2006 Annual Report

Review 2006

We report our performance in 2006 against our business principles.

Business principle 1:
We are committed to providing a working environment that is conducive to safety and health.

Although, the group’s safety and health performance has improved significantly since the formation of AngloGold in 1998, we have not achieved our long-term target of eliminating fatal accidents and occupational illness, particularly at the African operations. (See case study: Safety review at South African operations.)

In 2006, the group’s Fatal Injury Frequency Rate (FIFR) of 0.22 per million man-hours rose by 57% year-on-year, although it remains a 44% improvement on the rate in 1998. The Lost Time Injury Frequency Rate (LTIFR) – at 7.70 per million man hours in 2006 – rose by 14% year-on-year, and has declined by 47% since 1998.

In spite of the improvements noted above, we regret to report a deterioration in our group safety performance, primarily as a result of the reversal of a positive safety trend in the South African operations.

At the South African operations Noise-induced Hearing Loss (NIHL) rates have decreased significantly in 2006 to 2 per 1,000 employees from 4 per 1,000 employees in 2005. Similarly, in respect of the South African operations, with respect to Occupational Lung Disease (OLD), including silicosis – new cases reported have increased slightly from 7 per 1,000 in 2005 to 10 per 1,000 employees during 2006. The incidence of pulmonary tuberculosis (TB) has also increased slightly in 2006 to 31 per 1,000 from that of 25 per 1,000 recorded in 2005. This is much lower than the figure of 35 per 1,000 recorded in 2004.

Business principle 2:
We will monitor the effects of the company’s operational activities on the safety and health of our employees and others, and we will conduct regular performance reviews.

Safety

A range of leading and lagging indicators are monitored throughout the group. Some of these are site-specific (particularly the leading indicators). The primary lagging indicators reported for the group as a whole are the FIFR, the LTIFR and the days lost per lost-time injury. The latter indicates the severity of lost-time injuries.

Fatal accidents

Regrettably, there were 29 accidents within the group in 2006 in which 37 employees and contractors lost their lives. Thirty-two of these occupational fatalities occurred at South African mines, 16 of them at one mine – TauTona – in nine separate accidents. (See case study: Mining plan at TauTona changed in the interests of safety). The board and management of the company extend their deepest sympathy to the families and colleagues of those who died. That employees die or become ill during the course of work is an area of great concern to the management and board of AngloGold Ashanti, and a great deal of attention and focus has been placed on ensuring that employees leave the company in good health at the end of their careers. See In Memorium (PDF - 16KB) for further details on each of these accidents and on the employees who died.

Safety rates

The FIFR increased from a rate of 0.14 per million man-hours in 2005 to 0.22 per million man-hours in 2006, a regression of some 57%. Nonetheless 13 operations ended the year having not experienced any occupational fatalities, while a further three operations improved their rates.

The LTIFR rose by 14% to 7.70 per million man-hours, from 6.77 in 2005. The LTIFR actually improved at a number of operations, with Cripple Creek & Victor (CC&V) in the United States having achieved a LTIFR of zero. In fact, CC&V has achieved a most notable milestone in having not had a single injury on mine during the past three years. (See case study: Risk management in North America).

Causes of fatal accidents

The primary cause of fatal accidents in South Africa remains falls of ground (78%), with seismically induced falls of ground accounting for 44% of all South African fatalities. (See case study: A new strategy for managing falls of ground in South Africa). One fatal accident at Obuasi mine in Ghana was caused by an employee being scalded by chemicals in the metallurgical plant, and the other by an employee being pulled into the rotating drill system of an underground drill rig.

FIFR year-on-year for each operation per million man-hours worked
 20062005
Argentina  
Cerro Vanguardia0.000.00
Australia  
Sunrise Dam0.000.00
Brazil  
AngloGold Ashanti  
Minera??o0.000.18
Serra Grande0.000.00
Ghana  
Iduapriem0.000.00
Obuasi0.080.29
Guinea  
Siguiri0.310.00
Mali  
Morila0.000.00
Sadiola0.000.00
Yatela0.430.00
Namibia  
Navachab0.000.00
South Africa  
Great Noligwa0.360.22
Kopanang0.140.07
Moab Khotsong0.270.16
Mponeng0.300.21
Savuka0.000.00
Tau Lekoa0.150.41
TauTona1.230.29
Tanzania  
Geita0.000.00
USA  
CC&V0.000.00
Group0.220.14

LTIFR year-on-year for each operation per million man-hours worked
 2006 2005
Argentina  
Cerro Vanguardia3.133.09
Australia  
Sunrise Dam1.813.06
Brazil  
AngloGold Ashanti  
Minera??o2.332.95
Serra Grande1.762.39
Ghana  
Iduapriem1.150.58
Obuasi2.292.89
Guinea  
Siguiri0.770.64
Mali  
Morila1.422.17
Sadiola1.021.30
Yatela0.431.25
Namibia  
Navachab4.093.02
South Africa  
Great Noligwa12.2112.13
Kopanang15.2211.51
Moab Khotsong15.7512.98
Mponeng10.7012.20
Savuka19.3014.13
Tau Lekoa24.9914.58
TauTona17.0910.76
Tanzania  
Geita0.630.79
USA  
CC&V0.000.00
Group7.706.77

Health

The primary occupational health threats to employees are NIHL and OLD, with the latter a particular threat in underground mining environments where silica dust exposure is present. In South Africa, TB in silica-exposed employees is a significant occupational disease risk, especially in view of the relationship between HIV/AIDS and TB. In many cases, the statistics reported below are presented for the South Africa operations only as this information is collected and reported to meet the requirements of the country’s Mine Health and Safety Act (MHSA). Furthermore, it is the company’s view that the risk posed by health threats is greater in South Africa owing to the large number of people involved in deep-level mining operations and the incidence of HIV/AIDS. HIV/AIDS and malaria, which are not strictly work-related but which present significant threats to the health and well-being of employees and communities, are dealt with under the Regional Health section.

Medical surveillance

In South Africa, 50,343 occupational medical surveillance examinations (initial, periodic, transfer and exit) were performed during 2006 in accordance with the requirements of the MHSA. Medical surveillance statistics from AngloGold Ashanti operations outside of South Africa are reported in the country and operational reports.

Noise-induced hearing loss (NIHL)

Sixty-seven new cases of NIHL were identified in South Africa during 2006, which is a rate of 2 per 1,000 employees. This represents a significant decrease from the 4 cases per 1,000 employees reported in 2005.

Comprehensive hearing conservation programmes are in place at all operations and include, among other aspects, noise control engineering (silencing), the provision of hearing protection devices, education and communication programmes, and annual audiometry examinations of employees. In South Africa, baseline audiograms conducted in 2005 in line with new compensation regulations form the basis of future assessments of employees’ hearing loss. A major engineering initiative to reduce noise at source to below 110dBA has resulted in all underground drills and noisy fans having been silenced in the South Africa operations, with the ongoing identification and silencing of other noisy equipment in progress.

NIHL (new cases) South Africa Rate per 1,000 employees

NIHL (new cases) South Africa Rate per 1,000 employees


Occupational Lung Disease (OLD)

Exposure to silica dust remains one of the major contributing factors to the development of OLD. (In this context OLD includes TB, TB silicosis and obstructive airways disease). Of these, TB is the most pervasive and is compounded by a high HIV prevalence in the mining population (of about 30%) which greatly increases the risk of TB. It is estimated that about 85% of employees diagnosed with TB are HIV-positive.

OLD statistics

During 2006, 348 cases of OLD were identified in South Africa, which reflects a rate of 10 per 1,000 employees, an increase on that reported in 2005 (7) and 2004 (7). An additional factor contributing to the incidence of OLD (including high TB and HIV rates) is the increasing average age of the South African workforce which has had a longer, cumulative exposure to silica dust underground. The average age of the South African underground workforce is 42.

OLD (new cases) South Africa Rate per 1,000 employees

OLD (new cases) South Africa Rate per 1,000 employees


Dust control

In South Africa, initiatives to eradicate dust and improve methods of dust control have continued, although the agreed* industry target, for which 95% of all individual samples must be below the legal limit of 0.1mg/m3 by 2008, has not yet been achieved. In 2006, the average silica dust concentration was 0.04mg/m3 (2005: 0,04mg/m3), with the 95th percentile at 0.129mg/m3 (2005: 0.13mg/m3). A total of 4,020 personal gravimetric samples were taken during 2006. (*Targets agreed by industry body, the Mine Health and Safety Council.)

TB control

TB control programmes in South Africa were boosted during the year with the roll-out of a second mobile digital diagnostic radiography unit. The two mobile units in service move from shaft to shaft to facilitate more frequent x-raying of employees. The objective is to detect and treat TB at an earlier stage, thereby preventing the spread of the disease and reducing its impact on the individual and the community.

World Health Organization-aligned TB treatment programmes are made available free of charge to employees and contractors alike by the group’s medical services. The TB control programme results exceed the WHO targets. (See case study: Thibela TB research programme under way at TauTona and Great Noligwa).

TB (new cases): South AfricaRate per 1000 employees

TB (new cases): South Africa | Rate per 1000 employees


Silicosis

Silicosis is caused by the inhalation of free silica dust present particularly in deeper level mining areas with high quartz concentrations, such as in South Africa and Brazil. (See case study: Legacy of silicosis).

Efforts to eradicate silicosis at the AngloGold Ashanti operations in Brazil have largely been successful with no new cases of silicosis having been identified in the past five years. In addition to successful dust mitigation programmes and intensive monitoring, Brazilian legislation limiting the number of years that employees may work underground has played a major role in this achievement.

The legacy of silicosis in South Africa remains a significant issue for the company. This is so for a number of reasons. The current state-led compensation systems are cumbersome and inefficient and, because of this, many silicosis-affected former employees of the mining industry may not have had access to regular medical examination, substantial medical care or compensation, if found to be due. AngloGold Ashanti, together with Gold Fields and Harmony, is working with the state and unions to identify affected ex-employees in need of care, and to improve access to and use of follow-up treatment and compensation systems. (See case study on the Nongoma project  – and Worker Compensation in South Africa under review). At the same time the company is participating constructively in the debate surrounding the possible combination of the current compensations mechanisms.

Heat and physical fitness

A consequence of deep-level mining is exposure to heat. This is an issue of concern in South Africa and at Obuasi in Ghana. AngloGold Ashanti has comprehensive heat stress management programmes in place in South Africa and these have been extended to Ghana. Some of the largest refrigeration plants in the world are used to cool the underground working environment to below  27.5?. Temperatures above 27.5? require a heat stress management programme to be implemented on-mine. Stoping wet-bulb temperatures were, on a weighted average, 28.5?C during the year.

The Kwesi Mensah shaft refrigeration plant at Obuasi mine in Ghana was commissioned during 2006. The reduction in the average wet-bulb face temperatures in the working places since the commissioning of the refrigeration plants at end of April 2006 brought temperatures down from 32.6?C to 30.2?C wet bulb. Further improvements are expected early 2007 when the remaining 50% of plant installations are commissioned.

Fatigue management

The management of fatigue is believed to be a major component of safety and health performance at those operations where rotational shifts are worked (such as at Sunrise Dam, Geita and Navachab). More recently, it is believed that fatigue is playing an increasingly important role in the South African operations (especially in light of an ageing workforce and high HIV levels). Proprietary research is being conducted by the company to underpin a sound fatigue management protocol. (See case study: Successful implementation of fatigue management programme at Navachab).

Performance reviews

Performance reviews in respect of health and safety and health performance are undertaken on a regular basis, internally and externally. Every fatal accident is reviewed not only through the required mine-based and statutory review bodies, but also by the corporate safety and health department and is subject to an executive review.

Given the disappointing safety performance in the South African operations during the year, high-level external parties (including participants from DuPont and major shareholder Anglo American plc) were asked to review the safety and health strategy. (See case study: Safety review at South African operations.)

Business principle 3:
The management of occupational safety and health is a prime responsibility of line management, from the executive level to the first-line supervisory level.

Safety and health is overseen by the Board Committee on Safety, Health and Sustainable Development, which meets on a quarterly basis in alignment with the company’s financial reporting periods. The committee’s role is to evaluate the social, economic, environmental and health effects of the company’s operations on both local and global communities, and to achieve a sustainable balance between economic and social development with due regard to the safety and health of employees and the impact of AngloGold Ashanti’s operations on the environment. One of the stated primary objectives of this committee is to ensure the elimination of all work-related accidents and diseases. The committee conducts on-site inspections on matters of serious concern.

The management of safety and health is the responsibility of line management at an operational level, who in turn are supported by specialist safety and health personnel. In South Africa, health services are provided by AngloGold Ashanti Health, a separate but wholly-owned subsidiary of AngloGold Ashanti.

Business principle 4:
We will set safety and health objectives based on comprehensive strategic plans and will measure performance against these plans.

The group’s Safety and Health Policy, underpinned by our values and business principles on safety and health, are minimum guidelines for the group in respect of safety and health. Regions and operations are encouraged to develop their own specific principles, guidelines and policies in line with local conditions and legislation, examples of which are available on our website.

Business principle 5:
We are committed to complying with all relevant occupational health and safety laws, regulations and standards. In the absence of such standards, leading practice will be adopted. The company will not tolerate or condone deliberate breaches in standards and procedures.

During 2006 no significant breaches of the safety and health legislation and regulations came to the attention of the board.

In October 2006, AngloGold Ashanti received a claim for compensation of damages allegedly suffered by Mr Thembekile Mankayi, who was employed by the company at Vaal Reefs mine from 1979 to 1995, in respect of Mr Mankayi’s having allegedly contracted silicosis. AngloGold Ashanti has indicated that it intends defending this action, although the company recognises the plight of former employees and proposes that a longer term and co-operative solution will be of significant benefit to former mineworkers and their communities. (See case study: The legacy of silicosis).

Business principle 6:
The company is committed to providing all necessary resources to enable compliance with these principles. We will provide all necessary personal protective equipment.

The provision of personal protective equipment to employees is provided for in terms of operation-specific policies, employment contracts and collective bargaining agreements, and varies from site to site and indeed from occupation to occupation.

Medical surveillance and medical care is provided for all employees, either at company-owned and -managed (or contracted) facilities or at the premises of external health care providers. These options are dependent on the location of the specific operation and the facilities that are available in that area.

Details on operation-specific medical facilities may be found on our website or in the respective country reports.

Business principle 7:
We will implement safety and health management systems based on internationally recognised standards and we will assess the effectiveness of these systems through periodic audits.

While safety and health performance is overseen at a corporate level, with strategies for specific issues being driven at this level (such as protocols for, and the auditing of, the management of cyanide), individual regions and operations are encouraged to develop their own safety management systems, consistent with the company policy and OHSAS 18001 specification.

Following the liquidation of the National Occupational and Safety Association (NOSA), which was used by a number of operations in terms of specifications for safety management systems and external auditing and certification, the group is moving towards the implementation of an alternative specification, Occupational Health and Safety Assessment Series (OHSAS) 18001. (See case study: From NOSA to OHSAS – a change for the group).

Business principle 8:
We will conduct the necessary risk assessments to anticipate, minimise and control occupational hazards. We will promote initiatives to continuously reduce the safety and health risks associated with our business activities.

Risk assessments are conducted at both group and operational level, from the risks relating to the group as a whole to risks associated with specific working places, with the aim of understanding the potential safety and health risks that exist so that they may be eliminated or reduced to tolerable levels. A detailed discussion on risk analysis within the group can be found in the Annual Report 2006 in the Corporate Governance section.

Risk assessment may be conducted by or with the assistance of external consultants, by the group’s corporate office, by underwriters (for insurance purposes) or by the operations themselves. In recent years, risk assessment has been extended to the rock face, with basic hazard identification skills being taught to front-line supervisors and employees. Specific risk management programmes and projects undertaken during the year are reported in the various country reports.

Number of shifts lost due to injuries
 2006 2005
Argentina  
Cerro Vanguardia131283
Australia  
Sunrise Dam512
Brazil  
Anglogold Ashanti  
Minera??o405437
Serra Grande393181
Ghana  
Iduapriem13387
Obuasi2,200841
Guinea  
Siguiri7265
Mali  
Morila2822
Sadiola167177
Yatela53156
Namibia  
Navachab45116
South Africa  
Great Noligwa10,99010,867
Kopanang8,8835,428
Moab Khotsong5,8784,074
Mponeng5,9957,325
Savuka1,7542,346
Tau Lekoa7,3818,601
Tautona6,6794,523
Tanzania  
Geita114148
USA  
CC&V00
Other758585
Group52,06446,274
Business principle 9:
We will establish and maintain a system of medical surveillance for our employees.

Medical surveillance forms an integral part of the management of occupational safety and health. Medical surveillance programmes are in place at all operations, and the results of this surveillance feed back into risk management processes and underpin the company’s safety and health reporting protocols. Surveillance systems include the monitoring of TB, OLD, NIHL and other aspects of employee health that may have an impact both on the work performance of the employee and on his or her overall well-being. (See case study: AngloGold Ashanti’s approach to fitness for work adopted as industry standard).

Enlarge Wellness in the workplace diagram
Business principle 10:
We strive for employee involvement and consultation with employees or their representatives to gain commitment in the implementation of these principles.

Safety and health agreements which have been negotiated with representative unions are in place at those operations where this is required by law and where union membership or collective bargaining agreements are in place.

  • In South Africa, which is governed by the Mine Health and Safety Act, each operation has its own agreement with the union representative of the majority of employees, the National Union of Mineworkers (NUM). These agreements, however, are extended to all the unions represented in the company. Joint health and safety committees are in place at every operation and all working places are covered by such agreements. As required by the Act, 23 full-time safety stewards and 1,900 safety and health representatives have been trained, designated and appointed.
  • At Morila in Mali the union (representing the entire workforce) participates in the election of safety representatives, in conjunction with the labour inspector from regional government. Twenty employees are elected for a period of three years. The union is an active participant in monthly safety stewards and 1,900 safety and health management meetings, as well as in investigations held into accidents and incidents.
  • Agreements are in place between management and the unions in respect of safety and health at Sadiola and Yatela in Mali, with 15 union representatives employed in the different departments.
  • At Navachab, safety and health agreements are in place with the Mineworkers’ Union of Namibia (MUN), which represents 80% of the workforce.
  • In Ghana employee safety and health is addressed in the collective bargaining agreements with the unions that cover all categories of employees.
  • Agreements are in place with unions in Argentina and Brazil relating to employee participation in safety matters.
  • Where no formal agreements are in place or where the operations are not unionised (such as at CC&V and Sunrise Dam), participation by employees is encouraged and forms part of their employment contracts.
Business principle 11:
We will communicate openly on safety and health issues with employees and other stakeholders.

We believe that the involvement of employees and, where applicable, employee representatives, in the area of safety and health is crucial to success, not only in terms of creating awareness and commitment to standards and best practices, but also to keep employees fully informed of their rights and responsibilities in respect of safety and health. All operations have safety and health communications programmes in place and a number of the different campaigns undertaken during the year are documented in the country reports. Communication tools include meetings, notices and signage, the intranet, mine-based newsletters, safety newsletters, launches and other events, industrial theatre, posters, videos and induction procedures.

Business principle 12:
We will ensure that employees at all levels receive appropriate training and are competent to carry out their duties and responsibilities.

We recognise that the provision of appropriate training is essential to ensure that employees are competent to carry out both their duties and their responsibilities safely. In many countries in which we operate, specific training requirements are provided for in terms of laws and regulations. A wide range of safety training initiatives was undertaken by the various operations in 2006 and details of these may be viewed on the website and in the country reports.

Business principle 13:
We will require our contractors to comply with these principles and we will seek to influence joint partners to apply them as well.

Contractors form an integral part of our operations and are employed to undertake specific short-and long-term mining and processing operations and specialist services. It is our philosophy that contractors must act and be treated in the same way as employees and indeed this is required by law in many of the countries in which we operate. The management of contractors in terms of safety and health is recognised as an important part of overall contractor management and specific policies, procedures and requirements form part of the procurement and contractor engagement processes. Contractor safety and health performance is a key consideration when the company is considering the appointment or re-appointment of contractors.

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AngloGold Ashanti Annual Report 2006 - Report to Society