Q&A: IMPALA PLATINUM - JSE MAGAZINE

Q&A: IMPALA PLATINUM

Cindy Mogotsi, group sustainable development manager at Impala Platinum, on investment in schools, rural infrastructure development and the importance of housing for employees

Q&A: IMPALA PLATINUM

Q: The SA mining industry embraces CSR, is it doing enough?
A: The mining sector is definitely one of the largest contributors to socio-economic development (SED). Overall SED expenditure grew from R6.2 billion in 2010 to R6.9 billion in 2012, a growth rate of 11%. The mining sector contributed almost 18% of all SED expenditure in 2012. Breaking this percentage down further, platinum group metals (PGM) contributed just less than 5% of SED expenditure. Despite downward economic pressures experienced by the sector since 2010, PGM motivated a 57% increase in SED expenditure. With these figures in mind, I believe that yes, overall the industry and the platinum sector is certainly making a big impact towards the upliftment of communities.

Q: What are the major challenges that Impala Platinum (Implats) believes need to be addressed through CSR initiatives?
A: There are five major issues that are crucial. First is improvement of the standard of education. This requires investment in school infrastructure and education programmes, particularly mathematics and science because these are the subjects that are required within the mining environment. This imperative is closely linked to a second motivator, which is to provide experiential learning, particularly to the youth to ensure they are employable. The provision of housing and improvement of living conditions is the third. It is one of the most critical challenges that continues to be addressed so that employees and the extended communities can be uplifted and informal settlements can be eradicated.

This goes hand-in-hand with the fourth issue, which is to focus on infrastructure development of rural areas and mining communities to ensure they have access to water and electricity, and that roads are developed. The final imperative is the creation of a database to ensure the social needs of communities are supported by research data and statistics.

‘Our approach to CSR is focused on making a difference within the areas we operate’

Q: What is Implats’ overall CSR vision?
A: Our view goes beyond mere philanthropy because we recognise the importance of operating in a healthy and sustainable society to support business success. As such, our approach to CSR is focused on making a difference within the areas we operate. This is achieved through partnerships with key stakeholders including employee representatives, communities, local municipalities, national government and a range of other industry players when and where possible.

Our initiatives are aimed at achieving the vision of ‘a better life for all’ and we believe that in some way Implats is contributing to the realisation of the SA dream. Our CSR strategy also complements our housing and accommodation strategy through a number of initiatives that include the provision of schools, clinics and other community amenities. Approximately 99% of our CSR spend is directed towards the communities in which we operate as well as those from where the majority of our workforce is drawn. We believe our employees benefit from the investments that are directed to the creation of socially and economically viable communities. This supports our business through a healthier, more motivated and better educated skilled workforce that has access to decent education, health and sporting facilities, among other amenities.

Q: Of all the Implats CSR programmes, which is making the most significant impact?
A: Definitely our commitment to improving accommodation and the living conditions of our employees and local communities. Implats is driven to seek and create communities where employees can reside with their families in a stable, healthy and secure environment that is within commuting distance of their workplace. We actively promote home ownership and have enabled many employees to become home owners for the first time.

Over the past five years we have invested R2.6 billion to ensure quality accommodation for employees. We have completed the conversion of all our hostels into single person residences and have built 3 200 homes in local communities. We have also established new urban areas such as Sunrise View and Platinum Village in Rustenburg.

Q: The home ownership programme that Implats has adopted is often cited as ground-breaking. how does this work?
A: The programme is intended to provide employees with access to decent and affordable accommodation, and our employees are actively encouraged to become home owners. Implats acquires land and develops large new integrated communities where houses are made available to employees at cost. Together with access to financing through interest free loans, accommodation allowances and negotiated preferential rates from financial institutions, this becomes a viable proposition even for the lowest paid worker.

Our employees are empowered through the acquisition of a quality asset that will grow in value over time. Currently 5 016 employees live with their families and our aim is to have at least 50% of our employees residing with their families in decent accommodation by the year 2020. We believe this goal is achievable, and there are plans to build an additional 2 420 homes at a cost of R1 billion over the next three years.

‘Implats works closely with a number of stakeholders, in particular social partners, government departments and local communities’

Q: How is Implats impacting on the greater community through CSR?
A: Our most successful programmes are those that involve the provision of infrastructure for new schools and the refurbishment and/or extension of existing schools, the provision of roads, and the upgrade of libraries. We have also established a chrome processing enterprise that benefits some of our local communities. We know these projects are successful because in 2013 more than 90 000 people had access to improved education, health and sport, and were exposed to general community upliftment and welfare. These initiatives are self-sustaining, generating revenues and profits. Another measure of success is that we have created direct and indirect employment – some 1 000 jobs were created in 2013 through SED interventions.

Q: What is the chrome processing enterprise and how does it benefit the community?
A: In 2009 Implats funded and constructed a R45 million plant that would beneficiate chrome from the Marula Platinum mine waste. Makgoma Chrome is a joint venture with Marula Community Chrome, Marula Platinum and Implats. The plant is 95% owned by six local communities and community members, and it currently produces between 5 000–6 000 tons per month, with the capacity to double that.

Since inception Makgomo Chrome has declared dividends in excess of R24 million, of which half flowed back to Marula Community Chrome. This is a typical example of how we can empower the local community to become employers, and is an ideal training ground, ensuring the sustainability and future of people.

Q: Sport is a strong focus for Implats CSR initiatives. Why is that?
A: We look at the holistic wellbeing of communities and sport provides an opportunity to improve the lifestyle and health of our employees. In 2006, we launched the Impala Sports Academy to help develop the sporting aspect of historically disadvantaged South Africans. It initially supported ad hoc sporting clubs that our employees were involved with, but has grown to include a learnership scheme in basic mining and engineering related disciplines for talented young sportspeople, who want to pursue a career in this field. Over the years the Impala Sports Academy has grown to provide a two-year sponsorship of a local provincial rugby team. Today the academy is recognised as a centre of sporting excellence in the North West province and beyond.

Q: Who monitors and determines the CSR initiatives with Implats?
A: Multidisciplinary committees, established at each of our operations, are responsible for the implementation of identified initiatives. The projects are endorsed in a forum where the local municipality, labour and communities are represented in collaboration with our stakeholders. There is a robust strategic review process that is followed to ensure the projects we select are valid and have value.

Following this, such interventions are submitted to an executive committee for approval. They are subsequently scheduled and budgeted for within the annual business plan and are assessed on an ongoing basis by a third-party appointed by Implats. The assessment takes into account the efficiency of expenditure of funds; quality of implementation; impact of the project/intervention; sustainability; and associated and potential risks, be those legal, reputational or cost impacts.

Q: CSR initiatives require co-operative agreements, how does Implats address this?
A: Implats works closely with a number of stakeholders, in particular social partners, government departments and local communities to ensure our investments are sound and importantly, sustainable. Each initiative or project requires that a memorandum of understanding be put in place to describe the role and responsibility of each stakeholder. As an industry we also recognise that more can be done through collaboration and therefore look at high impact initiatives that will better benefit communities.

By Kerry Dimmer
Image: David Maclennan