anglogold | report to society 2003


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Annual Financial Statements 2003

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Annual financial statements

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Provincial giving by number of grants (2003) Total = 104

Provincial giving by value of grants (2003) Total = R15.5 million

Sectoral giving by number of grants Total = 104

Sectoral giving by value of grants Total = R15.5 million

Mother and daughter from a nearby village working on a doormat. There are approximately 376 women and their families who manufacture handcrafts on demand for Ngezandla Zethu.

Carpenters at work at the factory in Kosi Bay. Here they are busy manufacturing a cupboard.

Bheki Mthethwa, project manager, inspects one of the cupboards that are manufactured at Ngezandla Zethu.

Characteristic of the furniture that Ngezandla Zethu produces is the artistic manner in which wood and woven twine is used to manufacture anything from dining table sets, bedroom sets, to coffee tables and bed lamps.

Petra Kruger, manager of the HIV/AIDS programme at AngloGold’s South African operations.

Case studies
South Africa

7.1 Contributing to community development – the work of the AngloGold Fund

AngloGold employs some 39,562 people in South Africa which in itself has an enormous socio-economic impact on the communities and regions in which it operates and indeed on the country itself.

The company aids the initiatives of people who seek to contribute towards the broader welfare of their society, primarily under the auspices of the AngloGold Fund. Established following AngloGold?s formation in 1998, it undertakes the company?s social responsibility activities, and provides support for sustainable community initiated projects, that contribute to their longer-term well-being and development.

During 2003, the Fund contributed R15.5 million to 104 projects, both large and small, across southern Africa. Although the Fund supports projects that have a national impact, the focus is on those regions and communities in which the company operates or has a major impact. For example, some 60% of funding went to the Eastern Cape, an area from which the company traditionally draws much of its workforce.

The experience gained in administering grants on this scale has led to further activities by the AngloGold Fund. This involves more pro-active work identifying appropriate areas of intervention where the Fund takes the lead in bring tailor-made development programmes to life. Such opportunities arise out of the extensive hands-on learning that the Fund has developed. Programme development and management introduces exciting new ways for the Fund to add value to the development process. Programmes are focused on delivery while the Fund manages multi-stakeholders partnerships to secure defined development objectives.

The Fund backs and supports people and organisations who make a real difference to their communities, and who are helping themselves to improve their circumstances. The main areas of activity are broadly defined as:

•	Education. This is the largest area of support, reflecting the greatest area of need in the country and the region. Funds are allocated to the infrastructural needs of rural schools, effective school interventions and towards programmes making a positive impact on education in general. A large proportion of these go towards the rural schools programmes.
•	Health/AIDS. Funding is provided to hospices, homes for AIDS orphans and TB sufferers and effective HIV/AIDS awareness progammes.
•	Welfare. Welfare funding focuses on children and the elderly.
•	Rural and community development. This involves projects focused on rural development, women and children, particularly grassroots projects that assist rural and peri-urban communities in achieving economic independence.

Ginsberg primary

A new double-storey classroom block was officially handed over to the Ginsberg Primary School, an independent Seventh Day Adventist school situated in Ginsberg, King William?s Town, by the AngloGold Fund in April 2003. The township of Ginsberg is the birthplace and final resting place of Steve Biko.

Established in 1956, Ginsberg Primary School today has 150 learners in its pre-school and 310 learners in grades 1 to 7. The reputation of the school is such that each year many applicants have to be turned away.

Apart from music and needlework, the school offers art, technology and gardening as extra-mural activities. Pupils who take gardening are able to grow vegetables on the premises and these are sold to raise funds for the school. Cricket, soccer, netball and softball are the sports that are provided.

Ginsberg Primary School?s new block, which was built with a grant of R1.2 million from the AngloGold Fund, comprises four regular classrooms and four ?special? classrooms ? a science laboratory, a computer room, a music room and a needlework room ? designed to enhance and enrich the learners? education.

The Principal, Henry Kachoka, explains: ?Our philosophy is that we want our learners to be given a holistic training that attends to their physical, mental and spiritual development and that will enable them to lead useful lives in society.

•	Since the school introduced needlework in 2000, educators have had to manage with just two sewing machines in crowded classrooms. The new needlework facility is equipped with 21 sewing machines and two overlockers.
•	Music was started in 2001 with one violin and one piano in the principal?s office. Today the music room has pianos, violins and cellos and it is the ambition of the staff to establish a school orchestra.
•	Until the building of the new block, learners had no access to computers while science was taught without the necessary apparatus.

?The new building is a beacon of hope to those of us involved in teaching here. Our learners are being given the privilege of an education that they wouldn?t otherwise get in this part of the world,? Mr Kachoka said.

And it is not only the learners of the school who will benefit from the additional facilities. For a modest fee, members of the community will be able to access these in the afternoons when staff members will be on hand to assist.

Rural Schools Initiative

AngloGold has, for many years, been involved in the Rural Schools Initiative which has overseen the building of classrooms in some of the most remote and needy communities in southern Africa. Over the past five years some R10 million has been spent on this initiative alone, resulting in the construction of about 239 classrooms, at 71 schools, and touching the lives of more than 30,000 learners.

In 2003, the Fund initiated a partnership with the Department of Education in the Eastern Cape in the implementation of the programme. The purpose of the partnership is to ensure that the programme is in line with overall provincial priorities, and addresses those schools most in need in respect of over-crowding.

This partnership will see the construction of 27 classrooms in the Bizana region by May 2004. AngloGold has contributed R4 million to this project and the Eastern Cape Department of Education has committed another R4 million. In addition to the funding, the project has appointed a Social Facilitator, who plays an important role in addressing community concerns relating to the construction process and who ensures that the needs of the community are addressed.

In terms of the agreement reached with the Department, the following has been agreed as an integral part of the partnership:

•	The Fund will implement the programme in areas where the company draws most of its labour;
•	The cost of the programme each year will be a 50/50 basis between the Fund and the department;
•	One department has undertaken to ensure that all classrooms built have sufficient teachers;
•	All classrooms built by the Fund will be furnished adequately; and
•	The programme will be jointly managed by the Fund and department and a special task team comprising representatives from both parties has been established.

The benefits of this partnership for the Fund is the guarantee of the speedy delivery of quality classrooms in areas most in need. The partnership is also not based on financial contribution, but also on the sharing of expertise and experience. This has opened new opportunities for the Fund to demonstrate its value add and to both understand the priorities and challenges of the Department of Education. In 2003 the value of the programme amounted to R8 million with R4 million coming from the Department of Education.

Goldfields Hospice

Based in the town of Welkom, where AngloGold had operations for many years , the hospice was established in 1987 to provide a range of services, including community-based home-care to terminally ill patients. Increasingly, over the past few years, the focus has been on people with AIDS. AngloGold has provided a three-year grant (R150,000 per annum from 2002 to 2004) towards the operating costs of the hospice.

Khululeka Community Education Centre

Based in Queenstown in the Eastern Cape, the Khululeka Community Education Development Centre was established in 1989 and is one of the best early childhood development training organisations in the region. Khululeka has established very effective partnerships with local government structures in the provision of training and support for educare workers in the rural Eastern Cape.

It is managed by a team of highly experienced and committed individuals who have over the years developed both innovative and practical programmes to address a lack of skills at pre-school levels and has trained more than 3,000 teachers since its inception. The training involved is focused not only on teachers' training, but also on empowering them with basic management skills, improving their literacy skills and teaching them how to make educational aids from waste material. In fact, materials developed by Khululeka for its community-based programmes are used by other NGOs in the province who do not have their own human resource and infrastructural capacity to develop their own materials.

AngloGold has had a long association with this initiative and, in 2003, contributed R250,000 towards the training programme.

Winterberg Schools Trust

The Winterberg Schools Trust was established in 1991 to address the educational and social needs of the community of Winterberg, a farming district, close to the town of Tarkastad in the Eastern Cape. This area covers about 1,000 km², with 32 farms and a population of about 1,000 people.

The Fund?s involvement stretches back to 1998 and, more recently, a three year grant of R100,000 was approved.

The original Trust Committee consisted of three farmers and six farm employees who were elected by the community. They were tasked with finding a solution to the provision of schooling for their children beyond primary school. Children were previously compelled to attend distant urban schools after completing Grade 7, at great cost to their parents.

Today, the programmes run by the Trust include a school for pupils from Grades 1 to 10, an adult education programme incorporating skills development, parenting skills and HIV/AIDS education, a teacher development and whole school development programme as well as an Early Child Development programme. This excellent project represents a sound model of what can be achieved in a rural area with determined champions.

The Siyazisiza Trust

The Siyazisiza Trust was established 14 years ago to contribute to poverty relief through training, sustainable job creation and capacity building in rural communities in Northern KwaZulu Natal. AngloGold has committed R400,000 per annum for three years (2003 to 2005) towards the Maputaland Rural Development Scheme run by the trust. The trust maintains excellent relationships in its areas of operation, and armed with a deep understanding of the communities in which it operates, is able to facilitate the development of sound small businesses. One of the key elements to success are the qualified and experienced local fieldworkers who live in the communities in which they work.

Training for the community includes financial literacy around record keeping, maintaining a bank account, business training, ordering of supplies and bulk buying and committee work. Income generating activities include block-making, vegetable and organic fruit production, bee-keeping, candlemaking, metalwork, carpentry, poultry and crop production, sewing and knitting and taxi and carwash operations.

The Trust has established more than 500 community businesses and has touched the lives of more than 11,000 households. One of the most important features of the Trust is that it taps into the potential of women, who have been severely disadvantaged in these rural communities.

7.2 Small and Medium Enterprise Development Initiative

Masakhisane ? ?Come Let?s Build Each Other Together? ? is the name of the fund which was established to assist entrepreneurship in the mainly Historically Disadvantaged South African (HDSA) sector.

Aware of the obstacles that HDSAs may encounter when approaching large banking institutions for finance, AngloGold set up its Small and Medium Enterprise Development Initiative (SMEDI) through the Masakhisane Fund to assist with the establishment of business opportunities. The Fund?s objectives are to stimulate economic growth, mainly in the areas in which the company operates, and to empower disadvantaged people, not only to participate in their communities, but to also give back.

With a R10 million fund, SMEDI identifies people with ability and embarks on a process of education, skills training and funding with a view to the business becoming self-sustainable. This is achieved through once-off funding and although investment is not typical, exceptions are made if the business has the potential to grow. SMEDI gives on going assistance throughout the establishment process until the project is ready to compete in a normal business environment.

Since the formation of AngloGold in 1998, SMEDI has been involved in the setting up of 146 small businesses with an accumulated turnover of more than half a billion rand, creating jobs for some 3,000 people.

SMEDI staff is based at Merafong in the West Wits and Vaal River areas, where a comprehensive database of companies and businesses, services and products is kept. Siphiwe Mahlangu, Senior Commercial Officer at SMEDI, assists potential entrepreneurs in drawing up business plans, and presents the proposals to the Masakhisane Board for funding assistance. Once approved, an implementation plan is drawn up and on-going assistance given for a period of about three to four years by which time it is expected that loans will be paid off and projects will be self-sustaining enough for SMEDI to withdraw, although it may continue to provide business assistance.

In 2003 a SMEDI growth programme saw the emergence of a number of black empowerment flagship projects. Siphiwe has seen a number of enterprises germinate and grow. One example is Amazing Laundry Service, a laundry service in the West Wits area, which has taken over the needs of the paraplegic unit when it was relocated from the Ernest Oppenheimer Hospital in 2003. The HR Department approached Siphiwe to identify a possible entrepreneur to take over the service. He found an interested woman entrepreneur, after which Masakhisane provided a loan, while at the same time retaining a 20% equity stake in the company. The laundry service currently employees three women, but is likely to grow as the number of contracts increase. It has already acquired a contract from the municipality, as well as one with an AngloGold hostel, and it hopes that hospitals in the areas will engage their services.

Another successful project is a bakery enterprise, called Moltsane-Im, which started last year in the Merafong Municipality (encompassing Carletonville and Fochville). Another woman entrepreneur approached Siphiwe regarding the use of a redundant AngloGold building to start up the bakery venture. Siphiwe assisted in drawing up the required business plan after which permission was granted. The bakery started with about 12 employees but is also likely to expand after acquiring contracts with two other mining companies in the area, Harmony and Gold Fields. It is also hoping to do business with AngloGold once fixed-term contracts with other companies expire.

Although no finance was required, SMEDI assisted Duswan Services through its negotiations with AngloGold regarding business premises and contracts. The enterprise, which repairs and refurbishes damaged mine equipment, currently employees about 30 people at West Wits but is likely to grow with on-going business assistance from SMEDI.

One of the bigger projects has been the Stone and Allied Industries, a joint venture signed in 2002 between the management of Stone and Allied (a former AngloGold subsidiary) and a group of black entrepreneurs. Some 90% is owned by this consortium and the remaining 10% by the Masakhisane Fund. Stone and Allied Industries, which crushes stone from the many waste rock dumps, owns three stone-crushing plants and four ready-mixed concrete batch plants in the Free State, Gauteng and North West Provinces. The company is now also providing mobile stone-crushing units to meet industry demands.

An exception was made when a furniture-making project was given SMEDI assistance in the rural KwaZulu Natal village of Kwa-Ngwanase. Although not a mining operational area, a decision was made to offer assistance in view of the fact that a large number of AngloGold?s migrant labour force originates from the area. The project, called ?Ngezandla Zethu? (Zulu for ?With Our Hands?), provides jobs to a number of previously unemployed people. Using hard wood from the old, fallen tree trunks in the surrounding indigenous forest, the factory makes items ranging from dining room tables to wooden bedsteads. A by-product of the project is the production of twine from the coastal reed beds, sold to the factory to be incorporated into tabletops, lampshades and chair seats. ?Ngezandla Zethu? has the backing of the Department of Nature Conservation, and the Council for Scientific and Industrial Research (CSIR) is assisting with technical training and strategic planning. More recently SMEDI has come on board through loaned finance for woodworking equipment and truck transport, both of which are vital to the project?s expansion.

All of the projects are linked to AngloGold?s Black Economic Empowerment (BEE) Procurement Strategy, established in 2001 to serve as a guide to AngloGold?s Commercial Services Department in obtaining goods and services from BEE companies. In this regard, AngloGold fulfils three key criteria of the Mining Charter?s Procurement Scoreboard ? it gives HDSAs preferred supplier status; it has identified the current level of procurement from HDSAs in terms of capital goods, consumables and services; and it is committed to a progression of HDSA companies over a three to five year time frame in terms of the aforementioned requirements. Regarding the last, AngloGold has exceeded its 2003 target value of almost R330 million and expects to more than double this amount over the next eight years.

The establishment of SMEDI will, to a large extent, continue to facilitate with the outsourcing of products and services from the small and medium business sector. However, value addition within AngloGold will only become significant when larger businesses and projects are linked into the company.

So while SMEDI?s Commercial Services Manager Johan Coetzer is justifiably proud of these projects, which reflect a range of enterprise size and products/services, he says, ?If we want to see a significant impact in what we do, we can?t neglect smaller ones but we must look at substantially-sized business opportunities to grow the economy.?

The challenge ahead is to encourage larger business opportunities in order to generate much-needed jobs, as well as to reach AngloGold?s 30% BEE Procurement target by the year 2012.

This will almost certainly be one of the issues talked about, when representatives from the Board of the Masakhisane Fund and SMEDI meet at a strategic session, to discuss the focus and direction of the company. The forum will include a review of past and present successes ? and shortcomings ? as well as strategies to inform future development, so that the company lives up to its mandate.

One of the carpenters carves a lamp at Ngezandla Zethu's factory in Kosi Bay.

7.3 Carletonville Home and Community Based Care

?You?ve got to keep trying to make the world a better place to live in,? responds Petra Kruger, when asked about her passionate involvement in the Carletonville Home and Community Based Care project. Not that she would ever take sole credit for the work being done in the community programme which reaches out to HIV/AIDS infected and affected members of Carletonville and its surrounds.

She is quick to point out that community-based care started humbly at grass roots level in 1998, when a dynamic and charismatic retired nurse realised the need for palliative care of terminally ill people in the nearby township of Khutsong. It has since grown to a fully-fledged organisation. As the numbers who required care grew, so did the need for a more structured form of community care and the Carletonville Home and Community Based Care (CHCBC) programme was born in 1999, acquiring its own Board of Governors in 2002.

The programme is now run with a team of community volunteers and Buti Kulwane, CHCBC?s Programme Manager, at the helm. Buti started out on a voluntary basis in 1999, while still a social worker at AngloGold Health Service. But it soon became evident that the CHCBC required a dedicated fulltime project manager if the programme was to make any real impact. By this stage AngloGold was involved with the project and Buti?s secondment to the project was approved. He works closely with Angelene Smith, an accountant at AngloGold Health Service, and the project?s Financial Manager; and with Petra Kruger, Manager of the HIV/AIDS programme at AngloGold, who was invited to the Board of Governors when it was established, at which time she was also elected as their first Chairperson, a position she still holds.

As manager of HIV/AIDS at AngloGold, it?s not as if she doesn?t have enough on her plate, with 30% of the 40,000 strong workforce affected by the disease. But nothing seems to be too much for this bubbly and energetic single mother, who devotes up to 20% of her week on such the projects, albeit in mostly administrative and managerial support of the programme. Not that she isn?t hands on. She is driven by a passion to get involved with children, cognisant of the fact that they carry the burden of the HIV epidemic and are a crucial target if inroads are to be made in retaining long-term social integrity and in making any real impact in stopping the spread of the disease. Adults, she says, are often too set in their ways, and not so open to advice and education. Indeed as a doctor in curative medicine and occupational health, regularly treating diseases ?at the end of a long string of poor lifestyle habits? she sometimes laments the fact that she didn?t go into education!

There are four components to the CHCBC programme, which cares for about 230 adults and 500 children in the community. The programme attracts mainly women volunteers, of all ages, from the unemployed community, although Petra is quick to point out that, as care workers, they do receive a R800 stipend a month. One component is palliative care for bed-ridden and terminally ill patients where care workers offer training, and support to attendant relatives as well as monitor patients and ensure continuity of care.

The second component is support groups for those who are still mobile and who can attend the CHCBC Centre. Manned by a coordinator and team leader, the groups are an important forum to ensure that HIV/AIDS sufferers start putting their affairs in order and draw up wills, so that their children will have immediate ownership of the family home and access to welfare grants, to which they will be automatically entitled as orphans e.g. free water and lights, schooling and foster grants, all of which require legitimate paperwork. These groups, besides discussing the illness with sufferers, providing meals, and assisting with documentation, also assist them in advising families of their HIV status. Much still has to be done in the area of destigmatising the disease and although there is interaction with families, neighbours and the community in the groups? day-to-day dealings with sufferers, Petra is convinced that it needs a massive marketing and media campaign, a project idea that she is already investigating.

Linked to the support groups is the income generating activities component, which offers some income to those who have lost jobs through their illness, but because they are not at the terminally ill stage, are not eligible for welfare grants. They comprise mainly breadwinners who are offered courses like beadwork, sewing, pottery, food gardens (the local Agriculture Department recently donated land) and bread and candle making, with a view to selling produce and products on the local market, as well as giving the participants a sense of purpose. However, the ever-pragmatic Petra admits that sustainability, the ideal outcome of such activities, is not overly successful and accepts that there will always be a greater element of charity.

The last component, a critical one, and which forms the majority of the care workers? responsibility, along with that of palliative care, is the orphan care project. It was first developed by Heartbeat, a Community Development organisation, which linked into Carletonville?s Home-Based Care programme to test its orphan-care model. The three-year pilot programme started in 2000, with the view that it would become self-sustaining after that period, and that Heartbeat would gradually withdraw. The model recommends that children who are not fostered remain in their home environment after the death of one or both parents, in favour of being institutionalised. Voluntary Care Workers supervise these child-headed households ? an average of 188 children per month ? ranging in age from four to 22 and with up to six family members. This number increases to 500 children if one includes granny-headed households, since the State considers it the obligation of family members to look after orphaned children in their midst and, therefore, do not allow them access to foster grants, leading to extreme poverty in those households where everyone is surviving on just a State pension. It has, however, been recognised that this legislation needs to be reviewed in the face of the HIV epidemic. Daily visits are made to each household to check, for example, that the the children have food and clothing, to ensure that they attend school and that homework is done, and that they are given surrogate love and attention, the last of which Petra admits is the most difficult to replicate on an ongoing basis.

Fundamental to the Orphan Care model is the recreation of community cohesion. The Sakhi-Sizwe Community Child Care Forum represented by schools, women?s groups, youth groups, social welfare, churches, police, and the CHCBC all meet once a month to rally around the care of children, first detecting children in distress and then mobilising resources to look after them ? for example, ensuring child protection where abuse is suspected, providing free schooling, or giving care.

All of which is a feather in the cap of the programme?s leaders, who are passionate about the success of the programme, not only in Carletonville but also further afield.

Business principle:

AngloGold in the community

	Structure and governance
	Impact on people, cultures and communities
	Involvement of communities
	Social investment initiatives
	Participatory and leadership roles
	Working with communities on land and resettlement
	Contribute to sustainable economic development of host communities

Reporting in line
with GRI

Objectives for 2004

Case studies

	South Africa
	7.1 Contributing to community development – the work of the AngloGold Fund
	7.2 Small and Medium Enterprise Development Initiative
	7.3 Carletonville Home and Community Based Care
	East and West Africa
	South America
	Australia
	North America
	Exploration

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