As noted in the Chairman’s
statement, higher production
contributed significantly to
Black Wattles’ profitability in
2012. In addition, the continued
improved performance of
Transnet, the State rail provider,
ensured strong demand for
our coal. This demand along
with the weakening of the
South African Rand against
the US Dollar helped offset
the impact of weaker
international coal prices
Run of mine production from Black Wattle
continued strongly in 2012 with total
production for the year of 1.87million metric
tonnes (2011: 1.45million metric tonnes).
The majority of this production came in the
second half of the year with overall monthly
production increasing from 149,000 metric
tonnes in the first half of 2012 to 165,000
metric tonnes in the second half.
At the end of last year we began to expand
further into our existing opencast reserves by
opening up additional opencast pits. The
ability to source production from various
opencast pits has allowed Black Wattle to
maintain profitable levels of production.
Looking forward into 2013, Black Wattle will
be mining into deeper reserves by opencast
mining. We will do everything that we can to
keep costs under control in these deeper
reserves and to ensure that 2013 is another
very good year.
Although domestic prices improved steadily in
2012, international coal prices continued to
weaken. At the beginning of 2012, the average
weekly price of Free on Board (FOB) Coal from
Richards Bay Coal Terminal (API4) was over
$100. By the end of the first half of the year the
price had weakened to under $90 where it
remained in a range of US$85 to US$90 for the
rest of the year. However a depreciation in the
South African Rand against the US Dollar
helped offset this decline.
The performance of Transnet continues to have
a positive effect on demand for our coal. In
2012, Transnet railed 68.5million tonnes to
Richards Bay Coal Terminal compared to
65.7million tonnes in 2011 and 62.8million
tonnes in 2010. In addition, strong demand
in the domestic market, in particular from
local power utilities, ensured stockpiles
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. 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
• 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
- Ongoing training on conveyor belt
operation is being conducted with all
employees involved with this discipline.
- 21 employees were trained in ABET
(Accreditation Board for Engineering
and Technology) level one and another
19 will be trained in 2013 on level one,
two and three.
HSE performance in 2012:
- No new cases of Occupational Diseases
- 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 2012
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 Colliery has substantially
improved its water management by erecting
a new pollution control dam as well as
upgrading existing dams in consultation with
the Department of Water Affairs and Forestry.
We are very pleased to report that Black
Wattle received their approved water licence
from the Department of Water Affairs and
Forestry. An external audit was also
conducted and completed on the approved
A performance assessment audit was
conducted to verify compliance to our
Environmental Management Programme,
no significant deviations were found.
Black Wattle Colliery Social and Labour
Plan (SLP) progress
Black Wattle Colliery is committed to true
transformation and empowerment within the
company as well as poverty eradication
within the surrounding and labour providing
Black Wattle is committed to providing
opportunities for the sustainable socioeconomic
development of the company’s
- Employees and their families,
through Skills Development, Education
Development, Human Resource
Development, Empowerment and
- Surrounding and labour sending
communities, through Local Economic
Development, Rural and Community
Development, Housing and Living
Condition, Enterprise Development
and Procurement Programmes.
- Empowerment partners, through
Broad-Based Black Economic
Empowerment (BBBEE) and Joint
Ventures with Historically Disadvantaged
South African (HDSA) new mining entrants
- The Company, through ongoing
consultation with stakeholders to develop
strong company-employee relationships,
strong company-community relationships
and strong company-HDSA enterprise
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 socio-economic
assessment was undertaken on baseline
data of the Steve Tshwete Local
Municipality (STLM) and Nkangala District
- 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.
In compliance with the Mining Charter and the
Mineral and Petroleum Resource Development
Act, Black Wattle has implemented a BBBEEfocussed
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
Black Wattle Colliery is proud to announce
that we are now a level 5 BBBEE contributor.
Black Wattle is committed to achieving the
goals of the 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.
- 97 percent of the women at Black Wattle
Colliery are HDSA females.
Since permissions were granted in 2010
to mine opencast the reserves at Black
Wattle, management have worked tirelessly
to increase production from our opencast
reserves in order to reach acceptable levels
of profitability. Going forward into 2013, we
wish to build on the success of the past year
not only at Black Wattle but also, in
partnership with our BEE partners, in growing
our reserve base in South Africa.
As a result, I am confident that 2013 should
be another successful year for our South
18 April 2013