Mining review The strong earnings and momentum achieved in the first half of the year at Black Wattle, our South African coal mining operation, were hampered in the second half of the year when mining was affected at one of our main production pits, where we mined into old underground workings which were never recorded on any historical mine plan. Looking forward to 2014, we expect to see the mine to return to acceptable levels of profitability by the second half of the year. With new reserves to develop and strong demand for our coal we remain highly confident on the prospects of our coal mining activities in South Africa. Production and operations Run of mine production from Black Wattle remained strong in 2013 with total production for the year of 1.77million metric tonnes (2012: 1.87million metric tonnes). Despite the setbacks in the last quarter the mine continued to source coal from various opencast pits ensuring a steady state of production throughout the year. As announced in the Chairman’s Statement, we are very pleased to report that Black Wattle has concluded an agreement with Blue Nightingale, a South African black owned and managed mining company, to purchase Run of Mine coal from an opencast reserve close to Black Wattle’s existing opencast mine. This is the second agreement concluded between us and we are very pleased to be continuing our successful relationship. The new reserve consists of approximately 2.3million tonnes of coal which can be sold either directly to local power utilities or transported to Black Wattle where it will be washed and sold into our existing domestic and export markets. At the end of last year we began relocating machinery to two of our profitable production pits. Looking forward into 2014, Black Wattle will plan to increase production from these two areas as well as begin the development of the new reserve at Blue Nightingale. Main trends/markets International coal prices continued to weaken. At the beginning of 2013, the average weekly price of Free on Board (FOB) Coal from Richards Bay Coal Terminal (API4) was $89. By the end of the first half of the year the price had weakened to under $75 where it remained range bound for most of the rest of the year, a far cry from the prices achieved above $120 two years previously in 2011. A depreciation in the South African Rand against the US Dollar has helped offset this decline but since the beginning of 2013 to date we have seen only a marginal increase in the Rand export coal price. Health, Safety & Environment (HSE) Black Wattle is committed to creating a safe and healthy working environment for its employees and the health and safety of our employees is of the utmost importance. HSE performance in 2013: No new cases of Occupational Diseases were recorded. Zero claims for the Compensation for Occupational Diseases were submitted. No machines operating at Black Wattle exceeded the regulatory noise level. Black Wattle Colliery recorded one Lost time Injury during 2013. In addition to the required personnel appointments and assignment of direct health and safety responsibilities on the mine, a system of Hazard Identification and Risk Assessments has been designed, implemented and maintained at Black Wattle. Health and Safety training is conducted on an ongoing basis. We are pleased to report all employees to date have received training in hazard identification and risk assessment in their work areas. A medical surveillance system is also in place which provides management with information used in determining measures to eliminate, control and minimise employee health risks and hazards and all Occupational Health hazards are monitored on an ongoing basis. Various systems to enhance the current HSE strategy have been introduced as follows: In order to improve hazard identification before the commencing of tasks, mini risk assessment booklets have been distributed to all mine employees and long term contractors on the mine. A Job Safety Analysis form has been introduced to ensure effective identification of hazards in the workplace. In order to improve the current reporting practice of incidents on the mine, initial reporting of incidents booklets were handed out to all employees and contractors. In order to capture and record investigation findings from incidents, an incident recording sheet was introduced to line management and contractors. Black Wattle Colliery utilises ICAM (Incident cause analysis method). Hazard Identification and Risk Assessment training was given to all levels of employees, line management, Heads of Departments, contractor representatives and contractor employees. Ongoing training on conveyor belt operation is being conducted with all employees involved with this discipline. Environment Management Programme Under the terms of the mine’s Environmental Management Programme approved by the Department of Mineral Resource (“DMR”), Black Wattle undertakes a host of environmental protection activities to ensure that the approved Environmental Management Plan is fully implemented. In addition to these routine activities, Black Wattle regularly carries out environmental monitoring activities on and around the mine, including evaluation of ground water quality, air quality, noise and lighting levels, ground vibrations, air blast monitoring, and assessment of visual impacts. Black Wattle is fully compliant with the regulatory requirements of the Department of Water Affairs and Forestry and has an approved and externally audited water use licence. Black Wattle Colliery has substantially improved its water management by erecting and upgrading all its pollution control dams in consultation with the Department of Water Affairs and Forestry. A performance assessment audit was conducted to verify compliance to our Environmental Management Programme and no significant deviations were found. Black Wattle Colliery Social and Labour Plan (SLP) progress Black Wattle Colliery is committed to true transformation and empowerment as well as poverty eradication within the surrounding and labour providing communities. Black Wattle is committed to providing opportunities for the sustainable socioeconomic development of its stakeholders, such as: Employees and their families, through Skills Development, Education Development, Human Resource Development, Empowerment and Progression Programmes. Surrounding and labour sending communities, through Local Economic Development, Rural and Community Development, Housing and Living Condition, Enterprise Development and Procurement Programmes; and Empowerment partners, through Broad-Based Black Economic Empowerment (BBBEE) and Joint Ventures with Historically Disadvantaged South African (HDSA) new mining entrants and enterprises. The Company engages in ongoing consultation with its stakeholders to develop strong company-employee relationships, strong companycommunity relationships and strong company-HDSA enterprise relationships. The key focus areas in terms of the detailed SLP programmes were updated as follows: New implementation action plans, projects, targets and budgets were established through regular workshops with all stakeholders. A comprehensive desktop socioeconomic assessment was undertaken on baseline data of the Steve Tshwete Local Municipality (STLM) and Nkangala District Municipality (NDM). The current Black Wattle Colliery Local Economic Development (LED) programmes were upgraded, and new LED projects were selected in consultation with the key stakeholders from the STLM. An appropriate forum was established on the mine and a process initiated for the consultation, empowerment and participation of the employee representatives in the Black Wattle Colliery SLP process. Black Wattle Colliery has concluded extensive work on various Agricultural projects as well as the E-Bag Recycling projects. The E-Bag Recycling project aims to minimize the environmental impact of post-consumer Polyethylene Terephthalate plastic (PET) on the South African landscape. The project was awarded the PET Entrepreneur award for 2013 and the project was awarded a new bailing machine as part of the award. An additional piece of ground has been identified to extend the project to a different area within the Mhluzi Township nearby to Black Wattle. Various upgrades were initiated at the Evergreen School nearby to Black Wattle including upgrades to the roof, classrooms and outer areas. Procurement In compliance with the Mining Charter and the Mineral and Petroleum Resource Development Act, Black Wattle has implemented a BBBEE-focussed procurement policy which strongly encourages our suppliers to establish and maintain BBBEE credentials. At present, BBBEE companies provide approximately 80 percent of Black Wattle’s equipment and services. We closely monitor our monthly expenditure and welcome potential BBBEE suppliers to compete for equipment and service contracts at Black Wattle. Black Wattle also sells much of its coal products to empowered companies. Black Wattle Colliery is proud to announce that we are a level 5 BBBEE contributor. Employment in South Africa As part of Black Wattle’s commitment to the South African government Mining Charter, the Company seeks to: Expand opportunities for historically disadvantaged South Africans (HDSAs), including women, to enter the mining and minerals industry and benefit from the extraction and processing of the country’s resources; Utilise the existing skills base for the empowerment of HDSAs; and Expand the skills base of HDSAs in order to serve the community. In addition Black Wattle is committed to achieving the goals of the South African Employment Equity Act and is pleased to report the following: • Black Wattle Colliery has exceeded the 10 percent women in management and core mining target. Black Wattle Colliery has achieved 18.5 percent women in core mining. 94 percent of the women at Black Wattle Colliery are HDSA females. In terms of staff training some highlights for 2013 were: 18 employees were trained in ABET (Accreditation Board for Engineering and Technology) level one; An additional 4 disabled women have started training on ABET level one and two; and Plans have been put in place for 2014 for a further 11 employees to be trained on ABET level one, two or three and 1 employee will be trained on ABET level four. Prospects Management continue to remain confident in the ability to achieve significant value from our existing South African mining operations and in acquiring and developing new coal reserves, in partnership with our BEE partners. As a result, I look forward to the coming year with confidence. Andrew Heller Managing Director 17 April 2014 © 2011 Bisichi Mining PLC Privacy & Legal Site map