Merafe and the Venture stakeholder engagement

Shareholder and the investor community

Stakeholder

Merafe Resources has a simple structure.  At 31 December 2016 Glencore Netherlands B.V. held 29% of its shares and the Industrial Development Corporation (IDC) held 22% of the Company’s shares.

Summary of material issues
  • Merafe’s returns to shareholders and potential for future returns
  • Financial and non-financial risk management
  • Corporate governance including executive remuneration
  • Performance against strategy
  • Trends and outlook for commodity markets
  • Management of environmental and social risks and opportunities
  • Sustainability
Method of engagement Frequency of engagement
Road shows to investors in South Africa, the United Kingdom, Europe and the USA Ongoing
Presentations at conferences both locally and abroad Ongoing
Half-year results and year end results presentations to shareholders Half yearly & Annually
Merafe’s annual general meeting Annually
Press announcements of its interim and year end results Ongoing
SENS announcements of its interim and year end results as well as quarterly production updates Ongoing
Merafe’s integrated annual report to shareholders Annually
Merafe’s website Ongoing
Key topics and concerns raised at the engagement and response/s to these
  • Impact of rand / dollar exchange rate on cash flow
  • Impact of ferrochrome prices on cash flow
  • Project progress and funding
  • Sustainability
  • Impact of labour unrest
  • Safety record
  • Good governance
  • The Company responds through providing transparent information on the Company and the ferrochrome industry through methods of engagement

Providers of debt

Stakeholder

South African banks

Summary of material issues
  • Ability of the Company to repay borrowing
  • Risk management
Method of engagement Frequency of engagement
The Company borrows from South African banks. Regular meetings are held with its bankers. Ongoing
Key topics and concerns raised at the engagement and response/s to these
  • Impact of rand / dollar exchange rate on cash flow
  • Impact of ferrochrome prices on cash flow
  • Risk management
  • Ability to repay borrowings
  • The Company responds by providing transparent up to date information and addresses in advance, issues relating to the above concern

Business partners

Stakeholder

Our partner in the Venture, Glencore

Summary of material issues
  • New acquisitions and developments
  • Financial returns
  • Risk management
  • Regulatory and policy compliance
  • Accountable and transparent corporate governance
  • Sustainability
Method of engagement Frequency of engagement
Merafe engages with its partners in the Venture, Glencore, through regular joint board meetings, the Venture’s executive committee and subcommittee meetings and regular contact on operational issues.
  • Monthly exco meetings
  • Audit and Risk, Treasury and Transformation meetings
  • Quarterly board meetings
  • Ad hoc meetings and communication as required
Key topics and concerns raised at the engagement and response/s to these
  • Sustainability
  • Accountability and transparency
  • Risk management
  • Financial stability
  • Empowerment credentials
  • Alignment of interests
Stakeholder

Department of Environmental Affairs (DEA)

Summary of material issues
  • Ambient air standards
  • Sponsorship in air monitoring programs
Method of engagement Frequency of engagement
  • Workshops
  • Members of air quality working groups
  • Meetings
  • Forums
  • Provision and sponsorship of training courses
Ongoing
Key topics and concerns raised at the engagement and response/s to these

Engagement allows us to give input into proposed legislation, to understand DEA thinking and share environmental knowledge including

  • Sharing of best practices
  • Discussion of industry
  • Providing technical assistance to government and others
Stakeholder

Department of Water Affairs (DWAF)

Summary of material issues
  • Integrated water and waste management strategies
Method of engagement Frequency of engagement
  • Presentations
  • Development of integrated water management programmes
  • Active participation with DWAF
Ongoing
Key topics and concerns raised at the engagement and response/s to these
  • Access to water
  • Water and waste management
  • Water licences
  • Engagement allows us to give input into proposed legislation, understand DWAF aims and intentions and share best practise

Engagement allows us to give input into proposed legislation, understand DWAF aims and intentions and share best practise

Stakeholder

Health authorities

Summary of material issues
  • Capacity building within health facilities and construction of health facilities in collaboration with the Department of Health (DoH)
Method of engagement Frequency of engagement
  • Working with provincial health departments to align processes and systems
  • Participating in Public Private Partnership (PPPs)
Ongoing
Key topics and concerns raised at the engagement and response/s to these
  • Interacting with health departments at national, provincial and municipal level with the aim of supporting efforts to improve the provision of healthcare in communities neighbouring our operations. This has resulted in us forming a PPP to provide healthcare facilities and extending our wellness programme to communities
Stakeholder

Department of Mineral Resources (DMR)

Summary of material issues
  • Mining Charter compliance
  • Mining rights
Method of engagement Frequency of engagement
  • With DMR directly and through Chamber of Mines and SA Mining
  • Development Association (SAMDA)
Ongoing
Key topics and concerns raised at the engagement and response/s to these
  • Following the release of the Codes of Good Practise for Minerals Industry (Mining Code) in April 2009, the Venture undertook a review of its progress on transformation which culminated in the development of its principle positions on the next phase of transformation. These positions, which align with government. The Venture engaged its peers in the mining industry and secured their agreement regarding the overreaching principles it believed should be applied in the new Mining Charter together with proposed balanced scorecard. The mining industry then shared their ideas with the DMR and engaged through the MIDGETT process. the culmination was revised Mining Charter and Mining Scorecard issued in September 2010
Stakeholder

Department of Labour

Summary of material issues
  • Employment equity job creation
Method of engagement Frequency of engagement
  • Meetings and submissions
Ongoing
Key topics and concerns raised at the engagement and response/s to these

Merafe and the Venture respond by putting in place policies and procedures to meet the requirements and objectives of the Department.

  • Employment equity performance
  • Job creation
Stakeholder

Local municipalities

Summary of material issues
  • Integrated Development Plans (IDP)
Method of engagement Frequency of engagement
  • Partnering with local municipal authorities
Ongoing
Key topics and concerns raised at the engagement and response/s to these
  • Infrastructure in need of repair, provision of roads, running water community centres and business parks. We partner with local authorities to improve living conditions for our employees and the communities in which we operate. Refer to the Community development section of this report for further details

International industry bodies

Stakeholder

International Chrome Development Association (ICDA) REACH (Registration, Evaluation, Authorisation of Chemicals)

Summary of material issues
  • Development of product knowledge and best practices
  • HSE risk assessments
  • Development of requirements for REACH registration and implementation
  • Integrated projects with downstream users
  • Material and chemical safety issues in EU for products up and downstream to ensure no risks associated with importing products into EU
Method of engagement Frequency of engagement
  • HSE committee meetings and information
  • Technical committees
  • Consortia involvement
  • Meetings
  • Directors: Sustainable Development sits on steering committee, HSE and technical committees of these international bodies and consortia
  • Glencore and Merafe are members of ICDA
  • Monthly and quarterly meetings
  • Ongoing interaction on joint studies, etc
Key topics and concerns raised at the engagement and response/s to these
  • Legal compliance
  • Joint studies
  • Cost sharing
  • Development of REACH dossiers
  • These consortia worked with REACH for the EU to ensure material and chemical safety
Stakeholder

International Stainless Steele Federation

Summary of material issues
  • ICDA works closely with ISSF
Method of engagement Frequency of engagement
Co-development of research projects Ongoing
Key topics and concerns raised at the engagement and response/s to these
  • Sharing information on efforts to reduce impact of climate change and product stewardship

National industry bodies

Stakeholder

Northwest Air Pollution Control Forum (NAPCOF)

Summary of material issues
  • Common industry problems
  • Performance of operations or individual companies
  • Interaction with government
Method of engagement Frequency of engagement
  • Bi-monthly meetings
  • Presentations
  • Engagement about air quality management plans
  • Glencore chairs forum
Regular meetings and ongoing communication between forum members
Key topics and concerns raised at the engagement and response/s to these
  • Common problems, performance trends
  • Technical assistance provided to government and others
  • Sharing of best practise
Stakeholder

Kroondal Eco Forum and Northwest Eco Forum

Summary of material issues
  • Impact of the Venture’s operations on the environment
Method of engagement Frequency of engagement
  • Meetings
  • Email
  • Telephonic communication
  • Direct access to Group Air Quality Specialist and Group Environmental Manager
  • SMS messages regarding venting incidents (also sent to all interested parties)
  • Query-by-query basis
  • Quarterly meetings
  • Regular meetings
  • SMS messages
  • Ongoing
Key topics and concerns raised at the engagement and response/s to these
  • Complaints/concerns are recorded and addressed monthly
  • Stakeholders are involved in operations’ activities and have a clear understanding of what is happening the steps being taken to improve sustainability performance
  • Messages regarding venting incidents provide information about the incident and mitigation action take
Stakeholder

Ferro Alloys Producers Association (FAPA)

Summary of material issues
  • Focus specifically on ferrochrome industry issues, including management of slag, environment, health and all other sustainable development issue
  • Slag reclassification from hazardous substances to a waste with beneficial use
  • Climate change
Method of engagement Frequency of engagement
  • Meetings
  • Venture chairs forum
Regular and ongoing
Key topics and concerns raised at the engagement and response/s to these
  • Common problems and best practice and performance trends which are shared
  • Progress on government understanding on management

Communities

Stakeholder

Communities surrounding the Venture’s operations

Summary of material issues
  • Impact of operations (environment and social)
  • Consultation on proposed new projects or changes to existing operations
  • Community needs
  • Enterprise development and local procurement
  • Traditional rights and cultural heritage
  • Substantial communities
Method of engagement Frequency of engagement
  • Complaints register to each site
  • Social development meetings with community
  • Annual community open days at all operations
  • Social and labour plans for each site
  • Grievance and conflict resolution mechanism
  • Quarterly meetings
  • Ongoing ad hoc communication including meetings emails and letters
  • Annual open days
Key topics and concerns raised at the engagement and response/s to these
  • Community radio programmes and newsletters
  • Regular scheduled quarterly meetings are held by the Venture to discuss operational issues that might have a significant impact on the community, or that are of interest to the communities in the vicinity of the operations.
    A register is kept of who attends, what is discussed and what actions resulted from the engagement sessions
  • Ad hoc meetings are also held when issues either arise from the operation, or are raised by the community. Open days were held at operations during the year. Communities were also engaged through the Integrated Development Plans (IDP)and Local Economic Development (LED) forums
  • Baseline studies are undertaken to identify the needs of the communities in the vicinity of our operations and to identify suitable Social and Labour Plan projects Other responses to community needs addressed as a result of community engagement include upgrading schools ,providing bursaries and tertiary education opportunities through the Venture's community development programme, assisting SMMEs with facilities such as an SMME business park at Kroondal and training in business skills
  • A register of community complaints is maintained at each operation and complaints are dealt with at operational level to existing operations
  • All of the Venture's operations appointed Community Development Officers with the aim of improving engagement with communities
  • A stakeholder perception survey was conducted during the year to assess the perceptions of members of the surrounding communities The survey provided valuable feedback that will be used to 1mprove aspects of community engagement in the futur

Employees

Stakeholder

Employees, their families and dependants

Summary of material issues
  • Remuneration and benefits
  • Workers’ rights
  • Skills development, training, career development and career opportunities
  • Health and safety
  • Community issues including HIV and AIDS, housing and job creation
  • Employment equity and non-discrimination
  • Company news
Method of engagement Frequency of engagement
  • Newsletter for Venture employees and newsletters at each operation
  • Posters
  • Digital messaging boards
  • Industrial theatre
  • Employee briefings
  • Green area meetings
  • Company intranet
  • Induction training
  • Business principles
  • Toolbox talks
  • Communication forums at each operation
  • Skills development committees
  • Employment equity committees
  • Occupational health and safety committees
  • Ethics line
  • Performance reviews
  • Grievance and conflict resolution mechanism
Ongoing regular engagement
Key topics and concerns raised at the engagement and response/s to these
  • Employees are kept informed on business issues, what is expected to them and which Business Principles they are expected to adhere to
  • Employees understand they are free to join a trade union
  • Training and communication raises employee awareness regarding health and safety issues
  • Career opportunities and career development discussed during performance reviews
  • Community issues covered in communication in confidence regarding behaviour that is contrary to the company’s business principles
  • Surveys inform company of employees’ levels of satisfaction and issues that may need addressing

Customers

Stakeholder

Customers

Summary of material issues
  • High quality products
  • Product stewardship
  • Contract terms and delivery
  • Reliability of supply
  • Maintaining strong ongoing customer relationships
Method of engagement Frequency of engagement
Glencore International AG (Glencore) and the Venture’s marketing team are responsible for maintaining the Venture’s relationship with customers to whom they market the ferrochrome it produces Ongoing
Key topics and concerns raised at the engagement and response/s to these
  • Typically the material issues are raised by customers at engagement and are addressed by Glencore and/or our marketing team,

Trade unions

Stakeholder

Trade unions

Summary of material issues
  • Workers’ rights
  • Remuneration
  • Health and safety
  • Consultation on future operational changes
  • Increase in basic wages
  • Improved housing benefits
  • Increase in leave entitlement
  • Employee shares
  • Reduction in working hours
  • Production bonus
  • Long service award (increase in values)
  • Service increment
  • More than one full-time shop steward per unit
Method of engagement Frequency of engagement
In terms of the mines and smelters that make up the Venture, employees are represented by the National Union of Mineworkers (NUM) and the Association of Mineworkers and Construction Union (AMCU). Recognition agreements and unions structures are used for the purposes of consultation and communication on union matters The relationship and engagement are dictated by carious collective agreements applicable labour legislation and management/ union structures
  • Monthly meetings
  • Ad hoc meetings subject matter and urgency
Key topics and concerns raised at the engagement and response/s to these
  • Demands for amendments to terms and conditions of employment
  • Dissatisfaction in the work environment (e.g. heat, dust, shift patterns. Overtime etc). These are responded to in line with our mandate, compliance with legislative requirements and the maintenance of workable relationships. Each topic requires and receives a specific response

Suppliers

Stakeholder

Suppliers

Summary of material issues
  • Requirements regarding supplier SD standards, sustainable development policies, practices and procedures
  • Requirements regarding HDSA procurement and procurement policies
  • Contract terms and delivery
  • Technology transfer
  • Legal compliance
Method of engagement Frequency of engagement
  • Tenders and supply contracts awarded by procurement committee
  • HDSA status details of all potential suppliers required
  • Scorecard established to measure procurement levels
  • Human rights awareness training undertaken with suppliers
  • Merafe supplier were required to provide details of the HDSA shareholding/participation in their business and the company has established its current level of procurement in terms of the Department of Trade and Industry’s Codes of Good Practice
Ongoing
Key topics and concerns raised at the engagement and response/s to these
  • Regular engagement by the Venture at all levels with Eskom regarding power supply and costs
  • Suppliers are made aware of the SD standards, human rights standards and sustainable development policies, practices and procedures to which they must adhere when working on the Venture operations

 

Corporate office

+27 (0) 11 783 4780
+27 (0) 11 783 4789

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