Presented by: Mongezi VetiTheme: Community Development and Mining

PRESENTATION OUTLINE

Background

Approach to Community Development

Success Stories – Case Studies Lephalale Development Forum Social Return on Investment (SROI)

Way forward

BACKGROUND• Exxaro is a South African-based, majority black-owned and diversified

resources group with interests in:– Coal, – Mineral sands, – Ferrous and – Energy commodities;

• It has major business operations and projects in South Africa but also operates in Botswana, Republic of Congo and Australia.

• Exxaro is the second largest coal producer in South Africa with current production of 40 Mtpa and is listed on the JSE Exchange Top 40 and Socially Responsible Investment (JSE SRI) indices.

OUR APPROACH TO COMMUNITY DEVELOPMENT

Strive to develop Shared Vision with communities affected and impacted by our mining activities

Transfer Ownership of community development initiatives back to the communities through the establishment of Community Development Forums;

Formalise the development of Social Closure Plan for all our operations with key focus on Sustainable Legacy Projects

Is mandatory that our Social Labour Plans are aligned to Social Closure Plan and Community Development Forum Plans

COMMUNITY BASED SOCIO ECONOMIC DEVELOPMENT

•Objectives Projects must be sustainable Project must show a positive

Social Return on Investment (SROI)

•Embed the volunteerism programme in our business process to foster socially conscious employees

•Focus Areas: Enterprise Development

(Incubator and HUB) Agriculture Skills Development Infrastructure Education

CASE STUDY: LEPHALALE DEVELOPMENT

FORUM (LDF)

Lephalale Development Forum (LDF)

LDF was created in July 2008 by bringing together various Public and Private Partners to review the impact of the development of Medupi power station in the Municipal area of Lephalale.

The economic growth in Lephalale area placed a huge strain on the existing rural infrastructure and the LDF was formed coordinate development:

The LDF has 5 working groups: Local Economic Development (Incubator and HUB) Infrastructure Social Services (Education, Health etc) Labour and Skills; and Environmental sustainability.

LDF GOVERNANCE STRUCTUREProvincial Cabinet

(EXCO)

Cabinet Cluster Committees: Social / Economic

Lephalale Development Forum (LDF) Chair:

Lephalale Municipal Manager

Environmental Sustainability

Working Group

Infrastructure and Housing

Working Group

LED and Beneficiation

Working Group

Labour & Skills Development

Working Group

Social Services Working Group

Municipal Council District Provincial Government National Gov Rep (where

appropriate) Local Business Labour Civil Society Current major industries: Exxaro Eskom Sasol Sekoko Anglo Resgen, and others

Shared Secretariat Support

Executive Committee Chair: Lephalale Municipality Mayor

Institutional Capacity

Working Group(Proposed)

SEZ Working Group

(Proposed)

LDF Achievements to Date

• Launch of the Lephalale Enterprise Development Incubator and Hub as a partnership between the LDF, Exxaro, Anglo Sebenza Fund and Shanduka Black Umbrellas.

• Successful implementation of Local economic development projects such as; Infrastructural Development (Housing, Roads and Water) Agriculture Skills Development Education Environment

Launch of Incubator and HUB April 2014

Purpose:1. To accelerate the development,

sustainability and ultimate independence of SMME suppliers and enterprises

2. To foster collaborate with partners in the private sector, government and civil society to address low levels of entrepreneurship and high failure rate of black owned and emerging businesses.

HOUSING DEVELOPMENT in LEPHALALE

797 housing units designed using Green Design Principles (aligned to the DoE, Energy efficiency goals)

We have now completed 740 housing units and have designed another 2400 Ervin for future support of our Waterberg projects

Allocation of housing units: 142 Houses; 323 Flats / Town houses; 464 Single quarter rooms

Road Infrastructure

Nelson Mandela, Kuipersbult- and Marapong roads

An amount of R200 million has been spent and 450 jobs created

Before After

Infrastructure: Zeeland Bulk Water Works Upgrade

Exxaro spend R100 million to expand the 16ML per day water treatment plant to 40ML per day (includes EIA, design, construction and project management)

Exxaro will continue to operate and maintain the bulk potable water supply to the Lephalale Municipality until the total facility is transferred to the Municipality .

Water is supplied to the town at cost – no profit to Exxaro

Agriculture Initiatives This agricultural project in Abbotspoort is a Public Private Partnership

between Queen Langa and her community and also with Government

This project is a self feeding scheme as well as income generating project and supply produce to mostly all local supermarkets

The Poultry Project was done in partnership with the Department of Agriculture and focus on broiler production and egg-laying

The farm employs 6 people and the whole community benefit and is sustainable

Skills Development

During 2013 Exxaro invested 6,5% of annual payroll on skills development interventions

The Exxaro training centre in Lephalale trained 157 candidates in learnerships of which 73% learner intake are Black and 28% female and 112 candidates qualified

The pass rate of 87% was the second most successful in history

Through the Medupi Expansion project 2000 people received skills training and 11 500 temporary construction jobs were created and 490 permanent jobs

Education Initiatives Education initiatives focus on School

Infrastructural upgrading and Learner-Teacher-Principal and Governing Body development.

The Mabalane Seleka School has also been adopted by Exxaro.

Successful Launches were held at 4 Schools during 2014 and R7,2 million has been spend on Infrastructural development at Schools

Palala South circuit Launch Learners with the Mayor, the Honourable Jack Maeko

MEASUREMENT OF IMPACT USING SOCIAL RETURN ON

INVESTMENT (SROI)

SROI• SROI is a methodology developed by Exxaro in conjunction with

KPMG for measuring the real social value of our community development initiatives;

• SROI tells a story of how change is being created by measuring social, environmental and economic outcomes and valuing these in monetary terms

• SROI measures the actual return generated for every R1 spent on the project:

SROI Results

Theme Sub-theme Project SROI

Enterprise Development ED New Enterprises Boitlamo Brick Making

2.49

Infrastructure Development Roads Construction Marapong roads 0.39

Skills Development Skills Development Mogolo Skills Academy 2.95

Education Whole School

Development (WSD) Lephalale WSD 1.60

Agriculture Agri-business Lephalale Agri Corridor

1.61

Health and Welfare Community HIV Projects HIV Awareness 5.12

Weighted SROI Average for 25 Project 1.34

Conclusion• Exxaro sees itself as the tenant of its host communities and

not the landlord;

• We must build mutually beneficial relationship with our host communities, local business, Government and NGOs which key for our business sustainability and growth

• The key to success lies in sharing and in measurement.(SROI)