> contents1. Chairman’s review

2. Life cycle of steel

3. Key quantifiable sustainability indicators

4. Operating units internationally

5. Overview of the group

6. Governance and business principles

7. Economic performance

8. Safety, health and environment (SHE) - management framework

9. Safety

10. Health

11. Environment

12. Labour practices and community involvement

13. Glossary of terms

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> Chairman’s review:sustainable development

report 2006For the Scaw Metals Group the health and safety ofemployees, the protection of the environment, deliveringvalue to shareholders and having due regard for thecommunities in which we operate are top priorities.

Sound Safety, Health and Environmental (SHE)management is integral to how the group conductsits business. The group has endeavoured to developan interdependent safety culture where individual andteam effort, as well as the associated accountabilityregarding the goal of zero lost time injuries, is reinforced.

continued...

Tony Harris, executive chairman,Scaw Metals Group.

1

Tony Harris engages with employees.

2

The SHE management systems of all material sitesare ISO 14001 and OHSAS 18001 certified. Theimplementation of an electronic action managementsystem, to ensure effective management andcoordination of SHE activities on an international basis,is currently under way.

The number of lost time injuries has decreasedfrom 30 in 2005 to 25 in 2006. The behaviouralapproach has been fully entrenched and integratedinto the formal safety management system. SafetyFundamentals Training based on the Group SafetyStrategic Plan and Safety Improvement Plan for linemanagers and supervisors is being rolled out acrossthe group, and 12 sites and 825 managers have beentrained to date. The Scaw Metals Group endeavoursto become the safest steel production and processingoperation in the world - a safety benchmark in thesteel industry.

The group focused on the efficient use of resources.Overall the group achieved a reduction in natural gasconsumption from 44.5 m3/tonne reported in 2005to 42.11 m3/tonne in 2006. Increased production ofdirectly reduced iron (necessary during periods ofsteel scrap shortages) resulted in an increased useof coal as a reductant. The group achieved a reductionin specific electricity consumption from 2.84 to 2.82GJ/tonne. The water consumption per tonne ofproduct produced has decreased from 1.46 m3/tonneto 1.42 m3/tonne of product produced.

Process waste is regarded as a valuable by-product.Progress has been made with the recycling of processwaste with the commissioning of a char waste recyclingplant. This plant resulted in the recycling of 30% ofprocess waste generated. In addition, the group isfocusing on sustainable rehabilitation of land, and theprototype Rietfontein Phytoremediation Project is anexample of this.

The group is involved in various community upliftmentprojects and continues to invest in people. ScawSouth Africa’s community training centre has to dateequipped 209 young underprivileged individuals withwelding or computer literacy skills.

The group expanded with the acquisition of theAltaSteel operation in Alberta, Canada in February2006. The group is operational in 11 countries acrossthe world and currently employs approximately 7 500people.

The company spend on Black EconomicEmpowerment (BEE) companies continues to grow.The South African operations announced a BEEtransaction early in 2007. Those operations werecorporatised into a new company known as ScawSouth Africa (Proprietary) Limited.

We strive towards continual improvement and,therefore, any comments that you may have on thisreport would be highly appreciated. Please completethe postcard provided and return it to me.

Sincerely,

Tony HarrisExecutive chairman - Scaw Metals Group

Chairman’s review> community is atop priority

3

Life cycle of steel> just as the cicada changesform through the process ofmetamorphosis, so steel istransformed into a host ofdifferent products

Every new steel product contains recycled steel and in some countries the recycle rate is as high as 85%.ecycle rate is as high as 85%.

Scaw Metals Group sales are almost 1.5 million tonnes annually. Union Junction produces over half-a-milliontonnes of liquid steel each year from steel scrap and directly reduced iron from its rotary kilns. The scrap steelin all forms is processed by a large shredder, shear and baler to ensure it is the optimum size to be used inthe various furnaces.

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> life cycle of steel

Products Markets

Rolled steel Cast steel and alloy iron productsCast steel railway wheelsLocomotive frames and railway componentsGrinding mediaSteel wire ropeWire and strandChainEarthmoving components

Deep level and surface miningOffshore oil explorationPower generationRailway industryConstructionElevatorsElectrical reticulationAutomotive industryMarine and fishingAgricultureForestry

Steel scrap is delivered to Scaw South Africa’s Union Junction operation where it is cleaned, shredded and processed before beingpassed on for manufacture and conversion into a wide range of value-added steel products.

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Key quantifiablesustainability indicators> seeds of perpetuity

1 2

3 4

5 6

7 8

Economic performance 2005 2006

> key quantifiablesustainability indicators

Photographs: 1. Locomotive frames. 2. Rolled product. 3. Steel wire rope. 4. Ground engaging tools.5. Bright bar. 6. Cast steel railway wheels. 7. Large diameter chain. 8. Grinding media.

Black economic performance: Procurement from BEE vendors 2005 2006

Capital goods 0.6% 0%Consumables 13.1% 16.5%Services 10.2% 9.2%Total 12.1% 15.8%

Fatalities 1 1Lost time injuries (LTI) 30 25Lost time injury frequency rate (LTIFR) 0.27 0.29Unsafe acts and conditions (% of total observed acts) 10% 6%

Safety performance 2005 2006

Noise induced hearing loss 70 20Silicosis 0 0Chronic obstructive airways disease 0 0Occupational tuberculosis 5 1Occupational asthma 0 0Contact dermatitis 0 0

Health performance 2005 2006

Water consumption (m3/tonne) 1.46 1.42Total energy consumption (GJ/tonne) 10.29 11.01Electricity consumption (GJ/tonne) 2.84 2.82Gas consumption (m3/tonne) 44.50 42.11CO2 emissions (tonne/tonne) 1.18 1.14Waste recycling (tonnes) 811 913 1 144 221

Environmental performance 2005 2006

Group value added statement $m $mTurnover 1 008.40 1 206.50Less: Paid to suppliers for materials and services 708.50 818.90Total value added 299.90 387.60

Value distributionTo employees for wages and related costs 160.10 201.00To providers of capital for interest 2.00 0.50To government for company taxation 33.10 49.20To reinvestment to maintain and expand the group 72.10 80.70To shareholders 32.60 56.20Total distributed and retained 299.90 387.60

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> Operating unitsinternationally

Mejillones

TalcahuanoSantiago

ArequipaLima

Guadalajara

KamloopsEdmonton

Durban

Germiston, Benoni, Springs,Johannesburg, Vereeniging

Kwe KweKitwe

MelbourneSydney

Taguig

Distribution network

South AfricaCape Town DurbanEast London JohannesburgKlerksdorp KurumanMossel Bay NewcastlePietermaritzburg Port ElizabethRichards Bay Witbank

NamibiaWindhoek

ZimbabweBulawayo Harare

AustraliaSydney Perth

> operating unitsinternationally

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Factory sites worldwide

South AfricaRolled and Cast Products Germiston and BenoniScrap Processing operations GermistonFlather Bright Steel SpringsSteel Wire Rope JohannesburgWire and Strand GermistonFibre Products DurbanChain Products VereenigingConsolidated Wire Industries (50% interest) Vanderbijlpark

ZambiaAfrope Zambia Kitwe

ZimbabweHaggie Zimbabwe Kwe Kwe

ChileProacer (50% interest) SantiagoMoly-Cop Talcahuano, Mejillones

PeruMoly-Cop Adesur Lima, Arequipa

MexicoMoly-Cop Guadalajara

CanadaMoly-Cop KamloopsAltaSteel Edmonton

PhilippinesMoly-Cop Taguig

AustraliaHaggie Reid SydneyPWB Anchor MelbourneDonhad (40% interest) Perth, Newcastle, Townsville

ItalyGSI Lucchini (30% interest) Piombino

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Overview ofthe group

> molten metal or lava?Just one of the myriadparallels that reflect the

interdependence betweennature and man

Scaw Metals was established in Johannesburg,South Africa in 1924 and moved to the Union Junctionsite in Germiston in 1939. In 1964 Scaw was acquiredby Anglo American and in 1983 Scaw acquired a jointcontrolling interest in the listed company Haggie Limited.In 1998 Scaw acquired 100% of Haggie Limited andthen delisted the company. In 2002 Moly-Cop, theforged steel grinding media division of GSI (USA), wasacquired, extending the group’s presence to Canada,Chile, Italy, Mexico, Peru and the Philippines, andexpanding its presence in Australia. In 2006 Scawacquired AltaSteel, a wholly-owned subsidiary ofStelco situated in Edmonton, Canada.

Today Scaw is a large, diversified steel and engineeringgroup with operations around the world. The SouthAfrican facilities produce the following products: Rolledsteel products, steel wire rope, wire and strand, casthigh chromium alloy iron and forged steel grindingmedia, steel and high chromium alloy iron castings,and carbon and low-alloy steel chain and fittings. Thegroup’s other operations in Australia, Canada, Chile,Mexico, Peru, the Philippines, Zambia and Zimbabweproduce a narrower range of related products.

Moly-Cop AltaSteel

AngloAmerican

plc

ScawSouth Africa

(Pty) Ltd

RolledProducts

CastProducts

Wire RodProducts

Scaw Metals Group structure

> overview of the group

From left: Locomotive frame, grinding media, steel wire rope and bead wire.

ScawInternational

Sarl

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Rod moving onto the cooling bed.

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Governance andbusiness principles> all our days aregoverned by the pathof the sun

Isaac Morallane, crane driver at Union Junction.

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Governance

The Scaw Metals Group is committed to complyingwith Anglo American’s “Good Citizenship: Our BusinessPrinciples” and safety, health and environmental policies.These are published widely and are incorporated innew contracts, letters of appointment and inductiontraining of new employees. They are also promotedthrough the Scaw Metals’ newsletter, Scaw Junction,and in the interaction between management andemployees.

Communication with stakeholders is promoted activelyand regularly through a number of channels such asthis publication and Scaw Junction, both of whichare sent to employees, key suppliers, customers,community representatives and entities associatedwith the group.

Scaw Metals participates in Tip-Offs AnonymousTM

and InTouch®, and continues to publicise these“whistleblowing” schemes to facilitate business integrityand ethics.

Every year significant donations are made to communityengagement projects aimed at enhancing the well-being and capacities of communities associated withthe business.

Sustainable development risks are managed throughthe Integrated Risk Management (IRM) System, ISO14001 for the environment and OHSAS 18001 forhealth and safety. These processes allow for theprioritisation of risks and the identification of riskmanagement strategies to mitigate the effects of riskon the business. The group is also very conscious ofsustainable development issues and seeks to makea positive impact on the social, economic andenvironmental context in which it operates.

The Human Resource department, in collaborationwith management, is committed to combating unfairdiscrimination and to promoting opportunities forworkers from disadvantaged backgrounds.

Business principles

The core values that underpin the business

As an employer Scaw Metals sets out to attract,develop and retain the best people. All employeesand contractors must perform their duties to thehighest standards of integrity and ethics. The groupwill not tolerate unfair discrimination and will promoteworkplace equality. There is no tolerance of injuries toemployees and contractors.

As an investment the business regards providingsuperior returns to shareholders and honouring itssocial and environmental responsibilities ascomplementary and mutually reinforcing.

As a good corporate citizen Scaw Metals seeks tocontribute to the well-being of the communities inwhich it operates and is committed to the principleof sustainable development. It will comply with allapplicable laws and will not engage in any forms ofcorrupt or anti-competitive practices.

In the world of commerce the group seeks mutualbenefit in its relationships with customers, partners,contractors and suppliers. It aims to be the supplierand partner of choice.

External audit

All sites are subject to external audit and peer review,and independent assurance at least annually in anumber of areas including finance, quality, safety, healthand environment.

> governance andbusiness principles

From left: Rassie Erasmus at Union Junction. Middle: Abel Nkomo, hom left: Rassie Erasmus at Union Junction. Middle: Abel Nkomo, heat treatment foreman (left) and James Memela, fettling foreman (left) and James Memela, fettling foremanat Benoni Works. Right: Preparing a sand core.

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Economic performance> creating value, protectingour stakeholders, maintainingour individuality

> economicperformance

Products and earnings

The group value added statement shows how valueadded by the Scaw Metals Group in the year toDecember 2006 was allocated among the differentstakeholders in the business.

Further points to make in respect of the value addedstatement are as follows:

• During the year to December 2006 products witha value of R662m / $97.9m were exported fromSouth Africa (2005 - R553m / $86m), generatingsignificant foreign currency.

• A total of R3.5m / $0.5m was spent on Scaw’sactivities in the communities around its operations(2005 - R1.8m / $0.3m).

Left and centre: Ball and ring assembly. Right: 36mm long link chain for Portnet.

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Turnover 6 428.10 1 008.40 8 166.00 1 206.50Less: Paid to suppliers for materials 4 516.10 708.50 5 542.40 818.90and servicesTotal value added 1 912.00 299.90 2 623.60 387.60

Value distributionTo employees for wages and related costs 1 020.80 160.10 1 360.20 201.00To providers of capital for interest 12.80 2.00 4.20 0.50To government for company taxation 211.10 33.10 332.90 49.20To reinvestment to maintain and expand 459.40 72.10 546.00 80.70the groupTo shareholders 207.90 32.60 380.30 56.20Total distributed and retained 1 912.00 299.90 2 623.60 387.60

Group value added statement 2005 2006Rm $m Rm $m

Inside the Steel Wire Rope manufacturing operation.

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The Nelson Mandela Bridge in Johannesburg is supported by over 100 tonnes of steel strand made by Scaw’00 tonnes of steel strand made by Scaw’s Wire and Strandoperation in Germiston, South Africa.

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As can be seen from the charts, the largest portion of value added (51% in 2006) was distributed to employeesby way of wages and related costs.

21% was retained in 2006 in order to support and secure Scaw Metals’ future growth and development.

Scaw Metals Group Value Added 2006

51% Employees13% Government21% Retained15% Shareholders

Scaw Metals Group Value Added 2005

54% Employees11% Government24% Retained11% Shareholders

Represented graphically and showing the year to December 2005 as a comparison, the distribution of valueamong the stakeholders was as follows:

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49% of Scaw’s product is sold within SouthAfrica and 51% outside South Africa

49% South Africa51% Rest of the world

Geographical analysis of activity

Scaw Metals is active in many countries around theworld, either through its global manufacturing anddistribution operations or as a supplier to its exportcustomers.

Photographs clockwise:Steel billet is core to the group’oup’s product range.Cast steel railway wheels are made at Union Junction, Germiston, South Africa.Rod is manufactured at Scaw’ed at Scaw’s operations in South Africa.

Cost savings

The Scaw Metals Group has an ongoing cost reductionprogramme in place.

During the year to December 2006, Scaw Metalsachieved cost savings of R124m /$20.0m. Thesesavings were generated in part by the group’sincreasingly efficient use of natural resources.

Black Economic Empowerment (BEE)

Scaw South Africa (Pty) Limited has adopted theAnglo American Black Economic Empowerment(BEE) Procurement Guidelines and continues to activelyseek suppliers that have empowerment credentials.The total value of goods and services purchased in2006 from BEE suppliers as a proportion of totalspend increased to 15.8% from 12.1% in 2005.

Small and medium (SMME) BEE suppliers arecontracted to provide cleaning, transport, printing andpainting services. During the year a number of Scaw’smajor raw material suppliers concluded empowermenttransactions which should result in a further increasein the proportion of total spend with black empoweredsuppliers in 2007.

Sales outside South Africa are broken down asfollows:

35% North America41% South America14% Asia and Australia6% Europe4% Rest of Africa

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ANNOUNCEMENT REGARDING THE BLACK ECONOMIC EMPOWERMENTTRANSACTION IN RESPECT OF SCAW SOUTH AFRICA (PTY) LTD

Black economic performance: Procurement from BEE vendors

Capital goods 0.6% 0%Consumables 13.1% 16.5%Services 10.2% 9.2%Total 12.1% 15.8%

Year 2005 2006

Scaw South Africa (Pty) Ltd has concluded a BlackEconomic Empowerment (BEE) transaction withretrospective effect from 1 January 2007.

The transaction has given a BEE consortium a 21%equity stake and an employee trust a 5% equity stakein the R5.3 billion South African business. AngloAmerican will hold the remaining 74%.

“The BEE consortium comprises three partners anda women’s group, still to be selected. The partnerselection process identified, evaluated and selectedpartners that we felt most closely met our strategicaspirations to foster sustainability and growth of ourmarket position,” says Tony Harris, executive chairmanof Scaw.

Scaw SA’s three BEE partners are Izingwe Holdings,Southern Palace Holdings and Shanduka Resources.

“Each partner is able to add value to Scaw SA whilebeing complementary to each other in terms of theirskill sets and business record.” Tony added, “Thistransaction will be beneficial to Scaw SA and ouremployees, who will share in the future of the company,as well as the majority of our customers who willbenefit from our status as a preferred procurementpartner under the broad-based BEE codes.”An employee share ownership plan (ESOP) is part of

the transaction. Designed as a ten-year scheme givingcapital appreciation and dividends over the scheme’slifetime, the ESOP is structured as a trust whichbenefits all of Scaw’s South African employees andincludes an interim cash payout in year five. The ESOP,and the acquisition by it of its 5% stake in Scaw, willbe fully funded by Scaw. Employees will, therefore,not be required to contribute any capital to theestablishment of the Trust but will participate, throughelected trustees, in the administration of the Trust.

Scaw SA given interim “A” rating for BEEcompliance

Empowerdex has been contracted to perform a fullBEE rating of Scaw South Africa as soon as theselection of a women’s group has been finalised. Inthe interim, Empowerdex has given Scaw South Africaan “A” rating.

“We are very pleased with our interim “A” rating”, saysTony Harris, “and hope to improve upon it by the timethe full scorecard rating is completed. Using this interimEmpowerdex rating of Scaw’s ownership compliance,along with internal estimates of the remaining scorecardareas, we expect to be rated at least as a level sixsupplier, allowing for 60% of all procurement fromScaw to be classified as BEE spend.”

Scaw South Africa forges strategic partnership with Black empowerment consortium

Below: Tony Harris, executive chairman of Scaw South Africa (centre), signs the BEE agreement. From left, Godfrey Gomwe, chiefoperating officer of Anglo American South Africa; Sipho Pityana, chairman of Izingwe Holdings; Sello Mahlangu, chairman of SouthernPalace Holdings; and Rowan Smith, director of Shanduka Resources.

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Safety, health andenvironment (SHE) -

management framework> every action has a

reaction that eitherjeopardises or

reinforces your safety

36

Safety, health and environmental management hasevolved in the Scaw Metals Grevolved in the Scaw Metals Group. Significant safetyimprovements have made the group a leader in theferrous metal sector with rous metal sector with regard to its safety trackrecord. The group safety performance is comparableto the best steel manufacturing operations in the world.The latest report published by the International Ironand Steel Institute (IISI) reflects an average LTIFR of0.96 and the North American Steel Producers releasedan average LTIFR of 1.03.

As with any aspect of an evolving, dynamic andgrowing organisation, approaches to managementoaches to managementundergo cyclical changes. In any successfulorganisation, one has to feel constructivelyorganisation, one has to feel constructivelyuncomfortable with the status quo. The SHEmanagement approach has progressed from a rigidapproach based on formal systems, standards andprocedures, to an integrated approach founded onbehaviour. The behaviour of employees accounts for

more than 90% of work related injuries, and conditionsin the workplace account for less than 10% of workrelated injuries. Usually the focus is on the workenvironment and conditions.

The group has reached a point in safety managementand performance wherand performance where it is gearing itself for target0 in 2007. This is challenging the way in which safetyhas been traditionally perceived in the workplace, andyet again it is time for change. The DuPont appryet again it is time for change. The DuPont approachto safety management has, therefore, been adopted.DuPont is the world leading institution in terms ofsafety management. The approach enforces, butdoes not replace, the BBS approach by focusing onthe important role that top management plays in thesafety success of an organisation. It is a leader-drivenprocess.

safety, health andenvironment (SHE)> managementframework

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Group Safety Strategic Plan

Group SHE Policy

Group SIPs

Group AuditProtocol

Direction

Means of delivery

Control

Review

Group Safety Strategic PlanGroup SHEStrategy and

Principles

SHE Policy, Procedures,Standards, Guidelines

SHE Management System (based onthe Anglo Safety Way and OHSAS / ISO

14001) - processes and responsibilities for thesafety strategy include the SIPs

Group Audit Protocol

en route to zero

> SHE ManagementFramework

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Elements of the SHE Management Framework

Group Safety Strategic Plan

The group Safety Strategic Plan articulates the group’svision, mission, goals and policy objectives. In sodoing, it gives direction to operations and employees.Strategic planning is a continuous process. TheStrategic Plan will be fully reviewed and updated atleast every two years. Interim adjustment may bemade as needed, in parallel with annual performanceassessments.

• Principles: The group Safety Strategic Plan is founded on the following principles: Zero harm, no repeats, and strict rules and standards.

• Vision and mission: A simple vision and missionstatement was adopted. The aim is to developa safety conscious and interdependent culture within the group that truly believes and lives the principle of zero harm.

• Policy objectives: Including outcome-related strategies and actions reinforcing the vision and mission.

• Safety management structure and systems: Thisincludes how people are aligned within the groupto ensure focused energy and aligned action.

• Behavioural approach: Building on a solid foundation of system and process control, a people and behaviour-focused approach was also adopted. This also entailed moving from lagging to leading indicators.

Principles

The corporate principles governing the group’sapproach to safety management are reflected in thefollowing:

Zero mindset: A belief and an acceptance of theresponsibility that all injuries and occupational illnessesare preventable.

No repeats: All incidents will be investigated todetermine the root cause and the necessary stepsimplemented to prevent a recurrence.

Strict rules and standards: Adopting common rulesand standards across the group to ensure that aminimum standard is maintained.

Vision and mission

The vision of the group is:

• To create an interdependent safety culture wherepride and team spirit reign, and all employees believe that all injuries and safety related incidentsare preventable through the effective managementof safety.

The mission of the group is:

• To lead by example and by enforcing a risk-basedsafety management system that drives desired outcomes.

Safety policy objectives

• The Safety Strategic Plan also sets out 12 SafetyPolicy Objectives. Each of the Policy Objectives and the related site specific targets are detailed in the Safety Improvement Plans (SIPs) of thevarious sites and departments in the group. The SIPs assign responsibilities and time framesrelated to the targets required to achieve the safetypolicy objectives.

Safety Policy Objective 1: Embracing safety as aline management responsibility

• Attaining top management commitment and realisation that safety management is ultimately a line management responsibility, with SHE professionals rendering a supporting function and,in so doing, facilitating buy-in.

Safety Policy Objective 2: Identify, evaluate andprioritise safety risks and hazards, andmanage change

• To ensure focused efforts on major risks and hazards, and to adequately manage process/people changes, which may alter the status quo with regard to identified risks and hazards.

Safety Policy Objective 3: Legal compliance as a minimum requirement

• To ensure that legal compliance is achieved as aminimum safety management requirement, whilstbest practices are embraced as the norm.

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Reels of steel wire rope in the Despatch yard.

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Safety Policy Objective 4: Targets, objectivesand performance management as continuousimprovement tools

• To adequately ascertain whether safety performance levels are appropriate, a safety performance management system implementationis key.

Safety Policy Objective 5: Training, awareness and competence creation

• To provide adequate training to employees and contractors to ensure that individuals are equipped with the knowledge and skill to conductactivities safely.

Safety Policy Objective 6: Implementation offocused communication

• Realigning current channels of communication toguarantee that concise and simple messages arespread throughout the group and at all the appropriate levels within the group. Ensuring thatthe intent of the message is understood and to share learnings and ultimately prevent repeat incidents. Refer to Case Study 1.

Safety Policy Objective 7: Enabling effectivedocument and data control

• Simplify and streamline the current safety management system to lift the current administrative burden from managers. This will assist line managers in effectively using their timeto focus on employee behaviour, and to ensure that responsibilities related to actions are adequatelyassigned, managed and closed off.

Safety Policy Objective 8: Zero harm - reduce, controland prevent all injuries

• Reaffirm the behavioural safety management approach by focusing on the top level of the organisation in addition to the bottom-up approachas advocated by behavioural based safety management. Top managers must lead by example, and must instill a sense of pride and team spirit within the group.

• Working safely must be a group effort driven by a personal value and belief system.

• Aligning authorities and responsibilities to ensurethat SHE professionals are clear on roles that need to be fulfilled within the SHE managementstructure, and to ensure that SHE professionals are of an adequate calibre to act as consultantsand facilitators.

Safety Policy Objective 9: Emergency preparedness

• To ensure that potential emergency situations areresponded to quickly and effectively.

Safety Policy Objective 10: Effective contractor and partner management

• Embracing contractors as an integral componentof the safety management system, and aiming to influence contractors and ensure that they adopt safety as a key performance indicator.

Safety Policy Objective 11: Report, investigate and analyse incidents effectively to preventrepeat incidents

• Encouraging and facilitating the reporting, investigation and analysis of all incidents effectivelyto prevent repeat incidents.

Safety Policy Objective 12: Monitoring, auditing and reviewing safety management system effectiveness

• Implementation of an integrated SHE managementapproach which includes audits and reviews based on international best practices and standards throughout the group.

Group Safety Strategic Plan

Safety

ImprovementPlansPerf

orman

ceEv

alua

tion

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Group SHE Policy

The Scaw Metals Group is an international group manufacturing a diverse range of steel products, as specifiedin each operation’s Safety, Health and Environmental (SHE) Management System Manual. The main productlines are: rolled steel, wire rope and strand, wire products, chain, forged steel and cast alloy grinding media,and cast steel and alloy iron foundry products.

Aims and beliefs• The group believes that safety incidents, occupational illnesses and diseases, and environmental

pollution are preventable, and that employee behaviour is the most critical element of the SHE managementsystem.

• The group contributes to sustainable development by operating with due regard for its employees, as wellas economic, social, cultural and environmental concerns.

• The group conserves natural resources through the efficient use of water and energy, and effective waste management practices. It recognises the importance of climate change.

Commitment• Senior executives and line managers are accountable for, and committed to, operating effective

management systems and employing measures to prevent, control, minimise or eliminate SHE risks and hazards.

• Ensure compliance to current applicable SHE legal requirements, and adhere to any other requirements to which the group subscribes.

• Applying the principle of continual improvement to SHE management and performance.

Competence• Provide the necessary resources and training in order to encourage greater awareness, competence and

responsibility.

Hazard identification and risk assessment• Identify, evaluate and prioritise the SHE hazards and risks, set objectives and targets, and implement action

plans to reduce and manage these.

Prevention and controls• Establish control measures to reduce, control and prevent injuries, occupational diseases and all forms of

potential pollution.• Develop, implement and maintain emergency contingency and response plans.

Performance evaluation and review• Evaluate, monitor and review performance of the SHE management system and achievement of targets

and objectives through internal and external audits and assessments.

Communication• Liaise with employees, regulatory authorities and all other interested and affected parties on a regular basis

in order to promote constructive interaction regarding SHE matters of concern, and to ensure that individualsunderstand their SHE obligations.

• Encourage all stakeholders to adopt responsible SHE practices.

The policy will be reviewed periodically to ensure that it remains appropriate to the nature and scale of the group,SHE risks, activities, products and services.

A HarrisExecutive chairmanScaw Metals Group

> safety, health andenvironmental policy

42

Kidwell Mvume, safety co-ordinator, Wire and Strand operation.

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SHE Management System

The Safety, Health and Environmental managementsystems of all material sites are ISO 14001 and OHSAS18001 certified and incorporate the Anglo Safety W18001 certified and incorporate the Anglo Safety Way.The implementation of an electronic actionmanagement system, to ensure effective managementand coordination of SHE activities on an internationalbasis, is currently under way. Refer to Case Study 2.

Audits and reviews

Internal cross auditing according to a newly draftedGroup Audit Protocol has been initiated across thegroup. The audits will incorporate the Peer Reviewmethodology as well as the OHSAS 18001 and ISO14001 requirements. This will ensure that a commonstandard is maintained across group operations.

Objectives 2007

SHE management

Risk assessments Ensuring that risk assessments are reviewed at Annually least on an annual basis or if/when an

incident occurs.

Safe Work Procedures Ensuring that SWP are compiled for the priority Annually(SWP) risks, as identified in the risk assessments.

Planned Job Observations Conducting annual PJO based on the SWP. Annually(PJO)

Training Ensuring that SHE training as identified in the Annuallytraining matrix is conducted.

Audits/reviews Internal. AnnuallyExternal. Annually

Charging of the electric arc furnace at Union Junction.

44

45

SHE> case study 1

Focused communication

The focus in 2006 was on realigning existingchannels of communication to guarantee thatconcise and simple messages were spreadthroughout the group and at all the appropriatelevels within the group. The aim was to ensurethat the intent of messages was understood,to share learnings and ultimately prevent repeatincidents.

Screensaver campaign

A SHE screen saver campaign has beenlaunched. The campaign is aimed at com-municating the latest SHE statistics as well aspertinent SHE information. The campaign makesuse of interesting and colourful images to relayimportant safety messages. The screen saversare updated on a monthly basis or when newinformation becomes available.

A Group SHE e-newsletter, aptly titled number1, was launched in October 2006. Number 1is circulated on a monthly basis to the group.Safety, health and environmental indicators,monthly topics, SHE newsflashes, monthlyachievements and High Potential Incidents arediscussed and learnings are shared.

Group SHE Liaison

To ensure that the strategy is implemented andto enhance knowledge sharing across the group,a SHE forum for the group was established.

The forum will disseminate a SHE liaisonschedule for all operating units in the group toensure that broader safety management issuesare identified proactively, to steer the group ina common direction, and to enable the sharingof best practices.

A venue in the heart of the Cradle of Mankind,South Africa hosted a conference for local andinternational SHE delegates. Naturalist andSouth African television celebrity, QuintonCoetzee, was the guest speaker. SHEprofessionals from operations in South Africa,Canada, South America and Australia gottogether. The aim was to dissect the GroupSHE Safety Strategic Plan with specific focuson the strengths, weaknesses, opportunitiesand threats that face the group from a safetyperspective and to refine the 12 Safety PolicyObjectives, as detailed in the Safety StrategicPlan. While at the conference, the teamdeveloped a SHE pact that summarises thecritical behaviours of the SHE professionalsacross the group. The pact highlights workingtogether as a team and supporting linemanagement, communicating effectively, beingpassionate about safety and focusing oncontinuous professional development. The visionis to contribute to establishing Scaw’s safetyperformance worldwide as an internationalbenchmark.

Below: The T-shirts say it all about Scaw’-shirts say it all about Scaw’s safety policy.Right: The number 1 team - group delegates at the SHE Liaison.

With humour and enthusiasm, guestspeaker Quinton Coetzee deliveredhis powerful message aboutinterdependence and the need forsustainability at the first Group SHELiaison seen below.

The group screen saver campaignand the monthly number 1 safetynewsletter communicate pertinentSHE messages.

46

Action management system

In line with the Group SHE Centralisation Strategy,a SHE action management system is in theprocess of being implemented group-wide. Thisis an electronic action management systemcalled IsoMetrix and its design is based on thestructure of the ISO 14000, ISO 9000 andOSHAS 18000 series of standards, andincorporates the Anglo Safety Way.

The flow of information is arranged in such away as to assist in building, monitoring andmaintaining a safety, health, environmental andquality management system. The system waspiloted at the Wire and Strand operation inGermiston, South Africa and has been tailoredto cater for the group’s requirements.

Policies

The system allows for the creation and trackingof the group’s SHE policies. Details that can bemaintained include the SHE vision andsustainability criteria, stakeholder informationand legal requirements.

Planning

IsoMetrix aids in the identification andmanagement of aspects, impacts, hazards andbusiness and legal requirements with respectto the group’s activities, products and services.Each aspect or hazard can be assessed usinga risk matrix and thereafter assignedmanagement priority. The establishment of thevarious safety improvement plans is based onthis information.

Implementation

The system provides details on each SHE taskor action. It also provides the means of recording,reporting, tracking progress and sign-off oneach action.

Check and correct

The system allows for the monitoring andevaluating of operational processes to determineconformity with objectives and requirements.Preventative and corrective actions in the caseof non-conformity and incidents are captured,and all relevant records such as photographsand reports can be linked to the incident.

The system will be a management tool for linemanagers and will allow for benchmarkingacross the group operations.

> case study 2

Lungile Sibisi, group SHE admini-strator (left) and MalebohengMonyake, SHE secretary, cap-turing data onto the Group SHEManagement System.

47

Safety > personalprotective equipmentis designed to protectyour life and limb

Golden Safety Rules

The Scaw Metals Group SHE management approach is founded on zero harm, no repeats, and strict rulesand standards. This is an approach to safety that insists on an absolute adherence to Scaw’s SHE policies,standards and procedures at all times; it is an approach that is intolerant of unsafe acts and/or conditions. TheGolden Rules are the 10 most critical safety rules.

1. Safety fundamentalsDo not carry out a task unless you are trained and authorised to do it. Make sure that you assess the risksinvolved and guard against them. Always wear the correct personal protective equipment (PPE) and obtain apermit where required. Intoxication (abuse of alcohol and/or drugs) will not be tolerated.

2. Confined spacesNever enter a confined space without understanding and following the procedure. This includes obtaining apermit and being escorted by a competent person.

3. Working at heightsNever work at heights without following the standards and procedures. Always ensure that fall prevention andprotection equipment are in place. Barricade the area beneath you.

4. Energy and machinery isolationNever work on plant or equipment that has not been electrically and mechanically isolated. Always follow thelock-out and isolation procedures.

5. Operation of vehiclesDrivers must be authorised and licensed to operate a vehicle in accordance with the current legislation andsite specific traffic rules and procedures. The maximum speed limit of 20km/hr (or as specified) must be adheredto at all times when driving on site.

6. Molten metal and hazardous substancesAppropriate safety equipment and PPE must be used when working with or near molten metal and hazardoussubstances. Be aware of the risks associated with these substances and adhere to the safe working proceduresat all times.

7. Lifting and mechanical handlingMake sure that the lifting device is capable of lifting the load. Never allow anyone to be in the drop zone of theload. Operators and slingers must be licensed and must adhere to the safe working procedures.

8. Safety devicesTampering with, making safety devices inoperable and not using the recognised and correct safety devicesare offences and will lead to disciplinary action.

9. Dams and water storageAll dams and water storage areas must be enclosed and locked at all times where practicable. Do not workaround water if you cannot swim. Always wear a personal flotation device and never work alone.

10. Stockpile managementDo not enter restricted stockpile areas without permission.Always stand clear of mobile equipment and maintain stockpiles at a safe angle.

50

> safety

Enuel Mbuyisa, production moulder at Union Junction.

51

Summary of key safety performance indicators

All figures include employees and contractors and the Lost Time Injury Frequency Rate (LTIFR) includes restrictedwork cases.

Performance 2006 Targets 2007Targets 2006

Zero fatalities.LTIFR less than 0.15.TRCFR less than 1.Severity index less than 30.Unsafe acts and conditionsof less than 15%.

One fatality.LTIFR of 0.29.TRCFR of 1.6.Severity index of 27.Unsafe acts and conditionsless than 6%.

Zero fatalities.LTIFR of 0.TRCFR less than 0.85.Severity index less than 25.Unsafe acts and conditionsof less than 10%.

Moly-Cop Wire Rod division Union Junction

Philippines Talcahuano

Zimbabwe RefractoriesScrap Processingdepartment (SPD)

Milestones and achievements

The group continues to achieve new milestones, and the following achievements were recorded in 2006:

Exceeding three years without a LTI

Moly-Cop Wire Rod division Union Junction

Two years

CanadaMejillonesMexico

DistributionFibre Products

Administration ServicesMetallurgical Controldepartment (MCD)

52

Moly-Cop/Others Wire Rod division Union Junction

Exceeding one year

Moly-Cop ArequipaMoly-Cop LimaRand Scrap Iron

Chain ProductsFlather Bright SteelAfrope Zambia

Cast grinding mediaForged grinding mediaMain melt shopEngineering

Other Wire Rod division Union Junction

Exceeding six months

AltaSteel Steel Wire RopeWire and StrandPWB Anchor

Wheel plantFoundrySection millRod and Bar mill

A total of 13 out of 27 operations were LTI-free for 2006.

Safety performance indicators

There continues to be an intensive focus on behaviouraland cultural safety to achieve the principles of zeroharm.

The group currently uses the Total Incident FrequencyRate (TIFR) as well as the Lost Time Injury FrequencyRate (LTIFR) as lagging indicators to assess the safetyperformance. In the past the Total Recordable Case

Frequency Rate (TRCFR) was used, but since thisexcludes First Aid Cases, it was decided to make useof a more inclusive indicator. The focus is, therefore,on all injuries, not only Lost Time Injuries. In addition,leading indicators have been incorporated into thesafety statistics. Near Hits, as well as unsafe acts andconditions, are now tracked and managed en routeto the target of zero harm.

Below, from left: Thabiso Ndlovu, Clifton Shabangu and Terry Hadley from Union Junction.

53

> safe drivingpractices reinforced

Safety performance: 2006

There was one fatality in the group in 2006. A forkliftoverturned and the driver, Moses Qungu, sustainedfatal head injuries. The incident took place at the Wireand Strand operation in Gauteng, South Africa. Moseswas loading coils (of pre-stressed concrete wire) ontoa truck with a forklift. According to an eye witnessMoses was moving and turning towards the truck ata speed, and whilst doing this he lifted the forks ofthe forklift. This resulted in the load shifting and theforklift overturning. According to the eyewitness, Mosesremoved his safety belt in an attempt to jump fromthe forklift and in doing so he sustained fatal headinjuries. The root cause analysis conducted by an

external specialist concluded that the critical factorswere: The position of the load during the turn, speedof the forklift during the turn and an inadequateunderstanding of the combined hazardous conditionswhile operating a forklift (simultaneously turning, liftingand speeding).

All employees were briefed and the importance ofsafe driving practices reinforced again. Althoughtraining material includes safe driving practices, it isbeing reviewed to ensure that load specific aspectsare addressed. The introduction of further driverprotection is being reviewed, in line with internationalbest practice.

No injuries

No Lost Time Injuries

No Medical Treatment Cases

No incidents (safety and environmental)

Nofatalities

Group safety performance

Year FIFR LTIFR TRCFR Severity Index

Actual Target Actual Target** Actual Target** Actual Target**2002 0.00 0 0.76 0.60* 4.4 2.5 37 482003 0.01 0 0.75 0.40 3.9 2.5 27 402004 0.00 0 0.36 0.40 1.3 2.5 44 302005 0.01 0 0.27 0.30 1.3 1.3 35 302006 0.01 0 0.29 0.15 1.6 1 27 30

** Less than* Target excludes restricted work cases

54

Patricia Mashigo, production foreman at Union Junction.

55

The group recorded 25 LTIs in 2006 compared to 30 LTIs in 2005.

Safety training

Safety training continues to be an area of focus. SafetyFundamentals Training was conducted throughoutthe group at 12 sites, and to date 825 line managersand supervisors have been trained. The training wasinitially facilitated by DuPont professionals but is

currently being rolled out with Scaw trainers accreditedby DuPont. Refer to Case Study 2.

The training is focused on establishing aninterdependent safety culture in the group.

The group has improved significantly over the past eight years

> Performance 2006 > Objectives 2007160

150

140

130

120

110

100

90

80

70

60

50

40

30

20

2

1.8

1.6

1.4

1.2

1

0.8

0.6

0.4

0.2

0

1998

1999

2000

2001

2002

2003

2004

2005

2006

LTI’s LTIFR157

149

116

85

7269

37

3025

Causes of Lost Time Injuries: 2006

Employee LTIs due to transportation 0Employee LTIs due to moving machinery 6Employee LTIs due to electricity 0Employee LTIs due to fire/hot metal 6Employee LTIs due to falling 2Employee LTIs due to falling objects 2Employee LTIs due to materials handling 7Employee LTIs due to other causes 2Employee LTIs due to all causes 25

56

Objectives 2007

Safety: Leading indicatorsVFL (Visible Felt Leadership) Senior management presence and interaction Weekly

with employees with regard to the safety culture.Unsafe acts/conditions Unsafe acts and conditions - percentage of the <10%

number of observations.Monthly observations Percentage of employees actively engaged >80%

with during VFL’s (focus at plant level).Line management driven.

SIPs Ensure that Safety Improvement Plans are put in 100%place for each business unit by March 2007.

Safety: Lagging indicatorsFatalities A fatality is a death resulting from a 0

work-related injury.LTIFR When a person is injured in the execution of 0

his/her duties and as a result is unable toperform regular duties for one full shift ormore on the day following the day on whichthe injury was incurred regardless of it being ascheduled work day or not.

TRCFR This is a more inclusive injury outcome measure 0.85which includes Fatalities + Lost time Injuries +Medical treatment Cases.

Severity index Number of shifts lost per LTI. 25

KPI Description Quantification(Key Performance Indicator)

57

safety> case study 1

Achievements

Union Junction

The Union Junction Building Maintenancedepartment achieved 14 years without aLost Time Injury. The department consistsof 33 employees and approximately 200contractors.

Key to the department’s success is a focuson daily Formal Planned Job Observations.In addition, communication is regarded asvital and safety is discussed on a daily basis.The team is goal-orientated and tasks areperformed as stipulated in the SafetyImprovement Plan.

This is a fantastic achievement that illustratesthat target zero is possible.

AltaSteel

Since being a part of the Scaw MetalsGroup, the AltaSteel operation situated inAlberta, Canada laid down new milestonesin safety, most notably the achievement of11 months without a Lost Time Injury forthe first time in its 51 years of operation. Avalue-driven safety programme, skewed tothe Scaw Metals Group approach to safetymanagement, has been adopted. SafetyFundamentals Training as well as peerreviews have been conducted at theoperation since the acquisition in February2006.

> case study 2

The AltaSteel factory inEdmonton, Canada.

Safety Fundamentals Training

Twenty nine training sessions have beenconducted covering 12 sites. A total of 825managers and supervisors have gone throughthe training. This training was conducted byScaw trainers (accredited by the DuPont safetyprofessionals) and DuPont facilitators.Approximately 500 more managers andsupervisors are still to undergo training.

Five Scaw trainers have now been accreditedto continue the roll out in the rest of the ScawMetals Group. These employees are JosephRatone from Chain Products, Preston Mashiane

from Steel Wire Ropes, Gladstone Mthembufrom Flather Bright Steel, Jasper van Eden fromWire and Strand and Rob Gardiner whorepresents the group.

An audit gauging how well the principles andstandards conveyed in the training areentrenched will be conducted once the trainingis finalised.

AltaSteel’AltaSteel’s steel making ladle.

The Bar mill at AltaSteel.

Below: Scaw accreditedtrainers, from left; Josephom left; JosephRatone, Jasper van Eden, RobGardiner, Gladstone Mthembuand Preston Mashiane. Right: Union Junction’Right: Union Junction’s Building Maintenance team recently achieved 14 years without a Lost Time Injury.

58

Transport Improvement Plan

An area of intense focus has been themanagement of transport and the associatedrisks across the group. Group vehicles travelalmost 10 million kilometers annually. A GroupTransport Improvement Plan has been compiled.Training has been highlighted as an area ofpotential improvement. The Vienna Test System(computer-aided psychological diagnosis) willbe implemented in the group to complementthe existing systems in use. This entails a

paradigm shift in the selection and placementof drivers. A battery of tests is applied whichcomprises, amongst others, a vigilance test,optical perception performance, senso-motorcoordination and practical navigational andspatial skills. In addition, forklift training materialis being reviewed in consultation with theTransport and Education Training Authority.

> case study 3

> case study 4Behavioural intervention for employee transport

In addition to the baseline audit and provisionof safety belts in buses, the group has contracteda specialist to assist in training bus drivers andimplementing a behavioural based safety systemat a contracting company that transportsemployees at selected operations in South

Africa. Behaviour observation checklists havebeen supplied to the bus drivers as a self-assessment tool. The aim of the programme isto eliminate all the at-risk behaviours that mayresult in injuries to employees.

> case study 5Proacer family safety week

At the end of December Proacer’s SHEdepartment hosted a Safety Week that involvedemployees and their families. The objective wasto communicate the 2006 summary of safetyresults and introduce the Proacer SafetyImprovement Plan for 2007 as part of the effortto achieve zero injuries.

A presentation was made by Mutual deSeguridad in recognition of Proacer’s work donein conjunction with that organisation over thecourse of 2006 and children of employees wereawarded for their creative submissions in asafety drawing competition.

Scaw sponsors safety training forthe Choeu bus service, whichthe Choeu bus service, whichtransports employees who work atthe Germiston operations.

Below: The Proacer managementteam receiving an award fromMutual de Seguridad in recognitionof the operation’of the operation’s progress in safety.Below left: Children’en’s creations showan understanding of PPE.

Fleet trucks at Rand Scrap Iron.

59

Health> eat right, live right,work right

> health performanceindicators

Ensure medical surveillancetargets are met.

Update risk assessments.Implement and continueappropriate medicalsurveillance.

Maintain system.

Maintain system.

80% of all employees to betested during 2007.

95% of known HIV cases onwellness programmes.

The health risks associated with operations have beenidentified. The principal health risk is related to noiseinduced hearing loss (NIHL) and dust exposure. Wherenoise risks cannot be eliminated, the appropriatepersonal protective equipment is made available toemployees. The management of these risks is beingtranslated into Health Improvement Plans that willform part of a newly introduced SHE actionmanagement system.

The management of occupational and primary healthcare on the larger sites in South Africa is contractedto independent specialist group Life Health Care. It issubject to external and internal audits to ensureadequate service delivery in line with OHSAS 18001and the principle of zero harm.

Summary of key health performance indicators

Set targets for medicalsurveillance to ensure allemployees are examined atcorrect intervals.

All remaining cases ofoccupational diseases to beidentified and submitted forcompensation.

Ensure that all noise zonesare re ident i f ied anddemarcated, and suitablehearing protection devicesissued (as per countrystandard).

Health risk assessmentcarried out on all hazardouschemicals, material safety datasheets obtained and medicalsurveillance carried out whereappropriate.

Increased VCT so that 70%of employees tested by theend of 2006.

Ensure wellness programmesestablished for all HIV- positiveemployees.

94% of medical surveillanceachieved.

Majority of occupationaldiseases now identified andsubmitted for compensation.

All noise zones identified anddemarcated, and suitablehearing protection issued.

Initiated but still ongoing.

76% of employees tested.

85% of known HIV cases onwellness programmes.

Targets 2006 Performance 2006 Objectives

62

Milestones and achievements

The health management system is risk-based, andthe focus is on the anticipation, recognition, evaluationand control of conditions in the workplace which mayresult in a health impact. This forms the basis ofmedical surveillance. Generally medical screening forsilicosis and NIHL is performed on each employeeevery two years. Where the risk is designated as high,employees may be screened more frequently. In 200694% of the scheduled employees attended medicalsurveillance.

The development of a medical surveillancemanagement system, linked with the hygiene surveys,is underway as part of the SHE action management

system roll-out. This will facilitate risk-based healthmanagement and streamline scheduling of medicalsurveillance.

Sub-Saharan Africa is the region most affected bythe HIV pandemic, hosting over 64% of global infections.Woman are mostly affected with 60% of infectionsamong women between the ages of 15 and 49 years.In South Africa one in four woman is affected by theage of 25. The Scaw Metals Group contributes to thefight against HIV/AIDS by providing voluntarycounselling and testing (VCT) to all employees andantiretroviral treatment (ART) to employees who areHIV-positive.

The HIV/AIDS programme continues to be based on three pillars which include:

Volu

ntar

yC

ouns

elling

and Testing Antiretroviral Therapy

Wellness Programme

HIV/AIDSManagementProgramme

63

Geddes Nala, an employee and a pear educator for HIV/AIDS.

64

Voluntary counselling and testing (VCT)

• Monthly targets for testing have been set to ensurethat the target of 80% tested is achieved by theend of 2007.

• When an employee has been diagnosed as beingHIV-positive he or she is enrolled onto a wellnessprogramme. The stage of the disease is determined by the blood CD4 count. This is repeated at set intervals. In addition, the employeeis counselled and his or her general health is monitored. ART is commenced when the CD4 count reaches a certain level.

Antiretroviral therapy (ART)

• The provision of ART has proved to be hugely successful and nearly all employees on this treatment are performing their normal duties.The focus is on ensuring that employeescontinue with therapy and adhere to the therapyrequirements.

During 2006 76% of employees in South Africa tookpart in voluntary counselling and testing (VCT). Whenincluding the number of known positives, thepercentage increases to 83%. The actual prevalencerate for employees tested in the group is 10.1%, whilstthe estimated prevalence rate is between 12 - 13%.This figure is low compared to national figures and isprobably due to the high average age of the existingworkforce and the low labour turnover, amongst otherfactors.

Awareness was raised as part of World AIDS Dayactivities during the week of 1 December 2006. Theactivities included ten industrial theatre presentationsas well as a presentation by peer educators and theHIV/AIDS Coordinating Committee. Refer to CaseStudy 2.

Employee Geddes Nala has openly declared his HIV-status and in doing so is playing an important role asa peer educator. He is living proof that being HIV-positive does not mean that you cannot live a healthyand full life. Geddes is becoming an internationalspokesperson. An article featuring Geddes’ life waspublished in the October 2006 edition of the Swedishtrade union magazine Dagens Arbete.

Geddes discovered that he was HIV-positive in 2003.He weighed 39kg when he went to the GermistonHospital in Gauteng, South Africa. “I could hardly siton the wheel chair,” he said. Geddes saw other HIV-positive people die in hospital and made a decisionthat he was going to take the antiretroviral drugsprovided by Scaw Metals. When Geddes startedregaining his health he made another very importantdecision: “I am going to be a role model”.

Geddes tells others about his experience. He explainsthat knowing your status and preventing the spreadof the disease by not having unprotected sex is theright thing to do. But it is not always easy: “I had twofriends who I persuaded to take the test”, Geddessaid. “But they refused to believe the result, eventhough they had seen what happened to me. Theydied. It is so sad”.

Performance

There were 20 new cases of noise induced hearingloss submitted in 2006. No new cases of silicosiswere submitted. Improved wearing of personalprotective equipment and improved work place designhave been implemented as preventative measures.There was one new case of occupational tuberculosissubmitted to the Compensation Commissioner.

Below: Life Health professionals, from left: Dr Jenny Sapire, Sister Ruth Mani, Sister Ephraim Zwane and Sister Kate Khetsi.

65

Year 2005 2006 2005 2006

Noise induced hearing loss 70 20 155 169Silicosis 0 0 0 0Chronic obstructive 0 0 1 1airways diseaseOccupational tuberculosis 5 1 0 0Occupational asthma 0 0 0 0Contact dermatitis 0 0 0 0

Occupational diseases

Occupational diseases New suspected cases Number of cases certifiedsubmitted

2002 253 42003 313 52004 2067 322005 3920 712006 4278 76

VCT performance

Year Number tested % Tested

At the end of 2006 there were 190 employees on ART and the results, when benchmarked, are similar to otherdivisions within Anglo American plc.

> performance66

HealthMedical surveillance Ensure a 100% uptake of employees 100%

scheduled for medical surveillance.HIPs Ensure that Health Improvement Plans are 100%

put in place for each business unit byend 2007.

VCT Voluntary counselling and testing. 80%Wellness programmes Ensure that 95% of HIV-positive employees 95%

are enrolled in a wellness programme.

KPI Description Quantification(Key Performance Indicator)

67

Objectives 2007

> healthcase study 1

Pule Dikoebe, occupationalhealth nurse, has made useof the digital pen and papersolution.

Feasibility of a digital pen and paper solution inan HIV treatment setting

In any setting where accurate and timely datais a necessity, most notably in dispersedgeographical locations, it is imperative that thedata collection tools are entirely reliable.

A pilot project where a digital pen and papersolution was used to capture and validate datafrom an HIV treatment site, and deliver it readyfor analysis to a server, was undertaken at theUnion Junction site in Germiston, South Africa.

At each patient visit, digital pens were used tocomplete standardised digital forms which weredocked onto computers using image transfersoftware. Any data discrepancies or missinginformation were reported immediately by thesystem to the user, allowing the forms to beappropriately amended and resubmitted. Thedata along with an image of the form was placedinto a verification queue on a distant web server.A data verifier visually compared the digitalimage of the form to the data recognised bythe system, ensuring the accuracy of thecaptured data. Once verified, the data wastransferred into the underlying database readyfor analysis. The opinions of users as to easeof use and reliability of the system were alsocollected.

Over the one month trial period 95% of formdata submitted was detected correctly by thesystem and transmitted to the verification centre.Incomplete and inaccurate data resulted mainlyfrom poor handwriting, writing outside definedareas on the forms and cancellation of forms.

Digital pen and paper systems are effectivetools for accurate and timely data collection.They promise a cost effective, easily accessible,digital form storage utility solution, which maybe useful in HIV treatment settings. Training andmotivation of staff are key factors for successfulimplementation.

Acknowledgements - from Aurum Institute forHealth Research, Johannesburg, South Africa:

Michael EisensteinYazabantu SoldatiSalome CharalambousDave Clark

68

> case study 2World AIDS Day activities

1 December 2006 was World AIDS Day. TheHIV/AIDS Coordinating Committee arrangedan industrial theatre roadshow to convey theimportance of knowing your status andpreventing infection. Ruth Mani (group HIV/AIDScoordinator) and Geddes Nala (peer educator)played a pivotal role in making the initiative a

huge success. The industrial theatreperformances conveyed to employees theimportance of knowing your HIV status andtaking responsibility for your actions.

Employees group-wide committed themselves to World AIDS Day activities. This photograph was taken at theUnion Junction site.

69

Environment> an integral component ofconducting business

Targets 2006

Summary of key environmental performance indicators

Performance 2006 Objectives 2007

environment> milestones &achievements

Milestones and achievements

Emissions to air

Particulate emissions

The Environmental Improvement Plans focus on the improved management of emissions in line with the NationalEnvironmental Management: Air Quality Act in South Africa, and country specific requirements in South Americaand Canada. A progressive process of upgrading fume extraction systems is underway in a phased approachin line with the commitment to continuous improvement.

Particulate emissions are monitored continuously on the relevant stacks and by means of dustfall-out sampling (dust buckets placed in strategic locations). The monitoring is complemented by annualemissions surveys conducted by external parties.

72

Water consumption notexceeding 1.46 m3/tonne.

Total energy consumption notexceeding 10.31 GJ/tonne.

Electricity consumption notexceeding 2.84 GJ/tonne.

Gas consumption notexceeding 44.50m3/tonne.

Greenhouse gas emissionsnot exceeding 1.16 tonnes/tonne.

Reducing process waste tolandfill by 30 %.

New acquisition to achievecertification by the end of2007.

Achieved 1.42 m3/tonne.

Achieved 11.01 GJ/tonne(includes increased use ofcoal as a reductant).

Achieved 2.82 GJ/tonne.

Achieved 42.11m3/tonne.

Achieved 1.14 tonnes/tonne.

30% reduction in processwaste to landfill achieved.

All material sites certified.

Targeting a reduction of 0.3%in specific consumption.

Targeting a reduction of 0.4%in specific consumption(target adjusted due tochanges in coal energyconversion factors).

Targeting a reduction of 0.5%in specific consumption.

Targeting a reduction of 0.5%in specific consumption.

Targeting a reduction of 0.4%in specific consumption.

50% reduction in processwaste to landfill.

Maintain certification at allmaterial sites.

Scaw Metals Group Environmental Statement

Environmental protectionEndeavour to effectively manage all potential environmental impacts arising from our activities bysupporting research and innovation, and by implementing effective abatement measures and cleanertechnologies which will result in continuous improvement.

Environmental risk managementPreventing environmental degradation by incorporating environmental risk assessments as a decisionmaking tool.

Sustainable developmentImplementation of the fundamental principles of efficient resource management and conservation, wastereduction, reuse and recycling, effective energy management, and applying the principle of sustainabledevelopment in the manufacturing of steel.

Environmental management systemTo incorporate proactive and progressive environmental management by monitoring and auditingactivities in terms of the SHE policy, relevant legislation, objectives and targets, as well as managementand operational procedures, both internally and externally.

Training and communicationDevelop and promote an environmental understanding by means of training and information disseminationto directors, management, employees, contractors, customers, government and the community.

Environmental quality assuranceRecognise, implement and integrate environmental quality assurance as an integral component ofconducting business, as reflected in the Policy.

73

> waste recyclingis a priority

Directly reduced iron kiln number 3 at Union Junction.

74

Carbon dioxide emissions

1800000

1750000

1700000

1650000

1600000

1550000

1500000

1450000

1400000

1.18

1.17

1.16

1.15

1.14

1.13

1.12

1.11

Total CO2 equivalent emissions 1 531 384 1 747 392(tonnes CO2 eq)

CO2 equivalent emissions per tonne of 1.18 1.14product (tonnes/tonne)

2005 2006

Sulphur dioxide

4000

3500

3000

2500

2000

1500

1000

500

0

2.240

2.220

2.200

2.180

2.160

2.120

2.100

2.080

Total SO2 emissions (tonnes) 2 771 3 429

Total SO2 emissions per tonne of product 2.129 2.229(kg/tonne)

2005 2006

Greenhouse gas emissions, specifically carbon dioxide emissions, are managed as part of the energy efficiencytargeting. The emission target of 1.18 tonnes/tonne was achieved with 1.14 tonnes/tonne. Cleaner DevelopmentMechanism projects in terms of the Kyoto Protocol are under way. Refer to Case Study 1.

Greenhouse gas emissions

75

Energy management

18000

16000

14000

12000

10000

8000

6000

4000

2000

0

11.20

11.00

10.80

10.60

10.40

10.20

10.00

9.80

Total energy consumption (1000 GJ) 13 399 16 945

Energy consumption per tonne of product 10.29 11.01(GJ/tonne - includes coal used as a reductant)

2005 2006

Total energy consumption

Increased production of directly reduced iron (necessaryduring periods of steel scrap shortages) produced atthe Union Junction site in Germiston, South Africaresulted in an increased use of coal. The coal isprimarily used as a reductant resulting in increasedtotal energy consumption from 10.29 GJ/tonne to11.01 GJ/tonne. The process involves the use of coalto reduce the iron oxide to an iron rich product. Thecarbon in the coal fulfils two objectives; it serves asa heat source, but primarily the carbon acts as areductant by reacting with the oxygen in the iron oreto produce carbon dioxide and iron.

AltaSteel, the second largest consumer of energywithin the group, will be the focus of future conservationefforts. Significant savings will result when the newbillet re-heat furnace is commissioned in 2008.

Gas consumption

Overall the group, which now includes the AltaSteeloperation in Edmonton, Alberta, Canada, achieveda reduction in natural gas consumption from44.5 m3/tonne reported in 2005 to 42.11 m3/tonnein 2006.

Electricity

The group achieved a reduction in specific electricityconsumption from 2.84 to 2.82 GJ/tonne. At plantlevel the energy efficiency drive started in 2000 at theGermiston operation, the largest consumer of energyin the group. Specific electricity consumption hasdecreased for the sixth year running to 4.38 GJ/ tonne(2005 4.72 GJ/tonne). Refer to Case Study 2.

Opposite page: High voltage power lines at the Union Junction site.

76

77

Water management indicators

Year 2005 2006

Surface water quality monitoring Yes YesGroundwater quality monitoring Yes YesWater use monitoring Yes YesSurface water and/or groundwater quality deterioration off-site No No

Water management

Although water scarcity does not confront us today it is a potential risk and is, therefore, a challenge that facesthe group. In addition, the quality of the water, determined by the downstream use of the water, is a crucialfactor. Consequently, the focus is on the active management of potential sources of contamination through,for example, the use of effective oil storage areas and waste disposal sites.

Water consumption

2250

2200

2150

2100

2050

2000

1950

1900

1850

1800

1750

1.47

1.46

1.45

1.44

1.43

1.42

1.41

1.40

1.39

Water used for primary activities (1000 m3) 1 899 2 181

Water used per tonne of product (m3/tonne) 1.46 1.42

2005 2006

78

A Union Junction water management dam with the Cast Grinding Media plant in the background.

79

Water cooling for re-use in the system.

80

Water quality monitoring

An integrated approach towards water resourcemanagement has been adopted, including the widerdefinition of a water resource in the managementsystem. Quality monitoring of surface water (stormwater and water contained in water managementdams) and groundwater is taking place and beingcompared with relevant water quality guidelines toensure that potential water quality deterioration isidentified proactively.

Water quantity management

The group endeavours to conduct its operations aswater-efficiently as possible. The water consumptionper tonne of product produced has decreased from1.46 m3/tonne to 1.42 m3/tonne of product produced.Additional water meters have been installed over thepast two years, resulting in the collection of moreaccurate data.

The focus is on creating awareness of the importanceof water conservation. This is achieved by means ofawareness creation campaigns in terms of newslettersand training. Furthermore, the reuse and recycling ofwater has remained an area of focus. Wea of focus. Water that canater that canbe reused is contained in water management dams,eused is contained in water management dams,the quality monitored and the water reused in theeused in theprocess.

Union Junction’Union Junction’s water management dams attract birdlife.

> the group iscurrently recycling 30%of process waste

Union Junction’Union Junction’s rehabilitated waste site.

81

Land stewardship and biodiversity

Indicator

Land under company charge (ha) 564Land occupied for industrial/office activities (ha) 194Land fully rehabilitated (ha) 16

Waste recycling

1 200

1 000

800

600

400

200

0

Paper (tonnes) Plastic (tonnes) Scrap steel (1 000 tonnes)

2005

2006

44 184 581

55 135 955

Rehabilitation activities: Waste sites

Progressive rehabilitation is taking place at the UnionJunction and the AltaSteel waste sites to ensureadequate waste management and a mitigatedaesthetic impact. The rehabilitation of the waste sitesis closely monitored by external consulting specialistsand the relevant government authorities.

The remediation of the Rietfontein Area B Landfill sitein Springs, South Africa is progressing well. Refer toCase Study 3.

82

Recycling initiatives

General waste recycling is a priority, and the grouprecycled 190 000 kg of paper and plastic in 2006.Steel is regarded as the most recycled material in theworld. The group has contributed to this fact byrecycling 955 000 tonnes of scrap steel in 2006.

Process waste recycling has been a focus area in thegroup. A phased approach to process waste hasbeen adopted with the initial focus on problematicwaste streams, both in terms of viable recycling optionsand in terms of the quantities produced. The groupis currently recycling 30% of process waste generated.Refer to Case Study 4.

Stakeholder involvement and informationtransfer

The group continued to ensure constructive dialoguewith interested and affected parties by conveningannual forums and engaging with community membersindividually on an ad hoc basis. The number ofenvironmental complaints recorded in the groupdecreased from 20 in 2005 to nine in 2006.

Total energy

Water

CO2

(carbon dioxideemissions)

EIPs

Waste

0.4%

0.3%

0.4%

100%

50%

Consumption of fossil fuels (electricity, coal, gas, diesel andpetrol) expressed as the percentage reduction in consumptionper tonne of product produced (GJ/tonne).

Consumption of water expressed as the percentage reductionin consumption per tonne of product produced (m3/tonne).

Tonnes of CO2 emitted to the atmosphere expressed in thepercentage reduction.

Ensure that Environmental Improvement Plans are put inplace for each business unit by end 2007.

General waste recycling - expressed in percentage recycled.

Objectives 2007

83

> environmentalcase study 1

Fuel switch project

Carbon credits are tools for carbon trading. Theaim is to assist industrialised first world countries(in Europe) in complying with the Kyoto Protocol.In terms of the Protocol, limits are imposed onfirst world industrialised countries in terms ofthe amount of greenhouse gases (GHGs) theycan emit. The Clean Development Mechanism(CDM) involves developing countries selling theirapproved carbon credits, through a middleman,to the first world industrial sector, which usesthese carbon units (usually traded in tonnes) tooffset the carbon emissions that it produces.These units can be traded like other commodities.

The fuel switch entailed the conversion fromproducer gas to natural gas at the UnionJunction site in Germiston, Gauteng, SouthAfrica in December 2003, and the associated

reduction in CO2 emissions qualifies as aretrospective CDM project.

Once registered the project would become theseventh registered project in South Africa andthe third to gain credits from changing fuelsources from cheap abundant coal to relativelyexpensive natural gas.

The project will use a methodology that allowsCertified Emission Reductions (CERs) to begenerated by replacing fossil fuel with cleanergeneration without expanding the capacity ofthe plant. The methodology was used by theLawley fuel switch project and the RosslynBrewery in South Africa, two of six registeredprojects.

> case study 2Energy management

The Union Junction site is the most intensiveenergy user in the group and contributes toapproximately 75% of energy used inthe group. The specific energy consumption,i.e. GJ/tonne, has improved by 4.38% in 2006from the 2005 usage.

The main contributing factors were increasedawareness and focus on energy conservation.An increased throughput contributed to thesaving. The target for the new roll former is toproduce balls at 1.5 GJ/tonne. The new rollformer will replace an old upset forge that iscurrently running at 5GJ/tonne.

The key performers were:

% Improvement

12.5% Grinding media operation17% Foundry13% DRI2.8% Rod and Bar/Section mill

Natural gas and water pipelines atUnion Junction.

Natural gas-cutting of billets.

Below: Manufacture of grindingmedia. Frmedia. From left: Grinding mediaballs being formed in the roll formermachine; two inch balls exiting theroll former; balls on the coolingconveyor; and finished product.

84

Above: An example of plants used inAbove: An example of plants used inthe remediation project.

Rietfontein remediation project

Probably the greatest challenges facingproduction industries worldwide are wasteminimisation and the conversion of waste toanother resource or disposing of it safely. InSouth Africa the requirement for a healthyenvironment is entrenched in the Constitutionand in stringent environmental legislation.Therefore, the generation and disposal ofhazardous waste significantly increases industryliability as well as production overhead costs.Waste generation in South Africa is estimatedto be in the region of 320 to 450 M tonnes/annum. In Gauteng and other long-urbanisedareas, there is a legacy of old hazardous landfillsites that pre-date the legislative requirementsand best-practice protocols. These old landfillscontribute to the pollution of water and soils intheir vicinity, and are both unsafe and expensiveto maintain.

The main pollution issues associated with landfillsites are the production of potentially explosivegases and liquid leachate. Consequently,economically and environmentally sustainabledisposal options are a priority in wastemanagement. One potential option isphytoremediation. Phytoremediation (i.e. theuse of plants, especially trees, to remediatepolluted land, waste and water) as a low-riskroute to the cleansing and sustainablerehabilitation of landfills is internationallyrecognised and regarded as the most cost-effective and environmentally sound method.

The use of ‘designer’ plants and their associatedmicro-organisms that are tolerant to toxicconditions and have the ability to degrade,transform, sequester, immobilise or otherwiserender pollutants harmless, are favoured. Thebioremediation market worldwide has anestimated value of US$2B, of which 15% hasbeen captured by the emerging technology ofphytoremediation. Effective rehabilitation ofwaste reduces company liability and facilitatessite closure. In addition, land availability for otherdevelopments is improved.

The Rietfontein Area B Landfill is an old clayquarry situated in Springs, Gauteng and is aprototype phytoremediation project that will setthe scene for future rehabilitation of industrialwaste sites in South Africa. The project hasbeen ongoing for two years. The following hasbeen achieved over the past two years: a

• Vegetation progress that exceeds expectations. The project commencedwith a one hectare trial that was very successful and entailed the optimisation of planting techniques to be used for the remainder of the landfill.

• Hyperspectral imaging in collaboration with the Witwatersrand University (Johannesburg, South Africa), Tel Aviv University (Tel Aviv, Israel) and Bar-Kal System Engineering Ltd (Israel). These images provide an indication of vegetation establishment as well as leachate management.

• Since the remediation of the landfill commenced, giant bullfrogs have been observed on site. The giant bullfrog is regarded as near-threatened by the WorldConservation Union. Initially only two bullfrogswere observed but the number has steadilyincreased.

• Community development and informationtransfer is at the core of the project. Community nurseries are established to provide the plants for the remediation projects. This contributes to job creation and skills development.

• Arbor Day activities in association with theDepartment of Water Affairs and Forestry, SANCO and the Witwatersrand University.Various primary schools in the vicinity of thelandfill planted trees and are now trackingthe growth of the trees as part of an ongoingproject.

> case study 3

85

case study 4Waste recycling

As part of the Duty of Care approach advocatedand embraced by the Scaw Metals Group, aswell as the constant drive towards producingsteel in a sustainable manner, emphasis hasbeen placed on the recycling of waste. As partof the preventative approach, the DirectlyReduced Iron (DRI) plant efficiency has beenoptimised as far as possible. The process does,however, result in the production of char anddust (unburned coal) as a source of waste.

Approximately 17 000 tonnes (which constitutes50% of the total process waste at the UnionJunction site) of char and dust is produced permonth from the DRI process.

To negate the need for the extension of thelandfill footprint it is essential to invest in therecycling of process waste.

Scaw South Africa (Pty) Ltd and Ruslyn Minerals(Pty) Ltd have, therefore, spent the last twoyears developing a solution to the process wasteproblem. The process will entail the magneticremoval of iron particles which will be reused inthe main melt shop at the Union Junction site.The remaining char and dust (carbon source)will then be used in the manufacture of bricks.This implies that coal, which would otherwisehave been mined with the associatedenvironmental impact, is replaced with a by-product.

Opposite page: The group’oup’s waste sites are rehabilitated progressively.

Below, from left: Photographs1, 2 and 3 - a series of theDirectly Reduced Iron (DRI)operations at Union Junction.

Far right: Product that isproduced by the DRI plant.

86

87

Labour practices andcommunity involvement> marshalling our commonresources to take care ofthose closest to us

Inside the Steel Wire Rope operation outsideJohannesburg, South Africa: Andrew Masterson,technician on the Plastication line (left) and HannesBreytenbach, production manager, Heavy Closing.

90

The group employs more than 7 500 peoplethroughout the world. The distribution of employeesin our operations is displayed in the table on page 94.

Employment opportunities

Most of Scaw’s operations have operated on theircurrent sites for many decades and the businessesare well-known to their communities as majoremployers providing long-term careers. Positions withScaw are sought after, especially those offeringapprenticeships and learnerships leading to certificationof qualifications in terms of the Skills DevelopmentAct (applicable in South Africa). Labour turnover dueto resignations was 2.8% in 2006.

The business has a proud tradition of technical training,offering apprenticeships in a number of trades. Scaw’sapprenticeship qualifications are recognised throughoutthe industry. The majority of successful apprenticesgo on to enjoy long and fruitful careers in the company.Practical training for learner technicians in metallurgy,chemistry, electrical and mechanical engineering isalso offered for young Technikon graduates who wishto build a career with Scaw Metals.

In consultation with stakeholder unions, the groupalso provides employment opportunities to dependantsof retired and deceased employees in order to assistpoor families.

The group offers employees competitive remunerationpackages, which include subsidised membership ofa medical aid scheme and membership of a retirementfund.

Labour relations

The group endorses the rights of employees tofreedom of association and to collective bargaining.In some countries collective bargaining takes placeat enterprise level, whereas in South Africa thistakes place at an industry bargaining council.

Presently 5 208 employees, 82.6% of Scaw’s SouthAfrican workforce, belong to trade unions.

At company level, the trade unions represent theirmembers on important matters such as health andsafety, work reorganisation, skills development,employment equity, and grievance and disciplinarymatters.

Each business site has its own union compositionand shop steward structure representing employees.Managers at the sites meet and consult regularly withthese structures on shop floor issues. Scaw’smanagement enjoys mature and professionalrelationships with these unions at both industry andindividual company level.

With regard to security of employment, there areestablished procedures embodied in the South AfricanLabour Relations Act as well as Bargaining Councilcodes of practice for handling the introduction of majorchanges to operations which may result in job losses.In other countries such matters are dealt with througha combination of both collective agreements atenterprise level as well as that country’s legal framework.Generally these provisions include disclosure ofinformation and consultation with employees andtrade unions on the planned changes. Retraining andseeking alternative employment opportunities areprominent features of the discussions.

Training and education

Training, education and development of employeesare crucial to the success of the operations.Management interacts with trade unions at eachoperation to consult on skills development plans andtraining activities for the year. Skills development isaligned to the strategic business objectives that includeproductivity improvement, safety, health andenvironment, product quality, customer relations andhuman capital development.

> labour practicesand communityinvolvement

91

Apprentice training

The group has a long-standing commitment to trainingskilled artisans for its operations. Typically about 200apprentices are in training at any one time at thegroup’s Union Junction Apprentice Training Centre inSouth Africa. To train an apprentice to qualify as anartisan takes up to four years of institutional andpractical on-the-job training. Scaw Metals has alsoembarked on implementing learnerships which provideemployees with structured learning and experiencethat will culminate in a qualification recognised by theSouth African National Qualification Framework (NQF).At present, the group has registered learnerships inarc furnace steel melting practices as well as chainmaking. Trainees on both schemes are progressingwell.

Bursaries: Children of employees

Various benefits are offered to employees, includinga school bursary scheme in which children ofemployees with more than five years service qualifyfor a bursary to assist one high school child per family– this covers part of the school fees and the cost ofbooks and school uniforms. In 2006 330 bursarieswere granted.

The group offers a bursary scheme for a limitednumber of children of employees to further their tertiaryeducation. These bursaries are restricted to disciplinesthat can be used in the steel and engineering industriessuch as metallurgy, engineering, human resourcesand finance.

Employment equity (South African operations)

Scaw Metals is committed to the transformation ofits workplace to more equitably represent thedemographics of the country, particularly in thesupervisory and managerial levels of the company.

In compliance with the South African EmploymentEquity legislation, the business submits annual reportson progress to increase the numbers of historicallydisadvantaged employees in supervisory andmanagerial positions. Scaw is making progress in thisvery important aspect through recruitment and internaltraining and development initiatives. Efforts are beingmade to attract and retain young professionals fromhistorically disadvantaged backgrounds to fill technicaland managerial roles.

A target of 40% representivity of historicallydisadvantaged South Africans in managerial levelswas set for attainment in 2007. At the end of 2006,a level of 42% had been achieved. Gender issues arealso being taken into account with the aim of increasingthe number of females in senior positions.

Non-discrimination

Scaw Metals is committed to creating a workplacein which individuals of ability and application candevelop rewarding careers at all levels. This is regardlessof background, race, gender, ethnic or social originand religion. Unfair discrimination in the workplace isprohibited. Management, employee representativesand trade unions work together to ensure that thereis no unfair discrimination taking place in the operations.

At company level, trade unions play a significant rolein upholding and protecting employee rights.

Below: Apprentice intake.

92

Godfrey Magugu, apprentice millwright, Union Junction.

93

labour> case study

Patricia Mashigo, first black female production foreman

Scaw South Africa has appointed PatriciaMashigo as its first black female productionforeman. Patricia did her electrical apprenticeshipwith Scaw and upon qualifying was employedby Union Junction as an electrician in theEngineering department in 1999. Patricia notonly has the academic qualifications and skillsfor the job, but over the years she has, timeand again, been willing to go the extra mile. Shehas the know-how, the leadership skills and theright attitude.

She says, “Women need to realise that thereare many chances for them but they must beprepared to take them. Just because a job hasalways been only a man’s job doesn’t meanthat it has to always remain only a man’s job.Women are just as capable. Times havechanged and we women must seize the newopportunities and take on the challenges!”

Patricia Mashigo, productionforeman at Union Junction.

Operations No of Employees

Present distribution of employees

South AfricaUnion Junction 2 945Steel Wire Rope 975CWI 544Cast Products (Benoni Works) 450Chain Products 436Wire and Strand 385Sales branches 174Rand Scrap Iron 132Fibre Products 118Flather Bright Steel 75Total 6 234

Outside South AfricaAltaSteel 361Zimbabwe 259Proacer Chile 173Moly-Cop Chile 117Zambia 72PWB Anchor (Australia) 59Moly-Cop Lima, Peru 54Moly-Cop Canada 51Moly-Cop Mexico 51Moly-Cop Arequipa, Peru 43Moly-Cop Philippines 22Reids (Australia) 7Total 1 269

94

Summary of the 2006 projects

• New hawker station

For several decades vendors have sold food,newspapers, sweets and telephone usage tothe 3000-plus employees at Scaw’s UnionJunction operation in Germiston, South Africa.Recently the vendors were moved from a narrowcongested pavement into a recessed minimarket facility, purpose built by Scaw, whichoffers increased safety away from the traffic,and provides a sheltered and hygienic vendorfacility.

Each trader has been allocated individual spaceand a lock-up facility. A tiled wash-up area hasbeen built to provide hot and cold running waterfor vendors involved in food preparation orserving. The vendors informally appointed aspokesperson from among themselves and a

set of rules was agreed concerning who usedthe site. Following that meeting, the old storageboxes and tables were removed and the entirearea is kept clean. No more vending takes placeon the pavements, spilling onto the road,blocking traffic and endangering pedestrians.

This is a mutually-beneficial co-operationbetween Scaw and the hawkers. Employeesare able to gain easy access to the vendorservices “on their doorstep” and the hawkersare able to continue to earn a living from theiroccupation. Most of the hawkers are womenwho are the sole breadwinners in their familiesand are, as such, entirely dependent on theincome generated from this mini market.

• Welding training school

During 2004 a community welding trainingschool was established at the group’s Germiston,South Africa operations to offer young,unemployed members of the community anopportunity to obtain a basic qualification inwelding. The college admits disadvantagedschool leavers who come from very poor familieswho would otherwise be unable to gain accessto formal training.

The welding course is registered with the metalindustry’s training authority as a skills trainingcourse and ensures that trainees reach certainlevels of competency in welding. The course

content has standards of learning that arerecognised nationally and against which thetrainee must be assessed for competencybefore certificates are granted. Obtaining thislevel of skill could lead to self-employment inthe manufacture of steel products (like furnitureand security gates). Alternatively, it could increasethe individual’s chance of finding formalemployment in industry. During 2006 46 studentsenrolled at the school and received training inwelding. A number of former students havefound employment with Scaw Metals and withother employers in the area.

Fruit seller Eunice Mbatha hasFruit seller Eunice Mbatha hassold fruit to Scaw employees since1986.

community> case studies

Linda Mthembu entertains Linda Mthembu entertains customers with her enthusiasm.customers with her enthusiasm.

Left: Some of the graduatesfrom the group’oup’s welding trainingschool enter Scaw operations.school enter Scaw operations.

95

• Computer skills training school

At the same time as the welding school started,a computer skills school was established onthe same site. The school admits youngunemployed school leavers who come fromdisadvantaged families and who would otherwisebe unable to gain access to formal training.

Training in the general suite of software packagesused in commerce and industry is provided,and a certificate of competency is awarded tosuccessful trainees.

During 2006 48 students enrolled at the schooland were trained.

• Read Education Trust

In conjunction with education authorities, ScawMetals provided funds to the Read EducationTrust to facilitate a literacy project at two schoolsin Katlehong, a large residential area adjoiningScaw’s main works. The prime focus of theprogramme is to provide training to teachingstaff in the principles of school managementand teaching methods, and to upgrade andenrich materials used in teaching Englishlanguage skills. The project is conducted in highschools that serve areas inhabited by manyScaw employees.

• Igagasi Primary School, Kathlehong

Scaw management has been working with theeducation authorities since 2004 to build acomputer centre and library at this school.Building is progressing and the project shouldbe completed in 2007.

• Community Neighbourhood News Bulletinand Wadeville Business Against Crime (WBAC)

Engagement continues with organisations inthe community that are concerned with crimeprevention. As a standing member of the WBACcommittee, Scaw Metals provides input wherepossible to reduce crime in the surroundingcommunities, and makes a significantcontribution towards running WBAC. The groupalso sponsors a local community organisationthat produces a crime prevention newsletter.

• Sports

A variety of sporting activities is sponsored bythe group including running, junior cricket andsoccer. The majority of children participating inthese activities come from disadvantagedbackgrounds who would otherwise not haveaccess to facilities and coaching at the levelprovided by Scaw Metals.

• BEE Courtwise Sponsorship

The name “BEE” is derived from the bumblebee which defies scientific odds in being ableto fly, just as BEE Courtwise wishesto succeed in its challenge to bring child offendersto justice.

It is a non-profit company established in responseto the poor conviction rate in criminal casesrelated to child abuse.

BEE Courtwise provides court support andpreparation for children testifying in cases wherethey have been abused and offers traumacounselling for adults and children. BEE wasgiven computer software and hardware for itsrooms at the Johannesburg Central PoliceStation where many of these types of casesare sent for trial. Special child-friendly witnesspreparation rooms have been set up here toallow children to testify in a more supportiveenvironment than that of the formal courtroomfor adults.

During 2006 the company held discussionswith BEE officials and senior members of theBenoni Magistrates Court with a view toestablishing a BEE facility. Approvals from theauthorities are presently awaited before theproject can commence.

community> case studies

Cricket coaching a Scawlands.

Pupils at Igagasi Primary Schoolwill soon have a brand newcomputer centre and library.

Bathabile Mosala, one of the trainersBathabile Mosala, one of the trainersat Union Junction’at Union Junction’s computer skillsschool.

96

• HIV/AIDS

In 2006 the group supported a HIV awarenesscampaign at all its South African operations.Subscribing to the Business Bannerthonprogramme, banners were purchased for displayat the operations and supporting promotionalmaterial was distributed to all employees.

Being situated on major roads and near railwaystations, Scaw Germiston is able to maximizecampaign exposure and, therefore, placedbanners in positions of optimum impact for bothemployees and members of the community.Funds collected from the Bannerthonprogramme are used to assist destitute childrenwho have been orphaned by HIV/AIDS.

• Overseas operations

Chile

Operations in Chile have provided support forlocal police, fire-fighting agencies and a numberof city projects, including anti-drug abusecampaigns. They have also supported sportsactivities and other charities, including housinginitiatives for the poor and a home for abandonedchildren.

• Un Techo para Chile (A Roof for Chile)

Un Techo para Chile is a solidarity campaignwith the objective of constructing houses forpoor families in Chile. Participants in thecampaign are Moly-Cop Chile, the Institute forGrassroots Formation and Empowerment(abbreviated as Infocap in Spanish), the WorkersUniversity, and a non-profit organisation foundedin 1984 by the Society of Jesus. Moly-CopChile donates funds for the construction ofhouses. The funds are allocated to beneficiaries

by Infocap and Un Techo para Chile. Moly-Cophas no influence on the fund allocation process.

Peru

Moly-Cop Peru is involved in a number ofcommunity initiatives on an ongoing basisincluding sponsorship of a nursing home forthe elderly, a home for disabled children inArequipa, and fire brigades in Lima and Arequipa.In addition, donations have been made for theconstruction of classrooms and the acquisitionof furniture in schools in and around Lima andin Cerro Colorado, Arequipa. Culturalprogrammes also receive support from Moly-Cop Peru, as do churches.

In December staff delighted 530 children atCarlos Macera Children’s Home, located neartheir operation, with bags of Christmas presents.

Staff at Moly-Cop Chile build housesfor the poor on weekends.

Edwin Marti, junior financial analyst (first photograph), Ingrid San Martin, treasury assistant (thireasury assistant (third photograph) andother staff from Moly-Cop Peru delivered Christmas presents to 530 childresents to 530 children at Carlos Macera Children’en’s Home inDecember 2006.

97

Philippines

The company contributed to various charitiesthrough the Philippines Business for SocialProgress, an NGO involved in numerous socialprogrammes.

Canada

The Canadian operations contribute to variouscharities through the organisation United Way.

Australia

• NERG radio tower

As part of its commitment to the local community,PWB Anchor contributes towards the annualoperating costs of the community-owned and

maintained radio tower of North East RadioGroup (NERG). The group provides education,training and social activities to a cross-sectionof the community. The radio tower plays a criticalrole in the NERG’s operation. Central to itscharter, NERG ensures that its radio tower ismade available for primary and back upemergency communications to a range ofemergency and charitable organisations. TheVictoria Police, the Red Cross, Local Government,Oxfam and the Rural Fire-fighting Services allbenefit from the radio tower provided by NERG.

Below: Andrew McDowell,manager of PWB Anchor (left),receives an award from NERG thatrecognises PWB’ecognises PWB’s communityinvolvement.

Right: A technician services theNERG tower.

community> case studies

This report is printed on Condat Matt, a chlorine-free paper sourced from sustainable Mondi forests.Produced by: Headline News 011 467 0281Print: ColorsMain photographer: Norman Hanna

98

Scaw Metals Group, Black Reef Road, Germiston, Gauteng, South AfricaPO Box 61721, Marshalltown, 2107, South Africa

Tel: +27 (011) 842 9000Fax: +27 (011) 842 9719e-mail: sheadmin@scaw.co.zawww.scaw.co.za

AAplc Anglo American plcBEE Black Economic EmpowermentCO2 Carbon dioxide - a gas formed during combustion and certain natural processes.

Increasing amount of carbon dioxide in the atmosphere is widely believed to contribute to climate change i.e. global warming

Environment The circumstances or conditions that surround us as well as the complex of social or cultural conditions that affect an individual or community

FAC First Aid Case - a minor injury which can be treated by the employee and does not require professional attention

Fatality The death of an employee or contractor resulting from a work-related injuryFIFR Fatal injury frequency rate - the number of fatalities per 200 000 hours workedGolden Rules A set of non-negotiable corporate safety rulesGreenhouse gas Gases that enhance global warming, predominantly CO2

Hours worked Total number of hours worked by employees, including overtime and training, excluding leave, sickness and other absencesIt includes the total number of contractor hours worked on site during the year

HIV/AIDS Human Immuno Deficiency Virus/Acquired Immune Deficiency SyndromeISO 9001 A quality management system standard published by the International Standards

OrganisationISO 14001 An environmental management system standard published by the International

Standards OrganisationLost Time Injury (LTI) Any occupational Lost Time Injury which renders the person unable to carry

out regular duties on the day following their injury, and which results in one or more days away from work: It includes restricted work cases

LTIFR Lost Time Injury Frequency Rate - the number of Lost Time Injuries per 200 000 hours worked and includes restricted work cases and contractors

Medical surveillance Employees who have been identified as being exposed to any significant risk or hazard undergo a regular planned medical examination to ensure their health is not affected by exposure to the risk

MTC Medical Treatment Case - an injury requiring more than basic first aidNGO Non-governmental organisationNIHL Noise induced hearing lossOccupational disease A disease or illness arising out of and in the course of employmentOccupational health The promotion and maintenance of the highest degree of physical, mental and

social well-being at workOccupational hygiene The assessment, measurement and evaluation of hazards and risks in the

workplace and the preventive measures that need to be applied to safeguard the health of employees

OHSAS 18001 A management system published by the Occupational Health and Safety Assessment Series

PPE Personal protective equipmentRecycling Processing of old discarded materials into new, useful productsRWC Restricted Work Case in which work activity is restricted and in which an

employee cannot perform his or her regular duties.Severity Index A ratio of the number of shifts lost per Lost Time InjurySHE Safety, Health and EnvironmentSO2 Sulphur dioxide - a colourless, corrosive gas formed during combustion and

natural processesStakeholders Employees, contractors and other parties who have a material interest in the Scaw Metals

Group Sustainable development An improvement in human well-being that allows the needs of the present to

be met without compromising the ability of future generations to meet their own needs, focusing on social, economic and environmental aspectsTotal energy consumption Calculated from electricity purchased and fossil fuels consumedTRFR Total Recordable Case Frequency Rate - the sum of fatalities, Lost Time Injuries and

medical treatment cases per 200 000 hours worked, including employees and contractorsWaste stream Steady flow of varied wastes, from industrial, commercial and construction refuse

Terms

m3 1cubic metre = 1 000 litres = 264,1 US gallons = 220 UK gallonsTonne 1 metric tonne = 1 000 kg = 2 205 poundsMWh electricity 1 Megawatt-hour = 3,6 Gigajoules (GJ)

Abbreviations and conversions for units of measurement