Slide 1: Investor Site Visit to Lion II Smelter
INVESTOR SITE VISIT TO LION II SMELTER 23 June 2014
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: Programme
Programme 1. Buffet breakfast 10h15 2. Welcome by CEO, Zanele Matlala 3. Presentation and safety video by Andre van Zyl 4. Guests change into safety apparel 5. Site visit 11h00 6. Lunch 13h00 7. Investor question and answer session 13h45 8. Bus departs Lion smelter to Winterveld 14h30 9. Depart Wint
Slide 4: Geographical distribution provides competitive advantage
Geographical distribution provides competitive advantage Chrome ore • 9 mines, 450 million tonnes of 6 000 full time mineral resources, 8 UG2 employees plants and long-term supply New Project- agreements with major SA Lion II platinum producers Lion I Impala UG2 Mototolo Thorncliffe Ferrochrome Hori
Slide 5: Recipe for producing ferrochrome
Recipe for producing ferrochrome Chrome ore 2.1 – 3.1 t Reductants 0.4 – 0.8 t Electricity 2.4 – 4.2 MWh Furnace Ferrochrome Water 1.0t 2.5m³/t FeCr Transport (Internal) 1.25t Slag Fixed Costs (Primarily Salaries) 5
Slide 6: Ferrochrome operations have access to a suite of technologies
Ferrochrome operations have access to a suite of technologies Conventional, semi closed and Outotec pellets 13 of the 22 furnaces in the PSV Lowest capital cost per ton of alloy Furnaces at Wonderkop, Rustenburg smelters and 1 Lydenburg furnace Full Outotec Process Outotec closed furnace wit
Slide 7: Recap of Lion Project
Recap of Lion Project Largest single-phased ferrochrome expansion in the world Lion I Capex : R1,7 billion including Helena mine Description : 360ktpa Greenfield ferrochrome production Technology : Premus Location : Steelpoort, Limpopo Province Lion II Capex : R5 billion including Magareng mine Desc
Slide 8: Combined Lion operation
Combined Lion operation • Pelletising capacity 1 500 000 tons/annum • Total ferrochrome production capacity 720 000 tons/annum 8
Slide 9: Lion addresses ALL the key challenges facing SA ferrochrome
Lion addresses ALL the key challenges facing SA ferrochrome Lowest specific energy consumption Escalating energy costs ca. 37% better than nearest rival Increased fine ore 1,500,000 tonnes pelletising capacity Skills shortages In-house training centre established Lagging logistics Proximity to Maput
Slide 10: Premus …. our competitive advantage
Premus …. our competitive advantage • Key source of competitiveness • Glencore Proprietary technology • Difficult to emulate and/or retrofit • High-skill level required for operation 10
Slide 11: Lion II uses significantly less electricity compared to other smelting technologies
Lion II uses significantly less electricity compared to other available smelting technologies Glencore-Merafe Venture anticipated the changes in the South African electricity tariffs and invested in efficiencies. Specific Energy Consumption (MWh/T) 4.2 4.1 3.5 2.4 Premus Outotec/ Conventional DC Arc
Slide 12: Venture average electrical energy efficiencies
Venture average electrical energy efficiencies 4.5 Conventional Semi - Closed - 13 Furnaces 3.99 Bokamoso Sinter Plant 4 2007 – ZAR 800 Million 3.66 3.46 3.47 Tswelopele Sinter Plant 3.5 2012 – ZAR 900 Million 3.29 3.3 3.19 3.19 MWh / tonne 3.15 3.08 3.05 2.99 3 Lion I – Two Large Furnaces 2007 – ZA
Slide 13: Premus delivers competitive chrome recovery and coke consumption
Premus delivers competitive chrome recovery and coke consumption Chrome Recovery 70% Coke Consumption 100% 90% 60% 90% 88% 60% 80% 77% 50% 70% 68% 40% 60% 40% 50% 30% 40% 20% 30% 20% 20% 10% 10% 0% 0% 0% Conventional Outotec DC Arc Premus Conventional Outotec DC Arc Premus 13
Slide 14: Fairly complex process
Fairly complex process SCREENING RAW MATERIALS PELLETIZING BENTONITE DRYING MILLING ANTHRACITE ORE HOT GAS MIXING BATCHING COAL ROASTING LUMP MILLING REDUCTANTS USABLE OFF GAS CHAR, COKE, ANTHRACITE PRE-HEATING FLUXES BATCHING GAS SCRUBBING Hot loading system GRANULATION SLAG LUMPY CRUSHING SCREENIN
Slide 15: Job Creation
Job Creation The Lion complex will create 2,197 direct jobs; 6,880 indirect jobs and will impact some 36,000 people in the region Lion II Total Jobs Created Dependents Total People Affected Local Steelpoort Area 1,598 4,795 6,394 Other SA Employees 63 188 250 Suppliers – Other SA 2,052 6,156 8,208 T
Slide 16: Lion II Construction
Lion II Construction • 3,692 contractors on site (peak) • 11 018 870 man-hours • LTIFR of 0.18 • Excellent safety performance for the construction period!
Slide 17: Lion I & II aerial photo
Lion I & II aerial photo 17
Slide 18: Lion II aerial photo continued
Lion II aerial photo continued 18
Slide 19: Lion II aerial photo continued
Lion II aerial photo continued 19
Slide 20: Lion II aerial photo continued
Lion II aerial photo continued 20
Slide 21: Lion II Furnace
rr LLEELLE! = hh a wa q td Bil dA ed | 21
Slide 22: Lion II Kiln pellet discharge
Lion II Kiln pellet discharge 22
Slide 23: Sustainable development
Sustainable development By focusing on different key areas of the communities that surround our operations, The Venture aims to bring sustainable change and upliftment Enterprise Development R60 million supplier park for Laundry Employee bus R3 million Vegetable Farming Eastern Bushveld operations S
Slide 24: Questions?
Questions ?