Our five capitals

FINANCIAL CAPITAL

Sustained operational recovery at Zondereinde.
Sales revenues 20% higher year on year at R4.4 billion
(F2012: R3.7 billion).
Increases in operating and cash unit costs contained.
Operating margin improves to 13.7% (F2012: 9.2%).
62.6% increase in earnings per share to 132.0 cents per share (F2012: 81.2 cents per share).
Successful commissioning of the Booysendal concentrator plant.
Booysendal South sale agreement lapses.

HUMAN CAPITAL

Northam is nothing without its people. The company is dependent on a healthy, skilled, trained and committed workforce, capable of completing tasks safely and productively. Efforts to develop and empower employees are on-going, and form part of a drive to continuously improve the quality of life of those who sustain the company’s business. More on human capital

SOCIAL CAPITAL

Northam understands that it does not operate in isolation from the communities and environments in which its mines are located. As a result, the company plays a responsible and co-operative role in these areas, providing meaningful and relevant contributions to their social and economic upliftment, wherever possible. More on social capital

NATURAL CAPITAL

Northam acknowledges that, as a PGM development, mining and processing company, its activities inevitably have an impact on the environment in which its operations are found. Conserving and optimising the use of resources including land, water, energy and fuel, are among Northam’s highest priorities and most significant challenges. More on natural capital

MANUFACTURED CAPITAL

PGMs are used in a wide range of applications which contribute to human health and wellbeing. They also provide various environmental health benefits. Northam’s strategic intent in terms of refining, distributing and selling its product is to maintain its positioning in the global marketplace as a reliable independent and competitive supplier of high-quality refined PGMs. More on manufactured capital

CHIEF EXECUTIVE OFFICER’S REVIEW

As a responsible corporate citizen, we are deeply conscious at Northam of compliance with legislation, regulations, reporting standards and norms, and we keep abreast of changes in the thinking around reporting. I alluded last year to the growing number of “sustainable” and “responsible” indices and guidelines we need to consider in our reporting and my concern about reporting for reporting’s sake.

GT Lewis Read review

A map of stakeholders and material issues

Northam ensures that the principles of openness, integrity and accountability are adopted at every level of engagement with identified stakeholders. The company defines its stakeholders as those individuals, groups and entities directly affected, both positively and negatively, by its activities. Northam believes that its ability to conduct its dayto- day business is influenced by its capacity to develop and maintain longstanding relationships with its stakeholders.

See the map

OUR APPROACH TO REPORTING

This sustainable development report addresses Northam’s governance, economic, social and environmental performance for the 2013 financial year. This information is structured according to the five capitals approach which covers the financial, human, social, natural and manufactured components of the business. Northam believes that this approach more accurately reflects the company’s primary divisions and their points of confluence.
Reporting scope

REPORTING SCOPE

OUR APPROACH TO REPORTING

The information contained in this report pertains to the period 1 July 2012 to 30 June 2013 and is referred to as F2013 in this report. The company’s previous sustainable development report was published in October 2012.

The report forms part of a suite of reports prepared at the company’s year end, and should be read in conjunction with them. The other reports include:

At the half-year stage, the company issues an interim report to shareholders. This is available in print format to shareholders who elect to receive it, and is also available on the website.

All of these reports are available on the company’s website at www.northam.co.za. They are also available in printed format on request.

Northam makes use of established and extensive systems to collate and record the information presented in this report, which is collected on a monthly basis and reviewed by management. Data for previous years is provided in certain instances for comparative purposes.

This report covers Northam’s Zondereinde mine and metallurgical complex. Information on the company’s new Booysendal mine is provided where this is available and meaningful. Since the Booysendal mine is deemed to have come into production from 1 July 2013, Northam has committed to reporting fully on Booysendal in the next financial year.

Unless otherwise specified, Northam uses the measure of three platinum group metal (PGM) elements (platinum, palladium, rhodium) and gold (3PGE+Au) to report its production, reserves and resources figures. All graphical information in this report pertains to Zondereinde unless otherwise specified.

Northam’s primary listing is on the Johannesburg Stock Exchange (JSE) in South Africa and the company reports in terms of the JSE’s listings requirements. The company’s financial information is reported in accordance with the International Financial Reporting Standards and the new South African Companies Act (No. 71 of 2008). The reporting of the company’s mineral reserves and ore resources is made in accordance with the guidelines of the South African Code for Reporting of Exploration Results, Mineral Resources and Mineral Reserves (SAMREC).

Northam’s structure and reporting framework is also guided by the King Report on Governance for South Africa (King III), and the company’s annual integrated report 2013, its third integrated report, has been produced in line with these requirements.

The Global Reporting Initiative’s (GRI) G3 Guidelines (G3.1) and the Broad-based Socio-economic Empowerment Charter for the South African Mining Industry (the Mining Charter) have been used as a guideline to disclosure in the report. This year, Northam has declared a B+ level of reporting (see Reporting inline with GRI for more information).

Northam’s internal and external controls are tightly managed and a significant level of control is maintained. The company’s internal audit function has been outsourced to KPMG Services Proprietary Limited (KPMG) in order to provide an independent appraisal function. KPMG has been specifically tasked with:

examining and evaluating the group’s systems of internal control in the mitigations of business risks; and
assisting members of management with discharging their duties effectively.

The group’s consolidated annual financial statements have been audited by external auditor, Ernst & Young Inc. (E&Y).

The independent assurance provider, Environmental Resources Management Limited (ERM), has assured certain non-financial key performance indicators (KPIs) in this sustainable development report. This assurance is conducted in accordance with the AA1000AS Assurance Standard Type 2 requirements that include the application of the AA1000APS Accountability Principles Standard and the reliability of specified performance information. ERM’s statement of assurance may be found in this report, under Independent assurance report.

For more information on sustainability reporting at Northam, please contact:

Marion Brower or Memory Johnstone

Tel: +27 11 880 3924
Fax: +27 11 880 3788
Email: marion@rair.co.za
memory@rair.co.za