2018 Mine Health and Safety Summit The Lakes Hotel and Conference Centre 19 October 2018 NEW LEVY MODEL Mr. Karabo Mkwanazi - MHSC Chief Financial Officer

Presentation Outline Introduction Current Levy Model vs 2014 Summit Milestones Rational for Reviewing Levy Model New Levy Model Levy Model Rebates Way Forward 2

1. Introduction The Mine Health and Safety Council (MHSC) funds its research activities with levies collected from mines. Levies are payables in terms of regulation 4(1) of the Regulations relating to the Payment of Levies by Mines on the basis of Health and Safety Risk, published under Government Notice 846 in Government Gazette 29144 of 18 August 2006 (the “Regulation”). The Regulation should be read with section 98(1)(zJ) of the Mine Health and Safety Act,1996 (Act 29 of 1996,as amended) (The MHSA). 3

STATE, SURPLUS AND INTEREST 1. Introduction…cont Audited Revenue for the year ended 31 March 2018 70% LEVIES R79 million 27% STATE, SURPLUS AND INTEREST R30 million 3% ADMIN FINES R3 million R130,5M 4

>R.5 billion 894 94% 492 73% 1. Introduction…cont MHSC COUNCIL 88 MHSC expenditure on research and promotion of health and safety in the SAMI Reduction in Fatalities 2020 2017 88 1996 457 The Journey to Zero Harm So Far… Tripartite Approach - 21yrs MHSC COUNCIL State Organised Labour Employers No of Mines Paying Levies 894 Based on levied in 2017/18 FY Number of Research/ Projects Completed 492 Right to refuse dangerous Work PPE for WIM Research Expenditure 73% Estimated expenditure based on ABC Revenue Collection 94% Collection of Levies from the mines. The Journey So far… Based on levied in 2017/18 FY - 853 5

1. Introduction…cont Research and Studies Completed No Thrust Area Research/ Studies 1 Human Factors/Behavioural Safety 17 2 Falls of Ground (FOG) 169 3 Rockbursts 42 4 Explosions and Fires 36 5 Machinery and transport systems 58 6 Airborne pollutants 44 7 Physical hazards 12 8 Occupational Diseases 9 Special Projects 56 TOTAL 492

2. Current Levy Model vs 2014 Summit Milestones During the 2014 Summit, the stakeholder in the South African Mining Industry (SAMI) set a target of zero harm. The current levy model is based on the number of fatal and reportable injuries over a 3-year rolling period and the average labour figures for the previous year. Not aligned to the goal of zero harm Not risk based, but more reactive in addressing the occupational health and safety issues. No rewards for good Occupational Health and Safety (OHS) record. 7

3. Rational for Reviewing the Levy Model In order to continue with world-class OHS research intended to achieve Zero Harm, the current levy model needed to be reviewed. As the industry strives toward zero harm, the number of accidents are expected to reduce to zero. The current levy model is not sustainable This presents a high risk of a below standard OHS research – and non-achievement of zero harm. 8

4. New Levy Model Risk Based Commodity Risk Principles of New Levy Model Risk Based Past Performance – MHSI Annual Report Commodity Risk High Risk Commodities – Higher Levy Production & Employment Figures Production – Safety Employment - Health Fixed & Variable Components Fixed – OHS – 90% Variable – OHS – 10% Rewards Rebate – 10% OH + S fatalities during the levy period which will also change from 3 years to 1 year. 9

4. New Levy Model…cont Consist of both Fixed and Variable elements Details Health Safety Total Fixed 45% 90% Variable 5% 10% 50% 100% Evenly distributed between Health and Safety Risk 10

10% TOTAL OHS LEVY REBATE 5. Levy Model Rebate The mines will now be rewarded for good OHS practices The Health rebate will be based on the achievement of 2014 Milestone target The Safety rebate will be based on zero fatalities and serious injuries TOTAL OHS LEVY REBATE 10% Occupational Health - 5% Safety – 5% 11

6. Way Forward Continuous Engagement Awareness Workshops Stakeholder Awareness Workshops All provinces Implementation YE 2020 12

RETURN ON INVESTMENT (ROI) ZERO HARM 0% EVERY MINE WORKER RETURNING FROM WORK UNHARMED EVERYDAY STRIVING FOR ZERO HARM

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