SUSTAINABLE DEVELOPMENT
Randgold Resources is committed to the integration of sustainable environmental and social impact management into its business activities. The optimum utilisation of mineral and other resources encompasses the protection and conservation of the existing environment. Within this framework, the company strives to assist the communities most affected by its operations to develop in a sustainable way and to give all its employees a high quality of work life, including a safe workplace.

Policy
Our integrated social and environmental management process identifies potentially significant negative and positive impacts. The implementation of sustainable environmental and social responsibility strategies aims to minimise negative impacts and maximise the positive impacts of our activities, commensurate with our business strategy and with national and World Bank standards. The strategies we use to achieve this include the following:

• Encourage and reward the use of integrated environmental management to ensure that management decision making processes include a sensitive and holistic consideration of environmental issues. To facilitate this, all projects must include a comprehensive environmental and social impact assessment. Where appropriate, specialist consultants are employed.
• Maintain positive relationships with neighbouring communities, local and national government authorities, NGOs and aid agencies and the public.
• Respect and consult with the communities in the areas affected by our operations so that these communities receive fair treatment and where possible benefit from our activities.
• Budget a percentage of profit for sustainable community development projects. The projects are selected and prioritised in consultation with communities and carried out in cooperation with community members.Aim to forge a pact with employees through having respect for fundamental human rights, including workplace rights, employee development and the need for a healthy and safe workplace.
• Strive for the highest quality of rehabilitation, waste management and environmental protection in the most cost effective manner.
• Strive to optimise the consumption of energy, water and other natural resources.
• Through the introduction of new alternative, environmentally friendly products and processes, as they become available, avoid the use or release of substances which, by themselves or through their manufacturing process, may damage the environment.
• Practise responsible environmental stewardship to meet the demands of local communities, host country government requirements and international standards, and strive for continuous improvement of environmental performance.

In terms of this policy we recognise that a successful mining company is one which is profitable because it also meets its social responsibilities and makes a real contribution to the countries and communities in which it operates. On each of our new developments, a process of assessment and engagement is undertaken to ensure that the positive impacts are maximised and negative impacts minimised. Strong local relationships are one of the foundation stones on which the company has been built and we thus take our social networking and interactions seriously. Our overall approach is guided by the recently updated IFC Guidelines on Environmental, Health and Safety as well as the IFC Mining and Performance Standards on Social and Environmental Sustainability.

During the early exploration stage our aim is to make as small a social impact as possible while respecting customs of the local communities. Once a target progresses to the feasibility stage, full social, medical and environmental baseline studies are conducted, which define the pre-mining conditions and are used as benchmarks throughout the duration of the project. Full environmental and social impact assessments are then carried out including public participation programmes with the local communities where the impacts, both negative and positive, are discussed with the local communities.

A community liaison committee, consisting of a broad spectrum of community representatives, is set up prior to the start of construction and provides a forum w here issues concerning the project can be discussed and mutually acceptable solutions found. Randgold Resources has now completed its third such process at Tongon and sees this as instrumental for allaying suspicions and conflicts, while building relationships based on trust between the mines and surrounding communities.

Environment
Monthly monitoring programmes incorporating dust fallout levels, physiochemical, cyanide, oil, grease and bacteriological levels of surface and groundwater across the mine site and TSF facilities as well as surrounding water courses continued through the year at Morila and Loulo. No pollution or breach of IFC guidelines was confirmed. Morila is ISO 14001 certified and Loulo has started a programme to become accredited within the next two years.

The underground environmental impact assessment and the environmental management plans for Loulo were updated based on the changes to the mine plan and with the onset of underground operations. Dust suppression is conducted by regular watering and deposition of molasses on the site roads and through the main adjoining villages. Loulo has an onsite sort ing and recycling facility of waste where useable recyclable waste is circulated into the communities. Domestic refuse collection has been contracted to a local women’s association, which in turn helps the local economy. Parliamentary delegations visited the surrounding villages to check the environmental and social impact of the mine and reported their satisfaction.

At Tongon a full environmental and social impact assessment (ESIA) was carried out by independent consultants Digby Wells & Associates as required by Côte d’Ivoire legislation as well as the company’s compliance with Equator principles and the IFC performance standards on social and environmental sustainability. Project alternatives have been examined and a public participation process completed. The natural pre-mining environment has been described and the potential project impacts evaluated. No fatal flaws were identified by the specialist studies on hydrology, geo-hydrology, flora, fauna or archaeology. A relocation action plan for affected farmers was formulated and has been agreed with the local communities and state authorities. The ESIA was submitted to the state, subjected to a public enquiry process and has been approved by the state and its environmental consultants. The environmental permit to develop the Tongon mine has now been issued.

Community
Relations with the communities in the villages surrounding our operations remained positive throughout the year. A community liaison committee was set up at Tongon in the first quarter of 2008 and following a three-day fact finding visit to Morila by its members, has, like the community committees at Morila and Loulo, met on a monthly basis.

Loulo and Morila continued to implement their respective community development strategies which address projects recommended by their respective committees, with preference being given to projects related to basic health, primary education, food security, employment creation and potable water provision to those villages most affected by the operation of our mines.

At Tongon, the emphasis of the committee has been on potable water provision to the villages surrounding the project, the resettlement of hamlets, compensation for farmers on the mine footprint, employment opportunities and the fair distribution of these between villages.

The projects recommended by the community committees and completed during the year included the following:

HEALTH AND PROVISION OF POTABLE WATER

• Four new boreholes each equipped with a hand pump at Djidian-Kéniéba village to increase potable water supply in the village closest to the Loulo mine.
• The provision of treated mosquito nets to the most vulnerable people in, and the fogging of the villages surrounding Loulo and Morila mines to prevent malaria.
• Grading of roads in local villages close to Loulo mine to assist with access and waste removal.
• Boreholes drilled and equiped with pumps in Morila and Fingola villages which are close to Morila mine.
• Potable water supplied to five villages surrounding the Tongon project by digging traditional wells, drilling wells and equipping with pumps, and repairing and refurbishing pumps that were out of commission.
• Provision of medical primary care to local villages.
• Provision of basic healthcare to the population of local villages surrounding the mine. HIV/Aids interventions by the mines medical officers in co-operation with a local non-government organisation in the local villages and the work site, such as education and awareness training, voluntary HIV testing for all and specifically among high risk individuals such as sex workers and lorry drivers.

EDUCATION

• Baboto village school built close to Loulo.
• School furniture delivered to surrounding village schools at Loulo and Morila.
• SSchool fenced at Sanso near Morila.

AGRICULTURE

• Seeds supplied to farmers and gardeners at Loulo and Morila.
• Reparation of water dam at Sitakili Village near Loulo.
• Two grinding mills delivered to Sitakili and Sakola villages through a joint programme between Loulo Mine and the National Platform Project (NGO).
• Tractor purchased for hiring out at preferential rates to local farmers.
• Bridge constructed at Sokéla near Morila.
• Two stores built in Morila and Finkola.
• Agricultural projects set up by the mine in cooperation with the local communities’ women’s committees did well during the year; with 20 tonnes of rice being harvested at Morila.

SPECIAL PROJECTS

• Building completed of a mosque at Djidian-Kéniéba village for the local communities near Loulo.
• Community radio station financed and installed at Sanso near Morila.
• Continuing administrative support to the Community Trust Fund set up by the mine with a donation from Morila SA of US$500 000 in 2002.

The pioneering partnership between the aid agency USAID, the Commune of Sanso (comprising the villages in the mayoral district) and Morila continued its work for the third year. This included a continuing focus on democratic and good local governance, public health, education, communication, environmental practices and economic growth.

1)Quality-of-life improvement projects such as potable water provision are agreed with local communities.

2)CEO Mark Bristow and chairman Philippe Liétard officially hand over a mosque built by the company and donated to the villagers of Djidian-Kéniéba.

3)The provision of healthcare extends beyond the company’s employees to the residents of local villages.

The financial contributions made during 2008 by the partners as part of the partnership agreement were:

Human resources

GROUP MANPOWER
Group manpower levels, inclusive of contractor labour, rose during the year to 3 802 with the most significant increases being in capital staff, including underground employees at Loulo, and construction employees at Tongon, where construction started in the second half of 2008. During a year when shortages of professional, managerial and skilled employees were experienced across the industry, resulting in labour cost inflation and double digit turnover of such staff, Randgold Resources maintained its salary cost discipline and retained its core employees. Manning levels related to permanent, expatriate and temporary employees on the major projects are shown in the table below.

It is planned to reduce Morila contractors’ employees by 600 and Morila employees by 100 during the first three months of 2009 as inpit mining ceases.

At Tongon several hundred new job opportunities will be provided in northern Côte d’Ivoire. The highest number of workers, exceeding 800, will be employed during the construction phase in 2009/2010. Subsequent to that, during the production phase, employment will reduce and should total approximately 536 permanent employees of which 278 will be employed by Randgold and 258 by contractors. During the construction phase recruitment will be carried out by GSS, a Côte d’Ivoire labour broker.

EMPLOYEE HEALTH
The most serious challenge for ensuring the health of our employees centres on the reduction of exposure to malaria and other diseases, airborne contaminants and noise on our sites. Personal protective equipment, supplied by the company, is utilised in all relevant areas. In terms of the former, malaria remains the most significant health risk for our operational personnel. The preventative measures that have been taken on the advice of our entomological consultant and our medical officers have led to a significant reduction in such cases.

SAFETY
We experienced one fatality in the group during the year as the result of a collision between two motorcycles at Loulo, en route to the Yalea underground mine. Stricter emphasis has been placed on the speed of motor vehicles on our mines to avoid a recurrence. While low injury frequency rates do not always translate into low fatality rates the Lost Time Injury Frequency Rate (LTIFR) (number of LTI per number of hours worked) x1 000 000 was 1.57 at Loulo and 1.12 at Morila.

Daily “toolbox” meetings are held in workplaces across our mines to constantly remind employees of the need for each employee to be safety conscious. These meetings are based on the principle of individual responsibility where the onus is on each employee to practice a high level of safety in the workplace. We are proud to report that Morila achieved 1 000 000 LTI-free hours during 2008 and once again won the National INPS award as the safest mine in Mali.

TRAINING
Strategic planning and team effectiveness workshops were held at Tongon, Loulo and Morila in the first half of 2008. They were attended by the chief executive, Randgold Resources executive committee members, mine and capital project managers and union general secretaries. Management and supervisory development programmes continued on site and at South African and European universities.

A specific drive was made this year to enhance basic engineering skills, using a combination of competency testing, gap identification and action learning to strengthen any weak areas. Employees at both operating mines attended induction and safety courses throughout the year. Cyanide handling courses were held at Loulo and Morila during the year for all processing plant employees.

All new contractor employees are required to attend the mines’ induction and safety training courses before starting work. In addition, safety talks take place at the start of each shift at all working places. ISO 14001 and OSHAS 18001 certification was retained by Morila and plans were drawn up during 2008 to initiate the ISO 14001 and OSHA 18001 certification process at Loulo and Tongon. Training interventions were undertaken during 2008 to meet the requirements of the ISO 14001 and OSHA 18001 certification process.

Since Randgold Resources took over the operatorship of Morila the expatriate headcount on the mine has been reduced by eleven by implementing the company’s localisation philosophy which consists of employing highpotential local staff, while providing coaching and other support as required.

INDUSTRIAL RELATIONS
Since Randgold Resources became the operator at Morila, the general secretaries of the two unions on the mine have, for the first time, been invited to attend Morila SA board meetings. This practice is part of the company’s initiative to build a pact with labour and has been successful in improving communications with the unions and the trust between management and unions at the mines.

In pursuit of the company goal of having knowledgeable and empowered union representatives, representatives and delegates of personnel at Morila and Loulo attended capacity building courses during the year. The courses were conducted by the Malian human resources consultancy, BARA Services.

Loulo followed the example set by Morila in 2004 in successfully concluding a mine level agreement aimed at clarifying the industry collective agreement and in so doing improved industrial relations at Loulo.

Industrial relations at Morila and Loulo during 2008 were complicated by the rightsizing effected for economic reasons on both mines. The major factor was the reduction in open pit mining carried out by the mining contractors on both mines. Additional rightsizing will become necessary at Morila in 2009 due to the cessation of open pit mining there. The prospect of rightsizing caused concern among employees and resulted in threats of industrial action at both mines. Due to the positive relations on our mines the threatened industrial action was largely averted. At Morila, part of the contractor and Morila workforces stayed away from work for two days. The action was peaceful and operations returned to normal with minimum disruption to production. Following this, management and the unions have redoubled their efforts to consult with each other and to resolve disputes within the procedures and spirit of the pact.

The Loulo and Morila human resource managers and union representatives, together with their peers from the other large mines in Mali, took part in discussions held at the Ministry of Labour’s offices in Bamako concerning a proposed new National Mining Industry Collective Agreement. The talks are expected to continue in 2009.

At Tongon, the project site has been visited by Mr Koffi Assienin, the Federated Union secretary-general, following regular discussions with him in Abidjan to keep him and his union informed of progress and to explain the concept of our pact with labour initiative.