Economic contribution

Economic contribution
We believe that the overall economic contribution generated as a result of our operations should fairly reflect the balance of the risks and rewards of responsible investment and development.
 

OUR ECONOMIC CONTRIBUTION

The disclosure of our strategic approach on economic performance indicators is detailed on the front cover of the Integrated Annual Report.
 

Payments to Government

The Company has a Board-approved tax strategy, which is discharged by a team of professionals acting in accordance with the Company’s business principles.

It is important to look at the total tax revenue which we generate in the countries in which we operate. It is an oversimplification to consider this merely in terms of the amount of corporate income tax and royalties which we pay in each country. It is necessary to also consider all the other taxes borne by the Group, including import and export duties, withholding taxes and other taxes. These taxes, which are a cost to the Group, amounted to R2,054 million (2010: R1,300 million) in 2011. In addition, there are taxes which arise as a result of our operations which, although not a cost to the Group, are collected by us and remitted to government. These include payroll taxes and VAT. In 2011, this amounted to R1,496 million (2010: R1,404 million). In South Africa in 2011, Anglo American Platinum Limited paid cash of R1,916 million (2010: R1,322 million) to the governments in the form of corporate income taxes, royalties and other taxes.

Taxes paid to Government generate the revenues which can then be spent on social infrastructure, schools, roads, public services, conservation and enforcement of laws. This forms part of our socio-economic impact. Our influence in many local economies spreads significantly wider than our operations and employees, with direct and indirect benefits extending, for example, to businesses supporting the Group’s operations. Government recognises the significant benefits that can accrue to an economy through the responsible extraction of natural resources. Tax revenues form an important part of those benefits, together with diversification of the local economy, job creation, infrastructure build, social programmes (such as health) and increases in the country’s gross domestic product.

No financial assistance is received from governments in the jurisdiction we operate in.
 
 

Value added statement

for the year ended 31 December
  2011
Rm
% 2010
Rm
% 2009
Rm
%
Value added            
Net sales revenue 51,117   46,025   36,687  
Less: Purchase of goods and services needed to operate the mines and produce refined metal including market development and promotional expenditure (24,757)   (22,801)   (17,708)  
Other net (expenditure)/income (1,223)   4,308   1,859  
Value added by operations 25,137 101 27,532 101 20,838 99
Income from investments and interest received (263) (1) (164) (1) 139 1
  24,874 100 27,368 100 20,977 100
Value distributed            
Salaries, wages and other benefits net of PAYE and SITE 12,147 49 11,054 40 10,372 49
Salaries, wages and other benefits 10,651   9,650   8,712  
PAYE and SITE 1,496   1,404   1,660  
Tax charges 2,054 8 1,300 5 1,027 5
South African taxation 1,436   442   169  
Foreign and withholding taxation     1  
Payment to Anglo American Group companies for utilisation of tax losses 127   431   188  
South African indirect taxes 491   427   669  
Providers of capital 3,821 15 966 4 1,998 10
Interest paid 530   966   1,992  
Dividends 3,291     6  
Total value distributed 18,022   13,320   13,397  
Reinvested in the Group 6,852 28 14,048 51 7,580 36
Amortisation and depreciation 4,761   4,444   4,214  
Accumulated profits 2,091   9,604   3,366  
             
  24,874 100 27,368 100 20,977 100
 

Direct value added to South Africa

Total turnover in 2011 was R51,484 million, distributed as follows:
Employees
Total payroll and benefits paid in South Africa, R millions 2011 2010 2009
Gauteng 1,283 1,039 836
Limpopo 4,463 4,799 4,581
North West 5,968 5,107 4,819
Mpumalanga 190 156 137
Total 11,904 11,101 10,373
Wages1 10,241 9,404 8,685
Pension 839 789 767
Other benefits 272 172 151
Share-based payments 498 455 487
Redundancy payments 54 280 282
Total 11,904 11,100 10,372
Public sector
Taxes paid and other payments to Government in South Africa, R millions      
South African normal taxation 573 751 91
Secondary tax on companies 186 13 16
Royalties 419 131 56
Other 738 427 667
Total 1,916 1,322 830
Apart from reimbursement of its payment to the skills development levy, the Company received no grants, tax relief or other types of benefits that did not represent a transaction of goods and services.      
Donations in South Africa, R millions      
Health 2.5 6.7 6.0
Education and youth projects 37.5 50.4 34.7
Environment 1.6
General community development (including infrastructural projects) 99.1 11.0 69.4
Arts, culture and heritage 1.0 40.7
Housing
Other 22.6 34.0
Chairman’s Fund contribution 23.8 15.0 25.0
Total 186.5 118.7 175.8
Non-core infrastructure development2, R millions      
1 Anglo American Platinum Limited is an equal-opportunity employer and to this end remunerates its employees competitively irrespective of race and gender.
2 This is infrastructure built outside main business activities, such as schools, hospitals and roads.
Private sector
Suppliers 2011 2010 2009
Cost of goods, materials and services purchased, R millions      
Total 28,135 25,788 28,318
Of which sourced from South Africa 26,767 24,716 27,132
Note: 100% of contracts were paid in accordance with agreed terms.
 
Customers
Anglo American Platinum Limited is primarily a platinum producer operating in South Africa. All other metals produced are by-products of the platinum process. The following analyses of the Company’s revenue are based on the end-use of metals sold, rather than on the location of primary customers:
Gross sales revenue analysis, R millions 2011 2010 2009
Platinum 32,171 29,481 25,528
Palladium 7,520 5,063 2,954
Rhodium 4,882 5,715 4,345
Nickel 3,180 2,919 2,269
Other 3,731 3,174 1,851
Total 51,484 46,352 36,947
North America 4,189 3,438 2,692
Asia 18,322 15,068 10,470
Europe 18,884 19,564 18,025
Africa 8,624 7,783 5,645
Other 1,465 499 115
Total 51,484 46,352 36,947

The following data represent the Company’s output as a proportion of supply. This is defined as ‘sales of new metal’:
Market share of global mined production, % 2011 2010 2009
Platinum 40 42 41
Palladium 19 20 19
Rhodium 44 44 45
Providers of capital      
Distributions to providers of capital, R millions      
Interest on short-term debt 530 965 2,065
Dividends 3,291 6
Total 3,821 965 2,071
Increase in accumulated profit 2,091 9,604 3,366
 
Underground workers at Unki Platinum Mine  
 
Our economic contribution
Black economic empowerment (BEE) ownership
In 2011, South Africa’s mining sector was again challenged for not adhering to the Mining Charter’s requirement that 26% of ownership be transferred to previously disadvantaged South Africans by 2014. (Although revised, the charter has not changed this target.) However, because Anglo American Platinum Limited had completed a number of BEE transactions over the previous decade, it complied fully with this requirement of the charter.
 
The Company’s empowerment transactions have resulted in the significant and meaningful empowerment of historically disadvantaged South Africans (HDSAs) in various operations and projects. Since 2000, Anglo American Platinum Limited has completed the following wide range of BEE transactions:
The August 2000 purchase of 22.4% of Northam Platinum Limited (Northam) by Mvelaphanda Resources (Mvela) for R440 million.
The formation in August 2001 of the 50:50 unincorporated Modikwa Joint Venture with ARM Mining Consortium Limited.
The establishment in July 2002 of a 50:50 unincorporated BRPM Joint Venture with the Royal Bafokeng Nation (RBN) over the Bafokeng-Rasimone Platinum Mine (including the Styldrift project area).
The formation in August 2002, with Lonmin plc, of the Pandora Joint Venture, which includes the participation of the Bapo-Ba-Mogale Mining Company and Mvelaphanda Resources (on behalf of Northam) as empowerment partners, each having a 7.5% interest in the joint venture.
The disposal in October 2005 of the rights on the property Elandsfontein 440 JQ to Eland Platinum Mines (EPM), with the Ngazana Consortium holding a 26% interest in EPM.
The development of a chromite recovery plant at the Group’s Union Mine in July 2006, with Siyanda Chrome Investments.
The transaction, in December 2006, with the Bakgatla-Ba-Kgafela (Bakgatla), who are the traditional community at Union Mine, giving the Bakgatla a 15% stake in Union Mine as well as a 26% stake in the Magazynskraal project and a 55% stake in the Rooderand project.
Anglo American Platinum Limited's establishment of an employee share-ownership plan (ESOP) that effectively owns 1.5% of the Company, to benefit all permanent employees not benefiting from any other Company share scheme.
The Group’s sale to Anooraq, on 30 June 2009, of an effective 51% of Bokoni Platinum Mine (Bokoni) and an additional 1% of the Ga-Phasha, Boikgantsho and Kwanda joint-venture projects.
The disposal of the Group’s 50% interest in the Booysendal project and of its 22.4% interest in Northam to Mvela, for a total consideration of R3.7 billion.
In 2008, the swapping of the Group’s 37% interest in the Western Bushveld Joint Venture for a 26.6% equity interest in Wesizwe Platinum Limited (Wesizwe), an HDSA company.
On 23 November 2011, Anglo American Platinum Limited's announcement of its implementation of a 10% community empowerment transaction at its Unki Platinum Mine (Unki). The transaction was an integral part of Unki’s indigenisation plan (which has been conducted in accordance with the country’s Indigenisation and Economic Empowerment Act).
 
Over and above the transactions conducted in South Africa, our Unki mine, which is based in Zimbabwe, will establish a trust – the Shurugwi Development Trust – for the purpose of subscribing for, and holding, 10% of Unki’s ordinary shares in issue. In addition, Unki will donate US$10 million to the trust, intended as seed capital to assist the community in the establishment of identified and approved development projects. The success of this transaction is dependent on further engagement and consultation with affected stakeholders, and consequently forms part of an ongoing engagement programme with the Government of Zimbabwe and the Company’s host communities.