Community

Structure and governance

The safety, health and sustainable development committee of the board has as its brief the evaluation of social, economic, environmental and health impacts of the company's operations on communities globally. The committee comprises two non-executive directors, Bill Nairn (chairman) and Dr James Motlatsi, and the chief executive officer, Bobby Godsell. Members of management, including the chief operating officer, Dave Hodgson, are invited to participate, as well as John McEndoo (safety), Dr Dave Barnes and Dr Brian Chicksen (health), Andrew Mackenzie (environment) and Paul Hollesen (community).

The management of community issues at an operational level falls under the auspices of the chief operating officer, who is supported by line management. In many cases, particularly in Africa, initiatives are undertaken collaboratively with non-governmental organisations (NGOs).

In South Africa, the largest part of AngloGold Ashanti's corporate social investment programme is undertaken by the AngloGold Ashanti Fund and Trust. Overseen by a board of Trustees, the fund is managed by Tshikululu Social Investments (TSI), a non-profit organisation, which also manages the Anglo American, De Beers and a number of other companies' social investment funds. Increasingly, the Trustees are supported by local area committees at the operations, which are closer to and can be more responsive to the more immediate needs of the community. Mine management has oversight of social investment spending.

Impact on people and communities - policies and procedures

AngloGold Ashanti is committed to having a positive impact on the people, cultures and communities in which it operates. It is the group's philosophy to be respectful of local and indigenous people, their values and traditions, culture and the environment, and this is demonstrated in many of the case studies in this document.

Because exploration and mining frequently occurs in remote areas, or regions where there is very little other economic activity, its relative impact is often heightened. These impacts need to be considered at the exploration stage, right through to operation and eventual closure. A range of potential impacts and mitigating measures are identified during the Environmental Impact Assessment (EIA), and mitigating measures are then incorporated into the Environmental Management Plans (EMPs) over the operation's life-of-mine. Case studies that demonstrate this are as follows:

• During exploration:
  Generating new ounces - doing business in new places in the Economic Performance section.
• During operation:
  Local community development a key issue for sustainable development.
• During downscaling:
  Reducing the trauma of retrenchment at Savuka in the Labour section.
• During closure:
  Closure consultation with communities at Ergo and Ergo programme focuses on maths and science education.

AngloGold Ashanti's values and business principles guide the group's relationships with communities. In addition, a number of operations may have specific community policies in place developed for their particular circumstances and in collaboration with employees and/or interested parties, but these are never in conflict with the overriding group policy. An example of this is the Community Policy in place in the Australia region. This policy was reviewed by a group of key external stakeholders in July 2003, and will be reviewed again in 2005.

Particularly during exploration activities, employees and contractors in the Australia region deal with diverse cultures. Many legal requirements exist which dictate minimum standards for exploration and mining activity and are reflected in standard operating practices. Together with the safety, health and environment policy, a number of community programmes and practices have been put in place to support these activities (see box).

In North America, AngloGold Ashanti operates in a highly regulated environment where the legal regime encompasses, among others, indigenous people, archaeological and cultural resources. Permitting procedures for any new developments or expansions are rigorous and no specific country-specific community policy exists. In addition to compliance with these policies, the mine participates in local initiatives and debate, such as the Southern Teller County Focus Group, which aims to bring tourism to the district.

The Mineral and Petroleum Resources Development Act (MPRDA) which came into effect in South Africa in May 2004, requires that all mining operations submit and adhere to a social and labour plan, including work programmes, as a pre-requisite to the granting of new order mining rights. (All mining operations have to apply for conversion of so-called old order mining rights into new order mining rights.)

The East and West Africa region, which comprises the Morila, Yatela and Sadiola mines in Mali, the Geita mine in Tanzania, and the Navachab mine in Namibia, has developed a regional strategic plan and environmental operating practices manual to guide social investment and community initiatives. The manual covers aspects such as legal and corporate governance, sustainable development, social investment, partnerships, procurement, stakeholder planning, land management and rehabilitation, media strategy and reporting, among others. In addition to the internal monitoring of compliance with these guidelines, regular socio-economic impact studies are conducted by independent consultants.

The Ghana and Guinea operations have adopted the AngloGold Ashanti group policy on community relations. The region abides by the guidelines set by the local Environmental Protection Agency (EPA) and the Mines Inspectors' Department. The EPA approves all Environmental Management Plans and Environmental Impact Statements after consultation with stakeholders. Close contact is maintained with the chiefs and traditional authorities, showing respect for local norms and customs. In Ghana, this includes paying homage - particularly to the Asantehene, the king of the Asante - at significant events. Good relationships are maintained with the District Heads in Ghana and the Prefecture in Siguiri. Structures are also in place for members of the community to lay complaints and air grievances. These are then investigated by community development managers and appropriate action taken.

Involvement of communities

The need to, and the process of, informing communities timeously of any potential impacts and maintaining their involvement throughout the operational life cycle is enshrined in the law of many of the countries in which the group operates, and is another fundamental commitment made by the group.

In the North America region, for example, stakeholder identification and engagement is formalised under the National Environmental Policy Act when public lands or federal permits or approvals are involved. When not triggered, other community outreach processes may be followed such as local land use planning and state permit hearing processes. These processes were used in part to explain the recent Cresson mine expansion project to local community stakeholders as well as to engage government agencies. The company also engages with the community informally by encouraging employees to actively participate in community affairs, both in terms of time and leadership roles. Presentations on mining activities and impact mitigating measures are also presented regularly at both informal meetings and visits and formal public gatherings.

In the South Africa region, community involvement and interaction with local, regional and national authorities is extensive and ongoing. This was particularly so during 2004 as the company prepared its submission for new order mining rights. As an example, during the year, company representatives participated in a series of workshops with the West Rand District Council regarding alignment with the MPRDA, and requirements relating to the development of service delivery focus areas in accordance with regional Integrated Development Plans (IDPs) as required by the Mining Charter. Other councils with which the company interacted are the Southern District Council (Klerksdorp), the Moqhaka District Council (Viljoenskroon/Kroonstad) and the Ekurhuleni Mining Forum (near Ergo). The process surrounding the closure of Ergo in March 2005, which is covered extensively in this document, is also an example of this.

Business unit personnel also engage regularly with community stakeholders through local chambers of business, AngloGold Ashanti Fund Local Area Committees and various community and charity forums. More formally, the company communicates with local communities at large in open briefings on the company's quarterly results and other issues. This is hosted in the three regions by the executive officer responsible for the South Africa region and the relevant general managers. Community members then have the opportunity to ask questions.

In South America, there are a number of programmes in place for interaction with community representatives, local development agencies, other companies, municipal authorities, district associations and others. A call centre is available to register community complaints and requests. Surrounding communities are kept informed about operational developments, particularly life-of-mine plans, through frequent meetings and other forms of communication such as bulletins.

Extensive stakeholder engagement structures exist at the African operations in Mali, Tanzania and Namibia. Stakeholder engagement, including relations with government, media, organised business and the communities themselves, is the responsibility of the business unit manager in the region. Mine management plans to meet formally with the local community structures at least once per month and briefing of local media takes place at least twice a year.

A Public Consultation and Disclosure Plan (PCDP) was developed for the Sadiola and Yatela mines in Mali to manage community development projects and to ensure their implementation in a sustainable fashion. The process followed in the development of an IDAP being put in place at Sadiola in Mali is an example of the engagement process being adopted in these regions.

The Annual Stakeholders Consultation Workshop held at the Sadiola mine in September 2004 brought together 120 participants from the local communities, regional and national government representatives, national and international NGOs, representatives of the media, mine management and representatives from AngloGold Ashanti and the International Finance Corporation. The main objectives of the workshop, which were largely achieved, were the review of progress since the last stakeholder workshop in 2003, the presentation of the findings of the IDAP and the identification of closure issues.

Another example of this relationship has been the ongoing involvement of communities in water management at the Sadiola and Yatela mines. An inclusive water committee that will oversee regular water testing and the development of plans in conjunction with the mine, for the sustainable provision of water, will be introduced. In this regard a dedicated epidemiological study has been undertaken.

At Geita in Tanzania, community workshops were held in six villages surrounding the mine - Nyakabale, Saragulwa, Mgusu, Samena, Mpomvu and Nyankumbu - with the aim of improving relationships, establishing a community profile and developing an understanding of the mine's business. The mine also hosted stakeholder orientation visits from Geita-based secondary and primary schools, religious organisations, engineers from the Mwanza regional and Geita district offices and the Tanzanian Commissioner for Mineral Resources. In August, Geita participated in an Investors' Forum held in Mwanza, hosted by the Tanzanian Vice President and which was well attended by foreign and local investors, representatives of international institutions, distinguished public figures, members of the diplomatic corps and media. The Forum deliberated on issues affecting the investment climate in the lake zone and in the country in general.

In Ghana, public consultation and disclosure guidelines underpin the community relations process. Monthly meetings are held with consultative committees comprising the traditional chief or head of the community, two community elders, a female community leader, a youth representative, representatives from NGOs and a representative from the district authority. The region is also an active member of the Chambers of Mines in Ghana and Guinea.

In Australia, AngloGold Ashanti has developed communication strategies for managing and consulting with key stakeholders. Local government and relevant state government departments are kept apprised of activities through normal mining activity processes. Sunrise Dam is an active member of the Laverton shire and regularly hosts shire council meetings on site. For aboriginal lands, it is standard practice to conduct annual community meetings to discuss current and planned mining activities.

Social investment initiatives and expenditure

In line with its business principles, social investment initiatives are aimed at making both a practical and meaningful contribution in those areas of greatest need. This varies from region to region, and operation to operation. In South Africa, there is a focus on education and health care, particularly HIV/AIDS; in East and West Africa, education, health care and economic development are priorities, while in North America community initiatives take priority.

In the USA, funds are made available at both a corporate and operational level. Specific initiatives during 2004 at the corporate level included support for political organisations, ballot education initiatives, and mining-related educational causes; at CC&V specifically, initiatives included health and safety projects, environmental projects, projects related to arts, culture and heritage, youth and education projects and general community projects.

In South America, social investment initiatives are mainly undertaken in the communities surrounding current and past operations. These include the following:

• Education: this includes 60 annual scholarships for intermediate level schooling and courses in administration at SEBRAE Technical Management School, particularly for underprivileged students; investment to date in this initiative amounts to some $21,200.
• Community development: this includes the building, equipping and management of an environmental centre in Santa Bárbara, near the Córrego do Sítio project, at a cost of some $115,000. The centre was completed in June 2004 and aims to provide environmental education for school children and the local community. Similar centres have been established at Nova Lima and Serra Grande. During the year the company also participated in the restoration of the old municipal theatre in Nova Lima at a cost of some $126,000. A project to restore the old Gold Museum in Sabará was also funded.
• Health care: projects included financial support to the health department in the town of Raposos, equipping and furnishing a new paediatric centre in Minas Gerais, Brazil. In Argentina the San Julian hospital was rehabilitated and a refrigerator for the storage of vaccines was purchased.
• Socio-economic development: this included support for the dressmakers' co-operative in Raposos (see box below) and contributions to Carnival festivities to promote tourism in the State of Minas Gerais. Other initiatives included the funding of various development agencies (See case study: Local community development a key issue for sustainable development) and the partnership with Micromina - FIEMG, Minas Gerais Industry Federation, which finances local small-scale entrepreneurs.
• Sports: supporting participation in sports included sponsorship of the Villa Nova Athletic Club football team and sponsorship of 30 children at the Crixás football school, amongst others.
• Environment: contributions to funding of the environmental rehabilitation of the Rio da Velhas basin, along with other companies.

In Australia, management of funds and programmes is primarily undertaken at a local level, with each area managing its local community and indigenous relations, with funding and support budgeted for in advance.

• Social: investment initiatives are concentrated on communities surrounding the exploration activities and the mining site.
• Education: support for Mt Margaret mission school facilities, All Saints College and local Laverton school administration.
• Health: a variety of projects are supported around Laverton and Sunrise Dam. These include Royal Flying Doctor service, medical support to local doctor, Laverton volunteer fire and rescue service and the Princess Margaret Children's Hospital
• Social/Sport: support for local Laverton aboriginal sport teams and the Laverton Leonora Cross Cultural Association group.

In South Africa, social investment initiatives are undertaken in the areas of need where the group can make a practical and meaningful contribution at two levels:

• first, the AngloGold Ashanti Fund and Trust disbursed some R16.148 million ($2.59 million) in 2004 to about 100 projects across southern Africa. (This amount includes the Fund's management fee.) The fund is managed by TSI, which studies and makes recommendations to a board of trustees on social giving. (See case study: Making a difference - the AngloGold Ashanti Fund and Trust.) TSI is supported in its endeavours by local area committees which also make grants and recommendations to the Trustees.
• second, the various operations have their own social investment budgets to respond to more immediate local community needs that are spent independently of the Fund. Collectively these amounted to R933,667 ($72,000) in 2004.

The corporate office also funded a number of initiatives and organisations at a cost of some $1.1 million (R7.05 million). These included:

• contributions towards Business Against Crime;
• sponsorship of the Tall Horse project (see box below);
• sponsorship of the Aardklop festival;
• contributions to the SA Business Coalition on HIV/AIDS;
• support for the Centre for Sustainability in Mining and Industry at the University of the Witwatersrand; and
• various political donations.

The focus in the African operations continues to be education, health care and agriculture.

A development foundation is being established at the Sadiola and Yatela mines in Mali to manage community development projects and to ensure their implementation in a sustainable fashion. A bursary scheme implemented in Mali in 2004 will fund the studies of 10 top school leavers at South African tertiary education institutions in 2005 in mining, engineering, environmental studies and geology. (See case study: Malian bursary scheme develops managers of the future in the labour section). Some of the projects that the operations supported include training of newly elected Sadiola district counsellors; assistance with polio inoculation by the Sadiola Commune Health Centre; a locust-fighting campaign; and sponsorship of a tourism day in Mail.

At the end of 2002, the Morila mine in Mali established a development foundation, donating $500,000 as initial seed funding. A local NGO, Aserni (Association d'Etude et de Mise en Valeur des Ressources Naturelles et des Institutions), completed a socio-economic review of the region and community around the mine. The report will form the basis for the mine's community development strategy. These social aspects will be incorporated into the mine's closure plan which is to be compiled with the assistance of Aserni. Social investment initiatives during the year include contributions to schools in Sanso and Domba, the sponsorship of a health awareness programme in Sanso, support for International Women's Day celebrations, various Sanso traditional ceremonies and independence day celebrations and local economic development projects including a market garden and rice fields at Fingola and Morila.

Also during the year, malaria control spraying was completed at Sanso village, as well as at the Morila mine prior to the commencement of the rainy season. The Morila mine community health educator joined the spray teams, giving malaria education as the teams went through the village. Unfortunately the use of impregnated mosquito nets by the community remains poor, despite an awareness campaign to promote them.

In Namibia, the focus of funding continues to be the Karabib Private School, which is a centre of educational excellence in the area, alongside other, smaller donations. In addition, two agricultural projects have been identified at Karabib and Usakos.

At the Geita mine in Tanzania, contributions to health care and education make up the bulk of social investment spending. These include:

• education and training: facilities were constructed at the Bukwimba Secondary School, Kamena Secondary School and the Katoro Secondary School.
• health: this includes the flagship annual voluntary initiative by the company, the Kilimanjaro Challenge Climb against HIV/AIDS. Geita also supports the local NGO AMREF, the AIDS centre in Geita Town and contributed to the mercy mission by Australian plastic surgeons who operated on 11 Geita children. (See case study: Geita community benefits from Australian surgical mission to Tanzania.)
• donations: include assistance given to the Media Council of Tanzania to assist in meeting the expenses in hosting the International Media Councils Conference.
• local economic development: projects include the Nyakabale agro forestry project - which has now been extended to chicken farming - and the Nyankumbu brick-making project. (See Report to Society 2003).

In Ghana, community relations efforts are focused on education, health care/sanitation and agricultural projects.

At Iduapriem in Ghana, some of the major projects undertaken during the year include:

• health care/sanitation: provision of primary health care and care for the community of some 7,400 people continues. The construction of two toilet blocks for the Mile 7 and Nkwantakrom, Acheampong, Domebra and Kofi Ahantakrom communities at a cost of $15,000 will benefit about 700 people.
• electricity: the first phase in providing electricity to about 500 local rural residents at the Wassa West - Mile 7 village has been completed at a cost $19,000.
• water: the design and installation of filters to remove naturally-occurring manganese and iron from borehole water at the Mile 7, Adieyie, Nkwantakrom, Teberebie and Adisakrom villages to the benefit of some 4,000 residents.
• education: the construction of a new six-classroom school building (to accommodate 240 learners) at Abompuniso (at a cost of some $41,000) will replace the existing dilapidated structure.
• agriculture: a snail farming venture is being piloted in the Iduapriem area.

Obuasi's role in its community is all-encompassing and it is difficult to separate community initiatives from the 'normal' operation of the mine. Two significant developments that were initiated during the year are:

• the $1.235 million upgrade being planned for the Edwin Cade Memorial Hospital. (See case study: Upgrade planned for the Edwin Cade Memorial Hospital at Obuasi in safety and health section.) The hospital currently provides health care to more than 70,000 people within the community. Going forward the hospital's priority will be to preferentially care for employees and their dependents, although members of the community may use the facilities for a nominal fee.
• the three-year $1.162 million malaria prevention programme that is being implemented at Obuasi is likely to have a significant impact on the region. Currently, an average of 6,000 new malaria cases are treated every month at the mine hospital - some 40% of new admissions; 27% of these are employees, 40% their dependents and 33% community members.

One of the main social investment projects at Obuasi this year was the alternative livelihood project undertaken in conjunction with the Centre for Biodiversity Utilisation and Development at the Kwame Nkrumah University of Science and Technology. The project involves the provision of training and financial support for the cultivation of grasscutters, snails, mushrooms and vegetables primarily at the village of Ayunfuri. The group is spending $5.6 million over a five year period on community development initiatives and in the fostering of alternative livelihoods. The construction of the Adubirem Junior Secondary School was completed in July 2004 at a cost of some $32,000, while the water supply well provided for the people of Okyerekrom, near the Gyanbunso pit, was also completed during the year.

In respect of health care/sanitation, Bibiani mine has financed the construction of public toilet facilities for the people of the Bibiani old town at a cost of some $15,000. Three boreholes have also been provided - two at Mpasatia and one at Bibiani old town - which will benefit more than 600 people, mainly farmers.

The mine's community farms at Bibiani and Anhwhiaso have employed 28 young trainees who were previously involved in artisanal mining activities, as part of the group's alternative livelihood programme. Some $14,000 was spent on similar youth programmes in 2004.

In Guinea, AngloGold Ashanti's Siguiri mine allocates 0.04% of the mine's revenue for social investment and community relations projects, amounting to $199,000 in 2004. Some of the main projects in 2004 are listed below.

• The mine is currently financing the construction of the Boukaria mosque in the predominantly Muslim district of Kintinian. Work started early in 2004 and the $50,000 project is expected to be completed in 2005. In addition to being a place of worship, the mosque is also the main Koranic school in the region.
• As part of a project to reconstruct the district capital, the mine is funding the development of a public cemetery in Siguiri Town at a cost of some $45,000.
• Siguiri is also funding the establishment of a community radio station - including the construction of a studio and offices at a cost of $35,000. The radio station is to be used to create awareness among the community of diseases and their prevention (such as malaria, HIV/AIDS, tuberculosis (TB), sexually transmitted diseases (STDs), etc) and other issues that have an impact on the lives of the community.
• The mine also spent $32,000 in 2004 on the expansion and modernisation of the Siguiri Sports Stadium.

Participatory and leadership roles in communities

AngloGold Ashanti actively encourages employees to make themselves available for participatory and leadership roles in their communities.

The North America region has a long-standing volunteer programme in place where 31 employees (10% of eligible workforce) volunteered a total of 2,500 hours of community service during the year. Employees are rewarded with one hour of paid time off for each three hours volunteered for community groups, and one hour off for each two hours volunteered for governmental positions, up to a maximum of 40 hours paid leave per year. Activities ranged from Little League coaching to assisting in local nursing homes and blood drives by the volunteer fire departments. Since inception in 1996, CC&V employees have donated over 5,000 hours per annum.

In June 2004, Geita mine in Tanzania once again undertook the Geita Gold Mine Kilimanjaro Challenge Climb Against HIV/AIDS, with some 48 people climbing the highest mountain in Africa to raise funds for and awareness of people with HIV/AIDS. A total of $150,000 was collected from this year's climb and donated to eight different HIV/AIDS organisations.

In South Africa, a 'give-as-you-earn' and matched volunteerism programme was piloted at the corporate office during the year. (See case study: Hearts of Gold programme launched in South Africa.) The programme is currently being rolled out at an operational level.

The Holding Hands initiative was launched in South America in October 2004. (See case study: Holding Hands - a volunteer programme in South America.)

The Australia region has policies and practices that encourage its employees to participate in leadership roles in their local communities. Making this work at Sunrise Dam is challenging, owing to the fly-in, fly-out working arrangements, but efforts are made to support employee involvement in volunteering activities. Nonetheless, Sunrise Dam employees have played an active role in supporting the Laverton Fire and Emergency Services group, Lake Carey Catchment Management Group and the Asian Rhino Project at the Perth Zoo.

Land use and resettlement

AngloGold Ashanti is committed to acquiring and using land in such a way that promotes best consensus among interested parties. Where resettlement is unavoidable, the group is committed to following best practice and to working with local communities in developing a workable solution in the interests of all parties.

The board committee on safety, health and sustainable development ratified the International Finance Corporation's Resettlement Policies, Guidelines and Standards on Involuntary Resettlement for all resettlements undertaken in future. Specifically, the board committee resolved to "seek to avoid relocation where possible. And where evidence that relocation is unavoidably required by a project, this will take place in accordance with AngloGold Ashanti's business principles, local legislation and the IFC's policies, guidelines and standards on involuntary resettlement. Where such resettlement takes place under specific, current, local legislation, the local legislation will take precedence."

The policy is intended for all managed operations, including joint ventures, and will be reviewed as necessary, including any time that the IFC makes changes.

• No resettlement was undertaken or is planned in South Africa, the USA, Australia, Tanzania, Mali or Namibia.
• Although no resettlement of communities took place at Geita in Tanzania, on occasion the mine has compensated informal farmers for the loss of farming land due to mining activity. Local legislation was followed.
• Resettlement of three communities has been and is being undertaken in Brazil. Those mainly affected are families living around the tailings dam and those perceived to be at risk. In all cases, the families' existing homes are valued, new land is identified and financed, and assistance is given in both purchasing building materials and in construction. The aim is to ensure that the families are no worse off than prior to the commencement of the resettlement. In fact, they are frequently better off.
  • At Mina D'Agua, 23 families living in areas adjacent to the tailings dam were resettled as the level of the dam was raised. This resettlement was completed over a three year period at a cost to the company of $300,000.
  • 22 families living too close to the tailings dam at Galo are being resettled at a cost to the company of some $145,000 to date.
  • 23 families living at Vista Alegre were resettled by AngloGold Ashanti Mineração, despite the fact that the land was sold more than 50 years ago. The resettlement became necessary as the families were considered to be at risk. Following consultation, they are being resettled at a single location at Banqueta do Bananal in Nova Lima at a cost to the company $280,000. The process will be completed in 2005.

In Ghana resettlement has, in the past, been based entirely on Ghana's Mining Law (L154) which places emphasis on monetary compensation, rather than physical compensation for the loss of surface rights. The most recent exercise, which is being conducted in accordance with IFC policy, involves a compensation process of the Teberebie farmers in the Wassa West District for the loss of farmlands due to mining activity. The compensation process has presented new challenges to Iduapriem, with valuable lessons being learnt by both principal parties. Due to a number of issues and events, the process itself has become complex, and in this case the farmers rejected the Land Valuation Board's price per crop compensation guide and demanded an independent assessment, which the company has accepted. The mine has also undertaken to make alternative farmland available to the affected farmers.

Contribution to sustainable development through local economic development

A fundamental philosophy of the group is that its operations and activities should contribute towards the long-term sustainable development of its host communities. This is particularly challenging for sometimes short-lived mining operations or exploration projects, particularly when there is a short window of opportunity to make an impact. A number of ways in which that be achieved, however, are:

• support through local procurement activities;
• the contribution of redundant assets to the community;
• assistance with the establishment and development of small to medium-sized sustainable enterprises; and
• the outsourcing of the provision of goods and services to local vendors where appropriate.

In the North America region, a specific policy has been developed to ensure that corporate social investment initiatives are indeed sustainable. This includes:

• ensuring that corporate donations are made to projects that will either promote the long-term economic and social benefits of the area, or creating a favourable, long-term socio-political environment in support of the company's activities;
• directing corporate donations towards those areas where these donations act as seed money for matching grants, resulting in a multiplier effect for its donations. (See case study: Getting the Pikes Peak Regional Medical Center off the ground);
• identifying opportunities in local communities for the development of sustainable ventures where the group's relationship with vendors, company expertise or peer companies' activities can be substantially leveraged; and
• avoiding situations where donations become a continuing, annual expectation.

The South America region has adopted a formal, integrated approach to the development of economic activities other than mining, based on lessons learnt following the Morro Velho mine closure in 1995. Together with a number of other partners, AngloGold Ashanti Mineração set up the Nova Lima Development Agency, one of the company's first formal community development initiatives. The agency aims to create economic and socio-development networks that draw and then facilitate new investment in the region. The efforts of the agency in Nova Lima have resulted in attracting 6,000 new jobs and 84 new companies into the region. In Sabará, where currently the company's primary operation - the Cuiabá Mine - is located, a similar development agency was formed in November 2003. The group has also initiated a development agency in San Julián in southern Patagonia, Argentina, home of the Cerro Vanguardia mine. In the towns of Crixás and Santa Bárbara, where the Serra Grande and Córrego do Sítio mines are situated, talks are underway to set up similar initiatives. (See case study: Local community development a key issue for sustainable development.)

In the South Africa region, the view is taken that its socio-economic activities should build on existing relationships with relevant stakeholders to stimulate entrepreneurship and sustainable economic activity, including infrastructural development, and to diminish the economic dependency of local and labour-sending communities on the mining industry over time. A second area of attention is poverty alleviation.

Examples of projects in local and labour-sending communities are:

• Lesotho water project. AngloGold Ashanti has contributed ($70,300) R450,000 to the Lesotho Water Project, which is managed by Teba Development. This involves fully restoring boreholes and hand pumps in order to reinstate access to water for at least 35 villages in what has traditionally been a 'labour-sending area'. (See case study: Lesotho Water Project - bringing a much-needed resource to employees' families.)
• The group's Small and Medium Enterprise Development Initiative (SMEDI), which identifies people, mainly from an historically disadvantaged background, who have ability and potential, to enter into partnership to provide education, capacity-building and funding with the long-term aim of creating self-sustaining businesses. The raising of venture capital is managed through a fund called Masakhisane (which means 'Come let's build each other together' in Zulu), which was established in 1998 with an initial capital outlay of R10 million. (See case study: Outsourced health care at Ergo.) In 2004, R603,000 was allocated for investment in new Black Economic Empowerment (BEE) companies that will add value to the local community.

The operations in Mali, Namibia and Tanzania have programmes in place to support local procurement as far as this is possible.

• At Morila mine, 45% of funds accumulated through the sale of redundant material from the salvage yard is redistributed to a local community fund which is used for the establishment of local small business initiatives. The fund has established a food (cereal) bank in Sanso, which is of particular benefit to the community during times of drought. Also, at Morila, market gardens were established at Sanso (1 hectare) and Domba (2 hectares) in June 2004 under the supervision of a monitoring and training committee. A community rice field was also established during the year.
• A micro-credit scheme implemented at Sadiola in 1999 for the development of small business has granted 83 loans, amounting to $72,000, to date, of which. 30% have been fully repaid. A micro-credit scheme at Yatela was established in 2000. To date the scheme has granted 20 loans to a value of $20,571, of which 50% have been fully repaid. Both schemes were suspended in 2004 pending the outcome of the IDAP study. (See box below.)
• The Nyakabale agro project at Geita, established in 2001, now has 60 registered members. (See Report to Society 2003.) More recently, chicken farming has been introduced. Communities are also involved in nurseries which provide seedlings for mine rehabilitation and in brick-making ventures. (See case study: Rehabilitation at Geita.)

In Australia, Sunrise Dam supports and encourages local economic development and, in particular, the development of business initiatives by local indigenous people. The mine promotes the use of businesses from the local town of Laverton for site activities and encourages its suppliers and contractors to do the same; this has resulted in contractors from Laverton supplying water to Roche, AngloGold Ashanti using Laverton-based car hire companies and local vehicle servicing. During 2004, Sunrise Dam began an indigenous supply initiative aimed at encouraging indigenous business from the local area to get involved in tendering for services associated with the site. A further initiative is to expand the indigenous seed-collecting activities around the region. Sunrise Dam works with Indigenous People in Mining, an industry and government network support group fostering contracting opportunities for Aboriginal business. A significant initiative by the company has been with Carey Mining, an indigenous contracting company, working on site.

About 24% of the all purchases made in Ghana and Guinea are procured locally (Obuasi - 20%, Iduapriem - 20%, Bibiani - 25% and Siguiri - 30%). This is made more difficult by the nature of the purchases required to run extensive underground mining operations (including equipment, machinery, consumables such as explosives and chemicals), and which have traditionally been sourced from other more industrialised regions. This is extended to the provision of services, such as the services of security companies to support the in-house security department.

An integral part of the region's social investment programme is the Alternative Livelihoods Programme aimed at providing skills for generating employment for local, illegal artisanal miners on the one hand, and to developing alternative opportunities for communities in advance of mine/pit closures.

At the Geita mine in Tanzania a micro-finance credit scheme has granted loans to 145 groups in the local community for small business development. About 82% of the loans have been repaid. Just over $16,000 has been donated to this project in total. At the Nyakabale Community Agro-Forestry project, 60 farmers from the local community are engaged in supplying 65% of the fresh fruit and vegetable supplies to the mine, while at the same time developing a cash crop that will sustain them once mining has ceased. Some 300 day-old chicks were added to this initiative in an effort to diversify this project into chicken farming.

As in Ghana, the Lake Victoria Goldfields in the Geita district in Tanzania attract artisanal and small-scale miners owing to the rich mineral endowment in the region, particularly of gold. The informal mining sector has provided an often meagre livelihood for many people and has persisted, despite the presence of a large-scale mining operation. Following research conducted in the area, Geita has developed a strategy aimed at offering socially, environmentally and economically sustainable alternatives to these miners. (See case study: Geita formulates policy to assist artisanal miners.)

Awards

• In the North America region, CC&V and the Southern Teller County Focus Group (which was assisted in its formation by CC&V) were awarded the Wirth Chair Community Award recognising sustainable community development projects.
• The Denver office and the CC&V mine in North America were recipients of awards for their involvement in the Colorado Mining Association Pollution Prevention Program. (See case study: Awards for North America region's contribution to pollution prevention of the Environment section.)
• The South America region has received a number of awards, namely:
  • One of 40 best companies in 'people management' in 2004, awarded by Hay do Brasil in conjunction with the newspaper Valor Econômico.
  • Best mining company - 2004 awarded by the Valor Econômico newspaper. The 1,000 largest Brazilian companies were entered for the awards, which were made by the economic sector.
  • First place in the mining sector - 2004 awarded by the 'Isto É Dinheiro magazine'. AngloGold Ashanti Mineração earned first place in the Innovation section, first place in the Socio-Economic Management section and second place in financial management.