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Community development

Review

Mining by its very nature has a finite life span. A mining operation has the potential to affect surrounding communities positively or negatively, both during its existence and after its closure. Petra takes steps to have a positive effect on local communities for the duration of its operations and to curb any problems that may arise with mine closure. The company does this primarily by contributing to the sustainable development of communities in which it operates, undertaken through consultation with relevant stakeholders in order to identify appropriate sustainable projects.

Corporate social investment (“CSI”) programmes and local economic development (“LED”) programmes are the means by which the potential negative impact of mining operations is curbed.

The objectives of Petra’s CSI programmes include poverty alleviation, job creation and skills development in the communities in which the company operates. Specific sectors targeted are the social, education and economic sectors, these are the same sectors given priority by government.

In order to develop an understanding of the varying needs of communities, Petra has consulted extensively with community leadership through local municipalities and been guided by their integrated development plans (“IDP”). The Company has also engaged with sector departments and community organisations in order to understand the challenges faced by communities.

A community development coordinator makes monthly visits to projects and project steering committees meet on a monthly basis to report on progress.

South Africa

CSI and LED expenditure

During the year under review, the following contributions were made to CSI and LED programmes by Petra’s South African operations:

  • Cullinan donated R206,935 for CSI programmes and budgeted R10 million for LED programmes. Projects included the sports development trust, agricultural farms, brick-making, community welfare and sports events.
  • Koffiefontein contributed R212,000 to CSI initiatives, R39,900 to food tunnels and R12,288 to Kholomba transport.
  • Kimberley Underground contributed R20,000 to CSI initiatives.
  • Helam made donations of some R17,000 to various community initiatives and has a budget of R1.75 million for LED programmes over a five-year period.
  • Star spent R20,000 on a brick-making project.
  • Sedibeng spent R58,944 on the Selelo street children project and donated R24,000 to Warrenton High School.

For the forthcoming financial year, the following amounts have been budgeted for CSI and LED initiatives:

  • Cullinan: R6,262,481 (LED project) and R185,000 (CSI initiatives);
  • Koffiefontein: R790,312 (LED projects) and R212 000 (CSI initiatives);
  • Kimberley Underground: R720,000 (LED projects) and R210,000 (CSI initiatives);
  • Star: R485,000 (LED projects); and
  • Sedibeng: R360,000 (LED projects) and R102,944 (CSI initiatives).

CSI and LED projects

Cullinan
  • Ikwezi agricultural hub project

    This project was identified by Cullinan from the former Kungwini municipality IDP. Cullinan, together with the Department of Trade and Industry, funded the project to improve the area’s infrastructure, to increase production outputs and to encourage women’s participation in agricultural activities. Cullinan has spent R479,957 on drilling for water and the erection of seven vegetable tunnels. Altogether there are 12 tunnels erected, the remaining five having been funded by the DTI. Cullinan plans to purchase a small truck and build a packing facility, with a view to supplying the market directly. For more information on this project, please see the case study, Ikwezi Farms: A growing success.

  • Vukuzenzele agricultural project

    This project was established in 2000 by De Beers to create jobs and thus alleviate unemployment and poverty. Cullinan, under the management of Petra, revived the project in 2009 and partnered with the Tshwane University of Technology to train project members on crop management skills. The Department of Agriculture and former Metsweding and Nokeng Tsa Taemane municipalities played a vital role by donating the land and facilitating the adoption of the project by Cullinan through their IDP. Cullinan has spent R510,537 on the project to train project members, purchase equipment, install boreholes and erect fencing. The mine continues to assist the project with financial and technical skills and plans to train project members in business and marketing skills.

  • Cullinan Sports Centre

    The Cullinan Sports Centre was developed to promote sports and recreation in the Cullinan communities of Rayton, Refilwe, Bronkhorstspruit, Cullinan, Onverwacht and Ekangala. The mine owns the property, which comprises the sports centre, old rugby club, a rugby field and a soccer field. Currently, schools in these areas are using the facility and Cullinan carries all the maintenance costs. There is the potential for employment creation for young people who can work at the centre.

Koffiefontein
  • Koffiefontein brick-making project

    The Koffiefontein brick-making project is intended to become a commercially viable entity and be operated by small, medium and micro enterprises (“SMME”) owned by historically disadvantaged South Africans (“HDSA”). This project will be a partnership between local communities as beneficiaries, the local municipality and Koffiefontein, as well as an agent who will implement the project. Money has already been spent on the establishment of the site. The allocated budget for FY 2012 is R187,500, subject to the outcome of a feasibility study and business plan.

  • Aggregate crusher plant

    The aggregate crusher plant is intended to provide aggregate for projects in the Letsemeng area, such as road infrastructure, storm water canals and the building of Reconstruction and Development Programme (RDP) houses. This project will be a partnership between local communities as beneficiaries, the local municipality and Koffiefontein, as well as an agent who will implement the project. Currently, R346,164 has been spent on this project for the purchase of a crusher machine and establishment of the site. The allocated budget for this project in FY 2012 is R187,500, subject to the results of a feasibility study and business plan.

Helam
  • Slimkop project

    Helam has been supporting the Slimkop project for seven years. The project funds the education of underprivileged children in Radikwega community of the North West Province. Learners are chosen on merit and family circumstances. The project finances school fees, tutoring, hostel accommodation, food, clothing, uniforms, stationery and anything else that is required for good school performance.

Sedibeng
  • Magareng food garden and vegetable processing plant

    This project is still in its initial planning stage, and discussions are currently taking place with municipality representatives. Expected expenditure is R1.6 million over five years and the project’s aims include reducing unemployment, contributing to poverty eradication through income generation, adding to food security, and implementing sustainable urban agriculture. Plans centre on establishing food gardens and a processing plant. Vegetables will be produced in the gardens, taken to the plant for processing and packaging and then delivered to markets for sale.

  • Selelo street children project

    This project came about due to the large number of street children in the Sedibeng area, as a result of the high unemployment rate and HIV/AIDS pandemic. Housing centres provide these children with a place to sleep and something to eat, as well as life skills programmes. The project is a partnership with a local non-governmental organisation (“NGO”) and the Northern Cape Department of Social Development. In FY 2011, expenditure on this project was R58,944.

Star
  • Theunissen ZR Mahabane brick-making project

    Recognised needs within the Star community area include infrastructure and skills development. As a result, the Theunissen ZR Mahabane brick-making project was established, a business specialising in the production of concrete-related products. Production has already begun and community members are working as beneficiaries. The project is a partnership with other mining companies in the area and with the municipality. Expenditure on the project is R200,000 and a further R250,000 will be spent in the future.

  • SMME development centre

    Star’s SMME development centre is intended to assist SMMEs to start-up and grow. Major functions will be the installation and maintenance of office equipment and that of a networking point. The project is in partnership with the municipality and will benefit local SMMEs and the community at large. No expenditure has yet taken place on this project but discussions have begun with the municipality. Total budgeted expenditure is R450,000, of which R285,000 is expected to be spent this financial year.

Tanzania

During the course of the year, Petra’s Williamson operation in Tanzania implemented the Mwadui community development project which focuses on promoting sustainable development in the areas of health care, education, water, and crop security. The project is administered by a development committee, representing the eight villages surrounding the lease area. The project’s priorities are determined by the development committee after open village consultation.

During the year under review, Williamson provided facilities and infrastructure for schools in its surrounding communities, and aided various environmental education initiatives and sport sponsorships.

Some of the projects assisted by Williamson include:

  • Mwadui Care and Treatment Centre

    In a joint venture with the Elizabeth Glazer Paediatric Aids Foundation, Williamson is providing the infrastructure, logistics and manpower to run an HIV/AIDS clinic for Mwadui residents and residents of neighbouring villages. A mother and child health care facility, an extension of the Mwadui Hospital, is also being supported through a joint venture with the Tanzanian government.

  • Mwadui Primary School

    The Mwadui Primary School is owned and operated by Williamson and provides free education to 460 learners. Facility upgrades to the amount of US$85,000 began in 2010.

  • Small business development

    A total of 107 private businesses are allowed to operate in Mwadui, providing a diverse range of goods and services to residents and those of neighbouring villages. Businesses are provided with rental-free premises. The estimated economic value of the agreement per business ranges between US$50 and US$500 per month.

Case studies

Ikhwezi Farms: A growing success

Ikhwezi Farms were started in the Boschkop area near Cullinan in 2006 by five local women, armed with no more than indigenous knowledge and passion. Though a lack of financial support inhibited the project for two years, in 2008, the Department of Agriculture donated three vegetable tunnels to the project and things began to take off. Woolworths was engaged as a market for Ikhwezi’s vegetables and Qutom Farm was assigned as a mentor. Read case study

GRI

The following GRI indicators are covered in this section:

Stakeholder engagement
4.17
Key topics and concerns of stakeholders
Indirect economic impacts
EC8
Development and impact of infrastructure investments and services provided for public benefit
Society
Management approach
Community
SO1
Nature, scope and effectiveness of any programmes and practices that assess and manage the impacts of operations on communities, including entering, operating and exiting