Harmony’s approach to sustainability reporting

Harmony has adopted the principle of integrated reporting for its 2010 Annual and Sustainability reports. The company recognises that integrated reporting combines reporting on a company's financial and non-financial (sustainable development) performance, and provides an holistic view of a company by explaining and promoting understanding of the cause and effect of various issues on the bottom-line.

In Harmony's view, integrated reporting is not necessarily one report but many platforms and would include all the reports prepared by Harmony:

• Annual Report
• Quarterly reports
• Media statements
• Form 20-F
• Sustainable Development Report
• Website updates
• Response to the Carbon Disclosure Project (CDP) and other investor and publicly available surveys.

The overall aim of Harmony's reporting effort is to comply with the listing requirements of the various stock exchanges on which the company is listed, to communicate with shareholders and the broader group of stakeholders, and to build up a formal, approved record of the company's financial and non-financial performance.

Social, environmental and economic considerations of the business, the opportunities and challenges they present and the company's performance in respect of these are presented throughout the Annual Report. Because Harmony believes that it remains important to report in greater detail than it is able to do in its Annual Report, and in line with its commitment to report in line with GRI, the company has also produced this separate Sustainable Development Report 2010.

Harmony aims to produce its reports in compliance with the regulations in the most cost-effective way possible. As far as it is practical and sensible, information will be placed on the website rather than in a printed document. For this reason, Harmony has published this report as a fully interactive HTML online report, although print-outs of the whole report or of its sections are available on request.

Identifying material issues

Harmony identified some of its most material sustainability issues to be included in this year's Sustainable Development Report. This process was undertaken discipline-by-discipline during a workshop process and as a result of feedback gathered by the discipline heads through their ongoing interaction and discourse with stakeholders.

The key issues identified and reported on in this year's integrated report are:

Governance indicators

• Compliance with legislation in the countries in which the company operates.
• Implementation of good practice in respect of governance and reporting.
• Establishment and maintenance of board and company structures so as to uphold the rights and interests of stakeholders and to report thereon.
• Ensuring integrity and ethics in all aspects of the business.
• Ensuring appropriate levels of risk management and mitigation.

Economic

• The ability of the company to produce safe, profitable ounces of gold.
• The gold market and exchange rates which influence the company's profitability.
• The company's investment in the future - exploration and development to sustain operations and to grow.

Safety

• The elimination of accidents, through the management of risk and ensuring the appropriate structures, systems and training are in place.
• Addressing the issue of illegal miners in South Africa.

Health

• Appropriate levels of surveillance and care for safe, healthy and productive employees.
• Effective disease management amongst employees and community members.

Labour and human rights

• Recruiting, developing, managing and retaining employees through initiatives such as Adult Basic Education and Training (ABET), training and development and leadership and supervisory development programmes.
• Developing and ensuring diversity above the required compliance levels.
• Promoting sound and constructive industrial relations.

Community

• Identifying and implementing sustainable socio-economic development initiatives such as enterprise and community skills development in line with our business philosophy and in compliance with our commitments.
• Developing and applying corporate social investment and local economic development strategies that help fulfil our role as a responsible corporate citizen.
• Affirmative procurement with an emphasis on promoting business with historically disadvantaged South Africans (HDSAs), women and local communities.
• Improving employees' housing and living conditions.
• Developing and promoting sound and responsive internal and external relationships through effective stakeholder engagement.

Environmental

• Implementing environmental management and auditing systems that ensure compliance with legislation and regulation in the countries in which Harmony operates as well as with the company's own internal policies and standards.
• The responsible use of resources such as energy and water.
• Ensuring appropriate risk management practices and mitigation measures are in place to eliminate or minimise the company's impact on the environment. Specific areas of concern include the management of cyanide, water pollution abatement, addressing Acid Mine Drainage (AMD) and understanding and developing plans to deal with climate change.
• Ensuring that closure plans are in place, including appropriate funding mechanisms, and that rehabilitation and closure are planned for during the life of mine and undertaken at closure.