SUSTAINABILITY PERFORMANCE Andile Sangqu, Executive Head: Anglo - PowerPoint PPT Presentation

ANGLO AMERICAN SUSTAINABILITY PERFORMANCE Andile Sangqu, Executive Head: Anglo American South Africa

OVERVIEW WHY SUSTAINABILITY MATTERS A FOCUS ON SOUTH AFRICA • Our people • Our host communities • Our partners ADDRESSING OUR MOST MATERIAL ISSUES • Safety • Health • Social impacts • Socio-Economic development • Environmental impacts • Water • Climate change • Mine closure • Tailings facilities

WHY SUSTAINABILITY MATTERS

WHY SUSTAINABILITY MATTERS  Sustainability issues are critical for the MISSION delivery of our strategy Together, we create  Mining has relatively small global sustainable value footprint, but results in significant local impacts that makes a real difference  Local approach to sustainability gives us our legal and social licence to operate VISION  Zero harm, constructive relationships To be partners in the with stakeholders, resource efficiency, and 100% compliance are core future characteristics of high-quality assets 5

FOCUS ON SOUTH AFRICA MEANINGFUL CONTRIBUTION TO SOCIO ECONOMIC DEVELOPMENT

SOUTH AFRICA: THE CONTEXT  Mining has historically provided the backbone of South Africa’s economy and continues contribute be one of the key sectors of the economy  The mining sector is pivotal to the task of redressing historical and social inequalities in a sustainable manner  We are doing our best to adapt to the challenging operating context  We continuously seek collaboration opportunities to support growth and sustainability in the mining sector  We engage with government and labour, with the aim of ensuring the sustainability of the mining sector and its continued contribution to the country’s  We are committed to the objectives of the MPRDA and the Mining Charter, as such we regard transformation as a business imperative  We are also committed to economic growth and development objective of the National Development Plan Lambasi Harvesting at Lusikisiki, Easten Cape 7

SOUTH AFRICA: OUR EMPLOYEES Our employees are the business. We strive to build a culture that reflects and harnesses a rich diversity of ideas and perspectives. We support the identification, development and retention of HDSAs Our Performance  Internal targets are set over and above those set by legislation  63% HDSAs in management  Gender diversity remains a priority - 17% women in overall workforce  $73.2m (R936m) spent on HDSA training - 4.8% of annual HDSA payroll  All business units achieved housing and accommodation Mining Charter requirements  $149m (R1.9bn) spent on housing initiatives – more than 4,000 houses built since 2010 Micahel Faku at the Anglo American Chairman's Fund- 8 supported Middestand Evanfeliese Sord computer centre

SOUTH AFRICA: OUR COMMUNITIES Mining companies and mining communities must work together to help create mutual trust and success. Only by working together can we change the way people think about resource development and how we can make a valuable difference to people in communities in their everyday lives. Our Performance  Social and Labour Plans are in place at each of our operations, $41m (R520m) spent in 2015  $70m (R891m) spent on community development programmes  Engagement with community representatives to identify priority projects that will best address community needs  Focus on education, health, infrastructure and capacity development  Diagnostic tool to assess compliance with SED plans  Chairman’s Fund is a dedicated corporate social investment arm Mphakiseng Tsotetsi pictured with her baby at the Lilian 9 Mambakazi Community Health Centre in Standerton, which was recently handed over to the local government

SOUTH AFRICA: OUR PARTNERS Diversifying ownership in our mining assets, increasing local procurement, and facilitating enterprise development and beneficiation are all critical means of advancing the empowerment of HDSAs and contributing to the socio-economic development of our communities Our Performance  We exceeded Mining Charter ownership requirements  $5.2bn (R67bn) value of BEE transactions since 1994  Flagship mining companies formed as a result of our BEE partnerships. E.g. Exxaro, ARM, Inyosi Coal, Royal Bafokeng  $2.87bn (R36.7 bn) procurement expenditure with BEE empowered companies  BEE procurement: AASA achieved 75% on capital goods, 82% on services and 79% on consumables  All SA-based employees are members of an ESOP  8,624 employment opportunities created through Anglo Zimele; 40% of Zimele beneficiaries are female while 35% are youth  Winslow Nyakudya pictured at the Anglo American Zimele $24m (R308m) funding provided for 321 businesses in 2015 10 Road show in Mthatha

SOUTH AFRICA: EMPLOYEE INDEBTEDNESS AT ANGLO AMERICAN PLATINUM – A CASE STUDY  Post the five-month strike in 2014, research was conducted into the financial position of Anglo American Platinum employees: - Around 1,330 Anglo American Platinum employees were under administration - Debt to income levels of the average employee in Rustenburg:  24% were at ‘dangerous levels’ (75% plus of their income is used to service debt)  26% were ‘in trouble’ (between 51% and 75% of their pay used to bring down debt)  Summit Financial Partners had been auditing employees’ garnishee orders since 2011 and had collectively saved employees approximately R3 million over a 3-year period  Anglo American Platinum extended Summit’s services to include a financial wellness offering 11 – to run from 2014-2016

SOUTH AFRICA: EMPLOYEE INDEBTEDNESS AT ANGLO AMERICAN PLATINUM – A CASE STUDY  Programme was named ‘ Nkululeko ’, meaning Freedom – a call to action for employees to embark on a journey to financial freedom  From October 2014 to August 2016: - 8,695 employees consulted a Nkululeko consultant - Over R32,2 million saved for employees annually on debt instalments - 964 debt relief solutions have been implemented - 1,000 audit cases on garnishee and admin orders and loan agreements - 7,480 cases of reckless lending identified - Garnishee orders have reduced from 5,877 in March 2011 to 797 in June 2016  Employees told their own stories of how they had benefitted financially from the programme  Employee indebtedness programmes are also running across our other business units and showing positive 12 results

SUSTAINABILITY ADDRESSING OUR MOST MATERIAL ISSUES

SAFETY Safety is a matter of basic human rights Focus on Zero Harm as well as an investment in an engaged, motivated and productive workforce Unrelenting focus on Zero Harm Our approach 41%  Leadership We are encouraged by continued  Effective planning and standards improvement in total injury rate since 2012  Supervision  Incident management Critical controls  Risk management Approach to safety focused on implementing Performance controls to manage risks  Deeply disappointing increase in number of losses of life in 2016 after years of improvement  Injury rates continue to improve 14

HEALTH Managing occupational health risks, and Leader in HIV/AIDS promoting health and wellbeing in the workplace, protects our people, enhances productivity, and is essential for 78,993 minimising potential long-term liabilities employees and contractors tested in southern Africa Our approach 92%  Reducing occupational health risks as source  Employee well-being programmes – including of identified HIV-positive employees enrolled in HIV/TB – that support the overall health of our wellness programmes workforce  Partnerships to support the health of communities Community health Continued investment in local health partnerships to Performance support communities near mines and in labour sending  areas 42% of employees exposed to noise levels and 9% to dust levels above OEL. All wear PPE  Reduction in number of new cases of occupational disease; no new cases of silicosis since 2011 15

MANAGING SOCIAL IMPACTS We seek to maximise the benefits of mining and mitigate its potential negative effects, which can trigger stakeholder opposition, resulting in project delays, disruption to our operations, and reputational damage Our approach  Social performance entrenched in Values and Business Principles  Social Way outlines mandatory performance standards  SEAT provides practical tools for managing social impacts, improving development and stakeholder engagement Enhancing stakeholder dialogue is a critical aspect of SEAT and our overall social performance programme 16

MANAGING SOCIAL IMPACTS… CONTINUED Performance  Assessment results show a steady improvement across almost all the requirements and decline in non-compliances  Level 3 – 5 social incidents are reported to the Board Sustainability Committee  319 Level 3 – 5 incidents recorded in 2015  A small number of incidents impacted production slightly Social conflict impacted Platinum operations. Complex causes including poor public service delivery and lack of employment opportunities. We’ve been working with the DMR with regards to issues of public service delivery, and a task team with community representatives has been established to serve as an engagement platform. The Minister appointed the South African Human Rights Commission to serve as the mediator between the communities and the mine. 17