Message from the Sustainable Development Committee Chairman

During this past financial year Harmony embarked on a significant step by adopting an integrated approach to the reporting of its annual performance as well as of its sustainable development. Its development has been an evolutionary process over the past few years, but the principle of integrated reporting provides a holistic view of the effects of the material issues that affect our performance and our bottom line.

Environmental, social and governance (ESG) issues are integral to Harmony’s sustainability. But while we have passed major milestones in our sustainability performance, challenges remain in the crucial area of safety performance. In addition, transformation has been identified as requiring more attention in Harmony’s South African operations.

Integrated reporting will provide management with an invaluable tool in assessing the performance of the company’s sustainability issues, with safety being a critical factor. Fatalities are viewed in a very serious light as safety is a fundamental value for Harmony. The company realises that it must be unrelenting in its efforts to raise safety awareness among our employees through training and education.

Although Harmony has sufficient safety infrastructure to manage safety issues, the training of employees calls for improvement. All the safety equipment in the world is of little use if people are inadequately safety conscious. The responsibility for safety at Harmony lies with each employee, and management leads in this regard. As behaviour is a key driver in the safety risk area, safety literacy is of the utmost importance. Accountability is also key and employees are being taken to task for negligence to reinforce maximum responsibility.

Adopting the principles of sustainable development and all that this encompasses has been an evolving process at Harmony. It has entailed a shift in mindset and behaviour, from focussing purely on safety issues to include, as equals, the health and wellness of employees.

We at Harmony are highly aware that mining activities affect our host communities and the natural environment. It is this awareness that has brought environmental issues to the forefront. The focus on these has become increasingly intense over recent years and, as a mining company, we are committed to continually improving our environmental performance so as to underpin the long-term sustainability of our business. We maintain this through the implementation and practice of responsible environmental management.

In terms of health and employee wellness, the company’s welfare staff closely monitor important factors such as HIV & AIDS, high blood pressure and other workplace diseases. The Sustainable Development Committee regularly carries out reviews of the company’s safety, health and wellness and environmental performance to guard against major risk in these areas.

The mining industry is arguably under much greater scrutiny for regulatory non-compliance than other industries. Mining licences, for example, are linked to a company’s implementation of its social and labour plans. At Harmony, compliance with transformation and Mining Charter requirements is an ongoing process and we continue to work on steadily improving this aspect of our business.

Harmony’s most significant stakeholders other than shareholders and government are the company’s employees and the communities in which it operates. Shareholders and government may previously have appeared more important, but with assistance from our unions there has been a mind shift - among our social activities is the encouraging of local economic development programmes in the areas which host our mines. Mining companies have the power to positively benefit their host communities and Harmony has risen to this challenge with specific deliverables which are reviewed at each of our operations. Details of these can be found within this report in the Working with our communities section.

In conclusion, I would like to thank the Sustainable Development Committee, the board, senior management and all employees for their role in the success of Harmony this past year, as we look towards the future with optimism.

Modise Motloba
6 October 2010