to meet the current and future job requirements. Coaching is however, a more hands-on and interactive transfer of experience geared towards developing the less experienced individual during the course of implementing actions whilst on the job.

Mentoring is a term that describes a relationship and a process to share experience and strategic advice that leads to greater capacity and performance. To summarise, mentors are:

• Advisers, people with career experience willing to share their knowledge; • Supporters, people who give emotional and moral encouragement; • Tutors, people who give specific feedback on one’s performance; • Sponsors, sources of information about and aid in obtaining opportunities; and • Models, of identity of the kind of person one aspires to be as leader or an expert.

Mentorship is a key process and tool in support of people development, HRD planning, performance management and employment equity. It is a formal relationship between a mentor and a mentee, and is established to enhance the mentee’s career by building skills and knowledge. A mentorship programme is in essence a process to foster a continuous mentorship relationship between the mentor and the mentee. The objective is to ensure that the maximum potential of the mentee is unlocked for the mutual benefit to the mentee, mentor and Khutala.

FY 2018 FY 2019 FY 2020 FY 2021 FY 2022

Employee Categories

No.

of

Em

ploy

ees

with

IDP

% w

ith ID

P

No.

of

Em

ploy

ees

with

IDP

% w

ith ID

P

No.

of

Em

ploy

ees

with

IDP

% w

ith ID

P

No.

of

Em

ploy

ees

with

IDP

% w

ith ID

P

No.

of

Em

ploy

ees

with

IDP

% w

ith ID

P

Paterson E Level 3 30% 3 30% 3 30% 3 30% 3 30%

Paterson D Level 32 30% 32 30% 32 30% 32 30% 32 30%

Paterson C Level 230 30% 230 30% 230 30% 230 30% 230 30%

Paterson B Level 265 30% 265 30% 265 30% 265 30% 265 30%

Total 530 30% 530 30% 530 30% 530 30% 530 30%

Table 11: Employees with Individual development plans

Table 19: Mentorship UndertakingUndertaking: Khutala will actively promote mentorship opportunities among its current and future employees

and will use financial year 2018 to refine and formalise its Mentorship Programme linked to its Career Progression Programme. The Mentorship programme will focus on mentoring and coaching HDSAs and women into more specialised technical and managerial positions, in line with the skills and employment equity requirements of Khutala.

Summary: Khutala will continue to ensure that all permanent employees at supervisory and management levels have a CDP with a target of achieving 100% compliance.

Responsible Person Strategic Action Timeframe

HRD Superintendent Formalise mentorship programme and align it with the Career Progression Programme, Skills Development Programme, Internship & Bursary Programme and Employment Equity Programme. Align with the skills need and employment equity need of Khutala Colliery.

Continuous

HRD Superintendent Determine internal mentorship need and individuals with potential to be earmarked as mentors. Assess line and senior management aptitude to be mentors for internal mentorships programme.

Continuous

023

2.2.8 Bursary Plan and Graduate Development Programme (Internship

Khutala is well aware of the need not only to assist its own employees with development opportunities, but also to provide opportunities for members of the local community and surrounding areas to access tertiary education opportunities (bursaries) and experiential work opportunities (internships). The bursary and internship plan link in with developing individuals to supply the operation with its required skilled people. Apart from business related qualifications, the Company is also aware of the need to develop qualified individuals from communities, affected by the operation, in other sectors of the economy. Khutala will equip its employees with skills which are portable to other sectors of the economy upon downscaling or closure.

Khutala’s internship and bursary plan will continue to focus on equipping people from Mpumalanga in particular and rest of South Africa in general, who have an interest in the mining industry, with the necessary skills, aptitude and abilities. In order to acquire a pool of high performing learners in Mpumalanga and to develop critical skills in the Province, South32 will actively promote the bursary opportunities available to learners. The target is to maintain a bursary portfolio with a 70:30 bias towards HDSAs. This percentage may vary based on the quality of the pool available.

2.2.8.1 Full Study Bursaries:

Bursaries are available to students (even if they have no current relation to the company) for full time studies at South African Universities or Universities of Technology in mining disciplines.

2.2.8.2 Study Assistance:

Financial Study Assistance (Study Loan) is also available to Khutala employees in order to encourage the workforce to obtain better qualifications in fields of study that would benefit the operation. This financial assistance is managed by the operation.

All graduates / interns and learners are directly supported by a targeted mentorship programme. Each individual in this programme is allocated a mentor from South32’s broader Management Team(i.e. Patterson D and E Levels). These mentors are pivotal and mandatory in both of these programmes and are at a mature state of maintenance and implementation (i.e. all current graduates and learners have designated, active mentors).

Table 21: Mentorship Target Table:2018 2019 2020 2021 2022

Learnerships 18.1 10 43 13 48 13

Learnership 18.2 42 30 10 30 10

Bursaries (Internal) 30 45 60 75 75

Internships (Internal) 10 10 10 10 10

Total: 109 146 149 110 98

Internships (External) 2 3 10 0 0

Total: 109 146 149 110 98

Table 14: Bursary Plan UndertakingUndertaking: The bursary plan is linked with the developing of individuals in order to supply the operation with

the required skilled people. Furthermore, the Company is also aware of the need to develop qualified individuals from the local community, affected by the operation, in other sectors of the economy. Furthermore, Khutala commits to continue to provide tertiary education bursaries to qualifying learners to pursue courses in various fields of study, whether at University or University of Technology, including dependents of employees.

Summary: Khutala will equip its employees with skills which are portable to other sectors of the economy upon downscaling and closure. South32 has established a Central Bursary Scheme that provides for training of individuals in disciplines such as, Mining Engineering, Electrical Engineering, Mechanical Engineering, Industrial Engineering, Metallurgy, Mine Survey, Geology and Finance. The bursary scheme furthermore provides bursaries to students for full-time studies at selected South African Tertiary Institutions. The bursaries are open to all Grade 12 scholars as well as students who are already studying.

Responsible Person Strategic Action Timeframe

HRD Superintendent Review Study assistance programme in line with the business objectives as well as community programmes

Annually

HRD Superintendent Inform the business of Industry trends and also align with the SETA Sector Skills Plan

Annually

024

Table 15: Targets for Child of Employee Bursary Programmes at WMC Colliery(FY 2018 to 2022)

Bur

sary

Pro

gram

me

Leng

th o

f

Prog

ram

me

Cur

rent

Can

dida

tes

FY 2018 FY 2019 FY 2020 FY 2021 FY 2022

New

Tar

get

Enr

olm

ent

Pass

Out

New

Tar

get

Enr

olm

ent

Con

tinua

tion

Pass

Out

New

Tar

get

Enr

olm

ent

Con

tinua

tion

Pass

Out

New

Tar

get

Enr

olm

ent

Con

tinua

tion

Pass

Out

New

Tar

get

Enr

olm

ent

Con

tinua

tion

Pass

Out

Chemical

Eng(Min

Proc)

4

years3 3 3 3 6 3 6 3 3 6 3

Electric and

Electronic

Eng

4

years2 2 2 2 4 2 4 2 2 4 2

Electrical

Eng H/C

4

years2 2 2 2 4 2 4 2 2 4 2

Industrial

Eng

4

years1 1 1 1 2 1 2 1 1 2 1

Mechanical

Eng

4

years4 4 4 4 8 4 8 4 4 8 4

Accounting 4

years1 1

Geology 4

years1 1

Mining

Engineering

4

years3 3 3 3 6 3 6 3 3 6 3

Total 2 15 0 15 15 2 15 30 0 15 30 15 15 30 3

Total Bursaries

at the Mine17 32 47 62 77

BudgetR 52

000R 1 237 047 R 2 721 503 R 4 490 481 R 4 939 529 R 5 433 482

External Bursars

Current FY 2019 FY 2020 FY 2021 FY 2022

External Bursars 12 10 10 10 10

Total 12 10 10 10 10

Budget: 1200 000 R 1 100 000 R 1 200 000 R 1 300 000 R 1 400 000

Table 14: Targets for External Bursary Programmes at Khutala Colliery (FY 2018 to 2022)

Table 15: Summary of Employee Study Assistance Targets at Khutala Colliery (FY 2018 to 2022

School Programme Training Course FYI 2018 FYI 2019 FYI 2020 FYI 2021 FYI 2022

Total (FY 2018to 2022)

Advanced Certificate in Mine Planning

0 0 0 0 0 1

Btech Electrical Engineering

1 1 1 1 1 6

Certificate in Mineral Resource Management

0 0 0 0 0 2

Certificate in ODETDP 0 0 0 0 0 4

Diploma in Civil engineering

2 2 2 2 2 11

Logistic Bridging Course 0 0 0 0 0 1

Master’s Degree in Engineering Management

1 1 1 1 1 6

Masters in Human Resource Management

0 0 0 0 0 1

MBA 1 1 1 1 1 6

MBL 1 1 1 1 1 6

Mine Managers Certificate

3 3 3 3 3 16

Mine Overseer Certificate

4 4 4 4 4 21

MsC Dissertation 0 0 0 0 0 1

Total: 13 13 13 13 13 82

Budget: R 302 747 R 333 022 R 366 324 R 402 957 R 443 252 R 2 587 115

025

Table 17: Internship/Graduate Development Programme Targets at Khutala Colliery (FY 2018 to 2022)

Training Course FY 2018 FY 2019 FY 2020 FY 2021 FY 2022

Internships 10 10 10 10 10

Total 10 10 10 10 10

Budget: R 266 889 R 293 578 R 322 935 R 355 229 R 390 752

Section 2.2.9 to follow provides the proposed implementation of the Internship Plan (Graduate Development Programme

2.2.9 Internship Programme (Graduate Development Programme)

South32 offers graduate programmes in various disciplines to diplomats and graduates with the focus on the development and training of employees in the technical disciplines. Graduate programmes are currently offered in the following disciplines: Mining (Graduates and Diplomats); Engineering (Graduates and Diplomats); Finance; Human Resources; and Geology. A Central Training Account (CTA) has been established to provide for the funding of training and development of the graduates. Khutala participates and contributes financially to the CTA. On completion of their studies, the bursars participate in a two year graduate programme through the CTA to obtain practical work experience. Within their structured programmes, graduates will undergo specific technical and leadership training to facilitate the acquisition of a professional qualification.

2.2.10 Employment Equity Plan

Khutala fully subscribes to the principles of the Mining Charter, and strives to achieve more than the minimum requirements. The Colliery believes that Employment Equity is an integral part of building an effective and representative workforce and to ensuring equality for all employees. Khutala has therefore developed and implemented an Employment Equity (EE) Plan to ensure that HDSA employees, especially women, are developed and targets are met. Particular effort will be directed at identifying HDSAs with talent, and providing accelerated training and development initiatives to assist their progression, in order to comply with the provisions of the Employment Equity Act (Act No. 55 of 1998).

Khutala will focus on the following to achieve the objectives of EE Legislation:1. Effective management of diverse employees;2. Create an environment that will accommodate all people from designated groups; and3. Recruit, train and retain people from designated groups.

Table 16: Feedback on Internship/Graduate Development Programme UndertakingUndertaking: The internship plan is linked with the developing of individuals in order to supply the operation

with the required skilled people. Furthermore, the Company is also aware of the need to develop qualified individuals from the local community, affected by the operation, in other sectors of the economy.

Summary: Internships are offered in various disciplines to diplomats and graduates with the focus on development and training of employees in the technical disciplines such as Mining, Finance, Human Resources (HR) and Geology. Furthermore, on completion of studies the bursars are given a two (2) year internship in order for them to gain the practical work experience. Within a structured programme graduates undergo specific technical and leadership training to facilitate the acquisition of a professional qualification. All CTA participants are incorporated into the Career Management Committees and are mentored at the operation through their training.

Responsible Person Strategic Action Timeframe

HRD Superintendent Develop plans to target students at the surrounding Universities of technology.

Annually

HRD Superintendent Practical experience students are monitored and evaluations are done quarterly to track progress

Annually

Tables 27 and 28 below provides the targets in respect of the Internal to Mining Internship as well as the External to MiningInternship programmes respectively.

026

Table 21: Employment Equity UndertakingUndertaking: The mine is committed to the strategic objectives of the Employment Equity Act that include having

individuals from previously disadvantaged groups (including women) represented in all positions of skills, responsibility and at all levels within the next five (5) years period.

Summary: Khutala will employ a strategy of:a) Recruiting from the local community; andb) Developing recruits via the career progression path and skills development programmes to ensure a skilled and competent workforce. Furthermore, Khutala will particularly focus on identifying HDSA’s with talent, and providing accelerated training and development initiatives to assist their progression.

Responsible Person Strategic Action Timeframe

HR Manager Focus will be placed on attracting and retaining HDSA’s including women and nurturing talent to supplement the workforce complement and to plan forsuccession

Continuous

HR Manager Targeting the recruitment of HDSA’s and Women in Mining positions is a specific focus of the workforce plan.

Continuous

HR Manager Mining-related occupations will be specifically identified in the workforce plan and strategies and targets identified to support the inclusion of women into these occupations.

Annually

Table 28 to follow provides the DMR prescribed “Form S” detailing the employment equity status of Khutala Colliery as at 28 February 2017

Table 19: Form S: Employment Equity Statistics at Khutala Colliery as at 28 February 2017

Occupational Level

Designated N0n- Designated

Total

Male Female

Afr

ican

Col

oure

d

Indi

an

Afr

ican

Col

oure

d

Indi

an

Whi

te

Whi

te M

ales

Fore

ign

Top management (F) 0 0 0 0 0 0 0 0 0 0

Senior management (E) 2 0 0 1 0 0 0 0 1 9

Professionally qualified and experienced specialists and middle management (D)

26 0 1 8 0 0 4 4 2 90

Skilled technical andacademically qualified work-ers, junior management, supervisors,foremen and superintendents (C)

399 5 3 106 1 0 10 10 7 717

Semi-skilled and discretionary decisions mak-ing (B)

689 1 0 126 1 1 3 3 36 868

Unskilled and defined decision making (A) 0

0 0 0 0 0 0 0 0 0

Total Permanent 1116 6 4 241 2 1 17 251 46 1684

Non-permanent 0 0 0 0 0 0 0 0 0 0

TOTAL 1116 6 4 241 2 1 17 251 46 1684

2.2.11 Employment Equity Strategies Applied at Khutala Colliery

a) Capacity Building (Talent Pool Development)Khutala has developed a leadership development programme as part of their talent pool management process. A total of six (6) employees per annum will be placed in the leadership development programme at Khutala at a total cost of 1.2 million rand a year. This talent pool will be constantly enlarged with further suitable candidates, and also refined, as candidates become successful in various progression programmes.

027

b) Fast TrackingFast tracking the career progression of those employees, especially from designated groups, identified as having significant potential and aspiratio.

2.2.12 Participation of Historically Disadvantaged South Africans

The Colliery has achieved its Paterson D level employment equity targets with 43% representation and 73% on Patterson Level C. Senior management is currently not compliant with a 33% representation, however the colliery foresees that the current vacant position will be filled within the near future, which will bring the mine to 40% HDSA’s in management on Patterson E level. Women are further also represented across the board with the colliery looking to improve the overall representation from 14% to 17% with the highest percentage improvement aimed for Senior management (from 11% - 20%). For further details on gender diversity at the mine, refer to section 2.2.13.

The annual targets for HDSA’s in Management for the next five (5) years are reflected in Table 30 below. The annual targets for the next five (5) years and progress against these plans will be monitored through the Employment Equity Forum (EE Forum) and reported on annually to the DMR. Furthermore, the Colliery will update “Form S” (Employment Equity Statistics) for inclusion within the Annual SLP Report. The aim of improving the level of HDSA representation within management and within the Colliery is considered vital within Khutala’s recruitment procedure and will remain a key focus into the future. The associated career management systems and succession planning mechanisms outlined in previous sections play a key role in ensuring the accelerated development of HDSA’s into management.

Table 20: Development of HDSA’s into ManagementUndertaking: The Colliery undertakes to ensure that the appropriate resources are made available and

effectively utilised to achieve the targets of 40% HDSAs in Management (both Junior and Senior levels), and 10% participation of women in mining- related occupations at Khutala.

Guidelines: The progress against these plans will be monitored through the Employment Equity Forum (EE Forum) and reported on annually to the DMR. The Aim of improving the level of HDSA representation within management and within the Colliery is considered vital within Khutala Colliery`s recruitment procedure and will remain a key focus into the future.

Responsible Person Strategic Plan TimeframeHR Manager Focus will be placed on attracting and retaining HDSA’s including women

and nurturing talent to supplement the workforce complement and to plan for succession.

Continuous

HR Manager Targeting the recruitment of HDSA’s and Women in Mining Positions is a specific focus of the workforce plan.

Continuous

HR Manager Recruitment targets for HDSA’s will be specifically aimed at developing and promoting such employees into management positions as and when these opportunities arise.

Continuous

028

2.2.13 Women at the Mine

To address the historical issues of South Africa, which resulted in the majority of South Africans being excluded from participating in the mainstream economy, especially women, Khutala has developed a gender equality policy and plan to ensure that women are represented in positions that traditionally have been considered male only, i.e. to ensure that women are employed throughout various positions on the Colliery. Khutala will comply with the 10% labour quota for women in mining, as required by the MPRDA.

Table 22: Women at the MineUndertaking: Khutala subscribes to gender equality and to ensure that women are represented in positions that

traditionally have been considered male only, i.e. to ensure that women are employed throughout various positions at the Colliery.

Guidelines: The Colliery has classified certain occupations to be in core mining and will design programmes in order to recruit and retain women in these occupations. Khutala will put direct interventions in place to increase the participation of Black women in managerial, professional and core mining related positions. These women will be selected from the surrounding and labour sending communities as a first preferential step. If this is not successful, the spatial distribution will be extended outwards from NDM to Mpumalanga and as a last resort to the rest of South Africa.

Responsible Person Strategic Plan TimeframeHR Manager Evaluates and assesses Khutala’s approach to empowering women in mining

and management positions in compliance with the MPRDA and the Mining Charter

Continuous

HR Manager Identifies issues/obstacles preventing the successful integration and retention of women in core mining positions.

Continuous

HRDKhutala’s internal talent pool of employees for potential candidates to be assessed, in order to expedite the process of promoting HDSA’s into management positions, based on competence and commitment, in line with the career progression and skills development plan.

Continuous

HR Manager The WIM implementation programmes to be monitored on an on-going basis and should be aligned to the EE plan.

Continuous

As indicated above, Khutala will aim to achieve 20% women employed in mining related occupations. Table 32 below provides the targets set for Khutala Colliery to achieve annually from financial year 2018.

Table 26: Targets for Participation of Women in Mining at WMC Colliery (FY 2018 to 2022)

Professionallyqualified and experienced specialists and middle management (D)

Top Management (F)

Senior Management (E)

Skilled technical and academically qualified workers, juniormanagement, supervisor, foreman and superintendents (C)Semi-skilled and discretionary decisions making (B)

Unskilled and defined decisionmaking(A)

SECT

ION 3

SECTION 3LOCAL ECONOMIC

DEVELOPMENT

030

3. LOCAL ECONOMIC DEVELOPMENT PROGRAMME3.1 Introduction

This section focuses on strategic programmes that will cover the local and regional priorities of economic development, poverty alleviation, community upliftment and the improvement of the people’s lives and long-term sustainability beyond the life of the Colliery.

The Local Economic Development Programme (LEDP) seeks to promote Khutala’s on-going alignment and involvement in the LED initiatives and the Integrated Development Plans (IDPs) of the Nkangala District Municipality (NDM) and the host local municipality: Emalahleni Local Municipality (ELM). The following sections form the basis of Khutala’s LEDP:

• South32 Transformation Strategy • Background Regional Socio-Economic Analysis; • Municipal Integrated Development Plans Review • LED Projects Plan; • Housing and Living Conditions Plan; and • Procurement Plan.

3.2 South32 Transformation Strategy

South32’s Transformation Strategy is based on the following principles; • Aim to drive Transformation, Enterprise, Supplier Development and CSI in a way that supports the efficient and sustainable running of the business • Aspire to be a leading organisation around Transformation over the medium to long term • Aim to drive workforce capability development (particularly around Transformation) • Aim towards improving the South32 public reputation for demonstration of local commitment together with improving business sustainability • Aim to build a strong relationship with government through the compliance to the DTI and DMR codes • Aim to drive Transformation initiatives that ultimately seek to unlock potential business value (within the current constrained business environment)

The focus areas for the transformation plan include the following; • Direct and / or indirect spend associated with development of Emerging Micro Enterprises and Qualifying Micro Enterprises • Inclusion of local / regional transformed suppliers into the organisation’s procurement spend • Organisational equity in the hands of black individuals • Transformation across the workforce and improvement of workforce capability • Non-ED and SD commitments directed towards socio economic development • Internal Operating model to drive all Transformation plan elements

3.3 Socio-Economic Background Information

The Socio-Economic Analysis is based on a desktop study of existing socio-economic information and development strategies contained in the governmental national, provincial, regional and local databases (i.e. Statistics South Africa: Census 2011 and Community Survey 2016), Integrated Development Plans (lDPs), Census data from the Municipal Demarcation Board.) This SLP, particularly the LED, has been aligned to the district and local municipalities’ lDPs to ensure effective integration in the identification, planning and implementation of projects with economic impact and legacy.

The tables below depicting the social background and service delivery (population, dwelling type, toilet facilities, water access, refuse removal, energy sources and education) of the area within which Khutala is situated is based on the Community Survey 2016 from Statistics South Africa.

031

Table 27:Table 24: Socio-Economic Profile of Surrounding Region – Population

Population by Gender and Household Size

Mpumalanga Province Nkangala District Municipality

Steve Tshwete Local Municipality

Popu

latio

n

Perc

enta

ge

Popu

latio

n

Perc

enta

ge

Popu

latio

n

Perc

enta

ge

Male 2139187 49,34% 730739 50,55% 240754 52,89%

Female 2196776 50,66% 714885 49,45% 214473 47,11%

Total Population 4335963 1445624 455227

Number of households 1075488 356911 119874

Size of Household 4 4 4

Analysis

The gender composition throughout the province shows that there are more females than males, however, for the district and local municipalities, more males are reflected. This gender distribution may be attributed to the prevalent economic activities in the area, that is, mining and agriculture. The population profile of the district and local municipalities compares well with that of the province, with an average of 4 people per household.

Table 25: Socio-Economic Profile of Surrounding Region - Dwelling TypeHouse or brick/concrete block structure on a separate stand or yard or on a farm

79,06% 75,76% 73,46%

Traditional dwelling/hut/structure made of traditional materials

3,38% 2,53% 1,26%

Flat or apartment in a block of flats

0,66% 1,06% 0,93%

Cluster house in complex 0,32% 0,57% 1,49%

Townhouse (semi-detached house in a complex)

0,42% 0,91% 1,43%

Semi-detached house 0,52% 0,67% 0,43%

House/flat/room in backyard 5,64% 5,93% 3,62%

Informal dwelling (shack; in backyard)

3,47% 4,42% 3,47%

Informal dwelling (shack; not in backyard; e.g. in an informal/squatter settlement or on a farm)

5,03% 6,81% 12,73%

Room/flat let on a property or larger dwelling/servants’ quarters/granny flat

0,48% 0,39% 0,34%

Caravan/tent 0,01% 0,01% 0,00%

Other 1,01% 0,93% 0,85%

Not Applicable 0,01% 0,00% 0,00%

Analysis

The most dominant type of dwelling throughout the Mpumalanga Province is the house/brick structure with the Local Municipality having an average of slightly below 74% of households occupying such structures. The informal dwellings such as shacks are also quite dominant in the local municipality with percentages ranging from 3% to 13% depending on whether they are situated in backyards or in informal settlements. There is a need for more formal housing infrastructure to curb the increase in informal settlements especially in the Local Municipality where almost 13% of households occupy informal dwellings within squatter settlements or farms. This may be attributed to more people flocking into Witbank and surrounding areas to be closer to opportunities, however, there is an increasing need to formalise those housing structures.

032

Table 26: Socio-Economic Profile of Surrounding Region - Toilet FacilitiesFlush toilet connected to a public sewerage system

39,61% 49,73% 75,98%

Flush toilet connected to a septic tank or conservancy tank

2,46% 2,56% 0,96%

Chemical toilet 3,37% 1,39% 1,12%

Pit latrine/toilet with ventilation pipe

16,32% 12,24% 3,04%

Pit latrine/toilet without ventilation pipe

31,15% 28,44% 15,61%

Ecological toilet (e.g. urine diversion; enviroloo; etc.)

0,52% 0,46% 0,09%

Bucket toilet (collected by municipality)

0,18% 0,48% 0,00%

Bucket toilet (emptied by household)

0,67% 0,49% 0,28%

Other 2,97% 2,79% 1,63%

None 2,77% 1,42% 1,28%

Table 27: Socio-Economic Profile of Surrounding Region – Water ProvisionPiped (tap) water inside the dwelling/house

27,92% 39,62% 62,77%

Piped (tap) water inside yard 45,67% 43,26% 22,88%

Piped water on community stand

5,45% 2,12% 2,21%

Borehole in the yard 1,76% 3,11% 0,83%

Rain-water tank in yard 0,45% 0,31% 0,04%

Neighbours tap 3,83% 2,68% 2,96%

Public/communal tap 5,09% 3,02% 1,86%

Water-carrier/tanker 4,04% 3,15% 4,46%

Borehole outside the yard 2,10% 0,94% 0,29%

Flowing water/stream/river 2,17% 0,39% 0,33%

Well 0,16% 0,03% 0,01%

Spring 0,25% 0,04% 0,02%

Other 1,12% 1,33% 1,34%

Analysis

Basic services infrastructure appears to be more formalised with just above 75% of households within the Local Municipality having access to flush toilets either connected to a public sewerage or septic tank. However; in the Mpumalanga Province and District Municipality, there is still a great need for toilet infrastructure improvement with less than 50% of households having access to flush toilets. An average of 1% of households within the local Municipality have no form of toilet facilities and 2% use other means. There is a need to investigate other means of toilet facilities such as the Ecological Toilet as it might have environmental benefits as well as be cost effective. So far less than 1% of households throughout the Mpumalanga Province have access to ecological toilet facilities.

Analysis

More than 80% households within the Local Municipality have access to piped water within their dwellings or in their yards provided by the municipality which is probably attributed to the urban or semi-urban nature of most areas falling under the local municipality. The statistics indicates a great proportion of the population have access to piped water whether close to their dwelling or within the community stand which is commendable, however; more attention must be paid to improve the lives of those using other means to access water. Within the Mpumalanga Province 2% of the population still have no access to piped water and accesses flowing water from a stream or river whilst for the district and local municipalities less than 1% of people have no access to piped water. Efforts must be made to improve the population’s access to water in order to improve the quality of life and prevent the outbreak of diseases.

033

Table 28: Socio-Economic Profile of Surrounding Region - Refuse RemovalRemoved by local authority/private compa-ny/community members at least once a week

36,88% 46,40% 70,89%

Removed by local authority/private com-pany/community members less often than once a week

3,04% 3,41% 2,71%

Communal refuse dump 4,23% 5,64% 3,49%

Communal container/central collection point

0,92% 1,05% 0,72%

Own refuse dump 47,39% 34,36% 12,15%

Dump or leave rubbish anywhere (no rubbish disposal)

6,00% 7,36% 9,31%

Other 1,54% 1,77% 0,72%

Table 28: Socio-Economic Profile of Surrounding Region - Refuse RemovalElectricity from mains 77,40% 79,77% 75,54%

Other source of electricity (e.g. generator; etc.)

0,13% 0,15% 0,26%

Gas 1,34% 2,39% 4,33%

Paraffin 2,51% 5,83% 14,88%

Wood 15,18% 7,38% 1,36%

Coal 2,94% 4,04% 3,23%

Animal dung 0,11% 0,01% 0,02%

Solar 0,03% 0,03% 0,01%

Other 0,12% 0,15% 0,17%

None 0,21% 0,22% 0,17%

Unspecified 0,03% 0,03% 0,04%

Analysis

Throughout the District Municipality less than 50% of households have access to refuse removal at least once a week while a significant percentage of 71% within the Local Municipality enjoy the same service. The Mpumalanga province and the district municipality are characterised by a lot of areas which are semi-rural or completely rural and as such services such as refuse removal are not accessible or offered by the municipality or any other private company. On the other hand, the local municipality comprises of more developed areas where refuse removal is a service offered by the municipality or arranged by mining companies where communities fall in the close boundaries of Khutala. Throughout the regions of study, there is still a significant number of people who remove their own waste or don’t have rubbish disposal. Above 12% of the households in the local municipality remove their own waste while 9% dump their waste where feasible. There is a need for the municipality in conjunction with the private sector to come up with methods of waste disposal for those areas that have no access or dispose their own waste, this maybe in the form of waste disposal or recycling projects or even the promotion of small enterprises by contracting them to offer waste collection services in the areas without such services.

Analysis

A total of 77% of households throughout Mpumalanga have access to electricity for cooking purposes whilst in the local municipality 76% of the households use electricity for the same purpose. Paraffin is also a source cited to be used for cooking with 15% of the population within the local municipality using this as a source. Generally, electricity is an expensive source of energy and households may opt for cheaper alternatives such as wood or paraffin; however, there is still a need to improve access to energy sources for all households especially in areas where have no access to any source of energy.

034

Table 31: Socio-Economic Profile of Surrounding Region - Energy for LightingElectricity from mains 91,73% 88,98% 78,96%

Other source of electricity (e.g. generator; etc.)

0,20% 0,24% 0,55%

Gas 0,12% 0,15% 0,19%

Paraffin 0,75% 1,54% 3,88%

Candles 6,60% 8,43% 15,59%

Solar 0,16% 0,23% 0,26%

Other 0,12% 0,09% 0,16%

None 0,20% 0,22% 0,21%

Unspecified 0,11% 0,11% 0,20%

Analysis

Electricity seems to be the most dominant energy source for heating throughout the Province and the municipalities. Other popular and widely used energy sources include coal and gas although coal seems to be the second most dominant energy source in the district and local municipalities. More than 14% of households in the Local Municipality still have no access to any source of energy for heating. It might be useful to explore other cheaper and environmentally friendly methods of providing energy such as solar energy to ensure that most, if not all the households have access to an energy source.

Analysis

More than 75% of households have access to electricity for lighting purposes throughout the Province as well as in the Municipalities. The above statistics suggest that more households have access to electricity; however, most of them prefer to user cheaper methods for heating and cooking probably in an effort to avoid higher electricity tariffs. Candles are also a widely- used source of lighting which suggests that they are the preferred option where households do not have access to energy for lighting.

Table 30: Socio-Economic Profile of Surrounding Region - Energy Sourceused for Heating

Electricity from mains 60,70% 59,55% 62,84%

Other source of electricity (e.g. generator; etc.)

0,11% 0,05% 0,12%

Gas 1,10% 2,08% 3,37%

Paraffin 0,59% 1,00% 2,01%

Wood 11,86% 7,08% 2,49%

Coal 6,82% 11,63% 9,48%

Animal dung 0,14% 0,04% 0,02%

Solar 0,12% 0,30% 0,06%

Other 2,24% 3,45% 5,38%

None 16,22% 14,76% 14,11%

Unspecified 0,08% 0,06% 0,12%

035

Analysis

Overall statistics at district and local levels indicate poor educational profiles with most of the population having completed some primary and secondary education. This results in a shortage of educated local labour. In the local municipality, only 25% of the population have attained a Grade 12 qualification and less than 10% have higher qualifications (post high school). In terms of the available skills within all industries in the provincial economy, finance for the extension of education and training will be essential to provide the skills required for a growing regional economy.

Analysis

Less than half (35%) of the economically active population are employed while 13% of people are not employed within the local municipality. Only 24% is employed throughout Mpumalanga province. The employment rate of the population is closely linked to the educational qualifications as most people are unable to secure employment due to the lack of suitable qualifications. Improved educational levels will lead to increased employment. The employment status of these individuals is also related to the income distribution across various areas in Mpumalanga province and concerted effort needs to be taken to create a sustainable economy to eradicate poverty; such as skills development initiatives or local economic development projects.

Table 32: Socio-Economic Profile of Surrounding Region – EducationNo schooling 17,57% 15,35% 12,36%

Primary Schooling 27,49% 24,83% 21,69%

Some secondary Schooling 27,07% 28,54% 29,25%

Grade 12/Standard 10 20,72% 22,62% 25,31%

Higher 5,66% 6,85% 9,53%

Other 0,32% 0,43% 0,34%

Do not know 1,07% 1,30% 1,45%

Unspecified 0,09% 0,10% 0,07%

Table 33: Socio-Economic Profile of Surrounding Region – EmploymentEmployed 24.00% 27.17% 35.03%

Unemployed 11.09% 11.64% 13.18%

Discouraged work-seeker 3.73% 3.25% 2.43%

Other not economically active 25.27% 24.43% 20.61%

Not applicable 35.90% 33.50% 28.75%

The tables below depicts the economic background (employment, individual income and Sectorial Employment) of the area Khutala is situated in and is based on the Census 2011 from Statistics South Africa.

036

Analysis

Almost half (41%) of the population within the Local Municipality receive no income at all and resembles to a great extent the individual income profile of the Mpumalanga Province. Most of the population survives on a monthly income of less than R1 600 per month or less illustrating a significant number of people surviving below minimum wage. Less than 15% of the population earns above R6 400 per month. Improved employment rates will increase individual monthly income. Both employment and income are heavily reliant on improved education and skills. Education needs to be developed to enable people to obtain higher qualifications to secure sustaining jobs.

AnalysisThe bulk of economic activity within Mpumalanga province are centred on Manufacturing with a contribution of 57% to South Africa’s GDP. It is evident other industries are all above the 20% mark and almost similar. It is necessary to pay attention to other prevailing industries other than mining to skill the population in alternative roles outside the mining industry.

Table 34: Socio-Economic Profile of Surrounding Region – Individual IncomeNo income 41.99% 41.31% 40.81%

R 1 - R 400 20.66% 18.07% 11.91%

R 401 - R 800 3.15% 2.74% 2.76%

R 801 - R 1 600 11.08% 11.08% 8.28%

R 1 601 - R 3 200 5.56% 6.52% 7.69%

R 3 201 - R 6 400 3.87% 4.98% 7.15%

R 6 401 - R 12 800 3.16% 3.83% 5.79%

R 12 801 - R 25 600 2.18% 2.68% 4.51%

R 25 601 - R 51 200 0.78% 0.97% 1.72%

R 51 201 - R 102 400 0.19% 0.23% 0.42%

R 102 401 - R 204 800 0.08% 0.09% 0.13%

R 204 801 or more 0.06% 0.07% 0.10%

Unspecified 6.20% 6.47% 7.28%

Not applicable 1.02% 0.95% 1.46%

Table 34: Socio-Economic Profile of Surrounding Region – Individual IncomeAgriculture 41.4%

Mining 23.9%

Manufacturing 57.4%

Electricity. gas. and water 25.7%

Construction 26.8%

Trade 25.8%

Transport 24.5%

Finance 21.2%

Community. social and perso nal services 22.5%

General government services 41.4%

037

Table 36: IDP Priority Issues and Objectives for Nkangala District MunicipalityInstitutional Development and Municipal Transformation

• A solid foundation, consisting of early childhood development, general education at school as well as adult education and training;• Articulation of demand for skills; and• Securing a supply of skills, especially scarce skills, innovation and Research& Development.

Good Governance, Intergovernmental Relations and Public Participation

• Promoting the positive corporate image and brand of Nkangala District Municipality;• Widely communicating the governance priorities, successes and objectives of the District;• Improving relations between the three spheres of government, and its Local Municipalities and the Community at large; and• Improving public participation, accountability and transparency

Local Economic Development • Economic Development and job creation;• Planning and coordinating government socio-economic development strategies and initiatives spear-headed by our social partners within the framework of the IDP;• Diversification of the economy by promoting Agriculture, tourism and SMME development;• Establishing LED programme structures which include the District and Local Municipalities to co-ordinate and cooperate on policies, structures and LED initiatives; and• To collect and disseminate economic information to assist Local Municipalities with LED interventions.

Municipal Financial Viability and Management • Skills development;• Performance management;• Departmental risk management;• Development and sustainment of internal controls; and• Financial Viability.

Service Delivery and Infrastructure Development • Health;• Education (Social Conditions, Skills Shortage, Further education and Training);• Community Welfare (Vulnerable groups);• Culture, sport and recreation;• Emergency Services;• Water and Sanitation;• Electricity Supply; and• Roads and Stormwater.

Spatial Development and Rationale • Spatial Restructuring and Service Provision;• Transportation;• Land Reform and Land Administration;• Human Settlements;• Environmental Management; and• Waste Management.

3.5 Local Economic Development Planning 3.5.1.1 Integrated Development Planning: Nkangala District Municipality

The Nkangala District Municipality (DC31) is one (1) of the three (3) district municipalities in Mpumalanga Province. The head office of Nkangala District Municipality is in Middelburg (Steve Tshwete Local Municipality). The District is composed of six (6) Local municipalities namely Victor Khanye Local Municipality (MP 311), Emalahleni Local Municipality (MP 312), Steve Tshwete Local Municipality (MP 313), Emakhazeni Local Municipality (MP 314), Thembisile Hani Local Municipality (MP 315) and Dr. J.S. Moroka Local Municipality (MP 316). The area of the District covers a total area of approximately 16,892 square kilometres. The table below shows the IDP priorities and strategic objectives for Nkangala District Municipality.

3.5.2 Integrated Development Planning: Emalahleni Local Municipality

Emalahleni Local Municipality is situated on the Highveld of Mpumalanga. The geographical area of the Municipality is approximately 2,677 square kilometers. The Municipality consists of several towns, including Balmoral, Clewer, Coalville, Hlalanikahle, Kendal, Kriel, Kwaguqa, Lynnville, Matla, Minnaar, New Largo, Ogies, Paxton, Phola, Rietspruit, Thubelihe, Van Dyks Drif, Wilge, and Witbank. Witbank is one of the major urban concentrations in the Nkangala District Municipality and within Mpumalanga. Emalahleni is located close to Gauteng, adjacent to the N4 and N12 National Roads, which serve as an important transport link. Emalahleni is probably the most industrialised municipal area in Nkangala and

038

its landscape features mainly underground and opencast coalmines. This area has the largest concentration of power stations in the country. Its mining and industrial history is reflected in the area’s heritage places. This includes elements of industrial history, military history, architectural/engineering and graves which should be protected and conserved.

The following are the identified strategic objectives of Emalahleni Local Municipality; • To promote proper governance and public participation. • To ensure efficient infrastructure and energy supply that will contribute to the improvement of quality of life for all citizens within eMalahleni • To improve our public relations thereby pledging that our customers are serviced with dignity and care • To create an attractive and conducive environment for sustainable economic growth and empowerment for the business and broader communities within ELM • To contribute to the health and safety of communities in eMalahleni through the pro-active identification, mitigation and management of health including environmental health, fire and disaster risks. • To ensure proper facilitation of sustainable human settlement and social facilities for the betterment of our communities. • To provide effective and efficient workforce by aligning our institutional arrangements to our overall policies, processes, procedures and strategies to deliver quality services. • To ensure the financial sustainability of the municipality to fulfil the statutory requirement

The IDP priorities for the Local Municipality identified for the IDP period 2015- 2016 entail the following; • Upgrading and refurbishment of Infrastructure; • Land Development and Human Settlement needs; • Local Economic Development (LED); and • Institutional Development and Transformation.

3.6 Stakeholder Engagement and Management Plan1

The aim and objectives of this community development strategy is to provide guidance and direction to community relations practitioners and community development specialists for the period 2014 to 2019 after which the strategy will be updated.The objectives of this community engagement, investment and development strategy is to:

• Support and advance the stated business goals as well as ensure strategic community relations that will ensure sustainable community development; • Assist with the implementation of community investment programmes whilst ensuring compliance with Community and Anti-Corruption Policies and Standards; • Provide an overview of the organizational and community context applicable; • Describe the approach to community engagement, investment and development; • Identify the community and development issues; • Identify key messages that could be used in communications with affected and representative stakeholders; • Document how community engagement, investment and development will be managed; • Document how risks and issues will be mitigated and reported; • Identify linkages to other business and operational functions; and • Document policies and procedures to be followed in the execution of the community engagement, investment and development plan.

Performance against the objectives of this proposed plan and strategy will be measured against the following: • Obtaining early community and stakeholder support to facilitate the achievement of the strategy’s objectives; • Fulfilment of any statutory requirements; • Timely, accurate, and effective response to community complaints; • Ensuring all stakeholders are identified, their needs and interests are recognised, and that they are engaged with in a proactive, genuine, timely and consistent manner; • Understanding of issues and concerns and resolutions of the community expectation’s in a reasonable manner; • Avoiding and or minimizing negative impacts whether economic, social or environmental of the operations on communities and creating awareness of such mitigation measures to minimise these impacts; • Management of community risks and issues so that they do not escalate;

039

• Upholding the corporate reputation of the Company; and • Fostering within the project team a culture that adopts community engagement principles.

Table 37: Record of Stakeholder EngagementRecord of Stakeholder Engagement

Objectives of Meeting District/Local Municipality Date of attendance

Name and Position of Representative from South32

Mutually beneficial relationship; support for identification and SLP 3 LED projects and support for rollout of these projects

Emalahleni Local Municipality

18 May 2017 Thabo Manne

SLP 2 Close Out Discussion DMR 19 May 2017 Molebogeng Motabogi Thobatsi Thobatsi Cynthia Makhubele

SLP 2 Close Out Discussion Projects Emalahleni Local Municipality 9 June 2017 Molebogeng Motabogi

3.7 Socio-Economic Impact of the Mine in the local Communities

In February 2015, South32; then BHP Billiton conducted a study, on behalf of its operations, focusing on the latest trends in community relations, investment and development. The main purpose of the research was to obtain a global and local overview of community relations, investment and development; specifically, socio- eco-nomic and community development in general. The Company realises that community buy-in, support and proactive management as well as strong relationships are core to the success of its operations. It has also realised that sustainable and long-term relationships with stakeholders are important as they will have a direct impact on current and future business. The strategic objective now for South32 and most mining companies is to invest in their people as well as neighbouring communities.

Education was identified as the top priority focus area for social investment while training and skills development was recognised as key to the success of operations. It is very essential to have a pool of educated people in the surrounding areas of the company to feed into the workforce as and when needed. A need for partnerships was identified between the private sector, government agencies, NGOs and communities as it would create benefit in pooling knowledge and resources while enabling partners to draw on each other’s strengths for the greater good of socio-economic development. Research showed that involvement in community interventions should be entrenched in the mission and values of the company such that even the employees at all levels are roped in. The crucial focus for the future right now is the need to continue investing in community relationships andprogrammes that will ensure maximum benefit for society.

Through the Social Management Impact and Opportunity Assessment Research done for the company, it was concluded that the company enhanced the quality of life of surrounding communities through its social/commu-nity and enterprise development initiatives. Recommendations were made especially regarding education and enterprise development.

1) Education – The education portfolio must be redesigned and the current programmes exited responsibly. There is a great opportunity for combining the educational portfolio to address a very specific community need, for example, skills development for the unemployed youth leading to job creation, local economic development and ultimately economic independence of Individuals.2) Enterprise Development – the advancement of education and skills development provides an ideal oppor-tunity to refocus or extend the current enterprise development portfolio as well as to leverage resources already invested.

So far, the company has managed the enhancement of the quality of life of local communities very well and will continue to do so to nurture relationships.

As a measure of conforming to best practice socio-economic development methods in within South Africa and southern Africa; South32 has aligned its development initiatives to the New Partnerships for Africa’s Develop-ment (NEPAD) principles. The NEPAD Agency’s mandate is to:

• Facilitate and coordinate the implementation of continental and regional priority programmes and projects• Mobilise resources and partners in support of the implementation of Africa’s priority programmes and

projects• Conduct and coordinate research and knowledge management• Monitor and evaluate the implementation of programmes• Advocate on the AU and NEPAD vision, mission and core principle/ values

040

The NEPAD Agency’s Investment Programmes are:• Human Capital Development (Skills, Youth, Employment and Women Empowerment) - The programme

works to address issues of economic and social exclusion of youth by facilitating the creation of opportuni-ties and employment that enable them connect with the mainstream and hence enhance their contribution in the achievement of a prosperous continent.

• Industrialisation, Science, Technology and Innovation - A key consideration of the programme is the harmonization of country and regional level Industrialisation policies to ensure synergies with continental policy. Capacity enhancement in science, technology, innovation and entrepreneurship together with the establishment of an Industrial Development Index are integral components of this programme.

• Regional Integration, Infrastructure (Energy, Water, ICT, Transport) and Trade - The harmonisation of regional and national policies on infrastructure, market development and trade, as well as improve regional infrastructure in ICT, transport, water and energy, are cornerstones of this programme.

• Natural Resources Governance and Food Security - The focus of the programme is to strengthen agricul-ture, bolster food and nutrition security, promote the blue economy, improve environmental governance, and promote sustainable mining at the national, regional and continental level. A key aim is to facilitate the adoption of climate change mitigation and adaptation strategies.

3.8 Infrastructure Development, Poverty Eradication and Welfare Creation Projects

In reference to the Social Management Impact and Opportunity Assessment Research conducted as elaborated in section 3.6 above, and in line with the mandate of the MPRDA to identify suitable local economic development projects (job creation or infrastructure development) within the host community as well as major labour-sending areas, Khutala Colliery will support the LED projects listed in section 3.8.1.

3.8.1 Infrastructure Development and Poverty Alleviation Programmes

The key performance indicators and exit strategies for each of the above projects will be developed during the course of the next Financial year and will be included in the Implementation Plan.

Table 38: Five Year Project Summary Plan for Local Economic Development Projects of Khutala Colliery2

Project Focus area FY18 FY19 FY20 FY21 FY22 Total Location

Re-gravel 100km and eradicate 5km of roads- 10m

Municipal Support R2 000000

R 2 000 000 R 2 000 000 R2 000 000 R2 000 000 R10 000000 ELM

Phola Community Health Centre

InfrastructureR300 000 R15 000000 R15 000000 R- R30 000000 Phola

Land provision and monitoring of Fly Ash project Job Creation

R300 000 R300 000 R300 000 R300 000 R300 000 R1 500 000 Rietspruit

Waste collection–Supply of wheelie bin

Job CreationR1 200 000 R1 000 000 0 0 0 R2 200 000 ELM

Technical Skills Development Project

EducationR1 000 000 R500 000 R500 000 R500 000 R500 000 R3 000 000 ELM

Community Skills Development (Bursaries)

Education R1 000 000 R500,000 R500 000 R500 000 R500 000 R3 000 000 ELM

South32 After Schools Program (Incubation)

Education R500 000 R500 000 R500 000 R500 000 R500 000 R2 500 000 ELM

MSTA Winter Schools Program

Education R1 000 000 R500 000 R500 000 R500 000 R500 000 R3 000 000 ELM

Total: R7 000 000 R5 300 000 R19 300 000 R19 300 000 R4 300 000 R55 200 000

041

3.9 Housing and Living Conditions

Khutala Colliery has a focus on local recruitment of the workforce to be within the local labour sending area. Khutala employees should have the opportunity to live with their families in a sustainable social environment and have the opportunity to participate in wealth accumulation through ownership of propertyThe mine will therefore endeavour to improve the quality of accommodation of its employees through:

1. Provision of housing allowances where applicable;2. Promotion of the importance and benefits of home ownership and educating employees through

programmes regarding living budgets, housing options, accessing government housing loans and subsidies.

Furthermore, the Colliery provides transport to employees to transport them from hometo work and back to enable employees to live with their families in sustainable communities

Table 39: Housing and Living Conditions UndertakingUndertaking: Khutala undertakes to encourage employees to become homeowners and will facilitate home

ownership in areas in close proximity. In addition to this the mine will offer employees in lower occupational categories a market related living out allowance as agreed in the Wage Negotiations. Further strategies on how to promote home ownership in the mine will be developed and communicated to employees

Guidelines: Khutala will provide the following assistance to employees to facilitate home ownership in close proximity of the mine:

Responsible Person Strategic Plan Timeframe

HR Manager

Include a suitable housing and living condition awareness plan for employees, with continuous Financial Awareness sessions, to emphasize:1. Focus on communication to employees about the benefits of home

ownership and living with their families;2. Creating awareness about the disadvantages of living in squatter

settlements.3. Educate employees on how to go about finding a home in a sustainable

settlement; how to purchase a home and get finance from the banks; understanding of interest rates;

4. Understanding of payment of rates, taxes and electricity; and5. Educate employees on how to structure and spend their salaries i.e.

Housing allowance

Annually

3.10 Health Care and Nutrition Plan

Our workforce at Khutala Colliery resides outside of hostels in either rented or owned accommodation, and therefore the mine therefore cannot directly influence the diet of their employees. However, through indirect nutrition programmes it can influence the health and wellness of the workforce and their families.

Khutala Colliery will through the Social and Labour Plan, contribute to the positive conditions of health of employees by means of focusing on the following:

• Implement Comprehensive Wellness program inclusive of health awareness, education and monitoring of compliance to chronic disease medication

• Access to health services to promote awareness, prevent infection, encourage early diagnosis and treatment and provide ongoing continuity of care and support optimal health in order for them to remain as productive members of the mining workforce and their communities.

• Continue utilising the services of a health practitioner and dietician to distribute information to employees and family members on appropriate diets, food preparation methods and eating habits to achieve the objectives;

• Encourage the reporting on HIV/TB programmes, to promote HCT campaigns (incl. TB screening); conduct audits to evaluate effectiveness programmes

• Assisting HIV positive employees as well as Aids patients to develop and adhere to supportive diets through the HIV/Aids programme that is available to all employee Medical Aids

• Monitoring results and applying changes/updates to programmes where required• Implement and assist employees living with chronic disease psychosocial support through the

introduction and management of Employee Wellness Programs• Close collaboration and coordination with the public sector in instances where companies do not

offer some of these services.

042

Table 40: Health Care and Nutrition Plan UndertakingUndertaking: With regard to nutrition the mine does not provide food for its employees as they reside outside

of hostels in their own accommodation, however the mine is looking at implementing awareness programmes so that they can inform workers how they can benefit from good nutrition.

Summary: The following plan in respect to improving the nutritional levels of its workforce will be implemented at Khutala during the remaining life of the mine:1. To continue to identify employees with specific health requirement; and2. To monitor these employees on a scheduled, weekly basis and to provide guidance in thefollowing aspects:a) An eating plan that would assist in lowering the incidence of hypertension and diabetes amongst employees; andb) An eating plan that would assist HIV/Aids positive employees and family members to remain healthy for as long as possible.

Responsible Person Strategic Plan TimeframeOperations HSE

LeadImplement Comprehensive Wellness program inclusive of health awareness, education and monitoring of compliance to chronic disease medication

6 months

Operations HSE Lead

Assisting HIV positive employees as well as Aids patients to develop and adhere to supportive diets through the HIV/Aids programme that is available to all employee Medical Aids

6 months

Principal Health Improvement

Establish collaboration and coordination with the public sector in instances where companies do not offer some of these services

12 months

3.11 Procurement PlanTable 41: Background on Preferential Procurement Undertaking

Undertaking: South32 is committed to Transformation and supports DMR’s initiatives to transform the mining industry. Our key strategy focusses on creating successful business partners in core activities of our operations. This strategy positively impacts the communities within which we operate.

Our preferential procurement policy is focused on benefitting the business partners created under our Enterprise and Supplier Development Programme. All procurement (regardless of value/type) is driven through suppliers who are themselves transformed. We are committed to moving beyond compliance and have already introduced additional requirements, such as:• Procuring of contracted labour requirements from the local community.• Local subcontracting – downstream subcontracting.• We also provide minimum requirements for the vendor to subcontract to local EME and QSE’s

Summary: Khutala’s approach to procurement is guided by the following principles:1. To facilitate SME access to procurement activities through training in technical, business and

managerial skills for sustainable business growth; and2. To create awareness, understanding and support for BBBEE among all local stakeholders and

business sectors.3. Supplier communication sessions;4. Workshops to clarify legislative requirements;5. Capacity building; and6. Enterprise/ Supplier development

Responsible Person Strategic Plan TimeframeManager ESD Identification of Tender/ RFQ opportunities to black owned and black woman

owned EME, QSE and LME’s.Ongoing

Manager ESD Training and development provided to black owned EME and QSEs where are-as are identified which will assist these SMEs to improve access to market and sustainability.

Ongoing

Manager ESD Spend on empowered QSE/EME from a Preferential Procurement perspective to be a percentage of measured spend/planned spend e.g. >30% of measured spend, aligned to legislative targets. Implement ED & SD initiatives as identified from an Operations perspective

FY18

043

3.11.1 Enterprise Development

The Khutala’s Enterprise development programme will focus on the following types of enterprises, Start-ups, Emerging Micro Enterprises, Qualifying Small Enterprises (QSE), Large and Medium Enterprises (LME).There are also several interventions planned for developing enterprises namely:• Support access to improved cashflow through 7-day payment terms to black owned EME’s;• Support access to capital through sponsorship of FRCs to qualifying black owned EME and QSEs;• Work experience & technical skills development;• Managerial and entrepreneurial skills training;• Access to markets and capability building through:• Sub-contracts.• Set asides;• Managerial and Legal training;• Technical training;

Table 42: Targets for HDSA procurement at Khutala Colliery (FY 2018 to 2022)Procurement Category Current FY 2018 FY 2019 FY 2020 FY 2021 FY 2022

Capital 43,50% 40% 40% 40% 40% 40%

Services 61,60% 70% 70% 70% 70% 70%

Consumables 45,70% 50% 50% 50% 50% 50%

SECT

ION 4

SECTION 4DOWNSCALING AND

RETRENCHMENT

045SECT

ION 44. DOWNSCALING AND RETRENCHMENT

4.1 Introduction

This section deals with the management of downsizing and retrenchments. It is the Mines intention to abide by the guidelines as set out in the Labour Relations Act.

The Downscaling and Retrenchment Plan will seek to implement measures, which may mitigate the adverse social impacts caused by eventual downscaling, retrenchment and mine closure. The following key strategies have been established and are focused on in the ensuing sections:1. Establishment of a Future Forum;2. Mechanisms to save jobs and avoid downscaling and retrenchment;3. Measures during downscaling and retrenchment;4. Alternative livelihood opportunities and integration with the IDP; and

The continual investment in Human Resource Development and facilitation of training during the lifetime of mine has the purpose to sustain skills that will support employment of the workers beyond life of mine. The mine intends to comply with the Basic Conditions of Employment Act in respect of specific skills development directed at facilitating the further acquisition of skills that will be of value to employees at the mine at the time of downscaling and retrenchment. The mine will preside over the portable skills development initiatives.

The applicable authorities and employees will be notified of the planned retrenchments in accordance with legislative requirements. Negotiations with regards to retrenchment packages will be carried out in line with applicable legislation and company’s Human Resource’s polices for retrenchment. In addition, provisions for downscaling and retrenchment will be finalised in the Future Forum when the need arises.

Table 47: Downscaling and Retrenchment Undertaking

Undertaking:

In terms of section 52 (1) of the MRPD Act, 2002 (MPRDA), should the profit: revenue ratio be less than six present (6%) on average for a continuous period of twelve (12) months or should ten present (10%) or more of the workforce or more than five hundred (500) em-ployees have to be retrenched, the company undertakes to notify immediately the Minerals and Mining Development Board of such an event. It also undertakes to comply with any min-isterial directive arising from such a process. Further the mine undertakes that early warning triggers will be activated where appropriate to anticipate contingencies, and alternatives to re-trenchment will be explored.

Summary:

The on-going investment in Human Resource Development Programmes and facilitation of train-ing during the life of the mine is intended to support the acquisition of skills that will en-sure employability of the workforce beyond the life of the mine. In addition, Khutala will comply with the Basic Conditions of Employment Act in respect of assistance for employ-ees in skills development directed at facilitating the further acquisition of skills that will be of value to employees at the time of retrenchment.

4.2 Future Forum

Khutala Colliery has established a Future Forum as required under Regulation 46 (d) (i) of the MPRDA. A Future Forum is a site specific labour management body that will focus on the implementation and monitoring of the SLP. Khutala will utilise the monthly Future Forum structure to discuss a variety of issues pertinent to facilitating a coherent communication channel with an informed workforce. Issues such as the mine’s safety performance, operational status, HR related matters, LED projects and production levels have been incorporated into the scope of the Forum. The current members of the Forum include senior mine management, HR management and representatives of all the Unions.

The Khutala Future Forum comprises of the following representatives and will meet on a monthly basis:1. Chairperson (appointed by the Operations Manager);2. Representatives (appointed by the Operations Manager of Khutala Colliery representing the Mine); and3. Representatives (appointed by recognised unions).

Table 48: Strategic Action Plan for Future ForumIR Specialist Identify and analyse issues, problems, challenges and solu-tions surrounding job

losses and retrenchment manage-ment in good time for mine closure.On-going

IR Specialist To continuously assess and report on through the annual SLP report, the success and progress of all job loss man-agement and retrenchment management programmes im-plemented during the closure, and subsequently the post-closure period.

On-going

046

Table 49: Strategic Action Plan to Communicate with the Authorities

Responsible Party Communication with Authorities Strategic Action Plan Date to be completed

Future Forum In event of identifying the need to reduce mining operations and therefore the need for retrenchment of 10% (or more than 500 people) of workforce, the Future Forum is required to enter into consultation with the affected employees or relevant Trade Unions.

Commencement of the Social Plan

Future Forum As planning for job loss and retrenchments commences, the Future Fo-rum needs to notify:1. Department of Labour; and2. DMR, specifically Minerals and Mining Development Board.

Commencement of the Social Plan

Future Forum Government Authorities to be given notice of timeframes. Commencement of the Social Plan

Future Forum Progress reports need to be submitted to the Social Plan and Produc-tivity Advisory Council and the Department of Provincial and Local Government.

Commencement of the Social Plan

4.4 Mechanisms to Avoid Job Losses

In order to save employment, the mine will consider the minimal operational requirements to run the mine efficiently. This will also lessen the impact of retrenchment, as communal support systems will still be available.

Table 46: Mechanisms to Avoid Job Losses Undertaking

Undertaking:In order to save employment, the mine will consider the minimal operational requirements to run the mine efficiently. This will also lessen the impact of retrenchment, as communal support systems will still be available.

Summary: The Company will develop and implement turnaround strategies and mechanisms to save jobs, prevent unemployment and downscaling by focusing on the following:1. Seeking to prevent retrenchments from taking place, where possible.2. Utilising the Future Forum to identify strategies to prolong the life of the mine and

operations or avoid retrenchments and downscaling.3. Consulting with the DoL, DMR and surrounding mining companies to asses any potential

opportunities to migrate to above mentioned.

4.5 Provision of alternative solutions and procedures for creating job security where job losses cannot be avoided

One of Khutala’s goals is to ensure that through the effective implementation of its HRD plan, appropriatesystems for creating employee mobility will be in place. Where possible an appropriate programme will beimplemented to further diversify the skills base of retrenched employees, through learnerships, skills programme and portable skills training.In addition, Khutala will assist affected employees in finding alternative forms of employment or sustainable livelihoods. This will be done where necessary, given the expectation that the infrastructure development initiatives planned for the affected

4.3 Communication with Authorities

In compliance with Section 52 (1) of the MPRD Act, on identifying the need to reduce mining operations, should the profit revenue ratio of the relevant operation be less than 6% on average for a continuous period of twelve (12) months or should 10% or more of the workforce (or more than five hundred (500) employees) have to beretrenched, a comprehensive consultation process with the relevant trade union structures or affectedemployees will commence in compliance with Sections 189 and 189(A) of the Labour Relations Act, 1995(as amended) through the established Future Forum structure.

As planning for the Social Plan and its associated job loss and retrenchment management programmescommences, the Department of Labour and the Department of Mineral Resources (specifically the Minerals and Mining Development Board in accordance with Section 52(1) (a) of the Act) will be notified. Table 54 outlines the strategic action plan with regards to communicating with the authorities. The government authorities will be given notice of the timeframe for the closure process as well as the on-going consultation and Social Plan through the Future Forum structure. Regular progress reports will subsequently be distributed to the necessarydepartments, including the Social Plan and Productivity Advisory Council and the Department of Provincial and Local Government. Compliance to the Board’s directive will be adhered to in order to meet the correctivemeasures as stipulated by the Board.

047

4.6 Mechanisms to ameliorate the social and economic impact on individuals, regions and econo-mies where retrenchment or closure of the operation is certain

To ameliorate the social and economic impact on individuals, regions and economies where retrenchment or closure of the operation is certain, Mine management, together with the Future Forum, will assess in advance the impact that will be caused by the retrenchment and/or closure of its operations. This will be communicated to the affected individuals and communities involved so, as to make all affected parties aware of what the outcome of the retrenchment and/or closure will be. Proposals to lessen the impact on the socio- economic situation of the area concerned will be considered. In order to assess this effect a socio-economic impact analysis (SEIA) will be carried out by specialist prior to the development of detailed closure management plans. Such an impact assessment will incorporate interaction with both the Future Forum and relevant community structures.

Table 47: Provision of Alternative Solutions UndertakingUndertaking: Khutala aims to ensure the effective implementation of the HRD Programme to provide the

workforce with both mining-related and portable skills. In this manner Khutala wants to assist the workforce to be multi-skilled and employable in diverse fields should the mine need to downscale and close. Furthermore, the mine will regularly communicate with the Future Forum to direct the retrenchment process and the establishment of a Job Advice Centre, which will provide counselling and support to employees. Inherent to this, a "job-help" facility will be provided to aid employees in locating alternative employment, through the formulating of employee CV's, integrations mechanisms with potential employers, interview strategies. Contactors will however be responsible for the management of downscaling and retrenchment of their own employees.

Summary: Khutala is planning for closure throughout the process by acknowledging the future well-being of its employees in the eventuality of closure. During this phase partnerships with the DoL and the representative unions will be formed. Here affected employees will be assisted to maximise their chances of re-employment.

Responsible Person Strategic Plan TimeframeIR Specialist A retrenchee database to be established, including information regarding exist-

ing skills, experience, and expertise. This database will be used to identify po-tential employment opportunities within or outside of the company.

Ongoing

IR Specialist Appropriately train and skill retrenchees in order to find alternative employment Ongoing

Table 48: Mechanisms to Ameliorate the Social-Economic Impact UndertakingUndertaking: Downscaling and retrenchment has the potential to affect not only employees but also surrounding

businesses and communities. Thus careful planning is imperative to limit the potential fallout of such an event. A major objective of the Human Resources De-velopment Programmes and the LED Programmes is to facilitate sustainable social and economic growth in the local communities during the life of the mine. This will need to be supplemented by additional measures to manage the impact of the mine closure on both the surrounding communities and those communities from which labour is sourced.

Summary: After considering all alternatives to downscale and retrenchment becomes inevitable, Khu-tala will assist affected employees in redeployment within the company and finding al-ternative employment or sustainable livelihoods, six (6) months before this eventuality. This phase will be managed jointly by the Company in partnership with the Department of Provincial and Local Government. The focus will be on the integration of the work-force into various LED projects, which will be done in collaboration with the district and local municipalities and other stakeholders serving on the LED Forum/CDF.

Responsible Person Strategic Plan TimeframeEAP Service

ProviderPsychological counselling to be provided to employees.. At times of

downscaling/closure

HRD Portable skills training interventions to be uplifted and to include comprehensive self-employment opportunities.

On-going throughout the Life of Mine

(LoM)/ At times of downscaling/closure

HR In conjunction with the DoL, the mine to facilitate retrenchees in the completion of UIF claim forms.

At times of downscaling/closure

HR/Finance The mine to ensure that sufficient financial provisioning is in place for the implementation of all plans relating to the process of downscaling and retrenchments.

On-going throughout the Life of Mine

(LoM)

communities will absorb a portion of the workforce after closure. The focus of this phase will fall on the integration of the workforce into various LED projects, which will be done in collaboration with the district and local municipalities. Where workers cannot be absorbed into LED initiatives, they will be furnished with skills and training (through the HRD programmes) which will enable them to find alternative employment after mine closure.

048

4.7 Post Closure Planning

Management strategies for the post-closure period will also be developed with local stakeholders within the closure planning process. Strategies that avoid dependency amongst the social intervention beneficiaries and promote independence amongst individuals and businesses in the community will be developed to ensure post-closure sustainability. On-going consultation and advisory roles facilitated through the Future Forum structure will be utilised to ensure that the programmes and plans continue to deliver sustainable and effective benefits. The continued contribution and on-going management role of local government in this respect will be essential to this post-closure management process.

Planning for specific LED projects at closure is very difficult given that the life of the proposed mine is thirty(30) years. Knowledge of the specific LED needs within the area surrounding the mine at the time ofseveral years in advance of closure is very difficult. However, cognisance of the need for comprehensive LED projects which are developed with the aim of sustainable social and economic development in theregion surrounding the mine, particularly for workforce and/or communities previously dependent on the mine for their livelihoods, will be key. Such planning will commence some five (5) years prior to closure.

4.8 Social and Labour Plan (SLP) Communication

In order to comply with the requirements of the MPRD Act [specifically regulation 46(f)] Khutala will ensure that each employee is informed about the provisions laid out in the mine’s SLP as well as progress inachieving the objectives on an annual basis.

Clear, effective and participative communication of the Social and Labour Plan, including using the Career Progression Plan (CPP), Skills Development Plan (SDP) and Worker’s Forums to ensure it is communicated on a level that each worker can grasp.

Table 49: Strategic Action Plan to Communicate the Social and Labour Plan

Responsible Party SLP Communication Strategic Action Plan Timeframe

SLP Coordinator/ Corporate Communications

The mine will hold dedicated meetings on an annual basis to provide feed-back to its employees on the progress made within the SLP.

Annually

HR Manager SLP Future Forums will be set up at mine level as a forum to discuss and communicate SLP issues during the life of the mine as well as issues per-taining to downscaling and retrenchment should these arise.

Monthly

SECT

ION 5

SECTION 5FINANCIAL PROVISION

050

5. FINANCIAL PROVISION5.1 Financial Provision

In terms of Section 23(1) (e) of the MPRDA “The Minister grants a mining right if the applicant has provided financially andotherwise for the prescribed Social and Labour Plan”. This section intends to outline the manner in which The Mine aims to provide financially for each component of the Social and Labour Plan. Table 59 provides a summary of the financial commitment by the mine for the next five (5) years.

Table 50: Summary of Financial Provision for Key Elements of Khutala Colliery’s SLP over the Five (5) Year Period (FY 2018 to 2022)

Human Resource Development Programmes

R18 821 480 R36 806 689 R26 089 366 R47 640 547 R30 741 134 R154 989 896

Local Economic Development Programmes

R7 000 000 R5 300 000 R19 300 000 R19 300 000 R4 300 000 R55 200 000

Estimated Total Provision for SLP

R 25 821 480 R 42 106 689 R 45 389 366 R 66 940 547 R 35 041 134 R 210 189 896

5.2 Financial Provision for Human Resource Development Programmes (Regulation 46 (e)(i))

Khutala will fund its HRD programme by means of the procedures put in place through the Skills Development Act and the payment of skills levies as well as the budgetary commitments made for through the operating costs associated with the mine andimplementation of the overall business plan.

Table 51: Summary Breakdown of Human Resources Development Five (5) Year Budget for Khutala Colliery (FY 2018 to 2022)

HRD Budget 2018 2019 2020 2021 -2022 Total Budget

AET R803 530 R989 930 R1 423 200 R1 227 342 R1 037 980 R5 481 982

Community AET R0 R0 R0 R0 R0 R0

Artisans R4 684 833 R5 153 315 R5 668 864 R6 235 511 R6 859 062 R28 601 585

Bursaries (internal)

R1 237 047 R2 721 503 R4 490 481 R4 939 529 R5 433 482 R18 822 041

Bursaries (External)

R1 200 000 R 1 100 000 R 1 200 000 R 1 300 000 R 1 400 000 R 6 200 000

Core Business Skills

R4 529 600 R4 982 560 R5 480 816 R6 280 867 R6 631 787 R27 905 630

Learnership 18,1 R2 612 588 R11 145 458 R3 161 231 R14 798 323 R3 825 090 R35 542 691

Learnership 18,2 R2 036 548 R8 665 056 R2 464 223 R10 484 718 R2 981 709 R26 632 255

Internships R266 889 R293 578 R322 935 R355 229 R390 752 R1 629 382

Portable Skills Training

R1 145 680 R1 260 248 R1 386 272 R1 524 900 R1 677 390 R6 994 490

School programs (Study Assistance)

R302 747 R333 022 R366 324 R402 957 R443 252 R1 848 302

Community Skills Dev

R 1 000000 R 500 000 R 500 000 R 500 000 R 500 000 R 3 000 000

Leadership Development programme

R1 200 000 R1 260 000 R1 323 000 R1 389 150 R1 458 608 R1 531 538

Total Budget R21 021 480 R63 904 226 R69 817 477 R57 329 662 R60 142 555 R297 204 573

051

5.3 Financial Provision for Local Economic Development Programmes (Regulation 46(e)(ii))

Section 3 details the Mines plans to undertake Local Economic Development in line with the local and district municipalitiesIntegrated Development Strategies.

Table 52: Summary of Financial Commitment for Local Economic Development for Five (5) Years for Khutala Colliery (FY 2018 to 2022)

LED Projects R7 000 000 R5 300 000

R19 300 000

R19 300 000

R4 300 000 R55 200 000

Total Financial Provision for Local Economic Development Programmes

R7 000 000 R5 300 000

R19 300 000

R19 300 000

R4 300 000 R55 200 000

5.4 Financial Provision for Management of Downscaling and Retrenchment (Regulation 46(e) (iii))

The on-going investment in Human Resource Development Programmes and facilitation of training during the life of Khutala is intended to support the acquisition of skills that will ensure employability of the workforce beyond the life of the mine. In addition to this, The Mine will comply with the Basic Conditions of Employment Act in respect of assistance for employees. Specific skills development initiatives directed at facilitating further acquisition of skills that will be of value to employees at the time ofretrenchment will be implemented.

No provisions for retrenchment and downscaling have been made as a result of the Company not planning to retrench in the near future. In such an unforeseen event, normal legislative procedures will be followed, where appropriate financial provisions will be made which will be in accordance with IFRS.

SECT

ION 6

SECTION 6UNDERTAKING

053SECT

ION 66. UNDERTAKING

This represents an undertaking by the holder of the mining right to ensure compliance with the SLP and to make it known toemployees and for further contacts on follow-ups, requests, reports, queries, enquiries and discussions.

South32, herein represented by Rajan Jaison duly authorized thereto, hereby undertakes to adhere to the information,requirements, commitments and conditions as set out in the Social and Labour Plan.

Signed at Johannesburg on this ………………………………... day of ………………………………………………. 2017.Signature of responsible person(s).

……………………………………………………………………………………..…………………..Designation – Operations Manager

ADDENDUM A: LABOUR SENDING AREASMine Community 47 2,7%

Nkangala District Municipality 1493 85,8%

Other Mpumalanga: Ehlanzeni District Municipality 31 1,8%

Gauteng City of Johannesburg Metropolitan Municipality 10 0,6%

City of Tshwane Metropolitan Municipality 22 1,3%

Ekurhuleni Metropolitan Municipality 32 1,8%

Metsweding District Municipality 29 1,7%

Sedibeng District Municipality 8 0,5%

KwaZulu-Natal Amajuba District Municipality 9 0,5%

Ethekwini Metropolitan Municipality 1 0,1%

Ugu District Municipality 1 0,1%

Umkhanyakude District Municipality 1 0,1%

uThungulu District Municipality 1 0,1%

Zululand District Municipality 3 0,2%

Limpopo Mopani District Municipality 1 0,1%

Sekhukhune District Municipality 25 1,4%

Vhembe District Municipality 2 0,1%

North West Bojanala Platinum District Municipality 6 0,3%

Ngaka Modiri Molema District Municipality 1 0,1%

Free State Thabo Mofutsanyana District Municipality 4 0,2%

Fezile Dabi District Municipality 1 0,1%

Mangaung Metropolitan Municipality 2 0,1%

Western Cape Oudtshoorn District Municipality 2 0,1%

Eastern Cape Alfred Nzo District Municipality 2 0,1%

Amathole District Municipality 1 0,1%

Chris Hani District Municipality 1 0,1%

Joe Gqabi District Municipality 1 0,1%

OR Thambo District Municipality 1 0,1%

Lesotho Lesotho 2 0,1%

055

Proposed South32 Qualifications Framework

EU Post Graduate Degree (4yrs)

Degree (4yrs) Degree (4yrs) Degree (4yrs) Min 10 years’ experience of

which 5 years at least in Managerial

position

Advantageous if 2nd degree

Financial

Advantageous: Advance Lump Ore Beneficiation (LOB)

Advantageous if 2nd degree Financial

EL Degree Degree (4yrs) / Mine Managers'

certificate MMC (Mining)

Degree (4yrs) Chemical Engineering

/ Metallurgy

Degree (4yrs) / Government Certificate of

competency GCC (Engineering)

Min 6 years’ experience of

which 3 years at least in Managerial

position

DU Degree or National

Diploma (3yrs)

Degree or National Diploma (3yrs) / Surface Mine Overseer MQA Level 5

Degree or National Diploma in Chemical

Engineering or Metallurgy (3yrs) and/or

Advance Lump Ore Beneficiation (LOB)

Degree or National Diploma (3yrs)

Execution roles: Government Certificate of

competency GCC (Engineering)

Min 5 years’ experience of

which 2 years at least in Managerial

position

DL Degree or National

Diploma (3yrs)

Mine Overseer Certificate

/ Mining Operations

MQA Level 4

National Diploma in Chemical Engineering

or Met. (3yrs) orAdv. LOB.

Rail – Relevant rail certificate

N4 Engineering (Ideally N6/T3/S4 National Diploma in an Engineering

+ Trade)

Min 4 years’ experience of which 1 year

at least in Supervisory

position

CU National advanced

certificate / Equivalent

(2yrs)

Surface Rock Breaking MQA

Level 3

National Diploma (3yrs) or

Intro Lump Ore Beneficiation (LOB)

N3 + Trade Test Min 3 years’ experience

CL Occupational Certificate (1yr)

Blasting Assistant Level 2 / Competent

A Level 2

Introduction to Lump Ore

Beneficiation (LOB)

Internal = N2 + Trade Test

External N3 + Trade Test

Min 2 years’ experience (if not from Mining and Metals Industry)

B Matric English with Mathematics and Science (Maintenance , Engineering and Processing) / Matric English with Mathematics Literacy (Mining and Functions)

(For internal candidates a Standard 8 (Grade 10) will be required for an internal promotion within the B band. External however remains as above)

KHUTALA COLLIERYMINING RIGHT REFERENCE NUMBER:

MP30/5/1/2/2/118 MR

SOCIAL AND LABOUR PLAN FOR SOUTH32