APPROACH AND OVERVIEW

STAKEHOLDER ENGAGEMENT

PARTNERS IN GROWTH

Magdeline Medupi, receptionist, and Theodor Moeti, business developer, in the reception area of the Kumba small business hub support centre in Kuruman, near Sishen mine.

Kumba is aware that its ability to conduct its day-to-day business is influenced by its capacity to develop and maintain longstanding relationships with its stakeholders. Kumba’s stakeholder engagement therefore aims to build new, and improve existing relationships, to establish key partnerships and to obtain support for the company’s activities. Hence the theme of this report: ‘Towards sustainable partnerships’.

In its approach to engaging with identified stakeholders, the company adopts the principles of transparency, integrity and accountability, and reports timeous, relevant and meaningful information to all stakeholders. The identification of, and Kumba’s interaction with, its community stakeholders is conducted in line with the Anglo American plc SEAT processes. Community development is further prescribed by the commitments made in the company’s social and labour plans. In line with the requirements of the Mining Charter, Kumba ensures that its policies and practices are aligned with the integrated development plans of local municipalities.

As part of its engagement strategy, Kumba is committed to membership of, or support for, several external initiatives on public policy issues. These organisations deal with key issues of concern to the company and its stakeholders and are as follows:

• Chamber of Mines of South Africa;
• International Council on Mining and Metals (ICMM);
• National Business Initiative;
• JSE Limited Socially Responsible Investment Index (JSE SRI);
• Carbon Disclosure Project (CDP);
• World Business Council for Sustainable Development;
• Business Leadership South Africa;
• Progressive Business Forum;
• Die AHI (Afrikaanse Handelsinstituut);
• Executive Global Networks South Africa; and
• South African Business Coalition on HIV/AIDS (SABCOHA).

Kumba received external recognition for outstanding performance in various areas during 2011. These included:

• Nedbank Green Mining Awards: the top award in the sustainability category and joint top award in the socio-economic category;
• African Access National Business Awards: the fast growth company award for investing in people, the environment and sustainability;
• South African Publication Awards: best sustainability report;
• Sunday Times Top 100 Companies: third place for it share return over five years;
• Financial Mail Top Companies 2011: sixth place; and
• Ernst and Young Excellence in Corporate Reporting Awards: tenth place.

IDENTIFYING KEY STAKEHOLDERS

During the year, Kumba completed a formal stakeholder identification process to identify those groups and individuals who have an interest in the company, and with whom the company regularly engages. A stakeholder engagement policy was also developed and approved by the Executive Committee in December 2011. This will be rolled out across the group in 2012. A copy of this policy is available on the company’s website.

In identifying its stakeholders, Kumba has developed a matrix of those groups and individuals who are directly and indirectly associated with the company, including employees, shareholders, customers, suppliers, unions, government and regulatory authorities, neighbours and community members from communities in which we operate.

Kumba’s stakeholder relationships are underpinned by structured, strategic and transparent engagement processes and a genuine willingness to achieve mutually beneficial outcomes.

Extensive and ongoing engagement, both formal and informal, is undertaken by the board at a strategic level and by various disciplines. The table below illustrates some of these interactions.

Description of key stakeholders	Discipline	Comment
Shareholders, analysts and potential shareholders have an interest in the company’s performance.	Investor relations	Shareholders are encouraged to attend the company’s results presentations and participate in the AGMs, at which they have access to the board, and to raise issues of concern or interest directly with the company through various means of communication, investor and analyst meetings, site visits and company presentations. Kumba’s management team engages directly with investors and key analysts during roadshows. Kumba’s major shareholders, Anglo American plc and IDC, are also engaged at a board level and their inputs are sought on key issues.
Relations with employees and unions are governed by recognition agreements.	Human resources	Employees are encouraged to raise issues of concern and interest via the formal and informal structures in place, including through the human resources discipline, line management and union structures. Two-way communication channels are used to consult with the unions. Senior executives have access to the board and are expected to represent employees at this level.
Kumba engages with a broad range of interested and affected parties, including national, provincial and local government representatives, non-governmental organisations (NGOs), farmers, business partners, media representatives and opinion makers.	Public affairs	Kumba participates in various industry associations either directly or through its association with Anglo American plc. Other means of engagement include one-on-one discussions, company announcements, site visits and focus group forums, and through the media and other company publications.
Kumba engages with groups and individuals from the communities that surround its operations who are directly affected by or have a direct impact on the company’s operations, or who have an interest in the group.	Social and community development	Engagement takes many forms including one-on-one discussions, group dialogues and briefings, local, provincial and national focus group forums, community consultations and internal publications.
Kumba exports iron ore to around 30 customers in more than 10 countries.	Marketing	The company engages with current and potential customers in a number of ways that involve active, well-established two-way communication. These include formal presentations, road shows, company announcements, feedback reports, site visits and customer satisfaction surveys.
Developing suppliers is one of Kumba’s priorities. A number of programmes, designed to train local and historically disadvantaged South African suppliers, are in place.	Supply chain management	One-on-one meetings, open days and stakeholder forums are held to communicate company policy and procedures. Development programmes are discussed to encourage two-way engagement between Kumba and its suppliers.

STAKEHOLDERS

CURRENT SHAREHOLDERS AND POTENTIAL INVESTORS, ANALYSTS AND BUSINESS PARTNERS

Engagement process	Key topics and concerns	Useful references
• Annual general meetings • Investor road shows • One-on-one investor analyst meetings • Investor presentations • Interim and annual results briefings • Annual financial statements • Company website • Company announcements • Integrated annual reports • Sustainable development reports • Carbon Disclosure Project submissions • SENS announcements • Investor and analyst site visits	• Company strategy • Overall financial performance • Operating performance • Ongoing financial sustainability • Issues relating to the overall sustainability of the company in particular:   • risk mitigation   • nationalisation   • safety   • energy   • carbon emissions/climate change   • equity and transformation	Delivering on strategy Material issues Risk management Shareholders’ information • JSE SRI Index     www.jse.co.za/About-Us/SRI/Introduction_to_SRI Index.aspx • Carbon Disclosure Project Report     http://www.cdproject.net
GOVERNMENT AND REGULATORY AUTHORITIES
Engagement process	Key topics and concerns	Useful references
• Dialogue with, and participation in industry associations • Participation in forums • Social and labour plans • Integrated report • Open days • Site visits • Presentations	• Licence to operate • Health and safety • Employment equity • Transformation • Preferential procurement • Beneficiation • Human resource development • Social and community development • Infrastructure development • Environmental impact and rehabilitation • Taxes and royalties	Group profile Compliance and controls Governance of sustainability Social performance Environmental performance
COMMUNITIES AND NON-GOVERNMENTAL ORGANISATIONS
Engagement process	Key topics and concerns	Useful references
• Community forums • Municipal, provincial and national focus group forums • Industry partnerships • Social and labour plans • Community engagement programmes • Dialogue • Company announcements • Local publications • Awareness campaigns • SEAT	• Transformation • Preferential procuremen • Beneficiation • Human rights • Social and community development • Skills development • Employment and job creation • Health-related issues, in particular HIV/AIDS and TB • Environmental impact and rehabilitation	Social and community development Value-added statement • SEAT Report     www.angloamericankumba.com/pdf/reports/seat_ report_29022011.pdf
EMPLOYEES AND UNIONS
Engagement process	Key topics and concerns	Useful references
• Collective bargaining practices • Briefings by CEO and general managers • Team briefings • Two-way manager-employee communication • Campaigns • Internal communication channels:   • intranet   • publications   • posters   • flyers	• Company strategy and performance • Training and development • Transformation • Remuneration • Health and safety • Contractor management • Participation in share incentive schemes • Housing and living conditions	Remuneration report Envision Value-added statement Social performance
CUSTOMERS
Engagement process	Key topics and concerns	Useful references
• Formal presentations • Road shows • Company announcements • Integrated report • Site visits • Dialogue • Customer satisfaction surveys • Carbon Disclosure Project submissions	• Company strategy • Innovation • Transportation and supply of products • Quality of products • Price	Product responsibility • Our products     www.angloamericankumba.com/products_main.php
CONTRACTORS AND SUPPLIERS
Engagement process	Key topics and concerns	Useful references
• Company announcements • Integrated report • Participation in forums • Briefing sessions • Open days • Dialogue • Annual financial statements	• Company strategy • Local/BEE procurement programmes • Preferential practices • Overall sustainability of company • Business training and support • Financial sustainab	Human rights Economic transformation, procurement and supply chain
MEDIA
Engagement process	Key topics and concerns	Useful references
• Company announcements • Company website • Online presentations • Interviews • Media site visits • Integrated report • Briefings	• Financial results • Corporate activity • Environmental issues • Marketing • Community development topics • Safety and health • Labour relations	Review by the chairman Chief executive's review Chief executive's review • Press releases and media coverage     www.angloamericankumba.com/media_main.php