Economic performance

With R711 million ($111 million) of total procurement spend at its South African operations in 2004 being attributable to companies with at least 25% historically disadvantaged South African (HDSA) ownership, AngloGold Ashanti has been able to raise its own HDSA procurement targets in line with its commitment to the spirit of the Broad-Based Socio-Economic Charter for the Mining Industry (the Mining Charter) and the accompanying Scorecard. Though the Mining Charter and Scorecard do not set specific targets, a key aspect is procurement from HDSA-affiliated companies. The intention is to encourage and promote growth and employment by businesses managed and owned by HDSAs. AngloGold Ashanti's Black Economic Empowerment (BEE) procurement policy is designed to comply with the principles set out in the Mining Charter.

The government's Scorecard has been designed to determine compliance with the Mining Charter and in terms of procurement asks:

• do you give HDSAs preferred supplier status?
• have you identified current levels of procurement?
• have you indicated your progressive commitment to procurement of capital goods, consumables and services from HDSA companies over the next three to five years and to what extent has this commitment been implemented?

AngloGold Ashanti can answer yes to all three questions: HDSA companies are regarded as preferred suppliers. Those companies complying with the HDSA criteria are included in the preferred vendor list and receive preferred status should they be commercially competitive. The group has identified current procurement levels for spend on capital goods, consumables and services and has set targets for procurement from HDSA companies until 2012 (see table below). Furthermore, existing suppliers are encouraged to establish partnerships with HDSA companies. AngloGold Ashanti also promotes the development of HDSA procurement capacity by facilitating access to the Department of Trade and Industry's assistance programmes.

In 2001, the then AngloGold introduced its black economic procurement strategy which serves as a guide for the purchase of goods and services from BEE companies. At that time, total BEE procurement was 7.5% of total procurement of R3.4 billion ($530 billion). Since then, this has increased steadily towards the target of 63.5% for 2012. (See case study: Growing small businesses in southern Africa.)

BEE procurement and targets (%): 2001 - 2012