CONTRACTOR MANAGEMENT AT XSTRATA COAL

INDEX Location of sites Employees vs. Contractors Contractor selection phase Pre-engagement operational phase Engagement operational phase Post engagement / project completion phase Completion stage Common problems experienced Future initiatives

Location of sites Middelburg Witbank Ogies Waterpan Boschmans Witcons South Witbank Goedgevonden Tweefontein Division Middelburg Witbank Phoenix Tavistock ATC ATCOM iMpunzi Division Ogies Mpumalanga Division Tselentis Spitzkop DTJV - Middelburg DTJV - Douglas Rietspruit

Employees vs. Contractors Mine Tons/mth No. empl No. Contr % of Workforce Arthur Taylor 164000 537 138 20 ATCOM 176000 363 79 18 Boschmans 280000 568 282 33 Goedgevonden 60000 5 173 97 Phoenix 84700 430 83 16 South Witbank 342 297 44 Spitzkop 433 221 34 Tavistock 177500 492 295 38 Tselentis 115000 92 737 89 Waterpan 110000 141 437 76 Witcons 190000 394

Employees vs. Contractors Strength Injuries Contractors contribute to 31% of the total number of injuries

Management Of Contractors CONTRACTOR SELECTION PHASE CONTRACTOR SELECTION PHASE PRE-ENGADGEMENT OPERATIONAL PHASE OPERATIONAL PHASE The company Preparation Completion of all documentation Including contract, indemnities, returns, etc Attendance at HS and Operational Meetings Evaluation criteria Over inspection / Monitoring / Auditing Tender Assessment in accordance with Company Procedure Completion of pre-emptive risk identification and assessment Assessment and response to pre-emptive risk identification and assessment by the company. POST-ENGADGEMENT OPERATIONAL PHASE Selection / Rejection Review contractual performance / delivery of services Induction / Training Medical Examination (certificate of fitness and medical surveillance) Review compliance with obligations

Contractor Selection Phase Need for contractor employment identified Scope of work defined Evaluation criteria Tender assessment – company procedure Company actions Selection

Pre-engagement / Operational Phase Documentation, i.e. contract, indemnities, appointments, etc Pre-emptive risk identification & assessment Response to risk identification & assessment Induction training Medical examination (C.O.F. & medical surveillance)

Engagement / Operational Phase Monitoring performance, i.e.: H&S Meetings Risk management programme Occupational hygiene controls monitored Incident / injury reports Daily, weekly, monthly returns submitted First aid programme Induction Medical surveillance Health & safety training programme

Engagement / Operational Phase Issue & control of PPE Equipment inventory Logbooks, registers, appointments Fire drills Emergency preparedness / escape routes Vehicle / equipment pre-use checks Planned task observations H & S Audits Hazardous substances Maintenance management

Engagement / Operational Phase OEM training / authorisation procedure Approval of deviations / modifications to equipment Approval – temporary workers Approval – contract variation orders Non-compliances Special precautions for hazardous work

Post-Engagement / Project Completion Phase Review of contractual performance Delivery of service Quality assurance Review of compliance with obligations Cold commissioning of system Hot commissioning of system Warranty and maintenance period confirmed Contractor documentation Security cards returned

Post-Engagement / Project Completion Phase Exit medical examinations Equipment removal Site area cleared, clean & safe Acceptance of ownership

Common Problems experience Limitation on the number of specialist contractors in the market Time restraints in selection and appointment process Quality of contractors supervisors and employees Record keeping on the movement of contractors employees between mines Desertion of contractors employee without completing exit medical examinations

Future initiatives Preferred contactors list Electronic data base with program to generate tender documents