Preparing forrecovery - The Vault Operations Whollyownedandmanaged Lonmin 100% byLonmin. Platinum...

Web-based Sustainable Development ReportFor the year ending 30 September 2009

Lonmin Plc

Preparingfor recovery…

01 Message from our Chief Executive Officer

02 Lonmin Charter

03 Safety and Sustainable Development Policy

04 Our Sustainable Development Reporting

07 KPMG Assurance Statement

09 Lonmin at a Glance

11 Governance of Sustainable Development

17 Stakeholder Engagement

21 Risk and Impact Management

22 Summary of our Performance against our Targets

25 Creating Wealth

33 Upholding Ethical Business Practices

36 Respecting and Valuing Fundamental Human Rights

39 Eliminating Fatalities, Serious Injuries and Unsafe Behaviour

42 Health

44 Eliminating Noise Induced Hearing Loss

45 Managing HIV/AIDS in the Workplace and in the Greater Lonmin Communities

47 Our Employees

48 Empowering Historically Disadvantaged South Africans

51 Attracting and Retaining a Skilled Workforce

55 Availability and Affordability of Housing for our Employees

57 Environment

61 Accessing and Managing Energy Resources

64 Accessing and Managing Water Resources

66 Responsible Materials Stewardship and Waste Management

70 Reducing our Impacts on Air Quality

73 Responsible Land Management, Biodiversity Conservation and Mine Closure

76 Uniting with our Communities

83 Key Performance Indicators

85 Reporting Against Global Reporting Initiative Indicators

92 Acronyms

93 Definitions

LONMIN IS THE WORLD’S THIRD LARGEST PRIMARYPRODUCER OF PLATINUM GROUP METALS.

OUR PRODUCING ASSETS ARE ALL BASEDIN SOUTH AFRICA, WHICH CURRENTLYCONTRIBUTES NEARLY 80% OF GLOBALPLATINUM PRODUCTION.

We welcome your response to this Web-based Sustainable Development Report to ensure thatour reporting meets your expectations. Please either complete the online feedback form onwww.lonmin.com or send feedback or requests for further information to:

Rob GurnerHead of Investor RelationsLonmin Plc4 Grosvenor PlaceLondon, SW1X 7YLTel: +44 (0) 20 7201 60 or [email protected]

mailto:[email protected]

01

In 2009, Lonmin management took a number of actions which aimedto stabilise operational performance, improve our position on the costcurve and preserve cash. These actions were initiated to help mitigatethe impact of general macro-economic factors and specific SouthAfrican PGM industry-related challenges.

Whilst initiating and implementing these actions, we have remainedcommitted to the values of our Charter and our Safety and SustainableDevelopment Policy and we have not deviated from our belief in thecompelling business case for sustainable development. Safety, inparticular, continues to be a major priority for the Company. Our stancetowards safety remains uncompromising and we have continued tofocus on aiming to eliminate fatalities, injuries and unsafe behaviour.Loss of life is our single greatest concern and I regret to report thedeaths of three of our employees at our operations in 2009. During theyear, we slightly improved our lost time injury frequency rate (LTIFR) to6.21, but this fell short of our target to improve this rate by 15% in theyear. Going forward we are targeting a further improvement of ourLTIFR by 10% by 2010.

In 2009, we completed a major restructuring programme, whichled to around 7,000 full time employees and contractors leaving thebusiness. We implemented employee assistance programmes andportable skills training to reduce the impact of the restructuring onaffected employees. The restructuring process has impacted ourprogress towards increasing the number of Historically DisadvantagedSouth Africans (HDSA) and female employees in the Company.Nevertheless, in 2009, 41.3% of management comprised HDSA andfemale employees and this exceeds our target of 40%. Due to thereduction in the availability of financial resources, we will not achieveour targets to construct 5,500 houses and undertake 85 hostelconversions by 2011 and are engaging with relevant stakeholderson revised targets. We continue to exceed our targets of totaldiscretionary spend with HDSA suppliers, which in 2009 amountedto 66.6%.

In 2009, we have continued with the implementation of ourHIV/AIDS programmes, including early diagnosis and intervention,education and effective treatment through our wellness and anti-retroviral treatment (ART) programmes. In 2009 our number of newNoise Induced Hearing Loss (NIHL) cases have reduced substantiallyby 80.9%, and as one of the most significant occupational health risksfaced by our employees and contractors, we continuously strive toreduce noise exposure. We are nearing the completion of the rolloutphase of silencing 4,000 rock drills.

In common with the rest of the mining industry, our keyenvironmental challenges include the access to and managementof water and energy resources in an efficient and responsible manneras well minimising closure costs and environmental risks throughintegrated environmental management and closure planning. Weremain committed to our targets to improving our resource useefficiency by integrating efficiency considerations into our businessand planning strategies, improving efficiency at current operations andinvestigating alternative energy and water sources.

We remain dedicated to empowering our host communities andimproving their quality of life by contributing to their long term social,economic and institutional development. US$5.7 million was spent in2009 on community development projects, of which US$3.2 millionwas on local economic development projects as per our approvedSocial and Labour Plans.

As a member of the International Council for Mining and Metals(ICMM) we fully support its goal of establishing a global sustainabilitybenchmark for the mining industry and are committed to implementingtheir principles through the Sustainable Development Framework.Furthermore, as a member of the United Nations Global Compact(UNGC) we support their principles and initiatives and strive towardsour commitments in the areas of human rights, labour practices,environmental management and anti-corruption.

We realise that our performance is of interest to a diverse range ofstakeholders. We are dedicated to publicly reporting a balanced reviewof our approach and performance on our broader economic, socialand environmental risks to enable our stakeholders to obtain anobjective overall assessment of our achievements. Our reporting forfinancial year ending September 2009 comprises both a SustainableDevelopment Review as a component of the Annual Report as well asa web-based version which provides a comprehensive coverage ofsustainable development in the Company. The contents of the reportshave been largely defined by risks facing the Company and interestsand expectations of our stakeholders.

This report has been prepared using the guidance of the GlobalReporting Initiative’s 2006 Sustainability Reporting Guidelines (GRI)and the Mining and Metals Sector Supplement. External assurancesupports the integrity of our report content and has been providedby KPMG over selected parameters, reporting principles as well ason progress made against the requirements of the ICMM SustainableDevelopment framework. We declare that this report is aligned withthe GRI B+ application level.

Ian FarmerChief Executive Officer

Ian FarmerChief Executive Officer

Message from ourChief Executive Officer

We remain committed to our Charter and our Safety andSustainable Development Policy and we have not deviatedfrom our belief in the significant business case for sustainabledevelopment.

02

2009 Web-based Sustainable Development Report / Lonmin Plc

Lonmin Charter

Our Mission

To grow and build ourportfolio of high quality assets.

To deliver the requirementsof the South African broad-based socio-economic MiningCharter and we welcome theopportunity to transform ourbusiness.

To build a value-basedculture, which is foundedon safe work, continuousimprovement, commonstandards and procedures,community involvement andone that rewards employeesfor high performance.

We are successfulwhenOur employees live and worksafely and experience thepersonal satisfaction thatcomes with high performanceand recognition.

Our shareholders are realisinga superior total return on theirinvestment and support ourcorporate sustainability values.

The communities in which weoperate value our relationships.

We are meeting ourcommitments to all businesspartners and our suppliers,contractors, partners andcustomers support ourCharter.

Our Values

Zero HarmWe are committed to zeroharm to people and theenvironment.

Integrity, Honesty & TrustWe are committed ethicalpeople who do what we saywe will do.

TransparencyOpen, honest communicationand free sharing of information.

Respect For Each OtherEmbracing our diversityenriched by openness,sharing, trust, teamworkand involvement.

High PerformanceStretching our individual andteam capabilities to achieveinnovative and superioroutcomes.

Employee Self-WorthTo enhance the quality of lifefor our employees and theirfamilies and promote selfesteem.

We are Lonmin, a primary producer of Platinum Group Metals. We create value bythe discovery, acquisition, development and marketing of minerals and metals.

We respect the communities and nations that host our operations and conductbusiness in a sustainable, socially and environmentally responsible way.

Roger PhillimoreChairman

May 2009

Ian FarmerChief Executive

03


Safety and SustainableDevelopment Policy

Honouring our health and safetyvalues and sustaining anenvironment that promotes thesafety, health and wellbeing ofour employees and their families,contractors and the communitieswhere we operate.

Providing adequate andappropriate resources toimplement effective managementsystems and risk management,based on valid data and soundscience, during all phases of ouroperations to ensure thereduction of risks and theadoption of best practices.

Respecting and valuing thefundamental human rights,cultural heritage and indigenoustraditions of our employees,communities and otherstakeholders where we operate.

Integrating safety and sustainabledevelopment into the decisionmaking process during allphases of our operations.

Upholding ethical businesspractices, sound corporategovernance and transparency,while meeting or exceedingapplicable legislation, standardsand other requirements.

Implementing the principle ofequal opportunity and equitywhile maintaining an appropriatelyskilled and diverse workforce.

Empowering our hostcommunities and improving theirquality of life by contributing totheir long term social, economicand institutional developmentand promoting the beneficiationof our minerals.

Implementing effective materialstewardship to manage thelifecycle of our products in asocially and environmentallyresponsible manner.

Promoting the sustainable useof natural resources and thereduction, re-use and recyclingof waste.

Preventing pollution andenvironmental degradation inorder to reduce our impact onthe environment and thecommunities where we operate.

Responding to climate changeand driving the reduction ofgreenhouse gases by adoptingbest practice technology,alternative energy sources,improved control systems andmanagement practices.

Promoting integrated land usemanagement and biodiversityconservation by applying aprecautionary approach duringall phases of our operations,including mine closure.

Maintaining transparent andongoing consultative relationshipswith all stakeholders andincorporating this engagementinto the decision making process.

Fostering the commitment of allemployees and contractors tothis policy through training andawareness programmes.

Seeking continual improvementto achieve a high level ofperformance through aframework of setting andreviewing our policy, objectivesand targets.

Reporting publicly oursustainable developmentperformance in accordancewith the ICMM SustainableDevelopment Framework andutilising the guidance of the GlobalReporting Initiative SustainabilityReporting Guidelines.

To honour our Charter, to fulfil our Vision and to create sustainable valuefor our stakeholders, Lonmin is committed to improving the quality of lifeof current and future generations through the integration of economicprosperity, social development and environmental protection by:

We are Lonmin, a primary producer of Platinum GroupMetals. We create value by the discovery, acquisition,development and marketing of minerals and metals.

We respect the communities and nations that hostour operations and conduct business in a sustainable,socially and environmentally responsible way.

Ian FarmerChief Executive

October 2008

04


Our Sustainable Development Reporting

This year we have made use of the following formalreports to communicate our sustainable developmentperformance:• Our 2009 Annual Report provides a summary

of our sustainable development performance,focusing on sustainable development related risksto the Company, to our broader stakeholder group,including our employees, business partners,shareholders, local communities, government,suppliers, contractors, customers, industryspecialists and non-governmental organisations;

• This more extensive Web-based SustainableDevelopment Report provides detailed informationon our sustainable development strategy andprofile, management approach, performance andcase studies for those requiring more in-depthinformation.

Report contentTimelinessOur annual reporting provides a reflection of ouroperational activities and covers our performance forthe financial year ending 30 September 2009. Thereports have been prepared using the guidance of GRI.

Materiality and stakeholder inclusivenessThe content of this Web-based SustainableDevelopment Report has been largely defined by:• Sustainable development risks facing the

Company;• Taking into consideration interests and

expectations from a range of stakeholdersobtained from various engagement initiatives andreporting on risks that would substantivelyinfluence their perceptions and decision;

• Taking into account legislation and issues thatsociety at large consider relevant to ouroperations; and

• Reporting best practice.

The Sustainable Development Review in the AnnualReport in turn provides information relating to oursustainable development related risks, of higherpriority, as identified by the Company and by ourstakeholders. We have compiled the reports consciousof the fact that our stakeholder groups are varied.

Sustainability contextWe have clearly outlined our approach to sustainabledevelopment in a local and global context. Wherenecessary we have referenced our performancedata to global and national sustainability initiativesand principles.

Balance and clarityThe reports reflect a balanced approach highlightingpositive and negative aspects. We have endeavouredto present data and information in a clear andunambiguous manner to ensure that the informationin our reports are readily understandable andaccessible to our stakeholders.

ComparabilityWe are committed to presenting information and datain a consistent manner to enable comparativeanalysis. Trend information is presented for all keysustainability information from 2005 and wherechanges in data measurement or collectionmethodologies have occurred, we have stated thebasis, calculation and assumptions in the text. Wheredata has been restated, it is indicated as such andthe implications where necessary are clearlydescribed. Definitions of indicators are provided inthis report on page 93. All monetary amountsreflected in the report are expressed in United Statesdollars (US$), using a South African Rand/US$exchange rate of R8.99/US$. A value of 1,267,529Platinum Group Metals (PGMs)/oz constitutes thebasis of efficiency calculations, this including totalproduction and part-processed material.

WE ARE COMMITTED TO REPORTING PUBLICLY OUR SUSTAINABLEDEVELOPMENT PERFORMANCE. WE REALISE THAT OURPERFORMANCE IS OF INTEREST TO A DIVERSE RANGE OF BOTHNATIONAL AND INTERNATIONAL STAKEHOLDERS, INCLUDING OUREMPLOYEES AND CONTRACTORS.

05


Report boundaries and report completenessOur previous report reflected performance for thetwelve-month period 1 October 2007 to 30 September2008, and since then, there has been no significantchange in our size, structure ownership or productsthat would materially influence the scope or boundaryof this report. Although there have been no significantchanges in this regard, it is to be noted that in 2009,we withdrew from our exploration activities inTanzania, placed our Limpopo mining operations oncare and maintenance and closed our Marikanaopencast operations. We are confident that the reportprovides a complete and balanced view of ourperformance for the twelve month reporting periodand does not omit material information that wouldinfluence stakeholder’s assessment of our operations.The report boundary includes all Lonmin ownedentities and those joint ventures or partnerships overwhich we have exercised management control duringthe twelve-month period ending 30 September 2009.We do not report on indicators, other than keyemployee and safety statistics for our head officesor satellite offices as the limited size and impactsof these offices render them not material to ourreporting processes. In 2009, we have recordedand for the first time reported on LTIFR of ourexploration activities, which are wholly owned ormanaged by the Company.

Reliability and accuracyIndependent external assurance of our publiclyreported sustainable development performance is akey element of our sustainable developmentframework. External assurance supports the integrityof our report content and has been provided byKPMG over selected parameters, the application ofthe reporting principles as outlined by GRI, as well asassurance relating to our progress towards thealignment of our policies and business practices withthe ten principles of the ICMM. We have endeavouredto identify and confirm the accuracy of our originalsources of information and have provided evidenceto support our assumptions and calculations to thesatisfaction of our external assurer. The scope ofthe assurance includes the Web-based SustainableDevelopment Report and the SustainableDevelopment Review in the Annual Report.

Application levelsBased on our own assessment of the report contents against the criteria provided in the GRI applicationlevels, we declare that in combination, the Web-based Sustainable Development Report and theSustainable Development Review in the Annual Report fulfil the requirements of a B+ application level.The GRI table referencing information per GRI indicator is presented on page 85.

About this Report (continued)

Optional

Mandatory

Application level

2002in accordance C C+ B B+ A A+

Self

Declared

Third

Party

Checked

GRI

Checked ReportExternallyAssured

ReportExternallyAssured

ReportExternallyAssured

06


Scope of the report and assurance statementAssurance on

Entities Ownership Components Report scope selected data Data reported

Exploration Wholly owned and Gabon* Employee data;

managed by Lonmin. Kenya* Safety data

Ireland �

Joint Ventures, with Lonmin Loskop �as managing partner.

Joint Ventures and not Canadamanaged by Lonmin. � �

Operations Wholly owned and managed Lonmin 100%by Lonmin. Platinum �

Marikana

PreciousMetal Refinery

(PMR) � �

LonminPlatinumLimpopo* �

Akanani* �

Joint Ventures, with Lonmin Pandora 100% dataas managing partner. Joint reported as part

Venture � of our Marikana� operations.

Dwaalkop 100% dataJoint reported as part

Venture* � of our Limpopooperations.

Head offices Johannesburg Employee data;

London � � Safety data

* Activities on site are limited.

About this Report (continued)

07


Independent Assurance Report to Lonmin Plcon Sustainability Information

We have been engaged by the Directors of Lonmin Plc (‘Lonmin’) to provide assurance over selected sustainability performanceinformation presented in the Web-based “Sustainable Development Report for the year ending 30 September 2009” at the samedate as this report (“the Report”).

The Directors of Lonmin are responsible for preparing and presenting the Report and the information, statements andcommitments with respect to sustainability performance contained herein, as well as for identifying stakeholders and stakeholderreporting requirements and material issues, and establishing and maintaining appropriate performance management and internalcontrol systems from which the reported information is derived. The Directors are also responsible for the selection andapplication of the following criteria used in the evaluation of the selected sustainability performance information:• The Lonmin internally developed sustainability reporting guidelines applied to the selected sustainability performance

information, which are available on request from Lonmin;• The GRI G3 Guidelines requirements for the B+ application level (ICMM Subject Matter 5); and• The ICMM’s ten sustainable development principles (ICMM Subject Matter 1), as described in the ICMM sustainable

development framework.

Our responsibility is to express assurance conclusions on the selected sustainability performance information based on ourwork performed.

Our report is made solely to Lonmin in accordance with the terms of our engagement. Our work has been undertaken so thatwe might state to Lonmin those matters we have been engaged to state in this report and for no other purpose. We do notaccept or assume liability to anyone other than Lonmin, for our work, for this report, or for the conclusions we have reached.

We comply with the appropriate requirements of the International Federation of Accountants (IFAC) Code of Ethics forProfessional Accountants and have systems and processes in place to monitor compliance with the code and to prevent conflictsregarding independence. Our work was carried out by a multi-disciplinary team of health, safety, social, environmental andassurance specialists with extensive experience in sustainability reporting.

We do not express any assurance in relation to the 2009 sustainable development performance indicators in the Report notincluded below. We believe that the evidence obtained from our work performed provides an appropriate basis for our reasonableand limited assurance conclusion expressed below.

Assurance standards usedWe conducted our engagement in accordance with the ISAE 30001.

The scope of our assurance engagementThe scope of our engagement includes the provision of:1. Assurance, as described below:

(a) Reasonable assurance on the following sustainability performance data:• social performance parameters – total spend on local economic development projects in 2009 in terms of the Social

and Labour Plan (page 76), fatalities (employees and contractors) (page 39), LTIFR (employees and contractors)(page 41) and NIHL compensated (page 44);

• environmental performance parameters – greenhouse gas emissions (direct and indirect) (page 62), total energy use(direct and indirect) (page 62) and total fresh water intake (page 64).

(b) Limited assurance on the following sustainability performance data:• social performance parameters – new cases of tuberculosis diagnosed and treated (page 42), percentage women at the

mine (page 47), percentage women in mining (page 49) and percentage designated groups in management (page 47);• environmental performance parameters – SO2 emissions (fugitives and stack emissions) (page 57).

2. Limited assurance on Lonmin’s self-declaration of the GRI B+ application level (ICMM Subject Matter 5) (page 5);3. Limited assurance on Lonmin’s assertions with regards alignment of policies and business practices with the ICMM ten sustainable

development principles as described in the ICMM sustainable development framework (ICMM Subject Matter 1) (page 14).

1 International Standard on Assurance Engagements 3000: Assurance engagements other than Audits or reviews of Historical information, issued by theInternational Auditing and Accounting Standards Board.

08


Independent Assurance Report to Lonmin Plcon Sustainability Information (continued)

Work performedOur work included the following evidence-gathering procedures:• Interviewing management and senior executives at group level to assess the application of the GRI G3 principles and ICMM’s

ten sustainable development principles and to obtain an understanding of the general control environment;• Evaluating and testing processes and systems and reviewing of documentation in place at group level and at site level to

support the generation, collation, aggregation, monitoring and reporting of the selected sustainability performance informationfor the year;

• Visiting a risk based selection of operation sites from the Marikana Operation;• Conducting an application level check on the Report to ensure all disclosure requirements of the GRI B+ application level

have been adhered to;• Obtaining an understanding of the alignment of Lonmin’s sustainability policies to ICMM’s ten sustainable development

principles;• Evaluating whether the information presented in the Report is in line with our overall knowledge and experience of

sustainability management and performance at Lonmin.

Unqualified conclusions1. On the selected sustainability performance information

In our opinion the performance information set in 1(a) above for the year ended 30 September 2009, is fairly stated in allmaterial respects on the basis of the Lonmin internally developed sustainability reporting guidelines;

Based on our work described above, we have no reason to believe that the performance information set out in 1(b)above for the year ended 30 September 2009, is not fairly stated in all material respects on the basis of the Lonmin internallydeveloped sustainability reporting guidelines;

2. On Lonmin’s self-declaration on the GRI B+ Application LevelBased on the work described above, we have no reason to believe that management’s self-declaration of a B+ applicationlevel (ICMM Subject Matter 5), is not fairly stated in all material respects on the basis of the GRI G3 Guidelines;

3. On the ICMM’s ten sustainable development principlesBased on the work described above, we have no reason to believe that management’s assertions with regards to alignmentof policies and business practices with the ten principles of the ICMM (ICMM Subject Matter 1), is not fairly stated in allmaterial respects on the basis of the ICMM sustainable development framework.

KPMG Services (Pty) LimitedPer PD NaidooDirectorJohannesburg

11 November 2009


Lonmin at a Glance

We are Lonmin, the third largest producer of PGMs,with a valuable reserve and resource base in theBushveld complex in South Africa, which containsmore than 80% of the world’s known PGMs.

We have a scarce, valuable and lasting reserveand resource base. All of our operations are based inthe Bushveld complex in South Africa, which containsmore than 80% of the world’s known PGMs reservebase. We are one of only three major integrated mine-to-market PGM businesses.

In 2009, our total platinum production amountedto 683,359 oz and our total PGMs producedamounted to 1,267,529 oz. We are listed on theLondon Stock Exchange, with a secondary listing onthe Johannesburg Stock Exchange. Our South Africanheadquarters are located in Johannesburg, with ourUnited Kingdom headquarters based in London. Ourmain operating subsidiaries, in which we have an 82%interest, are Western Platinum Limited and EasternPlatinum Limited. We operate two key business units,namely the Mining and Process Division.

Mining DivisionOur mining operations comprise Marikana mining inthe North West Province of South Africa and BaobabShaft in the Limpopo Province. We also manage thePandora Joint Venture to the east of our Marikanaoperations. Our Marikana mining operations currentlycontributes around 100% of our annual production.At both our operations, we mine the Upper Group 2and Merensky PGM-bearing reefs. In 2009, weclosed our Marikana opencast operations and placedour Limpopo operations on care and maintenance.

Process DivisionOur Processing Division, including eightconcentrators, a smelter and a base metal refinery(BMR) is located primarily in Marikana. The PMR islocated near Johannesburg in the Gauteng Province.

Other operationsOur two major acquisitions during the last few yearswere Akanani and Limpopo, including the DwaalkopJoint Venture, all located in the Northern Bushveld.

Exploration activitiesWe also have a focussed exploration portfolio whichincludes the following projects:• Kenya: Wholly owned and managed by Lonmin;• Canada: Joint ventures with Vale Inco and

Wallbridge Mining Company in the Sudbury Basin;both of which are managed by these partners.

• Gabon: Wholly owned and managed by Lonmin;• Ireland: Wholly owned and managed by Lonmin;

and• South Africa: Loskop Joint Venture with Boynton

and the Vlakfontein project wholly owned byWestern Platinum and managed by Lonmin.

In March 2009 we withdrew from the joint venturewith IMX Resources in Tanzania. We are currentlyseeking to vend our non-core exploration projects inKenya and Gabon.

WE ARE LONMIN, THE THIRD LARGEST PRODUCER OF PGMS, WITHA VALUABLE RESERVE AND RESOURCE BASE IN THE BUSHVELDCOMPLEX IN SOUTH AFRICA, WHICH CONTAINS MORE THAN 80%OF THE WORLD’S KNOWN PGMS.

Our Boabab Shaft is located in the Limpopo Province. Our Marikana operations are located in the North West Province.

09

10


Percentage shareholding in our operations

Entity Companies Equity Partners

Marikana Mining Western Platinum Limited 82% held by Lonmin 18% Incwala Resources

Process DivisionEastern Platinum Limited South Africa (UK) Limited Pty Limited.

Limpopo Messina Platinum Limited 100% held by 18% Incwala ResourcesWestern Platinum Limited Pty Limited in Western

Platinum Limited, thus 18%indirect shareholding.

Akanani Metals Technology Incorporated 74% held by Metals 26% Incwala Resources(wholly owned subsidiary Technology Incorporated Pty Limited.

of Lonmin Plc)

Pandora Joint Venture Eastern Platinum Limited 42.5% held by Eastern 42.5% RustenburgPlatinum Limited Platinum Mines Limited.

7.5% Bapo Ba MogaleMining Company Pty

Limited.

7.5% MvelaphandaResources Limited.

Dwaalkop Joint Venture Western Platinum Limited 50% held by Western 50% MvelaphandaPlatinum Limited Resources Limited.

Akanani

Limpopo

Marikana

Pandora

Pretoria

Johannesburg

Processing Capability• Marikana – Smelter

and BMR• Johannesburg – PMR• Each processing facility

has capacity of 1.2 millionplatinum oz

Resources and Reserves(platinum, rhodium,palladium and gold)indicated in millions of oz.

AkananiResources 22.5

LimpopoResources 25.4Reserves 5.2

MarikanaResources 120.8Reserves 39.9

Pandora Joint VentureResources 7.6Reserves 0.42

Lonmin at a Glance (continued)

11


Governance of Sustainable Development

We are fully committed to the highest standards ofcorporate governance which, we believe helps createthe business integrity needed to deliver robust andsustainable business results. The governance of theCompany is underpinned by the values set out in theLonmin Charter and supported by the Lonmin Codeof Business Ethics. In terms of the governance ofsustainable development, the Lonmin Safety andSustainable Development Policy defines ourcommitments. Management standards form thefoundation of the management system forimplementation of these sustainable developmentcommitments. As a member of the ICMM and theUNGC, their principles are integral to our sustainabledevelopment governance.

The BoardThe Company is led and controlled by a unitary Boardof Directors. The Board currently has nine members,comprising a non-executive Chairman, six independentnon-executive Directors, and two executive Directors.An independent Director is a person who isindependent in character and judgment and free fromrelationships or circumstances which could affect theirjudgment. All non-executive Directors at the Companyare regarded as independent by the Board, as per therequirements of provision A.3.2 of the Combined Code.

The role of the BoardThe Board provides the entrepreneurial leadership,direction and control of the Company; is thecustodian of the Company’s strategic aims, visionand values; and assesses whether the necessaryfinancial and human resources are, and will continueto be, in place to enable the Company to meet its

objectives. All Directors are free to express their viewsand may ask that these be recorded in the minuteswhere appropriate.

The Board has a formal schedule of mattersreserved for its decision, the most material of whichfall into the key areas listed below:• Strategy and management;• Financial reporting and control;• Social, environmental and ethical matters;• Contracts and financial commitments;• External communications;• Corporate governance;• Remuneration; and• Board composition and membership.

Whilst all Directors have equal responsibility in lawfor managing the Company’s affairs, it is the role ofexecutive management to run the business within theparameters laid down by the Board and to produceclear, accurate and timely reports to enable the Boardto monitor and assess management’s performance.The executives make full use of the expertise andexperience that the non-executive Directors bringfrom their business careers. The Chairman routinelyholds discussions with non-executive Directors withoutthe executive Directors being present. The non-executive Directors have access to the managementteam through working sessions with the ExecutiveCommittee and with the operational managementteam reporting to the Executive Committee.

The Chairman and the Chief Executive OfficerThe roles of Chairman and CEO are clearly separatedand set out in writing. The Chairman, who was felt todemonstrate complete independence in character,judgement and action at the time of his appointment,is responsible for leadership of the Board, ensuring itseffectiveness and setting its agenda, and for facilitatingthe effective contribution of all Directors, ensuring thatthere is a constructive relationship between theexecutive and non-executive Directors. The Chairmanalso has primary accountability for providing strategicguidance to the executive team and monitoring theperformance of the business, and for ensuring thatthere is effective communication with all shareholders.The role of the Chief Executive Officer is to provideleadership to the executive team in running thebusiness, to develop proposals for the Board toconsider in all areas reserved for its judgement and tooversee the efficient and effective implementation ofBoard-approved actions. Executive management, ledby the CEO, are responsible for developing strategyfor consideration by the Board, the implementation ofthat strategy once approved and furnishing the Boardwith all information reasonably required to monitor theefficient and effective conduct of the business.

WE ARE COMMITTED TO UPHOLDING ETHICAL BUSINESSPRACTICES, SOUND CORPORATE GOVERNANCE ANDTRANSPARENCY, WHILE MEETING OR EXCEEDING APPLICABLELEGISLATION, STANDARDS AND OTHER REQUIREMENTS.

King III Corporate Governance Report

The third South African report on corporategovernance (King III) was released on 1 September2009 and becomes effective on 1 March 2010.The philosophy of King III revolves aroundleadership, corporate governance andsustainability. The report is a set of corporategovernance principles and guidelines addressingtopics such as ethical leadership, governance ofrisk, codes and standards as well as internalauditing. The codes of corporate governanceapply to all South African entities, including privatecompanies and are to be applied on a “complyand explain” basis. Entities will be required tomake a statement as to whether or not they applythe principles and then to explain their practices.Consideration of the principles espoused in KingIII will be a key task for the new financial year.

12


Governance of Sustainable Development(continued)

Board balance and independenceThe Board believes that it has sufficient members tocontain a balance of experience and skills and to managesuccession issues, but without being so large as to beunwieldy. The quality of the individual Directors and theBoard’s composition is a key contributor to the Board’seffectiveness, with no one individual or group of individualsbeing able to dominate the decision-taking. The Board keepsthe membership of its Committees under review, to ensuregradual refreshing of skills and experience. It is satisfied thatall Directors have sufficient time to devote to their roles andthat it is not placing undue reliance on key individuals. Allof the Non-executive Directors are regarded as independentby the Board, as was the Chairman on his appointment.

There are three key mechanisms by which we attemptto ensure that the Directors continue to provide suitableleadership and direction to the Company, namelyperformance evaluation; succession planning and periodicre-election by shareholders.

The Company has previously implemented a Boardperformance evaluation process which is designed toidentify whether the Board possesses the relevant skills,knowledge and experience to fulfil its mandate, so enablingit to manage succession issues. The Board recognisesthat externally facilitated evaluations can provide a usefuland impartial feedback mechanism. However, since boththe Chairman and the CEO have only been in post for amatter of months, the Board decided that it would not beappropriate to have such a review at this time. Instead,Mr Phillimore held individual discussions with each of theDirectors to assess their views on a wide range of issues,including the effectiveness of the Board Committees, usingset questions to structure the debate. Feedback fromeach of those discussions was provided to the Board. Themost material conclusion was that executive managementshould be based in South Africa, close to the miningoperations with the aim of enhancing day to-daymanagement and communications, as well as enablingthe Company to engage more effectively with its SouthAfrican stakeholders. It was also decided to add a thirdday to each of the bi-annual Board visits to South Africa inorder to afford more time with local senior managers. TheBoard is considering the appointment of an externalfacilitator during the course of 2010. In September 2009,under the chairmanship of the Senior IndependentDirector and without the Chairman being present, theBoard also assessed the effectiveness of the Chairman.The unanimous conclusion was that the Chairman waseffective in the role, in large part because of his length oftenure and intimate knowledge of the business.

The Board aims to review formally succession plansfor all key management roles including executivedirectorships, on an annual basis. The purpose of this istwofold – to mitigate the risk of key roles not having oneor more identified successors and to review potentialdevelopment opportunities and career plans for talentedindividuals. All Directors are required by the Company’sArticles of Association to submit themselves for re-electionby shareholders after first appointment and thereafter byrotation at least once every three years. Where a non-executive Director (save for the Chairman) has served morethan three three-year terms, they are obliged to do so onan annual basis. Sufficient biographical and other information(including, in the case of a non-executive Director seekingre-election, a statement as to their continued effectivenessand commitment) is provided to enable shareholders tomake an informed decision. The Nomination Committeehas carried out formal performance evaluations of each ofthe non-executive Directors seeking re-election and hasconcluded that each is effective and demonstratescommitment to his respective role.

Engaging with shareholdersThe Combined Code encourages dialogue withinstitutional shareholders based on the mutualunderstanding of objectives. The executive Directors haveregular discussions with institutional shareholders wherethey believe this to be in the Company’s best interests, butno information is shared which is not available toshareholders generally. Detailed feedback from these visitsis shared with the Board and a summary of the viewsexpressed is presented to the next Board meeting. Inaddition, the Chairman routinely offers key shareholdersthe opportunity of meetings with either himself or theSenior Independent Director to discuss governance,strategy or any other matters shareholders wish to raise.The Chairman of the Remuneration Committee, havingbeen appointed during the year, and our HR Director metwith several institutional shareholders and representativebodies during the year to discuss the Company’s policyon remuneration and how this is implemented in practice.The Senior Independent Director, Michael Hartnall, isavailable to shareholders if they have concerns whichcontact through the normal channels has failed to resolveor for which such contact would be inappropriate.

The Combined Code urges boards to use the AnnualGeneral Meeting to communicate with private investorsand to encourage their participation. The Board hasfollowed these principles for many years. The Notice ofMeeting is sent to all shareholders at least one monthin advance. At the meeting, a business presentationis made by the Chief Executive and all Directors areavailable to answer questions both during the meetingand informally afterwards. We give shareholders theopportunity to vote on every substantially different issueby proposing separate resolutions and use electronic pollvoting on all resolutions, with the results of those votesbeing announced to the markets and displayed on ourwebsite. This enables the votes of all shareholders to betaken into account, whether they are able to attend themeeting or not, as well as providing a more discreet anddemocratic method of voting at the meeting. TheCompany has taken advantage of the ability in law tomove to a default route of electronic communicationswith shareholders, both to save cost and to avoid theuse of paper, ink and other resources that would beentailed in printing and distributing large numbers ofdocuments. However, individual shareholders can optto receive paper documents should they so wish. Inrecognition of the needs of private shareholders, theCompany’s website contains a range of investor relationsmaterials, including up-to-date information on the Group’sactivities, copies of all presentation materials given toinstitutional investors and copies to read or downloadof all our public reporting documents.

At the 2009 Annual General Meeting, statementsor questions on the following sustainable developmentaspects were raised by shareholders:• Preferential procurement, in particular female owned

companies;• Black economic empowerment; and• HDSA, including disabled persons.

The Board CommitteesThe Board has established four Committees and providessufficient resources to enable them to undertake theirduties. Detailed information on the Board Committee’sterms of reference and governance policies can beaccessed in our 2009 Annual Report.

13



Committees of the Board

Committee’s of the Board Composition (as at time of publication) Mandate

Audit and Risk 2 non-executive Directors The primary purpose of the Audit and Risk Committee,1 non-executive Chairman is as follows:

• To monitor the integrity of the Company’s financialstatements and announcements relating to its financialperformance and reviewing significant financial reportingjudgments;

• To keep under review the effectiveness of the Company’sinternal controls and risk management systems;

• To monitor the effectiveness of the internal audit functionand review its material findings; and

• To oversee the relationship with the external auditorsincluding agreeing on their remuneration and terms ofengagement, monitoring their independence, objectivityand effectiveness and ensuring that policy surroundingtheir engagement to provide non-audit services isappropriately applied.

Nomination 6 non-executive Directors The primary purpose of the nomination Committee,1 non executive Chairman is as follows:

• To ensure that a regular, rigorous and objective evaluationof the structure, size, composition, balance of skills,knowledge and experience of the Board is undertaken;

• In consultation with the Chairman, to recommend anyproposed changes to the composition of the Board andto instigate and manage the recruitment process;

• To ensure the Company’s adherence to applicable legaland regulatory requirements in relation to the above; and

• To oversee compliance with the Combined Code andother applicable corporate governance regulation.

Safety and Sustainability 1 non-executive Chairman The primary purpose of the Safety and Sustainability2 non-executive Directors Committee, is as follows:1 executive Director • To have oversight of and provide advice to the Board

and, as necessary to the Audit and Risk Committee, onsafety and sustainability including health, environmentand community matters, and particularly as pertaining tothe risk and management of these issues within the Group;

• To have oversight of and provide advice to the Board onthe Group’s compliance with applicable legal andregulatory requirements associated with safety andsustainability;

• To assess the effectiveness of management’s attitudesand approach towards, and activities in, managing safetyand sustainability related risk;

• To assess periodically the effectiveness of the Group’spolicies, standards and systems for identifying andmanaging safety and sustainability related risk;

• To review significant safety and environmental incidentsand consider causative factors, consequences andactions including the impact on employees and thirdparties and reputational risk;

• To review the Group’s performance indicators inconnection with safety and sustainability matters;

• To review the Group’s public disclosures on safety andsustainability matters and approve these as necessary; and

• To report to the Board on developments, trends and/orforthcoming significant legislation on safety andsustainability matters which may be relevant to theGroup’s operations, its assets or employees.

Performance related pay for executive Directors

Percentage of bonus Actual payment foropportunity on offer the year (percentage

Safety and Sustainable Development Matters (20%) for target performance of bonus opportunity)

Safety – improvement in LTIFR 10% 0%Community – improvement on Social and Labour Plan targets 10% 10%

Total 20% 10%

14



The Board Committees and sustainabilityIn 2009, the Safety and Sustainability Committee of theBoard met five times. Membership currently comprisestwo non-executive Directors and one executive Directorand is chaired by an independent non-executive Director.A number of senior executives also regularly attend thesemeetings, including the Chief Operating Officer (COO) andthe Executive Manager Mine Services.

The Remuneration Committee of the Board believesthat participation in a short-term incentive schemeenhances the focus of the executive Directors and keysenior executives by providing a meaningful incentive tooutperform and helps ensure that the management teamis appropriately focussed on business critical outcomes(refer to the box below).

The Lonmin Charter and Safety and SustainableDevelopment PolicyThe Lonmin Charter and the Lonmin Code of BusinessEthics provide a framework for all business practices.The Safety and Sustainable Development Policy, whichis aligned with the principles of the organisations wesupport including the ICMM and UNGC, outlines ourcommitments to sustainable development.

Safety and Sustainable Development ManagementStandardsThe Safety and Sustainable Development ManagementStandards clearly outline the minimum operatingrequirements for the Company. The requirements of thestandards drive us to deliver on policy commitments in amethodical and consistent way. They are aligned with therequirements of South African National Standards, ISO14001 and ISO 9001 and OHSAS 18001.

Significant issues discussed at the meetings ofthe Safety and Sustainability Committee in 2009

• Safety and sustainability organisational structuresand reporting lines;

• Incident Cause Analysis Method reports onfatalities occurring within reporting period;

• Overview of results of presidential safety audits;• Update on safety legislation;• Key safety performance indicators;• Key environmental risks and non-conformances;• Key environmental performance indicators and

performance against targets;• Updates on environmental legislation;• Key health performance indicators and

performance against targets;• Review of budgetary spend and progress

on community projects;• Sustainable development reporting in terms

of GRI and assurance; and• Review of our performance against our Social

and Labour Plan targets.

Committees of the Board (continued)

Committee’s of the Board Composition (as at time of publication) Mandate

Remuneration 3 non-executive Directors The primary purpose of the remuneration Committee,1 non-executive Chairman is as follows:

• Make recommendations to the Board on the Company’sexecutive remuneration policy;

• Determine individual remuneration packages withinthat policy for the executive Directors and certainsenior executives;

• Oversee the operation of the Company’s incentiveschemes;

• Review Directors’ expenses; and• Oversee the Company’s executive pension arrangements.

15



External organisations and public policy positionsWe are recognised for our approach to sustainabledevelopment by being included in the FTSE4 GoodIndex and Johannesburg Stock Exchange ResponsibleInvestment Index. We participate in a number oforganisations or forums which we believe will furtherour performance in terms of our values, principles orcommitments or enable us to influence policy anddecision making both nationally and internationally.On affiliation with an organisation we are committedto aligning our business practices with the principlesor requirements of such an organisation, with theaccountability residing with our Board of Directorsand our CEO. In order to participate and add valueto these organisations, we provide the necessarytraining or skills development to our employeeswho either participate or who are responsible forthe implementation of the criteria or requirementsof these organisations.

We report our progress in terms of these affiliationson an annual basis. We have been members of theICMM since 2004 and continue to value ourmembership. The ICMM is a CEO-led organisationrepresenting leading international mining and metalscompanies as well as association members. As avoluntary member of the ICMM, we support theirvision of a respected mining and metals industry thatis widely recognised as essential for modern livingand a key contributor to sustainable development.Our Safety and Sustainable Development Policy isaligned with the 10 principles of the ICMM andprogress on these principles are detailed in varioussections of this report. Through our participation inthe ICMM, we also endorse the Extractive Industries

Transparency Initiative. The Extractive IndustriesTransparency Initiative is a coalition of governments,companies, civil society groups, investors andinternational organisations which aims to strengthengovernance by improving transparency andaccountability in the extractive sector.

In 2009 we have remained a signatory to theUNGC and continue to support the principles of thevoluntary initiative. The UNGC is a strategic policyinitiative for businesses that are committed to aligningtheir operations and strategies with ten universallyaccepted principles in the areas of human rights,labour, environment and anti-corruption.

We are members of and participate in theInternational Platinum Association, InternationalChamber of Commerce, South African Chamberof Mines and a number of forums in a local contextapplicable to our individual operations. In 2009we have continued to participate in the CarbonDisclosure Project. In 2009, although we haveparticipated in public policy development, we havenot been involved in any significant lobbying on anorganisation level.

Management systemsThe purpose of our management system is to providetools to support the management of the business in asystematic and controlled way, with the aim of deliveringconsistent performance. We also use these tools toimplement the Safety and Sustainable DevelopmentManagement Standards in order to achieve thecommitments of our Safety and SustainableDevelopment Policy and so deliver robust andsustainable business performance.

Certified management systemsOccupational Health International Internationaland Safety Standard Standards Organisation Standards Organisation

Operations (OHSAS) 18001 (ISO) 14001 (ISO) 9001

Shared Business Services �Marikana Mining �Limpopo Mining �Concentrators �Smelter � �BMR � �PMR � � �Assay Laboratory*Training Academy � �

* We aim to reinstate the Assay Laboratory’s OHSAS 18001 and ISO 14001 certification by December 2009.

Our Chairman Roger Phillimore visiting our Merensky Concentrator in 2009as part of one of the regular Board visits to our operations in South Africa.

16



Among the key constituents of our managementsystem are our Company risk management andincident reporting and investigation processes. Alloperations are responsible for reporting, rating andinvestigating incidents. Incidents which are rated aslevel three to level five incidents are investigated byapplying the Incident Cause Analysis Method, withthe objective that root causes are identified andappropriate corrective and preventative actions aretaken. The outcomes of all level three and higherinvestigations are presented to the ExecutiveCommittee and the Safety and SustainabilityCommittee of the Board. Six Sigma processimprovements constitute an important componentof our management systems, by providing us with acontinuous improvement methodology.

In 2009, all our operations remained ISO 14001certified, other than the Assay Laboratory whosecertification expired in 2009. We expect thiscertification to be reinstated by December 2009.We endeavour to have the management systemsat all operations certified in terms of OHSAS 18001by 2011.

Auditing and assuranceThe Audit and Risk Committee of the Board approvesthe annual Company-wide internal and external auditplan. Audit findings are updated monthly andprogress on corrective management plans is reviewedby the Executive Committee on a monthly basis andregularly by the Audit and Risk Committee of theBoard. External auditing of ISO 14001, ISO 9001and OHSAS 18001 management systems, atoperational level, ensures continuous improvement.Environmental Management Programme Reportsform part of the annual external EnvironmentalPerformance Assessment audits, which is a legalrequirement under the Minerals and PetroleumResource Development Act 28 of 2002.

As part of the assurance engagement, we ensurethat our assurance providers are independent fromthe Company, have the necessary individual andorganisational competencies and that the engagementprocess is based on best practice guidelines. Externalassurance is provided on selected parameters in thisreport, the alignment of our policies and businesspractices with the ICMM principles and our reportingin accordance to the GRI reporting principles. Inpreparation for this report, we have conducted aninternal audit on selected key sustainability indicatorsto monitor the effectiveness and inclusivenessof our systems.

Our 2008 sustainable development reporting

In 2009, we were acknowledged with thefollowing awards based on our 2008 sustainabledevelopment reporting:• Winner of the Building Public Trust Award 2009

for Sustainability Reporting in the FTSE 100,which recognises trust and transparency incorporate reporting; and

• We were awarded first place in the Ernst andYoung Excellence in Reporting Award for 2009,which recognises excellence in the quality ofreporting by South Africa’s top companies.

We are fully committed to the highest standards of corporate governance,which we believe helps create business integrity needed to deliver robust

and sustainable business results.

Stakeholder engagement and reportingIdentifying and responding to the expectations of ourstakeholders and incorporating their feedback intoour decision making processes is a strategiccommitment which defines the way we do business.Our approach to stakeholder engagement varieswith the nature of the stakeholder and the specificmatters at hand, ranging from legally required, formalengagement platforms to ad hoc informal engagementprocesses and site specific projects to generalaspects affecting the Company at large.

17


Stakeholder Engagement

We appreciate the importance of sound relationshipswith our stakeholders in growing our operations,in delivering consistent operational performanceand in working towards long-term sustainability. Weunderstand the inherent risk associated with poorengagement and unstable relationships with ourstakeholders and will continue to improve ourengagement approaches by evaluating our practices.

Our approachOur stakeholders are all individuals, communities orgroups that influence our operations or are affectedby our existence. We engage with those who aredirectly affected by our operations through the natureof our business or through proximity to our locations,and with those stakeholders who demonstratean interest in our business. We engage with ourstakeholders in order to improve relations; understandtheir perspectives and expectations; and communicateour plans and vision.

We respond to our stakeholders concerns andrequests for information in a number of ways. Werespond formally in the event that a formal concernor query is lodged with the Company and whereconcerns are raised in relevant stakeholder forums,feedback is either provided at the forum itself orsubsequent to the event. Feedback is dependant onthe type of concerns or information required and maytake the form of formal written feedback or moreinformal telephonic discussions.

We also take into consideration the interestsand expectations from a range of stakeholdersobtained from various engagement initiatives, interms of the content of our annual sustainabledevelopment reporting.

Risks or issues that are material to our stakeholdersIn 2009, we have engaged with a diverse rangeof stakeholders with varying frequencies and withdifferent approaches. The table below identifiesthe stakeholders with whom we have engagedwith in 2009, how we engage with them, how often,and some of the more important issues identified.The risks or issues which have been identified beloware not exhaustive and are focussed on the moreprominent risk or issue raised within that categoryof stakeholders. These risks or issues have beenidentified through direct engagement processes andour ongoing stakeholder communication channelsinherent to the management of our operations.

WE ARE COMMITTED TO MAINTAINING TRANSPARENT ANDONGOING CONSULTATIVE RELATIONSHIPS WITH ALLSTAKEHOLDERS AND TO INCORPORATING THIS ENGAGEMENTINTO THE DECISION-MAKING PROCESS.

Our stakeholders include:

• Employees;• Contractors;• Business partners;• Trade unions;• Shareholders• Communities, including adjacent mineral and

surface land owners;• Suppliers;• Tribal structures;• Local, provincial and national government;• Non-governmental organisations;• International and national organisations;• Industry peers; and• Customers.

Left: Jerry Makgau, thecoach of Segwetlhanesoccer team readingthe Lonmin GLC Voicenewspaper.

Right: BarnardMokwena, ExecutiveVice President HumanCapital and ExternalAffairs addressingstakeholders at theRekopaneDevelopment Forum.

18


Stakeholder Engagement(continued)

Engagement with our stakeholders in 2009

Stakeholders Method of engagement Frequency Summary of issues that are material

Safety and Meetings regarding the review of safety and Quarterly • Safety and sustainabilitySustainability sustainable development performance within organisational structures andCommittee the Company. reporting lines;of the Board • Safety performance, risks and

legislation;• Environmental performance,risks, and legislation;

• Health performance, risks andlegislation;

• Community developmentprojects; and

• Sustainable developmentreporting in terms of GRI andassurance.

Employees Lonmin intranet; containing a library Ongoing • Safety in the workplace;of information for all employees. • Reorganisation and closure of

Platinum Conversation, an employee Monthlyoperations; and

newsletter distributed in three languages• Retrenchment and impact

providing general information to employeeson employees.

on safety performance and otheroperational aspects.

The COO’s newsletter, a communication Weeklymedium from the COO providing generalinformation to employees on safety, marketnews, performance and strategic matters.

Mining optimisation newsletter, an employee Monthlynewsletter distributed to employees, providinginformation on performance within theMining Division.

Further engagements include shop-floor Ongoingbriefings, regular internal announcements(including daily safety statistics), meetingsand annual performance reviews.

CEO stakeholder feedback forum. Bi-annual

Trade unions Union engagement forums. Monthly • Employment equity;

Employment equity forum. Monthly• Safety in the work place;

Stakeholder forum. Quarterly• Market related remuneration;

Discipline specific meetings covering aspects As required by

• Retrenchment process;

of safety, health and remuneration. the project

• Employee training and

Central restructuring forum. As required

development; and

(as often as

• Engagement with trade unions

weekly within

and the workforce.

retrenchmentperiod)

19



Engagement with our stakeholders in 2009 (continued)


Shareholders Financial and non-financial reporting. Quarterly andannually

Annual general meeting. Annually

Performance and strategy meetings. Quarterly andannually

Face to face or telephonic discussions with As requireda variety of shareholders. by the project

Business and Board meetings with our business partners, Quarterly • Safety in the workplace;project partners which include amongst others, Incwala • NIHL;

Resources Pty Limited, Anglo Platinum • Retrenchment /restructuringMvelaphanda and the Bapo Ba Mogale. processes;We also engage with the Independent • Black economic empowerment;Development Trust as a business partner. • Retaining a skilled workforce;

Meetings with project specific business As required by• Availability of housing for

partners, including the IFC. the projectemployees/contractors;

• Availability and security of waterresource;

• Availability, use and security ofenergy (electricity) resources;

• Environmental authorisations;• Rehabilitation of opencastmining; and

• HIV/AIDS awareness andtraining.

Traditional We engage with the Traditional Authorities in Quarterly • Equity and shareholding;Authorities the regions where we operate. The Authorities meetings • Royalties;

meetings include the Bapo Ba Mogale, (monthly in the • Employment; andMapela, Mphahlele, Ledwaba, and case of Zebediela • Community engagementZebediela Ndebele. Ndebele) process.

Project specific meetings. As required bythe project

Greater Lonmin GLC area meetings with area representatives, Monthly • Reorganisation/retrenchmentCommunities during which community development and processes;(GLC) engagement is discussed and project • Safety/security of the community;

performance tracked. • Air quality management and

Project specific meetings, including meetings As requiredhealth issues;

as required by social and environmental• Availability of potable water;

impact assessments, with relevant• Management of water resources

community members.and pollution;

Akanani and Mapela community committee As required• Archaeological artefacts and

meeting.management thereof;

Environmental stakeholder forum. Six monthly

• HIV/AIDS awareness in thecommunity;

• Safety in the workplace,particularly in terms ofimprovement and benchmarking;

• Maintaining sustainability effortswith reduced financialresources;

• Employment equity and blackeconomic empowerment;

• Engagement with governmentagencies and trade unions;

• Ethics and whistle-blowing;• Availability, use and securing ofwater resources;

• Availability, use and security ofenergy resources; and

• Community development interms of employment, educationhousing and health.

20



Engagement with our stakeholders in 2009 (continued)


Greater Lonmin Community health meeting. MonthlyCommunities

CEO stakeholder feedback forum. CEO stakeholder(GLC)feedback forum

(continued)GLC Voice, a community newsletter providing Every secondgeneral information to communities at large monthon aspects relating to the Company andto the GLC.

Local, regional Direct ongoing engagement on environmental Ranges from • Safety in the workplace;and national and social issues with amongst others the monthly, • Social and Labour Plan;government local municipalities, the Department of Mineral quarterly, • Employment equity;

Resources, the Department of Environment annually to • Retrenchment processes;and Water Affairs, the Department of Health, ongoing • Availability of potable waterthe Department of Basic Education, resources; andDepartment of Higher Education and Training • Environmental policies, strategiesand the Department of Agriculture, Forestry and legislation and performanceand Fisheries. in this regard.

Environmental open day. Annually

Project specific meetings, including meetings As requiredas required by social and environmentalimpact assessments.

Contractors We continuously engage with our contractors Ongoing • Preferential procurement;and suppliers and suppliers on safety, health and dependent • Safety in the workplace; and

environmental requirements and preferential on type of • Environmental performance.procurement. contractor

or supplier

Non- Project specific meetings, including meetings As required • Contractor management;governmental as required by social and environmental • Air quality;organisations impact assessments, with relevant • Engagement with non-

community members. governmental organisations; and

Environmental stakeholder forum. Six monthly• Availability, use and securing of

CEO stakeholder feedback forum. CEOwater resources.

stakeholderfeedback forum

Industry We actively engage in various industry Dependent on • Safety in the workplace;associations associations such as the South African the association, • Environmental legislation

Chamber of Mines, ICMM, the South African changes from amendments;Mining Biodiversity Forum, the International monthly to • Sustainable developmentPlatinum Association, the Extractive Industries twice per reporting assurance; andTransparency Initiative and the UNGC. annum • Registration, Evaluation,

Authorisation and restrictionof Chemicals.

Customers Research and Development. Annual • Development of new potential

Customer satisfaction surveys.applications for PGMs.

• Health care delivery;• Community development andengagement; and

• Change management anddelivery of commitments.

21


Risk and Impact Management

The timely identification, assessment andmanagement of risks is critical to the success of ourbusiness. The Lonmin Risk Management Policy andRisk Management Standard provide the frameworkfor integrated and dynamic risk management in theCompany.

Our approachThere is an ongoing process in place for identifying,evaluating and managing the significant risks facingthe Group that has been in place throughout theyear under review and to the date of approval of theaccounts. This process has been reviewed regularlyby the Audit and Risk Committee on behalf of theBoard, and accords with the guidance appendedto the Combined Code. The approach taken issystematic and combines both a “top-down” and a“bottom-up” review and approval process. All seniormanagers are responsible for managing andmonitoring risks that could impede the achievementof business objectives and these are recorded in arisk register. It is mandatory for this process to takeplace at least once a year, but in practice a morefrequent review takes place in most business areas.The precautionary approach is inherent in the riskmanagement framework. It identifies all risks thatcould affect the Company and its partnerships, using

WE ARE COMMITTED TO PROVIDING ADEQUATE ANDAPPROPRIATE RESOURCES TO IMPLEMENT EFFECTIVE RISKMANAGEMENT BASED ON VALID DATA AND SOUND SCIENCE,DURING ALL PHASES OF OUR OPERATIONS TO ENSURE THEREDUCTION OF RISKS AND THE ADOPTION OF BEST PRACTICES.

Sustainable development risks, of a higherpriority which are presented in the AnnualReport:

• The global economic downturn;• Fatalities, serious injuries and unsafe

behaviour;• Empowering HDSA;• Skilled work force;• Housing of our employees;• NIHL;• HIV/AIDS and tuberculosis;• Water resources;• Energy resources;• Minimising closure costs and environmental

risks through integrated environmentalmanagement and closure planning;

• Local economic development; and• Stakeholder engagement.

a standard framework to assess risks and prioritiseactions. For each risk identified, management alsoassesses the root causes, consequences and mitigatingcontrols in relation to the risk. An assessment isthen made of the maximum risk exposure and theeffectiveness of the controls in place to mitigatethat risk. A numerical scoring matrix is used toderive a risk score and priority after taking accountof mitigating controls. Where the risk score andpriority remain high after mitigating controls are takeninto account, action plans are devised to reducethese risks further and progress against these plansis regularly reviewed. Each of the business areas issupported by an Operational Risk Champion whoco-ordinates all risk management activity in thatbusiness area and ensures that actions areimplemented appropriately. Progress againstaction plans is also reviewed regularly by the Auditand Risk Committee and reported to the Board.

Additionally we take into consideration theinterests and expectations of the stakeholders withwhom we engage. Page 17 outlines the stakeholderengagement initiatives which we have undertaken in2009, along with the key issues which have beenidentified through these engagement processes.

In 2010, third party assurance will be sought,as aligned with the requirements of the ICMMSustainable Development Framework AssuranceProcedure, on the process of identification andprioritisation of our material sustainable developmentrisks and opportunities.

Our risks and impactsWhilst the Sustainable Development Review in theAnnual Report provides details around our principlesustainable development risks as identified throughthe Company wide risk management process andtaking into consideration the risks which ourstakeholders believe are material, this report providesfurther information on these risks and other issuesfacing the Company that we believe are of a higherpriority to the business. They are not presented inany order of significance in the report.

The next section provides a summary of ourtargets on our key issues, our performance againsttargets in 2009, as well as targets for the next reportingperiods. Explanation around our performance as wellas the main processes in place to manage these risksis detailed in the various sections of the report.

22


Summary of our Performanceagainst our Targets

WE ARE COMMITTED TO CONTINUAL IMPROVEMENT IN OURPERFORMANCE THROUGH A FRAMEWORK OF SETTING AND REVIEWINGOUR POLICIES, OBJECTIVES AND TARGETS.

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We are committed to continual improvement in our performance through a framework of setting and reviewing our policies, objectivesand targets. The table below summarises our performance against our key targets and outlines our targets going forward, with ‘�’indicating not achieved and ‘�’ indicating achieved.

Issue Progress Targets for 2009 and beyond Performance and additional targets

Management systems We will maintain our current management systems All operations maintained ISO 14001certification for the reporting year. certification, other than the Assay

Laboratory whose certificate expiredin 2009. In 2009, the BMR, Smelterand PMR maintained their OHSAS 18001certification. We will achieve OHSAS 18001management system certification at allour operations by 2011.

We will receive zero fines and prosecutions We received no fines andfor the reporting year. prosecutions in 2009.

Human capital We will comply with the principles embodied in the In 2009, there has been no reportedUnited Nations Declaration for Human Rights incident of violation of the principles.(recurring target).

We will increase the literacy rate of our employees We have increased the literacy rateto 50% by 2009. of our employees to 47%. We will aim

to improve the literacy rates of ouremployees by 2% in 2010 based on ourperformance in 2009.

We will ensure that 40% of senior and middle In 2009, 41.3% of senior and middlemanagement comprise employees from management comprised employees fromdesignated groups by 2009. designated groups. We will increase the

participation of employees from designatedgroups within senior and middlemanagement to 53% by 2014.

Not on track We will increase women in mining to 10% by 2012. In 2009, we have increased the numberof female employees at the mine to 6.8%and have increased the number of womenin mining to 2.9%. Although we were noton track to achieve our targets in 2009,we have implemented initiatives to enhancethe participation of women in our workforceand thus believe that we will achieve ourtargets in 2012. We will increase femaleparticipation at the mine to 11.6% in 2012.

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23


Summary of our Performanceagainst our Targets (continued)

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Procurement We will increase our total discretionary spend with In 2009, we have increased our totalHDSA suppliers to 60%1 by 2009. discretionary spend with HDSA suppliers

to 66.6%. We aim to maintain at least65% of our total discretionary spendwith HDSA suppliers by 2012.

On track We will have 63% of our total discretionaryspend with HDSA suppliers by 2010.

Safety We will achieve zero fatalities at our In 2009, regrettably three fatalitiesoperations each year. occurred at our operations.

We will improve our LTIFR by 15% by As at the end of September 2009,30 September 2009 (baseline year 2008). we have improved our LTIFR by 0.96%.

We will improve our LTIFR by 10% by30 September 2010 (baseline year 2009).

Health We will increase participation of patients in our In 2009, the participation of patients inwellness programme by 20% by 2009. our wellness programme decreased by

51%, this partially being attributed to therestructuring and reorganisational processthat was undertaken in 2009, with 17% ofpatients exiting as a result of restructuring,28% defaulting from the programme and6% commencing with ART. We aim toincrease participation of patients in ourwellness programme by 20% in 2010(2009 baseline year).

We will train one workplace peer educator for In 2009, we have one trained workplaceevery 75 employees by 2009. peer educator for every 71 employees.

In 2010, we aim to maintain one activeworkplace peer educator for every75 employees.

We will reduce our number of new NIHL cases In 2009, we have reduced our newby 30% by 2009 (2008 baseline year). diagnosed NIHL cases by 80.9% from our

2008 baseline year. We will reduce ournumber of new NIHL cases by 10%in 2010 (2009 baseline year).

All operations to implement a baseline survey on All operations have implemented baselineoccupational exposure hazards and establish surveys on occupational exposureoccupational hygiene monitoring and health hazards and have establishedsurveillance programmes by 2009. occupational hygiene monitoring and

health surveillance programmes.

1 The target of 50% stated in the 2008 Web-based Sustainable Development Report was incorrect and has been rectified to 60% by 2009.

�

24


Summary of our Performanceagainst our Targets (continued)

�


Environment On track We will reduce our aggregate fresh water intake We have reduced our aggregate freshby 15% per unit of production (2007 baseline year) water intake by 12.16% per unit ofby 2012. production since 2007.

Not on track We will reduce our aggregate energy consumption We have increased our aggregate energyper unit of production by 10% by 2012, thereby consumption by 3.77% per unit ofreducing greenhouse gas emissions by 5% production and our greenhouse gas(2007 baseline year). emissions by 10.32% per unit of

production since 2007.

On track We will reduce our quantities of waste disposed We have increased our quantities of wasteof to landfill by 15% (2008 baseline year) by 2012. disposed of to landfill by 23.4% since 2008.

This increase can be attributed to theincreased disposal of calcium sulphite atlandfill until such a time that alternativedisposal options are implemented.Excluding the contribution of calciumsulphite, we have reduced our wastedisposal to landfill by 2% in 2009.

Housing We will convert five hostel complexes into bachelor We remain committed to the ultimateand/or family accommodation in 2010. construction of 5,500 houses within

the GLC. However due to financialconstraints the target date for completionof these houses is under reviewand will be discussed with theDepartment of Mineral Resources.

Community We will spend 41% of our five year financial We have spent 41.1% of our five yearcommitments on local economic development financial commitments on local economicprojects as per the Social and Labour Plan development projects as per the Socialby 2009. and Labour Plan. We aim to spend 58%

of our five year financial commitments onlocal economic development projects asper the Social and Labour Plan by 2010.

25


Creating Wealth

IntroductionOur economic impacts are both of a direct andindirect nature. Our mission is to grow and build ourportfolio of high quality assets and to enable ourshareholders to realise a superior total return on theirinvestments and to improving the quality of life ofcurrent and future generations through the integrationof economic prosperity, social development andenvironmental protection.

Additionally, we support the ICMM’s Resourcesand Economic position paper and acknowledge thatmineral resources have the potential to promoteeconomic development and contribute to povertyreduction. Additional information on our financialperformance can be obtained from our 2009 AnnualReport, which is located on www.lonmin.com.

The global economic downturnThe global economic downturn in 2009 has had asignificant negative impact on the Company’sperformance as a result of economic uncertainty,significant impacts on the PGM pricing, Rand/US$exchange rates, share price and difficulties incredit markets.

The Company derives substantially all of its cashflow from the production, processing and sale ofPGMs based on market prices. As a result, the

Company’s financial performance is significantlyaffected by the market prices of the PGMs that theCompany produces, particularly the prices ofplatinum and rhodium. Along with other commodities,the pricing environment for PGMs has changedsignificantly over the last 12 months. The platinumprice peaked at US$2,276/oz in March 2008, mainlyas a result of supply side challenges arising frompower generation concerns in South Africa and agrowing number of industry safety stoppages,alongside a strong demand environment. Since then,the platinum price declined to a low of US$756/oz inOctober 2008, but subsequently rose to US$1,287/ozas at 30 September 2009. We believe that the fall inPGM prices was driven initially by the worseningoutlook for the global automotive industry and wassustained by a fall in the demand for automotivevehicles and other PGM-containing consumer goodsas a consequence of the global financial crisis, as wellas a reduction in investment holdings. This effect hasbeen exacerbated by de-stocking amongst industrialconsumers of PGMs and some sales of inventories.The continuing market downturn has had a majorimpact on pricing, resulting in our average PGMbasket price during the first half of the 2009 financialyear declining by 55% to US$699/oz. Pricing has,however, improved during 2009 with the PGM basketincreasing by nearly 20% to US$861/oz in the secondhalf of 2009.

Actions to improve operational performanceWe remain one of the lower cost producers of PGMsand have recently taken a number of significant actionsto improve operational performance, achieve costsavings and preserve cash, to help mitigate the impactof the global economic downturn. These steps includea major restructuring programme at our core operationsat Marikana, a renewed emphasis on low costproduction and an extensive cash conservationprogramme across the business, specifically as follows:

Elimination of non-value-adding ounces: Wehave ceased production from our higher unit costoperations, specifically at our opencast operations atMarikana and at our Baobab Shaft at Limpopo, whichhas been placed on care and maintenance. As partof these actions, we have completed a significantrestructuring and retrenchment programme at ourMarikana operation.

Change of mechanisation strategy: We are inthe process of switching from mechanised to hybridmining at a number of our shafts, with conventionalstoping supported by mechanised development.

WE CREATE VALUE BY THE DISCOVERY, ACQUISITION,DEVELOPMENT AND MARKETING OF MINERALS AND METALS FORCOMMUNITIES, SHAREHOLDERS, BUSINESS PARTNERS,EMPLOYEES AND SUPPLIERS.

Summary of our 2008 performance

• The global economic downturn in 2009 hashad a significant negative impact on theCompany’s performance;

• Net cash distributed in 2009 amounted toUS$619 million;

• In 2009, our total platinum productionamounted to 683,359 oz and our total PGMsproduced amounted to 1,267,529 oz;

• The largest percentage shareholders of theCompany include M&G InvestmentManagement and Xstrata Zinc BV, whichown 19.41% and 24.67% respectively asat 30 September 2009;

• US$2.6 million was spent on localinfrastructure development in 2009;

• In 2009, we have achieved and exceeded ourtarget of 50% total discretionary spend withHDSA suppliers, with a 66.6% spend totallingour spend to US$523 million; and

• The local supplier development programmehas been successful, with 215 contracts todate being awarded to GLC suppliers, to thevalue of US$31.5 million.

26


Creating Wealth(continued)

Cost reduction, performance improvementand capital rationing: Approximately 7,000 fulltime employees and contractors employed at theCompany exited as at 30 September 2009. Thecost savings relating to this headcount reductionare expected to deliver annualised cost benefitsof US$90 million for 2009. Additionally we haveimplemented a number of programmes across ouroperations to improve performance going forward.In addition, capital expenditure programmes at theLimpopo Phase Two Project and Akanani wereplaced on hold. As part of our restructuringprogramme, we have also significantly curtailedour exploration activities.

Simplification of organisational structure withclear accountability: We have implemented a newsimplified management structure which enhancesfocus and accountability, giving the operations moreownership of the functions required to ensure efficientand effective delivery. The Company’s new simplifiedmanagement structure places the operationalmanagement emphasis firmly in South Africa.

We have also taken action to improve its financialflexibility, including not paying a final dividend for 2009and refinancing US$575 million of existing facilities tomaintain the aggregate quantum and lengthensignificantly the tenure of the Company’s facilities.

We expect the pricing environment to continue tobe unpredictable in the short term while significanteconomic uncertainty prevails but are confident thatthe positive balance between supply and demand inthe PGM sector will return in due course. We remainconfident of the longer term potential of theCompany, with our high quality asset base and lowcost position, and in the fundamentals of the PGMindustry, and our primary focus continues to be onpreserving and enhancing value for all ourshareholders.

Impacts of the downturn on sustainabledevelopment

In 2009, the Company’s profitability andcashflows were negatively impacted by the globaleconomic downturn. Consequently, managementinitiated a major restructuring programme during theyear, resulting in the voluntary separation and forcedretrenchments of employees. This impacted on ourprogress towards increasing the number of HDSAand female employees within the Company andretaining key skills within the workforce. Furthermore,due to the adverse change in our financial situation,we will not achieve our targets to construct housesand undertake hostel conversions by 2011.

Additionally, the completion deadlines for anumber of environmental and social projects havebeen extended in an attempt to reduce operationalexpenditure. However, we have taken steps to ensurethat this will not have a material impact on thebusiness, our compliance or impacts to theenvironment or communities where we operate.

Despite the impact of the global economicdownturn on our financial flexibility, we have notdeviated from our belief in the business case forsustainable development and the associated businessbenefits. Furthermore, we remain fully committed tothe values of our Charter and our commitments withinthe Safety and Sustainable Development Policy.

Further information on the effect of the economicdownturn on each of these sustainable developmentaspects have been provided within the body of thisreport.

Direct economic impactsThe 2009 Annual Report, which is located atwww.lonmin.com, details all direct economic risks,opportunities and key strategies on our economicperformance.

Operational performanceIn 2009, our total platinum production amounted to683,359 oz and our total PGMs produced amountedto 1,267,529 oz.

Economic performanceWe recognise that as a leading global producer ofPGMs, a finite resource, the impact our business hason the economic conditions of our stakeholdersincluding employees and communities is extremelyimportant. The value added statement for Lonmin Plcas at 30 September 2009 depicts our direct economicimpact.

27



Payments to governmentNeither the South African nor United Kingdomgovernments are present in the Company’sshareholding structure. The Extractive IndustriesTransparency Initiative is a coalition of governments,companies, civil society groups, investors andinternational organisations that aims to strengthengovernance by improving transparency andaccountability in the extractive sector. The ExtractiveIndustries Transparency Initiative has a robust yetflexible methodology that ensures a global standard ismaintained throughout the different implementingcountries. We are one of 37 companies from the oil,gas and mining industry that supports and activelyparticipates in this initiative. By committing to supportthe initiative, we have submitted an International-LevelCompany Self Assessment form and commit toreporting publicly on an annual basis, any paymentsmade to government. Government taxes in 2009amounted to US$55 million.

Assistance from governmentIn 2009, the Company received a skills developmentgrant, amounting to US$2.4 million from the MiningQualifications Authority on evidence of the executionof our training programmes.

Our employeesIn 2009, the Company employed a combined totalof 21,623 employees and 10,497 contractors wereregistered on our database. Where possible, weemploy persons from our local communities.Employees, including executive Directors, receivedsalaries to the value of US$499 million.

Value-added statement for Lonmin Plc as at 30 September 20092009 2008

US$ million US$ million % Variance

Net cash generatedCustomers, consumers and investment incomeCash received for products 1,138 2,270 (50)Cash returns on investment 3 13 (77)

Suppliers1

Cash payments for materials and services purchased (488) (445) 10Cost of borrowings (34) (23) 48

Net cash flows 619 1,815 (66)

Cash distributedHuman capital (salaries and benefits) 499 557 (10)Social capital 6.2 7.3 (15)– Donations 0.5 0.7 100– Other community projects2 5.7 6.6 (14)Government taxes 55 245 (78)Directors remuneration 7 9 (22)Shareholders distribution – 186 (100)Cash retained for sustainable growth 52 811 (94)

Net cash distributed 619 1,815 (66)

1 We have a 30 day payment policy on services and procurement.

2 Inclusive of salary and administrative costs.

The skills development grant is used to further our training initiatives, suchas our operators’ training.

28



Our shareholdersThe figures to the right illustrate a breakdown of ourshareholders by type of fund and geographic location.The percentages provided for the geographic locationof our shareholders excludes Xstrata Zinc BV. Thelargest percentage shareholders of the Companyinclude M&G Investment Management and XstrataZinc BV who own 19.41% and 24.67% respectivelyas at 30 September 2009.

Indirect economic impactsWe, as a Company have both positive and negativeeconomic impacts at a local, regional and often nationallevel, examples including creating wealth throughlocal market presence and community developmentand the impact of our workforce on the availability ofhousing and our physical impact on the environment.Within this report we have reported on the significanceof these impacts and where relevant, in the contextof external benchmarks, such as internationalstandards and protocols. We identify and assess ourindirect impacts through amongst others, baselineassessments, needs analysis, stakeholder surveysand environmental and social impact assessments.

Indirect economic impacts are defined as intangiblebenefits that emanate from the secondary effects ofcapital investment, mine development and employmentin the local community. We are committed to localemployment, developing local suppliers and investingin local infrastructure to stimulate and attract furthereconomic development in the areas where we operate.Our Social and Labour Plans provide for opportunitiesfor employee and community development as alignedwith the local government development plans. Risksassociated with non-compliance to these plans mayinclude compromised stakeholder relations, penaltiesand even temporary closure.

Preferential procurementWe support the transformation programmes of theSouth African government to address previousinequalities and to create stability and prosperity forall. A key component of transformation is enhancingthe participation of HDSA companies, and in particularour local HDSA companies, in the procurementchains of our operations, in terms of consumables,services and capital.

As part of our Social and Labour Plan, we haveset targets to increase our total procurement spendwith HDSA suppliers to 60% by 2009, 63% by 2010,64% by 2011 and 65% by 2012. In 2009, we haveachieved and exceeded the 2009 target, with a66.6% HDSA procurement spend. In 2009, ourHDSA procurement spend was US$523 million andour spend as from 2007 amounts to US$1,310million. Our procurement strategy targets HDSAcompanies and where this is not possible, weencourage existing suppliers to form partnershipswith HDSA companies and to capacitate thesecompanies. Aligned with our vision to create stableand economically independent communities, we arealso focusing on developing supplier opportunities forlocal HDSA community members residing in the GLC.

34.0%

37.0%

9.0%

14.0% 6.0%Unknown

Rest of World

Continental Europe

North Americaand Canada

Scotland

England and Wales

Shareholders by geography in 2009

3%

5%

33%

41%

6%12%

Others

Custodians

Insurance Companies

Pension Funds

Unit Trusts

Under or belowthreshold

Shareholders by type in 2009

007 08 09

% Target% US$ million

70

20

10

50

40

60

30

0

700

200

500

400

100

300

600

%

US

$m

illio

n

Financial year

HDSA Spend

29



The GLC supplier development programmeAlthough we have exceeded our target to increaseour total discretionary spend with HDSA suppliers to60% by 2009, the achievement of this target has notresulted significantly in the empowerment of the localcommunity to our satisfaction, as HDSA suppliersfrom the metropolitan areas of Johannesburg andPretoria have primarily benefited from this policy. Tothis end, we have also focussed on developing thesocial and economic standing of local communitiesresiding within the GLC through local supplierdevelopment. In 2007, we commenced with aninitiative with the International Finance Corporation(IFC), the duration of which is over a period of threeyears. The strategic objective of this programme is totap the entrepreneurial skills of communities whoreside in the GLC and develop 60 locally ownedsupply companies, thirty of them sustainable duringthe next three years and award them with contracts

from the Company at a value exceeding US$44.5million. In addition to the geographical location of thesupplier as well as the HDSA status, factors thatinfluence our supplier selection include costs, financialcredibility, environmental performance and socialperformance. The intent of this programme is topromote sustainability by contributing significantly tothe development of the communities throughenhancing knowledge, skills and entrepreneurdevelopment of the communities and community selfreliance. The basis for success is for these suppliersto extend their services, not only to other miningorganisations in the regions, but also to non-minerelated customers.

Thirty months have lapsed since thecommencement of the local supplier developmentprogramme. The programme has been successfulwith 215 contracts to date being awarded to 34 localsuppliers, to the value of US$31.5 million in thedisciplines of construction, ore and concentratetransport, training and catering. In 2009, 0.8% of totaldiscretionary spend on goods, materials and servicesor an amount of US$6.6 million was spent on GLCsuppliers. In 2009, 117 additional contracts andorders were awarded to local suppliers. In order toidentify opportunities within the GLC, we haveconducted business landscape assessments duringwhich available and potential businesses wereidentified and assessed. To date we have identifiedmore than 200 potential suppliers who haveregistered companies of which the majority requiredevelopment prior to participating in the programme.The supplier development programme has identifiedthree ways of matching potential suppliers in the GLCwith business opportunities, namely:• 100% GLC owned companies. This is the

preferred approach although it is often notpossible due to a shortage of existing companiesand skills;

• 100% GLC owned companies as sub contractor.This approach is to enable GLC companies, theopportunity to develop their skills and gainpractical experience; and

• Joint ventures. The majority of establishedbusinesses will entertain joint ventures with GLCsuppliers, affording them the opportunity topromote their own black economic empowermentand to be accepted as suppliers of services orproducts to the Company.

The programme requires, in order to besuccessful a range of partners, including traininginstitutions, financial institutions and communitygroups. In order to develop the GLC companies inthe most effective manner, in 2009, we established anincubation centre, thus providing a structured processfor training, support and monitoring of these suppliersand potential suppliers.

Bons Construction prospers!

Our local supplier, Bons Construction has continued to prosper withan additional 46 contracts awarded in 2009. Bons Moeng and MinahMaduma from Bons Construction.

One of the companies that we reported on in2008 that have benefited from our GLC supplierdevelopment programme is Bons Construction.Bons Construction has continued to grow andprosper as a construction company and in 2009were awarded an additional 46 contracts underour local supplier development programme,totalling the number of contracts to date to 65.These contracts have included road repairs inMooinooi, maintenance at Andrew Saffy Hospitaland refurbishment of the Karee adult basiceducation and training (ABET) classrooms.Additionally as a result of advertisements beenplaced in local newspapers and the distributionof copies of their business profiles, they wereawarded the contract for general maintenance atthe Bethanie Police Station. Bons Constructionmakes use of our supplier developmentincubation centre, and aims to further developtheir business opportunities in 2010.

30



Infrastructure developmentWe also have indirect economic impacts on thecommunities where we operate through our socialdevelopment programmes, which encompass capitalinvestment in public infrastructure development,education and health programmes. The socialdevelopment programmes are aligned with therequirements of our Social and Labour Plans that arein turn aligned with the Integrated Development Plansof the municipal areas in which we operate. In 2009,US$2.6 million was spent on community infrastructuredevelopment projects of which the significant projectsare outlined. Please refer to page 78 for furtherinformation on these programmes.

Infrastructure development expenditure in 2009

Project Lonmin Investment

North West waterand sanitation project US$781,795Water and sanitation (Eastern Cape) US$61,179Silindini bridge (Eastern Cape) US$336,485Health care delivery US$34,734School facilities upgrade US$769,805Personal computer laboratories US$14,987Agisanang farming project US$532,722Itireleng community co-operative US$24,244

Incubation centre for supplier development

In 2009, in partnership with the IFC, we haveestablished an off site incubation centre to affordGLC Companies who have contracts with theCompany in excess of five months with fullyfurnished office facilities and business and financialtraining. Facilities include office furniture, personalcomputers, internet usage, telephones, faxes,printing facilities as well as meeting room facilities.Entrepreneur development initiatives comprisesfacilitation for financing, assistance with thecommencement of businesses, enterpriseevaluations, enterprise system setups, training on 22modules, coaching and mentoring opportunities

To date, 104 individuals have participated in theincubation centre representative of 70 companies.These enterprises have been evaluated, 31 trainingsessions have been completed and 51 days oftraining have been held. The incubation centre andthe training that has been conducted to date havebeen at an expense of US$5.9 million to theCompany. Going forward, we aim to privatise theincubation centre to enhance independence from theCompany. This will be achieved through theparticipation of other mining houses in the immediatearea in establishing an independent transformationtrust to which suppliers of the mining houses will beable to make donations in order to meet their broadbased black economic empowerment obligations.These trust funds will be managed by externalauditors, whilst fund allocation will be managed bythe trustees of the trust.

Local supplier companies receiving business and financial training at oursupplier development incubation centre.

31



The Platinum Group Metals marketWe are South Africa’s third largest producer of PGMs.South Africa is the largest producer of platinum andrhodium in the world and contributes 76% and 83%of global supply respectively. We are committed togrowing the market for PGMs. PGMs are used inapplications that depend on their unique physical andchemical properties such as catalysis, inertnessconductivity and biocompatibility. PGMs are used incatalytic converters to reduce noxious emissions fromvehicle exhausts, gasoline, diesel, bio-fuels andhybrid engines. Their superior performance in suchapplications protects against substitution. The long-term demand fundamentals for platinum and otherPGMs have remained positive although platinum andother PGM prices have shown significant declines inthe past twelve months. This volatility has an impactin the consumption and purchase behaviour ofPGMs. Although auto catalyst sector continues to bethe primarily demand driver for platinum, palladiumand rhodium, primarily as a result of robust long-termautomotive demand as emerging market vehicleproduction grows tightening emissions legislation andcontinued growth in clean air legislation globally, therecontinues to be a strong demand growth in PGMs inthe jewellery industry, which represents around 18.6%of global demand for platinum, as well as increasingusage across a range of other industrial applications.There is also an increase in demand for stationary fuelcell applications to deliver on global energy savingand clean air commitments. We serve the samemarkets as is broadly served by all platinumproducers or refiners worldwide, including companiesthat manufacture auto catalysts, industrial andchemical companies, as well as glass companies andjewellery manufacturers.

Product responsibilityWe undertake mining and processing activities in anenvironmentally and socially acceptable manner,which in turn gives rise to a responsible product. Weare committed to responsible product design andpromoting the use, reuse, recycling and disposal ofour products and where relevant, assess the healthand safety impacts of the life cycle of our products.Our Company values and policy commitmentsunderline our approach to marketing and selling ofour products; we choose our customers based ontheir business ethics and sustainable developmentvalues and approach and relate to our customers aspartners.

Accountability for product responsibility ultimatelyresides with our CEO. Although aspects relating toproduct quality are managed by the ExecutiveManager Marketing, the responsibility for productmanagement, and training and awareness thereof,lies within each operational unit contributing to thelifecycle of our products.

Product classification and labellingWe are a founder member of the Registration,Evaluation, Authorisation and Restriction of Chemicals(REACH) PGM consortium and strive to adhere to thecodes and practices in respect of product

classification and labelling adopted by theconsortium. We actively participate and attend forumsand submit and share data relating to the content andchemical composition to promote responsibledistribution and management of our material. Formore information on REACH and our participation inthis regard, please refer to page 69.

Whilst there are no legislative requirements for ourproducts, service information and labelling,information regarding the content of all of ourmaterial, particularly with regards to substances thatmay result in an environmental or social impact, isprovided upon delivery to our customers.

Customer satisfactionAlthough no external auditing in respect of customerproduct complaints is conducted at this stage, wehave a comprehensive internal product concernmonitoring process that is strictly adhered to by allstakeholders. In terms of customer health and safety,there are no material health or safety complicationsrelated to the final product produced and marketedby the Company. Although the health and safetyimpacts of our post production product in its variousstages of the life cycle has not been formallyassessed, consistent efforts are made to addressall health and safety issues as they relate toour products.

We assess our customer’s satisfaction on our finalproducts through annual surveys in which ourcustomers provide feedback and a rating in respectof their product satisfaction. Our performance interms of delivery, product quality, responsiveness,communications, labelling and packaging is assessed.

19%

3%

52%

5%3%

7%

6%

5%Jewellery

Petroleum

Other

Investment

Glass

Auto catalysis

Electrical

Chemical

Source: Johnson Matthey Platinum 2009 Report

Platinum demand by industry

29%

20%

1%

2%

38%

10%

Japan

USA

South Africa

Germany

Switzerland

UK

PGM market by geographical breakdown

32



Lonmin, a proud sponsor of the Design InnovationAward

We are committed to excellence, both in ethical practicesand design innovation. In 2009, we were the primarysponsor of the Lonmin Design Innovation Award, which is aplatinum-based competition organised by Blue Incorporatedwho are the publishers of the Platinum Collection, aimed atdesigners who are looking to drive forward contemporaryjewellery design. The Design Innovation Award was set upseven years ago to recognise and reward outstanding designin platinum. On a more general level, the competition aims toenhance the design standards of all contemporary jewelleryto greater heights. Within the competition, there are twocategories; emerging designers who have less than fiveyears experience as a jewellery designer and establisheddesigners who have more than five years of experience.

In 2009, there were eight winners, four in the EmergingDesigner category and four in the Established Designergroup for the most creative and innovative designs. Theprizes include a £300 contribution to the production of theirwinning design, features in the Platinum Collection and on theLonmin Design Innovation Award website, promotion withthe editorial in the Platinum Times and other leading jewellerytrade titles and an invitation to showcase their designer pieceon the Johnson Matthey stand at International JewelleryLondon 2010.

Although the ratings from the annual surveys areconfidential, we have performed well as per theresults of these surveys. We respect the privacy ofour customers and to this end, we have confidentialityagreements in place with all our customers. Nocomplaints regarding breaches of customer privacyor losses of data were recorded in 2009.

In 2009 there were no incidents of non-compliance with voluntary codes concerning thehealth and safety impacts of products and services.Due to the business-to business nature of our nichecustomer base, we assess compliance to voluntarycodes with our customers in the form of structureddiscussions. No incidents of non-compliance withregulations were reported in 2009. No incidents ofnon-compliance with regulations or voluntary codesconcerning marketing communications, advertising,promotion or sponsorship were reported in 2009. Oursales are largely business to business and as a resultno definitive codes are followed for the purposes ofmarketing communications, promotions andsponsorships. Additionally in 2009, no fines werereceived in respect of non-compliances in theprocess of the provision and use of the product.

Five incidents of non-compliance with voluntarycodes involving slight discrepancies in thecomposition of impurities contained in the productwere reported in 2009. We responded and managedthe concerns accordingly.

Product research and developmentWe seek to promote the use of PGMs and promotebeneficiation within the South African context. To thisend, we supply financial support for research and

Top: The Aeon earrings designed by Fei Liu.Bottom: The Geo. Galactica ring designed by Tom Rucker.

development efforts of our current customer basewith a primary directive to find new applications forPGMs and opportunity to bring the ideas and conceptsinto the South African landscape for the benefit of theSouth African community and workforce. We were akey founder of the Platinum Beneficiation Committeein 2007 and continue to participate in the shaping ofthe beneficiation policies and developments withinour industry. We have actively participated in theformulation of a response to the revised beneficiationstrategy and policy document presented to industryin May 2009. We will continue to support and seekopportunities to create value and growth for thepeople of South Africa through its product streams.

Product promotionWe are particularly mindful of the fact that thejewellery industry is a key demand sector within thePGM consumption arena, yet one that is significantlyimpacted by the metal price and believe therefore thatextra attention and promotional activity is needed tosustain this very important segment of the platinumindustry. We have been a primary sponsor to thePlatinum Guild International for the past 10 years and2009 was no exception. In 2009, the jewelleryindustry embraced the new lower prices and as anindustry the jewellery industry became the one shininglight in an otherwise challenging environment,validating our firm belief that our support and activitywithin the jewellery industry is well placed and shouldcontinue unabated. As such we were the primarysponsors for the six consecutive year of the PlatinumCollection Design Innovation Awards.

33


Upholding Ethical Business Practices

Our approachOur business ethics are grounded in the Company’sstated values, which promote integrity, honesty andtrust. Our Lonmin Charter outlines the values to whichwe ascribe as a Company and the Lonmin Code ofBusiness Ethics provides the framework within whichall Company business practices must be conducted,managed and regulated. This Code of BusinessEthics has been compiled in accordance with thecommon values shared by all involved in theCompany, the general principles of law andinternationally accepted ways of doing businessethically. The Code encompasses aspects of fraud,corruption, theft, conflicts of interest, disclosure ofgifts, intellectual property and political support. Inaddition, systems of control have been introduced toensure that in attaining our objectives, we behavelegally, ethically and appropriately.

In support of the Code of Ethics, we haveinstituted an Ethics Hotline, with is available to allemployees, contractors, customers or suppliers whowish to report activities that they feel are not consistentwith the spirit of this Code. The Ethics Hotline is asafe and secure channel whereby any information canbe reported without fear of recrimination. In additionthe failure to “blow the whistle” in cases whereemployees know of misconduct arising under thisCode is regarded as a serious offence. The EthicsHotline is operated by a third party and all reportsmade are fully confidential and the option to remainanonymous is available. All reports made are referredto the Company Secretary and the Group InternalAudit and Investigation’s Department, whom thentakes action as deemed appropriate to investigateany violations of this Code reported through theEthics Hotline.

We were one of the founding members of theInstitute of Business Ethics; a United Kingdom basednon-profit organisation encouraging high standardsof business behaviour through research, advisoryservices, reporting and education. We are also amember of the Ethics Institute of South Africa, anindependent, non-profit organisation that promotesethical practices in South Africa. Additionally, wepartake in a number of forums to contribute togovernment decision-making and to create a platformto collaborate with industry peers and government.

We report on our ethical business performanceand in particular, significant investigations, to theExecutive Committee and to the Risk and AuditCommittee of the Board monthly and bi-annuallyrespectively.

WE ARE COMMITTED TO THE HIGHEST STANDARDS OF SOCIALAND BUSINESS PRACTICES BY UPHOLDING ETHICAL BUSINESSPRACTICES, SOUND CORPORATE GOVERNANCE ANDTRANSPARENCY.


• Our Lonmin Charter outlines the values towhich we ascribe as a Company and theLonmin Code of Business Ethics provides theframework within which all Company businesspractices must be conducted, managed andregulated;

• We have continued to identify, assess andmanage risks relating to corruption at alloperations as part of our Company formal riskassessment;

• We report on our performance and significantinvestigations to the Executive Committee andto the Risk and Audit Committee of the Boardmonthly and bi-annually respectively;

• We continue to provide training to allemployees and contractors on our Code ofBusiness Ethics;

• In support of the Code of Ethics, we continueto make available the Ethics Hotline, to anyemployees, contractors, customers orsuppliers who wishes to report activities thatthey feel are not consistent with the spirit ofthis Code;

• In 2009, we did not receive any legal actionfor anti-competitive behaviour, anti-trust ormonopoly practices; and

• As part of the screening process on allpotential vendors to assess their suitability,there have been a number of incidents whencontracts with business partners have notbeen renewed due to violations related tocorruption.

Our business ethics are grounded in the Company’s stated values, whichpromote integrity, honesty and trust.

34


Upholding Ethical Business Practices(continued)

Anti-corruptionWe do not tolerate any behaviour that is corrupt.Risks relating to corruption are encompassed withinour formal risk assessment and managementprocesses in place for all (100%) of our operations.Risk assessments include risks facing our operationsas well as risks applicable to the business. Theserisks are monitored on an on-going basis and theprogress on management plans is monitored andreviewed on a monthly basis. Responsibility for theelimination of corrupt behaviour for our operationsresides with line management. All employees andcontractors receive training pertaining to businessethics, including that of anti-corruption, on an annualbasis as part of the induction and refresher training.

Ethical value chainsOur procurement policy is to procure third partygoods and services from partners who we believe tobe ethical in their business practices and to havegood human rights, safety and sustainabledevelopment practices in place. Our conditions ofcontract with our suppliers and contractors includeclauses reinforcing these practices. We have thenecessary systems and checks in place to enforceour policies, including security clearances that areundertaken on potential suppliers and contractorsprior to engagement. These checks include companyregistration, credit and tax information, black economicempowerment status and financial judgments. Fullevaluations of suppliers and contractors are alsoconducted on request.

Anti-competitive behaviourUpholding the principle of fair and open competitionforms an important component of our approachto business. While we will compete vigorouslyand honestly to get the best outcome for ourshareholders, we will never do so by illegal, dishonestor unfair means or by using information gainedunfairly. We will work with competitors where webelieve we have common interests and can achievethe best outcome for the Company, but will nevercollude with competitors, suppliers or customers inany form of deception or other improper activity.We will respect the confidentiality of any informationgained from these dealings and never use it to thedisadvantage of the other party. Meetings withcompetitors where sensitive matters could ariseare policed by qualified attorneys, and we believethat we adhere to all relevant legislation and avoidanti-competitive behaviour at our operations.Responsibility for ethical business practices resideswith line management, although our CEO remainsaccountable. Employees and contractors receivetraining pertaining to business ethics as part of theinduction and annual refresher training.

Compliance with legislationWe are committed to complying with all relevantlegislation of the countries where we operate in thesphere of environmental management, safety, humancapital, health, business ethics, human rights andcommunity development. We have internal monitoringand internal and external auditing plans in place todetermine compliance to the legislation, with supportingreporting methods. Responsibility for compliance tothese issues resides with line management. We havetraining and awareness programmes in place acrossall operations to reduce risks associated with legalnon compliance.

Our performanceIn 2009, 70% of identified unethical behaviour caseswere reported directly to the Security Department byemployees and other stakeholders. The incidentsare then reported to the Investigations Departmentfor further investigation. In addition, a number of callsare made directly to the in-house investigations team,and other ethical breaches become apparent in thecourse of internal audits or other investigations.Cases reported by the Ethics Hotline are negligible,totalling 18 cases in 2009. We have embarked onan initiative in 2009 to enhance the awareness on theEthic Hotline. Priority one unethical behaviour casesare reported directly to the Board, priority two casesto the Audit and Risk Committee of the Board andpriority three cases to the Executive Committee ona monthly basis. The priority rating of the cases isbased on inherent monetary value to the Company.The figure below outlines the finalised number ofpriority one, two and three cases reported percategory and the results of these cases for 2009.

0

Compa

nypr

oced

ure

violat

ions Fr

aud

Forg

eryan

dutt

ering

Vend

orinv

estig

ation

Corru

ption

Statuto

ryrel

ated

35

30

25

15

10

5

20

Finalised but awaiting court hearing

Finalised by awaiting criminal action

Finalised but awaiting discipline action

Finalised with criminal action taken

Finalised with disciplinary action taken

PGMrel

ated

Num

ber

Job

sellin

g

Categories and status of casesof unethical behaviour in 2009

35


Upholding Ethical Business Practices(continued)

Anti-corruptionIn 2009, there were eight incidents which resulted ineight employees being disciplined and ultimatelydismissed for dishonesty. There have been a numberof incidents when contracts with business partnerswere not renewed due to violations related tocorruption. We routinely screen all potential vendorsto assess their suitability. A number of these mattersare either still within the legal process, orconfidentiality obligations preclude further disclosure.Accepting or giving bribes in all forms is prohibited inbusiness transactions undertaken directly by theCompany or through third parties, includingsubsidiaries and joint ventures. We do not directly orindirectly participate in party politics nor make anyfinancial contributions to any party or individual. In2009, the Company received a skills developmentgrant, amounting to US$2.4 million from the MiningQualifications Authority on evidence of the executionof our training programmes. We also support theExtractive Industries Transparency Initiative,promoting transparent reporting by extractiveresource companies of their dealings with, andpayments to government.

Anti-competitive behaviourIn 2009, we did not receive any legal action for anti-competitive behaviour, anti-trust or monopolypractices.

Compliance with legislationIn 2009, we conducted numerous audits of thevarious risks within our business to determinecompliance to relevant legislation. The objective andresults of these audits are provided within the contextof each issue in this report. In 2009, we were issuedwith a number of notifications in relation to the MineHealth and Safety Act 29 of 1996. Marikana received35 such notifications. These notifications are evidenceof a renewed stance by the government on safety inthe mining industry, which we fully support. However,the notifications result in temporary closure forinspection of the individual shaft under review.

As part of our annual refresher training our employees receive training on business ethics.

36


Respecting and Valuing FundamentalHuman Rights

Our approachWe support and respect the protection ofinternationally proclaimed human rights. We have azero tolerance stance to any behaviour that maycompromise the principles of human rights and weendeavour to promote these principles within oursphere of influence. These principles are fundamentalto the success of the Company and integral to ourCompany values. The responsibility for all aspects ofhuman rights ultimately resides with our CEO, who issupported in terms of policies and standards by ourExecutive Vice President Human Capital and ExternalAffairs and Company Secretary. Adherence to policycommitments and requirements reside with linemanagement.

Our Company Values, Human Rights Policy andStandard provide the framework for compliance tolegislation and the principles of human rights. Ourpolicy is aligned with the principles enshrined in theUniversal Declaration of Human Rights, theInternational Labour Organisation, the ICMM and theUNGC. Human rights forms an integral part of thecompany risk management approach. Any riskspertaining to the compromise of human rights areidentified, prioritised and managed accordingly. TheEthics Hotline supports our initiatives to abide to thecommitments within our Human Rights Policy.

All of our employees and contractors (100%)receive training on the key principles of human rightsas part of the induction programme and throughrefresher courses. We do not report on the totalnumber of hours devoted to training on human rights,as it is a component of our training material andcourses. The material is translated into Afrikaans,Xhosa and Setswana, and illiterate employees arebriefed verbally in their mother-tongue languages. Inaddition, we have ‘a manager’s guide to implementingsound human rights, business principles and ethics’in place. We have the necessary mechanisms andgrievance and corrective action procedures in placeto enable the reporting and monitoring of incidents.

Working conditionsOur Human Rights Policy as well as our employmentpolicies explicitly prohibits the employment of personsunder the age of 18 years. All employees are engagedfreely in their chosen employment at the Companyand have the right to freedom of movement. Employeesare expected, where necessary, to work overtime tothe national permitted level.

Security services and human rightsWith regards to our security services, we complywith relevant national legislation and with the UnitedNations Basic Principles on the Use of Force andFirearms by Law Enforcement Officials. All of oursecurity employees as well as contractors receiveinduction training on Company polices, includingthose of human rights, prior to commencement ofemployment or contractual agreements and thereafteron an annual basis.

Freedom of association and collective bargainingWe are committed to upholding the freedom ofassociation and the effective recognition of the rightto collective bargaining. Our Human Rights Policyand our Recognition Agreement, as aligned to theLabour Relations Act 66 of 1995, sets out oursupport for the principles of freedom of associationand collective bargaining. We are actively interestedin the welfare and opinions of our employees andunion membership provides employees with anestablished mechanism to voice their opinionsand grievances. We regularly engage with all ourrecognised trade unions, both on a corporatelevel and at a business unit level.

WE ARE COMMITTED TO RESPECTING AND VALUING THEFUNDAMENTAL HUMAN RIGHTS, CULTURAL HERITAGE ANDINDIGENOUS TRADITIONS OF OUR EMPLOYEES, COMMUNITIESAND OTHER STAKEHOLDERS WHERE WE OPERATE.


• We continue to have a zero tolerance stanceto any behaviour that may compromise theprinciples of human rights and we endeavourto promote these principles within our sphereof influence;

• We achieved our target in 2009 to complywith the principles embodied in the UnitedNations Declaration for Human Rights;

• We are committed to upholding the freedomof association and the effective recognition ofthe right to collective bargaining. In 2009, thetrade unions have had a strong presence inour areas of operation with 80.3% of ouremployees being members of trade unions;and

• In 2009, no discrimination cases werereported as part of the grievance reportingprocedure at the Company.

37


Respecting and Valuing FundamentalHuman Rights (continued)

Discrimination and grievance practicesWe have the necessary grievance and correctiveaction procedures in place to enable the reporting ofgrievances and to implement effective correctiveactions. The Ethics Hotline also provides a means ofreporting of activities that persons feel are notconsistent with the ethics and values of the Companyand of the countries where we operate.

Ethical value chains and investmentsOur procurement policy is to procure third partygoods and services from partners who we believe tobe ethical in their business practices and to havegood human rights, safety and sustainabledevelopment practices in place. Our conditions ofcontract with our suppliers and contractors includeclauses reinforcing these practices. We have thenecessary systems and checks in place to enforceour policies, including security clearances that areundertaken on potential suppliers and contractorsprior to engagement. Full evaluations of suppliers andcontractors are also conducted on request. We haveinstituted a capital investment procedure thataddresses social impacts and human rights risksduring the pre-feasibility stage of each project. Allmajor and minor capital investment project proposalsare scrutinised to assess the risks and impactsassociated with the project.

Indigenous rightsWe respect the rights and interests of indigenouspeople and strive to fully understand the interests andperspectives of indigenous people when seeking todevelop or operate mines and to engage withpotentially affected indigenous people during allstages of new mining development activities.

Our performanceOur target in 2009 was to comply with the principlesembodied in the United Nations Declaration forHuman Rights. We are not aware of any aspects ofthe business that do not comply with these principles.

Working conditionsNo incidents of child labour of forced or compulsorylabour were recorded at any of our operations in2009, nor are our operations at risk of suchoccurrences.

Security services and human rightsIn 2009, a total of 150 security personnel wereemployed by the Company and further supported by211 security contractors.

Freedom of association and collective bargainingThrough our risk management process, we havenot identified employee rights to exercise freedomof association or collective bargaining as a risk atany of our operations either as a result of our typeof operations or the countries where we operate.Unions have a strong presence in our areas ofoperation with 80.3% of our employees participatingin trade unions. A range of minimum notice periodsextending from three days to 12 weeks are providedto employees and their elected representatives priorto the implementation of significant operationalchanges that could substantially affect them, thisdependent on the nature of change. These noticeperiods and/or provisions for consultation andnegotiation are specified in collective agreements.In 2009, we experienced no protected orunprotected industrial action.

Number and percentage of total employees as members of trade unions in 2009

Union/Association 2009 (number) 2009 (%) 2008 (%) 2007 (%) 2006 (%)

National Union of Mine Workers 15,360 71.1% 70.7% 69.7% 64.0%

Solidarity 588 2.7% 2.3% 2.1% 1.7%

United Association of South Africa Trade Union 820 3.8% 3.7% 3.7% 4.0%

Other Unions 580 2.7% 2.8% 4.2% 3.4%

Total unionized workers 17,348 80.3% 79.4% 79.7% 73.5%

38


Respecting and Valuing FundamentalHuman Rights (continued)

Key health and safety aspects are integral to ourformal agreement with our largest trade union, namelythe National Union of Mine Workers. This agreementpromotes the basis for acceptance of responsibilitiesby both trade unions and by the Company anddefines the roles and responsibilities of Health andSafety Representatives and Committees. Safety andhealth topics that are covered within our formalagreements with trade unions include Health andSafety Representatives and Committees, training anddispute resolution procedures. Additionally we haveformal Health and Safety Committees in place at eachoperation as per the requirements of the Mine Healthand Safety Act 29 of 1996 that represents more than75% of our total workforce. These committeesoperate at an operational level and provide a formalplatform for the discussion on aspects relating tohealth and safety including but not limited to safework behaviour, risks associated with NIHL,standards and code of practices.

Discrimination and grievance practicesIn 2009, there were no discrimination cases reportedas part of the Company’s grievance reportingprocedure.

Ethical value chains and investmentsIn 2009, our top ten significant suppliers andcontractors contributed 27% of the Company’sspend. There were no contracts with these suppliersand contractors declined or additional performanceconditions imposed as a result of their human rightsperformance. In 2009, no significant investments oragreements were implemented by the Company,significant referring to any investment exceedingUS$20 million which requires CEO approval andsignature in terms of the delegation of authority.

Indigenous rightsIn 2009, no incidents of non-compliance againstindigenous people were formally lodged againstthe Company.

We respect the culture of the communities where we operate. This culturaldance was performed at the Wonderkop Stadium.

We have a maternity policy in place, which respects the rights of pregnantwomen in our workforce. Tara Anderson our Air Quality Specialist.

39


Eliminating Fatalities, Serious Injuriesand Unsafe Behaviour

Zero harm to our employees and contractors is acore value of our business and we are committed tothe wellbeing of our employees and contractors, andmaintaining a culture of safe behaviour. Fatalities andserious injuries at our operations resulting from fall ofground, use of track bound mobile equipment,scraping and rigging are our key safety risks.

Our approachOur CEO is ultimately accountable for the safety ofour employees and contractors on site. The SafetyDepartments provide the minimum safety standardsand training material as well as audit the implementationof these requirements. Line management remainsaccountable for ensuring effective implementation ofthese requirements through supporting systems andprocedures. We are members of the South AfricanChamber of Mine Committees as well as a memberof the ICMM working groups.

Our Safety and Sustainable Development Policy,Safety and Sustainable Development ManagementStandards and Fatal Risk Control Protocols providea risk based management framework for company-wide safety management, continual improvement andalignment with international best practice. In 2009,

we have made progress with regards to thedevelopment and implementation of the environmental,health and safety SAP database to support theimplementation of our management systems. Weremain committed to achieving OHSAS 18001certification for all our operations by 2011.

Visible leadership is crucial to our success insafety and is a powerful aid in creating aninterdependent safety culture. To this end, wepractice safe behaviour observations as a leadindicator to our safety performance and conductcontinuous risk assessments to minimise unsafebehaviour or situations. Training and awarenesscampaigns form an important component of oursafety management systems. In 2009, we continuedthe implementation of the “Laduma Score a Goal forSafety Campaign”, a soccer match learning map thatseeks to reinforce safe behaviours and adherence tosafety procedures to achieve serious injury freeworkplace by 2010. This campaign has proven to beboth popular, in the light of the imminent 2010 WorldCup in South Africa.

We continue to rigorously investigate incidentsand near-miss incidents through the Incident CauseAnalysis Method. Findings from these incidents arecritical to our efforts in eliminating fatalities and arecommunicated across our operations. We report oursafety incidents to the Department of MineralResources as required by the Mine Health and SafetyAct 29 of 1996, which is aligned with the InternationalLabour Organisation’s Code of Practice on Recordingand Notification of Occupational Accidents andDiseases.

We have highly trained surface and undergroundrescue teams, fire fighters and emergency medicalservices available on a 24 hour basis to support ouroperations, while our exploration activities areassisted by international emergency service providers.We regularly review our emergency and disastermanagement plans and conduct training drills tooptimise our responses to emergency situations.

Our safety campaigns and emergency responseextends beyond the boundaries of our operationsincluding extensive regional road safety initiatives, theimpact of life style on the working environment andcommunity assistance.

WE ARE COMMITTED TO HONOURING OUR SAFETY VALUES ANDSUSTAINING AN ENVIRONMENT THAT PROMOTES THE SAFETY OFOUR EMPLOYEES AND CONTRACTORS.


• We regret to report the deaths of three of ouremployees during 2009 as a result of fatalinjuries sustained from electrocution, fall ofground and an incident involving track boundmobile equipment (locomotive);

• Our LTIFR has decreased by 0.96% in 2009as compared to our performance in 2008,thus we have not achieved our target of a15% reduction;

• In 2009, our severity rate was 249.1 and dayslost were 18,486;

• We were issued with a number of notificationsin relation to the Mine Health and Safety Act29 of 1996. Marikana received all of the 35notifications in 2009; and

• In 2009, we were acknowledged by theAssociation of Mine Managers of South Africafor our leading industry safety performanceand we were awarded a number of prizes.

40


Eliminating Fatalities, Serious Injuriesand Unsafe Behaviour (continued)

Our performanceIn 2009, we were acknowledged by the Associationof Mine Managers of South Africa for our leadingindustry safety performance. On the 20 June 2009,the association issued seven awards of which thecompany won four, as follows:• Four million fatality free shifts was awarded

to Lonmin Marikana;• Three million fatality free shifts was awarded

to 4 Belt Shaft;• Three million fatality free shifts was awarded

to K3 Shaft (UG2 section); and• Three million fatality free shifts was awarded

to East 1 Shaft.

During the year we were also recognised for ourleading safety practice with regards to zero harm andK3 Shaft and Rowland Shaft were acknowledged fortwo million fatality free shifts and E2 Shaft for onemillion fatality free shifts.

We take pride in accepting our commitmentto zero harm by living a safe day, every day, andensuring that all unsafe acts are eliminated. Throughthe implementation of our safety managementsystems, we continually strive to eliminate fatalities,reduce injuries and near miss incidents, encouragepositive behaviour and enhance our training andawareness programmes. The impact of our safetyprogrammes, management and leadership on ourperformance is reflected by the number of fatalities,LTIFR and severity rate, as key safety performanceindicators.

Responding to emergencies affecting thecommunities where we operate

On the 4th of November 2008, over 80 womenand children sustained injuries and 357 RuralDevelopment Programme houses in MarikanaWest, one of our GLC communities, weredestroyed by a devastating storm. Ouremergency and disaster management teamarrived at the scene, providing emergencymedical treatment and dispatching all injuredwomen and children to local hospitals within twohours. Our team in association with localgovernment erected an overnight centre at theMarikana Community Hall to provideaccommodation for those whose homes weredestroyed in the storm. The affected area wasvisited by the South African President, Mr JacobZuma as well as the former premier of the NorthWest Province, Ms Edna Molewa whocommended our emergency and disastermanagement team for their dedication andefficiency in responding to the disaster. As at theend of June 2009, all houses which were affectedby the storm were repaired and within whichdwelling by the community resumed.

Work related fatalities in 2009

Name of deceased Date Location Cause of accident

Mantelana Mvela 16 February 2009 K3 Shaft A loaded locomotive collided with astationary locomotive, resulting in injuries

which ultimately proved to be fatal.

Lorenzo Joseppe Myburgh 10 March 2009 K4 Shaft Contact with an unguarded electricalcable, resulting in an electrical flash with

subsequent burn wounds to 80%of his body.

Clement Tshidiso Motlotla 15 July 2009 K3 Shaft A fall of ground occurred whilstconducting entry examinations that

resulted in fatal injuries.

Work related fatalities in 2009Loss of life is our single greatest concern. It is withregret that we report the death of three of ouremployees during 2009 as a result of fatal injuriessustained from an incident involving track boundmobile equipment (locomotive), electrocution and fallof ground. We extend our sincere condolences to thefamilies and friends of our colleagues.

In 2009, our Company wide fatality frequency rateamounted to 0.04, which is the equivalent of our2008 rate. This achieved rate of 0.04 is aligned withinternational trends as determined and monitored bythe Department of Mineral Resources.

41


Eliminating Fatalities, Serious Injuriesand Unsafe Behaviour (continued)

Lost Time InjuriesThe Company completed a restructuring programmeacross our operations resulting in the reduction of ourworkforce by approximately 20%. This exerciseinevitably impacted employee morale and created asignificant distraction amongst the organisation. Thereduction in headcount occurred mainly in ‘low safetyrisk’ areas and hence there was no real reduction inthe number of employees in the “higher risk” areas ofthe organisation, such as the working faces. Whilstthe actual number of LTIs reduced by 7.8% from thetotal in 2008, the significant reduction in the totalnumber of employees and therefore man hoursworked affected the calculation of LTIFR, whichconsequently only showed a reduction of 0.96% fromour 2008 rate of 6.27 to a rate of 6.21. We thus didnot achieve our target for 2009 to improve our LTIFRby 15%. In 2009, 33% of our LTIs were as a result ofmaterial handling, followed by 15% as a result of fall ofground. In 2010, we are committed to reducing ourLTIFR by 10% from our 2009 baseline. In 2009, theseverity rate was 249.1 which is an increase of 28%from 2008.

In 2009, following a number of undergroundlocomotive collisions, research was commissioned toseek an engineering solution as part of the measuresto minimise possible collisions. Locomotive anti-collision devices have been purchased and installedon a number of our locomotives on a trial and testbasis. The principle of the operation uses radiofrequency transmitters and receivers that triggeralarms in the driver’s cabin warning the driver of theclose proximity of another locomotive. Furtherinvestigations are underway to establish if thesetransmitters can be placed at strategic hazards orobstructions in haulages to trigger alarms.Additionally, in 2009, we commissioned a PersonalProtective Equipment Steering Committee whichfocuses on the enforcement, standardisation andoptimisation of personal protective equipmentCompany wide.

Notifications in terms of the Mine Health and SafetyAct 29 of 1996In 2009, we were issued with a number ofnotifications in relation to the Mine Health and SafetyAct 29 of 1996. Marikana received 35 suchnotifications, including section 54 notifications interms of the Act. These notifications are evidence of astance by the government on safety in the miningindustry, which we support.

005 06 07 08

Fatalities

Financial year

LTIFR

09

20

8

6

4

2

16

14

18

12

10

0

7

4

2

6

3

1

5

Inci

den

tsp

erm

illio

nho

urs

wor

ked

Num

ber

offa

talit

ies

LTIFR and fatalities in 2009

33.4%

9.1%

15.4%

8.2%

6.3%

6.3%

3.9%

2.6%

2.2%

2.2%

2.0%

1.7%

1.1%

0.9%

0.7%

0.7%

0.7%

0.4%

0.4%

0.4%

0.4%

0.2%

0.2%

0.2%

0.2%

0.2%Equipment safeguarding

Hot/molten material

Rapid descent

Struck against

Working at heights

Underground trackboundmobile equipment

Horseplay

Hazardous material

Falling to below

Trackless mobile equipment

Isolation

Other

Cut or punctured by

Gases and explosions

Lifting equipment

Caught between

Underground tracklessmobile equipment

Contact with

Strain or over exertion

Struck by

Scraping and rigging

Rolling rock

Underground trackboundmobile equipment

Slip and fall

Fall of ground

Material handling

LTI agents for 2009

42


Health

On an international and national scale, we partakein a number of forums to contribute to governmentdecision-making and to create a platform tocollaborate with industry peers and government inissues pertaining to occupational hygiene and health.We are a member of the South African Chamber ofMine’s Health Policy Committee as well as membersof the ICMM working groups.

Our main risks in terms of employee andcontractor health remain NIHL, HIV/AIDS andpulmonary tuberculosis. We have internal targets inplace for these risks and monitor our performance ona monthly basis. Our performance is underpinned byextensive training programmes to reduce exposure tothese risks and to provide affected employees withknowledge to manage and reduce the impacts thatthe disease may have in their lives.

Managing health risksIn 2009, all operations implemented a baseline surveyon occupational exposure hazards and refinedoccupational hygiene monitoring and healthsurveillance programmes. These are aligned withrelevant legislation including those of the code ofpractices, as well as best practice such as theICMM’s 2009 Good Practice Guidance onOccupational Health Risk Assessments.

Although we continue to assess and monitorexposure to occupational diseases such aspneumoconiosis, occupational asthma, silicosis,occupational dermatitis and platinosis, incidents ofthe disease within our workforce are low. The tablebelow indicates how many of our employees andcontractors are diagnosed with the various diseasesper 100,000 employees.

WE ARE COMMITTED TO HONOURING OUR HEALTH AND SAFETY VALUESAND SUSTAINING AN ENVIRONMENT THAT PROMOTES THE SAFETY,HEALTH AND WELLBEING OF OUR EMPLOYEES AND THEIR FAMILIES,CONTRACTORS AND THE COMMUNITIES WHERE WE OPERATE.


• All employees have medical aid coverage;• In 2009, we refurbished five clinics within the

Marikana GLC to the value of US$34,734,thereby enhancing the efficiency of healthservice delivery in the GLC;

• In 2009, we have reduced our new diagnosedNIHL cases by 80.9% from our 2008 baselineyear to 45 cases;

• Our number of in-service deaths since 2006are continuing to decrease, illustrating thesuccess of our HIV/AIDS prevention andtreatment programmes;

• As at the end of 2009, we have 962 patientson anti-retroviral treatment (ART) and 518patients on our wellness programme;

• We have made a commitment to ensure thatfree ART is offered to the employee for life,regardless of whether or not they remainemployed by the Company;

• In 2009, we have continued our partnershipwith global mining companies to finance theresearch and development of a new HIVtherapeutic vaccine, VIR 201, which is in stagethree of research and development; and

• In 2009, 472 of our employees werediagnosed with tuberculosis, which is an11.4% decrease from 2008. 374 employeescontracted pulmonary tuberculosis whilst 19of our employees contracted multi-drugresistant tuberculosis. No new cases ofextreme drug resistant tuberculosis wereidentified in 2009.

Rate of diseases in 2009

Occupational disease 2009

Rate of NIHL cases diagnosed 140/100,000Rate of NIHL cases compensated 140/100,000Rate of tuberculosis 2,183/100,000Rate of pulmonary tuberculosis 1,730/100,000Rate of extra pulmonarytuberculosis 453/100,000Rate of extreme drugresistant tuberculosis 0/100,000Rate of multi-drug resistanttuberculosis 88/100,000Rate of pneumoconiosis 0/100,000Rate of occupational asthma 3/100,000Rate of occupational dermatitis 3/100,000Rate of platinosis 3/100,000

IntroductionThe health and wellbeing of both our employees andthe communities where we operate is essential to oursuccess as a Company. In line with our zero harmvalue and with the realisation that employees are thefoundation of our business, addressing healthconcerns for all of our employees is paramount.Whilst our CEO is ultimately accountable for thehealth and wellbeing of our employees, health caredelivery and occupational health and hygiene policies,standards, monitoring and the auditing thereof is theresponsibility of the Company’s Health Department.Responsibility for the implementation of theseoccupational health and hygiene requirements resideswith line management.

43


Health (continued)

Employees exposed to hazardous workenvironments, or required to perform arduous tasks,are medically examined each year to allow earlydetection of occupational diseases, prevent potentialdeterioration and ensure they have the physical abilityto work safely in working environments. To assess anindividual’s fitness for underground mine work, all newrecruits, as well as current employees whose fitnesslevels require reassessment, are evaluated at ourfunctional capability facility. In 2009, comprehensiverisk assessments were undertaken on risk exposureto women in the work place. This included workplacehazards identification, needs analysis as per womeninterviewed, job placement guidelines andrecommendations to enhance the employment andretention of women in the workplace.

Health care deliveryOccupational and primary health care and medicalservices are available to all employees. Our healthcaredelivery structure is supported by an onsite hospital,three clinics in Marikana, an onsite clinic in Limpopoand a highly skilled 24 hour emergency team. Allemployees are covered by a company subsidisedmedical aid scheme and have the option for familycover as well. In 2009, we implemented a disastermanagement plan to enhance the preparedness ofMedical Services to respond to and manage potentialdisaster situations.

An employee’s physical fitness to perform his orher occupation is fundamental to our value of zeroharm in a mining industry where heavy manual labouris required. It is critical to establish a noviceemployee’s capability of performing physical labour

requirements in the mining environment. OurRehabilitation and Functional Assessment Centrewhich was established in 2008 provides bothfunctional and physical quantitative assessmentsof individuals’ capabilities.

We offer various assistance programmes tomanage the health of our employees, their familiesand community members. Preventive measures for,or risk-control of, serious diseases are provided tocommunity members through our partnerships withthe Department of Health and other role players.In 2009, campaigns to provide information to thecommunity on cholera and tuberculosis wereundertaken and training was provided to communitieson nutrition, including food preparation, hygiene andthe importance of good nutrition to combat effectsof diseases such as HIV/AIDS and tuberculosis.Following an outbreak of cholera in the LimpopoProvince of South Africa in 2009, the Companydonated US$11,123 to the National Departmentof Health, to assist with cholera prevention andtreatment programmes.

Fresh fruit and vegetables were provided by theCompany to 22 schools within the GLC on a dailybasis to supplement the nutrition programmes of theDepartment of Education, ensuring that childrenreceive daily balanced meals. The two mobile clinicsdonated by the Company to the Department ofHealth in 2008 continue to provide school healthservices to the communities where we operate. In2009, we refurbished five clinics within the MarikanaGLC to the value of US$34,734, thereby enhancingthe efficiency of health service delivery in the GLC.

Assistance programmesPrevention/

Programme recipients Education/Training Counselling Risk Control Treatment/Care

Employees � � � �

Employees’ families residing within GLC � � � �

Community members � � � �

44


Eliminating Noise Induced Hearing Loss

NIHL is the most significant occupational disease inthe platinum mining industry, and one of the mostsignificant occupational health risks faced by ouremployees and contractors. NIHL has far reachingeffects on the quality of lives of our employees andhas financial implications for the Company. To thisend, we will continue to honour our value of zeroharm, endeavour to sustain an environment thatpromotes the wellbeing of our employees andcontractors and strive towards continual improvementof our health management systems.

Our approachWhilst we acknowledge that by the very nature ofmining operations, our employees are exposed to highlevels of noise, we are committed to eliminating theexposure of our employees and contractors to noiselevels exceeding the noise exposure limit of 85 decibels(dB)(A). The focus is to reduce noise levels in thework place through engineering interventions and toeffectively utilise personal protective equipment. Wecontinue to support and work toward the philosophyof the directive issued by the Department of MineralResources in 2007 to realise zero new cases of NIHLand to reduce the total noise emitted by allequipment installed in any workplace to a soundpressure level of 110dB(A) by December 2013.

We have a comprehensive hearing conservationprogramme in place supported by a group-wide riskmanagement framework and the guidelines of theSouth African mandatory Code of Practice for noise.Although the accountability for eliminating employee’sexposure to unacceptable noise levels resides withline management, the Occupational Health and HygieneDepartments and the Engineering Department workin conjunction with line managers to identify andimplement these programmes. Our hearing conservationprogramme focuses on workplace noise assessment,personal exposure monitoring, education andtraining, medical surveillance reporting and reviewof these programmes.

Our performanceWe have achieved our target of reducing our numberof new NIHL cases by 30% by September 2009. In2009 we reduced our number of new diagnosed andsubmitted cases with NIHL from 236 in 2008 to 45 in2009 this representing an 80.9% reduction in casesdiagnosed with NIHL. The total number of casescompensated in 2009 amounts to 45, includingoutstanding cases from previous years, which is a80.4% decrease from 2008. Seven cases from 2009are pending qualification by Rand Mutual. Thesedecreasing trends are evidence of the success of ourhearing conservation programmes. To date, ourmining and processing operations have baselineoccupational hygiene risk assessments, exposuremonitoring programmes for significant hazards as wellas medical surveillance programmes in place.

WE ARE COMMITTED TO HONOURING OUR HEALTH AND SAFETY VALUESAND SUSTAINING AN ENVIRONMENT THAT PROMOTES THE HEALTH ANDWELLBEING OF OUR EMPLOYEES AND CONTRACTORS.

005 06 07 08 09

600

500

300

200

100

400

Financial year

Num

ber

Number of NIHL cases compensated

Reducing noise through re-engineering and equipmentsubstitutionIn 2009, we have focussed on reducing the causes ofNIHL by noise attenuation of equipment which havesound pressure levels exceeding that of 110dB(A)through re-engineering and sourcing of alternativeequipment. We have assessed high risk equipment forthe potential of noise reduction through re-engineeringand substitution and have taken into considerationfactors associated with efficiency, practicality, costs andreliability. Although these initiatives are ongoing and inline with the target for 2013, in 2009 we have completedthe research and development for silencers on stopingrock drills, have purchased 4,000 silencers at a cost ofUS$445,000 and are nearing completion of the rolloutphase of silencing the drills. The rollout will be completedby December 2009.

The use of personal protective equipmentWe have extensive area noise and personal noise exposuremonitoring programmes in place across our operations.Hearing protection devices are mandatory in work placesthat are exposed to noise levels exceeding 85dB(A) andwhich are demarcated as such. We offer our employeescustom fit hearing protection devices. Our approach totraining and awareness is geared towards changing thebehaviour of each employee and instilling a culture ofresponsibility for their own health.

Screening and diagnosesAll employees and contractors who are exposed to risksassociated with elevated noise levels are screenedannually to allow early detection of hearing loss and toprevent potential deterioration of hearing loss thresholds.In 2009, we initiated six monthly monitoring audiogramsof selected high risk employees so as to further enhancethe detection and early diagnoses of hearing loss. Wehave management systems in place to enable us tounderstand the relationships between each employee’sexposure levels, health records and employment data,thus assisting with diagnosis and treatment.

45


Managing HIV/AIDS in the Workplace andin the Greater Lonmin Communities

HIV/AIDS is a serious and debilitating disease thathas widespread social and economic consequenceswithin South Africa and in the communities where weoperate. Given national statistics we estimate thatabout one out of five of our workforce is HIV positive.A risk to our business.

Our approachWe continue to respond to the HIV/AIDS epidemicin a responsible, non-discriminatory and supportivemanner and strive to minimise the social andeconomic implications within our business andwithin the GLC. Our strategic approach to managingHIV/AIDS is two-fold, firstly the prevention andsecondly the treatment of the disease. Our approachis founded on the principles of confidentiality. OurHIV/AIDS policy, which was revised in 2009, providesan equitable and consistent approach to themanagement of HIV/AIDS, through awareness andprevention, management of the disease amongstthose who are infected and support for them. Ourawareness and prevention campaigns extend into thecommunities that host our operations. Through ourmembership of the ICMM and in conjunction withother companies we participate in the developmentof leading practices and industry benchmarking inhealth care in a drive to improve our health systems.In partnership with the IFC, we have initiatives onwork place peer education training, communityhealth education and home based care. In 2009,we have continued our partnership with globalmining companies to finance the research anddevelopment of a new HIV therapeutic vaccine,VIR 201, which is in stage three of researchand development.

Our performanceIn 2009, 110 or 68% of our in service deaths werethe result of AIDS. Although HIV/AIDS does representa risk that will have to be managed on a continuingbasis, we believe that the epidemic does not posea significant threat to the long-term sustainabilityof our operations.

Testing, prevention and educational programmesFree testing, education and awareness programmesare in place across the Company in an effort toprevent the spread of the disease, to eliminate theassociated social stigma and to provide employeeswith sensitive, accurate and up to date information onrisk reduction in their personal lives. These programmestake the form of Voluntary Counselling and Testing(VCT), mine induction programmes and ongoingawareness campaigns by peer educators. In 2009,4,680 of our workforce participated in our VCTprogrammes, of which 13% were tested as HIVpositive. To date, we have 380 trained peer educatorsfor the workforce, one for every 71 employees whichexceeds our target of one peer educator for every 75employees. In 2009, 206 active peer educators held4,008 education sessions and numerous one on onemeetings reaching over 78,000 people and havedistributed over 700,000 condoms.

In addition to our robust workplace programme,we have intensive community testing, prevention andcare programmes in place at our Marikana, Brakpan,and Limpopo operations. In 2009, 1,999 communitymembers were counselled and tested for HIV/AIDS ofwhich 18% tested positive, 14% of males and 22% offemales. To date, we have 58 active home basedcarers trained in an intensive training programme of69 days. Currently over 1,200 patients and 640 orphansare being cared for on a regular basis, with over 50,000visits made in the past year. In total, 1,856 patientsbenefited from the home based care programme.

WE ARE COMMITTED TO PROMOTING THE HEALTH AND WELLBEINGOF OUR EMPLOYEES, CONTRACTORS, THEIR FAMILIES AND OF THECOMMUNITIES WHERE WE OPERATE, THROUGH OUR VALUES OF ZEROHARM AND RESPECT.

In 2009, a ceremony for our peer educators was held during which CharleneMuller, a Programme Manager from Epicenter handed out certificates to theeducators who completed their training in HIV/AIDS.

46


Managing HIV/AIDS in the Workplace and inthe Greater Lonmin Communities (continued)

Treatment and support programmesOur wellness programme is designed to cater forthe physical and emotional needs of HIV positiveemployees. Once their CD4 T-lymphocyte count isbelow the acceptable limit, employees may join theART programme, which is made available by theCompany through the employee’s medical aidwithout additional cost. We have made a commitmentto ensure that free ART is offered to the employeefor life, regardless of whether or not they remainemployed by the Company, this being particularlyrelevant during the recent restructuring andreorganisational processes.

In 2009, an additional 276 employees joined ourwellness programme, totalling the active participationto 518 employees which is a 51% decrease since2008. To date, we have 962 patients on ART, whichis a 3% decrease from 2008. The reduction in theparticipation of both our wellness and ART programmesare partially as a result of the restructuring andreorganisational process and employees defaultingfrom the programme. Of concern to us, is theapproximate 10% of patients who defaulted fromART on a monthly basis in 2009. Although thetreatment is voluntary, we continuously strive toreduce defaulting through education and awareness.

TuberculosisTuberculosis is one of the leading opportunisticillnesses associated with HIV/AIDS. We have aneffective tuberculosis control programme in place,in addition to targeted medical surveillanceprogrammes. These programmes comprise earlyidentification and appropriate treatment with qualitydrugs and lifestyle management through directlyobserved treatment, which is a World HealthOrganisation intervention to improve adherence totuberculosis treatment. In 2009, the Company’sTuberculosis Policy was reviewed and amended. Wecontinue to be vigilant with the identification andtreatment of extreme and multi-drug resistanttuberculosis through our tuberculosis controlprogramme. In 2009, 472 of our employees werediagnosed with tuberculosis, which is an 11.4%decrease from 2008. Of the 472 cases, 374 caseswere pulmonary tuberculosis and 19 multi-drugresistant tuberculosis. No new cases of extreme drugresistant tuberculosis were identified in 2009. Multi-drug resistant tuberculosis is exhibiting an increasingtrend in our workforce.

005 06 07 08 09

600

500

300

200

100

400

Num

ber

Financial year

Number of tuberculosis cases

005 06 07 08 09

2,500

2,000

1,000

500

1,500

Patients on WellnessPatients on ARTN

umb

erFinancial year

ART and wellness programme participation

47


Our Employees

In November 2008, we commenced with arestructuring and reorganisation process in response to theglobal economic downturn and resultant impact on thecommodity businesses. Restructuring and the potentialsavings on labour was viewed as a significant element incost and production efficiency. Consultation with the tradeunions and the relevant government authorities wereextensive and encompassed the identification of areas ofimprovement and cost saving initiatives, with theconsideration of compulsory retrenchment of employees asa last option. The restructuring and reorganisation processwas undertaken as prescribed by the Labour Relations Act66 of 1995 and within the Restructuring FrameworkAgreements as approved by trade unions in respect ofMarikana, Akanani and our Limpopo operations. In 2009,3,427 voluntary separation applications were approved,258 employees were successfully redeployed and 306employees were affected by compulsory retrenchments.The retrenchment process considered a number of factors,including employee experience and qualifications, timeemployed at the Company and HDSA status. Althoughdiversity indicators were taken into consideration, 0.7% ofvoluntary separation packages and 6.9% of compulsoryretrenchments comprised designated group employees inmanagement positions and 3% of voluntary separationpackages and 12% of compulsory retrenchmentscomprised women.

In terms of the success of the Company andemployee wellbeing and satisfaction, the key risks facingthe Company remain the empowerment of HDSA, theattraction and retention of a skilled workforce and theprovision of affordable housing to our employees. Eachof these risks have objectives and targets in place inorder to mitigate the impacts of these risks to theCompany, the performance of which is monitored andaudited on a frequent basis.

WE ARE SUCCESSFUL WHEN OUR EMPLOYEES LIVE AND WORK SAFELYAND EXPERIENCE THE PERSONAL SATISFACTION THAT COMES WITHHIGH PERFORMANCE AND RECOGNITION.

Summary of our 2009 performance• As at 30 September 2009, we employed a total of

21,623 employees which has reduced by 16.7% in2009 as compared to 2008 due to the Company’sreorganisation and restructuring process;

• As at 30 September 2009, we have a total numberof 10,497 contractor personnel who are registeredon our database, and which includes all contractortypes including ad hoc contractors, externalconsultants, labour brokers, service provides andvolume contractors;

• In 2009, in response to the global financial crisisand resultant impact on the commoditybusinesses, Company reorganisation andrestructuring was undertaken which resulted in3,427 voluntary separation applications beingapproved and 306 employees being affected bycompulsory retrenchments;

• In 2008, we have exceeded our target of 50%discretionary spend on HDSA suppliers,amounting to a 66.6% discretionary spend onHDSA procurement. Additionally we have anintensive programme in place to support, train,and develop local HDSA companies;

• 41.3% of our management employees comprisedemployees from designated groups, whichresulted in us achieving our 2009 target of 40%;

• Women at the mine accounted for 6.8% of ourworkforce and disabled persons 0.6% of ourworkforce;

• We have successfully implemented portableskills training at our operations, with 1,658employees registering in 2009;

• Due to the global financial crisis and resultingfinancial constraints, the target to convert allexisting hostels into family and bacheloraccommodation and construct 5,500 houses inthe GLC by 2011 will not be achieved and is in theprocess of being reviewed in discussion with theDepartment of Mineral Resources; and

• In March 2009, the Marikana HousingDevelopment Corporation passed a resolution tosell the 1,149 houses owned by the Corporationto legal occupants of the houses.

0Marikanaand PMR

Limpopo ManagementServices

2,500

2,000

1,000

500

1,500

Compulsory retrenchments

Voluntary separations

Num

ber

ofem

plo

yees

Business Unit

Voluntary and compulsory retrenchments

IntroductionOur employees are the foundation to our businessand by investing in our employees’ wellbeing; we areinvesting in the Company’s long-term future, throughenhanced attraction retention and employee morale.Our CEO is ultimately accountable for the wellbeing ofour employees and achieving equal opportunity andequity while maintaining an appropriately skilled anddiverse workforce and he is supported by theExecutive Vice President Human Capital and ExternalAffairs. Whilst the Human Capital Departmentprovides policy standards, requirements and auditsthe implementation thereof, line management remainsresponsible for implementation of these requirements.

48


Empowering Historically DisadvantagedSouth Africans

Historically the South African mining industry hasexcluded many groups from participating inmainstream economic activities including black SouthAfricans, mining communities, disabled persons andwomen. The South African government haspromulgated legislation to redress the persistinguneven distribution of wealth and opportunity. Wesupport the government’s initiatives and arecommitted to implementing the principle of equalopportunity and equity by maintaining anappropriately skilled and diverse workforce.

Our approachIn line with the Constitution of South Africa, thelegislative requirements and our Charter, we arecommitted to providing the necessary resources todeliver the requirements of the South African Broad-based Socio-economic Mining Charter. We welcomethe opportunity to transform our business into amodel for fairness and equality in the new SouthAfrica. We intend to empower HDSAs by means ofthese measures:• Ownership in our existing or future mining

prospecting, exploration and beneficiationoperations;

• Expanding and developing skills;• Promoting the employment of HDSAs within the

Company at professional and management level;• Involving HDSAs in our procurement supply

chains; and• Improving socio-economic development in host

communities and major labour-sending areas(refer to page 76 for further information).

Our performanceOwnership and joint venturesThe Mining Charter of South Africa requires that at least15% of the equity of mining companies (or equivalentunits of production) must be owned by HDSAs by May2009, and at least 26% at May 2014. Incwala Resources(Proprietary) Limited is a South African registeredcompany specifically incorporated for the purposes ofenabling broad-based equity participation by HDSAs inLonmin Platinum. Incwala Resources Pty Limited hasan 18% holding in the share capital of our Marikanaand Limpopo operations and a 26% stake in ourAkanani project. During the year, discussionscommenced regarding the future ownership of IncwalaResources Pty Limited, involving the HDSA shareholdersof Incwala Resources Pty Limited, their providers offinance and Lonmin. Our other business partners includeMvelaphanda Resources, which own 7.5% of thePandora Joint Venture and 50% of the Dwaalkop JointVenture; and the Bapo Ba Mogale Mining Companywhich own 7.5% of the Pandora Joint Venture.

Preferential procurementWe continue to work towards enhancing theparticipation of HDSA companies in the procurementchains of our operations, in terms of goods, servicesand consumables. As part of our Social and LabourPlan, we have set targets to increase our totalprocurement spend with HDSA suppliers to 50% by2009 and to 63% by 2010. In 2009, we have achievedand exceeded the 2009 target with a 66.6% HDSAprocurement spend. In 2009, our HDSA procurementspend was US$523 million and our spend as from 2007amounts to US$1,310 million. Our procurement strategytargets HDSA companies and where this is not possible,we encourage existing suppliers to form partnershipswith HDSA companies and to capacitate thesecompanies. Aligned with our vision to create stableand economically independent communities, we arealso focusing on developing supplier opportunities forlocal HDSA community members residing in the GLC.

Employment equityWe are committed to helping all employees developtheir talents and enjoy rewarding careers, regardlessof gender, ethnicity, race, age or disability. We promotethe participation and development of employeesfrom designated groups within our workforce.Employees classified as designated groups arepersons disadvantaged by unfair discrimination beforethe Constitution of the Republic of South Africa, Act200 of 1993, came into operation. The definition ofdesignated groups includes employees who aredisabled, woman or employees classified as African,Asian or Coloured and who are South African citizens.84% of our workforce is South African citizens, whilstapproximately 16% are non South African citizens.

WE REMAIN COMMITTED TO IMPLEMENTING THE PRINCIPLE OF EQUALOPPORTUNITY AND EQUITY WHILE MAINTAINING AN APPROPRIATELYSKILLED AND DIVERSE WORKFORCE.

We, as a Company report on the number of women at our operations, as aindicator of our diversity.

49


Empowering Historically DisadvantagedSouth Africans (continued)

In 2009, as a result of the global financial crisisand associated reorganisation and the results of anaudit which was undertaken by the Department ofLabour, our employment equity plan has beenrevised, with our revised targets and targets from theSocial and Labour Plan as follows:• 53% participation in management by designated

groups by 2014;• 10% of women in mining (at our core mining and

processing operations and applicable to certainemployment categories) by 2012 and 11.6% ofwomen at the mine Company wide by 2012.

We have an Employment Equity Forum and subcommittees of the forum in place, which consists ofrepresentatives of all major trade unions andmanagement. The forum convenes on a monthlybasis and reviews performance against these targets.

Designated groupsWe have policies and procedures in place to supportemployment of designated groups in a nondiscriminatory manner. In 2009, 41.3% of ourmanagement employees comprised employees fromdesignated groups, thus achieving our target of 40%by 2009. Additionally a number of initiatives havebeen taken in 2009 to manage and expedite ourperformance, namely:• Recruitment decree for the employment of

internal and external HDSA candidates as apriority over internal candidates who arenot HDSA;

• Integration of employment equity targets to keyperformance areas of line management andappropriate support personnel;

• Strengthening of our talent management andmentorship programme in developing designatedemployees;

• Enhanced succession planning by gender, raceand category; and

• Earmarking of positions in the Company foremployment by women.

In 2009, no discrimination cases were reported aspart of the grievance reporting procedures at theCompany.

Employment of womenHistorically, mining has not been a career easilyaccessible to women. This is reflected nationally withonly 5% of all employees in the mining industry beingfemale. We are committed to increasing the numberof women employed at our operations, retainingcurrent female employees and to creating a culturethat empowers women in the workforce. We have therelevant policies procedures and programmes inplace to support the participation of women in ourCompany. As aligned with our Social and LabourPlan, we measure our performance against settargets in terms of two indicators, namely the totalpercentage of women employed by the Company(women at the mine) and the percentage of womenemployed in core positions within the Company(women in mining).

To date, we have not achieved our 2009 targetsof female participation in the Company. We have6.8% women at the mine and 2.9% women in miningat our operations. In 2009, 268 women exited theCompany, primarily has a result of voluntaryseparation.

Although we have not reached our target for theemployment of women at the Company, we havemade progress in our attraction and retentionprogrammes focussed on the employment of womenin the last few years. Since 2007, there has been a46% increase in the number of women employed bythe Company and a total of 15 projects have beenimplemented to expedite the employment of womenin the Company, with the highlights provided below:• Structures and policies: Eight policies have been

revised and approved; a Lonmin’s women’s unioncommittee has been established and employmentof women has been included as part of theannual performance reviews.

• Facilities and employment: To date; 12 changehouses have been constructed to accommodatefemale underground workers, 200 toilets installedand maintained, two piece overalls issued towomen and an alternative job placement systemfor pregnant and breastfeeding has now beenestablished. The basic salary of men and womenin the Company per employment category donot differ.

• Retention and recruitment: Systems have beenimplemented to track progress in terms of theemployment and retention rates of femaleemployees. The retention of female employeeshas increased significantly, with current ratesindicating that women stay at the Companyat twice the rate of their male counterparts.

005 06 07 08

TargetActual

Financial year

09 10 11 12 13 14

60

40

30

20

10

50

Per

cent

age

Percentage employees from designated groupsin management

50


Empowering Historically DisadvantagedSouth Africans (continued)

• Organisational culture: A ‘women in mining’communications campaign was launched; trainingwas included as part of the annual employeetraining programmes and training on our sexualharassment policies and programmes havebeen initiated. Additionally, research hascommenced on the impact of female wageearners on family well being and on the safetyrecords of female workers.

Disabled personsPeople with disabilities have historically not been aclearly recognised group, despite the fact that we doemploy a number of people with disabilities. In 2009,0.6% of our workforce comprised people withdisabilities, which is equivalent to our composition in2008. In 2009, we have further refurbished facilities tocater for disabilities within the Company.

006 07 08 09

Target Revised employmentequity target

Actual

10 11 12

16

8

6

4

2

10

12

14

%

Financial year

Percentage women at the mineFemale representation at the Company(percentage)

2007 2008 2009

Board of directors 9 9 10Executive committee 20 20 0Management 20 20 20

Total Lonmin employees 4.9 6.1 6.8

Working at Lonmin as a woman: Ponny Khumalo, Night Shift Supervisor, E1 Incline

Ponny Khumalo has been an employee of Lonmin for a period of 15 months. As a result of her hard work,and opportunities which have realised for many women in the Company over the period of the last fewyears, Ponny was appointed in 2008 as a Night Shift Supervisor at E1 Incline, subsequent to being ageneral mine worker at her previous employer. She has in excess of 40 people reporting to her and she isresponsible for her team’s safety, healthand the production within her area. Ponnyexperiences the mining environment as achallenging and interesting place to work.Today, the income she earns from her jobat the Company offers her with the freedomand ability to provide her four childrenwith a good education and developmentopportunities. Ponny concluded that eventhough mining is not traditionally viewedas a women’s sector, she would like toencourage all women to try mining out as acareer as she believes that although womenaren’t always as physically strong as men,they are emotionally strong. I believe thatwith passion and with the right attitude,women quickly earn respect from theirteams and can do well in the mining industry.

Ponny Khumalo, a Night Shift Supervisor at E1 Incline.

51


Attracting and Retaininga Skilled Workforce

As a result of the ever-increasing demand andcompeting interests for skilled recruits nationally andwithin the international mining industry, our success isdependent on our ability to attract talented employeesto our operations, while retaining and developing ourexisting employees. We are successful when ouremployees live and work safely and experiencethe personal satisfaction that comes with highperformance and recognition.

Our approachThere is a continued shortage of critical skills in themining industry. To combat this, our Human CapitalStrategy, designed for skills development and retention,includes a three-fold approach namely attractingemployees who value the Company’s Charter andhave the appropriate competencies for current andfuture needs, retaining current employees who areperforming well or have the potential to perform welland developing the skills of our existing employees.

Attracting employeesWe employ whenever possible, people from our localcommunities, employees from designated groups andpersons with disabilities. Our recruitment programmesare customised for local and national level recruitment.In 2009, we have set ABET level four as a minimumentry level of education for our employees. For skilledlabour, recruitment is coupled with pre-employmentpsychometric and competency assessments toensure that the correct person is aligned with the jobprofile. Market-related remuneration, as well asemployee benefits are key elements of ourrecruitment success. In the absence of a minimumwage within the mining sector, we work from theapplicable national minimum wage for employees withbasic skills. Additionally, the remuneration of scarceskills is assessed regularly in the market place, andsalaries adjusted, to ensure we attract the requiredskills. Benefits provided to full-time employeesinclude, but are not limited to, healthcare, lifeinsurance, disability insurance retirement provisions,share incentive programmes, maternity and familyresponsibility leave. We have no defined benefit/finalsalary pension programmes but we operate definedcontribution plan and pension schemes for ouremployees. It is mandatory for our employees toparticipate in either industry based or companydefined contribution provident funds or pensionschemes. Our obligation in terms of these plans isdirectly met by our general resources and wecontribute between 3% and 21% of these funds.Additionally we have committed to providing our HIVpositive employees with ART for life.

Retaining employeesTo retain employees with talent, those who deliver highperformance and HDSA employees in managementpositions, we have financial and non-financialretention programmes.

Developing our employeesIn addition to legislated requirements, the developmentof our employees is critical to the establishment of acompetent workforce and future leadership for theCompany. Employee development is facilitated byboth the Human Capital and the OrganisationalDevelopment Departments. OrganisationalDevelopment comprises the Lonmin Training Academy,the Centre of Leadership and Business Developmentand facilitates training and skills development, whilstthe Human Capital Department provides the frameworkfor talent management as a component of employeedevelopment. We have extensive employeedevelopment programmes in place encompassingboth personal and professional developmentrequirements of which the key interventions aresummarised below.

Talent managementWe have an entrenched talent managementprogramme in place for management and professionalemployees to identify and develop employees whoare high performing or employees with developmentpotential. HDSA employees are specifically earmarkedfor participation in this programme. The talentmanagement programme comprises talent review,performance management, career development,succession planning and mentoring.

Training programmesWe have extensive training programmes in place,including but not limited to the following:• ABET remains a national priority in South Africa

and an integral element of our employeedevelopment. We offer each employee throughthe Lonmin Training Academy, an opportunity tobecome functionally literate and numerate with avariety of full-time and part-time ABET courses,varying from level one to four. We also offer thecommunities where we operate, access to thetraining programme;

• The Lonmin Training Academy also providesemployees with the opportunity to further theirdevelopment with technical skills training througha wide range of courses specific to mining,processing and shared business services. Safetytraining is also integral to our technical skillstraining programmes;

• We continue to drive Six Sigma, as a tool todefine and implement business improvementsthroughout the Company;

AN APPROPRIATELY SKILLED AND DIVERSE WORKFORCE IS THEFOUNDATION TO THE SUCCESS OF OUR BUSINESS AND WE ARECOMMITTED TO MAINTAINING THIS BALANCE.

52


Attracting and Retaininga Skilled Workforce (continued)

• We have a variety of training and developmentinterventions in place to increase the performanceof managers and performance within work teams,these including management and supervisorytraining and mission-directed work team training;

• We have a study assistance programme in placeto support our employees with further studying atinstitutions independent to the Company. TheStudy Assistance Policy provides the frameworkfor financial funding as well as the provision ofsabbatical time from work; and

• In 2009, we have focussed on the implementationof the portable skills training programmes, whichare available to employees exiting the Companydue to retirement or retrenchment. Trainingprogrammes include skills such as brick laying,welding and electrical skills. These skills are easilytransferable to learners and useful in the currentsocio-economic climate to secure a stableincome and to locate re-employment.

Our performanceAttracting employeesAs at 30 September 2009, we employed a total of21,623 employees which has reduced by 16.7% in2009 as compared to 2008 due to the Company’sreorganisation and restructuring process. Additionallyas at 30 September 2009, a total number of 10,497contractor personnel who are registered on ourdatabase, were employed by the Company. Due toimprovements in data capturing systems, ourcontractor figures in 2009 include all contractor typesincluding ad hoc contractors, external consultants,labour brokers, service provides and volumecontractors. All of these contractors do notnecessarily work on a full time basis at ouroperations, but from a good governance perspectivethey are registered on our database. 99.9% or21,592 of our employees reside in South Africa. Wedo not report on the number of supervised workersas we consider employees and contractors asemployment categories. In 2009, we recruited 1,136employees of which 110 were female. Of the 1,136,28 were management employees of which four werein HDSA. We report on HDSA and women at ouroperations as indicators of diversity, and thus thepercentage of employees from minority groups orvarying age groups are not material to our business.Although we employ, wherever possible, personsfrom local communities it is not possible to indicatethe percentage of senior management originatingfrom local communities.

New talent is essential to the success of ourbusiness and we provide attractive career opportunitieswithin the mining industry for graduates. We havepartnered with academic institutions to attract youngprofessionals to the mining industry and to theCompany through our bursary and intern programmes,with 183 and 118 participants in 2009 respectively.

Bursary and intern programme

Number of Number of Number ofYear interns bursars sponsorships

Cumulativetarget (2012) 216 209 None2009 24 41 302008 41 45 632007 39 36 522006 4 33 262005 10 19 202004 0 9 0

Total 118 183 191

Retaining our employeesIn 2009, as a result of the restructuring andreorganisation, the Company’s net labour loss was4,121, a significant decrease in labour from levelsprevailing in 2007 and 2008. In 2009, the totalemployee turn over of employees younger than 30was 598, between 30 and 50 years of age was 3,493and older than 50 years of age was 1,620. We do notreport on turnover by regions as there is no regionaltrend or differentiation in this regard.

In 2009, 58 cases were submitted to theCommission of Conciliation, Mediation and Arbitration,and of these claims, 32 cases were resolved andwith 23 cases in the Company’s favour. Of thetotal cases submitted, 24% were as a result of thereorganisation and restructuring process. Severancepay for retrenched personnel is provided and takesinto account years of service at the Company.We do not offer job placement services for thoseemployees who are retrenched. In addition toresignations, a high rate of absenteeism affectsproductivity and we work continuously to reducethis rate. In 2009, our absenteeism rate was 11%,a 38% improvement from 2008.

Group labour turnover (permanent employees)

2009 2008 2007 2006

New recruits 1,136 3,815 2,831 1,424

Resignations (322) (506) (471) (363)

Deaths(not work related) (208) (223) (237) (231)

Dismissals (942) (780) (956) (887)

Retirements (52) (126) (147) (80)

Retrenchments (3,733) (2) (15) (133)

Net gain/loss (4,121) 1,729 1,005 (270)

53



Employee developmentAll supervisors, management and professionallyqualified employees are subject to an annualperformance review process that guides performancemanagement and identifies employee developmentareas. In 2009, this accounted for 1,367 or 6.3%of our employees of which 46.5% were employeesfrom designated groups. Career development plansare reviewed annually and are based on careerpathways for various disciplines, outliningqualifications and experiences required for employeesto progress in their chosen careers. To date, 6.3%of employees have completed this process. In 2009,we have 512 registered mentees and 210 menteesin active relationships.

In 2009, US$9.3 million was spent on traininginterventions Company wide and an employeereceived an average of 25.7 hours of training duringthe year. In 2009, 47% of our employees wereconsidered functionally literate and numerate, thusnot achieving our target of 50%. In 2010, we aimto increase the functional literate and numerate rateby 2%.

Average hours of training per employee per occupational category

Categories Average hours of training per employee per annum

Contractors 17.2

Unskilled and defined decision making 23.6

Semi-skilled and discretionary decision making 26.2

Skilled technical and academically qualified workers, junior management,supervisors, foremen and superintendents 16.4

Professionally qualified and experienced specialists and mid management 9.7

Senior management 5.6

Top management 0

Happy Mahlala, a Training Facilitator, providing machine safety training toLouis Bawane and Malefetsi Mahase at our Eastern Platinum Training facility.

Dineo Seruwula, from the local village, Tornado, attending ABET four.

In 2009, 667 full time employees, 60 communitymembers, 173 contractors and 299 part timeemployees attended ABET courses at a total cost ofUS$6.2 million which includes costs relating toreplacement labour. Six Sigma has been decentralisedto the operations subsequent to the reorganisationand restructuring process. Six Sigma continues tofocus on embedding continual improvement intobusiness culture. In 2009, we continued with theFront Line Supervisory Development Programme,aimed at equipping supervisory employees withnecessary supervisory and management skills with63 registering and 28 completed this course to date.In 2009, US$667,555 was spent on businessleadership development interventions. In 2009,transition training programmes, focusing on portableskills have proven to be successful, with 1,658 exitemployees registering for the training. The traininghas been made available to all employees who exitthe Company due to retrenchments.

54


Portable skills training proving to be a success

In 2009, in light of the recent reorganisation and restructuringof the Company, we have a legislated and moral obligationtowards our employees and contractors to reduce the impactof this process on their livelihoods and to enhance transitionto often non-working lives. We offer each employee with theopportunity to participate in our portable skills trainingprogrammes. A portable skill is defined as a transferableexpertise on a specific craftsmanship. These skills are easilytransferable to learners and useful in the current socio-economic climate to secure a stable income and to locate re-employment. The portable skills training that we offered in2009, included building (bricklaying, carpentry, plumbing,plastering, tiling and painting); basic motor mechanics;welding and torch cutting; computer skills; business skills;basic electrical repairing; sewing and beadwork; agriculturalskills; water purification and driving skills.

In 2009, we partnered with our service provider, Train theNation, to offer not only a selection of skills developmentprogrammes but also to assist in rendering suitableemployment for successful trainees of the programme whoexit the Company. Additionally, local community suppliersalso contributed to the programme. The training is providedat our Marikana and Limpopo operations and is an averageof 20 days in duration. In addition to the specific skillstraining offered, a two day business management workshopis offered to all employees to enhance financial managementskills, this being particularly important in the event ofseverance pay.

In 2009, 1,658 exiting employees attended the training.At our Limpopo operations, 844 exiting employees registeredfor the training, with the most popular selection beingwelding and computer skills. At our Marikana operations, 814exiting employees registered for the training and 289 traineessuccessfully completed the courses. The programme was ata cost of US$961,233 to the Company. At Marikana, Trainthe Nation identified five trainees who were successful in theirtraining programme to assist with the renovations of TebogoPrimary School in the Marikana GLC. To date the roofs,ceilings, cracked walls and windows are been repaired andthe burglar bars have been erected on the doors. As with anyprogramme, we have experienced challenges in theimplementation phase, mainly due to suboptimal attendanceof the programme and failure of trainees to complete thecourses.

In March 2009, Mr. Stoffel Mbale, an Assistant Planner at the Western Platinum Salvage Yard, whohas worked for the Company for 30 years made a decision to accept a voluntary separation packagefrom the Company and to retire to his family. Stoffel was aware that he would still need to continueproviding financial support to this family and wanted to be trained in a craft which he could do fromhome. Stoffel successfully completed the welding course offered by the Company and was awarded hiscertificate on the 3rd July 2009. He is very impressed with the supervisors at the training facilities. “I amvery happy with the supervisors, because they really want to teach and not just get the job done.” Stoffelaims to approach potential employers in the vicinity of his home with his welding certificate and someitems which he has made, including cooking equipment. Stoffel and two other trainees, Castigo Sambaand Reginaldo Ernesto, established their own company, Cape Gannet properties, and to date haveinstalled gas bottle cages at 21 schools and have commenced with a project to repair broken schoolfurniture at reduced costs. The sense of empowerment is the very focus of these training programmes,which is enhanced by making tangible items that can remind them that they are skilled in a specific craft.


Top: Mgwayi Mgwiliko, attended the welding courseas part of the portable skills training initiatives.

Bottom: Stoffel Mbale demonstrating his welding skills.

55


Availability and Affordability of Housing forour Employees

We are successful when our employees live andwork safely. The regions in which we operate arecharacterised by an estimated 50% of the populationliving in informal dwellings. The shortage of housing isa critical issue on both a national and regional scaleand a concern that needs to be addressed. Themagnitude of this challenge for the Company isunderlined by statistics indicating that a significantnumber of our own employees reside in theseinformal settlements.

Our approachOur approach to housing is centred around thedelivery of affordable houses which impact positivelyon our employees’ quality of lives in terms of reunitingemployees with their families, enhanced security andexperiencing sustainable community living.

We currently have 1,429 houses, 635 family unitsand 85 hostel complexes, available for our category3-8 employees. We also provide a living outallowance to those employees who prefer not to stayin the hostels.

In recognition of the shortage of available andaffordable housing and the social imbalances thatthe legacies of single sex hostels pose, we havecommitted to addressing these shortfalls throughthe following targets presented in our Social andLabour Plan:• The conversion of all our 114 hostels blocks into

family and bachelor accommodation; and• The construction of 5,500 houses within the GLC.

Our performanceMarikana hostel conversionsWe acknowledge that hostels are not an acceptableform of accommodation for our employees, and thuswe have made a commitment that in the future noemployee of the Company will reside in hostels. Nonew hostels will be constructed and in terms ofexisting hostels, we are committed to converting allour 114 single sex hostel complexes into 1,500 familyand/or bachelor accommodation for category 3-8employees. Additionally, in order to promote theownership of these houses by the occupants, aportion of the accommodation will be as a long termplan converted from rented accommodation intosectional title ownership.

Due to the global financial crisis and resultingfinancial constraints, the target to convert all existinghostels into family and bachelor accommodation by2011 will not be achieved and will be discussed withthe Department of Mineral Resources. To date, phaseone of the conversions have been completed by aconsortium of GLC women contractors, with a total of29 hostels converted into 412 bachelor or familyaccommodation at a total cost of US$5.56 million. In2010, we expect to recommence with our hostelconversion programme and aim to convert five hostelblocks into family and bachelor accommodation.

Mooinooi housingIn 2009, the programme to design and construct80 houses in Mooinooi was terminated due to acontinued shift in focus to rental accommodation andfacilitation of development by property developers inMooinooi as opposed to direct construction ofhouses by the Company.

WE ARE COMMITTED TO ESTABLISHING SUSTAINABLE HOUSES THATPROVIDE SHELTER, SECURITY, SERVICES AND A SENSE OF PLACE FORALL OUR EMPLOYEES AND THEIR FAMILIES.

We are committed to the following in terms ofour housing programmes:

• Houses are to be affordable to our employeesand home ownership is pivotal to the successof our housing programme;

• Houses are to be secure, have access toservices and infrastructure and provide asense of place for all our employees andtheir families;

• Within practical boundaries, we endeavour toprovide choice to our employees and to makeavailable show houses, maps and models;

• Houses are to be designed in a sustainablemanner in terms of energy and waterefficiency;

• Taking into consideration location, as a criticalfactor when sourcing accessible land for ourhousing programme;

• Our employees are to be equipped with theknowledge and skills required to managepersonal finances and to own a home; and

• Unrealistic expectations and perceptions areto be managed through effective two-waycommunication channels with our employees.

56


Availability and Affordability of Housing forour Employees (continued)

Marikana housingWe remain committed to the construction of 5,500houses within the GLC. Due to financial constraintsand certain challenges facing the housing programme,the target date for the completion of these houses by2011 will not be achieved. Although the target isunder review and will be discussed with theDepartment of Mineral Resources, it is expected thatthe rate of construction of these houses will be basedon employee demand for home ownership.

The housing needs assessment undertaken in2008 outlined the importance of plans, models andshow houses to enable our future home-owners tovisualise the houses prior to making a financialcommitment and to afford them with the opportunityto provide feedback on the design. In 2009, showhouses of varying designs were constructed andwill be exhibited to potential home owners andother stakeholders. The designs have taken intoconsideration the preferences of our employeesas highlighted in the housing needs assessments.These include stand-alone houses made of brickand the affordability of choice in terms of size. Thedesign and costs of the houses are inclusive of solargeysers and gas stoves to enable more energyefficient dwellings. Prior to the selling of the houses,the home owners will be provided with educationon aspects associated with home ownership,including financial management.

We have continued our focus on securing landfor future housing developments as well as securingaccess to electricity and water resources. To date,we have secured land for 2,500 houses in Marikanaof which 800 stands have been serviced andproclaimed and 1,700 stands have been approvedby the Rustenburg Local Municipality for townshipestablishment. Trade Unions and the internal HousingSteering Committee continue to convene at amonthly Housing Forum, providing a platform foreffective communication.

In March 2009, the Marikana HousingDevelopment Corporation, a Lonmin Group Companypassed a resolution to sell the 1,149 houses ownedby the Corporation to legal occupants of the houses.

An architectural drawing and model of one of the show houses.

57


Environment

IntroductionBy nature of our mining and processing activitieswe have an impact on the environment where weoperate. Producing PGMs whilst limiting degradationof the environment and using resources more efficientlyis at the core of the sustainable developmentbusiness case for the Company. We share globalanxiety around environmental degradation andresource scarcity in particular water and energyresources as we are dependant on these resourcesin order to function. By adopting new or cleanertechnologies, we make production processes moreefficient, reduce costs and improve qualityenvironmental degradation. Our approach toenvironmental management is founded on our valueof zero harm to the environment, best internationalenvironmental practice and compliance withlegislative and other requirements. Management ofour environmental aspects and risks is underpinnedby our Safety and Sustainable Development Policyand supported by group targets, standards andguidelines.

In response to the global financial crisis, theEnvironmental Departments were restructured andfocus given to efficient in-house consulting asopposed to the utilisation of external consultants,which has cumulated in approximate savings ofUS$589,544. Accountability for environmentalmanagement resides with the Board of Directors andour CEO. They are supported by the EnvironmentalDepartment, which provides the Company policy,minimum standards and guidelines and audits theimplementation of these requirements whilst linemanagement remains accountable for ensuringeffective implementation of these requirementsthrough management systems.

On an international and national scale, we partakein a number of forums to contribute to governmentdecision-making and to create a platform forcollaboration with industry peers and governmenton issues pertaining to environmental management.We are a member of the South African Chamberof Mine’s Environmental Policy Committee andspecific working groups, the Steering Committeefor the Centre of Sustainability at the University ofthe Witwatersrand and of the ICMM working groups.We are also represented on a number of governmentcommittees, focusing on the development of policyand legislation.

WE ARE COMMITTED TO THE VALUE OF ZERO HARM TO THEENVIRONMENT, TO MINIMISE OUR MINING FOOTPRINT ANDTO CONTINUALLY IMPROVE OUR PERFORMANCE WITHIN ALLENVIRONMENTAL DISCIPLINES.


• All operations, other than the Assay Laboratorymaintained ISO 14001 certification in 2009;

• One level four and seven level threeenvironmental incidents were reported in 2009;

• In 2009, we have initiated a Company wideclimate change strategy to quantify corporate,financial and operational risks and to align ourmanagement plans with international andnational agreements, strategies and targets;

• In 2009, we have increased our aggregateenergy consumption by 3.77% per unit ofproduction and our greenhouse gas emissionsby 10.32% per unit of production since 2007;

• In 2009, we have undertaken a number ofinitiatives to secure energy for our operations,improve energy efficiency at existing operationsand investigate alternative, low emissionenergy sources;

• In 2009, we have continued to voluntarilyparticipate in the Carbon DisclosureLeadership Index;

• Our average sulphur dioxide (SO2) emissionswere calculated at 11.1 tonnes/day, which isslightly higher than the 2008 average dailyemissions;

• In 2009, we have reduced our aggregate freshwater intake by 12.16% per unit of productionsince 2007;

• In 2009, as part of our storm water managementplan, the storm water storage facilities wereconstructed at the UG2 Concentrator, BMR andat the Smelter at a total cost of US$3.1 million;

• In 2009, the new Wonderkop waste watertreatment plant was commissioned at a costof US$3.2 million;

• On the 1st of July 2009, the NationalEnvironmental Management: Waste Act 59 of2008 was enacted and we have been proactivein the implementation of the requirements;

• In 2009, we have increased our quantities ofwaste disposed of to landfill by 23.4% since2008. This increase can be attributed to theincreased disposal of calcium sulphite atlandfill until such a time that alternativedisposal options are implemented;

• We have finalised an integrated risk basedmine closure strategy for our Marikana andLimpopo operations to provide a strategicframework within which all closure planning forall our operations can be managed; and

• We are represented at the Precious Metalsand Rhenium Consortium to ensure thatour products and intermediates are correctlyclassified, tested and registered in termsof REACH.

58


Environment (continued)

Corporate and operational environmental risks areidentified as part of the Company risk managementprogramme on both a formal and an ad hoc basis.Our material issues in terms of environmental aspectsinclude the following:• Obtaining or maintaining ISO 14001 certification

at all operations;• Compliance with legislation, regulations and

permits;• Access to, security of and improving efficiency

in the use of energy resources;• Access to, security of and improving efficiency

in the use of water resources;• Minimising impacts of our operations on air

quality;• Understanding the risks and opportunities

presented by climate change;• Eliminating waste disposal to landfill;• Responsible materials stewardship;• Supporting biodiversity and minimising impacts

on land resources; and• Minimising closure costs and environmental risks

through integrated environmental managementand closure planning.

Key environmental risks and opportunities relatingto each discipline within environmental managementalong with key strategies, targets and procedures forimplementation, successes and challenges arediscussed within the respective sections on theenvironmental disciplines. Initiatives to mitigatesignificant impacts of our products and services arereported on, and where possible the extent to whichimpacts have been mitigated.

We assess the eco-efficiency and health, safetyand environmental impacts as well as the effects ofincorporating best practice, more responsiblebehaviour and cleaner more efficient technology in thevarious stages of our products through numerousimpact assessments, internal and external auditing,data trend analysis and life cycle assessments.

Management systemsIn 2009, all our operations, other than the AssayLaboratory maintained their ISO 14001 certification.The Assay Laboratory’s certificate expired in 2009and is expected to be reinstated by December 2009.

Training and awarenessEnvironmental training programmes and awarenesscampaigns form an important component of ourenvironmental management system. In addition togeneral environmental induction training received byall employees and contractors on an annual basis,each operation conducts site-specific training onenvironmental aspects according to training matricesand schedules. In 2009, we have amended theenvironmental induction training material which nowprovides in-depth information on operationalenvironmental control.

Monitoring programmesWe have monitoring programmes in place to monitorour impacts on the environment including thoserelating to water, air quality, waste, land andbiodiversity management and our performancein terms of our policy commitments, objectives,targets, legal and other requirements. Monitoringof compliance of contractors and suppliers to ourrequirements form an integral component of theseprogrammes. These programmes comprisesoperating procedures, the analysis of monitoringresults, the identification of corrective andpreventative actions and the subsequentreporting thereof.

We are committed to the ICMM position statementon Mercury Risk Management, and in line with therequirements of the statement, we will report onmercury emissions in 2010.

Communication and reportingWe engage with stakeholders on both an informaland formal basis. In 2009, we have formally engagedwith our stakeholders primarily through workshopsfacilitated by third party consultants as required bythe environmental impact authorisation processes aswell through a bi-annual environmental stakeholderforum where we provide stakeholders with feedbackon our performance. We report on our performanceto government departments as required by ourEnvironmental Management Programme Report andother license conditions.

Legal compliance and auditingWe continue to strive for full compliance to SouthAfrican environmental legislation, our EnvironmentalManagement Programme Reports and other licensesand permits. In 2009, we achieved our target toreceive no fines or prosecutions relating toenvironmental management. We have both internaland external audit programmes in place.

Incident reporting and managementThe transparent reporting of incidents and theeffective mitigation of the impacts of these incidentsthrough corrective and preventative actions is afundamental aspect of our approach to environmentalmanagement and we have ensured that it ismandatory at all our operations. We continue torigorously investigate incidents through the IncidentCause Analysis Method and report on incidents to therelevant government departments. In 2009, one levelfour and seven level three incidents were reported asoutlined by the table on the next page.

Environmental expenditureIn 2009, Company wide expenditure on environmentalmanagement amounted to US$16.6 million. In 2010,we will report on expenditure per discipline.


59


Level three and four environmental incidents in 2009

Date Location Type of incident Description of incidents Impacts of incidents Mitigation of the impacts

23 October Marikana Mining Water management Blockage of a sewer pipe Soil and possible ground water contamination. The The burst pipe was repaired and the2008 (level 3) (Hossy Shaft) resulting in the contaminated water did not enter directly into impacted area remediated.

discharge of sewerage the surface water regime.into the environment.

30 November Marikana Mining Water management Seepage of process Soil and possible ground water contamination. The Investigations into the location of the seepage2008 (level 3) (Newman Shaft) water from unlined contaminated water did not enter directly and potential solutions were conducted.

settling dams. into the surface water regime. An action plan to implement further stormwater management measures was establishedand the resultant budget requirements have

been submitted for approval.

31 December Marikana Waste management Burning of the contents Burning of the material was done in close proximity On identification, the burning of the waste2008 (level 3) operations of ten drums (2100m3) of to a ventilation shaft, resulting in possible was immediately stopped and on the

waste containing yellow exposure to toxic fumes. same day, the waste was cleaned up byphosphate material (used in the company who illegally disposed of the

the food industry) by waste. Future disposal options by the companya private waste company. have been agreed to in writing.

12 May 2009 Marikana Mining Water management Seepage of process Soil and possible ground water contamination. The An action plan to install an effective lining(level 3) (B4 Shaft) water from unlined contaminated water did not enter directly into the system in the dam was developed and the

settling dams. surface water regime. capital application has been submitted forapproval for commencement in 2010.

5 June 2009 Marikana Mining Water management Seepage of process Soil and possible ground water contamination. The An action plan to install an effective lining(level 3) (E3 Shaft) water from unlined contaminated water did not enter directly into the system in the dam was developed and

settling dams. surface water regime. the capital application has been submittedfor approval for commencement in 2010.

25 June 2009 Marikana Mining Waste management Historical and continuous Limited impact on soil resources. Intensive cleaning and remediation of the(level 3) (E3 Shaft) poor house-keeping at affected surface area was undertaken.

the storage and waste Construction of infrastructural requirements isseparation facility. complete resulting in the containment of

hazardous waste spills and surface drainageissues. Housekeeping has improved with

large amounts of industrial wastes removedto the salvage yard.


60


Level three and four environmental incidents in 2009 (continued)

Date Location Type of incident Description of incidents Impacts of incidents Mitigation of the impacts

8 July 2009 Marikana Water management Discharge of Soil and possible ground water contamination. The Pipe was replaced immediately and an(level 3) Process Division process water into contaminated water did not enter directly inspection schedule compiled to verify

(Tailings the environment from into the surface water regime. pipe thickness on a six monthly basis.Complex 5) the return water

pipeline as a resultof a burst pipe.

9 September Marikana Waste management Illegal disposal of Run-off from the placement of hazardous waste Samples of the waste have been taken for2009 (level 4) Process Division hazardous waste on on the dam wall, into the return water dam, caused classification for disposal and all visible waste

(Tailings the top of the number by a rain event, resulted in the death of fish and has been removed and stored until disposalComplex 5) five return water aquatic organisms in the dam. A possibility exists options have been verified. Underlying norite,

dam wall. that soil and ground water contamination derived soil and water samples were taken for analysis.from residual waste and leachate might be present. The possible origin of the waste could not be

established but there are investigationsunderway in terms of this. In situ treatment

options for water and soil are being investigated.

61


Accessing and Managing EnergyResources

Energy is indispensable to mining and industrialwealth generation. As a result of the growingdemand and competing interests for energy bothinternationally and within South Africa, our successis dependent on our ability to secure access tosufficient energy resources and to manage them ina responsible and sustainable manner for our currentoperations and growth opportunities. PGMs areglobally strategic metals for a number of crucialapplications worldwide. Given the importance ofSouth Africa’s role in the PGMs market, the securityof power supply remains a strategic issue for theindustry. Energy management is also our primaryfocus to manage our impact on climate change.

Our approach81% of our energy profile is attributed to the use ofelectricity from the national grid, of which 90% issupported by non-sustainable fossil-fuel-basedcarbon. The nature of this fuel, coupled with electricityshortages faced by South African mining industries,has resulted in energy management and efficienciesbeing regarded as a critical business imperative.Our approach to energy management is centredon securing the availability of sufficient energy forour current and future mining operations, reducingour energy consumption by improving energy useefficiencies and ultimately minimising our carbonfootprint. These initiatives will inevitably contribute toreducing greenhouse gas emissions from direct andindirect sources. Short term, our focus with regardsto energy management involves integrating energyefficiency considerations into our business andplanning strategies, improving energy efficiency atexisting operations and investigating alternative, lowemission energy sources. This is being undertakenthrough the adoption of best practices, efficientenergy technologies and mechanisms that focus onalternative sources with the least cost and greatestlong term potential. Efficient, real-time electricalenergy and demand management monitoring andcontrol systems effectively monitor our maximumdemand and consumption across the Company.

We are committed to minimising the impactsof transportation of our ore, products and workforceon the environment. Training and monitoringinitiatives with regards to transportation are includedas components within our broader environmentalmanagement programmes. We have identified energyuse and associated greenhouse gas emissions assignificant impacts of all transportation undertakendirectly or indirectly by the Company, based on areview of potential environmental impacts.

Our performanceEnergy useWe have a set target to improve our energy efficiencyby 10% by 2012 based on our performance in 2007.In 2009, electricity usage amounted to 81% ofour energy consumption and Company wide useamounted to 1,481,744.75MWh, which is a 6%decrease from our consumption in 2008 and 9% fromour 2007 baseline year. The Company wide electricityconsumption per unit of production has howeverincreased since 2007 and 2008 primarily due toenhanced infrastructure use and limited productionoutput at K4, Hossy and Saffy Shafts in preparationfor production build up. In 2009, we have improvedthe power factor to 0.98, as required by Eskomfollowing the South African power crisis experiencedin 2008.

WE ARE COMMITTED TO PROMOTING THE SUSTAINABLE USE OFNATURAL RESOURCES, RESPONDING TO CLIMATE CHANGE AND DRIVINGTHE REDUCTION OF GREENHOUSE GASES BY ADOPTING BEST PRACTICETECHNOLOGY, ALTERNATIVE ENERGY SOURCES, IMPROVED CONTROLSYSTEMS AND MANAGEMENT PRACTICES.

7%

81%

1%11%

Coal

Gas

Fuels

Electricity

Energy profile in 2009

005 06 07 08 09

8,000

7,000

5,000

4,000

3,000

2,000

1,000

6,000

TJ

Total energy efficiencyTotal energy

0

6

1

4

3

2

5

GJ/

PG

Moz

Financial year

Total energy use

62


Accessing and Managing Energy Resources(continued)

In 2009, our total energy use, of which all isnon-renewable, amounted to 6,613TJ which is an11.0% decrease from our consumption in 2007.Our energy per unit of production has increased by3.77% on our 2007 consumption to 5.22GJ/PGM oz.Although our total energy use has improved since2007, our consumption and efficiency since 2008have deteriorated. In 2009, 6.6% of our total energyconsumption was direct energy whilst 93.4% or5,334TJ was indirect energy. From a Companywide perspective our energy footprint is changingwith the continued focus on the operation of newershafts which have been designed taking intoconsideration energy efficiency as opposed to theolder less energy efficient shafts. The placement ofour Limpopo operations on care and maintenancealso resulted in a lower energy footprint for theoperation. There were no incidents of energy beingexported outside the reporting boundary.

In 2009, in terms of our initiatives to secure energyfor our operations, improve energy efficiency at existingoperations and investigate alternative, low emissionenergy sources we have undertaken the following:• In 2009, we received provisional approval from

Eskom for our application to obtain funding withregards to demand site management projectswhich have the potential to reduce our Companywide energy footprint by 5%. The project entailsthe implementation of a control and monitoringsystem for compressed air usage at our shafts;

• We are in the process of exploring options regardinggeothermal energy use and bio-energy generation;

• Continued focus on demand control managementby shifting on-peak energy use to off-peak periods;

• Further replacement of low energy efficiencymotors with high energy efficiency motors andother initiatives such as extending the use of solarwater heaters and the disconnection of geyserswhere possible; and

• Continued our drive to secure permanent ortemporary energy for our future mining andprocessing activities, including our Pandora,Akanani and Limpopo operations.

Additionally in 2009, we have further refined ourmeasurement systems thus enabling a relationship tobe established between business units, productionactivities and energy efficiency.

Greenhouse gas emissionsWe have set targets to improve our greenhouse gasefficiency by 5% by 2012, based on our 2007performance. In 2009, we emitted 1,594,827 tonnesCO2 equivalent of greenhouse gases, in accordancewith our 2007 scope of activities. Although we havedecreased our greenhouse gas emissions by 4.7%and 3.9% since 2007 and 2008 respectively, ourgreenhouse gas emissions per unit of productionsince both 2007 and 2008 have deteriorated,primarily as a result of lower production. In 2009 ourgreenhouse gas emissions efficiency amounted to1.26 tonnes CO2 equivalent/PGM oz. In 2009, it hasnot been possible to quantify the reduction in

1,30005 06 07 08 09

1,800

1,700

1,750

1,500

1,550

1,450

1,400

1,350

1,600

1,650

Kilo

tonn

esC

O2

equi

vale

nt

Total greenhouse gas emissions efficiency

Total greenhouse gas emissions

0

1.4

0.2

0.8

0.6

0.4

1.0

1.2

Kilo

tonn

esC

O2

equi

vale

nt/P

GM

oz

Financial year

Total greenhouse gas emissions

Jacob Kobela, taking stock of the gas cylinders at the Marikana Stores.

emissions as a result of initiatives undertaken toimprove our efficiency, of which the majority of ourcurrent initiatives are associated with electricityreduction.

We have evaluated our 2009 greenhouse gasreporting boundaries and have apportioned emissionsaccording to the best practice in quantification andreporting as per the figure on page 63. Theassessment covers all six Kyoto greenhouse gasesand encompasses scope one, two and threeemissions. Given that 2009 is the first year ofapportioned reporting with the data available in termsof emissions scope, the data boundary for this issubject to change going forward. We are in theprocess of reviewing, ascertaining and confirming ourreporting boundary in this regard to ensure that ourreporting is, in totality, reflective of our operations.Consolidated scope apportioned reporting will beundertaken by 2014. Data should be viewed in lightof improved disclosure.

63


0 20 40 60 80 100

Total

Limpopo

Marikana

PMR

Scope 2 emissions

Scope 1 emissions

Scope 3 emissions

%

Percentage apportionment of scopeof greenhouse gas emissions per site

1.30%

95.76%

2.93%

Limpopo

Marikana

PMR

Percentage greenhouse gas emissions apportionedto site

Accessing and Managing Energy Resources(continued)

Climate change

Our approach to climate change remains aligned with that of the ICMM, and as a member company werecognise the significance of climate change on a global, national and local scale. As a PGM producer,our products play a critical role in emission reduction technologies.

As a Company we are currently undertaking various projects under the climate change umbrellaincluding the development of an integrated water and waste management plan adopting the principles ofreduce, reuse and recycle; reducing our freshwater intake through the increased reuse of industrial water;implementation of water conservation and demand management principles; compilation of a biodiversitymanagement plan to inform closure planning and end land use; and energy management initiatives.

We have commenced with the development of a Climate Change Strategy for the Company which isenvisaged to be completed in 2010 and will include the status quo of the business; the identification ofrisks (environmental, financial, operational, regulatory, and physical amongst others) and priorities goingforward. The implementation of priorities is to be instated by 2012. We are revising our carbon footprint to2009 baseline data for an organisational assessment, a business operations footprint and a productfootprint to inform our climate change strategy.

We have continued to voluntarily participate in the Carbon Disclosure Leadership Index which rankscompanies with regards to the quality of their disclosures around climate change.

Our Marikana operations constitute the greatestsource of greenhouse gas emissions with 95.8% ofemissions emanating from this site. For 2009, andsubsequently previous years, the dominance of scopetwo emissions remains our greatest source ofgreenhouse emissions. It is for this reason that ourenergy management has primarily focussed on theinitiatives as mentioned previously. For 2009 datareporting our indirect and direct greenhouse gasemissions amounted to 1,514,275 tonnes CO2

equivalent and 81,277 tonnes CO2 equivalentrespectively in 2009.

In terms of the direct and indirect transportation(undertaken by the Company or by our contractors)of our ore, concentrate and product by air and roadas well as the transportation of our employees by onsite buses and Company owned vehicles, energy andgreenhouse gas emissions amount to 347TJ and26,123 tonnes CO2 equivalent respectively. Initiativesto reduce our carbon footprint related to transportationare included in our Company wide efficiency initiatives.For further information regarding standards used andmethodologies associated with greenhouse gasemissions, please refer to page 93.

64


Accessing and Managing WaterResources

Our mining operations are located in water-scarceregions of South Africa. Access to adequate waterresources remains essential for our mining operations.We strive for continual improvement in ourenvironmental performance and we promote thesustainable use of natural resources.

Our approachOur management of water resources is an integratedthree-fold approach to secure the availability ofsufficient water for our current and future miningoperations; to reduce our freshwater consumption byimproving water use efficiencies and water recycling;and to prevent the contamination of ground and surfacewater resources in the regions where we operate. Asa result of the growing demand and competing interestsfor water both internationally and within South Africa,we need to secure sufficient water for our operationswithout adversely affecting communities’ access topotable water. We support the United NationsMillennium Development Goal to reduce by 50% thenumber of people without access to safe drinkingwater by 2015. Our effort to reduce fresh waterconsumption and minimise contamination of groundand surface water increases the availability of waterresources to both communities and mining operations.

Our performanceSecuring water for our operationsWe have currently secured access to water resourceswhich we expect to be sufficient for our currentand planned mining and processing needs at ourMarikana operations, assuming no major divergencefrom expected rainfall patterns. We continuously seekopportunities to further reduce fresh water consumptionthrough securing access to waste water or water ofpoorer quality. We are in the process of securingfurther water resources for our Akanani operationsin the Limpopo Province.

Reducing fresh water consumptionFresh water usage at our operations in Marikana andat our PMR is sourced from the regional water utility,while our Limpopo operations access freshwater froma regional well-field. Ground water usage is limited toexploration activities. At our Limpopo operations, theyield of the aquifer from which we obtain ourfreshwater is 30,000m3/day, of which we have theauthorisation to utilise 17% of this yield. On average,based on four years of consumption, we utilise 7% ofthe yield of the aquifer. The aquifer is not designatedas a protected area and the biodiversity value iscurrently unknown. No water from surface resourcesis utilised in our operations.

We have set a target to reduce our aggregate freshwater consumption by 15% per unit of production by

September 2012 as at the baseline consumption in2007. In line with this target, we continue to implementwater management programmes, maximise water re-useand recycling to ensure sustainable resource utilisation,with key initiatives outlined below:• Implementing further measures to enforce the zero

surface discharge policy to maximise waterrecycling through closed system reticulation;

• Capturing groundwater contamination resulting fromour tailings facility at our Limpopo operations for re-use and to prevent further movement of the groundwater contamination plume;

• Researching the availability, sustainability andpracticality of utilising contaminated groundwater fromour tailings facilities at our Marikana operations toreduce our reliance on fresh water consumption andto minimise ground water contamination. In 2009, thecompleted study was reviewed to verify yield andwater qualities, which to date indicates a goodpotential of the water source in terms of availability,sustainability and practicality; and

• Establishing a Company wide real time waterbalance model, which is to be completed by 2012,which will enable us to report accurately andcomprehensively on the percentage and volumesof recycled and reused water as well as all sourcesof water withdrawal.

In 2009, our total fresh water intake from the regionalwater utility and from the wellfield in Limpopo amountedto 8,885,360m3 which is a decrease by 24.7% and 4.0%from the total intake in 2007 and 2008 respectively. Thetotal fresh water efficiency has improved by 12.16% from7.98m3/PGM oz in 2007 to 7.01m3/PGM oz in 2009.

WE ARE COMMITTED TO PROMOTING THE SUSTAINABLE USEOF NATURAL RESOURCES AND TO PREVENTING POLLUTION ANDENVIRONMENTAL DEGRADATION IN ORDER TO REDUCE OUR IMPACTON THE ENVIRONMENT AND THE COMMUNITIES WHERE WE OPERATE.

005 06 07 08 09

14,000,000

12,000,000

8,000,000

6,000,000

4,000,000

2,000,000

10,000,000

m3

Total freshwater intake efficiencyTotal freshwater intake

0

9

8

1

4

3

2

7

6

5

m3 /

PG

Moz

Financial year

Total freshwater intake

65


Accessing and Managing Water Resources(continued)

Ground and surface water resourcesWe strive to prevent pollution and environmentaldegradation to surface and groundwater resources,mitigate and remediate where contamination hashistorically taken place and to continue monitoring theimpacts of our operations on water resources and theeffects of our remediation efforts. Our water licensesprovide the regulatory framework for the managementof our water resource qualities. We have proactivemanagement programmes in place which aim toreduce the possibility of pollution and provide us withearly warning of any incident, so that we can takeappropriate mitigating action, with the followinginitiatives in place:• Implementing storm water measures over a five-

year period at our Marikana operations to complywith the National Water Act 36 of 1998. In 2009,the storm water storage facilities wereconstructed at the UG2 Concentrator, BMR andat the Smelter at a total cost of US$3.1 million;

• Implementing the Company lining specificationguideline for all newly constructed dirty waterstorage facilities to minimise seepage to thereceiving environment. In 2009, the liningmechanisms at two high risk water storagefacilities at our Marikana operations have beenearmarked for replacement;

• Implementing a policy of zero surface discharge.In 2009, five level three unplanned andunpermitted discharges to surface waterresources occurred as detailed on page 59,which were reported to relevant authorities asper legislated requirements. Volumes of thesedischarges are unknown and the quality of thedischarged water was inherently poor, particularlywith high electrical conductivity levels. No fineswere incurred due to these discharges; and

• In 2009, the new Wonderkop waste watertreatment plant was commissioned, replacing theindividual, older and often legally non complyingwaste water treatment plants at our Marikanaoperations at a cost of US$3.2 million.

In order to monitor our impact on the receivingwater resources, we have extensive surface andgroundwater monitoring programmes in place at alloperations. To this end we monitor in excess of 260groundwater monitoring boreholes and 135 surfacewater monitoring points in total. The results of themonitoring programmes and annual groundwatermodelling are interpreted to effectively monitorimpacts of our operations on the receivingenvironment. There are five river catchments spanningour Marikana operations, most of which are smalltributaries to the Crocodile Marico River, including theHoedspruit catchment in the west, the Sterkstroomand Maretlwane catchments centrally and theModderspruit and Kareespruit catchments in the east.

We continue to make progress in terms of theremediation of groundwater and soil contamination atthe PMR, as reported on in both 2006 and 2007. In2009, we have completed an independent peerreview process to consolidate and verify the quality ofthe investigations completed to date. Additionally wehave undertaken resistivity studies to further enhanceour understanding of the pollution plume. The resultsof these investigations have identified the requirementfor further monitoring, the installation of additionalmonitoring boreholes and the remediation of theplume source which is scheduled for 2010.

The construction of the storm water dam in close proximity to RowlandShaft amounted to US$3.1 million.

66


Responsible Materials Stewardship andWaste Management

Our approachOur approach to material stewardship and wastemanagement is founded on our value of zero harm tothe environment, best international environmentalpractice and compliance with legislative and otherrequirements. Company wide management of wasteand materials is underpinned by our Safety andSustainable Development Policy and supported bygroup targets, standards and guidelines.

Material stewardshipMinimising the use of hazardous material in miningand processing operations is the basis of ourmaterials and waste management. We continue toseek opportunities to make use of non-hazardousalternatives and to reduce quantities of hazardousmaterials utilised. Where these substances cannotbe substituted, reduced or eliminated, there areoperating procedures that outline responsiblepurchasing, separation of wastes and storage, andthe use and disposal of waste.

The percentage of products sold and theirpackaging materials that are reclaimed is not materialto the Company as products sold and theirpackaging material reclaimed is insignificant in thecontext of PGM production and thus not an impactor risk to the Company. Additionally, the percentageof materials used that are recycled or classified assecondary input material is not material to theCompany as quantities of materials used which arerecycled input materials are insignificant in the contextof PGM production. In 2010, we will report on oursignificant materials used by weight or volume atour operations.

Eliminating wasteWe continually seek opportunities to prevent wastegeneration, minimise the generation of waste andenhance waste re-use and waste recycling. All wastestreams that cannot be eliminated at source, re-usedor recycled are sent to permitted waste disposalfacilities. General waste is disposed of either at offsite landfill sites or at our on-site permitted MooinooiLandfill, whilst hazardous wastes are removed byauthorised waste contractors to permitted off-sitehazardous landfill facilities. Where off-site disposaltakes place, disposal is confirmed by the wastecontractors through the issuing and recording ofwaste manifest documentation or waybills and safedisposal certificates. Mineral waste, comprisingmostly waste rock and tailings, is disposed ofon-site on waste rock dumps and tailings facilitiesrespectively.

WE ARE COMMITTED TO THE PHILOSOPHY OF ZERO WASTE TO LANDFILLAT ALL OUR OPERATIONS THROUGH THE REDUCTION, RE-USE ANDRECYCLING OF WASTE AND RESPONSIBLE PRODUCT DESIGN IN ORDERTO REDUCE OUR IMPACT ON THE ENVIRONMENT.

The National Environmental Management:Waste Act 59 of 2008

On the 1st of July 2009, the NationalEnvironmental Management: Waste Act 59 of2008 was enacted. The waste sections withinthe Environmental Conservation Act 73 of 1989have been repealed by the Waste Act, with thisAct laying the foundation for the regulation andmanagement of pollution and waste. This Acthas adopted the waste hierarchy prioritisationsystem of promoting prevention and minimisationmeasures at source, thereafter reuse and recyclingand disposal as a last resort and provides forreasonable measures for consumption of naturalresources, adherence to adequate wastemanagement practices, remediating contaminatedland and integrated waste management planningand reporting. We are committed to legalcompliance and have been proactive in theimplementation of the requirements.

We are currently in the process of compilingan integrated waste management plan, whichwill address issues such as waste minimisation,recycling, reporting, systems development andpromote research and development, especiallyfor the reduction of our hazardous wastestreams to landfill. In terms of the Act, we haveappointed a waste specialist to ensure alignmentand compliance with the requirements and tomanage waste and soil contamination issues.We have identified certain waste activities whichrequire licensing and have commenced with thelegal and administrative process. We arecontinuing to liaise with government on issuespertaining to the Act and in particular theclassification and definition of waste within amining right area. Many of the reportingrequirements are already in place. Our wastemanagement services on site are based on anintegrated approach, where all potential avenuesfor recycling, reduction and treatment areexplored and introduced into the conventionalwaste management cycle.

67


Responsible Materials Stewardship andWaste Management (continued)

Managing waste disposal facilitiesEffective and responsible management of wastedisposal facilities is imperative as it is mostly in thevicinity of these facilities that the potential for pollutionexists. We operate a number of waste disposalfacilities at our operations, including landfill facilities,a waste incinerator, waste rock dumps and tailingsfacilities, of which we have the necessary permitsand authorisations in place. We operate our wastefacilities in accordance with permit conditions andrelevant environmental legislation. We have externalaudits conducted by qualified external landfillauditors, verifying our compliance to our permits forthe three GSB- landfills owned by the Company.Audit reports are sent to the relevant governmentauthorities together with landfill reporting requirementsand our waste minimisation and reduction strategy.We also use off-site facilities that are not owned oroperated by the Company, to recycle and disposeof waste streams, and thus have a vested interestin the responsible management of these facilities.Third party verification audits scrutinise off-sitefacilities where hazardous waste is treated, recycledand disposed of, to confirm and ensure that wemaintain our duty of care responsibility.

Tailings, a by-product of the concentratingprocess, are disposed of at tailings facilities situatedat our operations. We have five dormant and sixoperational tailings facilities at our operations. Thesefacilities are managed according to legislated codesof practices. Site inspections and formal audits areundertaken on the facilities to ensure compliance withthe code of practices. Once a tailings facility isclassified as dormant, various dust suppression andre-vegetation programmes are undertaken. We have13 waste rock dumps, 12 at our Marikana operationsand one at our Limpopo operations. These excludetemporary opencast rock dumps. Waste rock dumpsare managed in accordance with legislated code ofpractices. Internal and third party auditing forms anintegral component of the management of the wasterock dumps.

The codes of practices and operationalprocedures of our residue deposits, such as tailingsfacilities and waste rock dumps outline managementrequirements which are adhered to, and auditedagainst, in terms of required risk assessments,stability tests and leachate tests. Records of theserequirements and subsequent audits are maintained.

Our performanceWe commenced in 2009 with the compilation of anIndustry integrated waste management plan for themanagement, minimisation and where possible, theelimination of general and hazardous waste disposalacross the operations.

Materials stewardshipIn 2009, we completed the safety, health andenvironmental guideline for the handling andmanagement of hazardous materials which is basedon legal compliance and best practice and providesoperational units with minimum requirement forresponsible materials stewardship.

Managing waste disposal facilitiesIn order to minimise pollution at our Mooinooi Landfill,in 2009 we have extended the bentonite geosyntheticlining system on the side slopes of the site and haveinstalled an extensive leachate collection system.

Eliminating waste generation and minimisingdisposalWe have set a target to reduce the quantity of wastedisposed of by landfill, by 15%, by 2012. This targetpertains to combined quantities of hazardous andgeneral waste as defined by the NationalEnvironmental Management: Waste Act 56 of 2009.In 2009, we have disposed 63,107 tonnes of generaland hazardous waste to landfill sites, thus increasingour disposal of waste by landfill by 23.4% since 2008.This increase can be attributed to the disposal ofcalcium sulphite to landfill, while undertaking thenecessary studies to substantiate the disposal of thislow hazardous waste to tailings. With all otherhazardous wastes and general waste generated,there has been a 2% decrease on generation from2008 mainly due to the suspension of certainoperations on site, greater awareness to theunnecessary generation of waste through traininginitiatives and cost drivers to decrease unnecessaryexpenditure. We have made a concerted effort toreduce illegal dumping on our land with theintroduction of signage, policing and development ofprocedures and systems for reporting, documentingand monitoring of incidents and offenders.

General waste recycled, refurbished and re-used(tonnes)

Waste type 2009

RecycledFerrous and non-ferrous scrap 4,837Paper 7Rubber 915Plastics 222Tyres 143Food 19

RefurbishmentSteel 154

Re-useWood 6,381Plastic 1

88.50%

0.10%

11.40%

Hazardous waste

Health care waste

General waste

Percentage waste type disposed and incinerated

68



005 06 07 08 09

18,000

16,000

10,000

12,000

6,000

8,000

2,000

4,000

14,000

Financial yearK

iloto

nnes

Tailings disposed to tailings facilities

005 06 07 08 09

1,600

1,400

800

1,000

400

600

200

1,200

Financial year

Kilo

tonn

es

Waste rock disposed to waste rock dumps

Maditlhokwa Clean-up Campaign

On the 16th July 2009, we embarked on a clean upcampaign in the informal settlement of Maditlhokwa with theassistance of contractors, community volunteers and wardcouncillors. Approximately 150 community membersparticipated in the campaign and a total of 1.8 tonnes ofgeneral waste were collected and disposed of at theCompany’s permitted Mooinooi Landfill. We have initiateddiscussions with the Rustenburg and Madibeng LocalMunicipalities to collectively work on the problem of illegaldumping, littering and service delivery, which is problematicwithin the GLC to produce a sustainable solution for a cleanand healthy environment.

In 2009, 7,199 tonnes of general waste weredisposed of to landfill sites and five tonnes wereincinerated at the licensed incinerator at the PMR.Garden waste is treated by means of composting,but these quantities have not been recorded for2009. In 2009, 59 and 55,847 tonnes of hazardouswaste were disposed of by incineration and disposalat landfill sites respectively, with calcium sulphitecontributing 53% to the weight of hazardous wasteto landfill. A detailed Environmental ManagementReport Amendment and environmental impactassessment was completed and approved by theDepartment of Mineral Resources in 2009 for theproposed disposal of calcium sulphite onto tailingsdisposal facilities. Research continues in terms oflong term alternative disposal, reuse or minimisationoptions for this waste material. We have alsofurthered our research and development to minimisethe liquid hazardous waste streams at the PMR andAssay Laboratory.

In 2009, we recycled 12,679 tonnes of generalwaste and 160 tonnes of hazardous waste, whichamounted to US$1.1 million gained through theserecycling initiatives. In 2009, a composting plant atthe Wonderkop waste water treatment plant has beencommissioned whereby sewerage sludge and gardenwaste is converted to compost for use on the tailingsfacilities side slopes to fertilise vegetation to minimisedust generation. In 2009 US$6.7 million was spent onCompany waste disposal, excluding the financialbenefits of recycling.

In 2009, 17,068 kilotonnes of tailings and 1,343kilotonnes of waste rock were disposed of at tailingsfacilities and waste rock dumps respectively. Tailingsare re-worked at selected tailings facilities and wasterock is used where possible as a material for roadconstruction fill and back fill.

In 2009, we have not transported, imported orexported any waste categorised as hazardous in theBasel Convention. We also do not make use ofexternal sources of waste material in the mining andprocessing of PGMs.

Victoria Ntsobo and Tsidiso Mapasa from the Maditlhokwa communityvolunteering to help clean their community.

69


Implication of REACH Legislation to the Company

REACH is a European Union regulation that was promulgated in June 2007 to address the productionand transportation of chemical substances within the European Union with particular attention to thepotential impacts of those substances on both human health and the environment. The legislationprohibits substances that have not been registered from entering the European market. The fullimplementation of REACH is over a ten year period. Registration by June 2011 for materials deemed tobe of significant toxicological significance is required; of which none of the Company’s products orintermediates fall within this requirement.

On account of the Company transporting many final metals and intermediates into the EuropeanUnion, it is vital that the Company stays abreast of the legislation and potential impacts on the ability toexport those products and intermediates into Europe. To this end representation has been made at thePrecious Metals and Rhenium Consortium to ensure that our products and intermediates are correctlyclassified, tested and registered. The onus of registration and pre-registration lies with the Companyimporting materials into the European Union, thus pre-registration of all of our materials has been madeby associated companies and it is envisaged that full registration of our material types is to be completedbefore the end of 2011.

We, as a Company are party to two sub-committees of the aforementioned consortium; firstly thePGM project to cover the five final products that are sold into, or through, the European Union andsecondly the Complex Refineables project to cover the intermediates and residues that are toll refined inEurope. In 2009, we were also invited to join the Technical Advisory working group to assist withtechnical support across the consortium. The PGM project has progressed well and phase two is nearingcompletion whereby the literature search, substance sameness and referencing for prior testing for 75key substances has been undertaken. The strategy for intelligent testing is also near completion with aview that these tests can be carried out during 2010 on the significant reference samples. The ComplexRefineables project has taken longer to establish due to the diverse range of materials. The intermediateshave now been classified into ten fundamental substance sameness groups, with a few relevantsubgroups. An identification card for each substance has been developed detailing typical physical form,process origin with primary constituents. The next steps will be to determine a viable testing strategy thatconforms to the regulatory requirements. The Company’s intermediates and residues have been alignedto the relevant substance grouping with appropriate tonnages assigned.


70


Reducing our Impacts on Air Quality

Our operations affect the ambient air qualityenvironment, and we acknowledge our responsibilityto continuously manage and reduce the impact. Weare committed to continual environmental improvementand permanent zero harm to the environment.

Our approachWe strive to minimise all risks and impacts associatedwith our emissions as a result of our mining andprocessing activities. Our air quality managementsystem, which includes minimising dust fallout,gaseous, particulate emissions, noise and odours isbased on our Charter and the Safety and SustainableDevelopment Policy.

Continuous improvementIn the light of our commitment to continual improvementand to meet the requirements of the NationalEnvironmental Management Air Quality Act 39 of2004 (NEMAQA) that is envisaged to come into fullforce in 2009, we are compiling a NEMAQA alignmentstrategy. The strategy outlines short, medium andlong-term plans to align our operations and systemsto meet the requirements of the Act. We continue toactively participate as an interested and affectedstakeholder in the process leading to thepromulgation of the Act.

We will continue to improve on the reporting ofour atmospheric emissions, in line with our value oftransparency. Currently we disclose total SO2 andgreenhouse gas emissions, as our key emissions,however we are committed to reporting additionalemissions by 2014. Contained within this reportingimprovement is the disclosure of ozone depletingsubstances, persistent organic pollutants, volatileorganic compounds and hazardous emissions. In theperiod leading to 2014, we will continue to monitorour emissions and accurately ascertain our reportingboundary to enable us to report comprehensively onsignificant atmospheric emissions.

MonitoringWe have an extensive ambient and source monitoringnetwork in place. This includes dust fallout at alloperations, continuous ambient air quality monitoringstations and passive diffusive sampling at ourMarikana operations and continuous on-line stackmonitors at both the smelter and the PMR.Intermittent emission monitoring campaigns areadditionally undertaken to measure emissions forwhich no continuous analysers are set up. Themonitoring results are used to identify areas ofconcern, compliance reporting and to mitigateadverse impacts. Our monitoring system is a vitalcomponent in the compilation of our NEMAQAalignment strategy.

Our performanceOur commitment to implementing dust suppressionmeasures on tailings facilities has fashioned a seriesof innovative dust suppression projects over the lasttwo years on both operational and dormant tailingsfacilities. At our Marikana operations, two operationalfacilities are equipped with irrigation systems whilstanother one is equipped with an overhead irrigationsystem. The operational facility at Limpopo is similarlyequipped with the suppression methodology. Dustfallout monitoring sites are located around thefacilities, with monitoring results indicating theeffectiveness of these systems.

Karee tailings facility one was decommissioned inFebruary 2008, which triggered our commitment torevegetate all dormant facilities. The implementationof a three phased dust suppression project wasinitiated. Phase one of this project involved theimplementation of Hessian socks filled with hydrogel,a mixture of indigenous grass seeds, compost,hessian sheeting and hessian wind breaks, aroundthe perimeter of the facility. Phase two which wassuccessfully completed in 2009 entailed theapplication of an environmentally friendly chemicaldust suppressant on the remaining middle part of thefacility to mitigate dust fallout during the dry wintermonths. Phase three, which is currently underway,involves the seeding and composting of the remainingmiddle part of the tailings facility. Maintenance onthe vegetation cover on both the side walls and topareas of our additional dormant facilities continuesto be undertaken.

WE ARE COMMITTED TO PREVENTING POLLUTION AND ENVIRONMENTALDEGRADATION IN ORDER TO REDUCE OUR IMPACT ON THE ENVIRONMENTAND THE COMMUNITIES WHERE WE OPERATE.

Dust suppression measures, in the form of overhead irrigation, on tailingsfacility three, four and five at our Marikana operations.

0

Total

data

point

s

With

inind

ustria

l

perfo

rman

cetar

get in

dicato

r

Outside

indus

trial

perfo

rman

cetar

get in

dicato

r

% of performancetarget achieved

Data points

100

20

10

60

40

80

30

0

350

250

20050

70

90

100

150

300

%

Dus

tfa

llout

mon

itorin

gsa

mp

les

Dust fallout in 2009

71


Reducing our Impacts on Air Quality(continued)

007 08 09

12

10

6

2

4

8

Tonn

es

Financial year

Average tonnes of SO2 emitted per day from pointand non-point sources

Our air quality management system includes acomprehensive emissions inventory, which iscontinuously updated as per operations, whichinforms the placement of dust fallout monitoring sites.We continue to maintain and operate an extensivedust fallout monitoring network to monitor and trackthe performance of our mitigation measuresimplemented for sources of particulates at both ourMarikana and Limpopo operations. We track ourmitigation action at both the operations on a monthlybasis against our set performance indicators for bothon and off-site which are based on best practice.Our industrial performance target indicator is set at1200mg/m2/day, 92% of our monitoring data fellwithin this target as indicated by the figure to theright. Our residential performance target indicatoris set at 600mg/m2/day, for which we monitoredone exceedance for 2009. Where sites exceededthe targets, the incident was logged and an actionplan compiled.

We continue to maintain and operate the airpollution control equipment at our processingoperations. For our smelter operations, the total SO2

emitted for 2009 was an average of 11.1 tonnes perday. This is an increase of two tonnes per day incomparison to 2008. During 2009, an advancedcontrol system was commissioned and installed atthe smelter, allowing for improved SO2 absorptionlevels due to multi-variable control. Although thecontrol system has only been in operation for the monthof September, significant improvement on the efficiencylevels of the sulphur fixation plant were evident.

During 2009, maintenance on the sulphur fixationplant at the smelter was undertaken during November2008 and June 2009. The plant was bypassed duringthese periods with the operation running at a reducedcapacity to minimise the ambient impact of SO2.Continuous communication was undertaken with ourstakeholders during both these periods. A changefrom annual to bi-annual maintenance was undertakento maintain air pollution control efficiency continuously;minimise the risk of emergency repairs and to reducethe cumulative offline time of the air pollution controlequipment. The bi-annual maintenance has proven tobe efficient as no significant air pollution controlequipment shutdowns were experienced for 2009 withequipment running at satisfactory utilisation levels.

72


Reducing our Impacts on Air Quality(continued)

Progress on the hazemeter project

Aerosols and greenhouse gases interfere with the earth’s energy budget. These changes are expressed in terms ofradiative forcing. Aerosols are comprised small solid particles and liquid droplets which are airborne, either natural oranthropogenic origin. Aerosols in the atmosphere and their contribution to climate change are currently the object ofmany international research programmes around the world, as they remain the dominant uncertainty in radiative forcing.

The hazemeter project, which commenced in 2008 in association with the Climatology Research Group at theUniversity of the Witwatersrand, continued with the second data collection campaign commencing in May 2009.The participating eight schools remained enthusiastic and eager to participate in the project. The percentage datarecoveries achieved for the first and second campaigns were a satisfactory 78% and 87% respectively. A significantimprovement in data recovery is seen between the campaigns, indicating an increased understanding ofinstrumentation handling and project awareness. A workshop with all the learners and educators involved will beundertaken during the course of 2010 to allow for learners to analyse the data collected. A third data collectioncampaign is set for 2010.

Campaign TwoCampaign One

0

100

Schools

80

70

40

20

10

30

60

50

90

A B C D E F G H

%

Percentage data recovery for two campaigns

73


Responsible Land Management, BiodiversityConservation and Mine Closure

We are committed to conserving the diversity oflandscapes, ecosystems, habitats and species and toaddress factors that may threaten biodiversity and thenatural environment. We make every effort to minimiseour mining footprints and remediate areas ofdegradation or pollution. Our commitment goes beyondour site-specific activities into the broader communitiesto include observing national laws where we operateand the indigenous cultures and dependency onnatural resources of neighbouring communities.

Our approachBiodiversity and land managementThe loss of biodiversity as a result of competing landuse and habitat loss is of global concern. Werecognise this business risk and endorse the ICMMprinciples and position statements to contribute tobiodiversity conservation and to commit to integratedland use planning and management by implementingthe precautionary approach to minimise direct,indirect or cumulative adverse effects on biodiversityfrom our operations. Company biodiversity and landmanagement is informed by the integratedenvironmental and closure planning strategy andsupported by a biodiversity action plan andguidelines, which are aligned with legislativerequirements and in particular the NationalEnvironmental Management Biodiversity Act 10 of2004, other legislation, best practice and ICMMprinciples. The assessment and management ofbiodiversity is integral to analytical tools such asenvironmental impact assessments which areundertaken for all new listed mining activities. Wereport annually on our progress on biodiversity torelevant government authorities and as part of oursustainable development reporting.

Aspects relating to biodiversity and integrated landuse are key components of our risk managementprocess and environmental impact assessmentsundertaken for proposed activities. Sound ecologicalprincipals provide the foundation for our biodiversityaction plans. All of our operational sites requirebiodiversity action plans, of which the decision isbased on the presence of a number of characteristicsincluding habitat fragmentation, loss of habitat, loss ofspecies, change in species composition, alien invasivespecies, soil and water contamination and siltation.The action plans are supported by software modellingthe key parameters including alien invasive species;the potential buffering quality of existing wetlands andassociated vegetation; and the potential for faunalhabitats.

In line with our commitment to biodiversity issues,we are a member of the South African Mining andBiodiversity Forum, the intent of which is to provide aplatform for the sharing of best practice in order toimprove biodiversity management.

Mine closure planningWe strive to follow a closure based risk assessmentapproach in planning for closure. This integratedapproach provides for the consolidation of managementplans, enhanced application of pollution preventionprinciples and reduced long-term financial risk.

WE ARE COMMITTED TO INTEGRATED LAND USE MANAGEMENT ANDBIODIVERSITY CONSERVATION BY APPLYING A RISK BASEDPRECAUTIONARY APPROACH DURING ALL PHASES OF OUR OPERATIONS,INCLUDING MINE CLOSURE.

As part of our Arbour Day celebrations, our Environmental Departmentdonated trees to St. Catherine Primary school.

We own and manage a game farm, which comprises 212 hectares.

Species found at our operations as per international Union for Conservation of Nature red data status

The World Conservation Union (IUCN) Probability ofScientific Name Common name Red Data Status occurrence

InvertebratesMetisella meninx Marsh Sylph Vulnerable High

ReptilesPython natalensis Southern African Python Vulnerable High

MammalsAtelerix frontalis South African Hedgehog Near threatened HighMiniopterus schreibersii Schreiber’s Long-fingered Bat Near threatened HighTatera leucogaster Bushveld Gerbil Data deficient High

BirdsFalco naumanni Lesser Kestrel Vulnerable HighSagittarius serpentarius Secretary Bird Near threatened High

74


Responsible Land Management, BiodiversityConservation and Mine Closure (continued)

Our performanceBiodiversityIn 2009, we have completed a strategy comprising oflong term objectives, risk assessments and biodiversityaction plans containing time frames and responsibilitiesfor our Marikana operations. The significance of theimpacts on biodiversity are rated according to theCompany’s risk management process, which in turnresults in the actions as per the biodiversity actionplans. Additionally we have established a monitoringframework that will assist us in determining thesuccess of the action plans once implemented.

In 2009, we withdrew from our joint venture withIMX Resources in Tanzania and have returnedoperatorship of the project to them. All drill sites havebeen successfully rehabilitated. Additionally, ourexploration activities in Gabon were placed on hold in2009. With the exception of exploration activities inGabon and Northern Ireland, our operations are notlocated in biodiversity sensitive areas or areas of highbiodiversity value. We continue to work in closecollaboration with government, the WorldConservation Society and other non-governmentalorganisations to ensure that the appropriate riskmanagement through biodiversity assessment andmanagement programmes.

Operations near to biodiversity sensitive areas

Location Type of operation Position in relation to protected area Size of operation Biodiversity value

Gabon Exploration Within the Monts de Cristal 9,241 km2 The park is a level two areaNational Park. according to the classification

of the International Union forConservation of Nature.The ecosystem is of a

terrestrial nature.

Northern Ireland Exploration The area is adjacent to 2,746 km2 No known classificationthe Giant’s Causeway and the level regarding biodiversityCauseway Coast Heritage Site. value. The area has heritage

and archaeological value.

75


Responsible Land Management, BiodiversityConservation and Mine Closure (continued)

Land management

Land use in 2009

Land use Hectares

Total land managed 23,631Total land covered by tailing facilities 975Total land covered by waste rock 80Net land disturbed by opencast 655Total land disturbed and not rehabilitated 168Total areas rehabilitated 403

In 2009, subsequent to the global economicdownturn, our Limpopo and opencast operationswere placed on care and maintenance. Therehabilitation of opencast mining was based onreserve availability.

The total area of land managed by the Companyincludes land owned and land leased. Areas ofexploration are excluded from these areas. The areaof land restored equates to the area of opencastmining operations that have been rehabilitated. Wehave the necessary expertise in house to audit andassess remediation and restoration practices andwhere required we make use of the expertise andservices of external professionals in the field ofrehabilitation and restoration. We have not formedpartnerships with third parties to protect or restorehabitat areas distinct from where the Company hasoverseen and implemented restoration or protectionmeasures.

In 2009, we completed the compilation of a fiveseries rehabilitation guideline, outlining legislativerequirements and national and international bestpractice for the rehabilitation of waste rock dumps,slag residue deposits, landfill sites, opencast miningand tailings facilities. We have maintained our re-vegetation programmes on our dormant tailingsfacilities with our initiatives this year focusing onimproving the density of the vegetation andenhancing vegetation growth in areas of poorcoverage. In 2009, we have continued to monitor theremediation of Vlakfontein Mine and results to dateindicate successful rehabilitation with little evidence ofprevious environmental degradation. In 2009, theunlicensed tailings facility at our Limpopo operationswas successfully rehabilitated, with tailings beingremoved to the licensed tailings facility at anestimated cost of US$110,861.

Mine closure planningA key consideration for the any mining company isthe notion that, at some point, all mining operationswill cease. We have adopted a risk based approachtowards closure planning and have finalised in 2009an integrated mine closure strategy and plan for ourMarikana and Limpopo operations. The strategy andplan, which is to be reviewed every two years, providesa strategic framework within which all closure planningfor our operations can be managed. The strategyinforms all environmental management programmesat our operations so as to ensure alignment with bestpractice and legislation and comprises conceptualland use spatial development plans and consolidatedenvironmental plans which are based on riskassessments. This gives rise to enhanced applicationof pollution prevention principles and reduced long-term financial risk. Integral to the development of thestrategy and plan were extensive stakeholderconsultations which provided stakeholders with theopportunity to provide feedback into the sustainableuse and management of our natural resources.

Financial closure provisions for unscheduled andscheduled closure are reviewed annually against theprogress made in implementing the integrated mineclosure strategy and plans. These provisions arealso audited annually by third parties and amendedaccordingly to ensure sufficient financial resources areavailable at any given time to implement rehabilitationmeasures as required by the management programmesand closure planning. At 30 September 2009, we hada provision covering the costs of site closures ofUS$67 million, compared to US$50 million in 2008.This provision is partly funded by Rehabilitation TrustFund deposits with the balance supported by bankguarantees. All new projects undertaken considerclosure measures and the associated closure costsare integral to the environmental impact assessmentsundertaken for the activities.

Eric Mbele and Ismael Mabote showcasing the crop from Agisanang farm.

76


Uniting with our Communities

IntroductionThe reality of our business is finite ore reserves, thecertainty of mine closure and the possible adversesocial, economic and environmental effectsassociated with mine closure. Platinum mining hasattracted large populations to mining operations inanticipation of employment opportunities. In line withnational statistics, the GLC has a 40% unemploymentrate, HIV infection rates of 23% and dwellings arecharacterised by the lack of basic services, such aswater and electricity.

The business case for empowering the GLC, ourhost communities and improving their quality of life isstraightforward. We cannot succeed in societies thatfail. To this end, we continue to endeavour tocontribute to our communities’ long-term economicdevelopment and promote the beneficiation of ourminerals – in this way, we can retain our license tooperate, innovate and grow. Additionally, stakeholder

engagement improves company-community relations,and guides the Company when taking decisions thataffect the community. Risks associated with poorcommunity relations and ineffective communitydevelopment may have far-reaching implications forthe success of the Company.

Our Charter states that we are successful whenour communities value our relationships. Our Safetyand Sustainable Development Policy spells out ourcommitments to community engagement andcommunity development. We are committed toempowering our host communities and improvingtheir quality of life by contributing to their long-termsocial, economic and institutional development andpromoting the beneficiation of our minerals as well asmaintaining transparent and ongoing consultativerelationships with all stakeholders.

As a member of the ICMM, we support theirPosition Paper Statement on Mining and IndigenousPeople. Our CEO is directly accountable for thesecommitments relating to community development andcommunity relations and is supported by theExecutive Vice President Human Capital and ExternalAffairs. Our community initiatives in terms ofdevelopment and engagement are focussed on theGLC, a term describing the communities within a 15kilometre radius of our operations. Additionally ourcommunity development initiatives are also focussedon our labour sending areas of the Eastern CapeProvince.

Our approachCommunity impact assessmentBefore the commencement of mining, independentsocial impact assessments, which are part of theauthorisation process, determine socio-economicconditions and the potential impacts, both negativeand positive, which operations may have on thecommunities. In addition, as part of the mininglicenses granted in terms of the Minerals andPetroleum Resources Development Act 28 of 2002,possible socio-economic development projects withinthe communities are identified in the Social andLabour Plans. These are integral to the mining licenseapproval process. These projects are aligned with andsupport the integrated development plans of localgovernment. The impacts and effectiveness ofprojects are monitored throughout the life of mine,as part of the specific project execution, baselineassessments and community perception surveys.Prior to mine closure, further social impactassessments consider the impact of withdrawingoperations on the community. As part of this impactassessment, management plans are identified andexecuted to minimise impacts on communities.

WE ARE COMMITTED TO EMPOWERING OUR HOST COMMUNITIESAND IMPROVING THEIR QUALITY OF LIFE BY CONTRIBUTING TO THEIRLONG-TERM SOCIAL, ECONOMIC AND INSTITUTIONAL DEVELOPMENTAND PROMOTING THE BENEFICIATION OF OUR MINERALS.


• US$5.7 million was spent in 2009 oncommunity development projects, of whichUS$3.2 million was spent on local economicdevelopment projects as per the approvedSocial and Labour Plans;

• The GLC area meetings and the RekopaneDevelopment Forum meetings provide theplatform where key stakeholders discuss andco-ordinate community development projects;and

• We have a number of land claims lodgedagainst the Company in terms of theRestitution of Land Rights Act 22 of 1994.

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Uniting with our Communities (continued)

Community engagementThe key objectives for community engagement areto understand community concerns and guideexpectations; plan and manage communitydevelopment projects; and encourage communityself-reliance, governance and skills development.Over the past couple of years we have learnt throughour annual perception surveys that our approach tocommunity engagement often lacked inclusivenessand structure. In response, we initiated theengagement process, termed Lentswe (meaning“Voice”) in 2008, which is now focussed on monthlyGLC area meetings and quarterly RekopaneDevelopment Forum meetings, which includecommunity members, local government institutions,tribal authorities and where required industry peers aswell as specialist partners. We are committed toinvolving communities in decisions that affect them.Incidents relating to communities are channelledthrough our Human Capital and External AffairsDepartment to the respective departments wherethey are addressed in direct consultation withapplicable community members. We also have aformal complaints register that is easily accessiblewith the option to remain anonymous. The RekopaneDevelopment Forum also provides a platform forcommunity complaints to be raised and subsequentlyaddressed by the Company. Our engagement isfocussed on issues which are perceived as materialto the communities and the impacts which ouroperations have on the communities where weoperate.

Community resettlementOur community policies comply with the World BankOperational Directives on Resettlement of IndigenousPeoples and Cultural Property, which providesguidelines to minimise and mitigate adverse socialand economic impacts of operations on indigenouspeople.

Community land claimsWe have a number of land claims lodged against theCompany in terms of the Restitution of Land RightsAct 22 of 1994, mostly by the communities within theregion where we operate. Discussions are being heldin this regard with the Land Claims Commission ofSouth Africa in order to resolve these claims.Mechanisms for resolving disputes or grievances inthis regard are managed through the legislativeframework of the Land Claims Commission and LandClaims Court on a regional basis.

Community developmentSince 2006, we have focussed our communitydevelopment programmes on the commitmentsoutlined in the Social and Labour Plans for Marikana.Our key focus areas are infrastructure development,educational support, health support and localbusiness development, including commercialagriculture. These projects have been selected and

developed in close collaboration with local authoritiesand government to ensure that we complement localdevelopment plans. We have a number of trainingprogrammes in place that affords the community withthe opportunity to enhance their skills and knowledge.These training programmes encompass diversitytraining, ABET and project specific training, includingschool governance training and knowledge shared aspart of the eco-schools curriculum.

Our performanceCommunity engagementIn 2009, we have refocussed our communityengagement initiatives on the quarterly RekopaneDevelopment Forum and GLC area meetings which takeplace monthly. These meetings are project orientatedand provide platforms for discussion of challenges,successes and progress of various projects. Communitymembers are also provided with the opportunity tobecome a part of the projects in their areas.

Although no additional community perceptionsurveys were undertaken in 2009, we have a solidunderstanding of the perception of our communitiesgathered during the annual surveys undertaken since2006. Comprehensive socio-economic assessmentswere completed on the Marikana GLC in 2008, whichhighlighted housing, basic services and health careservices as community needs. Feedback from thesesurveys and assessments is incorporated in ourcommunity development and engagement strategies.

Community resettlement and small-scale miningThere was no resettlement of communities across ouroperations during 2009; nor any artisanal or small-scale mining. We are not involved in any programmesto address artisanal and small-scale mining regionallyor nationally.

Community developmentIn 2009, 60 community members attended the ABETtraining programme. Many community membersreceived training or information relating to specificprojects, including the permaculture training and eco-schools farming projects. We are committed to localeconomic development in the Marikana, Limpopo andEastern Cape Province communities and havecommunity development projects in place. Themajority of these development projects are pro bonoengagements as per the requirements of the Socialand Labour Plans. In 2009, US$5.7 million was spenton community development projects and of this amountUS$3.2 million was spent on local economicdevelopment as per the Social and Labour Plans. Todate, we have spent 41.1% of our total five yearfinancial commitments for local economic developmentas per the Social and Labour Plans, thus slightlyexceeding our target to spend 41% by 2009.Baseline socio-economic and quality of life indicatorsenable us to track our impact on sustainabledevelopment. The table on the next page outlines thekey projects, the extent of the development,achievements to date and spend in 2009.


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Key community development projects in 2009

Project Objectives Spend in 2009 (US$) Achievements of the project in 2009

Community skills To provide basic education to US$9,738 • 60 community members have received ABET training, with 20 community membersdevelopment community members within the GLC. receiving training on ABET level 4;and

• Nine retrenched employees who successfully completed portable skills training were employed in a shortterm community project focusing on general maintenance and repairs at local schools.

Madibeng capacity To facilitate a capacity building US$66,892 • The geographic information system programme with the municipality to assist them withbuilding programme programme for the municipality project planning is complete. Further opportunities for the programme, in partnership with

that will assist projects in the IFC are being explored as part of the Lonmin/IFC programme to build capacity forMadibeng municipal area. Madibeng municipality; and

• A second phase of the programme is planned, that includes a maintenance/operations contract as weintend to expand the functionality of the programme within the Municipality.

Local supplier To contribute significantly to the US$593,0851 • 215 contracts and orders to date being awarded to 34 local suppliers, to the value ofdevelopment economic and social development US$31.5 million in the disciplines of construction, ore and concentrate transport, trainingprogramme of the communities through and catering;

enhancing the knowledge, skills • In 2009, 0.8% of total discretionary spend on goods, materials and services or anand entrepreneurial development amount of US$6.6 million was spend on GLC suppliers;of the communities. • In 2009, 105 additional contracts and orders were awarded to local suppliers; and

• In 2009, in partnership with the IFC, we have established an off site incubation centre to afford GLCcompanies who have contracts with the Company in excess of five months with fully furnished officefacilities and business and financial training.

North West water To improve basic water and US$781,795 • The implementation phaseand sanitation project sanitation in the communities of the was commenced in 2009, with(Oustad project) North West province. 400 households receiving water reticulation infrastructure and yard connections.

Water and sanitation To improve basic water and US$61,179 • 22 toilets have been constructed at JoJo Senior Secondary School, thus totalling the(Eastern Cape Province) sanitation infrastructure in the number of toilets constructed in the area to 179; and

schools of the Alfred Nzo District • Approximately 238 learners and eight educators have benefited from the infrastructureMunicipality of the Eastern refurbishment.Cape Province.

Silindini Bridge Construction of a single lane steel US$336,485 • The environmental impact assessment and water use licenses were completed and(Eastern Cape Province) bridge across the Xuka River to submitted to government authorities for approval; and

provide improved access to the • Civil drawings were completed and the contract awarded.Thusong service centre constructedin 2008.

1 Expenditure through Lonmin-IFC partnership.


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Key community development projects in 2009 (continued)


Health care delivery To provide access to adequate US$34,734 • Two mobile clinics that were donated to the Department of Health in 2008 continue to be operational; andhealth care services for • Refurbishments were undertaken at five clinics within the GLC.GLC communities.

Rustenburg hospice To provide HIV/AIDS home-based US$94,550 • To date, 13 caregivers have been trained, with training continuing in 2009; andcare services and social support • 422 patients are visited regularly as part of home based care.in the towns of Segwaelaneand Wonderkop.

HIV/AIDS peer To reduce the spread of HIV/AIDS US$61,887 • We have 58 active home based carers trained in an intensive training programme of 69 days;education and and to enhance treatment of the • Currently over 1,200 patients and 640 orphans are being cared for on a regular basis, with over 50,000home based care disease through peer education visits made in the past year;

and home-based care in the GLC. • In total, 1,856 patients benefited from the home based care programme;• 1,999 participants were counselled and tested in the VCT campaign in the Marikana and Brakpan GLC;• A tuberculosis awareness campaign was held in Marikana and a cholera awareness campaign in Brits; and• A World HIV/AIDS celebration day was held.

Post matric bridging To enable students with the US$62,180 • 20 learners from the GLC have attended the course in 2009, totalling this to 63 learners to date; andcourse opportunity to improve their grade • A number of former learners who have attended this course have been successful with the completion of

12 results on selected subjects and computer engineering diplomas or have gained acceptance to study computer engineering at a university.to provide them with the opportunityto enter into tertiary education.This bridging course is presented inpartnership with the LonminAcademy and Damelin.

Saturday School To provide learners with the US$94,347 • 352 learners from the GLC attended Saturday school in 2009 of which the final grade 12 results areprogramme opportunity to improve their outstanding;

knowledge on the school curriculum • Psychometric testing was completed on 1,245 learners to assist with subject choice decisions; andfocusing primarily on mathematics • Grade ten to 12 learners that attended the programme obtained between 5.8% and 7.8% higherand science. Saturday School averages in the 2008 final exams than those learners who did not attend the programme.comprises a 36 week programmeper annum to selected learnersfrom the GLC High Schools inconjunction with North WestUniversity.


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Personal computer To establish computer centres at US$14,987 • 550 personal computers have been upgraded and repaired to date; andlaboratories GLC schools and to equip school • 21 schools in the GLC have been equipped with functional computer laboratories.

educators with the necessary skillsto operate a personal computereffectively and provide relevanttraining.

Early childhood To identify the priority needs, US$30,478 • Baseline assessments completed at a total of 28 centres to date; anddevelopment baseline information and implement • Constitutions have been established at three crèches to facilitate the payment of educators.

support structures for gifted children.

School infrastructure To improve the infrastructure of US$769,805 • Seven schools received 12 mobile classrooms, totally the number of mobile classrooms donated toupgrade schools in the GLC based on date to 23, thus reducing learner classroom ratios significantly;

requirements identified through a • Refurbishment of three schools, with 2,636 learners and 74 educators benefiting;needs assessment, in order to • Furniture repairs completed for five schools within the Marikana GLC; andaddress overcrowding and the • General maintenance and repairs at Segwaelane Community Hall and Primary School.safety of learners.

Curriculum support To provide educators and learners US$12,697 • Five primary schools were equipped with the software; andsoftware with a competency based computer • 50 educators have been trained on the software.

programme to support learningoutcomes of the national curriculum.

Annual career To facilitate and manage annual US$34,125 • Successful facilitation of the third GLC career exhibition in June 2009;exhibition career exhibitions for grades nine • An estimated 1,457 learners and 102 educators from 13 GLC Schools attended the career exhibition

and 12 learners from the GLC in over two days at which 13 Companies exhibited;order to provide learners with the • 63 Educators from 30 GLC Schools attended a motivational workshop in 2009;opportunities to obtain knowledge • 13 GLC schools were provided with Careers for Africa Books; andand information on careers. • Nine GLC school learners qualified to apply for Lonmin Bursaries for their studies in 2010.Learners are encouraged to discussfuture prospects of training, jobopportunities and internships offeredby companies exhibiting.


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School nutrition To enhance the nutritional status, US$641,421 • 22 schools in the Marikana GLC are supplied with fresh fruit and vegetables to supplement the mealsprogrammes health and school attendance of provided by the Department of Education;

the pupils in the GLC schools by • 286 food preparers and educators in Marikana have received training on food preparation and theensuring food security. importance of nutrition;

• 12 schools in the Limpopo GLC were provided with cooking equipment; and• 31 educators and volunteers were trained on food gardening in Limpopo and a demonstration garden wasestablished at one of the local schools.

Permaculture and To facilitate the implementation of US$40,378 • To date, 14 schools in the Marikana GLC and five in Brakpan GLC are enrolled in the project; andeco-schools the eco-schools programme at • Ten schools to date have productive food gardens in place and the vegetables are being used as a

schools within the GLC, to improve supplement in the school nutrition programme.environmental learning andenvironmental managementpractices of the learners.

Agisanang farming To realise the commercial potential US$532,722 • Successful re-launch of the farming project focusing on vegetable and crop farming;project of the 63 hectare Agisanang Farm • Development of overhead and drip irrigation systems; and

and to create employment • The employment of 78 community members.opportunities and to support smallscale farming.

Itireleng community To train and support small-scale US$24,244 • 16 beneficiaries trained in vegetable and poultry farming; andco-operative commercial farming to succeed in a • Renovations of vandalised infrastructure and equipment.

co-operative farming enterprise inBapong comprising six hectarevegetable garden.

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School nutrition programme delivers results.

We are committed to alleviating hunger and poverty in the GLC by improving nutrition and creating economicincentives for the disadvantaged. We acknowledge that good nutrition and education goes hand in hand, bothrequired for the empowerment of our youth. In 2009 we in partnership with the Department of Education embarkedon a programme within the Marikana GLC, with the vision to provide every child within disadvantaged primaryschools with one balanced meal per week day. To date, 22 schools within the Marikana GLC, a combined total of13,009 learners and 93 food prepares are benefiting from this programme. Additionally, we have provided thisservice to some of the intermediate schools in the GLC.

The Department of Education provides all schools with non-perishable food and we augment the programmewith fresh fruit and vegetables, so that every child each day receives one piece of fresh fruit and vegetable. We havealso contributed to food preparers’ stipends and enhanced the food preparation equipment provided by theDepartment, including the donation of cooking pots, plates and refrigerators. Additionally, as a safety initiative, wehave erected cages for storage of gas bottles and connections to the gas stoves. Food preparers have been trainedin food hygiene, the importance of nutrition in schools and the importance of nutrition in the combating of diseasessuch as HIV/AIDS. Mr. Eric Mogale, who is the principal of the Maruatona Primary School located in the MarikanaGLC, is very excited about results of the nutrition programme at his school. He has also reported that theprogramme has assisted in reducing their absenteeism rate from around 5% to 1%.

In support of these initiatives and to supplement the school nutrition programme, we have assisted ten schoolswithin the GLC to establish food gardens. Permaculture training has been provided to educators and twochampions from each school were selected. Vegetable and herb seedlings were provided to the schools as part ofthe training. The vegetables which are produced further supplement the meals provided by the Department and bythe Company. The majority of the schools that are involved in the programme have taken the initiative to extend theirgardens. Mrs Eva Motshabi, an educator at St. Catherine Primary School is very pleased with the project indicatingthat the learners are very enthusiastic, with many learners volunteering to work in the gardens during school holidaysand initiating their own gardens at home.

One of the schools that participate in the permaculture farming is the Rekgonne-Bapo special school in Bapong.The vegetable garden at Rekgonne-Bapo special school comprises tomatoes, which are grown in farming tunnels;lettuce, green peppers, chillies, herbs and potatoes which are grown in open fields. The tunnels at this school werea donation from one of our contractingcompanies. The garden has a simpleirrigation system in place that feedswater from storage tanks to the tunnelsand open fields. School learners assistin the garden after school lessons andparents also provide support byworking in the gardens during schooltimes. This programme has proven tobe very successful and in somemonths, the school has been able tosell some of the vegetables foradditional funding.

Winnie Zungu, Christine Maduma, Rebecca Macheleand Ani Muma are preparing a meal for the learnersat St. Catherine Primary.

The nutrition programme at St. Catherine Primary.

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Measurement 2005 2006 2007 2008 2009

ProductionPGMs produced Oz 1,704,249 1,809,744 1,477,529 1,366,307 1,267,529

EconomicNet cash generatedCustomers, consumersand investment incomeCash received for products US$ million 1,107 1,611 2,016 2,270 1,138Cash return on investment US$ million 2 1 16 13 3Suppliers1

Cash payments for materialsand services purchased US$ million (361) (429) (395) (445) (488)Cost of borrowings US$ million (29) (32) (41) (23) (34)

Net cash flows US$ million 719 1,151 1,596 1,815 619

Cash distributedHuman capital(salaries and benefits) US$ million 313 406 492 557 499Social capital US$ million 7 3.1 3.9 7.3 6.2Government taxes US$ million 80 186 267 245 55Directors remuneration US$ million 10 9 7 9 7Shareholders distribution US$ million 102 124 171 186 –Cash retained forsustainable growth US$ million 207 426 655 811 52

Net cash distributed US$ million 719 1151 1,596 1,815 619

EmployeesEmployees Number 21,228 23,804 24,122 25,967 21,623Contractors Number 5,306 6,932 8,580 7,758 10,4972

Designated employedin management on apermanent basis Percentage 25.8 36 37.9 42.3 41.3Women employedon a permanent basisin mining operations Percentage N.D.A 1.4 1.4 1.8 2.9Women employedon a permanent basisat the mine Percentage N.D.A 4.1 4.9 6.1 6.8Employee turnover rate Percentage 15.9 1.1 4.1 6.6 23.3Employees and contractorstrained in ABET Number N.D.A 1,681 1,389 2,866 1,139

Occupational Health and SafetyFatalities Number 6 6 3 3 3LTIFR Incidents/million

hours worked 18.103 12.50 10.80 6.27 6.21NIHL cases compensated Number 278 570 490 229 45Tuberculosis cases4 Number 286 338 504 533 472

HIV/AIDSEmployees for VCT Number 1,615 3,236 13,761 18,692 4,680Patients on ART(excludes PMR)5 Number 407 587 836 989 962Patients on the wellnessProgramme Number N.D.A N.D.A N.D.A 1150 518

Key Performance Indicators

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Measurement 2005 2006 2007 2008 2009

EnvironmentTotal freshwater intake m3 9,500,000 10,858,464 11,795,482 9,256,244 8,885,360Total freshwaterintake efficiency m3/PGM oz 5,60 6,00 7,98 6,77 7.01Electricity MWHr 1,402,718 1,617,771 1,619,922 1,575,917 1,481,744Energy Terajoules 5,813 7,348 7,434 6,555 6,613Energy efficiency GJ/PGM oz 3.50 4.10 5.03 4.80 5.22Greenhouse gas Kilotonnes

CO2 equivalent 1,489 1,775 1,673 1,659 1,595Greenhouse Kilotonnesgas efficiency CO2 equivalent/

PGM oz 0.89 0.98 1.13 1.21 1.26Tailings disposed totailings facilities Kilotonnes 12,832 15,519 14,487 12,649 17,068Waste rock disposedto rock dumps Kilotonnes 1,415 1,376 1,203 1,128 1,343Hazardous waste disposedof to landfill and by incineration m3 4,325 8,973 7,038 N.A N.AHazardous waste disposedof to landfill and incineration Tonnes N.A N.A N.A 42,857 55,906General waste to landfill m3 28,821 52,559 53,110 N.A N.AGeneral waste to landfill Tonnes N.A N.A N.A 8,279 7,199Average tonnes of SO2

emitted per day from pointand non-point sources6 Tonnes/day 3.4 7.4 11.3 9.1 11.1

CommunitiesPercentage spend of ourfinancial commitments onlocal economic developmentprojects as per the Socialand Labour Plan by 2009 Percentage N.A N.A N.D.A 24 41

N.D.A – No data available. Where it is indicated that no data is available, this is primarily as a result of low confidence in the accuracy of the data oran absence of measurement of the data.

N.A. – Not applicable

1. We have a 30 day payment policy on services and procurement.

2. Due to improvements in data capturing systems, our contractor figures in 2009, includes all contractor personnel registered on our database,including ad hoc contractors, external consultants, labour brokers, service providers and volume contractors. In previous years, a portion ofthese personnel were not registered on our database. Not all of these contractors are employed on a full time basis.

3. The figure for LTIFR for financial year 2005 was identified during the 2005 assurance process to have the potential of being underestimated by10%.

4. This was incorrectly published prior to 2009 – the data represents total tuberculosis cases and not only pulmonary tuberculosis cases.

5. PMR patients access ART through their private medical aid schemes.

6. The data for 2007, 2008 and 2009 represents emissions from both point and non-point sources.

Key Performance Indicators (continued)

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The following table references the information within this report against the GRI (2006) and the Mining and Metals SectorSupplement. Relevant disclosure on our management approach for each category indicator is provided within the text onthe particular issue or risk.

GRI Indicators

No. Statement Reported Page

Profile

Strategy and Analysis

1.1 Statement from the most senior decision maker of the organisation(e.g., CEO, chair, or equivalent senior position) about the relevanceof sustainability to the organisation and its strategy. � 01

1.2 Description of key impacts, risks, and opportunities. � 21

Organisational Profile

2.1 Name of the organisation. � Front cover

2.2 Primary brands, products and/or services. � 09

2.3 Operational structure of the organisation, including main divisionsoperating companies, subsidiaries, and joint ventures. � 06, 10

2.4 Location or organisation’s headquarters. 09

2.5 Number of countries where the organisation operates, and names ofcountries with either major operations or that are specifically relevantto the sustainability issues covered in the report. � 09

2.6 Nature of ownership and legal form. � 09, 10

2.7 Markets served (including geographic breakdown, sectors served,and types of customers/beneficiaries). � 31

2.8 Scale of the reporting organisation. � Annual Report,25 – 28

2.9 Significant changes during the reporting period regarding size, structure,or ownership. � 05

2.10 Awards received in the reporting period. � 16, 40

Report Parameters

3.1 Reporting period (e.g fiscal/calendar year) for information provided. � 05

3.2 Date of most recent previous report (if any). � 05

3.3 Reporting cycle (annual, biennial, etc.). � 05

3.4 Contact point for questions regarding the report or its contents. � Contents page

3.5 Process for defining report content. � 04, 05

3.6 Boundary of the report (e.g countries, divisions, subsidiaries). � 05, 06

3.7 State any specific limitations on the scope or boundary of the report. � 05, 06

3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities outsourcedoperations, and other entities that can significantly affect comparability fromperiod to period and/or between organisations. � 05

3.9 Data measurement techniques and the bases of calculations, includingassumptions and techniques underlying estimations applied to the compilationof the indicators and other information in the report. � 05

3.10 Explanation of the effect of any re-statements of information provided in earlierreports, and the reasons for such re-statement (e.g., mergers/ acquisitions,change of base years/periods, nature of business, measurement methods). � 04, 05

Reporting Against Global ReportingInitiative Indicators

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GRI Indicators (continued)


Report Parameters (continued)

3.11 Significant changes from previous reporting periods in the scope boundary,or measurement methods applied in the report. � 05

3.12 Table identifying the location of the standard disclosures in the report. � 85

3.13 Policy and current practice with regard to seeking external assurancefor the report. If not included in the assurance report accompanying thesustainability report, explain the scope and basis of any external assuranceprovided. Also explain the relationship between the reporting organisationand the assurance provider(s). � 05, 07, 08

Governance , Commitments, and Engagement

4.1 Governance structure of the organisation, including committees under thehighest governance body responsible for specific tasks, such as settingstrategy or organisational oversight. � 11 – 13

4.2 Indicate whether the Chair of the highest governance body is also anexecutive officer (and, if so, their function within the organisation’smanagement and the reasons for this arrangement). � 11

4.3 For organisations that have a unitary board structure, state the numberof members of the highest governance body that are independent and/ornon-executive members. � 11

4.4 Mechanisms for shareholders and employees to provide recommendationsor direction to the highest governance body. � 12

4.5 Linkage between compensation for members of the highest governancebody, senior managers, and executives (including departure arrangements),and the organisation’s performance (including social and environmentalperformance). � 14

4.6 Processes in place for the highest governance body to ensure conflictsof interest are avoided. � 11

4.7 Process for determining the qualifications and expertise of the membersof the highest governance body for guiding the organisation’s strategy oneconomic, environmental, and social topics. � 12

4.8 Internally developed statements of mission or values, codes of conductand principles relevant to economic, environmental, and social performanceand the status of their implementation. � 15, 16

4.9 Procedures of the highest governance body for overseeing the organisation’sidentification and management of economic, environmental, and socialperformance, including relevant risks and opportunities, and adherenceor compliance with internationally agreed standards, codes of conductand principles. � 11 – 16

4.10 Processes for evaluating the highest governance body’s own performanceparticularly with respect to economic, environmental, and social performance. � 12

4.11 Explanation of whether and how the precautionary approach or principleis addressed by the organisation. � 21

4.12 Externally developed economic, environmental, and social charters principles,or other initiatives to which the organisation subscribes or endorses. � 15

4.13 Memberships in associations (such as industry associations) and/ornational/international advocacy organisations. � 15

4.14 List of stakeholder groups engaged by the organisation. � 17

4.15 Basis for identification and selection of stakeholders with whom to engage. � 17

4.16 Approaches to stakeholder engagement, including frequency of engagementby type and by stakeholder group. � 18 – 20

Reporting Against Global Reporting Initiative Indicators(continued)

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Governance , Commitments, and Engagement (continued)

4.17 Key topics and concerns that have been raised through stakeholder engagement,and how the organisation has responded to those key topics and concerns,including through its reporting. � 17 – 20

Economic Performance Indicators

EC1 Direct economic value generated and distributed, including revenues,operating costs, employee compensation, donations and othercommunity investments, retained earnings, and payments to capital providersand governments. � 27

EC2 Financial implications and other risks and opportunities for theorganisation’s activities due to climate change. � 63

EC3 Coverage of the organisation’s defined benefit plan obligations. � 51

EC4 Significant financial assistance received from governments. � 27

EC5 Range of ratios of standard entry level wage compared to local minimumwage at significant locations of operation. � 51

EC6 Policy, practices, and proportion of spending on locally based suppliersat significant locations of operation. � 29

EC7 Procedures for local hiring and proportion of senior management hiredfrom the local community at locations of significant operation. � 52

EC8 Development and impact of infrastructure investments and servicesprovided primarily for public benefit through commercial, in kind orpro bono engagement. � 30

EC9 Understanding and describing significant indirect economic impactsincluding the extent of impacts. � 28

MM1 Sector supplementIdentify those sites where the local economic contribution anddevelopment impact is of particular significance and interest tostakeholders (e.g., remote sites) and outline policies with respect toassessing this contribution. Relevant information includes: Percentageof goods, materials and services purchased locally; percentage of workforcefrom local communities; investment in public infrastructure and itsmaintenance and compensation payments. Partial 28

MM2 Sector supplementValue added disaggregated to country level. �

Environmental Performance Indicators

EN1 Materials used by weight or volume. � 66

EN2 Percentage of materials used that are recycled input materials. � 66

EN3 Direct energy consumption by primary energy source. � 62

EN4 Indirect energy consumption by primary source. � 62

EN5 Energy saved due to conservation and efficiency improvements. � 62

EN6 Initiatives to provide energy-efficient or renewable energy based products andservices, and reductions in energy requirements as a result of these initiatives. � 62

EN7 Initiatives to reduce indirect energy consumption and reductions achieved. �

EN8 Total water withdrawal by source. � 64

EN9 Water sources significantly affected by withdrawal of water. � 64

EN10 Percentage and total volume of water recycled and reused. � 64

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Environmental Performance Indicators (continued)

EN11 Location and size of land owned, leased, managed in, or adjacent to,protected areas and areas of high biodiversity value outside protected areas. � 74

Sector supplementTotal amount of land owned, leased, and managed for productionactivities or extractive use. Mining companies should report the following1. Total land disturbed and not yet rehabilitated (opening balance).2. Total amount of land newly disturbed within the reporting period.3. Total amount of land newly rehabilitated within the reporting periodto the agreed upon end use

4. Total land disturbed and not yet rehabilitated (closing balance)5. Total amount of land owned, leased, and managed for productionactivities or extractive use. � 75

EN12 Description of significant impacts of activities, products, and serviceson biodiversity in protected areas and areas of high biodiversity valueoutside protected areas. Partial 74

EN13 Habitats protected or restored. � 75

EN14 Strategies, current actions, and future plans for managing impacts on biodiversity. � 73, 74

EN15 Number of IUCN Red List species and national conservation list specieswith habitats in areas affected by operations, by level of extinction risk. � 74

EN16 Total direct and indirect greenhouse gas emissions by weight. � 63

EN17 Other relevant indirect greenhouse gas emissions by weight. � 63

EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved. � 63

EN19 Emissions of ozone-depleting substances by weight. � 70

EN20 NO, SO, and other significant air emissions by type and weight.Sector SupplementReporting should include emissions from both major mobile sourcesand on-site stationary sources; management of fugitive emissions suchas dust from mining and processing activities (i.e., monitoring activitiescompliance with regulatory limits or number of dust-related complaintsand how they were addressed), case studies where significant localemissions occur. � 62

EN21 Total water discharge by quality and destination. � 65

EN22 Total weight of waste by type and disposal methodSector SupplementFor the mining and metals sector this refers to site wastee.g., waste oils, spent cell lining, office, canteen and camp waste scrapsteel, tyres and construction waste. The breakdown of “types of waste”(as requested in the indicator) should distinguish between hazardousand non-hazardous. Note: When collecting hazardous waste data forreporting, the reporting organisation should use the definition containedin the regulations that apply to the site. � 67, 68

EN23 Total number and volume of significant spills. Partial 59, 60

EN24 Weight of transported, imported, exported, or treated waste deemedhazardous under the terms of the Basel Convention Annex I, II, III, and VIII,and percentage of transported waste shipped internationally. � 68

EN25 Identity, size, protected status, and biodiversity value of water bodies andrelated habitats significantly affected by the reporting organisation’s dischargesof water and runoff. �


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Environmental Performance Indicators (continued)

EN26 Initiatives to mitigate environmental impacts of products and servicesand extent of impact mitigation. � 58

EN27 Percentage of products sold and their packaging materials that arereclaimed by category. � 66

EN28 Monetary value of significant fines and total number of non-monetarysanctions for noncompliance with environmental laws and regulations. � 58

EN29 Significant environmental impacts of transporting products and othergoods and materials used for the organisation’s operations, andtransporting members of the workforce. � 63

EN30 Total environmental protection expenditures and investments by type. � 58

MM3 Sector supplementThe number/percentage of sites identified as requiring biodiversitymanagement plans, and the number/percentage of sites with plans in place.Also include criteria for deciding that a biodiversity management plan isrequired and the key components of a plan. � 73, 74

MM4 Sector supplementPercentage of products(s) derived from secondary materials. This includesboth post-consumer recycled material and waste from industrial source(e.g., new scrap from fabricators and old scrap from end of life equipment),but excludes internal recycling within the facility. � 66

MM5 Sector supplementDescribe policies for assessing the eco-efficiency and sustainability attributesof products (e.g., recyclability, material use, energy use, toxicity, etc.). � 57, 58

MM6 Sector supplementDescribe approach to management of overburden, rock, tailings, andsludges/residues including assessment of risks, structural stability of storagefacilities, metal leaching potential; and hazardous properties. Quantities ofwaste that are hazardous should be reported. The relevance of reporting otherquantities of waste will be determined by the risk assessment. � 67

Labour Practices and Decent Work

LA1 Total workforce by employment type, employment contract, and region. � 52

LA2 Total number and rate of employee turnover by age group gender, and region. � 52

LA3 Benefits provided to full-time employees that are not provided to temporaryor part-time employees, by major operations. � 51

LA4 Percentage of employees covered by collective bargaining agreements. � 37

LA5 Minimum notice period(s) regarding operational changes, including whetherit is specified in collective agreements. � 37

LA6 Percentage of total workforce represented in formal joint management–workerhealth and safety committees that help monitor and advise on occupationalhealth and safety programmes. � 38

LA7 Rates of injury, occupational diseases, lost days, and absenteeism and numberof work related fatalities by region. � 39, 40, 42, 52

LA8 Education, training, counselling, prevention, and risk-control programmes inplace to assist workforce members, their families, or community membersregarding serious diseases. � 43

LA9 Health and safety topics covered in formal agreements with trade unions. � 38

LA10 Average hours of training per year per employee, by employee category. � 53


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Labour Practices and Decent Work (continued)

LA11 Programmes for skills management and lifelong learning that supportthe continued employability of employees and assist them in managingcareer endings. � 51, 52

LA12 Percentage of employees receiving regular performance and careerdevelopment reviews. � 52

LA13 Composition of governance bodies and breakdown of employees percategory according to gender, age group, minority group membershipand other indicators of diversity. � 48, 49, 50, 52

LA14 Ratio of basic salary of men to women by employee category. � 49

Human Rights Performance Indicators

HR1 Percentage and total number of significant investment agreements thatinclude human rights clauses or that have undergone human rights screening. � 38

HR2 Percentage of significant suppliers and contractors that have undergonescreening on human rights and actions taken. � 38

HR3 Total hours of employee training on policies and procedures concerningaspects of human rights that are relevant to operations, including thepercentage of employees trained. � 36

HR4 Total number of incidents of discrimination and actions taken. � 38

HR5 Operations identified in which the right to exercise freedom of associationand collective bargaining may be at significant risk, and actions taken tosupport these rights. � 37

HR6 Operations identified as having significant risk for incidents of child labourand measures taken to contribute to the elimination of child labour. � 37

HR7 Operations identified as having significant risk for incidents of forced orcompulsory labour, and measures to contribute to the elimination of forcedor compulsory labour. � 37

HR8 Percentage of security personnel trained in the organisation’s policies orprocedures concerning aspects of human rights that are relevant to operations. � 36

HR9 Number of incidents of violations involving rights of indigenous people andactions taken. � 38

Society Performance Indicators

SO1 Nature, scope, and effectiveness of any programmes and practices thatassess and manage the impacts of operations on communities includingentering, operating, and exiting. � 76, 77

SO2 Percentage and total number of business units analysed for risks relatedto corruption. � 34

SO3 Percentage of employees trained in organisation’s anti-corruption policiesand procedures. � 34

SO4 Actions taken in response to incidents of corruption. � 35

SO5 Public policy positions and participation in public policy developmentand lobbying. � 15

SO6 Total value of financial and in-kind contributions to political parties, politicians,and related institutions by country. � 35

SO7 Total number of legal actions for anti-competitive behaviour, anti-trust andmonopoly practices and their outcomes. � 35

SO8 Monetary value of significant fines and total number of non-monetarysanctions for noncompliance with laws and regulations. � 22


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Product Responsibility Performance Indicators

PR1 Life cycle stages in which health and safety impacts of products andservices are assessed for improvement, and percentage of significantproducts and services categories subject to such procedures. � 31

PR2 Total number of incidents of non-compliance with regulations and voluntarycodes concerning health and safety impacts of products and services duringtheir life cycle, by type of outcomes. � 31

PR3 Type of product and service information required by procedures and percentageof significant products and services subject to such information requirements. � 31

PR4 Total number of incidents of non-compliance with regulations and voluntarycodes concerning product and service information and labelling, by typeof outcomes. � 31, 32

PR5 Practices related to customer satisfaction, including results of surveysmeasuring customer satisfaction. � 31, 32

PR6 Programmes for adherence to laws, standards, and voluntary codes relatedto marketing communications, including advertising, promotion and sponsorship. � 32

PR7 Total number of incidents of non-compliance with regulations and voluntarycodes concerning marketing communications, including advertising, promotionand sponsorship by type of outcomes. � 32

PR8 Total number of substantiated complaints regarding breaches of customerprivacy and losses of customer data. � 32

PR9 Monetary value of significant fines for noncompliance with laws and regulationsconcerning the provision and use of products and services. � 32

MM7 Sector supplementDescribe significant incidents affecting communities during the reporting period,and grievance mechanisms used to resolve the incidents and their outcomes.Note: The reporting organisation should describe the definition of “significant” used. � 77

MM8 Sector supplementDescribe programmes in which the reporting organisation has been involved thataddressed artisanal and small-scale mining (ASM) within company areas ofoperation. The reporting organisation should describe the definition of“significant” used. � 77

MM9 Sector supplementDescribe resettlement policies and activities. � 77

MM10 Sector supplementNumber or percentage of operations with closure plans, covering social(including labour transition), environmental and economic aspects. Describecompany policy, stakeholder engagement processes, frequency of plan reviewand amount and type of financial provisions for closure. � 75

MM11 Sector supplementDescribe process for identifying local communities’ land and customary rights,including those of indigenous peoples, and grievance mechanisms used toresolve any disputes. � 77

MM12 Sector supplementDescribe approach to identifying, preparing for, and responding to emergencysituations affecting employees, communities, or the environment. Include adescription of the nature of existing skills, teams who respond to emergencysituations, training, drills, review processes and community involvement. � 39

MM13 Sector supplementNumber of new cases of occupational disease by type. Describe programmesto prevent occupational disease. � 42, 44 – 46


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ABET Adult basic education and trainingART Anti-retroviral treatmentAu GoldBMR Base metal refineryCD 4-T Cluster of differentiation four lymphocytesCEO Chief Executive OfficerCOO Chief Operations OfficerCO2 Carbon dioxidedB DecibelsFIFA Federation Internationale de Football AssociationGJ GigajoulesGLC Greater Lonmin communityGRI Global Reporting Initiative guidelineGSB General waste small landfill with no significant leachate producedHDSA Historically disadvantaged South AfricanHIV/AIDS Human immuno-deficiency virus/acquired immune deficiency syndromeHr HourICMM International Council on Mining and MetalsIFC International Finance CorporationISO International Standards OrganisationIUCN International Union for Conservation of Naturekm2 Square kilometreLTIFR Lost time injury frequency rateLTI Lost time injurymg/m/day Milligrams per metre per dayMWHr Mega watts per hourN.A Not applicableN.D.A No data availableNEMAQA National Environmental Management Air Quality Act 39 of 2004NIHL Noise induced hearing lossm3 Cubic metresOHSAS Occupational Health and Safety StandardOz OuncePGMs Platinum group metalsPMR Precious metal refineryREACH Registration, Evaluation, Authorisation and Restriction of Chemical substancesSO2 Sulphur dioxideTJ Terajoulest/d Tones per dayUK United KingdomUNGC United Nations Global CompactUS United StatesVCT Voluntary counselling and testing$ Dollar

Acronyms

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In terms of the definitions of terminology for reporting purposes, we have taken into consideration the definitions asstipulated by the ICMM, GRI as well as national legislation.

Term Definition

ABET level four Entry level to the National Qualifications Framework. This is equivalent of grade nine andtraining material covers mathematics, english and pre-rock breaking.

Absentee days lost Number of days lost as a result of an employee being absent from work because ofincapacity of any kind, not just as the result of work-related injury or disease. Permittedleave absences such as holidays, study maternity/paternity, and compassionate leaveare included as well as employees absent without permission.

Absentee rate Measure of actual absentee days lost as defined above, expressed as a percentage oftotal days scheduled to be worked by the workforce for the same period.

Anti-competitive behaviour Actions of the Company and employees that may result in collusion with potentialcompetitors to fix prices, coordinate bids, create market or output restrictions, imposegeographic quotas, or allocate customers, suppliers, geographic areas, and productlines with the purpose of limiting the effects of market competition.

Anti-retroviral defaulter This refers to a person who is on ART and who has missed treatment collection in themonth.

Anti-retroviral treatment Refers to drugs or medicine given to patients who are HIV positive and have CD4 cellcounts of 350 cells/mm3 and below.

Anti-trust and monopoly Actions of the Company that may result in collusion to erect barriers to entry to thepractices sector, unfair business practices, abuse of market position, cartels, anti-competitive

mergers, price-fixing, and other collusive actions which prevent competition.

Area protected Areas that are protected from any harm during operational activities, and theenvironment remains in its natural state with a healthy functioning ecosystem.

Area restored Areas that were used during or affected by operational activities, and where remediationmeasures have either restored the environment to its natural state or to a state where itis a healthy and functioning ecosystem.

Areas of high biodiversity Areas not subject to legal protection but recognised for important biodiversity featuresvalue by a number of governmental and non-governmental organisations. These include

habitats that are a priority for conservation and which are often defined in NationalBiodiversity Strategies and Action Plans prepared under the Convention on BiologicalDiversity.

Basel Convention The ‘Basel Convention on the Control of Trans-boundary Movements of HazardousWastes and their Disposal’ was drafted and adopted in 1989 and came into effect in1992. The convention works to reduce the movement of hazardous wastes to ensurethat wastes are disposed of as closely as possible to where they were produced and tominimise the generation of hazardous wastes in terms of quantity and level of hazard.

Bursar A person who is studying at a tertiary education institution with financial support fromthe Company.

Child This term applies to all persons under the age of 18 years.

CO2-equivalent Carbon dioxide equivalent which is the universal unit of measurement to indicate theglobal warming potential of each of the six greenhouse gases, expressed in terms of theglobal warming potential of one unit of carbon dioxide. It is used to evaluate releasing (oravoiding releasing) different greenhouse gases against a common basis.

Coal consumption Total weight of coal used for heating or the generation of energy (heat, electricity, steam,etc).

Collective bargaining Binding collective bargaining agreements include those signed by the Company itself oragreements agreements by employer organisations of which it is a member. These agreements can

be at the sector, national, regional, organisational, or workplace level.

Definitions

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Term Definition

Contractor Any individual, company or other legal entity that carries out work, work-relatedactivities, or performs services pursuant to a contract for service. This includes subcontractors working both permanent and part time.

Corruption Corruption is ‘the abuse of entrusted power for private gain and can be instigated byindividuals in the public or private sector. It is interpreted here to include such corruptpractices as bribery, fraud, extortion, collusion, conflict of interest, and moneylaundering. In this context, it includes an offer or receipt of any gift, loan, fee, reward, orother advantage to or from any person as an inducement to do something that isdishonest, illegal, or a breach of trust in the conduct of the enterprise’s business. Thismay include gifts other than money, such as free goods and holidays, or specialpersonal services provided for the purpose of, or liable to result in, an improperadvantage or that may result in moral pressure to receive such an advantage.

Cost of training The following interventions are included for all Company owned and managedinterventions operations, although salary expenditure is excluded:

• Mining related training;• Process related training;• Formal study assistance;• Student assistance (bursary, scholarship, graduates and Interns);• ABET (and replacement costs);• Leadership programmes;• Engineering related training;• Safety, health and environmental training;• Induction related training.

Designated groups A person, category of persons or communities, disadvantaged by unfair discriminationbefore the Constitution of the Republic of South Africa Act 200 of 1993, came intooperation. The definition of designated groups includes employees who are disabled,women or employees classified as African, Asian or Coloured and who have SouthAfrican citizenship status and who are based in South Africa.

Direct energy consumption Direct energy consumption is the total forms of energy that enters the Company’soperational boundaries and consumed either by the Company within its boundaries, or itcan be exported to another user. Direct energy can appear in either primary (e.g., naturalgas for heating) or intermediate (e.g., electricity for lighting) forms. It can be purchased,extracted (e.g., coal, natural gas, oil), harvested (e.g., biomass energy), collected (e.g.,solar, wind), or brought into the Company’s boundaries by other means.

Direct greenhouse gas Emissions from sources that are owned or controlled by the Company.emissions

Disabled employee People who are employed by the Company who have a long-term or recurring physicalor mental impairment which substantially limits their prospects of entry into, oradvancement in, employment.

Disciplinary case A formal enquiry aimed at correcting any breach of the Company’s code for correctiveaction conducted in terms of the Company’s Corrective Action Policy and Procedure.

Discretionary spend Discretionary spend is the sum of all spend on capital, consumables and servicesexcluding inter Company spend, spend on government, parastatals and municipalitiesimported technology and imported material that is not available locally.

Discrimination The act and the result of treating a person unequally by imposing unequal burdens ordenying benefits rather than treating the person fairly on the basis of individual merit.Discrimination can also include harassment, defined as a course of comments or actionsthat are unwelcome, or should reasonably be known to be unwelcome, to the persontowards whom they are addressed.

Disease Disease may be defined as a pathological process. The quality which identifies diseaseis some deviation from a biological norm. There is objectivity about disease which canbe seen, touched, or measured by medical professionals.

Disease rates Disease rates are expressed per 100,000 persons at work. The number of personnel atwork is calculated based on hours worked.

Definitions (continued)

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Term Definition

Dismissal The termination of service of an employee following a disciplinary process formisconduct and/or negligence, or as a result of dismissal in absentia.

Dust fallout rate Particulate matter with varying aerodynamic diameters and mass deposited due to rapidgravimetric fallout and reported as fallout in mg/m2/day over a 30-day averaging period.

Electricity consumed The quantum of energy used on site or in an operation for own consumption, purchasedfrom external electricity suppliers. This excludes use of electricity by surrounding miningcommunities.

Electricity use efficiency The amount of electricity utilised by the organisation in relation to the ounces of PGMsproduced.

Employee An individual who is, according to national law or practices, recognised as an employeeof the Company.

Extra pulmonary tuberculosis Extra pulmonary tuberculosis refers to the presence of mycobacterium tuberculosisbacteria in any other organ other than the pulmonary system and which is confirmed bya positive appropriate test for microscopy or culture for mycobacterium tuberculosis.

Extreme drug resistance Extreme drug resistant tuberculosis is tuberculosis that is resistant to first and secondtuberculosis line tuberculosis drugs.

Fatality A work related injury resulting in the death of an employee or contractor. These injuriesare merely categorised as fatal for statistical analyses, but are counted as LTIs forstatistical reporting purposes.

Fatality free shifts A shift is one working period worked by an employee or contractor during a 24-hourperiod. The total of these shifts, without sustaining an injury of a fatal nature is known asfatality free shifts.

Forced or compulsory labour All work and service which is exacted from any person under the menace of any penaltyand for which the said person has not offered her/himself voluntarily. The most extremeexamples are slave labour, prison labour, and bond labour, but debts can also be usedas a means of maintaining workers in a state of forced labour. Withholding identitypapers, requiring compulsory deposits or compelling workers, under threat of firing towork extra hours to which they have not previously agreed, are all examples of forcedlabour.

Foreign nationals Persons employed by the Company who do not have South African citizenship.

Formal agreements Written documents signed by both parties declaring a mutual intention to abide by whatis contained in the documents. These can include, for example, local collectivebargaining agreements as well as national and international framework agreements.

Formal committees Formal committees refers to committees whose existence and function are integrated inthe Company’s organisational and authority structure, and that operate according tocertain agreed, written rules.

Freedom of association Workers and employers may establish and join organisations of their own choosingwithout the need for prior authorisation.

Fuel consumption The quantum of fuel consumed on site derived from burning fuels or in an operation forown consumption.

Gas consumption The quantum of natural or synthetic gas consumed on site or in an operation for ownconsumption.

General waste Any waste that does not pose an immediate hazard or threat to health or to theenvironment, and includes:(a) domestic waste;(b) building and demolition waste;(c) business waste; and(d) inert waste;For the mining and metals sector this refers to site waste e.g. office, canteen and campwaste, scrap steel, tyres, wood and building waste.


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Term Definition

Governance bodies The committees or boards responsible for the strategic guidance of the Company, theeffective monitoring of management, and the accountability of management to thebroader Company and its stakeholders. This refers to the Board and the Committees ofthe board.

Government payments All Company taxes (corporate, income, property, etc.) and related penalties paid at theinternational, national, and local levels. This figure does not include deferred taxesbecause they may not be paid.

Greater Lonmin Community Communities situated within a 15 kilometre radius of our operations.

Greenhouse Gas Greenhouse Gases comprise of the following, as outlined in the Kyoto Protocol to theUnited Nations Framework Convention to Climate Change (1998):• Carbon dioxide;• Methane;• Nitrous oxide;• Hydrofluorocarbons;• Perfluorocarbons;• Sulphur hexafluoride;Means gaseous constituents of the atmosphere, both natural and anthropogenic, thatabsorb and remit infrared radiation.

Grievance Any dissatisfaction or feeling of injustice an employee may have in connection with hisemployment situation that is brought to the attention of management. Where anemployee lodges a grievance against another individual, group of employees, or thecompany, a formal hearing will be conducted and recorded in terms of the Company’sCorrective Action Policy and Procedure in order to resolve that grievance.

GSB- landfill A landfill site classified based on a design to accept general waste only (G), is classed asa small landfill accepting between 25 and 150 tonnes maximum rate of deposition perday (S), with no significant leachate generated in terms of the site water balance (B-).

Hazardous waste Any waste that contains organic or inorganic elements of compounds that may, owing tothe inherent physical, chemical or toxicological characteristics of that waste, have adetrimental impact on health and the environment. For the mining and metals sector thisrefers to site waste e.g., waste oils, oily waste, spent cell lining, fluorescent tubes,batteries, medical waste, etc.

HDSA Any person, category of persons or community, disadvantaged by unfair discriminationbefore the Constitution of the Republic of South Africa Act 200 of 1993, came intooperation. The definition of HDSA includes individuals who are disabled or employeesclassified as African, Asian or Coloured and who have South African citizenship status.

HIV/AIDS peer educator A HIV peer educator is an employee who voluntarily undergoes a five day training courseon HIV/AIDS, with the aim being to empower him or her in order to influence change ofbehaviour amongst her peers through informal discussions of HIV/AIDS.

Hours worked The total number of hours worked including overtime and training. Leave sickness andother absences should be excluded. If actual hours are not available, an estimate shouldbe based on a calculation.

Human capital expenditure Total payroll means employee salaries, including amounts paid to government institutions(employee taxes, levies, and unemployment funds) on behalf of employees. Total benefitsinclude regular contributions (e.g., to pensions, insurance, company vehicles, and privatehealth), as well as other employee support such as housing, interest-free loans, publictransport assistance, educational grants, and redundancy payments. They do notinclude training, costs of protective equipment, or other cost items directly related to theemployee’s job function.


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Term Definition

Human rights Generally recognised human rights are defined by the following five conventions anddeclarations:• United Nations Universal Declaration of Human Rights, 1948;• United Nations Convention: International Covenant on Civil and Political Rights, 1966;• United Nations Convention: International Covenant on Economic, social and cultural

rights, 1966;• International Labour Organisation’s declaration on Fundamental Principles and Rights

at Work, 1998;• Vienna declaration and Programme of Action, 1993.

Independent non-executive A non-executive Director is a person who is not a full or part-time employee of the non-Director executive Director Company or holder of an executive office. All non-executive Directors

at the Company are regarded as independent by the Board as per the requirements ofprovision A.3.1 of the Combined Code.

Indigenous people Indigenous people are those whose social, cultural, political, and economic conditionsdistinguish them from other sections of the dominant national community, or who areregarded as indigenous on account of their descent from the populations whichinhabited the country, or a geographical region to which the country belongs, at the timeof conquest or colonisation or the establishment of present state boundaries and whoirrespective of their legal status, retain some or all of their own social, economic, culturaland political institutions. Indigenous people are referred to in the context of this report asHDSA.

Indirect economic impact An additional consequence of the direct impact of financial transactions and the flow ofmoney between the Company and its stakeholders.

Indirect energy consumption Indirect energy consumption is the total intermediate energy purchased and consumedfrom non-renewable and renewable energy sources including:• Electricity;• Heating and Cooling;• Steam;• Nuclear energy;• Other forms of imported energy;• Solar;• Wind;• Geothermal;• Hydro energy;• Biomass based intermediate energy; and• Hydrogen based intermediate energy.

Indirect greenhouse Emissions that are consequences of the activities of the Company but are generated atgas emissions sources owned or controlled by another organisation. In the context of this indicator,

indirect emissions do not include those generated from imported electricity, heat, orsteam consumed by the reporting organisation (e.g., transport, packaging).

Intern A person who has completed the theoretical part of a formal qualification and arecurrently completing the practical part to qualify for his/her degree/diploma or a studentwho has already completed his full qualification.

IUCN Red list species An inventory of the global conversation status of plant and animal species developed bythe International Union for the Conservation of Nature and Natural Resources.

Level four environmental Incidents which result in a high impact on environment, natural process are totallyincidents disrupted for the duration of the activity, but resume functioning after the operation has

been terminated with possible irreversible impacts-impact extends locally or regionally,beyond mine property.

Level three environmental Incidents which result in a moderate impact on environment where natural processes areincidents notably altered but continued in a modified way with impacts being reversible within

lifetime of operation. Impact confined to mine property.


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Term Definition

Literate and numerate A person is functionally literate who can engage in all those activities in which literacy isrequired for effective functioning of his/her group and community and also for enablinghim or her to continue to use reading, writing and calculations. In the South Africancontext, this refers to a person who has successfully completed the requirements ofABET four.

Lobbying Refers to efforts to persuade or influence persons holding political office, or candidatesfor such office, to sponsor policies, and/or to influence the development of legislation orpolitical decisions.

Local Individuals either born in or who have the legal right to reside indefinitely in the samegeographic market as the operation. Local in the context of the Company refers to thegreater Lonmin community. This includes businesses and individuals relocated to bebased in the GLC.

LTI A LTI is a work-related injury resulting in the injured being unable to attend / return towork to perform the full duties of his/her regular work, as per advice of a suitablyqualified medical professional, on the next calendar day after the injury.

LTIFR The total number of LTIs per million man hours worked.

Management level Management level employees include all employees who are employed on D, E and Femployees Paterson grading levels.

Mentee A person whose welfare and career are deliberately supported by the Company over aperiod of time.

Middle management Middle management level employees include all employees who are employed on a Demployees Paterson grading level.

Multi-drug resistant Multi-drug resistant tuberculosis is tuberculosis that is resistant to two first linetuberculosis tuberculosis drugs.

Net turn over Total number of employees recruited by the Company, less the total number ofemployees who have exited the Company, including those relating to resignationsdismissals, death (not work related) and retirements in the reporting period.

NIHL Hearing loss, obtained by averaging the results from pure tone audiogram in both earsat 0.5,1,2,3 and 4 kilohertz, is above 25 decibels.

Non-point source Means a source of atmospheric emissions which cannot be identified as havingemanated from a single identifiable source or fixed location.

Non-renewable materials Resources that do not renew in short time periods, such as minerals, metals, oil, gas,coal, etc.

Occupational asthma Occupational asthma is asthma caused by workplace exposure and not by factorsoutside of the workplace. Occupational asthma can occur in workers with or withoutprior asthma.

Occupational dermatitis Non-infectious inflammation of the skin provoked by contact with an external chemicalor substance, accompanied by itching, cracking, blistering & ulcerations.

Percentage procurement Percentage of the procurement budget which has been spent (based on paymentsspend on HDSA suppliers made during the reporting period) on suppliers that are categorised as disadvantaged by

unfair discrimination before the Constitution of the Republic of South Africa, 1993 cameinto operation. This includes suppliers that are black owned (more than 50% blackeconomic empowerment equity holding and management), black empowerment (morethan 25 % but not more than 50% black economic empowerment equity holding andmanagement) and black influenced (not more than 25 % black economic empowermentequity holding and management). Excludes white owned companies.

Platinises Allergy to complex halogenated salts of platinum is an acquired hyper-sensitivity to the(Platinum Salt Sensitivity) complex salts of platinum which becomes manifest after a variable period of

symptomless exposure. The clinical characteristics include one or more symptoms andsigns of dermal, ocular and nasal allergy and/or asthma.


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Term Definition

Pneumoconiosis A medical diagnosis of parenchymal lung disease with compatible radiological findingsrelated to exposures to any of the following substances:• Asbestos;• Cobalt;• Refractor Ceramic Fibres;• Silica;• Cristobalite;• Other substances known to cause pneumoconiosis.

Point source Means a single identifiable source and fixed location of atmospheric emissions.

Pulmonary tuberculosis Pulmonary tuberculosis refers to tuberculosis of the respiratory organs of individualswhich is confirmed by positive sputa microscopy or culture for mycobacteriumtuberculosis.

Recycling/reuse of water The act of processing used water/wastewater through another cycle before discharge tofinal treatment and/or discharge to the environment. In general, there are three types ofwater recycling, re-use: (1) Wastewater recycled back in the same process or higher useof recycled water in the process cycle; (2) Wastewater recycled/re-used in a differentprocess, but within the same facility; and (3) Wastewater re-used at another of theCompany’s facilities.

Regular performance and Performance targets and review are based on criteria known to the employee andcareer development review his/her superior. This review is undertaken with the knowledge of the employee at least

once per year. It can include an evaluation by the employee’s direct superior, peers, or awider range of employees. The review may also involve personnel from the humanresources department.

Renewable energy Renewable energy is derived from natural processes that are replenished constantly. Thisincludes electricity and heat generated from solar, wind, ocean, hydropower, biomass,geothermal resources, biofuels, and hydrogen derived from renewable resources.

Scope one greenhouse Company controlled and owned sources of emissions from direct energy sources.gas emissions

Scope two greenhouse Company controlled and owned sources of emissions from indirect energy sources.gas emissions

Scope three greenhouse Emissions arising from sources outsourced or contracted to a third party entity.gas emissions

Security personnel Individuals employed for the purposes of guarding property of the Company, crowdcontrol, loss prevention, and escorting persons, goods, and valuables.

Senior management Senior management level employees include all employees who are employed on an Eand F Paterson grading level.

Severity rate The total number of days lost due to the lost time injuries per million hours worked.

Significant incident Is any incident which has actual or potential health, safety, environmental, quality orcommunity consequences that are of a serious nature and have the possibility to causeactual or potential material or reputational damage to the operation or to the Company.Classified as an actual or potential level four and five incident at the Company.

Six Sigma Six Sigma is a disciplined, data-driven philosophy and methodology to manage processvariations that cause defects and to systematically work towards managing variation toeliminate those defects. The objective of Six Sigma is to deliver world-classperformance, reliability, and value to the end customer.


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Term Definition

Social capital expenditure Voluntary donations and investment of funds in the broader community where the targetbeneficiaries are external to the Company. These include contributions to charities,non-governmental organisations and research institutes (unrelated to the Company’scommercial research and development), funds to support community infrastructure(e.g., recreational facilities) and direct costs of social programmes (including arts andeducational events). The amount included should account for actual expenditures inthe reporting period, not commitments.

For infrastructure investments, the calculation of the total investment should includecosts of goods and labour in addition to capital costs. For support of ongoing facilitiesor programmes the reported investment should include operating costs. This excludeslegal and commercial activities or where the purpose of the investment is exclusivelycommercial.

Any infrastructure investment that is driven primarily by core business needs (e.g.,building a road to a mine or factory) or to facilitate the business operations of theCompany is not included.

Sponsorship A person who is offered financial assistance by the Company to enable the student tocontinue with studies either at secondary or tertiary level.

The IUCN protected The IUCN defines a protected area as ‘an area of land and/or sea especially dedicatedarea categories to the protection and maintenance of biological diversity, and of the natural and

associated cultural resources, and managed through legal or other effective means’.IUCN categorises protected areas by management objective and has identified sixdistinct categories of protected areas.

Total energy consumption Total direct energy consumption is the sum of the direct primary energy purchased andthe direct primary energy produced, excluding the direct primary energy sold.

Total greenhouse Sum of direct and indirect emissions in tonnes of CO2 equivalent.gas emissions

Transportation The act of transferring resources and goods from one location to another (betweensuppliers, production plants, warehouses, and the customers) using different modes oftransport, including passenger transportation (e.g., employee commuting and businesstravelling).

Tuberculosis Tuberculosis refers to the presence of mycobacterium tuberculosis bacteria in thepulmonary system or any other organ and which is confirmed by a positive appropriatetest for mycobacterium tuberculosis.

Turn over rate Total turn over of employees as a percentage of the total average strength for thereporting period.

Water use efficiency The amount of water utilised by the Company in relation to the ounces of PGMsproduced.

Wellness programme This refers to the programmes whereby a patient who is HIV positive and not receivingART, is being monitored on a six monthly basis and supplied with immune boosters.

Women at the mine The total number of all women who are South African citizens and who work in thetechnical and non-technical fields, including all support functions.

Women in mining The total number of all women who are South African citizens and who work in theMining Division, Process Division, Technical Services Department and Capital andEngineering Department. It will however exclude those who work in support functionsi.e. Finance, Human Capital (including Central Training and Housing and Hostels),Security and Medical Services.


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Lonmin PlcRegistered in England, Company Number 103002Registered Office: 4 Grosvenor Place, London SW1X 7YL

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