It gives me pleasure to once again introduce Implats’ Annual Sustainability Report. This report supplements our Integrated Annual Report, and outlines what Implats has been doing – and what the Company still plans – to deliver on its strategic commitments across its material sustainability focus areas.

In this opening review, I reflect on some of the key highlights and challenges relating to Implats’ sustainability performance over the year, and share some forward-looking perspectives. We remain committed to ensuring Implats creates and shares value across its stakeholder groups. To do so without harm is our ongoing intent.

Through collaborative efforts, we have maintained stable and constructive labour relations and partnerships with unions at all our operations. It is gratifying to see the wage negotiation and shop steward election processes at our South African operations concluded without a major incident. This is testament to the high level of consultation with employees and demonstrates Implats’ commitment to the values of respect and care.

Implats continued its investment in employee training and development programmes, and conducted various activities aimed at creating a pipeline of future talent sourced from communities surrounding our operations. Recruitment efforts for the year under review focused on the critical skills which are scarce in our communities. Total employee turnover increased to 8.6% from 8.2% in 2016. At our Marula operation, continued community protest action coupled with persistently low metal prices have necessitated a downsizing exercise, which is being closely monitored for sustainability.

We are proud of our sustained commitment to providing affordable and decent housing for employees and remain an industry leader in this area. In South Africa, our focus is on enhancing home ownership opportunities. Our vision is to have the majority of company employees living with their families in decent accommodation within a reasonable distance from work by 2020. At Impala Rustenburg, there is a high demand from employees wishing to purchase units in our flagship home ownership project, Platinum Village. Work on the last two phases of Platinum Village will start during 2018. During 2017 we launched the Platinum Village primary and secondary schools, which together have capacity for 1 700 learners. Following the conversion of our hostel buildings into single person per room units, completed in 2013, we have steadily converted a number of these units into family units to accommodate employees seeking to live with their families.

The sustained expenditure and effort we have put into safety initiatives, technical solutions and training across the Group, are evident in the strong safety performance maintained at many of our operations, in particular Zimplats. Regrettably, however, nine of our employees died as a result of injuries sustained while on duty. We extend our sincere condolences to the families, friends and colleagues of these employees. As always with incidents of this nature, Implats has implemented appropriate remedial actions to avoid repeat occurrences. The fatalities are particularly disappointing in view of the renewed focus placed throughout 2017 on improving the safety culture of our employees, especially at Impala Rustenburg and Marula. Human error remains a common factor in safety incidents and we have made concerted efforts to better understand and address high-risk behaviour. We have focused on driving visible, felt leadership, and improving critical controls and critical safe behaviours at our operations. These will remain priority focus areas for 2018. We expect to see a further step change in our safety performance and ultimately achieve our goal of zero harm.

The principal health risks facing our employees remain pulmonary tuberculosis (TB), the associated human immunodeficiency virus (HIV) co-infection, and the occupational health risk of noise induced hearing loss (NIHL). We have placed a strong emphasis on managing chronic medical conditions, such as hypertension and diabetes. Our internal health drive is supported by our investments in community healthcare projects, the delivery and funding arrangements of which depend on local facilities and conditions, and thus differ between our operations in South Africa and Zimbabwe.

Employee indebtedness at our South African operations is an ongoing concern, affecting employee wellbeing and raising stress-related health and safety risks. We continued to implement initiatives aimed at helping employees reduce their debt and better manage their financial affairs.

Driving socio-economic transformation within Implats and across its value chain is a priority and informs much of the Group’s engagement with the government, communities and other stakeholders. Implats goes beyond compliance in this area and has played a leading role in industry discussions. There is a strong, Group-wide acknowledgement that delivering socio-economic transformation is non-negotiable.

In South Africa, our performance is well positioned relative to the 2010 Mining Charter targets, and we will align ourselves internally with the expectations of the Mining Charter III proposals, published in June 2017, once agreed between the relevant stakeholders. We also seek to align with the B-BBEE Act and work towards compliance with the new B-BBEE Codes of Good Practice. This year, Implats achieved a Level 4 verification certificate (100% B-BBEE recognition level), measured against the more demanding revised codes.

Advancing our progress in South Africa this year included:

• Investing R529 million in the training and development of historically disadvantaged South Africans (HDSA) representing 5.3% of HDSA payroll against a target of 5%;
• Achieving, and in most cases exceeding, the employment equity targets of the 2010 Mining Charter, where we are well positioned relative to our competitors; advancing the representation of women remains a challenge and focus area;
• Complementing our housing efforts with investments in community development projects amounting to R106 million, inclusive of social and labour plan (SLP) commitments; and
• Increasing our activities in supporting local and HDSA businesses through preferential procurement, supplier development and enterprise development initiatives; discretionary procurement expenditure for 2017 was R8.7 billion, of which 76%, or R6.7 billion, was from companies in which HDSA/BEE ownership was greater than 25%.

In Zimbabwe, representation of indigenous people is 99% at Mimosa and 100% at Zimplats. In terms of the 2016 presidential guidelines, mining companies in Zimbabwe are deemed indigenised if local spend is at least 75% of annual revenue. In 2017, our local spend at Zimplats was 82% of revenue generated.

While Zimplats has preformed well against the Presidential guidelines it is important to note that the guidelines are yet to be promulgated into law. As part of the indigenisation plan, we have successfully implemented an employee share option trust at Zimplats, which has been well received. We continue to engage with government on indigenisation.

The sustainability of our mining activities depends on our ability to contribute to the wellbeing and prosperity of our host communities. The challenging social context under which we are operating further highlights the need for sustainable community development as a commercial and social imperative. In South Africa, there is growing frustration and community activism in many of our neighbouring communities, particularly among the unemployed youth. With the slow pace of service delivery, reduced employment opportunities, and a rising cost of living, we faced a crisis of expectations during the period under review in terms of providing jobs, infrastructure, service delivery and procurement opportunities.

As far as possible, we seek to employ people from communities close to our operations. Despite efforts to hire more local people, migrant workers continue to play an important role in the industry, particularly for rock drill and winch operators. We invest in skills development in our local communities, and promote local employment through our local procurement practices.

This year we experienced minor community unrest at Impala Rustenburg and Two Rivers, and major, continued unrest at Marula. The management team at Marula continued to engage with community representatives and government officials to strengthen communication lines and relationships. Impala Rustenburg has maintained a good working relationship with its host communities, the Rustenburg local municipality and the Royal Bafokeng Nation.

Investment in the accommodation and living conditions of employees is one pillar of Implats’ contribution to the wellbeing of its host communities. Our social investment strategy complements this by providing schools, clinics and other amenities. Social programmes and investments are identified in collaboration with stakeholders in the areas in which we operate, and seek to address identified community needs by focusing on infrastructure, health, education, community employment, and empowerment initiatives.

This year in South Africa, total expenditure on social projects and housing amounted to R371 million. Our preferential procurement practices and enterprise and supplier development activities make a tangible difference to the lives and families of emerging black entrepreneurs, and stimulate economic development in our host communities. To this end we spent R2.6 billion on procurement from local businesses (all >25% BEE), within the Bojanala district for Impala Rustenburg operations and the Greater Sekhukhune district at Marula (2016: R2.5 billion or 31%).

In Zimbabwe total expenditure on social projects and housing was US$5.3 million. Zimplats spent US$80 million on local suppliers with at least 51% black Zimbabwean ownership, representing 23% of the total annual procurement spend (2016: US$103 million/31% of annual procurement).

Mining companies need to manage environmental impacts. As such, it is critical we demonstrate responsible stewardship of the resources we share with neighbouring communities. Our principal environmental risks relate to the pollution of soil, surface water, ground water and air quality, with the associated impacts on health, safety and biodiversity. We engage with the South African and Zimbabwean regulatory authorities to ensure all applicable licences and permit applications are approved and in place, and that all requirements are met.

During 2017, there were no “major” (Level 5) or “significant” (Level 4) environmental incidents at our operations, and we recorded 35 “limited impact” (Level 3) incidents. This number remains high and we will strive for no Level 3 incidents. There were no non-compliance notices, fines or penalties issued to any of our operations during the review period.

We have increased the use of recycled water, this year accounting for 46% of the total water consumed across the Group, compared to 41% last year. Another focus area is the use of alternative energy sources. This year we continued to make good progress in advancing fuel-cell technology initiatives. We are currently evaluating proposals for the commercial development of a prototype fuel-cell driven load haul dumper (LHD) that we will initially utilise at Impala Rustenburg 14 shaft.

We strengthened our stakeholder engagement framework to ensure deeper engagement, which has assisted in building stronger relationships. I am particularly encouraged by the collaborative engagement with our employees and union representatives this year, and the stronger relationship we have built with the Department of Mineral Resources. In preparing for the years ahead it is essential Implats does not create expectations that cannot be realised. Establishing and maintaining trust with all stakeholder groups will be critical as Implats strives to meet its commitments to zero harm, transformation, socio-economic development and environmental protection.

In closing, I express my thanks to management, my colleagues on the STR committee, and all employees for their work towards delivering on Implats’ sustainability commitments. I convey my particular appreciation to community leaders and the government for our collaborative efforts.

I encourage all stakeholders to read this report and to give honest feedback on our performance and our disclosure. Greater stakeholder accountability and engagement is critical in helping Implats deliver effectively on its sustainability goals. We welcome the new CEO, Nico Muller, who brings valuable industry experience to drive this process.

Mpho Nkeli
Chairperson: social, transformation and remuneration committee