Journey Towards Sustainability: The Case of the Newmont Ahafo Development Foundation Presented in New York – USA – March 2010 By Nick Cotts & Joseph Danso

2 Overview  Commitment to Sustainable Community Development  Ahafo Social Responsibility Forum  Community Agreements  Newmont Ahafo Development Foundation (NADeF)  Vision and Mission  Governance structure  Funding  Allocation of Funds/Development Focus  Articulation/Alignment  Foundation’s Activities  Challenges  NADeF Linkages to Newmont, COM DEV and Local Government

3 Newmont’s Commitment to Sustainable Community Development  Create value with a wider set of stakeholders through the alignment and linkage of our business and our social responsibilities  Balance economic considerations with social/environmental consequences to understand how our actions today may affect future generations  Fundamental understanding that community acceptance is paramount to a sustainable business model  Seek to maximize training, employment and business opportunities using fair and transparent processes that provide the opportunity for local communities to articulate their needs and aspirations  Maximize opportunities to leverage community development projects and empower other sectors through partnerships are sought out and encouraged

4 Ahafo Social Responsibility Forum  Community/Company initiative: Multi-stakeholder group of 55 members; independent moderator and co-moderator  Traditional Leaders, Youth, Women’s Groups, Regional Gov’t, Local Gov’t, Local NGOs, Farmer Groups, Newmont  Forum for discussion and decision-making between stakeholders on issues related to community development and the business  Forum met over 20 times during a 2 year period  Standing Committee Purpose/Function

5 Ahafo Social Responsibility Agreements Three agreements encompassing ten communities in the Ahafo mine area: Relationship Agreement: roles and responsibilities on how the Company and Community will engage Employment Agreement: guidelines in the hiring of local workforce Foundation Agreement: Creation of the Newmont Ahafo Development Foundation (NADeF) as a structure to fund and support sustainable community development programs

6 Newmont Ahafo Development Foundation (NADeF) Vision: To achieve community prosperity and self-reliance. Mission: Our mission is to empower communities through grants, knowledge-sharing, partnership and capacity building to achieve sustainable development. Stakeholders Vision for NADeF: Our vision for NADeF is to be a recognized and trusted development partner in the Ahafo Communities.  NADeF is registered under laws of Ghana.  NADeF Agreement signed between Newmont and Ahafo Mine Communities in May  NADeF Secretariat established with offices located in one of the Mine Communities

7 Governance Structure Board of Trustees  Nine-member Board (4-Comapany and 4-Community + Chairperson) established by the Agreement to manage and control the funds of the Foundation  After 6 years additional community members will be appointed, including Chairperson Secretariat  Established with 4 main employees (Exec Sec, Project Coordinator, Fin Controller, Admin Assist) and 4 supporting staff (1 driver, 1 housekeeper and 2 security guards)  Administer day-to-day activities

8 Governance Structure (cont) Tender Board  Nine-member Board (2-Traditional Leaders, 2-Local Government Reps, 2-Youth Reps, 2-Newmont Reps and 1 member appointed by BOT as Chairman)  Responsible for any tendering process in accordance with the Ghana Procurement Act Sustainable Development Committees (SDC)  Seven-member community-based committees in each of the ten communities (1-Youth Rep, 1-Women Rep, 1-Unit Committee Rep, 2-Trad Leaders Reps, 1- Assembly person and 1 community member nominated by the Traditional Leaders)  Responsible for planning development projects at the community level and submission of community proposals to the Secretariat through the District Assembly

9 Foundation Funding  Foundation is supported by $1 per oz &1% net profit from Ahafo Operation (about $4.7 Mn YE 2009)  Model is to partner with external donors locally, nationally and internationally  Endowment provision funded via the annual contribution (10% - first 5yrs; 15% - second 5yrs; 20% - third 5yrs; and 25% - fourth 5yrs).  Partnership funding and leveraging resources is opportunities are being evaluated

10 Allocation of Fund/Focus Areas  Social Responsibility Forum established allocation system aligned with self- determined development  Ongoing projects in the communities include: Construction of Teachers’ Quarters, Construction of Library, Drilling and mechanization of water bores, Construction of classroom blocks etc.  Funds are allocated to communities based on set criteria using impact, population, land size in mining lease area, commitment etc. Development AreaAllocation (%) Human Resource Development24 Infrastructure Development23 Social Amenities18 Economic Empowerment17 Natural Resource Protection12 Cultural Heritage and Sports6

11 Articulation/Alignment with Development Partners  SDCs liaise with the District Assembly in the identification of community projects  Final approval of community proposals to the Foundation is done by the District Assembly – to ensure projects are aligned to the District Development Plan  Technical supervision of all projects are done by the District Assembly engineers  Completed projects and programs are handed over to relevant government agency and the community  Ahafo Com Dev is coordinating the setting up of the Foundation Secretariat and capacity building for the SDCs  Ahafo Com Dev discussing possibility of existing projects that could be aligned to the Foundation agenda and possible implementation by Foundation

12 Journey Towards Sustainability  Projects supported under NADeF are aligned to the District Government’s Development Plan  Broader community participation in the planning, decision making and the implementation process creates sense of ownership  Governance structure separate from the company – individuals serving on committee as equal partners  Possibility of supporting projects with community resources – land, labour etc.  Infrastructure projects handed over include operations and maintenance plan  Endowment supports future of the Foundation aftermine closure  Leveraging resources through partnership approach

13 Foundation’s Activities List and Photos of key activities / some NADeF projects SDC Training Workshop Teachers Gyedu Classroom Wamahinso Mechanized Ntotoroso WC Ntotoroso SDC Refresher Training

14 Our Challenges  Dependency: Newmont Ahafo cannot meet everyone’s needs!  Continuous pressure to “act” as the local government  Building a long-term vision with local communities and government  Secretariat capacity, network and partnerships  Alignment/agreement of priorities vs. resource availability  Capacity of community to engage with Foundation and provide timely feedback  Managing expectations of stakeholders on community development issues  Defining sustainability and creating a shared vision