Merafe Resources Limited · JSE:MRF
Merafe Resources — Corporate Update (November 2017)
40 slides from Merafe Resources's corporate update, Nov 10, 2017
Slide 1: Lion Smelter Visit
Lion Smelter Visit 10 November 2017
Slide 2: Legal notice/disclaimer
Legal notice/disclaimer This presentation is published solely for informational purposes and does not constitute investment, legal, tax or other advice nor is it to be relied upon in making an investment decision. Information contained herein has been taken from sources considered by Merafe Resource
Slide 3: Key Agenda
Key Agenda • Overview • Glencore Merafe Mines and Smelters • Lion Smelter Overview • Lion Smelter Construction • HSEC • Community Involvement 3 Merafe Resources Ltd | Investor Site Visit – Lion Smelter 10 November 2017
Slide 4: Overview
Overview 4 Merafe Resources Ltd | Investor Site Visit – Lion Smelter 10 November 2017
Slide 5: Geographical Positioning and Capacities
Geographical Positioning and Capacities Smelters Ports Mines Lydenburg ❶ Maputo ● Kroondal ❻ Design Capacity: 396kt FeCr Richards Bay ● Processing Capacity: 1710kt Furnaces: 3 Premus and 1 semi- Production Capacity: 940kt closed conventional Durban ● UG2 Plants – West ❼ Lion ferrochrome (I & II) ❷ P
Slide 6: Glencore Merafe Smelters
Glencore Merafe Smelters • World-leading technology and processes: • 22 furnaces spread across five smelting facilities in South Africa, with a capacity of 2.34 million tonnes per annum. Three technologies are employed; conventional, Outokumpu and Premus. • Premus technology is the most sophisticate
Slide 7: Continuous improvement on MWh/t efficiency
Continuous improvement on MWh/t efficiency 4.5 Conventional Open furnaces(4.1 MWh/t) Conventional 3.99 4 3.66 3.46 3.47 Bokamoso 3.5 3.29 3.3 Tswelopele 3.25 MWh/t 3.19 3.15 3.14 3.11 3.06 2.95 2.95 2.93 3 Lion 1 Lion 2 2.5 Premus (2.4 MWh/t) 2 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Slide 8: Continuous improvement on ore efficiency
Continuous improvement on ore efficiency 3.2 Conventional Open furnaces (3.1 t/t) 3 2.79 2.8 2.69 2.60 2.6 2.52 2.53 Bokamoso t/t 2.40 2.4 2.30 2.30 2.27 Tswelopele Lion 1 2.22 2.20 2.2 2.09 2.00 2.01 2.00 2 Lion 2 1.8 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 8 Mera
Slide 9: Cr Mines and UG2 production
Cr Mines and UG2 production • Mined ore: total capacity of 3.6 million tpa • Western Mines: – Kroondal, Waterval • Eastern Mines: – Thorncliffe, Helena and Magareng • UG2 ore: total capacity of 2.35 million tpa – 8 Operations in West – 1 Operation in East 9 Merafe Resources Ltd | Investor Site Visit
Slide 10: Lion Smelter
Lion Smelter 10 Merafe Resources Ltd | Investor Site Visit – Lion Smelter 10 November 2017
Slide 11: Lion Smelter
Lion Smelter • Description • 360ktpa ferrochrome production per Phase • Rationale • Lowest cost (opex) & best return on capex ferrochrome expansion • Budgeted Capex • R1,7 billion including the Helena mine, Phase 1 - 2006 • R4.9 billion including Magareng mine, Phase 2 - 2014 • Technology • Glencore
Slide 12: Lion I & II addresses the key challenges facing the SA Ferrochrome industry
Lion I & II addresses the key challenges facing the SA Ferrochrome industry Challenge Solution Escalating electricity costs Lowest specific electricity consumption 37% better than nearest rival Increased fine ore 1 500 000 tonnes per annum pelletizing capacity Skills shortages In-house training cent
Slide 13: Premus is the superior technology choice
Premus is the superior technology choice Chrome operations have access to a suite of technologies: • Conventional Process, Semi-closed and pellets 13 of the 22 furnaces in the PSV are conventional furnaces Lowest capital cost per ton of alloy • Outokumpu Process Basis for the 2 Boshoek furnace
Slide 14: Complex process
Complex process SCREENING PELLETIZING BENTONITE DRYING MILLING RAW MATERIALS ANTHRACITE ORE HOT GAS MIXING BATCHING COAL ROASTING LUMP MILLING REDUCTANTS USABLE OFF GAS CHAR, COKE, ANTHRACITE PRE-HEATING FLUXES BATCHING GAS SCRUBBING Complicated Hot loading GRANULATION system SLAG LUMPY CRUSHING SCR
Slide 15: Lion Phase 1 & 2 Construction
Lion Phase 1 & 2 Construction 15 Merafe Resources Ltd | Investor Site Visit – Lion Smelter 10 November 2017
Slide 16: Lion Phase I & II Construction
Lion Phase I & II Construction • Entire project managed by in-house project management team - Wherever possible, fabrication, erection and civil work conducted in-house • Team has an exemplary track record - Managed all of Glencore Alloys’ major projects, including the Wonderkop Smelter, Lion Phase
Slide 17: January 2004
January 2004
Slide 18: October 2004
October 2004
Slide 19: November 2005
November 2005
Slide 20: April 2006
April 2006
Slide 21: July 2006
July 2006
Slide 22: January 2007
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Slide 23: December 2012
December 2012
Slide 24: July 2013
July 2013
Slide 25: January 2014
January 2014
Slide 26: January 2014
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Slide 27: February 2014
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Slide 28: March 2014
March 2014
Slide 29: May 2014
May 2014
Slide 30: Lion HSEC
Lion HSEC 30 Merafe Resources Ltd | Investor Site Visit – Lion Smelter 10 November 2017
Slide 31: HSEC Stats YTD 2017
HSEC Stats YTD 2017 10.00 350.00 9.00 300.00 8.00 7.00 250.00 6.00 200.00 5.00 Frequency Rates 150.00 4.00 3.00 100.00 2.00 50.00 1.00 0.00 0.00 January February March August September April 2017 May 2017 June 2017 July 2017 Oct-17 Nov-17 Dec-17 2017 2017 2017 2017 2017 FFR 0.00 0.00 0.26 0.26 0.26
Slide 32: Safety drive at Lion
Safety drive at Lion • Commitment base safety - 2008 • SafeWork – 2014 • Safe Family campaign 2015 • Positive reinforcement safety drive 2018 – Focused on immediate 32 Merafe Resources Ltd | Investor Site Visit – Lion Smelter 10 November 2017
Slide 33: Consequence Model
Consequence Model Consequence: Relative Power of Consequence • Experience is; – Positive (P) – Negative (N) • Occurs after behaviour is; PIC – Immediate (I) – Future (F) • Certainty of consequence after PIU behaviour; PFC NIC – Certain (C) NFC PFU – Uncertain (U) NIU Least Most NFU Powerful Powerful
Slide 34: Corporate Social Investment
Corporate Social Investment 34 Merafe Resources Ltd | Investor Site Visit – Lion Smelter 10 November 2017
Slide 35: Steelpoort Training Centre
Steelpoort Training Centre Technical Information Community: Sekhukhune and Neighbouring Communities Glencore Alloys Operation: Eastern Leg Operations Spend: R 40 000 000 Percentage complete: 100% Project Description Artisan Development – 295 Qualified L2 Eng. Qualifications – 132 Qualified L1 Generi
Slide 36: Bursary statistics
Bursary statistics 40% 38% 47 Glencore Merafe Bursary Holders in 2017 35% 30% 28% 25% 20% 17% 15% 15% 10% 5% 2% 0% African Males White Males African Females Coloured Females White Females 36 Merafe Resources Ltd | Investor Site Visit – Lion Smelter 10 November 2017
Slide 37: Artisan Learnership Program
Artisan Learnership Program 80% Total number of learners on Artisan Learnership Program is 201 70% 70% 60% 50% 40% 30% 20% 17% 10% 8% 5% 0% African Males Coloured Males White Males African females 37 Merafe Resources Ltd | Investor Site Visit – Lion Smelter 10 November 2017
Slide 38: Rehlahleng School for Disabled
Rehlahleng School for Disabled Two Class rooms Kitchen Boys and Girls Bathrooms Water Fencing 38 Merafe Resources Ltd | Investor Site Visit – Lion Smelter 10 November 2017
Slide 39: Katlegong Primary
Katlegong Primary Two Class rooms Kitchen, stove and fridge Boys and Girls Bathrooms Office Water and Electricity Fencing 39 Merafe Resources Ltd | Investor Site Visit – Lion Smelter 10 November 2017
Slide 40: Questions
Questions 40 Merafe Resources Ltd | Investor Site Visit – Lion Smelter 10 November 2017