Environmental, Social And Governance

Bushveld Minerals’ strategic intent of value beyond compliance is anchored on the principle of creating shared, long-lasting value for all its stakeholders.

The Group began to develop a sustainability strategy in 2020. The sustainability strategy focuses on Environment, Social and Governance (“ESG”) principles. The Group will integrate material ESG considerations into the decision-making process, across the value chain. It will report on material ESG Key Performance Indicators and communicate a consistent message to stakeholders on key ESG commitments.

The Group also started a process of developing the ESG management system, which is developed in line with the International Finance Corporation (“IFC”) Performance Standards. It also incorporates the requirements of the ISO 14001:2015 Environmental Management Systems  and ISO 45001:2018 Occupational Health and Safety Management Systems to facilitate future alignment with these standards and certification at an operational level.

Collectively, the ESG strategy and management system will assist Bushveld and its operations to comply with relevant authorisations, legal requirements, the IFC’s Environmental and Social Performance Standards and other obligations in a systematic and structured framework. The Group’s sustainability strategy and ESG management system will be concluded in Q4 2021.

 

1. Health and safety

Bushveld Minerals recognises that the well-being of employees and communities is key for its long-term success, and we intend to build on the foundations already in place at Vametco and Vanchem.

The approach is risk-based, starting with a Baseline Risk Assessment, moving to an Issue-based Risk Assessment, and then to a Continuous Risk Assessment, which includes lagging and leading indicators.

Our guiding principle is zero tolerance for deviations from safety regulations, whether by our own employees or contractors. We have instilled a work culture based on behavioural management that views health and safety as of paramount importance. This was achieved through various safety campaigns implemented in 2020.

Training is directed at making sure our employees not only work responsibly for their own well-being, but also look out for their colleagues’ health and safety. Our safety drive entails visible leadership and behavioural change coaching, inspections and training programmes that are conducted on site by both management and employees. We believe that measuring ourselves against industry-leading practices and implementing good health and safety systems and conditions will keep us in the forefront of the industry.

Bushveld Vametco’s safety performance for 2020 was zero fatalities and zero lost-time injuries. The Department of Mineral Resources’ Mine Health and Safety inspectors paid 15 visits to the mine and issued one stoppage in terms of the Mine Health and Safety Act’s Section 54.  All findings were corrected.

 

2 .Environmental management

Bushveld Minerals’ environmental strategy is centred on compliance with various environmental laws and regulations (national, provincial and local) and alignment with international standards, including the IFC’s environmental and social performance standards and the ISO 14001:2015 Environmental Management system.

Annual environmental performance assessment audits are conducted by an external environmental specialist and by regulatory authorities. They consider the Group’s compliance with the conditions of the Environmental Management Plan (“EMP”) and the mine’s environmental authorisations. Environmental legal compliance audits were also performed by an independent specialist. No major findings were reported from any of these audits and no environmental penalties were imposed by the regulatory authorities.

Vametco

Vametco is embarking on an Environmental Impact Assessment (“EIA”) for its expansion project. The updated EIA will enable it to develop a comprehensive EMP. Vametco plans to start the process of developing and implementing the ISO 14001:2015 Environmental Management System

Water management

Water management is integral to the Group’s licence to operate, so compliance with all the requirements of the Group’s Water Use Licence (“WUL”) is a priority. Vametco is in the process of amending its Water Use Licence to include activities under the third phase expansion. In 2020, there were two compliance audits by the competent authority, the Department of Water and Sanitation. Action plans were developed and communicated to the department to address the findings. The outstanding issues will be addressed through the amendment to the WUL, which is in progress.

Vametco also conducted all required internal and external Integrated Water Use Licence (“IWUL”) audits in 2020.

Based on those audits, action plans were developed to improve water management.

Vametco follows an ongoing surface and groundwater monitoring programme. Sampling and analysis of various chemical constituents and groundwater level measurements are conducted on a monthly and quarterly basis, as required by the IWUL and South African National Standards drinking water quality standards, to ensure effective management of the water resources on site and in surrounding areas. The implementation of best practice measures for effective clean and dirty water separation, optimised recycling of used water and water balance.

The annual water allocation under Vametco Alloys’  WUL is 1,624,811 m3 from various sources (boreholes, open pit seepage and third-party water supplied by the Hartbeespoort Irrigation Water Board (Canal). In 2019, Vametco’s water withdrawals were 77% of its total allocation (1,251,114 m3), resulting in a 23% saving (373,697 m3). In 2020, Vametco increased its water withdrawals by 6% compared with the 2019 utilisation. That brought its total extraction to 82% (1,324,302 m3) of its allocation.

Waste management

Vametco is in the process of amending its Waste Management Licence, which will be authorised by the DMRE as part of the environmental authorisation for the entire operation. With the advent of COVID-19, some non-essential activities were halted, which affected waste management services. Total waste removed from site declined by 31% compared with 2019. A total of 599 tons of waste was removed at Vametco in 2020, compared with 871 tons removed in 2019. Recyclable waste removed in 2020 (463 tons) declined by 33% (233 tons) against 2019 (696 tons). Waste disposed off-site into landfills (136 tons) declined by 22% (39 tons) compared with 2019 (175 tons).

An independent external specialist conducted audits on the Factor of Safety (“FoS”) of the Group’s mineral waste disposal, particularly the tailings dam and magnetite tailings storage facilities. The report is expected in 2021.

Air quality and environmental dust fallout

The Bojanala District Municipality granted Vametco an Atmospheric Emission Licence in September 2020, in line with Minimum Emission Standards valid for 5 years. The Group is dedicated to ensuring that there is compliance with the conditions of the licence This includes monitoring our stacks emissions and implementing management plans if they exceed the designated limits. Capital projects, including the installation of off-gas scrubber systems and bag house systems, demonstrate our commitment to keep our emissions within standards. The effectiveness of these measures is evident in the results of stack emissions monitoring conducted by independent third-party specialists.

Vametco developed and is implementing a dust management plan to ensure that the operation remains within its compliance limits of below 1,200 mg/m2 per day, in line with South African National Dust Control Regulations, 2013.

Biodiversity Management

Vametco conducts annual plant assessments as part of the biodiversity impact assessment. This includes an Invader Species Eradication Programme, in which people from the local community are employed. Vegetation and grass are planted in areas meeting final rehabilitation criteria during summer. Updated plant and animal specialist studies were conducted as part of the EIA.

Mine rehabilitation and environmental liabilities A closure cost review analysis for 2020 was conducted by a third-party consulting firm. No material change was reported compared with 2019. Concurrent rehabilitation is practised wherever possible to minimize environmental impacts during operation and reduce the final environmental liability. Vametco is finalising the Financial Rehabilitation for Closure in terms of the NEMA Financial Provisioning Regulations of 2015.

Quality Management System (‘QMS’): ISO 9001:2015

Vametco has maintained its ISO 9001 certification. During the annual assessment audit conducted in 2020 by the certification body, Bureau Veritas (“BV”), the organisation demonstrated that its quality management system fulfilled the requirements of the standard. No major findings were raised and all minor findings were addressed.

Vanchem

Occupational Health and Safety

One of Vanchem’s priorities is to provide a safe and healthy workplace for all its employees, contractors, suppliers, and visitors.

One of the first priorities following the acquisition of Vanchem was to update the Occupational Health and Safety Policy and Procedures. The updated policy and procedures are meant to provide the leadership with the resources to ensure all workers go home safe and well every day. The procedures are also designed to ensure a systematic approach is taken to anticipating, identifying, evaluating, controlling, monitoring, and managing occupational health and safety risks to make them “as low as reasonably practicable”.

The Group is developing the system in line with the ISO 45001: 2018 Occupational Health and Safety Management System.

Environment

Since acquiring Vanchem, independent consultants were commissioned to conduct various EIAs to evaluate the current status quo on the environmental impacts and risks of our operation. For projects which need to progress to construction and operation, the EIA forms the basis of the site-specific environmental management system (“EMS”).

The system is developed in line with ISO 14 001: 2015 Environmental Management System.

In 2020, Vanchem started to implement the ISO 9001: 2015 Quality Management System. The first-stage audit is expected in October 2021 and the certification audit is expected to take place in March 2022.

Bushveld Energy

Bushveld Energy is actively driving the adoption of Vanadium Redox Flow Batteries (“VRFBs”) in the global energy storage industry. Bushveld Energy’s activities stretch over three key areas: electrolyte production; battery investment and manufacturing; and project development.

Bushveld Energy is developing a 1 MW mini-grid at Vametco, consisting of 3.5 MW of solar photovoltaics and 1 MW/4 MWh of VRFBs. The additional benefit of this project for Bushveld Minerals is that it is expected to contribute towards the reduction of the Company’s carbon gas emissions through using renewable solar energy and storage. Bushveld Energy, together with the Group’s Operations team, is investigating options to further increase sourcing of renewable energy at all of Bushveld’s facilities to further minimise the carbon footprint.

VRFBs are designed to last for 20 years or more, so fewer batteries need to be deployed than would be the case for lithium batteries. The unique technical design allows full re-usability of the chemical electrolyte in the battery, once the electrical and mechanical components wear out. That means that even when the battery reaches the end of its 20-year lifespan, the electrolyte can be redeployed into another battery. The electrolyte can be easily reprocessed by existing vanadium processing facilities, at minimal cost, into products such as ferrovanadium and vanadium-pentoxide for use in high-strength steels and specialty alloys and chemicals. Vanadium electrolyte is primarily made of water, allowing for easier processing than from other compound states. Only one mineral is extracted from vanadium electrolyte, whereas lithium, nickel, manganate, cobalt, etc. need to be separated out in a lithium battery. These opportunities may make vanadium the most circular economy-friendly mineral.

 

3. Socio-Economic Development

In 2020, Bushveld Minerals was not immune to the global economic challenges brought on by the impact of COVID-19. The pandemic has not only negatively impacted many livelihoods globally, but in the case of South Africa, the impact of COVID-19 has worsened socio-economic challenges that pre-dated the pandemic. As a result, the host communities where the operations of Bushveld Minerals are located are currently experiencing even higher levels of unemployment, poverty and inequality. Communities have increased expectations of the mining sector and of other large employers in their areas. This will undoubtedly continue to put pressure on their relationship with the Bushveld operations at Vametco and Vanchem.

In 2020, the implementation of Corporate Social Investment (“CSI“) projects for Bushveld Minerals was impacted by the COVID-19 lockdown. However, a total of over ZAR1.5 million was spent to support various social initiatives around our operations that benefited our host communities. The key areas that were impacted by this spending were:

  • Improving infrastructure, using the services of local SMMEs;
  • Creating short-term job opportunities for unemployed community members; and
  • Raising COVID-19 awareness in the community.

Socio-economic Base Study

In October 2020, Bushveld Minerals commissioned a socio-economic baseline studies among local communities around its Vametco Alloys and Vanchem operations.

The results of the study will be used to identify and develop sustainable programmes that will help to address the socio-economic challenges within Bushveld’s host communities. The households surveyed were located in the identified host communities of Madibeng and Emalahleni. The results of the study, have provided key indicators of where efforts should be focused in future. Bushveld aims to build sustainable relationships with its host communities by partnering with them to implement sustainable development programmes.

Key Indicators

The baseline study focused on key socio-economic indicators related to population and demographics, community well-being, employment and income, employability, access to infrastructure and related public services, economic development and the impact of COVID-19.

Although there were some differences in population and demographics within the Madibeng and Emalahleni communities, there were also some clear similarities that are worth highlighting.

Socio-economic development contributions: human resources development

Human resources development (“HRD”) is one of the Company’s important socio-economic goals. Bushveld Minerals invests in developing the skills of its employees and members of the host communities. The aim is to improve the quality of life of workers and members of the community, while increasing their labour mobility and prospects of employment beyond Bushveld Minerals.  The HRD programmes include learnerships, internships, bursaries, portable skills and Adult Education and Training (“AET”). The HRD programmes and achievements in 2020 are described below.

  1. Learnerships: Learnership programmes are offered to both employees and non-employees. In 2020, there were 47 non-employee learners and five employee learners. Trades taught included: Fitting, Fitting and Turning, Electrical, Instrument Mechanician, Rigging, Boiler-making and Diesel Mechanics.
  2. Internships: Four community members were part of the one-year internship programme studying in Analytical Chemistry. Another 7 community learners were on a two-year internship programme, with two in Finance, one in Geology; one in Electrical Engineering; one in Analytical Chemistry and one in Chemical Engineering.
  3. Bursaries: 35 bursaries were awarded. 69% of the bursary holders were females. Qualifications pursued included Medicine, Accounting, Engineering, Information Technology, Geology, Law, Education and Pharmacology.
  4. Portable skills: Due to COVID-19 restrictions, the business was unable to make an impact in this area. Training sessions will resume once health and safety protocols allow.
  5. AET: This is an accredited curriculum offered to community members and employees to promote literacy. It focuses on upgrading English communication skills and numeracy. The curriculum ranges from pre-AET to level 4 (NQF1). In 2020, there were 29 learners from the community and 16 employees on this course.

Socio-economic development contributions:

Labour Profile

Bushveld Minerals’ subsidiaries pay special attention to sourcing labour from host municipalities, and this contributes directly towards local socio-economic development.

Bushveld Vametco Alloys Social and Labour Plan 2018 to 2022

Stakeholder Engagement

Bushveld Minerals has developed a Stakeholder Engagement Strategy which forms the blueprint for building relationships with stakeholders, including host communities and local landowners. The stakeholder engagement strategy was developed to enable Bushveld Minerals to develop a collaborative relationship with key stakeholders in support of its strategic objective – to become a fully integrated vanadium company.

The stakeholder engagement strategy builds on Bushveld’s strategic intention to identify key stakeholders and their interests and requirements, to develop appropriate engagement models. There were meaningful, transparent, and honest engagements with stakeholders in 2020.

Four key stakeholder engagement outcomes were set to support Bushveld Minerals’ strategy:

  • Socio-economic development, regulatory compliance, and creation of value beyond compliance in communities where we operate.
  • Development of a strong South African vanadium industry, including a broad base of stakeholders.
  • Development of a policy and regulatory framework for the battery energy storage systems industry, including VRFBs, in the South African electricity market; and
  • Expansion of VRFB deployments into the African continent and exports of vanadium, electrolyte, and the electrolyte rental product to key global markets (US, UK/EU and China).

The country experienced the worst pandemic in over 100 years, accompanied by government measures to curb infections. Without doubt, the national lockdown and new compliance and safety regulations had a negative impact on the original 2020 stakeholder relations plan for face-to-face engagements. Engagement has become virtual, which brings its own challenges. Key highlights from our stakeholder relations activities in 2020 include:

  1. The commitment by the Office of the Premier of the Eastern Cape to provide necessary support to Bushveld Electrolyte Company’s investment in the Eastern Cape.
  2. The commitment by the Office of the Deputy Minister of Finance in South Africa to provide necessary support to Bushveld Minerals in championing local beneficiation programs in the vanadium sector.
  3. Bakenberg Traditional Council, Bakenberg Mining Forum and Pamish resolved to engage further to finalise all outstanding matters affecting the mine, such as surface lease agreements, community shareholding, and implementing the social and labour plan.
  4. The Investment and Infrastructure Office in the Presidency committed to provide the necessary support to Bushveld Energy.

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