As the dust begins to settle on the latest brace of changes to South African mining law, DRD chairman and CEO Mark Wellesley-Wood derives some satisfaction from the fact that the company is making good progress towards meeting the requirements of the empowerment charter…

    During the past year, after a devastating leak of its draft contents caused a major crisis of confidence amongst investors internationally and consequent havoc with South African mining stocks, the Broad-based Socio-economic Empowerment Charter for the South African mining industry was finalised.

    Intended to provide clarity on demands the Minerals and Petroleum Resources Development Bill makes of the mining industry, the Charter itself has been extrapolated to a scorecard, the purpose of which is to assist mining companies with prioritising requirements and reporting to regulators and others on progress.

    DRD, through its membership of the South African Mining Development Association (SAMDA), was party to the extensive lobbying process precipitated by the leaked draft and as a result has been able to accept the final version of the Charter with a greater degree of equanimity.

    Indeed, in completing the scorecard for the year under review, the company is able to report compliance with much of the Charter’s requirements.

    “Most significantly, DRD – through its relationship with Khumo Bathong Holdings – has already achieved the Charter’s 10-year target of 26% empowerment in respect of ownership,” reflects DRD chairman and CEO Mark Wellesley-Wood.

    And on the human resource development front, functional literacy and numeracy are available through adult basic education and training programmes to employees at all operations with the exception of ERPM, where an audit is currently underway to determine needs.

    “In terms of other training and development, we’ve begun an ambitious, multi-faceted programme, unprecedented in DRD’s recent history. Career paths have been identified and mentors appointed for historically disadvantaged employees, and skills development plans submitted by all operations.”

    Employment equity plans have also been submitted by all operations and while the company does not yet have a plan in place to achieve the Charter’s stipulated 40% participation of historically disadvantaged South Africans in management within five years, current succession planning takes cognisance of the target and each department has been charged with identifying candidates for fast-tracking. The target of 10% participation by women in mining was a major focus of the 2003 wage negotiations and a recruitment strategy is in place.

    “In terms of the Charter’s requirements on mine community development, progress includes making mine-owned land available for low-cost housing developments, the donation of two mine-owned hospitals to the Department of Health and various community-level training initiatives.

    “We’re also addressing the Charter’s requirements on housing and living conditions through a programme to convert unused hostel accommodation to family units.”

    Rural development to date, Wellesley-Wood concedes, has not been a significant focus.

    On the Charter’s procurement requirements, DRD’s procurement department has begun the process of determining current levels of procurement from companies owned and operated by historically disadvantaged South Africans. This has involved initiating an audit of the company’s current vendor list of 1 360 companies to determine which meet its black economic empowerment (BEE) criteria, and to date, 83 of the 398 responding companies qualify.

    “We’re also updating our computer systems to provide the value of business done with BEE companies. Considerable mentoring to prospective BEE suppliers is being provided, both by internal and external financial experts, to ensure compliance with DRD’s tendering requirements since we continue to award contracts strictly on the basis of commercial viability.”

    As a 10% part-owner of Rand Refinery, Wellesley-Wood believes DRD to be significantly in compliance with the Charter’s requirements in respect of beneficiation.

    “Nevertheless, there are some additional initiatives in the pipeline to do more on this front,” he says.