sustainability report for the year ended 30 september 2009 tusker) – the tenacity and loyalty that...

Sustainability report for the year ended 30 September 2009

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Kambuku (great tusker) – the tenacity and loyalty that characterise the elephant also sum up PPC’s value-based management philosophy

Reader note:Given its broad stakeholder base, PPC has elected to publish separate annual financial and sustainability reports in 2009 to enable wider but cost-effective dissemination of its sustainability practices and progress. We also believe a stand-alone sustainability report will enable the group to elicit pertinent feedback from stakeholders that will be incorporated into future strategies and initiatives.

These reports should be read together for a fuller understanding of the group’s performance, strategies and objectives. PPC’s annual report is available on request (see inside back cover) or the

group’s website at

www.ppc.co.za

Organisational profile

Pretoria Portland Cement Company Limited (PPC) established the first cement plant in South Africa in 1892 and listed on the Johannesburg Stock Exchange in 1910. Today, PPC is the leading supplier of cement in southern Africa, with eight manufacturing facilities and three milling depots in South Africa, Botswana and Zimbabwe. Together, these facilities can produce almost eight million tons of cementitious products each year. Related products include aggregates from the company’s Gauteng quarries and the quarry in Botswana. PPC Lime is the leading supplier of metallurgical-grade lime, burnt dolomite, limestone and related products in southern Africa. It operates one of the largest lime plants in the world at Lime Acres, in the Northern Cape province of South Africa. PPC Aggregates supplies quality construction aggregates to the civil construction sector as well as products for the chemical, metallurgical and agricultural industries.

1 Process flow and products

2 Chief executive officer’s statement

4 Value added statement

6 Sustainability approach

14 Social report

48 Health and safety report

56 Environmental report

82 Financial overview

86 Index to Global Reporting Initiative indicators

94 Administration

95 Feedback form

Pretoria Portland Cement Company Limited Sustainability Report 2009

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Process flow and products The diagram depicts the cement-manufacturing process and potential environmental effects with their attendant social impacts.

Mining and crushingThe primary raw material for cement manufacture is calcium carbonate or limestone. This is obtained from the quarry where, after the removal of overburden, the rock is blasted, loaded into trucks and transported to the crusher. A multistage crushing process reduces the rock to stone less than 25mm in diameter. Most modern cement factories are located close to a source of limestone as about 1,5 tons of limestone are needed to produce one ton of cement.

Blending and storageThe crushed rock is stored in stockpiles where, by a carefully controlled process of stacking and reclaiming across the stockpile, blending takes place and a uniform quality of raw material is achieved. Systematic sampling and laboratory testing monitor this process. The other raw materials, normally shale, iron ore and sand, are also stored in stockpiles.

Raw milling and homogenisationCarefully measured quantities of the various raw materials are fed, via raw mill feed silos, to mills where steel balls grind the material to a fine powder called raw meal. Homogenising silos are used to store the meal where it is mixed thoroughly to ensure that the kiln feed is uniform, a prerequisite for the efficient functioning of the kiln and for good quality clinker.

Burning The most critical step in the manufacturing process takes place in the huge rotary kilns. Raw meal is fed into one end of the kiln, either directly or via a pre-heater system, and pulverised coal is burnt at the other end. The raw meal slowly cascades down the inclined kiln towards the heat and reaches a temperature of about 1 450oC in the burning zone where a process called clinkering occurs. The nodules of clinker drop into coolers and are taken away by conveyors to the clinker storage silos. The gas leaving the kiln is cleaned by electrostatic precipitators prior to discharge into the atmosphere.

Cement millingThe cement mills use steel balls of various sizes to grind the clinker, along with a small quantity of gypsum, to a fine powder which is then called cement. Without gypsum, cement would flash set when water is added and gypsum is therefore required to control setting times. The finished cement is stored in silos where further blending ensures consistency.

Quality assuranceExtensive sampling and testing during the manufacturing process ensures the consistency and quality of the end product.

Cement dispatchCement is dispatched either in bulk or packed in 50kg bags and distributed from the factory in rail trucks or road vehicles. The 50kg bags are packed directly onto trucks or palletised. Various types of cement are sold.

* Adapted from Polysius schematics

Mining limestone

Dust, noise, vibration and water impacts

Energy efficiency, air emissions and noise impacts Energy

efficiency, air emissions and

climate change

Crushing plant

Fugitive dust emissions

Limestone blending Coal stockpile

Dust and water impacts

Fugitive dust emissions

Raw mill

Coal mill

Pre-heater, kiln line & cooler Clinker storage Cement milling & dispatch

Cement manufacturing process and potential environmental/social impacts*

Page 1


Page 2

Chief executive officer’s statement

PPC’s commitment to sustainable business practices is integral to our own sustainability. We acknowledge this inter-dependence in our strategy which mandates the group to practice sound corporate, environmental and social governance, and in our values which stipulate respect for the individual; providing a non-discriminatory, healthy, safe and challenging work environment; a commitment to improving the quality of life for our people; and caring for the environment and communities in which we operate.

A number of macro issues around us

reinforce our commitment. The world

has become a smaller place and, with

that, comes increased competition. The

sustainable competitive advantage is the

human intellect and so the challenge

remains the retention, development and

acquisition of the best skills. The

cost and supply risk of energy

will increase in future and

the ever-increasing burden

on non-renewable energy

sources means the world has

to become more efficient. The

ongoing concern over climate

change will continue to ensure

manufacturers reduce their

carbon footprint and install

technology to minimise

emissions.

Key events During the year, encouraging progress

was made on a number of sustainability-

related fronts. Several best practices were

established for optimal environmental

management (page 64). At over 7% of

total payroll, PPC’s investment in skills

development and training continues

unabated (page 21). Additionally, we

expanded the suite of PPC academies

to include a leadership faculty, and

the first of our Dinaledi bursars joined

the group as a permanent employee

(page 24). Solid progress was made in

many community projects determined

in our social and labour plans (page 38).

The company maintained its strong cash

flow generation, adding value for all

stakeholders (page 4).

With regard to safety, we deeply regret

the loss of two colleagues during the

year. The board and Team PPC join me

in extending our sincere condolences

to the families, friends and colleagues

of those who died. Our goal remains

zero injuries for all and we are

redoubling our efforts to reach and

maintain that target. Commendably,

four PPC sites recorded over one million

hours worked without a lost-time

injury (page 50). Disappointingly, we

did not meet our safety targets; while

there were fewer lost-time injuries in

2009 (page 51), the lost-time injury

frequency rate was higher than the prior

period. We are confident that our focus

on behaviour-based safety campaigns

will produce the desired results, and

For elephants, sustainable competitive advantage lies in size. For PPC, it rests in skills


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• Legislation and compliance – many of PPC’s

activities are regulated by legislation. Staying

abreast of the complex and changing nature

of these regulations and maintaining full

compliance is challenging (page 11).

• Electricity supply (page 72).

• Technology – when selecting new technology

and equipment, optimal sustainable

performance is a key criteria. A good example

of this is our new Dwaalboom plant, which

features the most advanced manufacturing

technology in the world and delivers excellent

levels of energy efficiency and environmental

performance. Other important criteria

include economic, social and environmental

performance of suppliers.

• Stakeholder engagement – this is an

ongoing process to ensure effective lines of

communication across the full spectrum of

PPC’s stakeholders (page 13).

Aligning our sustainability reporting with the

accepted international benchmark, Global

Reporting Initiative (GRI), reflects the extent

of our commitment to inculcating sustainable

development in every level and facet of our

business. We understand that this is a progressive

task and we have formalised our commitment by

declaring this report as a GRI C application level,

with the intention of progressing in the medium

term (page 7).

We owe future generations no less.

Paul Stuiver

Chief executive officer

10 November 2009

every effort is being made to ensure this is sooner

rather than later.

During the year PPC established a sustainability

committee comprising senior management to

spearhead the integration of sustainable develop-

ment into our business. The committee discusses

key sustainability drivers relating to economic,

social, environmental and corporate governance

performance and establishes integrated controls

for effectively managing identified risks. The

committee’s initial projects include:

• Developing the PPC sustainability report

• Improving stakeholder engagement

• Developing a sustainability training matrix

• Managing PPC’s carbon footprint by proactively

managing risks relating to climate change.

Key challengesThe key challenges associated with our economic,

social and environmental performance have been

determined after formal internal and external

processes involving a broad range of stakeholders.

Where appropriate, the summary below is cross-

referenced to detailed discussion in this report

or in PPC’s annual report. At present, our major

challenges include:

• Safety – PPC is a heavy industry manufacturer

and therefore certain risks are inherent in the

business. Accident prevention for both PPC

employees and contractors is a major focus

(page 50).

• Skills – skills retention and development,

particularly in view of inadequate depth,

numbers and span of skills base (page 21).

• Climate change – current impact and proactive

measures to address climate change (page 69).

• Economic recovery – extent and duration of

South African economic slowdown.


Value added statement

A measure of the wealth created by the group is the amount of value added to the cost of raw materials, products and services purchased. This statement shows the total wealth created and how it was distributed.

2009 2008 2007Notes Rm Rm Rm

Revenue 6 783 6 248 5 566

Paid to suppliers for materials and services 1/4 (3 289) (3 017) (2 589)

Value added 3 494 3 231 2 977

BBBEE IFRS 2 charges (490) – –

Take-on gain arising from consolidation of Porthold 213 – –

Exceptional items – 2 14

Income from investments^ 72 94 89

Total wealth created 3 289 3 327 3 080

Wealth distribution:

Salaries, wages and other benefits 2 745 679 597

Providers of capital 1 558 1 558 1 296

Finance costs 363 157 84

Dividends 1 195 1 401 1 212

Ordinary dividends 1 188 1 088 798

Special dividend – 313 414

Dividends paid to external BBBEE trusts by consolidated SPVs 7 – –

Government 3 689 632 777

Reinvested in the group to maintain and develop operations 297 458 410

Depreciation and amortisation 315 218 196

Retained (loss)/profit (60) 98 217

Deferred taxation 42 142 (3)

3 289 3 327 3 080

Value added ratios

Number of employees (30 September) 3 234 3 164 3 097

Revenue per employee (R000)# 2 560 2 461 2 222

Wealth created per employee (R000)# 1 259 1 310 1 230

^ Includes interest received, dividend income and share of associate’s retained profit# Excludes employees of Porthold (2009: 583; 2008: 591; 2007: 592)


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1 000

2 500

4 000

5 500

7 000

2007 2008 2009

5 56

6

6 24

8 6 78

3

Revenue (R million)

1 000

2 000

3 000

4 000

2007 2008 2009

2 97

7 3 23

1 3 49

4

Value added (R million)

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2009 2008 2007Rm Rm Rm

NOTES

1. Paid to suppliers for materials and services

Transnet Freight Rail and Barloworld Logistics are the only suppliers of services exceeding 10% of total amounts paid.

All contracts are paid in accordance with agreed terms.

2. Salaries, wages and other benefits

Salaries, wages, overtime payments, commissions, bonuses and allowances 647 599 525

Employer contributions~ 98 80 72

745 679 597

3. Government

Taxation – Normal, CGT and STC 680 625 768

Rates and taxes paid to local authorities 3 3 3

Customs duties, import surcharges and excise taxes 4 2 2

Skills development levy 6 4 4

Cash grants and subsidies received from the government (4) (2) –

689 632 777

4. Included in “Paid to suppliers for materials and services” is:

Donations and social labour plan expenditure 16 6 10

Dividends paid to BBBEE transaction beneficiaries 7 – –

23 6 10

~ In respect of pension funds, retirement annuities, provident funds, medical aid and insurance


Sustainability approach

Report profileThis report covers the period 1 October 2008 to 30 September 2009. It follows the report published for the same period in 2007/2008, but has been separated from the annual financial statements to ensure broader dissemination among stakeholders. Details for obtaining copies of the annual financial statements from the PPC group company secretary appear on page 94.

For further details on the sustainability report, please contact: Urishanie Govender, PPC group manager, sustainability and environment,

tel +27(11) 386 9122, fax +27(11) 386 9117. Email [email protected].

Report scope and boundaryThe scope of this report covers all PPC’s manufacturing facilities, aggregate quarries and depots in South Africa. Botswana and Zimbabwe will be included in the 2010 annual report. Progress with projects in terms of expansions and upgrades is also discussed.

In compiling this report, PPC has considered the latest Global Reporting Initiative (GRI),

Sustainability encompasses the balanced integration of corporate governance, social, economic and environmental factors into all the planning, implementation and decision-making stages of the business. PPC exercises due diligence in all areas of operation to promote sustainable development in its business, employees, the environment and communities in which it operates.

PPC embraces the principles of social justice and fairness to achieve optimal well-being and prosperity for all its stakeholders. The group is committed to delivering stakeholder value in all its endeavours:

• Board accountability PPC directors are accountable for PPC’s

sustainability performance.

• Aligning values and principles with sustainable development

PPC aligns all decisions on the company’s financial sustainability and the fundamental rights of all its stakeholders (employees, customers, shareholders, suppliers and the communities in which it operates) within an established framework of values and ethical principles.

• Assessing risks and opportunities In identifying and effectively responding to

sustainability risks and opportunities, the company continues to enhance long-term shareholder value and simultaneously fulfils its broader economic, social and environmental responsibilities to society.

• Management systems PPC performs regular audits of its management

systems and programmes to ensure its sustainability policy is implemented and remains effective. The International Organisation for

Standardisation (ISO) and Aggregate and Sand Producer Association of South Africa (ASPASA) systems are externally audited. Performance and quality requirements are internationally recognised by the ISO certification. PPC is committed to using systems and programmes that meet or exceed applicable legal and regulatory standards.

• Performance monitoring and reporting PPC’s sustainability performance is reported

publicly to stakeholders. The company is committed to monitoring its use of natural resources and developing indicators to assess its progress against recognised standards.

• Engaging stakeholders PPC establishes and maintains constructive,

proactive and informed relationships with all stakeholders.

• Minimising environmental impact PPC is committed to identify, assess and reduce

the environmental impact of activities performed by employees, contractors and suppliers.

• Training and research PPC promotes innovative research, training

and technology cooperation in the search for environmentally sensitive solutions to minimise the organisation’s environmental impact.

Group sustainability policy


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sustainability reporting guidelines, known as G3. The GRI classification shown below for our report is application level C, which is self-declared and requires the group to report on at least 10 GRI indicators across our economic, social and environmental performance. The

GRI indicators published in this report reflect the extent to which we meet these reporting requirements. We have also included areas we believe will enhance understanding of our processes, achievements, challenges and progress for the year.

MaterialityTo ensure we have covered topics and indicators that matter most to us and to our stakeholders, we have identified our most significant or material issues. We used the following criteria of the G3 materiality test in a combination of external and internal factors as a guide to determine material issues:

Criteria used to determine material issues

Internal factors External factors

• Group’s vision, mission, key values, policies, strategies, operational management systems, objectives and targets.

• Challenges and emerging issues for the cement sector, for example: adopting climate change abatement technology to reduce the organisation’s carbon footprint.

• Expectations and concerns of stakeholders such as employees, investors, shareholders and suppliers.

• Relevant laws, regulations and changes to legislation that impact on the business and its stakeholders including skills development, employment equity, National Waste Act, National Air Quality Act, and local air quality by-laws.

• Underlying risks to PPC as defined by internal high-level risk methodologies.

• Changes involving sustainability issues, impacts, risks or opportunities (eg climate change, energy efficiency) identified through published global research and development.

• Product development and the manner in which PPC could potentially influence suppliers and customers in terms of sustainable development.

• Advice received through external experts in the sustainability field, ie KPMG.

PPC’s material issues are summarised on the next page and selected issues detailed further on.

C C+ B B+ A A+

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GRI checked

GRI classification


Sustainability approach continued

Key impacts, risks and opportunitiesMaterial issues and risks to PPCIn terms of PPC’s sustainability policy, 10 material sustainability risks have been identified, with mitigating actions summarised below and cross-referenced to detailed discussion elsewhere in this report:

Material issueKey performance indicator/target

GRI performance indicator Reference

Health and safety • Minimum operating and safety standards reviewed and updated.

• Ongoing safety induction programme and refresher safety training.

• All contractors required to adopt PPC health and safety standards on site.

• Risk assessment training at all sites.

LA7 – Rates of injury, occupational diseases, lost days and absenteeism, and number of work-related fatalities by region.LA8 – Education, training, counselling, prevention, and risk-control programmes in place to assist workforce members, their families, or community members on serious diseases.

Pages 50 to 55

Skills – Inadequate depth, numbers and span of skills base (operations and project teams, key suppliers/contractors).

• Regular update of succession plan.

• Appropriate investment in developing people.

• Developing PPC academies.• Regular salary surveys and

salary adjustments.• Scarcity allowance introduced.• Contracting consultants for

projects.• Added reserve positions

in operations (graduate development programme, increased pool of apprentices and production trainees) and outsourcing.

• PPC reputation attracts employees and suppliers.

• Continue overseas technical trips.

• Ensure best-available supplier skills are sourced.

• Use independent specialists to audit performance of suppliers and staff.

LA10 – Average hours of training. LA11 – Programmes for skills management and lifelong learning.LA12 – Percentage employees receiving regular performance and career development reviews.

Pages 21 to 29


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Climate change • Target for CO2 emitted for cement, lime and dolomite in 2009 is 850kg/ton.

EN16 – Total direct and indirect greenhouse gas emissions.

Pages 69 and 70

Exposure to regional economies

• Flexibility in starting and stopping plant in response to demand.

Page 52 (Annual report)

Speed of economic recovery – Extent and duration of the South African economic recovery.

• Reduce costs by optimising production facilities (kilns and mills).


Legislation and compliance – many of the company’s activities are regulated by legislation. Staying abreast of the complex and changing nature of these regulations and maintaining full compliance is challenging.

• Legal registers updated and linked to management system.

SO8 – Monetary value of significant fines, total number of non-monetary sanctions for non-compliance.


Competitor actions – Actions by competitors that could erode the company’s competitive position and profitability.

• Ensure strategic intelligence is current.

• Reinforce the brand and relationships.

• Explore alternative, more cost-effective technology.

• Pursue other feasible markets.




Key impacts, risks and opportunities continued

Material issues and risks to PPC continued



Electricity supply • Climate change targets.• Reduce electricity usage in

line with legislation.• Find and develop alternative

electrical energy sources.• Participate in voluntary load

shifting.

EN3 – Direct energy consumption by primary source.EN4 – Indirect energy consumption by primary source.

Pages 71 to 73

Stakeholder engagement

• Stakeholder maps. • Stakeholder engagement

meetings.

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.

Page 13


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GovernancePPC believes good corporate governance should extend further than mere statements of compliance. The company has a strong ethos of corporate governance – spanning its economic, social and environmental performance – that has been in place since its formation in 1892 and remains an important consideration in its day-to-day operations.

The PPC group is committed to the principles of fairness, discipline, independence, accountability, transparency and social responsibility associated with good corporate governance. PPC accepts the principles and recommendations of the Code of Corporate Practices and Conduct in King II, complies with additional governance requirements of the JSE Limited and the Public Investment Corporation’s (PIC) principles, policies and practical application regarding corporate governance. The group also welcomes the introduction of King III, with its greater focus on sustainability.

In addition to adopting GRI sustainability reporting guidelines on economic, environmental and social performance, PPC has continued to meet the criteria of the JSE’s Socially Responsible Investment Index since its inception in 2004.

PPC’s systems of corporate governance are continually evolving in pursuit of best practice and as the needs and expectations of stakeholders develop. During the review period, we established a sustainability committee comprising executive management across the group to develop a holistic view of sustainability issues. This cross-functional team has both the depth and breadth of expertise to craft solutions that will give great impetus to our journey towards fully fledged sustainability.

Assessing riskPPC is committed to managing its risks and opportunities in the interests of all stakeholders and to ensure that it meets its social, environmental, governance and economic objectives and obligations.

A systematic, multi-tiered risk assessment process supports the company’s risk management philosophy. This ensures risks are adequately identified, evaluated and managed at the appropriate level in the business units, and that their individual and joint impact on the company as a whole is considered. To enhance this process an enterprise-wide risk management framework is currently being developed.

Risk registers are maintained as part of the risk management process. Where appropriate, internal, external and joint audit protocol auditors adapt their audit procedures to include coverage of these risks in their reviews and compliance audits.

Divisional boards and senior managers carry out detailed annual self-assessments of risk. This process identifies the critical business, operational, financial and compliance exposures facing the company, and the adequacy and effectiveness of control factors are reviewed and updated every six months. The process is facilitated in alternate years by external risk advisers Marsh Vikela.

Business recovery plans have been compiled for each operation and are subject to regular testing.

The audit and risk management and compliance committees regularly review the main risks and risk management processes and advise the board accordingly.



Commitments to external initiativesPPC provides inputs to influence legislation and proactively engages authorities and other external organisations as shown below:

PPC involvement

Government Department of Water and Environmental Affairs – national level

PPC chaired working groups for the air emissions standard-setting workshops.

Non-government organisations

WWF (World Wildlife Fund) Senior corporate member of the WWF.

Associations ACMP-SA Cement Association body PPC chairs the secondary material and sustainability committees.

ASPASA (Aggregate and Sand Producers Association of South Africa)

PPC chairs the environmental committee.

NAPCoF (North West Air Pollution Control Forum)

PPC is a member of the executive committee.

Concrete and Cement Institute (C&CI) PPC serves on the cement standard sub-committees and offers technical inputs.

PPC also serves on the durability index testing committee which discusses SANS standards for concrete.

PPC participates in the industry round robin on cement strength testing and guides decisions relating to consistency of test methods.

Rose Foundation PPC is a licensed waste oil processor.

NBI Energy Accord PPC is a signatory.


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All PPC plants have established stakeholder forums that meet each quarter. The objectives of these forums include:• Create a platform to facilitate discussion on

environmental and social initiatives at the plant

• Build capacity in the community for environmental and social management

• Disseminate applicable information to stake-holders

• Establish the stakeholder map for PPC• Establish and maintain a database of issues

raised and their management• Manage expectations of communities

transparently • Strengthen the relationship between PPC and

the community.

Membership of these forums is open to representatives from:• All government departments• Applicable labour union representatives• Staff of PPC• Landowners, tenants and neighbours on

surrounding properties (including tenants)• Representatives from non-governmental

organisations (NGOs).

PPC has a broad and established stakeholder map that includes:

Trade unions

Non-governmental and community organisations

Employees

Peer companies

Professional organisations

National, provincial and local government

SuppliersCustomers

Regulatory authoritiesShareholders and investors

Academic institutions

PPC

Stakeholder engagement

Environmental review

Page 14


Growth and transformation through an empowered workforce are central to our sustainable development

Graduates from the sales and marketing course of June 2009

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Growth and transformation through an empowered workforce The passion and unconditional commitment of our employees underpin our growth and transformation. Their approach typifies the true spirit of Kambuku. The word is derived from Tsonga and means ‘great tusker’, referring to an elephant bull, whose characteristics of tenacity and loyalty sum up PPC’s value-based management philosophy.

Stakeholder value is created through the continuous growth and alignment of our people processes with the group’s business objectives.

The PPC way of lifeOur sustainable success relies on our people, who are integral to maintaining the Kambuku philosophy. This PPC ‘way

PPC’s success hinges on the passion and unconditional commitment of its employees, which is, in essence, the true spirit of Kambuku

Social report

of life’ creates a healthy, rewarding and satisfying working environment in which everyone has opportunities to contribute to the success of the organisation and their own development, and be recognised for excellence.

Maintaining open dialogueThe company believes in maintaining open and honest dialogue with its employees, and accordingly concentrates on engaging and consulting with its people at all levels.

The percentage of employees recognised as members of a trade union is 32% in South Africa, 63% in Botswana and 69% in Zimbabwe. PPC acknowledges freedom of association and relevant agreements between the company and various unions.

Social highlights

• 7% of payroll spent on employee skill development

• R10 million of a planned total of R60 million spent on local economic development projects approved by the Department of Mineral Resources

• Rated level 3 BBBEE contributor status in terms of Department of Trade and Industry’s Codes of Good Practice

• 45% of total procurement representing R1,48 billion spent with BBBEE suppliers

• 2 500 employees become new share owners

• More than 3 000 improvement suggestions generated by our people, of which over 60% contributed to direct savings of over R19 million

• An initiative known as Optimising Diversity launched to further empower the organisation towards its REAL transformation philosophy


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Enriching Kambuku To ensure sustainable business performance in a challenging environment, the Kambuku value-creation model must continuously be strengthened. A number of opportunities have been identified to enrich and deepen the existing Kambuku process and values.

Firstly, Kambuku principles and processes must be maintained and further entrenched to ensure their sustainable performance. Also, because the Kambuku enrichment initiative aims to establish a strong foundation from which to continuously empower employees and facilitate their growth, it provides opportunities to advance individual mentoring and coaching skills, foster a greater understanding of PPC’s REAL (relevant, empowered, actualised and lasting) transformation philosophy, and enhance the ability of managers to inspire employees in a diverse environment.

A key initiative during the year was to educate and equip line managers and supervisors with greater understanding and abilities in optimising diversity in our environment. Ultimately, the enrichment initiatives aim to increase the ability and effectiveness of Invocom team members through broad-based skills that ensure continuous improvement.

The focus of Kambuku’s enrichment is thus to strengthen existing process, embrace transformation and nurture the skills and ability of PPC employees.

Kambuku – creating lasting value for our peopleAn initiative focused on employee value creation was introduced nine years ago. This process, referred to as the Kambuku Way, has entrenched a high-performance culture across PPC based on employee engagement, growth and strong values. This underpins the way PPC does business. To maintain the passion and commitment of our people, it is important to continuously provide clear direction and realign the Kambuku organisational systems to current and future business challenges.

For almost a decade, Team PPC has embraced the processes and principles embodied in Kambuku to develop a world-class operation in all respects. Building on the foundation that has been created with passion, commitment, innovation and teamwork, we continue to record significant achievements, including:• The group average for our Invocom team

forums has been maintained at a very effective 4,3 out of 5,0 and organisational benchmark standards of 3,3 out of 4,0 exceeded world-class standards.

• Over 85% of our employees again participated in the annual PPC Individual Perception Monitor, giving the company a positive index rating of over 90% (page 20).

As part of the Kambuku process, an organisational performance model, shown overleaf, continues to set the benchmark for internal standards, systems and processes that facilitate employee engagement and participation. The effectiveness of each element in the model is measured annually.


Social report continued

Employee participation and engagement A fundamental principle of the Kambuku process is that positive results are easily achieved when employees across all levels are engaged, empowered and held accountable. Accordingly, active involvement and communication take place frequently across the company through well-established organisational systems and processes. PPC’s participation and communication efforts are encapsulated in various components of the Kambuku process, including:• Key leader summits: regular team meetings

are held at plant or site level throughout the company, involving all appointed, elected and informal leaders. The aim is to inform employees about plant or site performance, strategic initiatives, challenges and opportunities. In an environment of mutual trust and cooperation, there is robust and constructive communication, and the outcomes of each summit are communicated clearly and promptly down

to shop-floor level. This process enhances PPC’s efforts to maintain a clear purpose and common vision and direction throughout the company.

• Invocoms: structured, team-based discussions that take place daily for teams at shop-floor level, weekly at sectional supervisory level, and monthly at departmental level. Invocoms are held throughout PPC at all levels and across all functions of the business. There are approximately 350 active and effective Invocoms operating across PPC.

These discussions communicate elements of PPC’s vision and objectives, evaluate team performance, analyse obstacles affecting performance and develop action plans to overcome these obstacles, ensuring targets are achieved. Initiatives such as behavioural safety, educational topics and development are also discussed in Invocoms.

The vital elements of a performing organisation

RELEASE ENERGy/REWARddIRECT/FOCuS ENERGySTRuCTuRE/HARNESS ENERGyCREATE ENERGy

Co

nti

nu

ou

s p

erfo

rman

ce

imp

rove

men

t

Clear purposeVision strategy• Communication• Understood• Journey maps

Inspiring climate• Fairness, order, rules of the game• Communication, information,

influence• Management style• Recognition• Code of conduct• Remuneration and benefits• Effective HR administration• Safety and environment• Transformation

Learning for growth*• Career development• Skills development • Succession planning• NQF alignment

Performance improvement(Organisational/individual)• Role and function clarity• Accountability scorecards,

targets and action plans• Performance measurement• Performance review: – Recognition – Action plans for under-

performance

AlignmentValue drivers, structure job model• Purpose• Scorecard• Competencies

• Communication• Reviewing progress • Stretching targets• Solving problems• Education

Invocom®

* See expanded model on page 21


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Plant- and site-level Invocom structures are designed to spread communication both upwards and downwards through the company. These structures also:• Enable transparent problem resolution and

employee participation • Encourage teams regularly to stretch outputs

and targets by reviewing and assessing team performance

• Capture innovations and suggestions to enhance cost savings, process improvement, efficiency and safety

• Effectively communicate positive recognition• Capture best practices on a centralised

database• Manage the PPC climate through team

members’ adherence to the company’s code of conduct.

Saving costs through employee innovations and suggestionsDuring the review period, over 3 000 value-adding suggestions were generated via Invocom structures. Of these, more than 60% were evaluated, accepted by management and implemented. An estimated R20 million (see graph below) was saved through these suggestions in 2009, taking the four-year total to some R72 million in cost savings.

Individual Perception Monitor – continuous improvementFor the past nine years, PPC’s annual Individual Perception Monitor survey has given all our people the opportunity to express their views and rate the company on critical processes, including understanding its vision, employee benefits, leadership behaviour, remuneration, training, coaching and communication. Participation in the survey is both voluntary and confidential.

Importantly, results are analysed by each site and by management on a centralised basis, to identify and address areas of concern and reinforce positive trends. A healthy positive index average of over 90% has been maintained.

Estimated savings (R million)

0

500

1000

1500

2000

2500

3000

0

6

12

18

24

30

24

18

12

6

02006 2007 2008 2009

13,3

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22,3

19,5

Number of suggestions accepted

0

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1000

1500

2000

2500

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0

6

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18

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2 500

2 000

1 500

1 000

500

02006 2007 2008 2009

2 06

0

2 53

0

2 11

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1 98

7


0

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40

60

80

100

PPC Individual Perception Monitor (2002-2009) – % positive results

■ 2002■ 2003■ 2004■ 2005■ 2006■ 2007■ 2008■ 2009

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Empowering tomorrow’s leaders today through coaching and mentoringAs part of our focused efforts to improve and sustain superior business results, we have a multilevel coaching and mentoring initiative in place, known as the coaching advance performance (CAP) programme. Ongoing revisions ensure this programme becomes a broad-based skill for all appointed leaders in PPC. In our group, coaching refers to transferring operational theory and core skills into practice, while mentoring refers to the transfer of leadership skills, knowledge and attributes.

The CAP programme is a formal and structured process, and an integral part of PPC’s development and succession framework given its direct impact on the success of the company’s employment equity and development initiatives. The CAP process lies at the centre of transferring skills and knowledge to the younger generation of

primarily black colleagues, particularly those in critical positions.

Succession planningPPC’s succession strategy is designed to ensure that competent successors for key positions in the company are continuously available. The strategy entails the following:• Succession-planning discussions are held

biannually at group and site levels• Development plans include mentorship and

coaching• Strong alignment with economic empower-

ment targets and plans.

A growing workforce With the implementation of PPC’s inland capacity expansion projects, our staff complement has increased in the review period to 3 234, including Zimbabwe and Botswana, from 3 164 in 2008.


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Annual average employee turnover in 2009 was 2,5% across South African operations (2008: 4,1%). Average employee turnover for the group (including Botswana and Zimbabwe) was 1,16% (2008: 11,4%). The significant decrease reflects the stabilisation of PPC’s businesses in Botswana and Zimbabwe.

Learning and development The learning for growth element of the Kambuku value-based management system remains core to the PPC way of life and exemplifies our ongoing commitment to develop globally competitive people.

With the learning and development model and ladders of learning firmly entrenched in the Kambuku culture of PPC, the learning process allows for horizontal (multi-skills) and vertical (career development) implementation across various disciplines in the company.

On average, PPC employees had three performance and career development reviews during the financial year. Gaps identified in these discussions are captured onto the employee’s individual development plan which forms the basis of the annual training needs analysis and workplace skills plan.

Functional learning – competency driven

Foundational learning – ABET

Operations academy Technical skills academyGraduate development

programmeSales and marketing academy Mining academy

Technician development programme

Business fundamentals – bridging

Learning for growth model

Leadership development

Bu

sin

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alig

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The vital elements of a performing organisation*

RELEASE ENERGy/REWARddIRECT/FOCuS ENERGySTRuCTuRE/HARNESS ENERGyCREATE ENERGy

Clear purposeVision strategy• Communication• Understood• Journey maps

Co

nti

nu

ou

s p

erfo

rman

ce

imp

rove

men

tInspiring climate• Fairness, order, rules of the game• Communication, information,

influence• Management style• Recognition• Code of conduct• Remuneration and benefits• Effective HR administration• Safety and environment• Transformation

Learning for growth*• Career development• Skills development • Succession planning• NQF alignment

Performance improvement(Organisational/individual)• Role and function clarity• Accountability scorecards,

targets and action plans• Performance measurement• Performance review: – Recognition – Action plans for under-

performance

AlignmentValue drivers, structure job model• Purpose• Scorecard• Competencies

• Communication• Reviewing progress • Stretching targets• Solving problems• Education

Invocom®

* See page 18 for enlarged model



The Kambuku learning for growth investmentA total of 319 PPC employees are currently on learnerships or skills programmes. Of these learners, 257 (81%) are previously disadvantaged.

Economic empowerment profile of learners (SA only)

African Indian Coloured WhiteMale Female Male Female Male Female Male Female

TOTAL 145 22 2 1 82 5 56 6

Average hours of training per category

On average, a PPC employee spends around 88 hours or 11 days on training per annum.

Employee levelsAverage

training hrs

Senior management 19,4Middle management 47,8Professionally qualified specialists 68,9Skilled (upper) supervisors 114,9Skilled technical employees 44,0Semi-skilled employees 70,2Apprentices/trainees 266,1Unskilled employees 70,6Overall average 87,7

Percentage of payroll invested in skills developmentDeveloping skills remains a passion and commitment that is reflected through the Kambuku philosophy and approach to empowering people. During the review period, PPC spent 7,2% of its payroll (ie leviable amount) on the skills development of employees, and 75% of this was spent on previously disadvantaged employees at a total cost of R31,5 million, compared to R25,2 million in 2008.

Adult basic education and trainingAdult basic education and training (ABET) remains the cornerstone of learning and development in PPC. With the majority of the workforce already assessed for ABET training, PPC is well on its way to achieving its target of ABET level 4 in communication and numeracy. This target aims to give all employees the opportunity to fast-track their careers through the various PPC academies, which represent the company’s commitment to lifelong, outcomes-based learning.

The ABET programmes have proven highly successful and, to date, 522 learners are completing ABET level 1 to level 4 programmes, with impressive progress across the levels.

Cost of training

African male R19,5 million

Coloured male R7,4 million

Coloured female R1,4 million

Indian male R690 730

Indian female R459 423

White male R8,9 million

White female R1,8 million

African female R2,9 million

Cost of training (Rm) (SA only)


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PPC Jupiter – Sizofika ABET programme

PPC Port Elizabeth – Ikhwezi ABET programme

The Sizofika ABET School recently held a memorable graduation ceremony where 23 learners completed an ABET level and one learner completed the final level 4 programme. All learners shared their positive feedback and experiences at the school.

“We are very proud of our learners and look forward to congratulating more learners in future graduations at our quarterly awards functions,” said Alta Walker, general manager, PPC Jupiter.

In 2007 Ikhwezi opened its ABET classes to surrounding communities to assist in improving literacy levels.

Vukile Makaza joined Ikhwezi in 2009 (level 2 English and mathematics). Vukile lives in Zwide and is unemployed. The walk to PPC takes 90 minutes and he tries to attend classes at least three times per week. He is passionate about mathematics and is using his improved literacy to assist scholars in his community, voluntarily tutoring groups of grade 11 and 12 pupils in mathematics and science. One of Vukile’s success stories is a physically disabled student whose July maths exam mark rose from 37% to 50%.

“Maths is not difficult – first you need to understand the concept, then you need practice and more practice! Thank you PPC for making a difference in our lives.” Vukile Makaza

PPC Jupiter – Sizofika ABET programme

Vukile Makaza



PPC bridging programme The accredited bridging skills programme, launched in 2007 to help learners obtain the relevant entry requirements for the academy’s programmes, continues to operate successfully.

As part of the continued talent pipeline, learners currently exiting the ABET programme are enrolled in the bridging programme in preparation for entry to learnerships in the respective academies.

dinaledi bursaries – building educational capacity We believe that strengthening the educational capacity of historically disadvantaged South African communities is the key to sustainable development. By investing in and supporting various education programmes, PPC is facilitating the empowerment of young people, which in turn will enable them to participate in mainstream economic activity.

Since the Dinaledi programme was launched three years ago, PPC has invested almost R4 million in the futures of these young people. The first Dinaledi bursar joined PPC (through the graduate development programme) as a permanent employee in January 2009. During the review period, PPC spent R1,6 million to support 18 Dinaledi bursars selected from disadvantaged communities throughout South Africa to study at various universities in disciplines related to our business.

2009 dinaledi bursars’ study disciplines

Engineering disciplines Male Female

Chemical 5 3Mining 2 3Mechanical 4 0Electromechanical 1 0

TOTAL 12 6

Technician development programmeThe technician development programme was aimed at attracting, retaining and developing technicians from within and outside PPC. Ten candidates embarked on the pilot programme launched in early 2009.

The programme offers two routes towards technicians’ development. The first involves offering external students at universities of technology the opportunity to complete their in-service training with PPC and the second route offers PPC employees – current technicians or those who want to develop in this area – the opportunity to develop their existing competencies or follow the technician route by developing their knowledge, skills and experience.

Both routes of development will feed into technician succession pipelines.

Learners on the technician development programme


Technician 5 3 0 0 2 0 0 0

TOTAL 10 0


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Graduate development programmeThe graduate development programme was introduced in early 2008 to address the growing shortage of technical skills and competence in our business and across the industry, and to build benchmarks going forward.

The programme targeted new graduates from tertiary institutions across the country to join five key disciplines critical to our business: engineering, production and process services, mining, quality, and environment and sustainability.

Nine graduates were recruited to the programme in the first intake in 2008 and two graduates were recruited in the 2009 intake. The number of graduates recruited during intakes, and the disciplines to which these graduates belong, are determined by the business need. This is reviewed annually.

The programme produced its first graduate earlier this year – Radcliff Julies was appointed process engineer at the De Hoek factory site after specialising in production. On completion of the programme, successful graduates will be appointed to positions in their respective disciplines at PPC.

The programme the graduates follow has been developed by PPC specialists with the correct balance between theory and practical, hands-on application. Graduates are site-based in an open and supportive studying environment that has been created through regular quality assurance in the form of site visits, individual and focus group interviews.

Leadership developmentSustainable leadership development is a priority at PPC because PPC leaders are recognised as a vital element in building our competitive edge.

The review period saw significant investment in mentorship initiatives at senior leadership levels, ongoing emotional intelligence profiling and coaching for new and current managers as well as the annual leadership behaviour 360-degree review rollout at executive and general management levels.

All leadership development initiatives are reviewed annually for relevance and ability to add value to the overall strategic objectives of the business.

PPC academies – building skills and leaders Under the umbrella of the PPC Academy, the group has incrementally expanded the number of specialist academies available to employees.

The PPC leadership and management academy was launched in May 2009, while the academies for sales and marketing, operations and mining, which complement the existing technical skills (engineering) academy, are now fully operational. The first learners graduated from the sales and marketing academy in June this year.

The academies are the fruition of the Kambuku value statement and remain an integral part of PPC’s strategic objectives, as we believe they make a positive contribution to building an educated and multi-skilled nation.

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Growing the PPC Academy

African Indian Coloured WhiteProgramme Male Female Male Female Male Female Male Female Total

Bridging

2007 intake 25 1 0 0 20 1 8 2 572008 intake 11 0 0 0 22 0 10 2 452009 intake 3 0 0 0 8 0 1 0 12

Sales and marketing2007 intake 1 2 2 0 1 0 2 1 92008 intake 3 0 0 0 2 1 1 3 10

Operations2007 intake 5 2 0 0 5 0 8 0 202008 intake 8 0 0 0 5 0 7 0 202009 intake 9 0 0 0 4 0 4 0 17

Mining2008 intake 7 0 0 0 6 0 3 0 162009 intake 5 0 0 0 3 1 3 0 12

TOTAL 77 5 2 0 76 3 47 8 218

Sales and marketing graduates of 2009

PPC sales and marketing academy In 2007, the first group of 11 PPC learners and 20 from Barloworld’s Plascon was selected to study for the national certificate in customer management (NQF 4).

The level 4 certificate is accredited locally through the National Qualifications Framework, and recognised internationally by the European Marketing Federation, which gives PPC Academy’s qualifications an exportable edge.

PPC operations academy The operations academy was launched in July 2007 with learners studying towards the further education and training certificate in carbonate materials manufacturing process on NQF level 4. To date, 57 learners have embarked on this industry-first qualification and the first group of learners will graduate later this year.

Operations academy – 2009 intake


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PPC mining academy With new explosives regulations coming into effect in 2009, PPC’s speed of learning ensures it remains an industry forerunner as an accredited training provider, equipped to offer a qualification in rock-breaking.

To date, 28 learners have been enrolled on the rock-breaking: quarrying qualification. With a firm commitment to the mining charter and women in mining, PPC welcomed the first black woman into the programme in June 2009. Further opportunities are planned to make the mining academy more accessible to women in mining.

Mining academy – 2009 intake

development through training

Catherine Pinto started at PPC Riebeeck in January 2009 in an operator support role. Within four months, she was promoted to mobile equipment operator and, by August, joined the second intake of the rock-breaking programme.

Catherine’s background in the steel industry prepared her for working in a competitive male-dominated environment. For her, advancing rapidly through the ranks at PPC has proved that with the correct mindset one can achieve anything. “It does not mean that just because you are a woman, there should be limitations. I am really proud to work for a company that does not discriminate against women,” Catherine says, adding that she plans to register for her National Diploma in Mining in 2010 en route to her ultimate goal of senior mine management.

…to operatorCatherine Pinto – from support…



The first intake of 16 PPC leader/managers on the senior management programme of the academy was successfully launched in May 2009.

PPC leadership and management academy With continuous improvement being core to Kambuku and to our speed of learning, the PPC leadership and management academy was launched in May 2009. This initiative is focused on developing the balance of leadership and

management skills we believe ideal PPC leader/managers require at different points in their careers, and which also address our business requirements.

PPC technical skills academyThe technical skills academy (TSA) has maintained its ISO quality management system and was recertified on ISO 9001:2008 standards. It was recently audited by the Mining Qualifications Authority for reaccreditation as a certified training provider for engineering learnerships (fitting and turning; electrical and plater welding) and received a clean or ‘zero finding’ audit report. Together, these accreditations ensure that only artisans of the highest calibre qualify at our training centre, in turn becoming a resource for transferring skills to younger employees.

In true Kambuku spirit, PPC has reaffirmed its commitment to the mining charter by focusing its training on women in mining and empowering disadvantaged individuals.

PPC leadership and management academy – 2009 intake

The ideal PPC leader/manager

• Knowledge• Understanding• Vision

• Values• Purpose• Attitude• Emotional alignment

• Conduct• Behaviour• Results

Key

First-line manager

Middle management

Senior management Leader/manager

+

+

+

=

Manage context

Manage job

Leading others

Manage self

Func

tiona

l con

text

(job

)

Environment

Principles Learningparadigms

Thought leadership

Organisational context (PPC)

Execution excellence

Emotional maturity


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Of the 94 learners currently completing various engineering learnerships, 81 (86%) were unemployed before enrolling.

One of the women learners

Learners currently on engineering learnerships


TSA engineering learnerships 55 7 1 0 18 1 12 0

TOTAL 82 12

Engineering learners at TSA

2009 empowerment highlights

• R2,7 billion BBBEE transaction transfers 15% of PPC into black hands: – 2 500 employees new share owners – 2,7m shares allocated to new share owners – R27,4m in dividends paid to new share owners and loan funders• R60m increase in procurement from historically disadvantaged South Africans• Appointment of black chairman and two more black non-executive directors• 24% increase in women in management• 41% increase in black management staff• 15 social and labour plan projects implemented• Engagement forums and memoranda of understanding signed in all host municipalities for PPC’s

application to convert old-order to new-order mineral rights• R6,4m spent on PPC broad-based trust projects.

Growing our broad-based empowerment footprint



Workforce analysis – Botswana and Zimbabwe

Male Female

Senior management 4 0Middle management 36 6Skilled upper 144 33Semi-skilled/apprentices 272 15Labourers/unskilled 179 3

Subtotal 635 57

TOTAL 692

Recruiting by demographicsWhere appropriate, PPC endeavours to recruit black talent in line with the demographic requirements of the regions in which it operates. In South Africa, demographically representative recruitment is at 76% (2008: 85%, 2007: 68%).

Advancing transformation PPC remains committed to South Africa’s broad-based socio-economic transformation objectives beyond 2014. The group’s transformation implementation progress is guided by our REAL (relevant, empowering, actualised and lasting) transformation philosophy, which is at the heart of all our social performance initiatives.

Workforce analysis – South Africa

Male FemaleForeign

nationalsOccupational level B C I W B C I W Male Female Total

Top management 0 0 0 2 0 0 0 0 0 0 2Senior management 2 1 2 10 0 0 1 0 16Professionally qualified, experienced specialist and middle management 34 34 25 149 21 8 12 40 5 0 328Skilled technical and academically qualified workers, junior management, supervisors, foremen and superintendents 159 112 7 272 42 33 7 62 8 0 702Semi-skilled and discretionary decision-making 653 225 1 22 38 48 5 44 1 1 1 038Unskilled and defined decision-making 235 22 1 5 33 7 0 1 0 0 304

Total permanent 1 083 394 36 460 134 96 25 147 14 1 2 390

Temporary employees 56 34 0 19 24 7 1 11 0 0 152

TOTAL 1 139 428 36 479 158 103 26 158 14 1 2 542

Key: B – black, C – coloured, I – Indian, W – white.

SA recruitment by race 2009

n Africann Indiann Colouredn White

Recruiting 2009

Recruiting 2007 Recruiting 2008

51%

22%

3%

24%


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In 2009, PPC continued to consult and engage with various national and provincial government departments and municipalities in pursuit of realising its REAL transformation objectives.

In 2009, the transformation initiative in PPC gained further momentum to meet the following objectives:

Beneficiaries of empowerment PPC remains firmly committed to black economic empowerment in South Africa, knowing that meaningful participation by black people in the mainstream economy is essential to meet the country’s socio-economic objectives. PPC’s shareholding now includes some 3,5 million

black beneficiaries through new broad-based groupings of shareholders, including employees and communities as part of its BBBEE transaction in 2008.

This transaction created and transferred equity into black hands through various trusts, a consortium of strategic business partners, and community service groups (overleaf).

Announced as a R2,7 billion empowerment transaction, based on the PPC share price at that time, over 15% of PPC’s equity now provides the maximum benefit to thousands of participants through innovative funding structures that release dividends at the earliest possible time.

REAL transformation

To create business

opportunities for black partners

(equity and ownership)

To invest in and develop

disadvantaged communities

(corporate social investment, social and

labour plans)

To invest in and develop

black business (enterprise

development, preferential

procurement)

To develop and create

opportunities for black employees (skills development,

employment equity)

To create future black leaders

(skills development, mining charter)

REALtransformation



PPC external broad-based and internal staff trustsSince announcing the PPC broad-based black economic empowerment transaction in September 2008, a year later good progress has been made in terms of operationalising both the external broad-based and internal staff trusts linked to the transaction.

A significant portion (over half or 8% of the 15,29% equity stake in question, totalling R1,4 billion) relates to the trusts. As such, it required dedicated focus, sharing of ideas, coming together of minds (the Kambuku Way) and commitment from all stakeholders to ensure the successful launch and implementation of the individual trusts. The focus for each of these trusts is detailed below.

Creating REAL sustainable opportunities for black emerging contractorsThe PPC Construction Industry Associations Trust (CIA) (Reg No IT 1040/08)

The PPC Construction Industry Associations Trust was officially launched in January 2009, together with the appointment of the Construction Industry Association beneficiaries.

With the appointment of independent chairman, Mr City Serobe, an attorney by profession, the board of trustees considered and approved multiple projects across all CIA beneficiaries to the value of R3,2 million.

The advisory committee, in consultation with the board of trustees, ratified all projects for implementation by the various beneficiary association members. Projects ranged from construction skills training, leadership and technical construction charter training programmes for emerging contractors, and capacity-building initiatives around the associations, to the establishment of a ceramic factory and low-cost housing development initiatives.

To date over 376 members from the various associations have participated in diverse accredited training programmes. The long-term objective of the CIA Trust is the delivery of strategic projects that contribute to the socio-economic upliftment of disadvantaged individuals and communities across South Africa.

Priority skill needs for the sectorThe PPC Education Trust (Reg No IT 1041/08)

The PPC Education Trust was officially launched in August 2009, amid much interest from beneficiaries in the cement manufacturing, mining and construction sector in the Mafikeng region, where its first project was launched.


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The board of trustees, under the chairmanship of Mr Salim Abdul Kader, considered and approved an artisan training programme for five trainees in the plater welding, fitting and turning, and electrical fields. The training programme will run for three years, at a cost of R1,2 million. The advisory committee, in consultation with the board of trustees, ratified the project for implementation by the PPC technical skills academy.

Cognisant of the dire shortage of skills in the sector and, importantly, in the Mafikeng region, the trustees agreed to focus the first trust project in the Mafikeng communities. Highlighting the unemployment crisis in the region and need for financial assistance, over 400 potential beneficiaries applied for the five available training opportunities through the trust.

As the funding income in the Education Trust continues to grow, the long-term focus will be to spread educational opportunities in the cement manufacturing, mining and construction sectors across South Africa, with the ultimate aim of building a technical university.

Sustainable communitiesThe PPC Community Trust (Reg No IT 1035/08)

The PPC Community Trust was launched in 2009 under the independent chairmanship of Mr Helmut Bertelsmann, an educator and ardent social contributor to many disadvantaged communities in South Africa. Having worked most of his life in disadvantaged communities, Mr Bertelsmann shares the vision of the PPC Community Trust, which is to build thriving and sustainable communities across the country.

The trust has made significant progress in identifying key stakeholders within the 10 PPC host communities across South Africa. The phased establishment of community engagement forums to give beneficiaries direct participation in the trust is under way.

The pilot host communities will be Madibeng/Brits, Diepsloot and New Brighton (Eastern Cape), where the first community engagement forums will be established and projects implemented.

The forums will identify, prioritise and recommend to the trust sustainable community development projects that are aligned to their municipality’s integrated development plans.

The initial investment focus for this trust will be on phased capacity-building initiatives, and establishing community engagement forums across PPC host communities throughout South Africa. A budget of over R1 million has been allocated for this purpose.



Our people and their familiesThe PPC Team Benefit Trust (Reg No IT 1036/08)

Amid much excitement and interest from some 280 PPC employees and their families, the PPC Team Benefit Trust was launched at Slurry plant in June this year.

After conducting a needs analysis survey across the business, financial literacy among shop-floor employees was identified as a priority. The board of trustees and advisory committee therefore approved a financial fitness/wellness programme to the value of approximately R1 million. This will be rolled out to all qualifying employees and their families.

The financial fitness initiative was designed to cover all aspects of financial planning, including how to manage debt more effectively, so relevant in the current volatile economic environment in South Africa and the world. The financial fitness initiative is intended to be implemented across all PPC sites over a two-year period, covering over 5 000 beneficiaries. Initial response has been exceptionally positive.

The PPC Staff Trusts

Eighteen months ago PPC launched the internal staff trusts, creating share ownership in the business for all employees. By December 2008, some 2 500 staff at all levels across the business received their share allocation offer letters. In January and June 2009, these staff beneficiaries received close to R6 million in dividends, transferred directly to their bank accounts.

The Current PPC Team Trust shares are 100% allocated with 2,7 million shares passed on to staff beneficiaries. The Future PPC Team Trust shares are currently 30% allocated, with 181 000 shares passed on to beneficiaries.

This new culture of share ownership within PPC has undoubtedly elevated staff beneficiaries’ approach to PPC as a business; realising, as part owner of PPC, their well-being and growth are interlinked with that of PPC as an organisation, working to create a better Kambuku life for all.

The Future PPC Team and Black Managers Trust makes provision for future entrant share allocations to 31 December 2011.


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2009

Education61,3%

Infrastructure12,9%

Community training6,4%

Job creation5,7%Group CSI expenditure 2009

Other – Sport 1,3%

Welfare 9,1%

Arts & culture 0,7%

HIV/Aids 2,6%

Drug rehabilitation0,1%

Corporate social responsibilityPPC’s social performance embraces the principles of corporate social responsibility and corporate social investment (CSI). PPC’s CSI policy and community upliftment programmes seek to contribute towards creating thriving and sustainable communities, and uphold the socio-economic tenets of the mining charter, BBBEE scorecard legislation and principles of social sustainability. CSI and social and labour plans direct the company’s contribution to the communities in which PPC operates and sources its labour force.

PPC has focused on job creation, poverty alleviation and welfare through skills development, education and training to build sustainable projects that achieve a better life for all.

Through its CSI initiatives, PPC is making a significant contribution to the lives of many thousands of needy South Africans, particularly children.

PPC spent R6 million supporting various CSI projects across the country during the review period, with preference given to projects and initiatives that promote: • Education and training• Health and welfare• Infrastructure development• Poverty alleviation• Sport • Job creation.

Group CSI expenditure2008

Education55,4%

Infrastructure16,1%

Community training3,1%

Job creation11,5%Group CSI expenditure 2008

Other – Sport 3,8%

Welfare 4,5%

Arts & culture 0,8%

HIV/Aids 4,5%

Drug rehabilitation0,3%



CSI projects under wayPPC has a number of projects under way. Some of these are detailed below.

Job creation and poverty alleviation• Gauteng – Sisiziwe Mini BakeryThe bakery is situated in Johannesburg’s inner city and operated by former street children and commercial sex workers. To date it has created 20 direct jobs, with beneficiaries receiving a monthly stipend of R500 – R1 000. The income generated from the bakery supports other sub-projects such as art lessons, providing bus fare and school uniforms. It supplies a number of businesses with biscuits, including PPC head office.• Gauteng – PPC NOAH Ark BakerySituated in Kliptown, outside Soweto, the bakery is operated by NOAH volunteers. Eight volunteers have been trained and are working at the bakery, supplying bread to the Ark feeding scheme.

• Western Cape – Amstelhof Primary School Bakery

This project in the Amstelhof township in Paarl is operated by five parent volunteers from a neighbouring informal settlement. The bakery is on school premises, and not only supports the school feeding scheme, but supplies other local schools with 50 bread loaves a day.

• Gauteng – Time Sewing ProjectThis project in Johannesburg’s inner city focuses on manufacturing work suits and school uniforms. It is operated by former street children and commercial sex workers and has created 12 direct jobs following training provided by Bernina. Beneficiaries receive a monthly stipend of R500 – R1 000, benefiting 100 dependants. To date, PPC has ordered 200 work suits, while the Department of Social Development has ordered 300 school uniforms.• Eastern Cape – Latita soap-making projectThe project was implemented by PPC’s CSI department in partnership with the Calabash Trust and Summerstrand Hotels. Situated in New Brighton township, outside Port Elizabeth, it has created jobs for 15 women and one man who receive a stipend of R50/day, supporting 80 dependants.

InfrastructureIn the provision of housing infrastructure, PPC: • Supported construction of low-cost houses

through Niall Mellon Township Trust and Habitat for Humanity

• Partnered with Department of Human Settlement to sponsor the building of houses

• Supported construction of early childhood development centres through MaAfrika Tikkun

• Supported construction of schools through partnership with Adopt-a-School Foundation.


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WelfarePPC supported a number of NGOs including:• Autism South Africa• Cancer Association of South Africa• United Cerebral Palsy Association• TLC Ministries for abandoned babies• QuadPara Association of South Africa• Hospices around the country • Food and Trees for Africa.

Education and community trainingPPC supported the following initiatives:• Community bursaries• Early childhood development programmes• 2009 climate change diaries for learners• School furniture

• Environmental studies programme with Endangered Wildlife Trust

• Community ABET• School computers• ABET programme for the deaf and blind• Field Band Foundation• Revamping of Madibane High School in

Soweto• Permaculture food gardens• Extreme park make-over in Diepkloof,

Soweto.

Cowen High School learners receiving 2009 climate change diaries

Field Band Foundation



Sustainability beyond legislative compliancePPC continues to make significant progress towards meeting the government’s requirements in the broad-based socio-economic charter for the mining industry and the Minerals and Petroleum Resources Development Act, 2002. PPC’s old-order mineral rights conversion applications were submitted in 2008 to the Department of Mineral Resources.

After receiving formal feedback on these applications from the department, amended social and labour plans were submitted for approval during the year. Through these plans, PPC is committed to accelerating its broad-based socio-economic transformation process.

Socio-economic developmentPPC has committed in its 10 social and labour plans submitted to the Department of Mineral Resources to spending over R60 million over five years on local economic development (LED) projects in the communities. This involves a total of 28 projects in 12 communities in partnership with municipalities and around six provinces in South Africa.

In 2009, PPC spent over R10 million of a planned R60 million implementing projects approved by the Department of Mineral Resources and agreed with municipalities, over and above the group’s own CSI projects.

The three areas of spending include infrastructure development, poverty alleviation and job-creation projects. PPC continues to engage with all its communities in identifying and implementing sustainable projects.

Local economic development projects implemented during the year include:• Construction of youth skills development

centre in Willowmore, Eastern Cape. This project is included in the integrated

development plan (IDP) of Baviaans municipality and created 700 local jobs during construction.

• Hardwood community-based ostrich farming – focus during the year was on establishing the farming initiative and buying ostriches for this project in Klipplaat, Western Cape, which is included in the IDP of Ikwezi municipality. At present, it has 16 beneficiaries and created over 100 local jobs during construction.

• Wielie Walie Crèche – over 50 local jobs were created during the construction of these crèche facilities in Riebeeck West, Western Cape. Included in the IDP of Swartland municipality, the facility includes a permaculture vegetable garden in association with Food and Trees for Africa.


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• Meiring Primary School – PPC sponsored grade R classrooms at the Meiring primary school, near Riebeeck Kasteel in the Western Cape, to address the critical need to introduce grade R schooling in this area. The initiative will benefit over 120 learners initially, served by four educators. These educational infrastructure projects are part of PPC Riebeeck mine’s social and labour plan, and were implemented in partnership with the departments of mining and basic education and the Swartland local municipality.

• Riebeeck West Primary School – three extra classrooms were constructed for this primary school in partnership with the Department of Basic Education, Western Cape. Situated in Riebeeck West, Western Cape, it is included in the IDP of Swartland municipality.

• Steytlerville Primary School – three extra classrooms were constructed in partnership with the Department of Basic Education, Western Cape. Situated in Steytlerville, Western Cape, this project is included in the IDP of Bergrivier municipality.

• Ramokoka Primary School – PPC has relocated and rebuilt Ramokoka Primary school, a 100-year old rural school north of Rustenburg and close to PPC’s Beestekraal mine. Until recently a dilapidated mud-built structure, phase 1 involved relocating the school closer to the village community and erecting a modern building to accommodate 230 learners at a cost of R1,5 million. Local labour was used in rebuilding the school, and the Moses Kotane local municipality and tribal authorities’ administration were fully involved in planning and implementation. The second phase, comprising additional classrooms and an administration block, will be completed in 2010.



• Paving access roads and electrification of 150 households – as part of the IDP of Kgatelopele municipality, this project benefits Tlhakalatlou and Danielskuil townships in the Northern Cape and will create over 100 local jobs during implementation.

• Kgatelopele candle-making project – this project is situated in Lekgonyane village, North West and included in the IDP of Madibeng municipality.

• Waste buyback centre – as part of the IDP of Johannesburg City Metro municipality, a waste buyback centre and processing plant has been constructed in Diepsloot township, Gauteng.

• Installation of solar energy at diepsloot Skills development Centre – provides skills development training for the community of Diepsloot as part of the IDP of Johannesburg City Metro.

• Bakgatla ba Kgafela cattle feedlot project – benefits 30 community cattle farmers of the Bakgatla ba Kgafela villages in the Thabazimbi region.

Projects planned to start in 2010• SMME development hub – Motherwell,

Eastern Cape• Community clinic – Mafikeng, North West• Small business hive – Piketberg, Western

Cape• Multipurpose skills development centre –

Atteridgeville, Gauteng• Sewerage system upgrade – Riebeeck West,

Western Cape.


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Enterprise developmentEven before the Department of Trade and Industry (DTI) Codes of Good Practice were published, PPC actively sponsored and facilitated training and development opportunities for emerging contractors. These interventions took the form of practical building-skills training such as bricklaying and plastering, project management and construction management.

With the establishment of the PPC Ntsika Fund (Pty) Limited (Ntsika) in the latter part of 2008, a more formalised approach was developed to support black enterprises and entrepreneurs through financial assistance to start or expand their businesses. To date Ntsika’s board has approved R70 million for investment in viable black businesses, after receiving numerous requests for funding and business proposals from black entrepreneurs.

Metlakgola Construction & development (Pty) Limited

The Ntsika board approved R3,5 million for the construction and development of 25 plots into residential housing units in Soweto for entrepreneur Lesego Moraka. The investment will create a number of new job opportunities. Mr Moraka has a solid background in construction and administration, and strong entrepreneurial skills that will support his company’s growth in the years ahead.

One of Metlakgola’s houses in progress Shareholders Lesego Moraka and Dimakatso Moraka



Rhulanani Concrete Mixers (Pty) Limited Rhulanani is a black-owned ready-mix business in the town of Lephalale in Limpopo Province. The Lephalale area is currently enjoying strong growth as a result of developments around the construction of Medupi power station. The board of Ntsika approved R6 million for Rhulanani Concrete to acquire three additional ready-mix trucks, a front-end loader and working capital to run a successful business. All Rhulanani’s shareholders have invested their own financial resources into the business as part of the required start-up capital.

Olegra Oil (Pty) Limited Teaming up with the Rose Foundation to save our environment from the indiscriminate disposal of used oil, Ntsika invested R5 million into Olegra Oil. As part of its core business, Olegra will collect used oil from various mine sites and other businesses in the surrounding areas of Lime Acres to be used as start-up fuel at PPC Lime. The project will initially create 15 jobs, with the potential to create many more once the partnership with the Rose Foundation to establish collection depots over a wider area, is established.

Olegra’s oil-collection tanker Another Olegra asset is the Caltex garage at Lime Acres

Shareholder, Dr Ngoepe (right) with Mr Fanie Modimola, acting mayor of Lephalale, at the launch of Rhulanani

One of Rhulanani’s three new ready-mix trucks


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tEmpowerment statusThe company’s BBBEE audit and verification was again conducted by rating agency Empowerlogic during October and November 2009.

In terms of the DTI Codes of Good Practice, PPC has improved its ranking from level 4 to level 3 BBBEE contributor status and has also achieved a procurement recognition level 1. This enables our customers to claim back 138% of their product spend for their own preferential procurement points.

PPC’s rapid progress from level 4 to level 3 reflects our commitment to transformation at every level of our business.

Preferential procurementTotal discretionary procurement spend for the year was some R3,25 billion of which 45% or R1,48 billion (2008: R1,42 billion) constituted preferential procurement from BBBEE companies.

First Gas (Pty) Limited First Gas, founded in 2007, is a black-owned business specialising in diversified energy supply and distribution. The business currently distributes liquid petroleum (LP) gas and paraffin to the local community on a delivery basis in the East Rand area. Due to a lack of funding, the partners were unable to grow the business. Funding received from Ntsika will be used to acquire associated assets to expand First Gas’ home delivery services.

Modise Woodworks and Projects CC In September 2009, Ntsika provided a loan of R1,5 million to Modise Woodworks and Projects to purchase machinery and production equipment, and other assets, to improve the sustainability of the business. Owned by Mr Simon Mpinga, the company specialises in buying and selling furniture boards and fittings, and cutting and shaping these to meet customer requirements. The business operates from workshops in Soshanguve, north-west of Pretoria, and currently employs four people from the surrounding community.

First Gas owners: Clay and Natalie Springfield

Simon Mpinga and his personal assistant, Jessica Masipa



Mining charter scorecard

PPC is making steady progress against the 2004 broad-based socio-economic charter for the mining industry:

Requirements Achieved

Human resources development

• Has the company offered every employee the opportunity to be functionally literate and numerate and are employees being trained?

• Yes, opportunity offered at all sites. • 672 employees were trained in ABET, an increase on

623 in 2008.

• Has the company implemented career paths for historically disadvantaged South African (HDSA) employees, including skills development plans?

• Yes, PPC has skills development facilitators at every site to develop annual workplace skills plans and compile annual skills development reports. Workplace skills development plans were formulated and submitted to the relevant Setas in line with legislation.

• 2 387 employees (2008: 2 293) benefited from skills development interventions, 75% of whom were HDSAs.

• Individual development plans, linked to career paths, are being implemented in line with the workplace skills plan.

• Has the company developed systems through which empowerment groups can be mentored?

• Yes, PPC’s enterprise development unit, Ntsika, has to date approved R70 million in funding for enterprise development (page 41).

Employment equity

• Has the company published its employment equity plan and reported on its annual progress in that plan?

• Yes, employment equity reports for all sites were submitted to the Department of Labour.

• Progress is published each year in the annual report and communicated to stakeholders through employment equity forums in line with relevant legislation.

• Has the company established a plan to achieve a target for HDSA participation in management of 40% within five years of implementing its plan?

• Yes, PPC exceeds the target for management across the group – currently 41,2%.

• Black executive representation currently at 58%.• Black female executive representation at 17%.

• Has the company identified a talent pool and is it fast-tracking this pool?

• Yes, one-on-one performance reviews, intellectual capital reviews and succession plan processes across all levels are used to identify talent and fast-track development and promotion.


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Employment equity continued

• Has the company established a plan to achieve the target for female participation in mining of 10% within five years and is it implementing the plan?

• Yes, PPC has prioritised the recruitment of women to increase their participation beyond 2009.

• PPC has prioritised the recruitment of women, especially black females, into management positions

• Women’s participation in learnerships, bursaries and development initiatives increased significantly in line with this plan.

• Currently 17,6% women are employed across PPC against 18,6% in 2008.

Foreign migrant labour

• Has the company subscribed to the government and industry’s agreements to ensure non-discrimination against foreign migrant labour?

• Yes, PPC subscribes to government and industry agreements to ensure non-discrimination against foreign migrant labour.

• A non-discriminatory recruitment policy is in place and is implemented.

Local economic development

• Has the company cooperated in the formulation of integrated development plans, and is the company cooperating with the government in the implementation of these plans for communities in which mining takes place and for major sending areas?

• Yes, all social and labour plans have been aligned with the integrated development plans (IDPs) of host local municipalities, identified projects are under way (page 38).

• PPC spent a total of R15,6 million implementing local economic development projects in terms of the social and labour plan (R10,1 million) and CSI programmes (R5,5 million).

• Has there been an effort on the side of the company to engage the local mine community and major labour sending-area communities?

• Yes, arrangements are in place to participate in the development and implementation of host and labour-source municipality IDPs.

• Continuing interaction takes place in established bilateral forums.

• PPC sites participate in the mining forums of their host municipalities.



Mining charter scorecard continued


Housing and living conditions• For company-provided housing, has the

company, in consultation with stakeholders, established measures for improving the standard of housing, including the upgrading of hostels and conversions of hostels to family units, and promoted home-ownership options for mine employees?

• Companies will be required to indicate what they have done to improve housing and provide a plan to progress the issue over time and show its implementation.

• PPC prioritises sourcing labour from host and neighbouring communities.

• Company housing is provided at most remote operations.

• PPC promotes home ownership by facilitating opportunities for employees to secure housing loans where required.

Procurement

• Has the company given HDSAs preferred-supplier status?

• Yes, PPC’s procurement policy gives preferred-supplier status to HDSAs.

• Has the company identified present levels of procurement from HDSA companies in terms of capital goods, consumables and services?

• Yes, all PPC sites have completed the required Form Ts to identify current levels of procurement in each site’s social and labour plan.

• Has the company indicated a commitment to a progression of procurement from HDSA companies over a three- to five-year timeframe in terms of capital goods and consumables, and to what extent has the commitment been implemented?

• Yes, PPC intends to increase HDSA procurement to 50% by 2014.

• At present, procurement spend on HDSA companies is 45%.

• Total procurement spend on HDSA companies in 2009 was R1,48 billion, R60 million above the 2008 level.

Ownership and joint venture

• Has the company achieved HDSA participation in terms of ownership for equity or attributable units of production of 15% in HDSA hands within five years and 26% in 10 years?

• Yes, PPC achieved broad-based HDSA participation by placing over 15% equity ownership in black hands.

• PPC has appointed two black directors from the BEE consortium to the board.

• The Department of Mineral Resources is in ongoing discussions with PPC to finalise this ownership element of the scorecard.

• PPC has achieved level 3 BBBEE contributor status, independently verified.


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tRequirements Achieved

Beneficiation

• Has the mining company identified its current levels of beneficiation?

• Guidelines for PPC’s industry have yet to be published. PPC beneficiates all limestone mined into cement or lime. This equates to 30 times that of the mined mineral.

• Has the mining company established its baseline level of beneficiation and indicated the extent to which this will have to be increased to qualify for an offset?

• PPC beneficiation has reached the limit.• The final product is cement, used in the building

and construction industry.

Reporting

• Has the company reported on an annual basis its progress towards achieving its commitments in its annual report?

• Yes, progress on the mining charter scorecard and implementation of social and labour plan commitments is a permanent feature of the annual report.

• Independently verified annual reports on the implementation of social and labour plans will be submitted to the Department of Mineral Resources in accordance with legislative requirements in 2010.

• Extensive reporting on sustainability and social performance indicators is included in the annual report.


Page 48

PPC’s behaviour-based safety initiative enjoys top priority throughout the company

PPC’s Port Elizabeth plant in the Eastern Cape

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Page 50

Health and safety managementPPC has extensive management and other systems in place to manage the health and safety of all of its employees.

All cement factories and lime operations are OHSAS 18001 certified (Occupational Health and Safety Association Series – an international standard for managing health and safety) which is aligned with the ILO or International Labour Organisation requirements.

Included in this management system are requirements to:• Conduct focused risk assessments to

identify health and safety hazards.• Develop controls to mitigate identified

health and safety risks. These are based on the hierarchy of controls, which requires eliminating the risk, then substituting the process to get rid of the risk, then engineering control followed by signage, warnings and/or administrative controls. The final item in the list of controls is providing personal protective equipment.

• Develop work instructions once controls are identified/developed. These are implemented to ensure work is conducted safely.

Encouraging downward trend in lost-time injuries renews our determination to reach our ultimate goal of zero

Health and safety report

• Train employees on these safe work instructions and assess them for competence. Planned job observations are conducted to ensure work instructions are effective and being complied with.

• Set health and safety objectives and targets, and periodically audit and review the management system to ensure continual improvement of the health and safety system.

• Review the health and safety risk assessment when changes are to be made to operational plant, equipment or procedures or periodically (normally annually).

• These sites have also been rated by Dekra as five-shield sites (Dekra is an independent European certification body that ensures compliance with internationally recognised standards). Five-shield status is awarded for an audit score >95% and a lost-time injury frequency rate of <1.

All other sites have complied with the Dekra shield-rating system and have been awarded five shields, except for sales and marketing in Botswana. The aggregates division is rated and competes in the ASPASA health and safety management system. Both systems are based on OHSAS 18001.

• Four PPC sites recorded over one million lost-time injury-free hours during the year (Zimbabwe – 3,6m; Port Elizabeth – 2,37m; projects – 1,9m; sales and marketing including three depots 1,4m)

• Ongoing behaviour-based safety campaign producing results – lost-time injuries have declined from 28 in 2007 to 19 during the year (2008: 20)

• On track to 2010 target of 100% of PPC employees knowing their HIV status.

Health and safety highlights


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A behaviour-based safety campaign was initiated three years ago and is ongoing. This includes a bill of safety rights, safe work declaration and a card system to recognise safe behaviour and address at-risk behaviour. The card system is focused on learning and not meant to be punitive. Trends are determined and action plans implemented to correct identified deviations.

All new employees and contractors (project and maintenance) are required to attend general and site-specific safety induction and all existing employees attend annual refresher induction. Included with this induction programme is an entry/exit and annual medical examination. Where required, specific health monitoring programmes are implemented.

During the year, 400 employees were trained in hazard-identification techniques.

Personal protective equipment is issued to employees based on risks they will face in their particular work. Employees are trained in the use and maintenance of their equipment and must acknowledge that they will comply with the agreed rules of use.

A safety awareness video was produced which highlighted lessons from lost-time injuries experienced in PPC over the previous two years.

All sites are using this to raise safety awareness at their Invocoms and visitors will also view it.

We deeply regret to report that two employees lost their lives in industrial accidents during the financial year, one at Riebeeck and one at Lime Acres. Judging by the control measures in place at the time of both incidents, these were unforeseeable events. The Riebeeck fatality occurred when a forklift went over the edge of a ramp and fell onto the operator. Subsequently, further risk assessments of forklift operations have been conducted at all PPC sites and controls implemented to prevent such accidents in future. The Lime Acres fatality occurred when an employee entered an area that was guarded to prevent access to moving machinery.

There were also 19 lost-time injuries during the year compared to 20 last year. The performance of PPC’s projects department deserves special note, with not a single lost-time injury recorded in almost two million working hours (page 55). The group lost-time injury frequency rate for the year was 0,36 (2008: 0,29).

All PPC rail sidings are permitted under the requirements of the Rail Safety Regulator and undergo regular audits by the regulator. No significant findings have been recorded.

Bill of safety rights

1. Every PPC team member has the RIGHT and DUTY to work safely and ensure that all members of their team work safely.

2. Every PPC team member has the RIGHT and DUTY to be supplied with, and use, the proper safety equipment.

3. Every PPC team member has the RIGHT and DUTY to participate in risk assessments related to their work practices and conditions.

4. Every PPC team member has the RIGHT and DUTY to ensure that they receive adequate safety training related to their role.

5. Every PPC team member has the RIGHT and DUTY to STOP any work which could be unsafe. STOP AND THINK! IF IN DOUBT, STAY OUT!


Health and safety report continued

PPC group certifications, awards and recognitions – 2009

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Certifications

ISO 9001 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

ISO 14001 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

OHSAS 18001 ✓ ✓ ✓ X ✓ ✓ ✓ ✓ ✓

SANS 16001 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

SANS 1841 (Packing) ✓ ✓ ✓ ✓ ✓ ✓ ✓

ISO 17025 (Laboratory) ✓

Awards

DEKRA 5 Shields ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

DEKRA Bronze ✓

DEKRA Silver ✓ ✓ ✓ ✓ ✓ ✓ ✓ X ✓

DEKRA Gold X X X X ✓ X X X X XASPASA About Face ✓

ASPASA ISHE ✓

Recognitions

DME’s Flag X X X X ✓ X X XOver 500 000 hours accident free X X ✓ X ✓ X X ✓ X X ✓ X ✓

Zero lost-time injuries X X X ✓ X X X ✓ X ✓ X X ✓

– not applicableX – not achieved

Occupational health and HIV/AidsAll factories and depots have undergone health and safety legal audits as part of the OHSAS certification process. There have been no significant findings raised and all minor findings have been addressed by site-action plans.

Occupational hygiene surveys are conducted periodically to ensure lighting, ventilation, noise levels and ergonomics comply with the relevant standards.

All occupational health clinics at PPC sites have been subjected to external audits with no major non-conformances identified. The clinics compare favourably with an external benchmark.

HIV/Aids management Managing HIV and Aids remains a priority for PPC. A new HIV/Aids service provider was appointed in 2009 to provide the full scope of services, including voluntary counselling and testing (VCT), enrolling new patients, case management, and distribution and management of anti-retroviral medicines.


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Safety first in projects department

The PPC Cement projects department was established in 2005, and mandated to manage each project from concept to commissioning and close out. In practice, this often involves forming new teams, perhaps new contractors, and always working against the clock and budget. The potential for accidents is high – which is why the department made safety a cornerstone of its vision and purpose from the outset.

As such, all project planning and implementation activities on PPC project sites are required to consider safety aspects first. Safety is a daily priority and, through the project structures, the department does not allow any activity to take place if it cannot be done safely. In short, safety takes precedence over the project schedule and costs.

The approach to ensuring safe implementation is to ensure that safety is addressed in all phases of a project: concept, feasibility, design, engineering and procurement, implementation, commissioning and close out. For each of these phases, the project department has stipulated safety, health and environmental requirements.

By the end of calendar 2009, this exercise will be completed at another nine PPC operations, including Zimbabwe. By March 2010, voluntary counselling and testing will be complete across the group.

All operations in South Africa have accredited HIV and Aids management systems in place and successfully retained their SANS 16001 certification in the review period.

One of the related initiatives, the national HIV/Aids poster per Invocom competition was

successful, attracting 143 entries and reflecting growing awareness of the disease and effective prevention. Over 90% of PPC’s South African employees now know their HIV status, on track to our target of 100% for the group. While PPC enjoys a prevalence rate far below the national norm (based on a 2004 baseline study), every effort is being made to retain this status and prevent new infections.

Several other HIV/Aids initiatives are planned for the new financial year, driven by our 2010 vision of ‘zero new infections’.

HIV/Aids – progress on voluntary testing and counselling in 2009

Operations where testing was conducted

Employeestested

% employees(tested) HIV

positive Contractors

tested

% contractors(tested) HIV

positive

Sandton 101 0 0 0Sales and marketing 99 3 0 0Group Laboratory Services 32 0 0 0Jupiter 88 1,1 10 1Riebeeck 154 0 0 0Slurry 163 4,9 125 15,2Colleen Bawn 124 18,6 18 16,7Bulawayo 162 14,8 21 9,5

TOTAL 923 5,3 174 5,3


Health and safety report continued

Safety first in projects department continued

Given that the two most important phases are implementation (construction) and commissioning, the team knows that it is only possible to work safely during these key stages if the appropriate ‘pre-work’ has been done during the feasibility, engineering and procurement phases. PPC has developed a risk specification that each contractor must comply with from the start, providing a detailed safety submission as part of their tender document showing how they will meet the requirements of our risk specification. All contractor tender submissions are subjected to a number of adjudications, including technical, commercial, empowerment, quality and risk. Contracts are only awarded to companies that successfully demonstrate compliance with PPC risk requirements.

The PPC projects department has developed a set of safety, health and environmental requirements that is used during the construction and commissioning phases. These rules govern:• Medical and induction• Safety training• Competency requirements• Control of tools, equipment, material and personal protective equipment• Risk assessments• Environmental requirements (eg waste disposal)• Occupational health surveys• Project auditing• Legal appointments.

In closing a project, PPC evaluates the performance of the project team and contractors, so that lessons learned (also known as safer, cheaper, better, faster) are incorporated into future projects.

This approach is paying solid dividends. In the review period, the projects department has not had any lost-time injuries. The project risk manager, PPC project leaders, project managers and project engineers have passionately driven safety. PPC site/construction teams (construction managers/engineers and risk manager) have taken direct responsibility in ensuring that “safety comes first and always”.

During the year, numerous projects were in implementation phase with contractors working on site:• Se Kïka – specialist studies and drilling work• Ntšhafatso project• Batsweledi project• Laezonia crusher upgrade• Dwaalboom cement transfer project• Botswana palletiser project• Riebeeck West cement transfer project• Slurry SK7 upgrade project• PE raw mill bag house project• Lime Acres LK9 bag house project.


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Safety first in projects department continued

The Batsweledi project was nearing construction completion and commissioned during this time. At peak, Batsweledi had some 1 600 contractors on site. During its three-plus years, the project inducted over 3 700 contractors. Batsweledi has twice achieved one million hours without a lost-time injury (LTI) and, by 30 September 2009, had reached 750 000 hours without an LTI. In total, the Batsweledi project worked 5,5 million hours with only seven LTIs and an overall LTI frequency rate of 0,25.

Engineering project teams have also played an important role as they have not yet had an LTI despite working over 500 000 hours in the last two years.

In the three years of the Ntšhafatso project’s construction phase, it has also not had a single LTI, reaching over 1,5 million hours by end September 2009.

PPC has been fortunate to have partnered with excellent contracting companies in recent years, contributing to this achievement.

The combination of effective leadership, effort and dedication results in a world-class performance. The PPC projects department has now reached 1,9 million hours without a lost-time injury and looks set to continue this performance in 2010.


Page 56

Minimising PPC’s environmental impact by providing energy- and resource-efficient products

Children at the Wielie Walie Crèche (page 38) learning about permaculture

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Page 58

IntroductionThis report provides a reliable, clear and accurate assessment of PPC’s environmental performance for the period October 2008 to September 2009. It also provides feedback to the public on PPC’s performance drawn from stakeholder engagements through PPC site-specific environmental stakeholder forums, public participation meetings, stakeholder questionnaires and media reviews.

Following a workshop facilitated by KPMG in August 2009, material environmental issues identified for the 2009/2010 period are shown below:

Solid environmental performance during the year reflects ongoing investment in reducing PPC’s impact on the environment

Environmental report

• 15% reduction of CO2 emissions per ton cement, lime and dolomite from 1990 to 2009

• 17% reduction in energy consumption per ton of cement, lime and dolomite versus year 2000

• Energy efficiency accord target achieved before target date (2015)• All sites have environmental stakeholder forums and management

committees• All environmental management systems remain externally certified (ISO

14001 or ASPASA)• Significant spend on technology upgrades resulting in environmental

improvements.

Environmental highlights

declaration:

The data contained in this report is, to the best of our knowledge, accurate and reliable. during 2009, PPC contracted KPMG to review its GRI environmental indicator reporting practices. All significant reported findings from this internal verification were addressed prior to compiling this report. All data is internally verified by each plant according to a best-practice document developed for this purpose. Prior to forwarding information to head office for compilation, each site’s general manager reviews the information and signs off the data.

PPC communicates with its shareholders and stakeholders through a number of channels, including the annual report. PPC also has a website with more information on environmental issues at www.ppc.co.za.

Material environmental issues identified for 2009 – 2010

Climate change

Legislation and compliance

Material issues 2009 – 2010 Stakeholder engagement

Electricity constraints


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PPC’s approach to the environmentEnvironmental vision To minimise the impact of PPC’s environmental footprint by providing energy- and resource-efficient products emanating from an organisation that is driven by sustainable development.

Group environmental policy PPC is committed to understanding and managing any potential environmental impacts of our activities relating to the sustainable manufacture of cement and lime, as well as the mining of aggregates and other minerals.

We do this by ensuring that environmental management is an integral part of our operations. We continue to strive to meet the expectations and requirements of all our stakeholders through monitoring and managing environmental performance using an integrated and effective environmental management system.

We believe that all PPC employees and everyone associated with the organisation have an important role in achieving our environmental objectives and targets.

Accordingly, PPC is committed to:• Establishing clear accountability for

environmental performance• Continual environmental improvement by

providing a customised framework for setting and reviewing environmental objectives and targets based on stakeholder engagement and identification of significant environmental impacts

• Complying with environmental legislation and other requirements to which PPC subscribes to enable PPC to identify and implement resource optimisation strategies and technology improvements to achieve a level of environmental performance that meets or surpasses the requirements for regulatory compliance

• Implementing effective waste and energy management principles and cleaner technology alternatives throughout the organisation

• Effective and transparent communication for our stakeholders by establishing environmental management stakeholder forums and internal communiqués

• Building capacity among our stakeholders to identify, report and act on opportunities to minimise environmental impacts.

The policy is constantly monitored and updated to minimise and prevent any adverse environmental effects of the company’s activities.

Supply chain policyBy ‘greening’ the PPC supply chain, we have identified significant potential environmental opportunities by partnering with suppliers and service providers on joint environmental initiatives. Accordingly, a group-wide green supply chain policy is being developed.

Climate change strategy One of the material issues identified for PPC is managing risks relating to climate change. PPC has developed a strategy on climate change which is available on the website – www.ppc.co.za – and detailed on page 69.


Environmental report continued

Environmental governance and management systemsUltimate accountability for sustainable environmental management at PPC lies with the board of directors. The newly formed sustainability committee and the divisional executive committee both report to the board which is kept informed of PPC’s sustainability projects, site environmental performance and compliance to authorisations. To facilitate environmental awareness and management on site, each PPC operation has a dedicated environment manager or specialist who reports directly to the plant general manager.

The responsibilities of environment managers at Head Office level span developing best practices,

reporting guidelines and structures, auditing roles as well as providing guidance and support to the plants. The projects division environment manager is responsible for identifying environmental triggers for all new projects and upgrades, as well as managing the environmental legal process. The environment manager at the aggregates division brings environmental expertise to the three aggregate mines, namely Mooiplaas, Laezonia and Kgale. All environment experts have a direct line to the environment and sustainability manager on all technical and specialist matters.

Stakeholder issuesIssues identified by PPC stakeholders relating to environmental management are shown opposite:

Environmental governance

Board of directors

Sustainability committee

Environment and sustainability manager (corporate – 2)

divisional executive committee

General managers: cement and lime

Projects risk manager/aggregates executive

Environment and sustainability (graduate – 1)

Environment and sustainability manager/specialist (operations – 8)

Group manager: environment and sustainability

Environment and sustainability manager

(projects division – 1) (aggregates division – 1)


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Issues identified by PPC stakeholders

Stakeholder Priority PPC response

Environmental stakeholder forums Neighbouring farm owners requested assistance from PPC with collecting waste

PPC does not have a permit to store waste on site or transport waste to Mafikeng landfill site.

Health impacts associated with dust

Page 74

Department of Water and Environmental Affairs

Stack/air emissions Pages 68, 74

Integrated water-use licence applications

Pages 68, 75

Department of Mineral Resources Rehabilitation and financial provisioning, conversion to new-order rights

Pages 71, 72

Non-governmental organisation (NGO)

Stack/air emissions Pages 58, 68, 69, 74

Communities Dust impacts, noise Pages 58, 62, 74

Employees Training, awareness and participation in green initiatives implemented by PPC

Pages 60, 68

Environmental organisations/consultants

Sustainability of rehabilitation practices and biodiversity management

Pages 75, 76, 79

Benchmarking water footprint Page 59

Investors/shareholders/banks Carbon footprint Pages 58, 59, 67

West Coast District Municipality and Department of Water and Environmental Affairs and Development Planning

Requested details on what is meant by kiln start-up conditions

Page 74



To understand which issues PPC stakeholders would like to read about in the environmental section of the annual report, we developed a survey questionnaire that was circulated to all members of the various stakeholder forums, authorities, NGOs, employees, academics and environmental organisations and consultants. A total of 10 completed questionnaires were returned to us (of 100 distributed). The outcomes of the survey have been included in the table above. In terms of PPC’s management of environmental issues, most responses stated that PPC rated ‘good’ (from a choice of poor, good and excellent). Some 50% of surveys returned, however, stated that respondents believed PPC’s waste management was excellent. This survey will be repeated annually.

To effectively manage stakeholder issues, PPC has developed an environmental stakeholder system. This is a multifaceted database of information on stakeholders and creates a simple way to manage, record and retrieve the stakeholder contact information vital for progress and success in sustainability.

Environmental achievements in 2009 • Energy management – a 17% reduction in

energy consumption per ton of cement, lime and dolomite against the 2000 baseline has been achieved. This implies that the energy efficiency accord target has been met ahead of the compliance timeframe of 2015 (page 72).

• Climate change – PPC has decreased its carbon footprint by 3% from 2008 to 2009 as a result of lower fuel consumption from the new kiln at Dwaalboom and the decrease in tons of slag milled at PPC Saldanha. The CO2 equivalence per ton of cement for 2009 was 883kg, which is slightly better than the world benchmark of 890kg/ton cement (page 69).

• Internal verification of identified environmental indicators – PPC engaged KPMG to conduct an internal verification of key selected performance indicators reported as part of GRI. Gaps identified from the audit were addressed, strengthening the quality of reported data.

• Technology upgrades resulting in environmental improvements – PPC continuously strives to reduce dust emission levels at our factories. Air-emission control upgrades were undertaken at PPC Port Elizabeth and PPC Slurry near Mafikeng.

At Port Elizabeth, existing electrostatic precipitators (ESP) serving the raw mills were replaced with a new bag filter. Bag filters achieve dust emission levels below 50mg/Nm3.

The Port Elizabeth factory, situated in an urban area where conversion to bag filter technology will decrease dust emission levels


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• Progress with expansion and environmental improvement projects

Batsweledi Project (PPC dwaalboom)The new-technology kiln at PPC Dwaalboom has reduced CO2 emissions from coal combustion by 5,5% per ton of clinker. This is greater than the projected savings in the prior report of 4%. This project was recently certified as energy efficient.

Ntšhafatso Project (PPC Hercules vertical roller mill project)The Ntšhafatso project entails installing an energy-efficient vertical roller mill, a clinker silo and a duo-cell cement silo with bulk road loading facilities. The implementation/ construction phase of the project started in February 2007. By using modern equipment, we will ensure the continued supply of cement and numerous environmental benefits. Anticipated benefits include:• Improved energy efficiency• Reduction in point-source dust emission• Reduction in fugitive dust emissions• Improved ability to produce cements with a

lower carbon footprint.

Commissioning of the project is expected to start early in 2010. The expected energy saving for PPC Hercules for the 2010 financial year is 7%.

Construction at the Ntšhafatso project at PPC Hercules

The upgrade at Slurry kiln 7 included:Raising the electrostatic precipitator (ESP) roof by three metres and installing longer collecting plates and electrodes to increase the collecting plate area and reduce the dust emission level to a maximum of 50mg/Nm³:• Installing a new heat cross and chains to

improve heat transfer from the hot gas to the material.

• Replacing the cracked kiln shell section and worn riding ring.

• Upgrading the coal milling circuit to improve throughput and efficiency.

The PPC Slurry plant near Mafikeng where air quality management is being proactively addressed ahead of new national air quality standards

Due to the proximity of the De Hoek village, located in the Western Cape, to the plant, a noise impact study was undertaken. Certain areas of the plant did emit noise levels above the recommended standard. A mitigation plan was developed and measures implemented to reduce noise levels to within local by-law requirements.



Se Kïka Project (PPC Riebeeck expansion project)The existing PPC Riebeeck operation is nearing the end of its design life. To continue to guarantee supply in the region in the long term, PPC has investigated establishing a new 1,2 million ton per annum clinker production facility. The new facility will use leading international technology and deliver reduced dust, CO2, NOX and SO2 emissions, as well as reduced water and energy consumption per ton of clinker produced.

An environmental impact assessment (EIA) process was undertaken to identify and recommend mitigation measures for potential impacts. PPC has committed to more than 146 mitigation measures. PPC has also established a website for easy access to these commitments and other core EIA documentation.

The EIA was submitted to authorities on 18 March 2009. PPC awaits a decision from the Western Cape provincial government.

• Environmental management systems All our cement and lime plants have been

certified in terms of ISO 14001:2004, with PPC Jupiter being the last plant to obtain certification in September 2008. ISO is an international standard for environmental management systems (EMS) and is based on three key principles: preventing pollution, complying with legal and other requirements, and continual improvement in performance. Our two aggregate mines, Laezonia and Mooiplaas, are members of the Aggregate and Sand Producers Association of South Africa (ASPASA), an association that sets standards and guidelines for health, safety and environmental issues.

• Progress with best practices The aim of developing environmental

best practices is to provide minimum non-negotiable standards and to support consistent management controls. A number of environmental best practices such as air quality management, GRI reporting and verification as well as change management have been developed over the past year. However, we have identified the need for additional best practices aligned to our environmental vision and key performance indicators. These include best practices on green procurement and contractor management, environmental management system (EMS) auditing, energy efficiency and waste management. Development of these best practices will continue over the coming year.

• Internal audit reports PPC has amended audit report formats to

facilitate classification of environmental findings into structural and operational categories. This was undertaken to support capacity building and increased awareness of the need to integrate environmental management into operations. In addition, the process identified any potential breach in structures to proactively manage potential legislative non-compliance. Structural findings include those that indicate the absence of a mechanism/authorisation or clear evidence that an existing mechanism falls short in design/implementation, while operational findings are defined as those that generally relate to failure of an established mechanism, a once-off occurrence of deviation from licence/permit, etc.


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• Master plan projects Following an internal legal compliance audit at

each plant, an environmental master plan was developed to address all legal findings. This plan consists of a number of environmental projects, depicted above, chosen to ensure PPC meets legal requirements. All master plan

projects started in 2008. To date, 10 projects have been completed. The three outstanding projects (integrated water-use licence, mine environmental management programme (EMP) review and integrated waste applications) will be completed by December 2009, subject to approval from the authorities.

Environmental master plan projects

Capacity building – completed

Managing diesel-driven vehicles on public roads – completed

Flammable substances management – completed

Air quality permit amendment – completed

Structure of alien vegetation replacement programme

– ongoing

Integrated water licences– in progress

dangerous goods transportation review

– completed

Mine EMP review– in progress

Hazardous chemicals management review

– completed

Radioactive sources permit assessment – completed

dust management alternatives investigation

– completed

Integrated waste permits– in progress

Management of process waste – completed

Environmental



• PPC’s response to the power crisisIn the wake of the 2008 power crisis, PPC has adopted a proactive approach to the National Energy Regulator of South Africa’s (NERSA) proposed power conservation programme and has worked hard in the last year to prepare for a possible mandatory reduction in the power use of PPC operations.

An energy management team has been established at each operation affected by the power conservation programme. These teams are led by a central energy management team under the leadership of the technical department, and have been tasked with identifying potential power-conservation opportunities throughout the group.

The mass balance process• Issues hindering implementation of the

mass-balance project include lack of capacity (skills shortage). Support to the plants has been through capacity-building interventions undertaken by the PPC environmental and process services departments.

• The challenges of using secondary materials as alternate fuel sources.

• Compliance with environmental laws and standards given the increasing quantum of legislation promulgated by environmental authorities in different spheres of government. PPC is, however, an active member of government working groups and contributes to changes in legislation.

Environmental challenges in 2009

Changing environmental laws

and regulations

The greatest environmental challenges for 2009 are shown below:

Mass balance

Secondary materials

Energy efficiency

Prog

ress

wit

h ad

dres

sing

cha

lleng

es

Legal requirementContinuous improvement


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Environmental performance in 2009

2009 feedback

In 2008 we said we would… Progress in 2009

Identify best practices to be noted in PPC annual report.

Major best practices developed for 2009 include: air quality management; Global Reporting Initiative (GRI) disclosure standards; stakeholder engagement; climate change management and reporting and incident reporting.

Decrease energy consumption in line with PPC's energy efficiency accord targets.

Energy consumption declined by 6% in the review period.

Track non-renewable inputs of kilns even more closely.

This is managed through the GRI reporting system. Replacements for natural materials are continually sourced by PPC. See section under Secondary Materials.

Increase use of renewable materials as a thermal energy source by 5% by 2015, subject to environmental approvals.

PPC has not been able to increase the use of renewable materials significantly due to continuing slow progress with developing legislation.

Achieve a target for CO2 for clinker, lime and dolomite in 2009 of 1 000kg/ton. Note: this target only includes scope 1 emissions, ie direct emissions from the cement-production process which excludes CO2 emissions relating to electricity consumption.

Through the internal auditing process, PPC has identified and corrected CO2 emission levels reported in previous annual reports to include both scope 1 and 2 emissions. PPC will continue to improve on the accuracy and transparency of the data reported through more rigorous assurance processes.

Achieve a target for CO2 per ton of cement, lime and dolomite in 2009 of 850kg/ton. Note: this target only includes scope 1 emissions, ie direct emissions from the cement-production process which excludes CO2 emissions relating to electricity consumption.

The scope 1 CO2 per ton of cement, lime and dolomite in 2009 was 863kg. The targets were not met due to delayed plans for increased cement extension processes.

Ensure that all sites will undergo ecological (flora and fauna) and heritage impact assessments to further inform management efforts.

In progress. Most sites are at 70% completion.

Target is to have 100% completion of all reasonably possible concurrent rehabilitation.

Good progress has been made at the Beestekraal, Dwaalboom and Riebeeck operations on outstanding rehabilitation tasks. Final assessment will be based on the September 2009 aerial survey.

Target is to ensure ongoing adherence to the 100% concurrent rehabilitation goal, with particular focus on meeting specified environmental management plans.

Management plans as set out in the environmental management plan (EMP) are implemented through the ISO 14001 system.

Ensure that all plants will have updated water balances and water meters at strategic locations.

In progress.



In 2008 we said we would… Progress in 2009

Publish water-saving targets in the 2009 annual report.

Due to the delay in finalising water balances for all plants, water-saving targets can not yet be determined.

Summarise training modules and deliver it to all PPC staff and discuss it in environmental stakeholder forums.Maintain environmental legal compliance by facilitating required behavioural changes at PPC operations and increasing level of awareness about environmental matters.

This has been implemented. External service provider appointed to roll out environmental training to all sites.

Achieve zero non-compliance to conditions of all environmental authorisations by 2009.

External legal audits have identified a few areas of non-compliance, however management plans have been drawn up to address these areas of concern.

Ensure that all operations have formalised environmental forums and committees.

All sites have established environmental stakeholder forums.

Structure a complete stack-emission profile for cement and lime kilns.

In progress.

Set quantifiable targets for selected PPC environmental indicators.

This has been undertaken. Targets for CO2 and energy use have been established.

Continue to develop environmental and sustainability training modules for all levels.

In progress.

Develop and implement a PPC green procurement strategy.

Completed – awaiting sign-off.

Achieve environmental compliance audits of 20% of major suppliers and customers.

Completed.

Compile an emissions inventory informed by mass balance and fugitive emission estimation for all PPC plants.

In progress.

Train every environmental specialist and manager in environmental best practices and standards.

Ongoing.

Create stakeholder maps and formalised environmental forums for each PPC operation.

Undertaken at all sites.

Entrench environmental framework objectives and recommendations throughout PPC.

Ongoing.

Continue to use UN Global Compact principles as important criteria for project selection and milestone evaluation.

PPC continues to apply principles relating to responsible environmental management as per UN Global Compact.


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detailed discussion of selected issuesClimate change and carbon footprintAccording to the World Wildlife Fund’s G8 climate scorecards (2009), climate change is the greatest threat to development and prosperity on this planet, endangering people and cultures as well as the natural base of life. The climate scorecard emphasises South Africa’s strong dependence on coal, and the fact that approximately 27% of people have no access to electrical energy. In South Africa, emissions per capita are only slightly below the average of

industrialised countries, but well above averages for developing countries. Cement production accounts for 5% of global emissions. At PPC, we acknowledge climate change as a strategic risk and have taken action to reduce carbon emissions.

PPC uses the World Business Council for Sustainable Development (WBCSD) CO

2 protocol to calculate its carbon footprint. PPC’s footprint from 1990 to 2008 is depicted below.

PPC’s carbon footprint – scope 1 and scope 2 emissions

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009900

1 000

1 100

1 200

1 300

Clinker, dolomite, lime Cement, dolomite, lime

kg C

O2/

ton



PPC’s carbon footprint is based on both scope 1 (direct) and scope 2 (indirect) emissions. PPC has decreased its carbon footprint by 3% from 2008 to 2009 through lower fuel consumption due to the new kiln at PPC Dwaalboom and the decrease in tons of slag milled at PPC Saldanha.

The CO2 per ton of cement, lime and dolomite for 2009, including both scope 1 and scope 2

PPC’s carbon footprint of 883kg for cement, for 2009, is better than the world average of 890kg CO2/ton cement.

PPC’s direct emissions are from the calcining limestone (burning at high temperatures in the cement kilns) and using fuels such as coal and diesel. Electricity consumption forms the basis for indirect CO2 emissions.

emissions, was 960kg. The CO2 for clinker, lime and dolomite for 2009, including both scope 1 and scope 2 emissions, was 1 128kg CO2/ton.

The PPC climate change strategy to reduce CO2 emissions by 15% per ton by 2020, using 2008 as a baseline, is under review.

PPC is contracting an external service provider to undertake greenhouse gas audits at all sites using the GHG protocol. This will provide a clearer understanding of PPC’s impact on scope 2 (indirect) and scope 3 (travel) emissions. Once the audits have been completed, PPC will be able to identify its material impacts and develop mitigation strategies.

PPC’s CO2 emissions – cement only – scope 1 and scope 2 emissions

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009800

840

880

920

960

1 000

Per ton cement World average CO2 emission per ton of cement

kg C

O2/

ton


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Secondary materialsPPC is committed to investigating the use of alternative materials as input material. The company uses boiler ash, synthetic gypsum, magnetite and mine sand as input materials to minimise the impact on our natural resources.

PPC has not been able to increase the use of renewable materials significantly due to continuing slow progress with developing legislation. Although work was completed on the national policy on cement kiln co-processing in 2008, the policy was only released by the government in June 2009. PPC has received a positive record of decision (RoD) for the Hercules and Dwaalboom operations, but had to appeal the latter due to the unduly restrictive conditions of the authorisation.

PPC did implement a used-oil collection scheme in the Northern Cape, working with the Ntsika Enterprise Development Fund (page 41). This project will collect used oil in the province for co-processing in PPC lime kilns. With this project, two objectives were fulfilled – the development and empowerment of local people and finding a local solution for a hazardous waste problem in the Northern Cape.

The use of magnetite, a waste material from the vanadium process, was implemented at Jupiter

and Dwaalboom in the past year. Magnetite is a substitute for iron, which in turn comes from the non-renewable resource of iron ore.

PPC is continuously evaluating materials for their potential as renewable raw materials and fuels in our processes. With the requisite environmental approvals, this will become a focal point for the company in future.

Energy efficiency In June 2009, the Department of Mineral Resources published a national energy efficiency strategy for South Africa. PPC, in conjunction with the Association of Cementitious Material Producers, provided comments on this document to the authorities. PPC supports proposed recommendations for major energy savings, namely replacing old technologies with new and employing best-management practices.

The target for energy reduction at PPC is in line with the energy efficiency accord of 15% below 2000 levels by 2015.

PPC achieved a 17% reduction in energy consumption per ton of cement, lime and dolomite against the 2000 baseline. This implies that the energy efficiency accord targets have been met ahead of the compliance timeframe (2015).



PPC’s energy consumption PPC has decreased its energy consumption per ton of cement, lime and dolomite by 6% from 2008 to 2009 through lower fuel consumption due to the new kiln at Dwaalboom and the decrease in tons of slag milled at Saldanha.

Through the internal auditing process, PPC has identified and corrected energy-consumption

levels reported in previous annual reports. PPC will continue to improve on the accuracy and transparency of data reported through more rigorous assurance processes.

The Batsweledi and Ntšhafatso projects (page 63) illustrate PPC’s approach to invest in the most modern equipment with high energy-efficiency standards.

Energy consumption in 2009Terajoules Percentage

direct energy consumptionCoal 24 025 89Spent pot liner 170 1Diesel (excluding distribution) 553 2

Indirect energy consumptionElectricity 2 197 8

TOTAL 26 946 100

PPC energy consumption per ton of cement, lime and dolomite vs 2000 base year = 100

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Virtualisation

PPC’s IT department has implemented a virtualisation project. Virtualisation is the process of placing more than one operating system or ‘guest’ onto a single server. Each guest is independent of the other guests, yet has access to common components on the host server. This introduces efficiency while driving down operating costs.

Benefits of virtualisation per site include reducing the number of servers from 10 physical units to three virtual servers. Virtual services generate 10% of the heat and need 10% of the cooling required by the physical units.

What does this mean for green computing? • Less power used• Increased efficiency• Longer replacement cycles• Lower cooling requirements• Fewer disposals of environmentally unfriendly pieces of metal.

A pilot project was initiated at Hercules in June 2009. PPC intends rolling out this project across the group with final implementation by May 2010.

The breakdown of energy sources in the production process is roughly 89% from coal consumption, 8% from electricity consumption, 2% from diesel consumption and 1% from spent pot liner (waste material from the aluminium industry used as an input material in the cement and lime operations).

PPC is also implementing best practices to ensure all new capital projects achieve an energy-efficiency certificate rating as defined by the National Energy Efficiency Agency.

All plants are participating in an energy audit to identify areas for improving energy consumption and efficiency. A project implemented at our Jupiter plant in Germiston involves intergrinding fly ash: because fly ash is so fine, it does not all need to be milled with the clinker, and is therefore fed into separators and only the coarse fraction milled with the clinker after milling. This has produced significant energy savings.



Air emissions Air emissions (gases and particles released into the atmosphere through our manufacturing process) have been identified as one of PPC’s material issues. The emissions are released from stacks (the point sources) and from stockpiles and transfer points (fugitive sources).

Material issues to stakeholders are dust (or particulate matter), sulphur dioxide (SO2) and oxides of nitrogen (NOX) released from the kiln stacks. SO2 emissions are caused by sulphur-containing raw materials, while NOX emissions are caused primarily by high-temperature combustion in kilns.

PPC is dedicated to effectively managing and controlling stack and fugitive emissions. This includes actively participating in the section 21 Air Quality Act working groups in terms of setting reasonable and achievable air emission limits, and monitoring and reporting conditions.

All PPC kiln and mill stacks are fitted with continuous emission monitors for dust and have strict internal management systems. Several kilns also have continuous emission monitors (OPSIS) to quantify select gaseous emissions. Every plant has a portable gas analyser for discrete measurement of SO

2 and NOX. Controls have focused on technology upgrades, alternate air emission measurement studies, ie the mass balance project, forming closer relationships with national, provincial and local authorities, engaging with stakeholders through the environment stakeholder forums, developing best practices as well as training and capacity building among staff.

Quarterly reports are submitted to the Department of Water and Environmental Affairs, as well as to provincial and local air-quality authorities. Plants are required to report on their dust, SO2 and NOX emissions. Start-

up monitoring results (measured from start-up to a raw meal feed rate of 50% of nominal capacity) are excluded from results. Cement kilns are allowed to deviate from the limits of dust, NOX and SO2 emissions during heat-up, for a maximum of 72 hours after start-up.

Future environmental engineering projectsThe following environmentally beneficial projects are currently being investigated:• Slurry finishing mill 4: installation of a new

high-efficiency separator in the mill circuit and a bag filter for dust collection, resulting in greater energy efficiency and dust emission reduction.

• Hercules road transport tipping station: for coal and other incoming materials, resulting in environmental benefits including reduced fugitive emissions and improved water quality.

• Slurry coal handling and storage: initiatives to improve the coal storage and handling area, reducing fugitive dust emissions and improving water quality.

• De Hoek kiln 6: kiln ESP to bag house conversion, grate cooler and indirect coal-firing system installation. Benefits include reduced point-source dust emissions, reduced coal and water consumption and improved energy efficiency.

• Jupiter fly ash: improvements to storage, handling and transport system, allowing for increased cement extension. Benefits include a reduction in carbon footprint.

Community environmental concernsThrough ongoing monitoring and regular stakeholder forums, PPC stays abreast of environmental concerns raised by communities and is able to respond appropriately. While some environmental issues are clearly longer term (both in their impact and in addressing the root causes), we believe keeping lines of communication open is a vital first step.


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PPC Hercules has successfully managed to build trust within the community through detailed discussions at each environmental stakeholder forum. The reasons for spikes in kiln stack emissions are explained and the management team details action plans to sustainably address the incidents. Stakeholders are able to track the plant’s commitment to improving kiln stack emissions by being exposed to real-time operational monitoring data.

PPC Port Elizabeth has been in operation since 1927. Significant changes in surrounding land uses have resulted in the community living very close to the plant’s borders. This has, over the years, caused friction between the community and the cement operation. PPC Port Elizabeth is now required to operate to the standards of a modern cement plant in a residential area, despite being in an industrial area. This implies that despite meeting all legal environmental requirements, we have to go above and beyond to accommodate our communities.

In response, PPC Port Elizabeth has undertaken a number of initiatives:• A comprehensive air quality investigation is

being undertaken by an independent specialist to guide required changes in air quality management. Feedback on the progress of this project is communicated at the PPC Port Elizabeth environmental stakeholder forum.

• The operation has voluntarily decreased kiln stack emission limits from 200mg/Nm3 to 80mg/Nm3 after the recent upgrade of the electrostatic precipitator. This voluntary limit has been successfully maintained over the last year. There are, however, currently some teething problems with the upgrade, resulting in increased dust emissions and incidents of filter trips. These are being urgently addressed.

• A noise-reduction project was successfully implemented at the tippler area by enclosing the structures.

Health impacts of environmental issuesThe effect of any substance on human health largely depends on:• particle characteristics, particularly particle size

and chemical composition• duration, frequency and magnitude of

exposure• route of administration, eg lungs • susceptibility of the individual.

PPC therefore imposes strict emission monitoring requirements and adheres to operating within published guidelines and legal limits.

Water managementAcknowledging that South Africa is a water scarce country, PPC is committed to conserving the quality and quantity of water at all group operations. Our operations are focused on monitoring usage, measuring quality changes and calculating site-specific water balances to enable water-saving initiatives. The total amount of water consumed by the nine PPC plants in South Africa this year, as reported through the GRI, is 2 675 000 kilolitres. Water-saving targets will be determined as soon as water balances have been established for all plants.

Biodiversity managementAny negative impact on the environment is identified through the environmental impact assessment process and mitigated accordingly. In terms of our mines, PPC subscribes to the principles of concurrent mine rehabilitation, that is rehabilitating as the quarry is mined.

Waste minimisationPPC is currently developing site-specific waste management plans. All operations are actively involved in creating awareness on waste management and implementing the principles of the waste hierarchy of reduce, reuse and recycle.



Protecting the Renosterveld at Riebeeck

During a vegetation survey conducted as part of the environmental management programme report in 2000, the natural vegetation of a hill on the PPC Riebeeck property was identified as West Coast Renosterveld of the fynbos biome species. Because Renosterveld is one of the most endangered types of fynbos biome with less than 2% remaining in the province, every effort has been made to conserve it.

Given the risk that three hectares of Renosterveld area would be encroached by the advance of the current overburden dump, PPC constructed a long retaining wall between this habitat and the mining overburden dumps to act as a drainage system between the dump and the Renosterveld. The construction of a 12 metre high terramesh retaining wall started in June 2003 and was built in four phases, reaching a total height of almost 15 metres and extending for several hundred metres. The project was completed in March 2009, providing a protective barrier between the mining area and the Renosterveld habitat.

The rock used to construct the wall was sourced from mining operations and deliberately packed to allow water to pass through but not silt. A geotextile filter membrane aids this filtering process, preventing silt from passing into the stream that runs between the Renosterveld hill and part of the mine. The wall was built to blend with the natural environment while ensuring that, in terms of materials and durability, it achieves its long-term purpose. The area adjacent to the wall was shaped to a final slope angle of 1:5 according to the rehabilitation schedule. This area will be covered with topsoil and vegetation will be introduced in 2010.

At PPC Riebeeck, a retaining wall has been designed as a drainage system between the dump and the sensitive habitat


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Protecting the Renosterveld at Riebeeck continued

Some rare species found on site occur in this area, and at least six species of conservation concern were recorded, with a good probability of others remaining undetected. Of the six, four are listed as endangered:• Leucadendron lanigerum ssp. Lanigerum: a small but significant population of this species occurs

on this ridge.• Babiana odorata is a Swartland endemic bulb. A small but significant population occurs on site, and

is likely to be much more prominent in the years after a fire.• Agathosma latipetala is an attractive white-flowered buchu restricted to the central and southern

Swartland. The species is common in this patch, and can be regarded as a viable and significant population.

• Phylica thunbergiana is also a Swartland endemic. This species is common in this patch, and can be regarded as a viable and significant population.

The other two species have been listed as vulnerable:• Muraltia trinervia. The species is common on site, and can be regarded as a viable and significant

population of this primarily Swartland species.• Antimima mucronata is a creeper restricted to Swartland shales. The species is common in this

patch, and this can be regarded as a viable and significant population.



PPC Hercules waste-sorting project

A survey was conducted in early 2009 to establish the quantities of various waste types generated over a specified period. This information was used to engage with potential service providers ahead of appointing a company to sort and recycle waste.

A dedicated area was fenced off for all recycling activities with two entrance gates to facilitate easy access for trucks to remove full skips. A shelter was erected to enable the service provider to work in a covered area under adverse weather conditions. To facilitate separation at source, colour-coded 210-litre drums and wheeled bins were selected for use throughout the site:• Red – hazardous waste (oily rags, oil containers, grease containers, old personal protective

equipment, etc)• Blue – plastic, glass, cans and paper (soft drink cans and bottles, copier paper, etc) • Green – domestic waste (left-over food, wrappings, etc)• Cardboard boxes – photocopy paper in the offices• Wheeled bins – domestic waste in the administration block.

Suitable locations for waste collection were identified throughout the plant in consultation with all staff. Concrete slabs were cast to elevate drums to highlight their location. Each location is identified by a white number painted in a green block. These numbers are plotted on a site map indicating the location of the drums.

The waste drums around the plant are swapped for empty drums daily by the service provider to prevent spillage of any waste material in the site. The drums and wheeled bins are taken to the waste-recycling area for further sorting. Recyclables are removed and non-recyclables are placed in multi-waste skips for disposal. Hazardous waste is placed in a dedicated skip for disposal at the Holfontein site. All safe disposal certificates are filed on site. All recyclable waste removed from site is weighed and recorded by the service provider to demonstrate the volumes recycled instead of going to a landfill site.

A large quantity of waste produced on site is recycled, namely scrap metal, wooden pallets, old printer cartridges and old oil. Old rubber conveyor belts are used as vehicle liners and flooring. Supported by a multi-level communications campaign, the project has already produced positive results and improved housekeeping within the plant.


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Environmental performance – miningThere were several highlights of PPC’s environmental performance during the review period:

Backfilling mined-out voids:The disposal of overburden waste rock by means of backfilling mined-out voids at the Beestekraal and Zoutkloof operations continued throughout the year. This has a threefold environmental benefit over the surface construction of waste rock dumps:• The mining footprint is constrained by reducing

surface overburden disposal.• The size of the pit is reduced, reducing the

final void left after mining and the closure rehabilitation requirement.

• Significantly lower diesel use due to reduced hauling and profiling requirements.

Beestekraal: to date approximately 3 hectares has been backfilled to surface. The target is to backfill and profile 7,5 hectares to a depth of at least 30 metres from surface, reducing the void size from 39 hectares to 32 hectares.

De Hoek: some 50% of the overburden stripped in the review period has been backfilled into the southern portion of the depleted Zoutkloof pit. In conjunction with profiling the northern perimeter of the pit, this has reduced the void area from 76 hectares to 67 hectares.

Reducing the visual impact of mining:The haul road on the western slope of the Zoutkloof overburden dump has been backfilled and is being rehabilitated back to agricultural use. The road was required to reduce the hauling distance to the overburden tipping areas. A similar exercise is planned for the Riebeeck overburden dump.

Sustainable information technology for the future

To promote sustainable information technology, the PPC IT department selected a project on recycling of old and redundant equipment. In the past, the practice was merely to dispose of redundant equipment via a disposal company. Following a feasibility study on waste-management options, recycling was highlighted as a viable alternative.

Based on a number of selection criteria including legal compliance, a service provider was appointed. The contract involves removing redundant equipment from PPC’s Sandton premises thus providing one-stop convenience for recycling e-waste, with the assurance of technology protection and environment-conscious recycling methods. All electronic waste is manually stripped, disassembled and sorted to avoid cross-contamination. Items for recycling are not shredded as whole units, thus avoiding a mix of plastics, ferrous and non-ferrous metals. Sophisticated dust extractors are used to recover precious and non-ferrous metals. Shredding and pulverisation ensures that all metallics are separated and all plastics sent to plastic recyclers.

This project has been running smoothly for the past six months, with multiple benefits. PPC saves on disposal costs and contributes to less solid waste disposal on landfill sites, while supporting small business development.



The removal of alien trees, profiling and natural revegetation of the PPC Mooiplaas northern overburden dump has reduced the visual impact of the dump significantly.

Mine closurePPC has to date obtained closure certificates for four of its operations, namely Loerie, Pienaar’s River, Baroe Dump and Baroe Trend. Financial provision for mine closureFull financial provision for mine closure rehabilitation was made in September 2008 by contributing to the PPC Rehabilitation Trust fund to cover the shortfall in provision for each operation.

Concurrent rehabilitation performanceThe percentage of concurrent rehabilitation completed at September 2008 was slightly down on the 2007 level of 94%. This was primarily due to an area of 22 hectares on the southern overburden dump at Beestekraal being included in the required concurrent rehabilitation area at

the end of the three-year overburden stripping contract. The total concurrent rehabilitation backlog is currently 82 hectares of a total of 1 074 hectares. Environmental compliance and incidentsThere were no fines issued to PPC. An emergency incident report required in terms of section 30(5) of the National Environmental Management Act (Act No 107 of 1998) was lodged electronically with the Department of Water and Environmental Affairs during September 2009. During the monthly reconciliation of diesel stocks at PPC Slurry, it was discovered that about 3 509 litres of diesel were unaccounted for in August. An investigation conducted to trace the diesel revealed that the underground transporting pipes were leaking. The area has since been rehabilitated and the transporting pipes moved to the surface to prevent reoccurrence.

Environmental non-conformances on site are managed through the ISO 14001/ASPASA EMS system, which involves recording, investigating and implementing remedial measures.

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Note: 2009 data is unavailable at the time of printing; figures are reflected as at September 2008 as the annual mine survey is conducted by aerial surveys flown at the financial year end.


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Sustainable supply chain suppliers and customers Of the 11 major suppliers identified by PPC, three were audited for environmental compliance by completing a questionnaire. PPC will continue to implement green supply chain principles in its business dealings.

Environmental training and awareness in the communityPPC Slurry celebrated Environmental Day on 5 June with learners from the Slurry Intermediate School. Staff hosted a cleaning campaign in and around the school, while learners planted indigenous trees donated by PPC around their school.

Our goals for 2010

• Maintain compliance with all authorisations

• Phased externally verified and assured GRI report, with verification on reporting against GRI principles as an initial priority

• Engage suppliers in line with PPC’s green supply chain policy and strategy

• Roll out the PPC climate change strategy

• Complete energy audit baselines for all PPC major plants

• Improve carbon footprint reporting through independent assessment of scope 2 and scope 3 CO2 emissions

• Continue to develop relationships with all PPC stakeholders through environmental stakeholder forums and communication on the PPC internet site.

PPC Slurry Environmental Day


2009 2008 2007Notes Rm Rm Rm

ASSETSNon-current assets 4 195 3 196 2 546

Property, plant and equipment 1 3 941 2 813 2 178

Intangible assets 2 53 19 20

Investment in non-consolidated subsidiary 3 – 260 260

Non-current financial assets 4 107 51 26

Long-term receivables 5 28 39 52

Investment in associates 6 66 14 10

Current assets 1 624 1 338 2 336

Inventories 7 557 363 337

Trade and other receivables 8 819 751 696

Short-term investment 4 – – 2

Cash and cash equivalents 10 248 224 1 301

Total assets 5 819 4 534 4 882

EQuITy ANd LIABILITIESCapital and reservesShare capital and premium 11 (1 088) 115 868

Other reserves 150 57 16

Retained profit 1 853 1 541 1 465

Total equity 915 1 713 2 349

Non-current liabilities 3 366 511 340

Deferred taxation liabilities 12 469 299 156

Long-term borrowings 13 2 628 55 68

Provisions 14 250 151 114

Other non-current liabilities 15 19 6 2

Current liabilities 1 538 2 310 2 193

Short-term borrowings 16 764 1 619 1 366

Taxation payable 96 61 236

Trade and other payables 17 678 629 579

Provisions 14 – 1 12

Total equity and liabilities 5 819 4 534 4 882

Consolidated statements of financial positionat 30 September 2009

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2009 2008 2007Notes Rm Rm Rm

Revenue 6 783 6 248 5 566

Cost of sales 3 897 3 547 3 069

Gross profit 2 886 2 701 2 497

Non-operating income – – 1

Administrative and other operating expenditure 468 378 324

Operating profit before items listed below 2 418 2 323 2 174

BBBEE IFRS 2 charges (490) – –

Take-on gain arising from consolidation of Porthold 213 – –

Operating profit 18 2 141 2 323 2 174

Fair value (losses)/gains on financial instruments 19 (6) 4 1

Finance costs 20 357 157 84

Investment income 21 65 84 82

Profit before exceptional items 1 843 2 254 2 173

Exceptional items 22 – 2 14

Share of associates’ retained profit 6 7 10 7

Profit before taxation 1 850 2 266 2 194

Taxation 23 722 767 765

Net profit 1 128 1 499 1 429

Attributable to:Ordinary shareholders 1 024 1 499 1 429

Other shareholders^ 104 – –

1 128 1 499 1 429

Earnings per share (cents) 24.3

– basic 210,1 283,5 265,8

– diluted 209,1 283,5 265,8^ For details on other shareholders refer note 11

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Consolidated statements of cash flowsfor the year ended 30 September 2009

2009 2008 2007Notes Rm Rm Rm

CASH FLOWS FROM OPERATING ACTIVITIESProfit before exceptional items 1 843 2 254 2 173

Adjustments for:– depreciation 309 214 192

– amortisation of intangible assets 6 4 4

– profit on disposal of plant and equipment and intangibles (4) (2) (3)

– BBBEE IFRS 2 charges 490 – –

– take-on gain arising from consolidation of Porthold 30 (213) – –

– dividends received (9) (8) (8)

– interest received (56) (76) (74)

– finance costs 357 157 84

– loss on derivatives (cash-settled share-based payment hedge) 4 15 –

– other non-cash flow items 8 5 2

Operating cash flows before movements in working capital 2 735 2 563 2 370

Increase in inventories (107) (26) (116)

Increase in trade and other receivables (31) (55) (147)

Increase in trade and other payables and provisions 5 64 85

Cash generated from operations 2 602 2 546 2 192

Finance costs paid 27 (297) (192) (84)

Dividends received from investments and associate 12 14 21

Interest received 56 76 74

Taxation paid 28 (645) (800) (743)

Cash available from operations 1 728 1 644 1 460

Dividends paid 29 (1 195) (1 401) (1 207)

Equity-settled share incentive scheme refund/(payment) – 2 (30)

Net cash inflow from operating activities 533 245 223


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2009 2008 2007Notes Rm Rm Rm

CASH FLOWS FROM INVESTING ACTIVITIESAcquisition of property, plant and equipment 31 (883) (794) (954)

– to enhance existing operations (341) (277) (129)

– to expand operations (542) (517) (825)

Acquisition of intangible assets (38) (3) (10)

Dividends received from non-consolidated subsidiary company – – 30

Net proceeds received on disposal of property, plant and equipment 10 5 8

Movements in investments and loans 32 (118) (27) 114

Redemption of preference shares – – 30

Acquisition of treasury shares held by consolidated subsidiary company – (753) –

Treasury shares held by the BBBEE trusts and funding SPVs (1 190) – –

Receipt of instalment on long-term loan 32 11 10 10

Net cash outflow from investing activities (2 208) (1 562) (772)

Net cash outflow before financing activities (1 675) (1 317) (549)

CASH FLOWS FROM FINANCING ACTIVITIESIssue of shares 5 – –

Long-term borrowings raised 1 645 (13) (111)

BBBEE funding transaction 868 – –

Net short-term borrowings (repaid)/raised (862) 253 479

Net cash inflow from financing activities 1 656 240 368

Net decrease in cash and cash equivalents (19) (1 077) (181)

Cash and cash equivalents at beginning of the year 224 1 301 1 482

Cash acquired on consolidation of Porthold 30 43 – –

Cash and cash equivalents at end of the year 248 224 1 301

Cash earnings per share (cents) 24.6 328,6 310,9 271,6


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PPC’s Bulawayo Milling Depot in Zimbabwe

In compiling this report, PPC has considered the latest Global Reporting Initiative, sustainability reporting guidelines, known as G3

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Index to Global Reporting Initiative indicatorsThis index is based on the 2007 GRI guidelines (G3)

GRI indicator numbern/a – not applicablen/m – not measured

GRI element Topic Page

STRATEGy ANd ANALySIS1.1 Statement from CEO 21.2 Key impacts, risks and opportunities 2

ORGANISATIONAL PROFILE2.1 Name Inside front cover2.2 Primary products 12.3 Operational structure2.4 Location of head office 942.5 Countries of operation Inside front cover2.6 Nature of ownership Inside front cover2.7 Markets served Inside front cover2.8 Scale of organisation Inside front cover2.9 Significant changes to organisation Zero2.10 Awards 52

REPORT PARAMETERS3.1 Reporting period 63.2 Date of previous report 63.3 Reporting cycle 63.4 Contact points 63.5 Process for defining report content 73.6 Boundary of report 63.7 Limitations 63.8 Basis for reporting on joint ventures, etc 63.9 Data measurement techniques and assumptions 583.10 Explanation of restatements 583.11 Significant changes to scope, boundary or methods 693.12 GRI index 883.13 Policy and practice on external assurance 6

GOVERNANCE, COMMITMENTS ANd ENGAGEMENT 114.1 Governance structure 40 – 55 (Annual report)4.2 Status of chairperson 40 – 55 (Annual report)4.3 Independent non-executive directors 40 – 55 (Annual report)4.4 Mechanisms for stakeholders to interact with board 40 – 55 (Annual report)4.5 Link between compensation and performance 40 – 55 (Annual report)4.6 Process for avoiding conflict of interest 40 – 55 (Annual report)4.7 Expertise of board 40 – 55 (Annual report)4.8 Policies on economic, environmental and social performance 40 – 55 (Annual report)


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GOVERNANCE, COMMITMENTS ANd ENGAGEMENT continued

4.9 Procedures for board oversight of economic, environmental and social performance

11

4.10 Board performance 41 (Annual report)4.11 Precautionary approach4.12 External principles endorsed 114.13 Membership of industry associations and advocacy groups 124.14 Stakeholder groups 134.15 Basis for identification 134.16 Approach to stakeholder engagement 134.17 Topics and concerns raised, response 13, 7 – 10

ECONOMIC EC1 Economic value generated and distributed 4EC2 Financial implications, risks and opportunities due to climate change n/aEC3 Coverage of defined benefit plan obligationsEC4 Significant financial assistance from government ZeroEC5 Standard entry-level wage compared to local minimum wage n/aEC6 Policy, practices and spending on local suppliers 43EC7 Procedures for local hiring, proportion of senior management hired

from local community30

EC8 Development and impact of infrastructure investments and services for public benefit

32, 37, 38

EC9 Significant indirect economic impacts 4

ENVIRONMENTALMaterials

EN1 Materials used by weight or volume n/mEN2 Percentage recycled input materials 71

EnergyEN3 Direct consumption by primary energy source 72EN4 Indirect consumption by primary source 72EN5 Energy saved from conservation and efficiency improvements 71, 72EN6 Reductions from energy-efficient or renewable energy-based products

and servicesn/m

EN7 Initiatives to reduce indirect energy consumption, reductions achieved 71, 72, 73Water

EN8 Total water withdrawal by source 75EN9 Sources significantly affected by withdrawal n/mEN10 Percentage and volume recycled and reused n/m



ENVIRONMENTAL continued

BiodiversityEN11 Location/size of land owned, leased, managed or adjacent to

protected areas, areas of high biodiversity value76, 77

EN12 Significant impacts of activities, products and services on biodiversity in protected areas and areas of high biodiversity value

76, 77

EN13 Habitats protected or restored 76, 77EN14 Strategies, actions and plans for managing impacts on biodiversity 76, 77EN15 IUCN Red List species and national conservation list species in areas

affected by operations77

Emissions, effluents and wasteEN16 Total direct and indirect greenhouse gas emissions by weight 69, 70EN17 Other relevant indirect greenhouse gas emissions n/mEN18 Initiatives to reduce greenhouse gas emissions, reductions achieved 70, 74EN19 Emissions of ozone-depleting substances n/mEN20 NOX, SOX and other significant air emissions by type and weight 74EN21 Total water discharge by quality and destination n/mEN22 Total weight of waste by type and disposal method n/mEN23 Total number and volume of significant spills 80EN24 Waste transported under terms of Basel Convention (Annex I, II, III, VIII) n/aEN25 Identity, size, protected status and biodiversity value of water bodies

and related habitats significantly affected by discharges of water and runoff

n/m

Products and servicesEN26 Initiatives to mitigate environmental impacts of products, extent of

mitigation62, 63

EN27 Percentage of products sold and packaging materials reclaimed by category

n/m

ComplianceEN28 Significant fines, sanctions for non-compliance with environmental

laws and regulations80

TransportEN29 Significant impacts of transporting products and members of workforce n/mEN30 Total environmental protection expenditures and investments by type n/m

Index to Global Reporting Initiative indicators continuedThis index is based on the 2007 GRI guidelines (G3)



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SOCIAL PERFORMANCE: LABOuR PRACTICES ANd dECENT WORKEmployment

LA1 Workforce by employment type, employment contract and region 30LA2 Number and rate of employee turnover by age group, gender and region –LA3 Benefits for full-time employees not provided to temporary/part-time

employees–

Labour/management relationsLA4 Percentage employees covered by collective bargaining agreements 16LA5 Minimum notice period on significant changes, including specified in

collective agreements–

Occupational health and safetyLA6 Percentage workforce represented in formal joint health and safety

committeesLA7 Rates of injury, occupational diseases, lost days, absenteeism, work-

related fatalities51

LA8 Education, training, counselling, prevention and risk-control programmes to assist workforce members, their families or community members with serious diseases

50

LA9 Health and safety topics covered in formal agreements with trade unionsTraining and education

LA10 Average hours of training per year per employee by employee category

22

LA11 Programmes for skills management and lifelong learning that support continued employability

22 – 28

LA12 Percentage of employees receiving regular performance and career development reviews

21

diversity and equal opportunityLA13 Composition of governance bodies and breakdown of employees per

category: gender, age group, minority group membership and other indicators of diversity

22

LA14 Ratio of basic salary of men to women by employee category –




SOCIAL PERFORMANCE: HuMAN RIGHTSInvestment and procurement practices

HR1 Percentage and number of significant investment agreements with human rights clauses or screening

HR2 Percentage significant suppliers and contractors screened on human rights and actions taken

HR3 Total hours and percentage employee training on aspects of human rights relevant to operationsNon-discrimination

HR4 Total number of incidents of discrimination and actions takenFreedom of association and collective bargaining

HR5 Operations where right to freedom of association and collective bargaining is at significant risk, actions taken to support rights

Zero

HR6 Operations with significant risk for incidents of child labour, measures to eliminate

Zero

HR7 Operations with significant risk of forced or compulsory labour, measures to eliminate

Zero

Security practicesHR8 Percentage security personnel trained in policies/procedures on

human rights relevant to operationsIndigenous rights

HR9 Number of violations involving rights of indigenous people and actions taken

SOCIAL PERFORMANCE: SOCIETyCommunity

SO1 Programmes/practices to manage impacts on communities, including entering, operating, and exiting

5, 13, 35 – 43

CorruptionSO2 Percentage and number of business units analysed for risks related to

corruption51 (Annual report)

SO3 Percentage of employees trained in anti-corruption policies and procedures

SO4 Actions taken in response to incidents of corruptionPublic policy

SO5 Public policy positions and participation in public policy development and lobbying

12

SO6 Total value of financial and in-kind contributions to political parties, politicians and related institutions

Zero

Anti-competitive behaviourSO7 Legal actions for anti-competitive behaviour, anti-trust and monopoly

practices, outcomes53 (Annual report)

ComplianceSO8 Significant fines, sanctions for non-compliance with laws and

regulations53 (Annual report)

Index to Global Reporting Initiative indicators continuedThis index is based on the 2007 GRI guidelines (G3)



GRI

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inde

x


SOCIAL PERFORMANCE: PROduCT RESPONSIBILITyCustomer health and safety

PR1 Lifecycle stages in which impacts of products and services are assessed for improvement, percentage of significant products and services categories subject to such procedures

PR2 Number non-compliances with regulations and voluntary codes on health and safety impacts of products and services during lifecycle, by types of outcomesProducts and service labelling

PR3 Type of information required, percentage of significant products concerned

PR4 Incidents of non-compliance with regulations and voluntary codes on labelling

PR5 Practices related to customer satisfactionMarketing communications

PR6 Programmes for adherence to laws, standards and voluntary codes 53 (Annual report)PR7 Incidents of non-compliance Zero

Customer privacyPR8 Substantiated complaints on breaches of customer privacy and losses

of customer datan/a

CompliancePR9 Significant fines for non-compliance concerning provision and use of

products and services.



Administration

PRETORIA PORTLANd CEMENT COMPANy LIMITEd(Incorporated in the Republic of South Africa)Company registration number: 1892/000667/06

JSE code: PPCZSE code: PPC

ISIN code: ZAE000125886

AuditorsDeloitte & ToucheDeloitte PlaceThe WoodlandsWoodlands DriveWoodmead, SandtonPrivate Bag X6Gallo Manor, 2052, South AfricaTelephone +27 11 806 5000Telefax +27 11 806 5111

Transfer secretaries: South AfricaLink Market Services (Pty) Limited11 Diagonal StreetJohannesburg, South AfricaPO Box 4844Johannesburg, 2000, South AfricaTelephone +27 11 630 0815Telefax +27 866 743260Email [email protected]

Secretary and registered officeJHDLR Snyman180 Katherine Street, SandtonPO Box 787416Sandton, 2146, South AfricaTelephone +27 11 386 9000Telefax +27 11 386 9001

Transfer secretaries: ZimbabweCorpserve (Private) Limited2nd Floor, ZB CentreCorner First Street and Kwame Nkrumah AvenueHarare, ZimbabwePO Box 2208Harare, ZimbabweTelephone +263 4 758 193/751 559Telefax +263 4 752 629

Sponsor: South AfricaMerrill Lynch138 West StreetSandown, SandtonPO Box 651987Benmore, 2010, South AfricaTelephone +27 11 305 5555Telefax +27 11 305 5600

Sponsor: ZimbabweImara Edwards Securities (Private) LimitedBlock 2, Tendeseka Office ParkSamora Machel Avenue Harare, ZimbabwePO Box 1475Harare, ZimbabweTelephone +263 4 790 090Telefax +263 4 791 345


Name

Position

Company/organisation

Address

Date

Email

Telephone number

Please rate the following aspects of the PPC sustainability report on a scale of 1 – 5

1 = poor2 = fair3 = satisfactory4 = good5 = excellent

1. General

Format

Content

Level of detail

Information relating to material sustainability issues

PPC’s performance against targets

Level of stakeholder engagement

2. Governance

Level of disclosure

3. Social performance

Progress in terms of national objectives:

• skills development

• employment equity

• socio-economic development

4. Economic performance

Value added to stakeholders

5. Environmental performance

How well are PPC managing the following environmental issues:

• Carbon dioxide (CO2) emissions

• Energy management

• Dust

• Biodiversity

• Waste management

6. General comments

Any suggestions/recommendations on improving the PPC sustainability report

Please return to Urishanie Govender, PPC group manager, sustainability and environment, tel +27(11) 386 9122, fax +27(11) 386 9117. Email [email protected].

Feedback form

BASTION GRAPHICS

Elephant photographs courtesy of Jack Hochfeld

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www.ppc.co.za

sustainability report for the year ended 30 september 2009 tusker) – the tenacity and loyalty that...

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