PLATINUM MINING in SOUTH AFRICA May 2009 Platinum Mining in South Africa Contents May 2009

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PLATINUM MINING IN SOUTH AFRICA May 2009 Platinum Mining in South Africa Contents May 2009

Sources of platinum 3 South Africa 3 Russia 3 North America 4 Canada 4 United States 5 Zimbabwe 5

Global Market 7 Platinum supply 7 Platinum demand 7 Automotive demand 7 Jewellery demand 8 Industrial demand 8 Platinum investments 8 Platinum price 8 Outlook 9

Legislative and policy environment 11

Major platinum projects currently under development in South Africa 18

Main participants 22 Anglo Platinum 22 Impala Platinum 32 Lonmin 42 Northam Platinum 45 Aquarius Platinum 48 African Rainbow Minerals Platinum 52 Royal Bafokeng Resources 56

The material contained in this report was compiled by Paul Serebro and the Research Unit of Creamer Media (Pty) Ltd, based in Johannesburg, South Africa. To contact Creamer Media call +27 11 622 3744 or email [email protected]. www.researchchannel.co.za Platinum Mining in South Africa Contents May 2009

Junior platinum companies and explorers 58 Jubilee Platinum 58 Lesego Platinum 59 Mmakau Mining 60 Nkwe Platinum 61 Platmin 63 Platinum Group Metals 65 Ridge Mining 67 Wesizwe Platinum 68 Xstrata 69

Main sources 70

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Abbreviations

Aim – Alternative Investment Market AQPSA – Aquarius Platinum South Africa Arm – African Rainbow Minerals ArmGold – African Rainbow Minerals Gold ASACS – Aquarius Platinum South Africa Corporate Services ASX – Australian Securities Exchange BEE – black economic empowerment BFS – bankable feasibility study Bits – bilateral investment treaties BMR – base metals refinery BRPM – Bafokeng-Rasimone Platinum Mine CTRP – Chromite Tailings Retreatment Plant DME – Department of Minerals and Energy DMS – dense medium separation plant DPF – diesel particulate filter DTI – Department of Trade and Industry Ebit – earnings before interest and tax Ebitda – earnings before interest, tax, depreciation and amortisation EMPR – environmental management programme report ESOP – employee share ownership plan ETF – exchange-traded fund GFSA – Gold Fields South Africa HDSA – historically disadvantaged South Africans ICSID – International Centre for the Settlement of Investment Disputes IGC – International Gold Fields Implats – Impala Platinum IRS – Impala Refining Services JCI – Johannesburg Consolidated Investments JSE – Johannesburg Securities Exchange Kalplat – Kalahari Platinum Lonplats – Lonmin Platinum LSE – London Stock Exchange

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MCP – magnetic concentration plant MMZ – main mineralised zone MPRDA – Mineral and Petroleum Resources Development Act MSB – massive sulphide body NYSE – New York Stock Exchange oz – ounces PCMZ – peridotite chromititic mineralised zone PGM – platinum-group metal PLA – Platinum Australia PSA – pool and share agreement PTM – Platinum Group Metals PMR – Precious Metals Refinery RBH – Royal Bafokeng Holdings RBN – Royal Bafokeng Nation RBR – Royal Bafokeng Resources RBMR – Rustenburg Base Metals Refiners RPM – Rustenburg Platinum Mines SAHRC – South African Human Rights Commission Samrec – South African Mineral Resources and Mineral Reserves Code SavCon – Savannah Consortium SMC – Selous Metallurgical Complex TSX – Toronto Stock Exchange UG2 – Upper Group 2 UK – United Kingdom US – United States WBJV – Western Bushveld JV 3PGM+Au – three platinum-group metals – platinum, palladium, rhodium and gold 4E – four element platinum-group elements – platinum, palladium, rhodium and gold

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Sources of platinum

Platinum is produced in five countries in the world. Of ment and addition of existing and new magma as the these, South Africa is by far the largest producer, ac- case may be, producing a repetitive mineral layering. counting for over 75% of global output in 2008. In second position is Russia, which produced almost 14% of Mining company Impala Platinum, in its review of the global platinum output in 2008, followed by Canada, geology of the Bushveld Complex, indicates that indi- the United States and Zimbabwe. vidual layers or groups of layers of the Bushveld Com- plex can be traced for hundreds of kilometres. This Platinum supply by region 1999 – 2008 layered sequence, the Rustenburg Layered Suite, com- million ounces prises five principal zones, the Marginal, Lower, Criti- cal, Main and Upper Zones. The Bushveld Complex, is, South Africa Russia North America Others million oz horizontally, roughly clover-leaf shaped, consisting of 8 four compartments or limbs – western, eastern, north- 7 ern and southern ¬– in order of economic importance. 6 The Bushveld Complex is unique in both size, covering 5 an aerial extent of some 66 000 km², and the economic 4 importance of its minerals. Contained within the well- 3 layered ultramafic to mafic succession are two horizons in the Critical Zone that host economically exploitable 2 quantities of platinum group metals (PGMs), namely the 1 Merensky Reef and the underlying Upper Group 2 (UG2) 0 Reef. These two economic horizons can be traced for 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 370 km around the complex and are the focus of mining Source: Johnson Matthey Platinum 2008 Interim Review operations from which the PGMs – platinum, palladium, rhodium, ruthenium and iridium – are recovered, togeth- South Africa er with quantities of gold, nickel, copper and numerous other metals and compounds. Below the UG2 Reef are Platinum experts Johnson Matthey show South Afri- numerous other chromitite layers that are mined for ca to have produced 4,78-million ounces of platinum chromium, as their PGM content is too low. in 2008, which was 5% down on the country’s platinum production in 2007. A third PGM-rich ore body, the Platreef, which extends over a distance of 30 km, is found only on the northern The country’s platinum mining operations are concen- limb, in the vicinity of Mokopane in the Limpopo Prov- trated on the extremely large, two-billion-year-old, sau- ince. This ore body, first mined in the 1920s, was not cer-shaped, layered igneous intrusion, known as the exploited on a large scale until 1993. Bushveld Complex, which occurs in the northern part of the country, traversing the North West, Limpopo and Mpumalanga provinces. PGM Supplies: South Africa ‘000 oz

2007 2008 Professor Grant Cawthorn indicates, in a paper on the platinum and palladium resources of the Bushveld Platinum 5 030 4 780 Complex (published in the South African Journal of Palladium 2 770 2 525 Science), that it is generally understood that the Bush- veld Complex was formed by the repeated injection of Rhodium 696 620 magma into an enormous chamber. Owing to the huge Source: Johnson Matthey Platinum 2008 Interim Review volumes of magma involved, cooling and subsequent mineral crystallisation out of the magma was a slow Russia process. Different minerals were formed as the magma cooled. These minerals accumulated into sub-horizon- Johnson Matthey indicates that Russia produced 855 tal layers, building from the base of the chamber. The 000 oz of platinum in 2008, which was down on the 910 processes were repeated by the intermittent replenish- 000 oz produced in 2007. www.researchchannel.co.za 3 Platinum Mining in South Africa May 2009

Platinum mining in Russia can be traced back to 1823 mined in South Africa, but much more variable in grade when large alluvial platinum deposits were discovered and composition. in the central Ural Mountains. By the end of the nine- teenth century, these alluvial deposits had become the Other sources of platinum production include two al- world’s dominant source of platinum. luvial mining operations in the Russian Far East. The first and larger of the two operations, the Kondy- By the late 1920s, however, the most easily accessi- or mine, is located In the Ayano-Maisk region of ble high-grade placer deposits had largely been ex- Khabarovsk. Commercial exploitation of the deposit hausted and mining has since dwindled to a handful of by a local gold mining company, the Amur artel, be- small-scale dredging operations producing very mod- gan in 1984. The smaller Koryak deposit is situated in est quantities of platinum. Kamchatka on the Pustaya river system, which drains an area of PGM-bearing zoned ultrabasic rocks. Full- Johnson Matthey reports that there is a renewed in- scale mining of the deposit by the Chaibukha mining terest in the Urals as a potential future source of plati- artel, in conjunction with Koryakgeolodobycha, start- num. Modern extraction methods may make the ex- ed in 1995. ploitation of previously overlooked alluvial and placer deposits possible. In December 2008, it was reported that Russian Presi- dent Dmitry Medvedev had signed into law a Bill abol- Almost all of Russia’s PGMs are supplied by three min- ishing state firm Almazjuvelirexport’s monopoly on ing companies and from state reserves. State PGM exporting PGMs. Previously, all PGM producers and stocks remain a state secret, and nearly all PGMs in stock holders, including the world’s largest palladi- state stocks are believed to have been mined Norilsk um miner Norilsk Nickel, the central bank, and State Nickel. precious metals and gems repository Gokhran, had to export the metals through Almazjuvelirexport for a PGM Supplies: Russia ‘000 oz fee. The Russian government believes that the move was necessary as part of the process of liberalising 2007 2008 Russia’s previously secret PGM market. The Bill took Platinum 910 855 about four years to pass through both chambers of parliament. Palladium Primary production 3050 2940 North America State sales 1490 800 Rhodium 90 90 Johnson Matthey reports that platinum production in Source: Johnson Matthey Platinum 2008 Interim Review North America in 2008, at 340 000 oz, was up on the previous year’s production of 325 000 oz. However, palladium supplies fell by 4% to 950 000 oz, reflecting Norilsk Nickel dominates Russian PGM output, pro- lower production from Stillwater in the United States ducing platinum, palladium and other minor PGMs and North American Palladium in Canada. from its copper-nickel mining and smelting complex in northern Siberia. Small volumes of PGMs are also produced from its copper-nickel mines in the Kola Penin- PGM Supplies: North America ‘000 oz sula. Norilsk Nickel accounts for 46,3% of the world’s palladium market and 12% of the market for platinum. 2007 2008 In 2008, Norilsk Nickel produced 2,82-million ounces of Platinum 325 340 palladium and 659 000 oz of platinum. Palladium 990 950 The company’s northern Siberian facilities form the ba- Rhodium 20 19 sis of its Polar Division, which is situated on the Taimyr Source: Johnson Matthey Platinum 2008 Interim Review Peninsula. This division operates seven nickel-copper mines and associated metallurgical plants at Norilsk- Canada Talnakh. Deposits mined at Norilsk-Talnakh are unique in size and unusually rich in PGMs. Johnson Matthey Historically, according to Johnson Matthey, PGMs estimates that the head grades at the Norilsk-Talnakh have been produced as byproducts of nickel and cop- mines are about 10 g/t. In addition, the deposits are per mining in Canada. As recently as the 1940s, the considerably wider than the narrow, continuous reef nickel deposits of the Sudbury Basin were the world’s www.researchchannel.co.za 4 Platinum Mining in South Africa May 2009 largest single source of PGMs, and these deposits still United States produce substantial quantities of metal. Palladium accounts for between 55% and 60% of the PGM con- The United States (US) has only one primary PGM pro- tent of the Sudbury ores, with the remainder being plat- ducer, the Stillwater Mining Company, which conducts inum, while the rhodium content is small. mining operations at the Stillwater mine near Nye, Mon- tana, and at the East Boulder mine, south of McLeod, Commercial production of PGMs began around 1908 Montana. Both mines are located on the Johns-Man- when Vale Inco, the largest mining company in the Sud- ville (J-M) Reef, which is possibly the richest PGM de- bury Basin, opened a refinery in the United Kingdom to posit currently being exploited anywhere in the world. refine the Sudbury ores. Falconbridge, the other major The mill head grade is typically between 20 g/t to 24 producer in Ontario, produces PGMs at its refinery in g/t, with a platinum-to-palladium ratio of 1:3. Norway. Both companies were the subject of acquisi- tions in 2006, with Vale Inco now owned by the Brazil- ian base metals producer Vale and Falconbridge by the Zimbabwe Swiss diversified mining company Xstrata. Johnson Matthey indicates that Zimbabwe produced Another significant source of byproduct PGMs is Fal- 305 000 oz of platinum in 2008, which was up on the conbridge’s Raglan mine, situated on the Ungava pe- previous year’s production of 290 000 oz. ninsula in the far north of Quebec. Platinum mining in Zimbabwe is centred around the Johnson Matthey reports that the only existing prima- Great Dyke, a 550 km layered geological intrusion, with ry source of PGMs in Canada, the Lac des Iles mine mineralisation occurring in four elliptical bodies with a owned by North American Palladium, is located near total strike length of 350 km, running in a north-south Thunder Bay in western Ontario. Commercial produc- direction through the heart of the country. The PGMs tion of PGMs began in 1993 from the deposit known as occur in a layer known as the Main Sulphide Zone, the Roby Zone, which until recently was exploited ex- which is typically about 3 m thick. However, the eco- clusively via open pit mining. In 2005, an underground nomic mining width may be as little as one metre, de- section was developed to exploit a deeper, higher grade pending on grade, metal prices and the chosen mining section of the deposit. Ore from the mine is processed method. to a concentrate rich in palladium, while also containing small amounts of platinum and base metals. According to Cawthorn, PGM grades, at about 3 g/t,

PGM mining in North America

Raglan

VANCOUVER Lac des lles Sudbury MONTREAL

Stillwater

Source: Johnson Matthey Platinum 2001 Special Report www.researchchannel.co.za 5 Platinum Mining in South Africa May 2009 are lower than in the Bushveld Complex, but the ra- mines continue to operate, although not at full capacity. tio of platinum-to-palladium is relatively high compared Impala Platinum, the world’s second-largest platinum with most ores. In contrast, nickel and copper values producer has platinum mining interests in Zimbabwe. are typically higher than those found in South African The company has a controlling stake in Zimplats, which platinum ores. Zimbabwe’s platinum resources are es- operates an open pit and underground section at Ngezi, timated at 143-million ounces. and a 50% shareholding in the Mimosa mine with platinum junior Aquarius Platinum. A third platinum mine, Zimbabwe’s ongoing political instability and the asso- Anglo Platinum’s Unki project, is being developed near ciated economic crisis have largely brought mining in Gweru. When fully operational, the mine is expected to the country to a halt. However, the country’s platinum process around 120 000 t/m of ore.

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Global market

Johnson Matthey has indicated that platinum demand ering the challenging operating conditions in that coun- in 2008 was 6,52-million ounces. Platinum supply for try, producing 180 000 oz of platinum, 10 000 oz more the year was 6,28-million ounces, resulting in a supply than in 2007. shortfall of 240 000 oz. Platinum demand Platinum supply Global demand for platinum fell to 6,52-million ounces Platinum supplies in 2008 were down on the previous in 2008, a decrease of 155 000 oz from the previous year’s production of 6,55-million ounces. year. Johnson Matthey attributes the drop in demand to high platinum prices in the first half of the year and the South Africa, the world’s largest platinum producer, ex- global economic slowdown in the latter part of 2008. perienced a range of operational problems, which resulted in a 5% reduction in output, to 4,78-million ounc- Automotive demand es of platinum in 2008. Johnson Matthey attributes the decline in production to electricity supply constraints, The automotive industry is the largest consumer of industrial relations problems, and safety and technical platinum. About 50% of the world’s mined platinum is issues. used in the manufacture of autocatalysts. Auto catalytic converters, which consist of a base metal coated Electricity supply problems brought platinum mining with platinum particles, purify exhaust gases through and processing in South Africa to a halt in late Jan- chemical reactions facilitated by these metals. uary and early February. However, Johnson Matthey suggests that losses directly attributable to the power Gross auto catalyst demand grew by a modest 85 000 outages only amount to about 60 000 oz. Other fac- oz, to 4,23-million ounces in 2008. Johnson Matthey tors responsible for reduced output from South Africa’s reports that a heavy fall in North American vehicle pro- platinum mines include the temporary closure of Anglo duction depressed platinum demand by 305 000 oz. Platinum’s Amandelbult mine owing to flooding, which However, a healthy rise in platinum use in the European resulted in the loss of 67 000 oz, and smelter prob- diesel sector compensated for the reduced demand in lems at both Anglo Platinum and Lonmin. In addition North America. to lost production brought about by electricity supply problems, Impala Platinum lost a further 12 000 oz as In Europe, the demand for platinum used in the manu- a result of Presidential Safety Audits, with some shafts facture of autocatalysts increased by 16,2%, to 2,4-mil- closed for short periods while inspections took place. lion ounces in 2008. According to Johnson Matthey, very little platinum is used in European gasoline-fuelled Russian platinum output form Norilsk Nickel and the cars as substitution with palladium in this sub-sector of alluvial producers decreased from 910 000 oz to 855 the automotive industry continues to spread. 000 oz in 2008. Johnson Matthey reports that production at Norilsk Nickel was affected by severe weather However, demand for platinum in the light duty diesel conditions on the Taimyr peninsula in northern Siberia, sector remains strong. More than 50% of all light duty thus preventing the shipment of concentrates to Kras- vehicles sold in Europe now have diesel engines. Fur- noyarsk for refining. The rebuilding of the Nadezhda ther, in 2008, between 40% and 50% of these vehicles smelter in the first half of 2008 also curtailed platinum were fitted with platinum-containing diesel particulate output. In addition, reduced platinum sales by the allu- filters (DPFs), in addition to a diesel oxidation catalyst. vial producers reflect the gradual exhausting of some The introduction of Euro 5 emission rules in 2009 and of these deposits. 2010 will drive the use of DPFs higher.

According to Johnson Matthey, platinum production Johnson Matthey indicates that Japan’s automakers in North America and Zimbabwe increased in 2008. In purchased 590 000 oz of platinum in 2008, a drop of North America, platinum output grew by 15 000 oz to 10 000 oz. Japanese car makers have historically used 340 000 oz. Zimbabwe’s two operating platinum mines, higher platinum loadings than other car manufacturers. Mimosa and Zimplats, performed impressively consid- However, the increase in the platinum price in recent

www.researchchannel.co.za 7 Platinum Mining in South Africa May 2009 years has resulted in a move to using more palladium the 2007 total of 1,81-million ounces. Johnson Matthey in petrol catalysts. indicates that demand the glass, chemical, petroleum refining industries remained strong, but platinum sales The North American automotive sector performed to the electric sector fell in 2008. poorly in 2008, with a corresponding impact on platinum demand. According to Johnson Matthey, plati- Increased demand from the glass and chemical sec- num purchases by automakers fell by 305 000 oz to tors reflects the addition of significant extra capaci- 540 000 oz in 2008. In addition, the automotive industry ty in both industries in China. Glass fibre production reduced its strategic stocks of platinum in 2008, further is being relocated from Europe and North America to cutting demand. China, which now has over 40% of global manufacturing capacity. Similarly, in the chemical sector, China is Chinese light duty vehicle production climbed from attempting to decrease its dependence on imports of 8,1-million units in 2007 to 9,1-million units in 2008, commodity chemicals, such as paraxylene, by building with an associated increase in platinum demand of additional capacity, with the resultant increase in plati- 14,3% or 200 000 oz. Further, new emission regula- num demand. tions also came into effect in 2008, in the form of Euro 3 rules for most of the country and Euro 4 rules in Bei- Although the quantity of hard disks manufactured con- jing, Shanghai and Guangzhou. This development will tinues to increase, Johnson Matthey reveals that pro- increase the average platinum content of vehicles man- ducers are successfully able to decrease the metal ufactured in China. content of an average disk and have reduced working stocks owing to recycling material more quickly, lead- Johnson Matthey reports that 97 000 oz of platinum ing to lower net platinum demand in the electrical sec- were recovered from spent auto catalysts in 2008, an tor in 2008. increase of 7,2% from 2007. High platinum prices in the first half of 2008 encouraged collection these catalysts Platinum investments from scrapped vehicles. In the North American market, 625 000 oz of platinum was recovered in 2008, while Investment interest in platinum fluctuated wildly dur- in Europe, platinum reclamation increased to 245 000 ing 2008, driven by large flows of metal into and out of oz, reflecting the increasing number of end-of-life cata- exchange-traded funds (ETFs). According to Johnson lysed diesel vehicles being scrapped. Matthey, investments in ETFs were much lower than in 2007 – at 130 000 oz compared to 195 000 oz. Further, Jewellery demand Johnson Matthey reports that large quantities of platinum were purchased through ETFs in the first quarter According to Johnson Matthey, a rising platinum price of 2008 as the price rose rapidly, but sales were equal- in the first half of 2008 had a significantly negative -im ly heavy in the third quarter as the price fell. In addi- pact on retail sales and manufacturing volumes in most tion, net physical investment demand for platinum de- jewellery markets. In response to the high platinum creased in 2008 to 145 000 oz from 170 000 oz in 2007. price, recycling of old jewellery increased markedly in Japan, and to a lesser extent, in China, depressing net Platinum price jewellery demand further. According to Johnson Matthey, platinum traded at an The fall in the platinum price in the second half of the average price of $1 583,27/oz during the 2008 calendar year allowed manufacturers and retailers to rebuild year. The platinum price performed strongly in the first stocks and also reduced the amount of scrap material half of the year, driven by tight fundamentals. Supply entering the Japanese and Chinese markets. As a con- disruptions, initially in the form of intermittent electricity sequence of price volatility and the associated fluctua- supply and the temporary closure of the Amandelbult tions in demand, the net global demand for platinum mine in South Africa, drove platinum to a record price in this sector fell from 1,46-million ounces in 2007 to of $2 276/oz in March 2008, with the price remaining 1,12-million ounces in 2008. highly volatile during this period.

Industrial demand However, the global financial crisis led to heavy sales by investors, forcing the platinum price sharply lower. Platinum demand in the industrial sector reached two- By December 2008, the metal was trading at a monthly million ounces in 2008, an increase of 190 000 oz from average of $851/oz.

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Monthly average platinum prices for the 2008 ages and rebuilds may cause platinum supply to fluc- calendar year tuate in the short-term. In the longer-term, questions remain concerning the ability of mining companies to JM Base Prices US$ Monthly Average obtain sufficient power guarantees to commence new 2080 operations. In addition, at current prices, and with dif- 1950 ficulty obtaining credit, it may prove challenging for 1820 many producers to expand their production. 1690 In the automotive sector, Johnson Matthey predicts 1560 that at current price differentials, palladium will contin- 1430 ue to dominate the gasoline auto catalyst market, and 1300 will take an increasing share from platinum in the diesel 1170 sector. However, new Euro 5 vehicle emission rules will 1040 take effect in late 2009 in Europe, which will force the 910 use of DPFs on almost all diesel cars sold in the region, 780 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec supporting platinum demand despite a worsening out- 2008 look for global vehicle production. Platinum Period Average $1583.27 Source: Johnson Matthey Johnson Matthey indicates that the affordability of plat- Outlook inum jewellery has decreased in recent years, driving sales down. However, a lower platinum price has al- Since most major national economies are either in re- ready allowed the industry to restock and should help cession or suffering a slowdown, it is anticipated that retail sales, as demonstrated by strong physical pur- industrial demand for platinum will be affected. chasing in China in the third quarter of 2008. Further, the amount of metal returned to the market from sec- Johnson Matthey prefaces its assessment of the out- ond-hand jewellery in Japan has recently decreased as look for platinum, in its Platinum 2008 Interim Review, the platinum price has fallen and consequently net de- with the observation that extreme uncertainty in the mand there is set to improve. Nonetheless, price vola- global financial markets makes it difficult to forecast tility affects the trade’s confidence, so a period of sus- the severity of the current economic slowdown with tained price stability would benefit the industry further any accuracy, and hence, the outlook for the platinum and help rebuild demand to previous levels. Demand market is more uncertain than its has been for many for platinum jewellery, as with most luxury items, eased years. significantly as the global financial crisis intensified in the fourth quarter of 2008. As South Africa is the world’s largest producer of platinum, it is critical that the country’s producers maintain Investment demand for platinum is dependent on plat- output from existing mines and add extra ounces from inum’s price performance. Johnson Matthey predicts newer operations. Johnson Matthey believes that there that investment demand is unlikely to rise significantly is scope for some recovery in platinum production at in the short-term, as investors seek the safety of low many established mines in 2009. volatility investments.

However, Johnson Matthey suggests that platinum According to Johnson Matthey, forecasting the plati- miners in South Africa will encounter operational and num price has become increasingly difficult in the cur- financial challenges in their effort to maintain and pos- rent economic climate. In addition, platinum is essen- sibly increase production output. It is feared that the tially an industrial metal and the economic cycle will mining sector’s chronic skills shortage will undermine influence price expectations. Johnson Matthey indi- efforts to increase platinum production output. Further, cates that some major economies, including China, will rising UG2 output from the new generation of platinum escape actual recession, supporting physical demand mines is already placing increasing technical stresses for platinum and ensuring that the metal’s price does on smelting capacity in South Africa, and smelter out- not fall significantly.

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Platinum Supply and Demand

‘000 oz 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Supply

South Africa 3 900 3 800 4 100 4 450 4 630 5 010 5 115 5 295 5 030 4 780

Russia 540 1 100 1 300 980 1 050 845 890 920 910 855 North 270 285 360 390 295 385 365 345 325 340 America Others 160 105 100 150 225 250 270 270 290 305

Total Supply 4 870 5 290 5 860 5 970 6 200 6 490 6 640 6 830 6 555 6 280

Demand by application

Autocatalyst:

Gross 1 610 1 890 2 520 2 590 3 270 3 490 3 795 3 905 4 145 4 230

Recovery (420) (470) (530) (565) (645) (690) (770) (860) (905) (970)

Chemical 320 295 290 325 320 325 325 395 410 425

Electrical 370 455 385 315 260 300 360 360 320 315

Glass 200 255 290 235 210 290 360 405 390 490

Investment 180 (60) 90 80 15 45 15 (40) 170 145

Jewellery 2 880 2 830 2 590 2 820 2 510 2 160 1 965 1 640 1 460 1 120

Petroleum 115 110 130 130 120 150 170 180 210 270

Other 335 375 465 540 470 470 475 490 475 495 Total 5 590 5 680 6 230 6 470 6 530 6 540 6 695 6 475 6 675 6 520 Demand

Average 377 545 529 540 691 846 897 1 143 1 304 1 583 Price (US$) Source: Johnson Matthey Platinum 2008 Interim Report

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Legislative and policy environment

The background to the development the participation of historically disadvantaged people in of current legislation applications for prospecting and mining rights. Government and industry also drafted a socioeco- The Mineral and Petroleum Resources Develop- nomic empowerment charter to form part of the ment Act (MPRDA), which came into effect on May 1, Department of Minerals and Energy’s (DME’s) regula- 2004, was drafted in an attempt to formulate a regula- tions and criteria for awarding prospecting and min- tory framework for South Africa’s mining and minerals ing licences. The development of the charter was pro- industry. The aim of the legislation is to correct histori- vided for in section 100 of the Mineral and Petroleum cal imbalances in the industry caused by the legacy of Resources Development Bill, under the heading ‘Trans- apartheid, without threatening its attractiveness to do- formation of the Industry’, which stated that within six mestic and international investors. months of the Bill taking effect as an Act, the Minister of Minerals and Energy must have developed a char- The Act follows international trends in minerals regu- ter that sets the framework, targets and timetable for lation, especially those seen in Canada, Australia and effecting the entry of historically disadvantaged South North America, and centres around the provision that Africans into the mining industry. The charter estab- all mineral rights will revert to the State, representing a lishes how to achieve equitable access to South Afri- move away from the previous system where ownership ca’s mineral and petroleum resources for all South Af- of mineral resources lay in the hands of private com- ricans, and outlines how the creation of employment panies. and the advancement of social and economic welfare can take place through the appropriate use of these The intention of this development is to ensure in- resources. The charter also sets a framework that en- creased access to mining activity for historically disad- sures that the holders of mining and production rights vantaged people, and to enable the State to put an end contribute towards the socioeconomic development of to the hoarding of mineral rights, with a use-it-or-lose-it the areas in which they are operating. principle ensuring that if a company fails to use its mineral rights it will lose those rights after a certain period. The charter has been the source of much specula- tion and agitation among many in the industry, but is This affects mining companies holding unutilised re- considered necessary in order to correct the racial im- serves, as well as those that own projects that have balance of the South African mining industry, which been shut down due to unprofitability. In addition, remains white controlled. There has been some confu- the principle allows the State the discretion to force sion about how the mining charter will be affected by the holder of mineral rights to abandon development the Broad-Based Black-Economic Empowerment projects if it is of the opinion that the project is not pro- Codes of Good Practice, which outline what compa- ducing at its most efficient levels. nies need to do – in terms of ownership, management control, employment equity, skills development, prefer- The Act also answers the need for broader access to ential procurement, enterprise development and socio- geological, geochemical and geophysical information, economic development – to fulfil government’s black which, in the past, was held by the entity that conduct- economic-empowerment (BEE) policy requirements. ed the exploration and was protected by restrictions Regarding this, a tentative agreement was reached in on disclosure. Through this, and improved access to April 2005, between the Department of Trade and In- mineral rights, the Act is designed to bring an end to dustry (DTI), the DME, and the Chamber of Mines, to the situation in which a few large companies domi- the effect that the mining charter be left as is until the nate South Africa’s mining industry, and is intended to rights conversion process is concluded, and the Minis- stimulate the development of South Africa’s junior min- ter of Trade and Industry confirmed, in December 2006, ing sector, which is currently small and compares un- that the codes of good practice will not affect the min- favourably with junior mining sectors in other parts of ing transformation charter until at least 2009. Mean- the world. while, mining companies have been requested by the DTI to align their procurement and enterprise-develop- Junior mining companies are also expected to benefit ment policies with the spirit of the codes of good prac- from the proposal in the Act that requires evidence of tice. www.researchchannel.co.za 11 Platinum Mining in South Africa May 2009

The mining charter requires that 15% of the owner- preference to applications from historically disadvan- ship of existing mining industry assets must be held taged people. by historically disadvantaged South Africans within five years, and 26% within ten years. While the charter does The mining rights for established operations will offer not provide clarity on the issue of new mining projects, security of tenure for an initial 30 years, renewable for a meeting, held in July 2004, between the DME, labour additional 30-year periods. The Act provides for the unions and mine resource owners, resolved this issue. provision of a retention permit, allowing the company Agreement was reached that all new mining projects granted the mineral rights to retain the rights without where the mineral rights were previously State-owned developing them for a period of three years, renewable must have a 51% BEE shareholding within the one- for two years, if market conditions are poor. The new year transitional period, and a 26% BEE shareholding prospecting rights are valid for a period not exceeding if the mineral rights were formerly privately held. For five years, with a possible one-off renewal for another pending applications for prospecting rights the same period of a maximum of three years and, once pros- criteria will apply. All applications for rights not falling pecting has been completed, the company must reap- into these categories that are in the custodianship of ply to convert these rights into mining rights if it wishes the State will be subject to a minimum 26% BEE par- to establish operations. ticipation. All new mining licences, including those for existing The targets for the participation of historically disadvan- mineral rights properties, will require evidence of a BEE taged individuals must be reached by individual com- plan, a social plan, and an environmental management panies, but companies can earn offset points where- plan. by the ownership target will be moderated should the company facilitate value-adding downstream oppor- Under the MPRDA, a transitional period allows current tunities. This will be clarified in the future promotion holders of mineral and mining rights to convert their of beneficiation legislation. The charter also requires old-order rights to new-order rights. companies to procure from BEE companies, engage in skills upliftment, improve worker housing conditions, Mineral rights holders, which did not hold prospect- and develop social plans for retrenched workers. These ing permits or mining authorisations and which were obligations cannot be used to offset equity obligations. not actively prospecting or mining their properties were given a year from the date on which the Act came into Further to requiring the involvement of historically dis- effect to apply for prospecting or mining rights under advantaged people, which will be facilitated through the new legislation. Mineral rights holders, which did the empowerment charter, the Act also requires that not apply within this period lost their rights, and any companies consult with government should they wish other persons or groups will be able to apply directly to to beneficiate locally produced minerals outside the the State for prospecting or mining rights for the areas country. This provision is designed to promote the use formerly covered by those rights. of mineral resources for sustainable economic development, and to avoid the trap that many developing Mineral rights holders, which were actively prospect- countries fall into of exporting jobs through the expor- ing or mining on the properties to which their old-order tation of unbeneficiated minerals. rights related (with the necessary permits or authorisations from the DME) were given two and five years re- Based on this, the granting of mineral rights will be in- spectively, from the date on which the MPRDA came fluenced by the involvement of historically disadvan- into effect, to convert their old-order rights to new-or- taged people, and by plans to beneficiate the miner- der prospecting or mining rights. als locally. An application has to be lodged at the relevant DME re- To give effect to the charter, a scorecard has been re- gional office, depending on where the land is situated. leased by which companies will be evaluated to deter- Within 14 days of lodging an application for the con- mine whether they have complied with the provisions version of prospecting or mining rights with the DME, a contained in the charter and the Act, and thus to de- decision as to whether or not this application has been termine whether their old-order mining rights should be accepted will be made by the department. If an appli- converted to new-order rights. The entire scorecard will cation is rejected, the process ends there. In the case be taken into account in the adjudication by the Minis- of prospecting rights, if the application is accepted, the ter of Minerals and Energy. When considering applica- mining company is given 30 days to consult with in- tions received on the same date, the Minister will give terested and affected parties, and to give the results www.researchchannel.co.za 12 Platinum Mining in South Africa May 2009

Scorecard for the broad-based socioeconomic empowerment charter for the South African mining industry

Description 5-year target 10-year target Human resource development 1 Has the company offered every employee the opportunity to be functionally Yes No literate and numerate by the year 2005 and are employees being trained? Has the company implemented career paths for HDSA employees including skills Yes No development plans? 2 Has the company developed systems through which empowerment groups can be Yes No mentored? Employment equity Has the company published its employment equity plan and reported on its annual No progess in meeting that plan? Yes 3 Has the company established a plan to achieve a target for HDSA participation in management of 40% within five years and is implementing the plan? Has the company identified a talent pool and is it fast tracking it? Yes No 4 Has the company established a plan to achieve a target for women participation in mining of 10% within the five years and is implementing the plan? Migrant labour 5 Has the company subscribed to government and industry agreements to ensure Yes No non-discrimination against foreign migrant labour? Mine community and rural development Has the company cooperated in the formulation of integrated development plans and Yes No is the company cooperating with government in the implementation of these plans for communities where mining takes place and for major labour-sending areas? Has there been effort on the side of the company to engage the local mine community and major labour-sending area communities? (Companies will be required to cite a pattern of consultation, indicate money expenditures and show a plan). Housing and living conditions For company-provided housing has the mine, in consultation with stakeholders, 6 No established measures for improving the standard of housing, including the upgrading Yes of the hostels, conversion of hostels to family units and promoted home ownership options for mine employees? Companies will be required to indicate what they have done to improve housing and show a plan to progress the issue over time and is implementing the plan? 7 ForFor company-provided company-provided nutritionnutrition hashas thethe minemine established measures for improving Yes No thethe nutrition nutrition of of mine mine employees? employees? CompaniesCompanies willwill bebe requiredrequired to indicate whatwhat thetheyy havehave done done to to improve improve nutrition nutrition andand showshow aa planplan to progress the issue overover timetime aandnd isis implementingimplementing the the plan? plan? Procurement Has the mining company given HDSAs preferred supplier status? Yes No Has the mining company identified current level of procurement from HDSA Yes No companies in terms of capital goods, consumables and services? 8 Has the mining company indicated a commitment to a progression of procurement Yes No from HDSA companies over a 3˙ 5 year time frame in terms of capital goods, consumables and services and to what extent has the commitment been implemented? Ownership and joint ventures 9 Has the mining company achieved HDSA participation in terms of ownership for equity 15% 26% or attributable units of production of 15 per cent in HDSA hands within 5 years and 26 per cent in 10 years? Beneficiation Has the mining company identified its current level of beneficiation? Yes No

10 Has the mining company established its base-line level of beneficiation and indicated Yes No the extent that this will have to be grown in order to qualify for an offset? Reporting

Has the company reported on an annual basis its progress towards achieving its Yes No commitments in its annual report? www.researchchannel.co.za 13 Platinum Mining in South Africa May 2009 of this consultation to the DME. In respect of a mining lish a central point for the registration and recording of right, the mining company is given 180 days to consult all mining titles. with interested and affected parties. Then, depending on whether it is an application for a mining title conver- The MPRDA represents a significant move away from sion or prospecting right, the mining company is given the old regulatory regime, and the DME is required by either 180 days or 60 days respectively to devise an the Act to put in place the necessary supporting infra- environmental management plan. Once this has been structure to implement it. A Minerals and Mining De- submitted to the DME, the department has 120 days to velopment Board, consisting of no fewer than 14 and assess the application. The applicant is informed within no more than 18 members, was established in 2005 to 30 days for prospecting rights, and 180 days for min- advise the Minister on the sustainable development of ing rights, as to whether the application is granted or the country’s mineral resources, as well as on the trans- rejected. If granted, the applicant is called to come and formation and downscaling of the industry. The board execute the right, which takes place prior to the reg- also plays a role in dispute resolution, and in partner- istration of the relevant right. The applicant must then ship with the Mining Qualifications Authority, promotes lodge the right granted and executed for registration the development of human resources. within 30 days of the execution date. This closes the licensing process. To facilitate the passage of the new regulatory environment, the Act provides for transitional arrangements The impact of the legislation that will be used to phase in the new framework. These will ensure that security of tenure is protected, and will Mining companies are discontented over the time taken give the holders of old-order rights and OP26 rights the to be awarded new-order rights, and the lengthy appli- opportunity to comply with the Act. cation process has been identified by some as causing widespread uncertainty among mining and exploration In spite of the transitional mechanisms, however, un- companies operating in South Africa. Towards tack- certainties remain regarding the practical implementa- ling such concerns, the Director-General of the DME tion of the Act, and business has expressed concerns indicated in September 2006 that mineral rights would over this. be granted to mineral explorers within six months from the date of application lodgement, while mining-rights In late-2006, the DME launched a review of the MPRDA applications would take 12 months to finalise. In May and, based on submissions made by the mining indus- 2007, the Minister of Minerals and Energy, in her budg- try, is developing certain amendments to the legisla- et vote in Parliament, reported that the DME had re- tion, although it has stressed that such amendments ceived 11 447 applications for prospecting and min- will not alter the spirit of the law, but will rather seek ing rights since the new legislation was introduced, and to remove identified obstacles to mining investment. that there was no longer a backlog in the processing One such amendment will see mining companies hav- of these. However, figures continue to show that de- ing a period of 180 days after April 30, 2009, in which cisions on whether to grant or refuse a number of ac- to lodge claims with the DME before mining rights are cepted applications remain outstanding. expropriated.

Legislation, separate from the MPRDA, aimed at over- Other concerns that have been voiced by business with hauling the registration of mining titles and setting up regard to the MPRDA include what they have identi- a central office to regulate all mining and prospecting fied as broad discretionary powers granted to the Min- rights has been passed. Known as the Mining Titles ister, and the absence of clearly defined recourse to the Registration Amendment Act, this law seeks to bring courts in the event of having to challenge a ministerial registration in line with the MPRDA, and aims to estab- decision made by virtue of these powers.

Progress on rights applications made between May 2004 and November 2007

Received Accepted Rejected Granted Refused Withdrawn

Prospecting rights 7 703 6 019 1 539 2 835 2 067 281

Mining rights 1 807 1 596 182 336 309 105

Permit applications 3 990 3 339 559 1 374 822 207 Source: Compiled from the DME’s monthly update on applications (November 2007) www.researchchannel.co.za 14 Platinum Mining in South Africa May 2009

Government, however, holds that, in comparison to the to protect foreign investments from expropriation, ex- Minerals Act of 1991, the Act limits the extent of dis- cept in the case of prompt and effective compensation, cretionary power by containing objective statutory re- and require foreign investments in South Africa to be quirements that will be used to determine whether a subjected to fair and equitable treatment. company is granted prospecting or mining rights. Gov- ernment also emphasises that, as a fundamental right Based on this, under international law, a €266-million contained in the South African Constitution, recourse claim has been brought by the Italian investors in Marlin to the courts is implied, and is not excluded under the Holdings Limited, Marlin Corporation Limited, and Red new Act. Graniti SA (Pty) Limited. These investors have lodged a request for compulsory international arbitration against Concerns have also been raised over what is perceived the South African government under the World Bank’s as overregulation of the industry, demonstrated in the International Centre for the Settlement for Investment Act’s requirement that companies consult with govern- Disputes (ICSID) in Washington. The ICSID granted the ment should they wish to beneficiate locally produced request in January 2007. minerals outside the country. Government feels justi- fied in this, however, as it provides incentives for the lo- The request for international arbitration was made un- cal beneficiation of minerals. der South Africa’s bilateral investment treaties (Bits) with Italy and the Belgo-Luxembourg Economic Union. Further, business is concerned that, through the use- The request points out that by extinguishing the owner- it-or-lose-it principle, mineral resources previously held ship of the investors’ South African mineral rights with- by companies that were likely to exploit them over a out providing prompt, adequate and effective compen- long period, may now be developed in the next few sation, the entry into force of the MPRDA constituted years, increasing supply to the market and disrupting an unlawful expropriation of their investments. Like- the delicate supply-and-demand balance, thereby ex- wise, the mining charter’s forced divestiture of 26% erting downward pressure on metals prices. of the investors’ investments to historically disadvantaged South Africans, as a condition of the conversion The amendment Bill is introduced of the investors’ old-order rights to new-order rights under the MPRDA, constitutes a violation of the Bits’ The Mineral and Petroleum Resources Develop- requirement that the investors receive fair and equita- ment Amendment Bill of 2007 has been criticised for ble treatment. In the investors’ view, the Mining Charter worsening regulatory uncertainty in South Africa’s min- discriminates against foreign investors in favour of his- ing industry, with some experts indicating that the Bill torically disadvantaged South Africans, and thus vio- fails to introduce any measurable objectives into the lates the Bits’ equitable treatment requirements. MPRDA’s licensing requirements and contains certain legislative proposals that will aggravate the MPRDA’s Mining and the environment underlying problems. The environmental policies of the MPRDA are expected An example of this is the empowerment of the Minister to ensure responsible mining practices, to some extent, of Minerals and Energy to refuse to convert an old order although the enforcement of these policies will be the mining right, as an applicant must now provide docu- ultimate determinant of their effectiveness. mentary proof as to how it intends giving effect to the MPRDA’s empowerment, social and labour objectives. Everyone applying for a prospecting or mining right must lodge an environmental management programme As at August 31, 2007, 94 judicial review applications report (EMPR) evaluating the impact of the proposed had been instituted against the DME’s refusal to grant operations on the environment and on the socioeco- either a prospecting or mining right, and, as of the same nomic conditions of affected people. For this EMPR to date, the High Court had only refused to grant one judi- be approved, applicants must make the prescribed fi- cial review application. nancial provisions for the management of environmental impacts, and for rehabilitation. In a legal challenge to the MPRDA, the consequences of which remain unclear, mining lawyer and vice- The Act empowers the Minister to force a permit hold- chairperson of the International Bar Association Peter er to take urgent remedial action to deal with an envi- Leon, contended in February 2007 that the MPRDA is ronmental hazard, and the Minister is even authorised in breach of 42 international investment treaties signed to use State funds to pay for this, although the money by South Africa since 1994. Such treaties are intended must be recovered from the permit holder. www.researchchannel.co.za 15 Platinum Mining in South Africa May 2009

Although certain other environmental provisions are The Cabinet-approved amendments introduce a dis- made in the Act, it does not represent a definitive piece tinction between the royalties imposed on refined min- of environmental legislation, and the interrelationship erals, such as gold, and unrefined minerals, including between the Act and other environmental laws remains diamonds, gas and oil, which will have separate formu- important. las. Platinum group metals could fall into either category depending on whether they had been refined before Firstly, environmental rights are included in the Con- they are sold. For refined metals the tax base for the stitution, which requires that environmental considera- formula is gross sales minus the cost of transporting tions are accorded appropriate recognition in the South the final product to the buyer. African economy. The amendments also alter the tax base of the royalty To substantiate these environmental rights, the Nation- to earnings before interest and tax (Ebit) and not the al Environmental Management Act explicitly outlines previous earnings before interest, tax, depreciation and principles for cooperative environmental governance, amortisation (Ebitda), which have a much higher value. and mining companies find themselves subject to this The mining industry had objected to the use of Ebitda piece of legislation. claiming that it took no account of considerable capital investment, particularly by deep-level gold mines. One of the most significant environmental challenges Under Ebit, the mines will be allowed 100% capital ex- faced by the mining industry relates to water and, in or- pensing, as is the case for income tax. der to define responsibility in this area, companies fall under the National Water Act. In terms of the final draft of the bill, marginal mines would get automatic relief as their royalty rate will de- As a result of this, it has been noted that environmental cline as their profitability falls. However, the government law in South Africa appears fragmented and, on occa- will also enjoy the benefit of commodity price booms. sion, contradictory, with the result that uncertainty ex- ists as to what is required of mining companies with re- The Treasury has taken steps to protect the integrity of gard to environmental protection. the Bill in the light of the move to the lower value Ebit, by introducing a minimum rate of 0,5% into the formu- Introduction of royalty payments las.

South Africa’s mining sector will soon fall under a roy- Refined formula rates will typically range from 1,7% to alty regime. The Mineral and Petroleum Royalty Bill 2,5%, depending on the profitability of the mines, and was released in early 2003, and since that time has there will be a maximum rate of 5% in cases of high been revised, taking into account consultations with profitability. Unrefined formula rates will range from the sector. 2,2% to 3,3%, with a maximum of 7%.

The first two drafts of the Bill proposed that royalties Impact of the economic downturn and other factors be levied on turnover, and set specific royalty levels for specific minerals. Miners strongly rejected this system, Enacted in 2008, the Mineral and Petroleum Resourc- claiming that it would reduce the viability of existing op- es Royalty Act was initially set to be implemented in erations, increase pay limits and, consequently, cause May 2009. However, in an effort to mitigate job losses job losses. Further, the industry claimed that the legis- in the mining sector, the government has decided to lation could substantially increase hurdle rates for new postpone the implementation of the new mineral and and organic growth projects and, ultimately, threaten mining royalty regime until March 2010. the long-term viability of the industry. It has been suggested that about R1,8-billion in mining The third version of the Bill, tabled in December 2007, royalties would have been raised by the National Treas- proposed a levy based on profitable earnings. The ury, and it is believed that the deferred royalty payment approach incorporated the use of a single formula in will assist the mining industry through the current eco- terms of which the royalty rate for each company would nomic slowdown and thereby minimise job losses in vary depending on the ratio of earnings to sales. the sector.

Final amendments to the Bill were released in May The mining sector’s production and sales output has 2008, and the royalties were to become payable on been curtailed by the country’s electricity supply prob- minerals transferred as of May 1, 2009. lems, shutdowns related to mine safety, retreating com- www.researchchannel.co.za 16 Platinum Mining in South Africa May 2009 modity prices and weakening international demand in bled in Parliament, providing for a levy on the export 2008. of rough diamonds from South Africa. While the impo- sition of an export tax is already contained in the Dia- Mine safety monds Act of 1986, amendments to the Diamonds Act in 2005 have resulted in the need for amendments to the export levy on rough diamonds. Increased emphasis on mine safety in South Africa has brought the country’s mine safety legislation into sharp The export levy on rough diamonds in the Diamonds focus, with calls from unions and civil society for great- Act of 1986 is currently set at 15%. However, this Act er action on the part of government to improve safety provided for relatively generous exemptions. The pro- standards in the industry. However, mining companies, posed Diamond Levy Bills of 2007 reduce the export while supportive of the DME’s efforts, have warned that levy on rough diamonds to 5% but tighten the relief implementation of section 54 of the Mine Health and provisions, thereby laying a foundation for increased Safety Act, which empowers mine inspectors to “give effectiveness. It should also be noted that the reduced any instruction necessary to protect the health and 5% rate was not intended to undermine the power of safety of persons at mine” – including work stoppages, the levy as a deterrent. According to informal police es- if the mine inspectors believe conditions and practices timates, diamond smuggling costs are between 2,5% at the mine pose a health or safety risk – could have a and 5% of gross diamond values. detrimental effect on production and consequently en- danger the profitability and sustainability of some min- The intention of the proposed relief measures is to en- ing operations. sure that the local supply of rough diamonds is com- mensurate with local demand. The core element of Platinum producers in particular have indicated that these incentives is to encourage producers to supply safety-related work stoppages contributed significantly the local market with rough diamonds so that they can to reduced production output in 2008. export the remainder free from the levy. An Amendment to the Mine Health and Safety Act, Still to come is the Promotion of Beneficiation Bill, the Mine Health and Safety Amendment Bill of 2008, which is expected to provide incentives for upstream which intends strengthening the Act’s enforcement companies that facilitate downstream investments to provisions and simplifying the administrative system for reduce the exporting of unprocessed mineral products issuing fines, is currently with the Minerals and Energy and to promote local value-addition. The process of Affairs parliamentary portfolio committee. drafting this bill has been slowed to allow greater en- gagement with industry, which seems opposed to the Diamond export legislation idea, claiming that it is not reasonable to expect those involved in primary extraction to get involved in benefi- In June 2007, the Diamond Export Levy Bills were ta- ciation.

www.researchchannel.co.za 17 Platinum Mining in South Africa May 2009 Major platinum projects currently under development in South Africa

Major platinum projects under development in South Africa

Projected Owner Project name Province Value Duration Status annual output R400-million will be African Rain- The mine 120 000 oz/y spent in FY 2009 bow Minerals Two Rivers achieved steady- Mpumalanga of platinum R1,4-billion to complete the (55%)/ Impala Platinum state production concentrate project and develop Platinum (45%) in 2008. the north decline. Peak funding is In December 2008 Project 1 is Project 1 is estimated at be- the partners in the scheduled to Anglo Platinum estimated to tween $486-mil- WBJV executed de- Western produce 57 068 (37%), PTM produce be- lion at current finitive agreements Bushveld joint North West oz 4E in 2010/11, (37%), Wesizwe tween 235 000 metals prices, to restructure their venture ramping up to Platinum (26%) oz/y and 271 and $507-million, respective holdings 271 248 oz 4 E 000 oz/y of 4E. using three-year in the projects gov- two years later. trailing averages. erned by the JV. First production The intention is expected in Q4 The mine’s phase 2 is to increase of 2012. Global expansion project Twickenham R5,9-billion for Anglo Platinum Limpopo output to 50 economic condi- was approved by expansion phase 2 expansin 000 t/m of tions have set the the Board in the first mined ore. project back six quarter of 2008. months. The planned ore re- Amandelbult Steady-state serve development North West 100 000 oz/y of Anglo Platinum East Upper R1,57-billion production is ex- will be completed Province platinum UG2 pected in 2012. on schedule by the end of 2009. The project was For economic approved in April reasons, sinking The mining of 2008. Excavations activities have 300 000 t/m of for the main and Amandelbult North West been delayed, Anglo Platinum Merensky, UG2 Not stated vent shaft col- No.4 shaft Province which will result in and waste from lars and sinking of an overall project 18 half-levels. winder foundations delay of three commenced in years. 2008. The project has Steady-state pro- Rustenburg North West 275 000 t/m R2,4-billion (2003 been completed Anglo Platinum duction achieved UG2 phase 2 Province of ore monetary terms) and is being closed in 2008. out. B&W has completed several works at a Potgietersrust 600 000 t/m con- Platinum Limpopo 230 000 oz/y of Anglo Platinum R5,8-billion Not stated centrator at PPRust (PPRust) North Province platinum north expansion expansion project’s Mogalak- wena section. The ramp up will The development begin in 2009, Paardekraal North West 120 000 oz/y of of the surface infra- Anglo Platinum R2,6-billion with full produc- No.2 shaft Province platinum structure has been tion expected in deferred. 2014.

www.researchchannel.co.za 18 Platinum Mining in South Africa May 2009

Projected Owner Project name Province Value Duration Status annual output Production has started The project is as part of the project’s Anglo Brakfontein Limpopo 120 000 t/m expected to achieve R1,1-billion ramp-up. Construction of Platinum Merensky Province of ore steady-state surface infrastructure will production in 2010. be completed in 2009. The project is in the Townlands Steady-state Anglo North West 70 000 oz/y of implementation phase ore Not stated production is Platinum Province platinum and progressing towards replacement expected in 2014. steady-state production. Steady-state produc- Development is Anglo Waterval North West 52 000 oz/y of Not stated tion is expected in progressing Platinum Phase 3 Province platinum 2009. satisfactorily. Steady-state Anglo Waterval North West 226 000 oz/y of Execution has just Not stated production is Platinum Phase 4 Province platinum commenced. expected in 2012. First production is Anglo expected between Owing to the global eco- Platinum Styldrift North West 230 000 t/m 2011 and 2017, nomic slowdown, sinking (50%) / Royal R10,3-billion Merensky Province of ore according to Anglo operations have been Bafokeng American’s new delayed by 18 months. Resources project timeframe. The project has been granted a new-order mining rights for the Crocette section by the Depart- Crocette Eastern North West Full production is ex- ment of Minerals and section mine 40 000 t/m Not stated Platinum Province pected by mid-2010. Energy.The development development of the mine has started and underground development is under way. Impala North West 226 500 t/m of Full production is The project remains on No. 16 Shaft R4-billion Platinum Province reef ore scheduled for 2015. schedule. The site for the Impala North West 225 000 t/m of Full production is erection of shaft No. 17 Shaft R8,9-billion Platinum Province platinum scheduled for 2018. headgear structural steel has been established. Impala North West 150 000 oz/y of Full production is The project is behind No. 20 Shaft R3,6-billion Platinum Province platinum scheduled for 2015. schedule Production was 170 000 oz/y scheduled to begin Owing to the current eco- Impala North West Leeuwkop of platinum R6-billion in 2013, with project nomic crisis, the project Platinum Province concentrate completion expected has been deferred. by 2015. 115 000 oz/y Owing to the of platinum at The project was to Impala Marula Mer- Limpopo current economic crisis, a rate of 175 R3-billion be completed by Platinum ensky reef province the project has been 000 t/m of ore 2015. deferred. mined 500 000 oz/y Between Akanani of PGMs, A timeframe for the The project has been put Limpopo $600-mil- Lonmin platinum- including 250 project has not been on short-term care and Province lion and group metals 000 oz/y of disclosed. maintenance. $700-million platinum

www.researchchannel.co.za 19 Platinum Mining in South Africa May 2009

Project Projected Owner Province Value Duration Status name annual output The Limpopo expansion Limpopo First production project has been put on platinum Limpopo 85 000 oz/y of Lonmin $350-million was expected in care and maintenance mine phase Province platinum 2011. for the foreseeable 2 expansion future. PLA has reported the successful ore commissioning of the processing plant’s crushing and milling sections. Smokey Hills’ opencast operation will continue through to June 2009, at which The project is ex- Smokey point the ore stockpile Platinum Limpopo 95 000 oz pected to achieve Hills $49-million will have increased from Australia Province of 4E PGMs full production in platinum the current 100 000 t to 2009/10. about 200 000 t. The development of the shallow underground mine has already started and production from this mine will replace that from the open pit over the next 12 months. The cost for developing the mine has been The platinum estimated at mine is expected Platmin intends raising $350-million. to start produc- $175-million through A $596-million tion of platinum- the sale of shares to the 250 000 contract has group metals North West Pallinghurst Investment Platmin Pilanesberg oz/y of 3 been awarded concentrate Province Consortium and the PGE + Au for the opencast in early 2009, Bakgatla-Ba-Kgafela mining opera- rapidly building tribe, to finance the com- tions, which will up to steady state pletion of the mine. be in effect for levels by mid- the first six years 2009. of the mine’s operating life. The commissioning of the concentrator plant started on January 12, Ridge 2009, and is progressing Blue Ridge The mine is Mining (50%) 125 000 well. The first ore is ex- platinum- Limpopo scheduled to / Imbani oz/y of 3 $107-million pected to be processed group Province reach full produc- Platinum PGE + Au in mid-February 2009 metals tion by mid-2009. (50%) and the first concentrate will be produced around the end of February 2009. Ridge Min- ing (61,5%) Ridge Mining has Sheba’s / Industrial reported that the project Ridge Development 18-millions tons cannot go ahead while platinum- Mpumalanga $707-million Not stated Corporation a year of ore the mining industry is group (26%) /Anglo reeling under the global metals Platinum economic crisis. (12,5%)

www.researchchannel.co.za 20 Platinum Mining in South Africa May 2009

Projected Owner Project name Province Value Duration Status annual output With the bankable feasibility study due to be completed in the second half of 2009, work on site will start in 2010. The first pro- Northam Booysendal Limpopo 120 000 t/m R2,5-billion duction is scheduled Not stated Platinum platinum Province of mined ore for 2011, with the concentrator being commissioned early in 2012, and production building up to steady- state by 2014. Jubilee Platinum has completed its 42 borehole drilling programme at the Tjate Jubilee platinum project. The Platinum drilling programme 262 000 oz/y A timeframe for the (63%)/ Limpopo formed part of phase Tjate platinum of PGMs plus $510-million project has not been Tjate Plati- Province two of the feasibility gold confirmed. num Corpora- study, which started tion in early 2008, and continues to confirm the continuity at depth of the Meren- sky and UG2 reefs.

www.researchchannel.co.za 21 Platinum Mining in South Africa May 2009

Anglo Platinum

Brief history ered by the converted mining rights.

Anglo Platinum came into being in 1995 when Johan- The applications for conversion of mineral rights asso- nesburg Consolidated Investments (JCI) unbundled. ciated with Anglo Platinum’s 50:50 joint ventures with The platinum interests of JCI became Amplats, and in Royal Bafokeng Resources and the African Rainbow May 2005, the platinum producer was renamed Anglo Minerals consortium continue and are being processed Platinum. based on joint submissions and representations by all stakeholders.

Nature of business and market Further afield, Anglo Platinum is developing the Unki position mine in Zimbabwe, and is pursuing exploration opportunities in Brazil, Canada, China and Russia. Anglo Platinum is the world’s largest primary platinum producer. The company’s operations also produce oth- Anglo Platinum produced 2,39-million ounces of re- er PGMs, and nickel, copper and base metals, which fined platinum and 1,32-million ounces of refined palla- are byproducts of PGM production. dium in 2008. Refined PGM production for the year was 4,53-million ounces. The 2008 production figure for re- The company has its primary listing on the Johannes- fined platinum was 3,24% lower than the 2007 produc- burg Securities Exchange, and secondary listings on tion figure of 2,47-million ounces. the London Stock Exchange and the Brussels bourse. At the end of the 2008 financial year, Anglo Platinum In 2008, the company faced several challenges in had a market capitalisation of R123,2-billion. maintaining operational efficiency, including flooding at the Amandelbult Section, the suspension of opera- Anglo Platinum operates four wholly owned mines in tions to rehabilitate steelwork at the Turffontein shaft at South Africa – Rustenburg Platinum Mines’ Rusten- the Rustenburg section, electricity supply constraints burg and Amandelbult sections, and the Mogalakwena in January, safety-related stoppages, and commission- and Twickenham mines. The company is also involved ing delays and subsequent lower throughput at the in four joint-venture mining operations, which include Mogalakwena concentrator. the Union, Bafokeng-Rasimone, Lebowa and Modikwa platinum mines. In addition, Anglo Platinum has var- The implementation of Anglo Platinum’s extensive port- ious 100%-owned and joint-venture projects under folio of mining and processing projects, continued in development. The company also has pool-and-share 2008 with expenditure on capital projects increasing by agreements with Aquarius Platinum involving the lat- 26% to R13,1-billion over expenditure in 2007. Project ter’s Kroondal and Marikana mines. capital expenditure amounted to R7-billion while expenditure to maintain operations was R6,1-billion. Ma- Anglo Platinum’s processing operations consist of 20 jor capital projects in 2008 included the Mogalakwena concentrator plants, located in nine geographical lo- North expansion project, the Paardekraal 2 shaft re- cations around the Bushveld Complex. In addition, the placement project, the Amandelbult East Upper UG2 company operates three smelter complexes and two expansion project, the Base Metals Refinery expansion refineries. project and the Waterval Merensky plant retrofit.

In April 2008, South Africa’s Department of Minerals In response to the rapid decline in PGM prices in the and Energy granted Anglo Platinum new order mining second half of 2008 and reduced demand for PGMs rights for the Rustenburg, Amandelbult, Union, Leb- by automakers, brought about by the global econom- owa, Mogalakwena, Twickenham, Der Brochen and ic slowdown, Anglo Platinum has decided to decrease Bafokeng-Rasimone mining areas. Some of these are its capital expenditure budget to R9,1-billion and has conditional on submission of revised Social and Labour pegged its production target for 2009 at the 2008 level Plans. of 2,39-million ounces of refined platinum.

It is estimated that about 85% of Anglo Platinum’s re- Capital expenditure for 2009 has been reduced by defined platinum output originates from mining areas cov- laying expenditure across several major projects, in- www.researchchannel.co.za 22 Platinum Mining in South Africa May 2009 cluding Amandelbult No. 4 shaft, Twickenham, Styldrift, er, in which RBH will have a majority shareholding. The Modikwa Phase 2, the second slag cleaning furnace at transaction is expected to take between one and two Waterval and numerous smaller projects. years to complete.

Anglo Platinum has indicated that it is fully committed In March 2008, the company reached agreement with to the Mineral and Petroleum Resources Development its employees and labour unions on the main terms Act and the Mining Charter, and to achieving the asso- and structure of the company’s broad-based employee ciated sustainable economic transformation in the min- share ownership plan (ESOP). As a result, the company ing industry. The company has given expression to this established the Anglo Platinum Kotula Trust to facili- commitment by entering into significant BEE transac- tate the scheme on behalf of the beneficiaries and is- tions that have resulted in the establishment of three sued approximately 2,5-million shares to the trust, rep- major historically disadvantaged South African (HDSA)- resenting about one per cent of the company’s issued managed and -controlled PGM producers with signif- ordinary share capital. More than 90% of the benefici- icant broad-based empowerment. Further, the com- aries of ESOP will be historically disadvantaged South pany has implemented an employee share ownership Africans. plan to benefit some 50 000 employees. Platinum operations in South Africa In September 2007, the company announced two major black economic empowerment transactions, with Anglo Platinum is a vertically integrated platinum pro- Anooraq Resources and Mvelaphanda Resources in ducer, with extensive platinum mining and processing respect of Anglo Platinum’s Lebowa Platinum Mine and operations in South Africa. its investment in Northam Platinum. Steady progress is being made in concluding these transactions. The Mvelaphanda transaction is almost complete, with final Rustenburg Platinum Mines consent awaited from the Minister of Minerals and En- ergy on the disposal of the Booysendal property. Ow- Rustenburg Platinum Mines (RPM), a wholly owned ing to the global economic slowdown, certain aspects subsidiary of Anglo Platinum, operates three mines – of the Anooraq transaction are being re-evaluated and Rustenburg section, Amandelbult section and Union the date for its fulfilment has been extended. section – located on the western limb of the Bushveld Complex, near of the town of Rustenburg, in the North An agreement was reached with Royal Bafokeng Hold- West Province. RPM’s three sections have been grant- ings (RBH) in 2008 to restructure the Bafokeng-Rasi- ed new order mining rights mone joint venture, which includes the Styldrift project. In terms of the restructuring, Anglo Platinum will retain Rustenburg section an effective stake of 43% in the venture and receive payment for the transfer of control. The transaction will In 2008, the Rustenburg section produced 605 400 oz result in the creation and listing of a BEE PGM produc- of platinum, which was 9% less than the 665 400 oz

Anglo Platinum: Financial and production summary for the ended December 2008

Year ended Year ended Year ended December 2008 December 2007 December 2006 Revenue (R) 51,1-billion 46,9-billion 39,3-billion Revenue ($) 6,3-billion 6,7-billion 5,8-billion Net profit (R) 14,7-billion 12,7-billion 11,9-billion Net profit ($) 1,81-billion 1,74-billion 1,76-billion Total refined PGM production (oz) 4,5-million 4,8-million 5,2-million Total refined pt production (oz) 2,4-million 2,5-million 2,8-million Average market price achieved – platinum ($/oz) 1 570 1 302 1 140 Tons milled 42,6-million 41,6-million 43,8-million Cash operating costs ($/oz Pt refined) 1 384 1 153 849 Cash operating costs ($/oz PGM refined) 730 600 459 Source: Anglo Platinum Annual Report 2008 www.researchchannel.co.za 23 Platinum Mining in South Africa May 2009 produced in 2007. The lower output was attributed to team operating and reporting independently. closure of the Turffontein shaft for rehabilitation work, safety stoppages and contractor strike interruptions. Union section The situation was further exacerbated by Eskom power supply disruptions in January 2008. Anglo Platinum operates and owns an 85% stake in the Union section, with the remaining 15% of the opera- Total capital expenditure at the Rustenburg section in- tion being held by the Bakgatla-ba-Kgafela communi- creased marginally, to R2,2-billion in 2008, of which ty, which acquired the stake through an empowerment R1-billion was spent on stay-in-business expenditure, transaction concluded in December 2006. while project capital expenditure amounted to R1,2-billion. In 2008, the Union section produced 314 100 oz of platinum, an increase of 2% over the 2007 production The Rustenburg section’s capital expenditure budget figure of 309 400 oz. The 4E built-up head grade in- has been invested in line with the mine’s overall mining creased by 1% to 3,63 g/t in 2008, while the UG2 com- strategy, which aims to mine the Merensky Reef as the ponent of tons milled decreased marginally to 63% base operating layer, owing to its higher unit value and from 64% in 2007. to ensure sustained profitability, while using the UG2 horizon to fill spare shaft-hoisting capacity. The mining Total capital expenditure for the year was R567-million, strategy requires that a series of phased decline exten- which was 32% higher than in 2007. The increase was sion projects be undertaken at existing shafts. These principally the result of replacement project capital at projects are being implemented at the Paardekraal, the declines and the Spud shaft UG2 project. Frank, Turffontein and Townlands shafts on the Mer- ensky Reef horizon and at the Waterval shaft on the Mogalakwena mine UG2 layer. The Mogalakwena mine, formerly known as Potgiet- The Rustenburg section is in the process of reorganis- ersrust Platinums, exploits the Platreef, in the northern ing its operations. This involves the restructuring of the limb of the Bushveld Complex, in the vicinity of Moko- section into five mines and a central services facility. pane. Each mine will have its own management team acting and reporting independently. Production at the mine increased by 15% to 188 100 oz in 2008, compared with 163 500 ounces in 2007. Amandelbult section The increased production was attributed to the new Mogalakwena North pit and the commissioning of the In 2008, the Amandelbult section produced 455 700 new Mogalakwena North concentrator during 2008. oz of platinum, which represents a decrease of 21% The 4E built-up head grade decreased to 2,78g/t in compared with the 576 700 oz produced in the previ- 2008, from 3,49 g/t in 2007, as a result of the treatment ous year. The reduced output has been attributed to of increased low-grade material. the major flooding the mine suffered in January 2008, work stoppages as a result of safety issues, and a de- Total capital expenditure for the year, at R3-billion, was cline in the overall 4E built-up head grade, from 5,13 g/t 28% lower than expenditure in 2007, as a result of the low- in 2007 to 4,87 g/t in 2008. er expenditure on the Mogalakwena North concentrator.

The mine’s total capital expenditure doubled to R2,4- The Mogalakwena North expansion project, which was billion in 2008 from the previous year’s R1,2-billion. commissioned and handed over to the mine in March Project capital expenditure increased to R1,5-billion, 2008, and involved the relocation of the Ga-Puka and compared with R572-million in 2007, largely as a re- Ga-Sekhaolelo villages – commonly referred to as the sult of the East Upper UG2 expansion project. Stay-in- Motlhotlo village. This resettlement has been the focus business capital expenditure increased to R812-million of a South African Human Rights Commission (SAHRC) from R640-million in 2007, and included R355-million- investigation into possible human rights abuses com- worht of capital expenditure for the Amandelbult No. 4 mitted by Anglo Platinum. shaft project. The SAHRC initiated the investigation after nongovern- Amandelbult will undergo management restructuring in mental organisation ActionAid raised concerns over 2009. The mine will be divided into two independent environmental, economic and cultural issues associat- mining operations, each having their own management ed with the relocation. www.researchchannel.co.za 24 Platinum Mining in South Africa May 2009

While the SAHRC’s report made no findings of viola- 43% stake in the venture and will receive payment for tions of law or human rights, the report did draw atten- the transfer of control. The transaction will result in the tion to some potential hidden vulnerabilities of commu- creation and listing of a BEE PGM producer, with a ma- nities and residents involved in a complex, multi-year, jority share held by RBH and independently managed. multi-million rand relocation project. Further, the human rights body has suggested ways in which Anglo Plati- BRPM, which has been awarded new order mining num can improve its performance on a wide range of rights, exploits the Merensky reef on the western limb issues – such as multi-stakeholder community consul- of the Bushveld Complex. The operation mines only the tation, more effective grievance mechanisms, and im- Merensky reef. proved communications with affected communities about the non-financial implications of relocation. Anglo Platinum’s attributable share of equivalent refined platinum production, including 87 500 oz pur- As a consequence of the SAHRC report, Anglo Plat- chased from its joint-venture partner, decreased by inum has commissioned independent consultants to 10% in 2008, to 175 000 oz, compared with 193 600 oz undertake a post-resettlement review for Motlhotlo that in 2007. Lower production output at the mine has been will start in 2009. In addition, the company recognis- attributed to a shortage of skilled labour, work stop- es that it has a responsibility to these communities in pages for safety incidents, labour absenteeism, devel- terms of improving post-resettlement livelihoods. To opment delays in the Phase 2 expansion project and date the vast majority of the community has relocated power disruptions. to the new village. Anglo Platinum’s share of capital expenditure for 2008 Twickenham mine was R306-million, a 56% increase over 2007. Capital expenditure was incurred primarily on the BRPM Phase The Twickenham mine, 100% owned by Anglo Plati- 2 expansion project and the Styldrift feasibility study. num, exploits the platinum resource of the Twickenham and Hackney mining areas on the eastern limb of the The mine is continuing the development of the Phase Bushveld Complex. Despite difficult economic condi- 2 project, which is designed to deepen operations at tions, the mining operation has been most successful both the North and South shafts by an additional five with better-than-expected stoping widths and grades levels. The project is scheduled for completion in 2012. having been achieved. The success of Phase 1 mining operations informed the Anglo Platinum board’s de- In addition to the Phase 2 project, the Styldrift feasibil- cision to approve the R5,9-billion Phase 2 expansion ity study was completed in 2008, and the project was project. approved for implementation by the joint-venture partners. However, as a result of the global economic slow- In 2008, the mine increased its platinum production by down, the project has been delayed by 18 months. to 2%, to 9 500 oz, compared with 9 300 oz produced in 2007. The average 4E built-up head grade increased Lebowa Platinum mine to 4,76 g/t in 2008, from 4,65 g/t in 2007. Twickenham mines only the UG2 reef. The Lebowa Platinum mine is located on the eastern limb of the Bushveld Complex. The operation mines Capital expenditure at the mine totalled R517-million the Merensky Reef horizon and the UG2 layer. in 2008, compared with R168-million in 2007. Projects already under development at the mine include a min- Anglo Platinum, as part of the BEE transactions an- ing training centre, which is an underground mine de- nounced in 2007, will sell an effective 51% of Lebowa velopment centre for the eastern limb of the Bushveld Platinum mine to Anooraq Resources. It is envisaged Complex. that the transaction will be finalised during the first half of 2009. Once the deal has been concluded, Anooraq Bafokeng-Rasimone platinum mine Resources will assume management of the mine and determine its future operational plan. The Bafokeng-Rasimone platinum mine (BRPM) is a joint-venture between Anglo Platinum and Royal Bafo- The mine’s platinum production for 2008 declined to keng Resources. An agreement was reached with RBH 74 200 oz, which was 21% down on the 94 300 oz in 2008 to restructure the Bafokeng-Rasimone joint produced in 2007. Production was affected by work venture, which includes the Styldrift project. In terms of stoppages related to safety, skilled-labour shortages, the restructuring, Anglo Platinum will retain an effective power and labour disruptions, and a shortage of im- www.researchchannel.co.za 25 Platinum Mining in South Africa May 2009 mediately available face length. Further, production re- hampering production at the Borwa shaft. mained constrained at the vertical shaft owing to long travelling times and logistics lines, and delays in provid- Capital expenditure at Mototolo decreased by 28% in ing working face at the new Brakfontein shaft. 2008, to R61-million, from the previous year’s R86-million. Lebowa Platinum mine’s capital expenditure for 2008 amounted to R622-million, representing an increase of Xstrata South Africa is responsible for the managing of 21% on expenditure the previous year. This expendi- the underground mining operations, while Anglo Plati- ture was mainly associated with the Brakfontein project num manages the 200 000 t/m PGM concentrator. and the purchase of trackless mining equipment for the Middelpunt Hill operation. Kroondal platinum mine

Modikwa platinum mine Since 2003, Anglo Platinum has had a pool-and-share agreement with Aquarius Platinum involving the latter’s Situated on the eastern limb of the Bushveld Complex, Kroondal mine, situated adjacent to Anglo Platinum’s 15km northwest of Burgersfort, on the border between RPM on the western limb of the Bushveld Complex. the Limpopo and Mpumalanga provinces of South Af- rica, Modikwa platinum mine is a joint venture between Equivalent refined platinum production attributable to Anglo Platinum and African Rainbow Minerals (Arm) Anglo Platinum, which included 106 700 oz purchased Platinum. The mine is managed by Arm Platinum. from the joint-venture partner, increased to 213 400 oz in 2008, from 130 200 oz in 2007. Anglo Platinum’s In terms of the joint-venture agreement, all the metal share of production increased as a result of the com- produced is smelted and refined by Anglo Platinum. pletion of a sales agreement with Impala Refining Serv- Further, 50% of the equivalent refined platinum pro- ices (IRS), which resulted in the sale of only 7 700 oz duced is attributable to Anglo Platinum, while the other of platinum in 2008, compared with 55 900 oz sold to 50% is purchased from the joint-venture partner. Total IRS in the previous year. Further, opencast production production at the mine increased by 15% in 2008 to at Kroondal was terminated during 2008, with only 160 135 400 oz, from 117 700 oz in the previous year. This 000 t from this source being milled. figure includes the 67 700 oz purchased from the joint- venture partner. In addition, Kroondal has an offtake agreement with Anglo Platinum for the processing and refining of its The company’s share of the capital expenditure in- concentrate. creased by 82% in 2008, from R129-million in 2007 to R235-million. Expenditure was primarily directed to- Anglo Platinum’s share of capital expenditure for the wards the North and South shaft decline extensions. year amounted to R185-million, which was 45% higher Owing to the significant deterioration in global financial than in 2007. Most of this was spent on infrastructure markets and the sharp decline in the platinum price, it and on the rail project associated with the K5 project. was decided to halt the Merensky trial mining project and postpone capital expenditure on the deepening of Marikana platinum mine the declines. The Marikana mine is located 8 km east of the Kroondal Mototolo platinum mine mine, on the western limb of the Bushveld Complex, in the North West province. The mine has both under- The Mototolo mine, located on the eastern limb of the ground and open pit operations. Bushveld Complex, near the town of Steelpoort, is a 50:50 joint venture between Anglo Platinum and the Anglo Platinum has a second pool-and-share agree- XK Platinum Partnership, which compromises Xstrata ment with Aquarius Platinum, and the 2008 financial South Africa and Kagiso Trust Investments. year was the second full year of operation in terms of the agreement. Concentrate produced from mineral re- In 2008, the Mototolo mine produced 87 200 oz of serves provided by Anglo Platinum to the pool-and- equivalent refined platinum, including 43 600 oz that share agreement is smelted, refined and marketed by Anglo Platinum purchased from its joint-venture part- Anglo Platinum. ner. Production at the mine was 8% lower than the 2007 figure, owing to disruptions in power supply, the In 2008, the equivalent refined platinum attributed to shortage of critical skills and geological conditions Anglo Platinum, including the 16 100 oz purchased www.researchchannel.co.za 26 Platinum Mining in South Africa May 2009 from the joint-venture partner, increased by 39% to 32 oz/y is expected to be achieved by 2015. 200 oz, compared with 23 200 oz produced in 2007. Sales to IRS in terms of the Marikana offtake agree- Ore replacement projects on the Merensky and ment amounted to 26 400 oz in 2008. Production at UG2 Reef Horizons the underground operations was hampered by labour- related work stoppages, involving contract workers. Ore replacement on both the Merensky and UG2 Reef Further, operations at the Marikana No. 2 shaft were horizons has required the deepening of existing mine suspended owing to difficult ground conditions and de- infrastructure at Paardekraal, Frank, Turffontein, Town- clining metal prices. lands on the Merensky horizon, and at Waterval on the UG2 horizon. Current capital projects The Merensky ore replacement projects for the Turffon- tein and Frank shafts were approved in 2005, and are Rustenburg section projects nearing completion. The Turffontein project has been handed over to mining operations and the project’s Rustenburg UG2 Phase 2 project closure is imminent. The final handover of the Frank project to mining operations should be completed by Anglo Platinum’s Rustenburg UG2 phase 2 project was early 2009. approved in 2002. However, challenging global economic conditions required a scope change, which was With regard to ore reserve replacement on the UG2 ho- approved in February 2006, and entailed a reduction in rizon, the Waterval Phase 3 project was approved in planned output from 400 000 t/m to 275 000 t/m. The December 2006 and development appears to be pro- project has been completed. gressing satisfactorily. The project will contribute 52 000 oz of platinum production at steady-state in 2009. Paardekraal No. 2 shaft project Further, the Waterval Phase 4 project was approved in November 2008 and execution has started. The project The Paardekraal No. 2 shaft project is designed to re- will generate 226 000 oz of platinum when it achieves store Merensky reef output at Paardekraal, in line with steady-state production in 2012. Studies for a Phase 5 the overall Rustenburg mining strategy, which requires project are underway. that a series of phased decline extension projects be undertaken at existing shafts. Paardekraal is the first of The Townlands ore replacement project is intended to the shafts to undertake a decline extension project. The replace diminishing Merensky Reef output at the shaft project started in September 2006 with the first blast by extending the existing shaft decline. Approval for the for the construction of the ventilation shaft, and the project was granted in February 2007, and it is antici- construction of the man-and-materials shaft began in pated that the project will achieve its steady-state out- September 2007. Steady-state production of 120 000 put of 70 000 oz/y by 2014.

Anglo Platinum’s South African operations – refined platinum production (oz)

2008 2007 2006 2005 2004 Rustenburg Section 605 400 665 400 942 000 822 100 864 100 Amandelbult Section 455 700 576 700 678 000 548 900 605 500 Union Section 314 100 309 400 327 200 310 100 319 600 Mogalakwena 188 100 163 500 185 500 200 500 196 000 Lebowa 74 200 94 300 109 200 110 000 113 600 Mototolo JV 87 200 95 200 12 800 BRPM 175 000 193 600 240 600 188 400 183 500 Twickenham 9 500 9 300 Modikwa 135 400 117 700 145 600 128 200 114 000 Kroondal PSA 213 400 130 200 148 300 90 000 Marikana PSA 32 200 23 200 12 800 Source: Anglo Platinum Annual Report 2008 www.researchchannel.co.za 27 Platinum Mining in South Africa May 2009

Amandelbult section projects technically reviewed.

East Upper UG2 project Union Deep shaft project

Anglo Platinum’s East Upper UG2 project is mak- A concept study for the Union Deep shaft project was ing use of mined out Merensky infrastructure at No. 2 completed in late 2008. Approval for a prefeasibility shaft to access UG2 reserves. Implementation of the study will be sought in early-2009. Owing to the glo- project started in 2007, and development is on sched- bal economic slowdown, however, a 3D seismic survey ule to achieve steady-state production of 100 000 oz/y required for geotechnical modelling has been delayed. by 2012. Further, the planned ore reserve development will be completed on schedule at the end of 2009. Mogalakwena project

In order to process the output from the East Upper UG2 The Mogalakwena North project was approved by the mining operation, the 75 000 t/m UG2 concentrator is Anglo Platinum board in 2006. The R5,8-billion expan- being expanded to 210 000 t/m. The implementation of sion project will increase milling capacity at the mine this project started in February 2007, with commission- by 600 000 t/m to 985 000 t/m, with an additional 230 ing planned for the first half of 2009. 000 oz/y of platinum being produced. In order to meet these production targets, new milling and concentrat- No. 4 shaft project ing capacity has been installed at the pit. The project has been commissioned and was handed over to the The No. 4 shaft project consists of a twin shaft sys- mine in March 2008. tem planned to mine 300 000 t/m of Merensky, UG2 and waste ore from 18 half-levels. The project was ap- In addition, the company has secured the necessary proved in April 2008. Excavations for the main and vent supply of water to make the expansion project possi- shaft collars and the sinking of the winder foundations ble. The Polokwane water supply scheme, which in- started in 2008. However, the economic downturn has cludes seven development and upgrading subprojects, required a delay in the shaft sinking operations, delay- was concluded in early 2008. ing the entire project for at least three years. Despite the controversy surrounding the relocation of Union section projects the Ga-Puka and Ga-Sekhaolelo villages, the relocation of these communities is 92% complete. Union declines project Twickenham mine project The Union section’s declines project involves the 4B, 4 South and 3 South declines. Phase 1 of the 3 South de- As a consequence of the success of the Twickenham cline project was approved in 2005, and is almost com- mini-mine, the Anglo Platinum board approved the plete. The next phase of the 3 South project is sched- R5,9-billion phase 2 expansion project in the first quar- uled for approval in early 2009. The third phases of the ter of 2008. The project was scheduled to start pro- 4B and 4 South decline projects were approved by the duction in the fourth quarter of 2012. However, financial board in 2007 and are progressing well. The three de- constraints arising from the global economic slowdown cline projects are expected to maintain a production have delayed the project by six months. capacity of 140 000 t/m. Der Brochen project Further, the Spud UG2 conversion project was approved for implementation in 2007, in order to access The sale of Anglo Platinum’s stake in the Booysendal the UG2 ore body. The depletion of the Merensky ore property, which includes some 1,3 km of strike length reserve freed up 80 000 t/m of shaft capacity, which will of the Der Brochen ore body, has effectively sent the be used for UG2 Reef extraction. study back to the conceptual level.

Ore replacement project A bulk sample of the Merensky Reef has been mined via one of the adits on the Richmond property, to fur- The 5 South decline project has been proposed to re- ther define characteristics, including the reef’s recovery place production capacity. This project is currently in potential. Additional in-fill exploration drilling is also be- the prefeasibility stage and is in the process of being ing undertaken to optimise mining plans. www.researchchannel.co.za 28 Platinum Mining in South Africa May 2009

BRPM projects replacement project, which is currently on schedule, and the Middelpunt Hill Phase 3 project, a 125 000 t/m BRPM phase 2 project UG2 project that has been delayed for economic reasons. BRPM has continued with the development of the Phase 2 project, which is designed to deepen the op- Modikwa platinum mine projects erations at the both the North and South shafts by an additional five levels, and develop the associated infra- Modikwa Phase 2 project structure. The project is currently scheduled for completion in 2012. The Phase 2 project will ensure con- While the feasibility study for the Phase 2 UG2 replace- stant production BRPM, when production from Phase ment project was completed in the fourth quarter of 1 declines, as result of ore reserve depletion on the up- 2008, approval has been delayed owing to the global per levels. financial crisis.

Styldrift Merensky project It has, however, been possible to continue with the deepening of the North shaft, through approved inter- The Styldrift feasibility study was completed during im funding. The North shaft’s 6 level infrastructure is 2008, and the project was approved for implementa- forecast for commissioning in the first quarter of 2009. tion by the joint-venture partners. The project’s design Deepening of the South shaft started in the second provides for the production of 230 000 t/m of Merensky quarter of 2008, and despite poor ground conditions, Reef ore, which will be delivered to an expanded con- the progress made has been satisfactory. centrator adjacent to the existing facility. However, as a result of the global economic slowdown, sinking opera- Ga-Phasha project tions have been delayed by 18 months. The finalisation of the BEE transaction announced in Lebowa platinum mine projects September 2007 will result in Anglo Platinum selling an additional 1% in Ga-Phasha to Anooraq Resourc- Brakfontein Merensky project es, which will then have effective control of the asset. All project work at Ga-Phasha is under review in order The objective of this R1,1-billion project is the extrac- to evaluate the possible consolidation of this property tion of ore from a large ore body, situated on the east- with Lebowa platinum mine. ern extremity of the greater Lebowa Platinum lease area, on the farm of Brakfontein. Unki project

The project is both a replacement and an expansion The Unki project is situated near Gweru, on Zimba- project. Of the 120 000 t/m of ore mined, 85 000 t/m bwe’s Great Dyke, and is being developed by An- will be replacement ore, and the remaining 35 000 t/m glo Platinum on behalf of Anglo American Zimbabwe. expansionary ore. Unki is planned as a 120 000 t/m operation, with both the mine and concentrator having the potential for fur- Anglo Platinum reports that the development of the ther expansion. The mine uses a mechanised trackless new decline is on schedule. Production at the project bord-and-pillar mining method to extract the platinum- started in 2008, and construction of the surface infra- bearing ore. Two declines have been designed, one for structure should be completed in 2009. The project is carrying people and materials, and the other for con- expected to achieve steady-state production by the veying the extracted ore. Concentrate produced at the end of 2010. At steady-state, the project will provide mine will be transported to the Polokwane smelter. sufficient feedstock for the upgraded Merensky concentrator until 2021. Development of the underground declines is on schedule. The ore body was intercepted in September 2007, Middelpunt Hill Phase 2 and Phase 3 projects and stockpiling is in progress. Further, construction of the concentrator is well underway, with commissioning Other projects being undertaken at the mine include planned for December 2009. The mine is expected to the Middelpunt Hill Phase 2 project, a 45 000 t/m ore achieve steady-state production in 2010.

www.researchchannel.co.za 29 Platinum Mining in South Africa May 2009

Anglo Platinum has several projects underway at its The Precious Metals Refinery expansion processing operations, which will improve its capacity project to convert mined ore into saleable metals. Anglo Platinum’s Precious Metals Refinery (PMR) re- Slag-cleaning Furnace No. 2 project fines PGM and gold concentrates to high degrees of purity. Initial project work to increase production from Anglo Platinum’s smelters use a slag-cleaning furnace 3,5-million ounces to five-million ounces has started, to treat slag from the Anglo Platinum converting proc- but will be slowed down in line with deferred mining ex- ess. During the first quarter of 2008, the board ap- pansion projects. proved the construction of a second slag-cleaning furnace in line with an anticipated increase in production. Exploration However, global economic instability has necessitated the slowdown of the project’s implementation, with The main focus of Anglo Platinum’s exploration work in a concomitant deferment of capital expenditure from South Africa, in 2008, was risk mitigation and the up- 2009 to 2010/11. grading of resource estimates. Drilling remains the primary tool in determining and evaluating resources. Al- Rustenburg Base Metals Refinery projects though some percussion drilling is used for specific needs, diamond drilling, using mostly BQ (48 mm) diam- The Rustenburg Base Metals Refinery consists of two eter coring, is used for some 99% of boreholes drilled. metallurgical plants: the magnetic concentration plant (MCP) and the base metals refinery (BMR). Project cap- Advances in 3D seismic survey technology have led to ital has been provided for the expansion of both the greater use of this technology by the exploration team MCP and BMR. in recent years. These surveys serve as a useful tool in supplementing borehole data, by providing exceptional In the second quarter of 2008, the board approved detail on the structural deformation of the ore bodies, R698-million for the expansion of the MCP. The expan- which is not discernable from borehole data alone. This sion project will result in an increase in milling and mag- ensures the correct placement of shafts and other criti- netic separation capacity, from 64 000 t/y to 95 000 t/y. cal mining infrastructure, particularly where ore bodies Construction of the project started in the second half of are at moderate to deep depths. 2008, and it is expected to be completed by the fourth quarter of 2009. Where mine planning has reached an advanced stage, a variety of additional drill hole and surface to near-surface In addition, the BMR expansion project started in the imaging tools are employed to determine the structure second half of 2007 following board approval. It is 50% and competency of the ground targeted for development. complete, with certain areas having been handed over to operations, including autoclaves No.1 and No. 2, Foreign exploration continued in 2008, with projects in and the copper removal thickener. Brazil, Canada, China, Russia and Zimbabwe.

www.researchchannel.co.za 30 Platinum Mining in South Africa May 2009

Anglo Platinum

Shareholding structure AE Redman, MSc (Mining Engineering and Miner- Major shareholders as at December 2008: al Production Management), Non-executive director, Engineering Industries Pension Fund, 7,38% British Eskom Pension & Provident Fund, 9,88% SEN Sebotsa, MA Economic Policy Management, Liberty Group, 5,36% LLB (Hons) International Law, Independent non-ex- PSG Group, 12,17% ecutive director, South African Public Investment Corporation, 7,65% PG Whitcutt, Alternate director, South African SA Stockbroker, 7,95% TA Wixley, B Com, CA (SA), Independent non-executive deputy chairperson, South African Revenue R51,12-billion (year ended December 2008) Share performance R46,96-billion (year ended December 2007) Anglo Platinum Profit for the year R14,66-billion (year ended December 2008) 118 R12,67-billion (year ended December 2007) 109 100 Leadership 91 Neville Nicolau (CEO) 73 64 Directors 54 CB Carroll BSc (Geology), MSc (Geology), MBA, 45 Non-executive director, American 36 KD Dlamini, B Soc Sc (Hons), MPhil, Non-executive 27 director 18 RMW Dunne, CA (SA), Independent non-executive 9 director, British 0 BA Khumalo, D Admin (hc), MA, MBA, Dip in Man- May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr agement, AEP, Independent non-executive director, Source: McGregor BFA South African RJ King, BA (Hons) (Politics), AMP (Harvard), Non- Contact details executive director, British PJ Louw, BSc (Mining Eng) (Pretoria), Executive Postal address: Head, Mining PO Box 62179 WE Lucas-Bull, Independent non-executive director Marshalltown R Medori, Doctorate in Economics, Non-executive 2107 director, French South Africa MV Moosa, BSc (Mathematics and Physics), Inde- pendent non-executive director, South African Telephone: NF Nicolau, BTech (Mining Eng), MBA, Chief Execu- +27 11 373 6111 tive Officer, B Nqwababa, BAcc (Hons) (Univ Zimbabwe), CA Fax: (Zimbabwe), MBA (Univ Manchester & Wales), Chief +27 11 373 5111 Financial Officer, TMF Phaswana, B Com (Hons) (Energy Economics), Website: Non-executive chairperson, South African www.angloplatinum.co.za

www.researchchannel.co.za 31 Platinum Mining in South Africa May 2009

Impala Platinum

Brief history The company has a primary listing on the JSE and a secondary listing on the LSE. Impala Platinum may also Impala Platinum’s mining operations date back to No- be traded via a sponsored Level 1 American Depositary vember 1968 when the company was granted a lease Receipt programme on the NYSE. to mine an area of 13 500 ha on land belonging to the Bafokeng Nation. Production on the property that Implats produced 1,91-million ounces of refined plati- would become the Impala platinum mine began in num in the financial year ended June 30, 2008. This July 1969. Impala Platinum’s corporate history can be represented a decline of 5,9% over the 2007 produc- traced back to January 1973 when a company called tion figure of 2,03-million ounces. For the half year end- Bishopsgate Platinum, of which Impala Platinum was ed December 31, 2008, the company produced 878 a wholly owned subsidiary, was listed on the JSE and, 000 oz, a decrease of 14,8%, compared with 1,03-mil- in October 1978, changed its name to Impala Platinum lion ounces for the same period in 2007. Holdings (Implats). Implats’ mining interests are focused on the exploi- By the early 1990s, Implats had become the world’s tation of two of the word’s most significant platinum second-largest platinum producer, with an annual out- mineral-bearing orebodies – the Bushveld Complex in put of one-million ounces. In 1998, Impala Refining South Africa and the Great Dyke in Zimbabwe. Services (IRS) was established to make use of Implats’ surplus smelting and refining capacity. The company In South Africa, the company has operations on the subsequently expanded its mining operations through western limb of the Bushveld Complex – the wholly the acquisition of further mining rights enabling it to es- owned Impala platinum mine and the 74%-owned Leeu- tablish the Marula platinum mine. It also acquired stra- wkop project – and on the eastern limb of the Complex tegic stakes in Zimbabwean operations, Zimplats and – Marula platinum and Two Rivers platinum, in which Im- Mimosa, and entered into a joint-venture with the then plats has shareholdings of 73% and 45% respectively. Avmin group to develop the Two Rivers project on the eastern limb of the Bushveld Complex. On the corpo- The company is involved in two mining operations in rate front, Implats was unbundled from Gencor, which Zimbabwe, through an 86,9% shareholding in Zim- was in the process of being wound down. plats, and a 50:50 joint venture with Aquarius Platinum at the Mimosa platinum mine.

Nature of business and market Implats’ operations in South Africa and Zimbabwe have position a combined attributable mineral resource, inclusive of mineral reserves, of 237-million platinum ounces. Implats’ business is focused on the mining, refining and marketing of PGMs, primarily platinum, and associated The company also owns IRS, located in Springs, in the base metals, namely nickel and copper. In addition, the Gauteng province of South Africa. Established in 1998, company is involved in the secondary sourcing of plati- IRS houses Implats’ toll-refining operation and the met- num through IRS. al concentrate purchases built up by the company.

Impala Platinum: Financial and production summary

Year ended Year ended Six months to Six months to June 2008 June 2007 December 2008 December 2007 Sales (R) 37,61-billion 31,48-billion 16,24-billion 16,32-billion Profit (R) 17,70-billion 7,33-billion 5,26-billion 4,69-billion Total refined PGM production (oz) 3,64-million 3,85-million 1,71-million 1,98-million Gross fined platinum production (oz) 1,91-million 2,03-million 878 000 1,03-million Average market price achieved ($/oz) 1 598 1 185 1 369 1 352 Tons milled ex-mine 20,38-million 20,73-million 10,50-million 10,86-million Source: Impala Platinum Annual Report 2008 and Impala Platinum Interim Results for the six months ended December 2008 www.researchchannel.co.za 32 Platinum Mining in South Africa May 2009

Impala Platinum corporate structure

Mine-to-market Managed operations Impala Marula Zimplats Mimosa projects Leeuwkop 1 044 000 oz 66 000 oz 91 000 oz 73 000 oz In project phase 100% 73% 87% 50% 74%

1 907 000 oz Mine-to-market non-managed Two Rivers operations 91 000 oz 45%

IMPLATS IMPLATS Group Third party Impala Refining Toll concentrate/matte concentrate/matte treatment purchase contracts purchase contracts Services 206 000 oz 321 000 oz 336 000 oz 100%

Source: Impala Platinum Annual Report 2008

Strategically, Implats intends to shift increasingly to both its Marula Merensky and Leeuwkop projects. managed mine-to-market operations, where it has di- However, Implats intends investing R2,3-billion in its rect control over the entire platinum value chain. To Zimbabwean operations, after its mines in Zimbabwe this end, Implats has sold its shareholdings in Aquari- performed well above expectation. us Platinum and its subsidiary Aquarius Platinum South Africa (AQPSA) for R5,7-billion, although the compa- Implats has committed itself to achieving the empow- ny’s involvement with AQPSA will continue in terms of erment targets set out in the Mining Charter. In recent the offtake agreements it has with AQPSA’s Everest years, the company has concluded several BEE trans- and Marikana mines. actions, the most significant of which was the transaction involving the Royal Bafokeng Nation (RBN), which In its efforts to acquire further platinum resources, Im- was concluded in 2007. plats attempted unsuccessfully, in September 2008, to make a R21,2-billion offer for empowered mining com- In terms of the BEE transaction, Implats agreed to pay the panies Mvela Resources and Northam Platinum. This RBN all future royalties due to them, thus effectively dis- transaction would have given Implats access to Mve- charging the company from any future obligations to pay la’s Booysendal deposit, which contains more than royalties. In turn, the RBN subscribed for 75,1-million Im- 100-million resource ounces of PGMs. The deal col- plats shares giving the nation a 13,4% stake in the com- lapsed because the parties could not agree on what pany, thereby making it the largest shareholder in Implats. would be considered fair value for Mvela’s / Northam’s platinum resources, especially during the current peri- Further, Implats also has BEE partners at its Marula and od of market instability. Two Rivers mines. The Marula operations’ BEE partners together own 27% stake in the mine. The partners, In February 2009, Implats reported that the company each with a 9% shareholding, are the Marula Commu- was cutting its capital expenditure programme by R10- nity Trust, Tubatse Platinum and Mmakau Mining. Im- billion, to R13-billion, for the next four years to 2013, plats has a 45% shareholding in the Two Rivers mine, excluding 2009, owing to the current global econom- with empowered miner African Rainbow Minerals (Arm) ic crisis. The company announced that it had deferred holding the other 55%. www.researchchannel.co.za 33 Platinum Mining in South Africa May 2009

In 2006, Implats introduced an employee share owner- social and labour plans for the operation have been ap- ship programme, which has provided 28 000 employ- proved by the DME. ees with a material stake in the company. In the year to June 30, 2008, the mine produced In terms of employment equity, the Mining Charter stip- 1,04-million ounces of platinum and 1,84-million ounc- ulates that 40% of mangers be HDSAs, including white es of PGMs, representing a decrease of 1% and 2% women, by 2009. At the end of the 2008 financial year, respectively on the previous year. Production for the six 33% of senior and middle management at Implats were months ended December 31, 2008, amounted to 515 HDSAs. With white women included, this increased to 000 oz, which was a reduction of 10,5%, compared 45%. Further, the Mining Charter requires that 10% of with the 575 000 oz produced in the six months ended all employees must be women by 2009. The company December 31, 2007. is on its way to achieving this target, with 7,8% and 18,3% of employees at senior and middle manage- Implats attributes the decline in production to power ment respectively being women. supply constraints and mine safety issues. The two- day shutdown at the end of January, followed by a cut Implats’ operations in electricity supply to 90% of the operation’s requirements, contributed to a loss of production equivalent to approximately 8 000 oz of platinum for the six months to the end of June 2008. This loss was compounded Zimplats by Presidential Safety Audits, which resulted in several Zimbabwe shafts being closed for a number of days while under- Namibia Mimosa going inspection. These safety-related stoppages resulted in a further loss of around 12 000 oz of platinum. Botswana

Mozambique Further, the company contends that on-going shortag- Marula es of critical skills at miner and supervisory level have Two Rivers hampered efforts to improve safety and productivity. Afplats Implats To ensure that the mine’s production output is main- South Africa tained for at least the next 30 years, the company initiated a capital expansion programme in 1993 to extend the lives of its existing shafts and to develop new ones. The initial focus of the programme was on the develop- Source Implats’ website ment of a series of five decline shaft systems below the current third generation vertical shafts and a shaft link to 12 shaft. At present, three decline shafts are in full Platinum operations in South Africa production with development of the remaining two decline projects – 11 and 14 shafts – nearing completion. Implats’ operations in South Africa include the Impa- la platinum mine and processing facilities, the Marula The construction of 16 and 20 shafts was approved in mine, the Two Rivers mine and IRS. September 2004. At full production these two shafts will together produce 355 000 oz/y of platinum. The Impala platinum mine 20 shaft is scheduled to come into production in 2009 and 16 shaft in 2012, with full production scheduled for The Impala platinum mine, Implats’ primary operational 2013 and 2015 respectively. The 17 shaft project, ap- unit, has operations situated on the Impala lease area proved by the board in March 2008, will produce 180 on the western limb of the Bushveld Complex near 000 oz of platinum at full production, which is expect- Rustenburg in the North West province of South Africa, ed in 2018. and in Springs east of Johannesburg. Implats’ Mineral Processes is located at the Impala The Impala mine consists of 14 operating shafts, five of platinum mine. These facilities include a concentrator, which have underground decline systems, covering an which consists of 30 run-of-mine semi-autogeneous area of 260 km². Mining operations currently extend to mills, and smelter operations, compromising two im- a depth of around 1 000 m, and exploit both the Mer- mersed 37 MW electric arc furnaces. ensky and UG2 reefs. Impala platinum mine’s old order mining rights were successfully converted in 2008 and In the year to June 30, 2008, 15,9-million tons of ore www.researchchannel.co.za 34 Platinum Mining in South Africa May 2009 were milled at the mine, which was a decline of 2,7% Marula platinum mine on the tons milled in the previous financial year. Implats contends that two factors account for the decline in Marula platinum is 73% owned by Implats, with the milling output – firstly, the reduced volumes of the high- remaining 27% held by the mine’s BEE partners. The er grade Merensky ore mined had a major impact and, mine, located some 50 km north of Burgersfort, in the secondly, the loss of 120 000 t of production as a result Limpopo province of South Africa, is one of the first of the power shutdown in late January 2008. The less- mining operations to have been developed on the rel- than-favourable ore mix resulted in overall metallurgical atively under-exploited eastern limb of the Bushveld recoveries declining to 82,9% from 83,3% in the pre- Complex. The operation consists of an underground vious year. mine and a metallurgical plant. In 2008, Marula platinum mine was awarded new order mining rights. Capital expenditure at the company’s mineral processing operation is predicated on Implats’ strategy to in- Current mining activities at Marula target the UG2 crease its refined platinum output. Smelter capacity Reef, accessed via two declines, Clapham and Drie- is being increased to meet this production growth. In kop, which are situated 1,3 km apart and will eventually March 2006, the expansion of the smelter was initiated reach a depth of 770 m. The mine is currently convert- and this will increase capacity to 2,8-million ounces at ing to conventional breast mining methods, as the ini- Mineral Processes. The current smelter expansion will tial mine plan’s mechanised bord-and-pillar techniques cost R1-billion, with about half of this being spent on proved unsuccessful owing to steeper dips and unex- the third furnace and half on gas cleaning equipment. pected rolling of the reef. The smelter expansion is proceeding on schedule and on budget. The metallurgical plant at Marula, which was commissioned in February 2004, consists of a concentrator Implats’ refining operation in Springs consists of the and a dense medium separation (DMS) plant. Howev- Base Metals Refinery (BMR) and the Precious Metals er, the DMS plant is currently mothballed owing to low Refinery (PMR). The refineries produced 1,91-million throughput. The concentrator has a capacity of 6 000 ounces of platinum and 3,64-million ounces of PGMs t/d, which is sufficient to cope with current mine pro- in the year to June 30, 2008, which was down 5,9% duction. Overall recovery rates currently exceed 87%. and 5,6% respectively on the previous financial year’s Concentrate is transported by road to Implats’ Miner- performance. These declines were mainly a result of a al Processes in Rustenburg, in terms of a life-of-mine significant reduction in the toll treatment undertaken on offtake agreement with IRS. behalf of Lonmin. Marula produced 70 400 oz of platinum-in-concen- A phased expansion to increase refining capacity to trate in the 2008 financial year, which represented an 2,8-million ounces has been approved. Capital expendi- 8% increase over the 65 200 oz produced in the previ- ture amounted to R389-million in the 2008 financial year, ous financial year. In the six months to December 2008, compared with R161-million in the previous financial the mine produced 36 400 oz of platinum-in-concen- year, as the capacity expansions at the BMR and the trate, compared with the 35 700 oz produced during PMR continued. Capital expenditure to date on these the same period in 2007. However, production was projects is R542-million and R352-million respectively. less than planned, owing to labour disputes, shaft clo- sures following fatal accidents and difficulties in retain- The BMR Phase 2 expansion project was postponed ing skills. due to delays relating to the environmental impact assessment. However, the project is now progressing In the year to June 30, 2008, Marula’s capital expendi- satisfactorily and on budget, and remains scheduled ture totalled R345-million, which was up on expendi- for completion in 2010. ture of R280-million in the previous financial year. Most of the expenditure in FY 2008 was directed towards a At the PMR, the Phase 3 expansion project, increasing footwall conversion project, replacement of machin- refining capacity to 2,3-million ounces, has been com- ery, drilling, housing and engineering related to the Me- pleted. A feasibility study for Phase 4 has been finalised rensky project, which accounted for R22-million of the and will be presented to the board for project approval. capital expenditure budget.

www.researchchannel.co.za 35 Platinum Mining in South Africa May 2009

Two Rivers platinum project Impala Refining Services

The Two Rivers platinum project, a joint venture be- IRS was created to house Implats’ toll refining and ac- tween Implats (45%) and Arm platinum division, Arm cumulated metal concentrate purchases. The business Platinum (55%), is located on the eastern limb of the allows Implats to make use of its surface assets and Bushveld Complex, near the town of Steelpoort, in expertise to reduce costs associated with production, Mpumalanga. and to generate additional revenue.

Development of the Two Rivers project started in 2005, The business strategy of IRS involves entering into ei- and the project completed its second year of opera- ther toll refining or metal purchase agreements, or a tion in the 2008 financial year, with total production of combination of the two. In toll refining agreements, IRS 98 600 oz of platinum-in-concentrate produced. This charges the client a smelting, refining and handling fee represents a 12% increase in production when com- and either purchases, or returns to the client, a mar- pared with the 87 900 oz of platinum-in-concentrate ket-related percentage of the contained metal after an produced in the 2007 financial year. In the six months agreed processing period. In the case of metal pur- to December 31, 2008, the mine produced 58 000 oz chase agreements, a percentage of the contained met- of platinum, and has completed its ramp-up to full pro- al is purchased after an agreed processing period. duction of 120 000 oz/y of platinum-in-concentrate. Further, Implats reports that the development of the Total refined platinum production through IRS was 862 north decline has progressed well and monthly under- 700 oz in the year to June 30, 2008, which was 11,1% ground production from both declines is exceeding down on the 970 900 oz produced in the previous fi- plant capacity. nancial year. In addition, production for the six months to December 31, 2008, at 363 000 oz, was 20,4% The Two Rivers operation also has a metallurgical plant, down on production in the same period in 2007. An in- which was commissioned in 2007. To date, however, crease in output from Two Rivers and Marula, and an the facility has failed to operate optimally. Metallurgi- increased supply of auto catalysts for recycling, was cal recoveries declined to 74,2% in the 2008 financial insufficient to compensate for reduced volumes from year, from 77,5% the previous year, largely owing to re- other sources. The lower volumes were largely a result duced head grade. Results of a review of the plant, of the expiry of the offtake agreement with AQPSA’s following teething problems, highlighted three areas of Kroondal mine, and the absence of Lonmin concen- potential improvement. Firstly, the installation of addi- trate for processing. tional crushing capacity ahead of the mills will lead to increased mill throughput; secondly, additional clean- However, going forward, the volumes of concentrate er circuit flotation cells will aid recovery; and, lastly, processed through IRS are expected to increase, partic- expanded filter capacity at the back end of the plant ularly with the Blue Ridge and Smokey Hills operations will cater for additional volumes of concentrate. These expected to begin production in 2009, and with increased modifications will enable the plant to process at least volumes expected from Zimplats, Marula, Eastern Plat- 225 000 t/m of ore, which is expected from 2010. A inum’s Crocodile River and Aquarius Platinum’s Ev- stockpile of one month’s mill throughput is currently erest mines, as well as from auto catalyst recycling. being maintained. Impala Platinum’s South African operations – Capital expenditure at Two River for the 2008 financial refined platinum production (oz) year totalled R357-million, which was down from R488- Year Year Six months Six months million in the 2007 financial year, in line with the ramp up ended ended to to to full production. In FY 2008, expenditure was focused June June December December on the completion of the original Two Rivers project, 2008 2007 2008 2007 1,04- 1,06- in which R1,4-billion was invested, and the develop- Impala 515 500 575 000 ment and equipping of the north decline. The balance million million was spent on fleet maintenance and operating capi- Marula 70 400 65 200 36 400 35 700 tal to ensure that production is sustained. The compa- Two Rivers 98 600 87 900 58 000 ny has set aside R400-million for capital expenditure in IRS 862 700 970 900 363 000 455 800 2009, which will be used to complete the Two Rivers Source: Impala Platinum Annual Report 2008 and Impala Platinum Interim Results for the six months project and ensure the continued development of the ended December 2008 north decline.

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Platinum operations in the rest of Selous Metallurgical Complex (SMC), situated some 77 km north of Ngezi. The opencast operation was closed Africa towards the end of 2008, for cost reasons. Ore mined at Ngezi is transported by road to the SMC where it is con- Impala Platinum has shareholdings in two Zimbabwean centrated and smelted, before being sent to Implats’ mining operations – Zimplats and Mimosa. Mineral Processes in South Africa for refining. The company also owns the Hartley platinum mine, situated at The company employs close to 5 000 people at these the SMC, which is currently on care and maintenance. operations, and with the multiplier of 10:1, some 50 000 people are dependent on its operations in Zimbabwe. In the 2008 financial year, Zimplats produced 94 300 oz of platinum-in-matte, which was a decline of 2,3% over The company is hoping that the government of national the previous financial year’s production of 96 500 oz. unity will be able to bring some much-needed econom- However, production for the six months to December ic and political stability to Zimbabwe, and is proceed- 31, 2008 increased by 15%, to 46 900 oz of platinum- ing with an investment of R2,3-billion in its Zimbabwe- in-matte, compared with the 40 800 oz produced in the an operations. comparable period in 2007.

Implats believes that, in future, its platinum assets in Zimplats started production at the Ngezi opencast Zimbabwe could produce more platinum than the com- mine in December 2001. However, owing to increas- pany’s South African operations, and the company has ing mining costs, it was decided to reduce output from a long-term objective of producing one-million ounc- the opencast operation and replace this tonnage with es of platinum from its Zimbabwean mines. For now, underground production from the Portal 2 underground however, the company is adopting a wait-and-see ap- mine, which employs conventional bord-and-pillar min- proach to Zimbabwe’s political environment. ing methods. The Portal 2 operation, which achieved full production in June 2006, represents the completion Implats’ Zimbabwe operations of the first phase of the conversion from opencast to underground mining.

N ZAMBIA The company is currently engaged in a Phase 1 ex- Musengezi pansion project, which represents the start of Zimplats’ Complex long-term expansion plan. The project entails the simul- Harare taneous development of two new underground mines – SMC Portal 1 and Portal 4 – at Ngezi, and the construction of Hartley a new 1,5-million t/y concentrator. On completion, the Ngezi Complex expansion project will result in the mine producing 180 ZIMBABWE 000 oz/y of refined platinum. Great Dyke Mimosa platinum mine Selukwe Complex Mimosa is wholly owned by Mimosa Investments, a Mauritius-based company jointly held by Implats and Bulawayo Wedza Complex Aquarius Platinum in a 50:50 joint venture. The mine is BOTSWANA located on the Wedza Geological Complex on the Zim- babwean Great Dyke, east of the town of Bulawayo. The operation comprises a shallow underground mine accessed by a decline shaft and mined using semi- SOUTH AFRICA and mechanised bord-and-pillar mining methods, and Source: Zimplats fact sheet a concentrator. The platinum concentrate produced at the mine is transported to Implats’ Mineral Processes Zimplats in Rustenburg, in terms of a life-of-mine offtake agreement with IRS. Zimplats, which is 86,9% owned by Implats, is located on the Hartley Geological Complex on the Zimbabwe- In the 2008 financial year, Mimosa produced 76 600 oz an Great Dyke, southwest of Harare. The company cur- of platinum-in-concentrate, a reduction of 2% over the rently operates an underground mine at Ngezi and the previous financial year’s output of 78 200 oz. For the six www.researchchannel.co.za 37 Platinum Mining in South Africa May 2009

months ended December 31, 2008, the mine produced Total capital expenditure for the 2008 financial year 44 000 oz of platinum-in-concentrate, compared with amounted to R3,4-billion, which was mostly spent on 39 600 oz produced in the same period in 2007. the 16, 17 and 20 shaft development projects, the two remaining decline projects – the 11 and 14 shaft de- Mimosa’s capital expenditure budget of $33-million in clines – and the project to expand UG2 production at the 2008 financial year was spent largely on the Wedza 10, 12 and 14 shafts. Phase 5 expansion programme, with the balance being spent on the normal operational expenditure replace- The 20 shaft project, valued at R3,6-billion is behind ment programme. In the 2009 financial year, capital ex- schedule, largely as a result of poor contractor per- penditure of $35-million will be used to complete the formance. Full production of 150 000 oz/y is expect- Wedza Phase 5 expansion project and provide addi- ed in 2015. The 16 shaft project, being undertaken at tional housing for the mine’s employees. a cost of R4-billion, remains on schedule to achieve steady-state production in 2015. Impala Platinum’s in the rest of Africa – refined platinum production (oz) In March 2008, the 17 shaft project, costing an estimated R8,9-billion, was approved by the board. The high- Year Year Six months Six months ended ended to to er anticipated expenditure relates to the much deep- June June December December er shaft, ventilation and refrigeration requirements and 2008 2007 2008 2007 longer construction times, which have escalated costs. Zimplats 94 300 96 500 46 900 40 800 In addition, mining at such depths involves significant Mimosa 76 600 78 200 44 000 39 600 rock engineering and support installations. Shaft sink- Source: Impala Platinum Annual Report 2008 and Impala Platinum Interim Results for the six ing has started on the project. months ended December 2008 The current smelter expansion at Impala platinum’s Current capital projects Mineral Processes will cost R1-billion, with about half of this being spent on the third furnace and the oth- In 2008, Implats reported that it intended to invest about er 50% on gas cleaning equipment. The project has R30-billion over a five-year period on capital projects. proceeded on schedule and within budget. Hot com- However, the sharp decline in the platinum price, cou- missioning of the third furnace was completed in June pled with a drop in demand for platinum associated 2007, while the dryer was commissioned in August with the global economic slowdown, has necessitated 2008. Commissioning of the converter and gas clean- a downward adjustment in capital expenditure, to R13- ing equipment was completed in December 2008. This million over four years, excluding 2009. expansion will increase Impala’s smelting capacity to 2,8-million ounces of platinum. Implats’ main focus of its capital expenditure programme is the development of the 16, 17 and 20 shafts In the 2008 financial year, refining-related capital - ex at the Impala platinum mine. The company has also penditure rose to R389-million as the capacity expan- invested substantial sums in the Zimplat’s expansion sions at the BMR and the PMR continued. Further, cap- project. However, as a result of the cut in expenditure, ital expenditure of R875-million has been set aside for the Leeuwkop and Marula Merensky Reef projects the 2009 financial year, which will cover the costs as- have been deferred. sociated with the refinery expansion programme, the continuation of the copper-winning, reduction auto- In the 2008 financial year, Implats’ capital expenditure clave replacement, and boiler upgrade programmes, as totalled R5,3-billion, compared to the R2,8-billion spent well as the consolidated and expanded effluent evapo- in 2008. In the six months ending December 31, 2008, ration plant. the company’s expenditure on capital projects amounted to R3,9-billion, up from R2,4-billion a year earlier. Marula platinum mine

Impala platinum mine The Marula mine is in the process of ramping up to steady-state production of 130 000 oz/y of platinum- Capital expenditure at the Impala platinum mine is in-concentrate, which is expected to be achieved by primarily being directed towards shaft development 2011. In addition to the UG2 Reef operations, Maru- projects, a smelter expansion project at the mine’s la platinum has completed a feasibility study for the Mineral Processes and capacity expansion projects at Marula Merensky project, which is intended to exploit BMR and PMR. the Merensky Reef.

www.researchchannel.co.za 38 Platinum Mining in South Africa May 2009

The Marula Merensky project will incorporate the de- 2009. The commissioning of the concentrator was development of a new decline and concentrator, as well layed until April 2009 owing to a manufacturing fault. as supporting mining infrastructure. The project is ex- However, the concentrator is still expected to achieve pected to have a life-of-mine of 20 years. full production by June 2009.

Development of the project was scheduled to start in 2009, In the 2008 financial year, capital expenditure at Zimplts with production expected to begin in 2014, and steady- totalled $182-million. Of this, almost three-quarters was state production of 115 000 oz/y anticipated in 2016. spent on the Phase 1 expansion project, with replace- This would have increased total production at Marula to ment capital, funding for the power supply sub-sta- 245 000 oz/y of platinum. However, the global econom- tion currently under construction and exploratory drill- ic slowdown has forced the deferment of the project. ing accounting for the balance. Capital expenditure of $191-million has been budgeted for the 2009 financial Leeuwkop project yeaar, with most of it being allocated to the continued development of portals 1 and 4 and the concentrator In April 2008, a mining right was awarded for the Leeu- expansion; and replacement expenditure that includes wkop project, in which Implats has a 74% sharehold- the replacement of underground equipment and the re- ing as a result of the company’s acquisition of Afplats habilitation of the road between Ngezi and the SMC. in 2007. The project will mine the UG2 reef and involves the de- Exploration velopment of a twin-shaft system to depths of between 1 000 m and 1 500 m, and the construction of a con- Implats’ exploration strategy includes brownfields and centrator plant. Leeuwkop is expected produce 170 greenfields activities, although emphasis is on brown- 000 oz/y of platinum-in-concentrate at full production. fields prospecting. The majority of offshore greenfields exploration is carried out in conjunction with explora- Additional evaluation work has been undertaken on the tion partners. project, which indicates that mechanised footwall development with conventional stoping will be more suit- In addition to the exploration focus on primary PGM able for the orebody than the mechanised bord-and-pil- targets, attention is also being given to potential nickel lar mining method originally proposed. The new mine targets in southern Africa. plan, will also enable the mining of a higher head grade, which in turn will result in increased platinum production. Brownfields exploration in South Africa However, conventional mining requires a longer lead and Zimbabwe time in building up to full production with a consequent increase in the capital cost, which is now estimated at Exploration around Implats’ existing mining operations R6-billion. As a result, production is scheduled to be- is undertaken in support of life-of-mine operations, fea- gin in 2013. sibility studies and growth opportunities. At Rustenburg, a large 3D seismic survey of the deeper portions of the As a result of the global economic slowdown and its mining right and prospecting right areas will start in ear- impact on the platinum price and demand for the pre- ly 2009. At Afplats, exploration has begun at the pros- cious metal, the Leeuwkop project has been deferred. pecting right areas on the farms Wolwekraal and Karee- poort, and portions of the farm Hartebeestpoort. Infill Zimplats expansion project drilling at Afplats’ Leeuwkop is also being conducted.

Zimplats is currently engaged in a Phase 1 expansion Further, exploratory drilling will be undertaken at the project, which represents the start of the company’s North Hill deposit, at Mimosa, in the 2009 financial year, long-term expansion plan. The project entails the si- when 1 980 m of drilling are planned. A detailed resource multaneous development of two new underground evaluation for the Wedza 6 expansion is under way, pri- mines – Portal 1 and Portal 4 – at Ngezi, and the con- or to seeking board approval for a final feasibility study. struction of a new 1,5-million tons a year concentrator. On completion, the expansion project will result in the Greenfields exploration in South Africa mine producing 180 000 oz/y of refined platinum. In the 2008 financial year, surface drilling continued at The company reports that Portal 1 is operational, and the Tamboti project, on portions of the farms Tweefon- development of Portal 4 is on track for completion in tein, Kalkfontein and Buffelshoek, adjacent to the Two www.researchchannel.co.za 39 Platinum Mining in South Africa May 2009

Rivers mine. Exploration also continued at the Paradys up work is in progress. project, which is a joint venture with Endulwini Re- sources, targeting the Paradys diapiric antiform struc- Canada ture in the eastern Bushveld Complex. Limited drilling undertaken during the 2008 financial Implats has been awarded a new prospecting right for year at the Highbank Lake project, to identify areas with the Springbok project, situated near Bela-Bela in the potential for the development of PGM mineralisation, Limpopo Province. Exploration at this project will start failed to yield significant results. in early 2009. Greenland Other exploration projects Implats has entered into an option and joint-venture Botswana agreement with NunaMinerals regarding the Amikoq intrusion in southwestern Greenland. Exploration activ- Implats continues to fulfill the terms of the agreement ities started recently. with Health Hive, with respect to the Masoke and Seg- wagwa intrusions in southeastern Botswana. Favoura- Madagascar ble geophysical anomalies have been soil sampled and drill tested, and sample results are awaited. Implats continues to collaborate with Jubilee Platinum over the Ambodilafa intrusion in Madagascar. Drilling Mozambique and down-hole geophysics continued during the 2008 financial year. PGM mineralisation grading 3,99 g/t over The licences around the Tsangano intrusion in Tete 0,89 m was intersected in one borehole on the western province have been stream and soil sampled. Follow- portions of the intrusion.

www.researchchannel.co.za 40 Platinum Mining in South Africa May 2009

Impala Platinum

Shareholding structure Executive Chairman, South African Major shareholders as at June 30, 2008: LC van Vught, BSc (Hons) (Chemistry), B Com, Inde- Public Investment Corporation 10% pendent Non-Executive Director, South African Royal Bafokeng Holdings 13,4% Share performance Revenue R37,62-billion (year ended June 2008) Impala Platinum R31,48-billion (year ended June 2007)

116 Profit for the year 107 R17,71-billion (year ended June 2008) 98 R7,33-billion (year ended June 2007) 89 80 Leadership 71 Fred Roux (chairperson) 62 David Brown (CEO) 53 45 Directors 36 S Bessit, NHD (Metalliferous Mining), Executive Di- 27 rector, South African 18 DH Brown, B Com, CTA, CA(SA), Chief Executive 9 0 Officer, South African May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr D Earp, B Com, B Acc, CA(SA), Chief Financial Of- Source: McGregor BFA ficer, South African F Jakoet, BSc, CTA, CA(SA), Independent Non-Ex- Contact details ecutive Director, South African Postal address: M McMahon, Pr.Eng, BSc (Mech Eng), Independent Private Bag X18 Non-Executive Director, South African Northlands MV Mennell, BA, MBA, FCMA, THD, Independent 2116 Non-Executive Director, South African South Africa K Mokhele, BSc (Agric), MSc (Food Science), PhD (Microbiology), Independent Non-Executive Director, Telephone: South African +27 11 731 9000 NDB Orleyn, B Juris, B Proc, LLB, Independent Non- Executive Director, South African Fax: LJ Paton, BSc (Hons) (Geology), B Com, Pr SciNat +27 11 731 9254 FGSSA, Executive Director, South African DS Phiri, B Juris, LLB, LLM, HDip Co Law, Non-Ex- Website: ecutive Director, South African www.implats.co.za FJP Roux, BSc, MSc, PhD, MBA, Independent Non-

www.researchchannel.co.za 41 Platinum Mining in South Africa May 2009

Lonmin

Brief history Lonplats’ operations produced 732 125 oz of platinum- in-concentrate in the financial year ended September Lonrho was incorporated in the UK on May 13, 1909 30, 2008, which was a decline on production in the pre- as the London and Rhodesian Mining Company. For vious financial year of 869 832 oz. most of the twentieth century, the company engaged in a broad cross-section of business activities, including Platinum operations mining and newspaper ownership. Lonplats’ South African operations include Lonmin In July 1998, the assets of Lonrho were demerged. Two Platinum Marikana and Lonmin Platinum Limpopo, and publicly listed companies, Lonrho plc and Lonrho Af- the Pandora JV. rica plc were created – the former retaining all the non- African businesses and mining assets. In 1999 Lon- rho plc was renamed Lonmin plc and soon thereafter Marikana it divested itself of all its non-core business assets and emerged as a focused mining company. Lonplats’ Marikana operations consist of the Eastern Platinum, Western Platinum and Karee mines, a smelter and a base metal refinery. The Marikana property is Nature of business and market located on the western limb of the Bushveld Complex position and hosts both the Merensky and UG2 Reefs, which are primarily mined underground over a strike length of Lonmin is the world’s third largest producer of PGMs. 27 km at an average depth of 360 m. Opencast mining The company has its primary listing on the London also takes place at Marikana. Stock Exchange, and is also traded on the JSE. All the company’s operations are located on the Bushveld The Marikana operations mined 11,5-million tons of Complex. ore in the 2008 financial year, a 10% decrease on the same period in 2007, with the underground operations The company’s South African operations are held by contributing 10,2-million tons. The opencast tonnage Lonmin Platinum (Lonplats), in which Lonmin has an amounted to 1,3-millions tons, compared with 1,6-mil- 82% shareholding. Lonmin’s BEE partner, Incwala lion tons in the previous financial year. Marikana pro- Resources, holds the remaining 18% shareholding in duced 661 370 saleable ounces of platinum-in-con- Lonplats. centrate in the 2008 financial year.

Lonmin and the Industrial Development Corpora- Decreased production at the underground operations tion each own 23,56% of Incwala, with the remain- has been attributed to safety related stoppages, the ing 52,88% of the company being held by black in- Eskom four-day power outage in January 2008, avail- vestment companies Dema Capital, Andisa Capital able face constraints and high levels of absenteeism. and Vantage capital; the Bapo Ba Mogale community, Opencast operations were suspended in December which resides near Lonplats’ operations; Lonplats’ em- 2008, owing to the relatively high production costs as ployees; and the South African Women in Mining In- well as the low grade of opencast ore and its dilutive ef- vestment Holdings. fect on concentrator recoveries.

In August 2008, Xstrata announced that the compa- The company reports that it has failed to significantly ny wanted to acquire the entire issued share capital of improve productivity from the two mechanised shafts Lonmin for £33 a share. However, Lonmin’s board con- at Marikana, and given the resultant high cost of pro- sidered the offer to be inadequate and significantly un- duction, Lonplats has decided to change its mining dervalued Lonmin’s business and therefore advised its strategy. The company is switching to hybrid mining at shareholders to reject Xstrata’s offer. By October 2008, the Saffy shaft, where conventional stoping methods Xstrata had withdrawn its offer for Lonmin, citing un- are being introduced, while maintaining mechanised certainty in the financial markets. While Xstrata did not development. In addition, the K4 shaft will be devel- proceed with the takeover of Lonmin, it did acquire a oped as a hybrid operation when it comes into produc- 24,9% shareholding in the company. tion in 2010. Further, the Hossy shaft will continue to www.researchchannel.co.za 42 Platinum Mining in South Africa May 2009 operate as a fully mechanised shaft. shallower shafts are reaching the end of their operational lives, but this decline in production will be offset Capital expenditure at the Marikana mining division by the three hybrid/mechanised shafts and sub-decline was R1,46-billion in the 2008 financial year, the major- projects being undertaken to deepen the Rowland and ity of which was allocated to the Hossy, Saffy and K4 K3 shafts. shafts. The Limpopo platinum mine phase 2 expansion project Limpopo has been put on care and maintenance for the foreseeable future, as a result of the global economic slowdown The Limpopo mine, situated on the eastern limb of the and its impact on the platinum price and demand for the Bushveld Complex, was acquired by Lonplats in 2005. precious metal. Prior to being put on care and maintenance, a prefeasibility study confirmed that the project Production at the mine continues to be constrained by could be developed as a fully mechanised mine with an a shortage of available ore caused by an iron-rich ultra- estimated production of 85 000 oz at steady-state. mafic pegmatoid occurrence and a lack of ore development. The mine produced 523 000 t of ore in the 2008 The Akanani PGMs project is located on the northern financial year, a decline of 31% on the previous year’s limb of the Bushveld Complex. The deposit has a strike output. In addition, Limpopo produced 22 017 saleable length of about 9 km, and the Platreef orebody lies at ounces of platinum-in-concentrate, a decline of 38% a depth of between 800 m and 2 000 m. Akanani was on the previous year, owing to lower throughput from awarded a new order exploration licence in June 2006. the mine and a six week shutdown of the concentra- In May 2008, it was reported that the resource estimate tor for repairs. at Akanani had been updated to 8,8-million ounces of PGMs. The estimated capital expenditure required for Lonplats’ Limpopo Baobab shaft operations have al- the development of the mine, concentrator and infra- ways been high cost, and in the current economic cli- structure is between $600-million and $700-million. A mate, the company has decided to put the shaft on preliminary evaluation of the project suggests that the care and maintenance, with the loss of 1 500 jobs. current resource at the site could support an initial mine development producing about 500 000 oz/y of PGMs, Pandora JV including 250 000 oz/y of platinum. As a result of the company’s focus on cash management and the current Lonmin owns a 42,5% stake in Pandora, with Anglo state of the credit markets, this project has also been Platinum (42,5%), Mvelaphanda Resources/Northam put on short-term care and maintenance. Platinum (7,5%) and the Bapo Ba Mogale community (7,5%) holding the balance. Lonmin purchases 100% Exploration of the ore produced by the Pandora JV for onward processing. Canada

The underground operations at Pandora produced 124 Lonmin is involved in a joint venture with Vale Inco cov- 000 t of ore in the 2008 financial year, a 3% decline ering six properties in the Sudbury Basin. The joint ven- from the previous year. Further, the opencast opera- ture continues for new PGM deposits and aims to bet- tions produced 275 000 t of ore in the 2008 financial ter delineate the mineralisation zones to have sufficient year, a 4% reduction on the previous year. Lonmin pro- resources to support a dedicated mill and concentrator duced 48 743 saleable ounces of platinum-in-concen- designed for optimal PGM recoveries. trate, and 87 871 saleable ounces of total PGMs-in- concentrate. Also in Canada, Lonmin has a joint-venture with Wall- bridge Mining, which covers seven properties in the Sud- Current capital projects bury Basin. Lonmin has first right of refusal on all Wall- bridge’s Sudbury properties for a period of five years. The mechanised Hossy and hybrid Saffy shafts at the Marikana mine are reaching full production, while the Gabon K4 hybrid shaft on the western side of the property will come into production in 2010 and at full produc- Lonmin’s exploration of the Mont de Cristal in Gabon tion in 2014 is expected to contribute an additional 180 is at an early stage. Grid sampling and mapping have 000 platinum ounces. Lonmin indicates that the mine’s so far been carried out on a small portion of the south- www.researchchannel.co.za 43 Platinum Mining in South Africa May 2009 ern area, which represents only 10% of the intrusion’s Lonmin manages and operates the project and funds length. Further, stratigraphic drilling to obtain more in- all project exploration expenses except for Platmin’s formation on the structure and geochemistry of the in- contribution to the Rietfontein property. trusion is underway. Tanzania South Africa The discovery of massive nickel sulphide mineralisa- The Loskop project, a joint-venture with Platmin, com- tion, outside of the Mibango project’s main intrusion, prises the farms Rietfontein, Loskop South, De Wagen- resulted in airborne magnetic, electromagnetic and ra- drift and Kameeldoorn, and is located on the south- diometric surveys being undertaken, which have iden- western end of the Bushveld Complex’s eastern limb tified targets for follow-up by ground geophysics and in the Groblersdal magisterial district of Mpumalanga. surface mapping.

Lonmin

Shareholding structure Share performance Major shareholders as at September 2008: Ameripise Financial Inc and group companies 4,91% Capital Research and Management Company Lonmin 4,72% Credit Suisse Securities (Europe) Ltd 5,84% 120 Prudential Plc and group companies 12,17% 110 Xstrata Plc 24,90% 100 90 Lonmin Platinum is held by: 80 Lonmin Plc 82% 70 Incwala Resources 18% 60 50 Revenue 40 $2,23-billion (year ended September 2008) 30 $1,94-billion (year ended September 2007) 20 10 Profit for the year 0 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr $675-million (year ended September 2008) Source: McGregor BFA $556-million (year ended September 2007) Contact details Leadership Postal address: Roger Phillimore (chairperson) PO Box 98811 Ian Farmer (CEO) Sloane Park 2152 Directors South Africa K de Segundo, Non-Executive Director, Dutch IP Farmer, CA(SA), CEO, South African Telephone: A Ferguson, Chief financial officer, British +27 11 516 1300 PC Godsoe, CA, MBA (Harvard), Non-Executive Di- rector, Canadian Fax: SM Gounden, B Eng (Durban-Westville), PhD (Natal), +27 11 516 1310 Non-Executive Director, South African MJ Hartnall, CA, Non-Executive Director, British Website: D Munro, Non-Executive Director, British www.lonmin.com JRB Phillimore, Chairperson, British J Sutcliffe, Non-Executive Director, British

www.researchchannel.co.za 44 Platinum Mining in South Africa May 2009

Northam Platinum

Brief history dal as a result of the transfer of 121-million shares in the company to Mvelaphanda Resources, and will have full Northam Platinum was established in 1984 as part of operational control of the project. Gold Fields South Africa (GFSA). The company started mining in 1986, with platinum production beginning in Northam Platinum concluded a metal offtake agree- January 1993. ment with Platmin’s Pilanesberg mine in May 2008. The Pilanesberg mine is expected to come into production With the unbundling of GFSA in 2000, Anglo Platinum in 2009, and full production is expected to add some acquired an equity stake in Northam in exchange for 250 000 oz to Northam’s sales volumes. two contiguous properties, thereby extending the life- of-mine to 23 years at the time. A BEE transaction in The company’s capital expenditure amounted to R265- the same year saw Mvelaphanda Resources purchas- million in the year ended June 30, 2008. Major expens- ing a 22,4% shareholding in the company. es included the deepening project (R69-million) and im- provements to the metallurgical facilities (R33-million). Nature of business and market position Platinum operations

JSE-listed Northam Platinum is an independent black The Northam mine, which is wholly owned by Northam economic empowered PGM producer. Platinum, is situated on the northern part of the western limb of the Bushveld Complex, adjacent to Anglo Plati- The company wholly owns and operates the North- num’s Amandelbult section, near the town of Thabaz- am platinum mine, situated at the northern end of the imbi, in the North West province. Bushveld Complex’s western limb. In addition, North- am has acquired the Booysendal platinum project The mine covers an area of 7 625 ha, and has a strike through a deal with Anglo Platinum and Mvelaphanda length of 8 km. The mine’s mineral resource amounts to Resources. 30,3-million ounces of 3PGM+Au, while it has reserves of 9,2-million ounces of 3PGM+Au, with a life-of-mine The Booysendal acquisition is part of a larger BEE of 18 years. transaction involving Anglo Platinum and Mvelaphanda Resources, through which Mvelaphanda will acquire Northam mine’s underground operations exploit the Anglo Platinum’s 53,1-million shares in Northam. This Merensky and UG2 Reefs via a twin shaft system at will enhance Northam’s BEE credentials, as Mvelap- depths varying between 1 294 m and 2 215 m below handa Resources’ stake in company will total 62,8%. surface. Mining activities are driven by hydropower In addition, Mvelaphanda Resources will acquire Anglo equipment, a technological innovation pioneered by Platinum’s 50% shareholding in Booysendal. In terms Northam, and now commonly used in deep-level mines of the agreement, Northam will own 100% of Booysen- in South Africa.

Northam Platinum: Financial and production summary

Year ended June Year ended June Six months ended Six months ended 2008 2007 December 2008 December 2007 Revenue (R) 3,89-billion 3,74-billion 1,61-billion 1,50-billion Net profit (R) 1,49-billion 1,33-billion 371-million 473-million PGMs in concentrate produced (3PGM+Au) 292 989 324 296 166 952 150 755 (oz) Total refined platinum production 169 612 212 484 . . Average price realised – platinum ($/oz) 1 688 1 206 1 197 1 396 Tons milled 2,02-million 2,27-million 1,16-million 1,02-million Source: Northam Platinum Annual Report 2008, and Northam Platinum unaudited results for the six months ended December 2008. www.researchchannel.co.za 45 Platinum Mining in South Africa May 2009

Surface infrastructure at the mine comprises two con- project area was extended by 1,3 km along the strike centrator plants for the processing of both Merensky into the southern portion of Anglo Platinum’s Der Bro- and UG2 ore, a smelter and a base metals removal chen project area. plant where copper and nickel are extracted from the high grade PGM concentrate. In addition, the compa- In 2008, Northam commissioned a review of an exist- ny has recently constructed a furnace slag treatment ing prefeasibility study on the project. This has since plant. Northam Platinum’s final PGM concentrate is moved to the bankable feasibility study (BFS) stage. toll-refined by WC Heraeus, at its Port Elizabeth and The BFS has focused on testing and refining the ex- Hanau refining operations. traction scenario, as indicated in the prefeasibility review, and is due to be completed in the second half of Owing to the sterilisation of part of the resource in the 2009. east of the lease area, which has resulted in the suspension of development and stoping activities on the The trade-off studies for alternative mine designs have Merensky Reef, a mine deepening project is being un- been concluded and point towards a modular design dertaken to counteract this loss of some 1,72-million with an incremental production build-up as the pre- ounces to the total mine resource. ferred method of developing the Booysendal mine. This has resulted in a revision of the project’s capital ex- In the financial year ended June 30, 2008, Northam penditure, which is now estimated at R2,5-billion over mine milled 2,02-million tons of head grade from both a five-year period. The initial emphasis is a single 120 the Merensky and UG2 Reefs, producing 292 989 oz 000-t/m UG2 production unit that will be replicated as of precious metals in concentrate (3PGM+Au). In the market conditions allow. same period, Northam sold 169 612 oz of refined platinum. In the six months ended December 31, 2008, Pandora Northam produced 166 952 oz of precious metals in concentrate from 1,16-million tons of milled ore, which In line with the strategy agreed to by the joint-venture amounted to PGM sales of 147 864 oz. partners, to proceed with a phased implementation of the project, a small-scale mining approach was adopt- Current capital projects ed at Pandora in 2006, based on the continued development and stoping at Lonmin’s No. 3 decline. The Booysendal mining operation also includes an opencast section. In 2006, a rescoping project was started and was com- The Booysendal platinum project, located on south- pleted in 2008. It is anticipated that Lonmin’s No 3 de- ern part of the Bushveld Complex’s eastern limb, is a cline will undergo further development. 103-million ounce resource, which is shallow and con- ducive to mechanised mining methods. The total ex- Lonmin, which owns a 42,5% in the Pandora JV, buys tent of the Booysendal property covers some 15 000 100% of the ore produced by the mine for onward ha, with a strike length of 14,5 km. Both the UG2 and processing. In 2008, the Pandora JV produced 48 743 Merensky reefs offer accessible surface outcrops. oz of platinum-in-concentrate, compared to the 52 479 oz produced in 2007. The project, formerly a joint venture between Anglo Platinum and Mvelaphanda Resources, is now whol- The successful completion of the Booysendal transac- ly owned by Northam through a deal which saw Mve- tion will result in the imminent transfer of a 7,5% stake laphanda Resources increasing its shareholding North- in the Pandora JV, which has been warehoused by am to 62,8%. As part of the transaction, Booysendal’s Mvelaphanda Resources since 2004, to Northam.

www.researchchannel.co.za 46 Platinum Mining in South Africa May 2009

Northam Platinum

Shareholding structure Share performance Major shareholders as at June 30, 2008: Anglo Platinum 22,2% Northam Platinum Mvelaphanda Resources 21,7% 123 Revenue 114 R3,89-billion (year ended June 2008) 104 R3,74-billion (year ended June 2007) 95 85 Profit for the year 76 R1,49-billion (year ended June 2008) 66 57 R1,33-billion (year ended June 2007) 47 38 Leadership 28 Lazarus Zim (chairperson) 19 Glyn Lewis (CEO) 9 0 Directors May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr ME Beckett, BSc, FIMM, Non-executive director, Source: McGregor BFA British Contact details NJ Dlamini, MB ChB, MBA, Independent non-exec- Postal address; utive director PO Box 412694 AK Gupta, BSc, Alternate director Craighall R Havenstein, MSc (Chemical Eng), B Com, Non- 2024 executive director South Africa ET Kgosi, B Com (Hons), Independent non-executive director Telephone: GT Lewis, BSc (Min Eng), MBA, CEO, British +27 11 759 6000 PC Pienaar CA(SA), Non-executive director BR van Rooyen, BA, LLB, Non-executive director Fax: PL Zim, B Com (Hons), M Com, D Com, Non-exec- +27 11 325 4795 utive chairperson Website: www.northam.co.za

www.researchchannel.co.za 47 Platinum Mining in South Africa May 2009

Aquarius Platinum

Brief history sources, both of which recover PGMs from the tailings streams of various platinum and chrome mining oper- Aquarius Platinum was established in 1920 as the ations on the western limb of he Bushveld Complex. Mount Monger Gold Mining Company to exploit the Kalgoorlie goldfield in Western Australia, and in 1984 it Aquarius Platinum’s interest in the Mimosa mine, situ- was listed on the Australian Stock Exchange. ated on the Great Dyke in Zimbabwe, is held through a 50% stake in Mimosa Investments. The company entered the platinum sector in 1995, and in that year acquired Gemex Exploration & Min- In the 2008 financial year, Aquarius Platinum’s attribut- ing Company and Randex Platinum Holdings, and Pa- able PGM production was 500 203 oz, down 6%, com- cific Platinum the following year, so giving it control of pared with the previous financial year’s figure of 530 the Kroondal lease area, in the North West province of 726 oz. South Africa. AQPSA’s BEE partner is the Savannah Consortium After a successful feasibility study, Aquarius signed a (SavCon), which holds a 26% stake in the company. life-of-mine offtake agreement with Implats in 1998, Initially, SavCon had acquired a 29,5% shareholding, then listed Kroondal Platinum Mines on the JSE and but sold 3,5% to Aquarius Platinum for a cash consid- began construction at the Kroondal site. The compa- eration of R342,5-million. Proceeds from the disposal ny listed on the London Stock Exchange in 1999, and were used to repay a sizable portion of the third-par- in that year secured the Marikana property. In 2001, ty funding raised by SavCon for the BEE transaction. Aquarius Platinum acquired full control of the Kroon- As a consequence, Aquarius Platinum’s shareholding dal mine, and delisted the operation, which was then in AQPSA had increased from 50,5% to 54%. placed under a new subsidiary, Aquarius Platinum South Africa (AQPSA). Further, AQPSA acquired sever- Aquarius Platinum has increased its shareholding in al sites in 2001, including Everest South, from Implats AQPSA from 54% to 67,5%, and raised the BEE own- in exchange for a 25% stake. ership in AQPSA to 32,5%, as a result of the repur- chase of Implats shares, which amounted to 8,4% of Nature of business and market the outstanding share capital of Aquarius Platinum. In addition, AQPSA repurchased Implats’ 20% stake in position the company for $780-million. Aquarius Platinum is a focused PGM producer, with In June 2008, Aquarius completed the acquisition of a operations on the eastern and western limbs of South 50% interest in Platinum Mile Resources, from a con- Africa’s Bushveld Complex and on the Great Dyke in sortium of private investors and Mvelaphanda Hold- Zimbabwe. The company’s shares are traded on the ings, at a cost of $22,9-million and 2,7-million shares in Australian Securities Exchange (ASX), the JSE and the Aquarius Platinum. main board of the LSE. Further, Aquarius Platinum has a sponsored Level 1 ADR programme in the US. Platinum operations In South Africa, Aquarius Platinum’s primary assets, which are operated by AQPSA, are the Kroondal, Mari- Kroondal kana and Everest mines. The company has been granted new order mining rights for these operations. At two The Kroondal mine is situated on the western limb of of its operations, Kroondal and Marikana, AQPSA has the Bushveld Complex, in the North West province. pool-and-share agreements (PSAs) with Anglo Platinum, Kroondal has partnered with Anglo Platinum in a PSA which enable the two companies to mine neighbour- since 2003, which has allowed Kroondal to expand the ing properties on their respective lease areas. Through scope of its operations and extend its life-of-mine to Aquarius Platinum’s wholly owned subsidiary, Aquari- 2017. us Platinum South Africa Corporate Services (ASACS), the group holds a 50% stake in the Chromite Tailings Kroondal, which exploits the UG2 Reef, consists of four Retreatment Project (CTRP), and in Platinum Mile Re- operating decline shafts, namely the Central, East, No www.researchchannel.co.za 48 Platinum Mining in South Africa May 2009

3 and K5 shafts, which access the Kroondal and Town- cated adjacent to the Kroondal mine and retreats old lands blocks. The mining operation also has two con- mine dumps and tailing streams from the beneficiation centrators, with a combined capacity of 570 000 t/m. processes used by neighbouring chromite mines. The Kroondal has an offtake agreement for the processing CTRP is jointly owned by Aquarius (50%), which man- and refining of its concentrate with Anglo Platinum. The ages the plant, Ivanhoe Platinum and Nickel (25%), and agreement with IRS came to an end during the course Sylvania South Africa (25%). The retreatment plant proof 2008. duced 9 849 oz of PGMs in the 2008 financial year, of which 4 924 oz is attributable to Aquarius. In the 2008 financial year, the Kroondal mine’s total PGM production declined by 11% to 391 117 oz, from Platinum Mile 439 351 oz in the previous financial year, of which 195 558 oz was attributable to Aquarius. In 2008, Aquarius acquired a 50% interest in Platinum Mile, which operates a tailings retreatment facility lo- Marikana cated on Anglo Platinum’s RPM lease area, adjacent to the Kroondal mine, and processes certain tailings from The Marikana mine is situated 8 km east of Kroondal, RPM. The concentrate produced is sold to RPM, with on the western limb of the Bushveld Complex, in the which it has a profit share agreement. The remaining North West province, and has both an underground – 1, 50% stake in company is held by Mvelaphanda Hold- 2, and 4 shafts – and an open pit operation. In addition, ings. Total PGM production at the facility amounted to Marikana’s concentrator has a monthly processing ca- 7 042 oz, of which 3 520 oz was attributable to Aquar- pacity of 220 000 t. ius.

Commissioned in late 2002, the mine has a pool-and- Platinum operations in the rest of share agreement with Anglo Platinum, and the 2008 financial year was the second full year of operation in Africa terms of the agreement. In the 2008 financial year, Ma- rikana produced 125 583 oz of PGMs-in-concentrate, Mimosa compared to the 132 375 oz produced in 2007. The mine’s attributable production amounted to 62 791 Mimosa is wholly owned by Mimosa Investments, a oz of PGM-in-concentrate, down from 66 187 oz pro- Mauritius-based company jointly held by Aquarius Plat- duced in 2007. inum and Implats in a 50:50 joint-venture. The mine is located on the Wedza Geological Complex on the Zim- Everest babwean Great Dyke east of the town of Bulawayo. The operation comprises a shallow underground mine ac- The Everest mine, the youngest in the Aquarius portfo- cessed by a decline shaft and mined using semi- and lio, was commissioned in December 2005. The mine is mechanised bord-and-pillar mining methods, and a con- located on the eastern limb of the Bushveld Complex, centrator. The platinum concentrate produced is trans- near the town of Lydenburg, in Mpumalanga. ported to Implats’ Mineral Processes in Rustenburg, in terms of a life-of-mine offtake agreement with IRS. Currently, the mine consists only of an underground operation that mines the UG2 Reef, which is currently In the 2008 financial year, Mimosa produced 150 832 oz being ramped-up. The open pit operation came to an of PGM-in-concentrate, a reduction of 1,8% over the end during the 2008 financial year, with the rehabilita- previous year’s 153 570 oz. Aquarius’ share amounted tion of the open pit largely completed. In addition, a to 75 416 oz. Further, the mine produced 76 785 oz of concentrator with a capacity of 230 000 t processes platinum-in-concentrate, of which 38 283 oz was at- the material mined. Concentrate from Everest is smelt- tributable to Aquarius. ed, refined and marketed by IRS. Mimosa’s capital expenditure budget of $33-million In the 2008 financial year, the mine produced 157 995 in 2008 was spent largely on the Wedza Phase 5 ex- oz of PGMs-in-concentrate, a decrease of 4% on the pansion programme with the balance being spent on previous financial year’s figure of 163 938 oz. the normal operational expenditure replacement programme. In 2009, capital expenditure of $35-million Chromite Tailings Retreatment Plant will be used to complete the Wedza Phase 5 expansion project and provide additional housing for the mine’s The Chromite Tailings Retreatment Plant (CTRP) is lo- employees. www.researchchannel.co.za 49 Platinum Mining in South Africa May 2009

Exploration At the Everest mine, exploration is being undertaken at the farms Hoogland and Sterkfontein, while at the Aquarius Platinum’s exploration activities, in the 2008 Kroondal mine, exploration is in progress at the Town- financial year, entailed exploration drilling on its exist- lands prospect. On the eastern limb of the Bushveld ing mines as well as the execution of the company’s Complex, exploration work is being undertaken at exploration programmes on properties, for which the Chieftain’s Plain, Walhalla, Everest North, and the Bak- company has prospecting rights. gaga project.

Aquarius production by mine (oz)

Year ended June 2008 Year ended June 2007 Kroondal 391 117 439 351 Marikana 125 583 132 375 Everest 157 995 163 938 Mimosa 150 832 153 570 CTRP 9 849 7408 Platinum Mile 7 042 -

Production by mine attributable to Aquarius (oz)

Kroondal 195 558 219 674 Marikana 62 791 66 187 Everest 157 995 163 938 Mimosa 75 416 76 785 CTRP 4 924 3 703 Platinum Mile 3 520 - Source: Aquarius Platinum Annual Report 2008

www.researchchannel.co.za 50 Platinum Mining in South Africa May 2009

Aquarius Platinum

Shareholding structure Share performance Major shareholders as at August 2008: HSBC Custody Nominees (Australia) 5,04% Aquarius Platinum JP Morgan Nominees Australia 5,10%

Nutraco Nominees 6,61% 128 118 Revenue 107 $919-million (year ended June 2008) 96 $709,2-million (year ended June 2007) 85 75 Profit for the year 64 $363,6-million (year ended June 2008) 53 $293,6-million (year ended June 2007) 43 32 Leadership Nicholas Sibley (Non-executive chairperson) 21 Stuart Murray (CEO) 11 0 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Directors Source: McGregor BFA DR Dix, Tax Law, Independent non-executive Direc- tor, South African Contact details T Freshwater, Independent non-executive director, Postal address: GE Haslam, Independent non-executive director, PO Box 1282 Z Mankazana, MSc (Econ), Non-executive alternate Bedfordview director, South African 2008 K Morna, MBA (London Business School), BS (Prin- South Africa ceton Univ, USA), Non-executive director, South Af- rican Telephone: SA Murray, BSc (Chem Eng), AMI ChemE, CEO, +27 11 455 2050 South African H Nolte, CA (SA), Finance director Fax: WJ Purves, Senior Independent Non-Executive di- +27 11 455 2095 rector H Scholes, BA Law, LLB (Wits), Executive director Website: NT Sibley, FCA, Independent Non-Executive Chair- www.aquariusplatinum.com man P Smith, ACS (SA), Executive Director

www.researchchannel.co.za 51 Platinum Mining in South Africa May 2009

African Rainbow Minerals

Brief history Platinum, was created, and in April 2002, Arm’s gold assets were consolidated into African Rainbow Miner- als Gold (ArmGold), and were listed on the JSE with The history of African Rainbow Minerals (Arm) can be a market capitalisation of R5-billion. ArmGold merged traced back to 1994 when Patrice Motsepe, the com- with Harmony Gold in September 2003, and in May pany’s executive chairperson established Future Min- 2004, a range of transactions initiated between Avmin, ing. In 1997, African Rainbow Minerals and Exploration Arm and Harmony resulted in the formation of the ‘new’ was founded, and in 1999, the company changed its Arm and an enlarged Harmony. name to African Rainbow Minerals, which had investments in the gold and platinum mining sectors. Nature of business and market The company became known as a result of its ability to position the turn loss-making gold mining shafts acquired from AngloGold into profit earners. In January 2002, Arm en- JSE-listed Arm is a diversified BEE mining group with tered into a joint venture with Harmony Gold, known three divisions, Arm Ferrous, Arm Platinum and Arm as Freegold, to acquire further AngloGold assets and a Coal. These divisions house the company’s South Af- Gold Fields operation. rican operations, while its exploration interests outside South Africa are managed by Teal Exploration & In 2001, Modikwa Platinum, a joint-venture with Anglo Mining.

Arm corporate structure

AfricanARM Rainbow Minerals

100% 100%** 51% 65% 16%

ARM ARM Exploration Gold ARM TEAL Harmony Platinum Ferrous Coal (primary listing on TSX) (primary listing on JSE)

PGMs Iron Ore 20% Xstrata Coal Zambia 10% 50% Modikwa* 50% Beeshoek South Africa 100%•Konkola North 55% Two Rivers 50% Khumani 70% Mwambashi Manganese Ore 100% Lusaka and Kabwe Nickel, PGMs 51% Goedgevonden 70% Exploration areas 2 & 3 and chrome 50% Nchwaning 50% Gloria 50% Nkomati DRC Manganese Alloys 60% Kalumines PGM exploration 50% Cato Ridge (CR) † 90% Kalplats 25% CR Alloys Namibia 92% Otjikoto Chrome Ore 50% Dwarsrivier Ferrochrome 50% Machadodorp

* Assets held through ARM ** Assets held through a 50% • Konkola North is subject to a Mining Consortium, effective shareholding in Assmang Limited buy-in right up to 20% (5% interest at 41.5%,the balance carried) by state-owned ZCCM held by the local communities Investment Holdings plc

† Platinum Australia will earn in up to 49% on completion of a bankable feasibility study and owns 50% of the Kalplats extended area

Source: Arm Annual Report 2008 www.researchchannel.co.za 52 Platinum Mining in South Africa May 2009

Platinum operations Two Rivers platinum mine

Arm’s platinum interests consists of four assets, name- The Two Rivers platinum project, a joint venture be- ly the Modikwa platinum mine, the Two Rivers platinum tween Arm Platinum (55%) and Impala Platinum (45%), mine, the Nkomati nickel mine and the Kalahari Plati- is located on the eastern limb of the Bushveld Com- num (Kalplat) exploration project. plex, in the vicinity of the town of Steelpoort, in Mpu- malanga. Modikwa platinum mine Development of the project started in 2005, and the The Modikwa mine is a joint venture between Anglo Plat- 2008 financial year saw the continuing ramp-up of pro- inum and the Arm Mining Consortium, which each hold duction. A total of 2,37-million tons were milled during a 50% interest in the operation. Arm has an 83% stake the year, with 206 491 oz of PGM-in-concentrate pro- in the Arm Mining Consortium, which translates into an duced. This represents a 12% increase in production, effective 41,5% shareholding in the Modikwa operation. compared with the 184 099 oz of PGM-in-concentrate produced in the 2007 financial year. The mine is situated on the eastern limb of the Bushveld Complex, 15 km northwest of the town of Burgersfort, In the six months to December 2008, Two Rivers op- on the border between the Limpopo and Mpumalanga erated both declines at full capacity, with tons milled provinces. Operations at the mine comprise an under- increasing by 20%, to 1,32-million tons, compared to ground mine, some 450 m deep, consisting of three de- the 1,10-million tons milled in the same period in 2007, cline shafts, and a concentrator. All the concentrate pro- and PGM ounces increasing by 28% from 95 355 oz in duced is smelted and refined by Anglo Platinum. 2007 to 121 678 oz in 2008.

In the year ended June 30,2008, tons milled at the op- Further, the surface stockpile stood at 243 017 t and eration increased by 6% to 2,46-million tons, while the will be processed over the coming months to partially Modikwa mine produced 294 721 oz of PGM-in-con- substitute underground tonnage as part of a cost re- centrate, which represented a 7,5% increase on the duction initiative. previous year’s production of 274 174 oz. The higher output is largely attributable to a change in mining In addition, the concentrator plant optimisation project, method, from dip mining to strike mining, in an effort which will improve recoveries by an expected 3% to to create additional panels as well as improve flexibil- 5%, is on track and is scheduled for completion by ity and continuity. Further, in the six months ended De- September 2009. cember 31, 2008, the mine produced 156 335 oz of PGM-in-concentrate, which represents a 6% increase Nkomati nickel mine on the 148 039 oz produced in the same period in 2007. The Nkomati nickel mine, located 300 km east of Jo- During the 2008 financial year, 140 000 t of Merensky hannesburg in the Machadodorp area of the Mpu- ore, at an average grade of 2,73 g/t, was milled on a trial malanga province, is managed as an unincorporated basis. The mine produced 8 710 oz of 4E or 4 811 plati- 50:50 joint venture with Norilsk Nickel Africa. Nickel num ounces from this ore. However, owing to the cur- mining takes place through an underground shaft as rent economic climate, Merensky mining has stopped. well as through opencast mining. In addition, oxidised chromitite is mined as part of the pre-strip of the mine’s A feasibility study for the Phase 2 UG2 replacement future open pits. Since 1997, Arm has been mining the project was completed in the fourth quarter of 2008. underground Massive Sulphide Body (MSB), which is However, approval of the project has been delayed ow- now almost completely depleted. ing to the global financial crisis. The tailing off of production from the MSB, with the as- It has, however, been possible to continue with the sociated lower nickel production largely as a result of deepening of the North shaft, by using approved in- the lower grades mined, necessitated the search for terim funding. The North shaft’s 6 level infrastructure is new nickel resources to be exploited. To access these forecast for commissioning in the first quarter of 2009. resources, the mine has initiated a major expansion Deepening of the South shaft started in the second project that will involve the mining of the Main Mineral- quarter of 2008, and despite poor ground conditions, ised Zone (MMZ) and the Peridotite Chromititic Miner- the progress made has been satisfactory. alised Zone (PCMZ).

www.researchchannel.co.za 53 Platinum Mining in South Africa May 2009

Production reported for the 2008 financial year and dered, and delivery is expected in May 2009, while the subsequent 2009 interim results represents the transi- crusher is expected in June 2009. The mine expects tional period between existing mining operations and to commission the MMZ concentrator, which is 60% Phase 2 of the large-scale expansion project. completed, in the fourth quarter of 2009. The conversion of the 100 000 t/m plant to the 250 000 t/m PCMZ In the 2008 financial year the mine produced 5 136 t of concentrator has, however, not yet been formally re- nickel, compared with 4 418 t in the 2007 financial year, leased, but long-lead items have been committed to while PGM production decreased by 11% from 46 101 support the scheduled November 2010 commission- oz in the 2007 financial year, to 40 813 oz in the 2008 ing date. financial year. For the six months ended December 31, 2008, 2 495 t of nickel was produced, which represent- The mine’s related infrastructure will also be upgraded, ed an increase of 5% over the 2 367 t produced in the including the construction of two new tailings facilities same period of 2007. Production of PGMs for the 2009 and an upgrade of the power supply to 80 MVA. By the half-year increased by 9% to 16 134 oz, from 14 742 oz end of 2008, all of the project’s infrastructure require- in the same period in 2007. ments, including tailings disposal facilities and waste rock dumps as well as water and power supplies, were Current capital projects on schedule. In its 2007 annual report, Arm laid out a timeframe for Nkomati mine phase 2 large-scale the completion of this project. At the time, the com- expansion project pany indicated that the project’s production would be sequenced, targeting the initial ramp up from the MMZ In September 2007, Arm and Norilsk Nickel approved concentrator during the third quarter of 2009, with full the R3,34-billion Nkomati mine phase 2 large-scale ex- production by the first quarter of 2010. The initial ramp pansion project to increase the average annual nickel up of PCMZ production was scheduled for the third production to 20 500 t/y from 5 500 t/y, and to extend quarter of 2010, with full production by 2011. The com- the life-of-mine by 18 years to 2027. pany reported in its interim results for the six months ended December 31, 2008 that the expansion project The phase 2 expansion will exploit two zones of the was progressing well within the approved budget and large layered polymetallic disseminated sulphide re- timelines, and that a total of R2,1-billion (64%) of the source, which contains 904 335 t of nickel, as well as approved capital budget had been committed by De- byproducts of PGMs, chromite, copper and cobalt. The cember 31, 2008. first of the two zones to be exploited was the MMZ, which formed the basis of the now completed phase 1 Exploration of the expansion project. The 100 000 t/m MMZ plant was commissioned during August 2007 with ore mined The Kalplats exploration projects are located in the from both the current underground operation and from North West province, 330 km west of Johannesburg, Pit 1. The MMZ is overlayed by the PCMZ, which will be and comprise two joint ventures with Platinum Aus- mined by open pit methods. tralia (PLA). Arm Platinum’s current interest in the Ka- lplats PGM JV is 90% and PLA can earn up to 49% As part of phase 2 of the expansion project, mining will in the joint venture by completing a BFS and making continue at the underground mine, at the rate of 47 000 its proprietary Panton metallurgical process available t/m. The two new open pits, Pits 2 and 3, will produce to the project at no cost. The Kalplats ‘Extended Area 578 000 t/m of ore at steady-state production. At the Project’ is a 50:50 joint venture. Both projects are cur- end of the 2008 financial year, the company reported rently managed by PLA. that pre-stripping of Pits 2 and 3 was on schedule, and that dewatering of the open pit had started to reduce In 2008, PLA completed 48 390 m of drilling. Geologi- the impact of groundwater on the mining operations. cal modelling and updating of the mineral resources for the individual deposits has been ongoing in preparation In order to accommodate increased ore processing, for pit optimisation and mine design. As part of a bank- the current 100 000 t/m concentrator will be upgrad- able feasibility study, which is expected to be completed to 250 000 t/m to process the PCMZ ore, while a ed by 2010, metallurgical test work as well as engineer- new 375 000 t/m MMZ concentrator will be constructing and process plant design are being undertaken. ed to give a total processing capacity of 625 000 t/m. The mill for the 375 000 t/m concentrator has been or- Since April 2007, Arm Platinum has held prospecting www.researchchannel.co.za 54 Platinum Mining in South Africa May 2009 rights for the Kalplats Extended Area. The first phase of was completed in August 2007. The second phase, exploration, comprising a detailed aeromagnetic sur- which involves extensive soil geochemical sampling, vey over the entire strike length of the extended area, was completed in 2008.

African Rainbow Minerals

Shareholding structure ZB Swanepoel, BSc (Mining Eng), B Com (Hons), Major shareholders with an interest of 5% or more: Non-executive director Allan Gray Investment Council 17,49% AJ Wilkens, MDPA (Unisa), RMIIA, CEO Arm & Exploration Investments 41,84% Arm Broad Based Empowerment Trust 13,64% Share performance Old Mutual Asset Managers 4,87% African Rainbow Minerals Revenue

R12,92-billion (year ended June 2008) 128 R6,15-billion (year ended June 2007) 119 110 Profit for the year 100 R4,95-billion (year ended June 2008) 91 R1,41-billion (year ended June 2007) 82 73 64 Leadership 55 Patrice Motsepe (Executive chairperson) 46 André Wilkens (CEO) 37 27 Directors 18 F Abbott, B Com, CA(SA), MBL, Executive director 9 0 MMM Bakane-Tuoane, BA, MA, PhD, Independent May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr non-executive director Source: McGregor BFA JA Chissano, BA, MA, PhD, Independent non-executive director, Mozambican Contact details WM Gule, BA (Hons) Wits, P & DM (Wits Business Postal address: School), Executive director PO Box 786136 MW King, CA(SA), FCA, Independent non-executive Sandton director 2146 AK Maditsi, BProc, LLB, LLM, Independent non-ex- South Africa ecutive director KS Mashalane, B Com (Hons), PMD (Harvard Busi- Telephone: ness School), Executive director +27 11 779 1300 JR McAlpine, BSc, CA, Independent non-executive director Fax: PT Motsepe, BA Legal, LLB, Executive chairperson +27 11 779 1312 LA Shiels, Executive director RV Simelane, BA (Econ and Acc), MA, PhD (Econ), Website: Independent non-executive director www.arm.co.za MV Sisulu, MPP, Ma Plekhanov, Independent non- executive director JC Steenkamp, National Met Diploma, MDP, Cert Eng, Executive director

www.researchchannel.co.za 55 Platinum Mining in South Africa May 2009

Royal Bafokeng Resources

Brief history num in the financial year ended June 30, 2008. This represented a decline of 5,9% over the 2007 produc- The Royal Bafokeng Nation (RBN) is a 300 000 member tion figure of 2,03-million ounces. For the half year end- community located in South Africa’s North West proved December 31, 2008, the company produced 878 ince. The community owns 1 200 km2 of land that over- 000 oz, a decrease of 14,8%, compared with 1,03-mil- lays the western limb of the Bushveld Complex. The lion ounces for the same period in 2007. RBN’s ownership of this platinum-rich property has generated much wealth for the community through the An agreement was reached between RBR and Anglo leasing of portions of this land to, or conducting joint Platinum in 2008 to restructure the Bafokeng-Rasi- mining operations with, some of the world’s major min- mone JV, which includes the Bafokeng-Rasimone plat- ing companies, including Impala Platinum and Anglo inum mine (BRPM) and the Styldrift project. In terms of Platinum. the restructuring, Anglo Platinum will retain an effective stake of 43% in the venture and will receive pay- In 2002, Royal Bafokeng Resources (RBR) was estab- ment for the transfer of control. The transaction will re- lished to manage and develop the RBN’s mining as- sult in the creation and listing of a BEE PGM producer, sets. controlled by RBR and independently managed. The transaction is expected to take a year or two to com- Nature of business and market plete. position Platinum operations in South Africa RBR manages the mining interests of the RBN, which BRPM, which has been awarded new order mining are currently focused on PGMs, base metals, chrome, rights, mines the Merensky reef on the western limb of coal and granite. the Bushveld Complex. The company’s exposure to the platinum sector is The mine, which is in steady-state production, pro- through a 13,4% shareholding in Impala Platinum (Im- duced 175 000 oz of refined platinum in 2008, a reduc- plats) and a joint venture with Anglo Platinum through tion of 10% when compared with the 193 000 oz pro- BRPM. duced in 2007. Lower output has been attributed to a shortage of skilled labour, work stoppages for safety The RBN’s relationship with Implats dates back to 1968 incidents, labour absenteeism, development delays in when it granted the company a lease, covering an area the Phase 2 expansion project and the power disrup- of 13 500 ha, for what was to become the Impala Plati- tions. num mine. In 1999, the RBN acquired a 1,3% stake in Implats following an agreement relating to Impala mine. In terms of a royalty agreement concluded in Septem- Current capital projects ber 2006, RBR obtained an additional 12,1% shareholding in Implats from March 2007. The ‘royalty trans- BRPM phase 2 project action’, as it is known, stipulated that Implats would pay the RBN all royalties due to it for a 32-year period com- The mine has continued the development of the Phase mencing July 1, 2007 under the mineral lease agree- 2 project designed to deepen the operations at the ment between the two parties. This translated into a both the North and South shafts by an additional five sum of R10,6-billion. Included in the transaction was a levels, with the associated infrastructure. The project is so-called ‘BEE compensation charge’ of R1,5-billion, currently scheduled for completion in 2012 and will en- which increased the value of the transaction to R12,1- sure constant production when the Phase 1 ore reserve billion. In turn, the RBN subscribed for 75,1-million Im- depletes on the upper levels. plats shares, which were added to its existing shareholding, giving the nation a 13,4% stake (83,11-million Styldrift Merensky project shares) and the largest shareholding in the company. The Styldrift feasibility study was completed during Implats produced 1,91-million ounces of refined plati- 2008, and project implementation was approved by the www.researchchannel.co.za 56 Platinum Mining in South Africa May 2009 joint-venture partners. The project’s design provides for to the existing facility. However, as a result of the global the production of 230 000 t/m of Merensky ore, which economic slowdown, sinking operations have been de- will be delivered to an expanded concentrator adjacent layed by 18 months.

Royal Bafokeng Resources

Leadership Kgosi Leruo Molotlegi (chairperson) Niall Carroll (CEO)

Contact details Postal address: PO Box 55669 Northlands 2116 South Africa

Telephone: +27 11 219 6000

Fax: +27 11 219 6060

Website: www.bafokengholdings.com

www.researchchannel.co.za 57 Platinum Mining in South Africa May 2009

Jubilee Platinum

Jubilee Platinum is a mining exploration and develop- mine and Anglo Platinum’s Twickenham platinum mine. ment company with a focus on PGMs, nickel and copper. The company is listed on the JSE and London’s AIM. In February 2009, Jubilee Platinum reported that the company had completed its 42-borehole drilling pro- The company’s South African investments are located gramme at the Tjate platinum project. The drilling pro- on both the eastern and western limbs of the Bush- gramme formed part of phase two of the feasibility veld Complex and include the Tjate platinum project, study, which started in early 2008, and continues to the Dullstroom Plats property and Maude Mining and confirm the continuity at depth of the Merensky and Exploration, which owns the Bokfontein JQ448 and UG2 reefs. the Elandsdrift JQ467 PGM properties in the western Bushveld. The project is rapidly advancing towards a definitive compliant mineral resource estimate. Jubilee Platinum has a 63% shareholding in the Tjate Platinum Corporation, which is developing the Tjate In addition to the Tjate platinum project, Jubilee Plati- project. The project entails the construction of a stan- num is conducting exploratory work at the 2 500 ha dalone mine, producing 262 000 oz/y of PGMs and Dullstroom tenement area, located on the eastern edge gold. The mining scenario considered is for a single of the Bushveld Complex some 20 km north of the vertical shaft system to a depth of 1 100 m, initially town of Dullstroom, in Mpumalanga. The Merensky and mining only the Merensky reef. Currently, the estimated UG2 reefs outcrop to the north of the tenement area. cost of the project is $510-million. Jubilee Platinum is also keen to capitalise on untapped The Tjate platinum project consists of three contigu- mineral wealth in Madagascar, where it is developing ous farms, totalling 5 143 ha in the eastern Bushveld: three nickel/copper/PGM assets. The company contin- namely Dsjate, Fernkloof, and Quartz Hill. The farms ues to collaborate with Impala Platinum over the Am- are down dip of Impala Platinum’s Marula platinum bodilafa intrusion.

Jubilee Platinum

Leadership Telephone: MA Burne (non-executive chairperson) +44 20 7584 2155 C Bird (CEO) Fax: Directors +44 20 7589 7806 C Bird, HND Min Eng, Chartered Eng, Cert Mine Manager (UK & SA), CEO Website: MA Burne, , Non-executive chairman www.jubileeplatinum.com C Molefe, BCom (Unin), Post-graduate diploma (University of Cape Town), Non-executive director, South African AF Sarosi, BSc Metallurgy (Wits), MSc Eng (Wits), Technical director

Contact details Physical address: 4th Floor 2 Cromwell Place London SW7 2JE

www.researchchannel.co.za 58 Platinum Mining in South Africa May 2009

Lesego Platinum

Lesego Platinum, a joint-venture between mining ex- es, and Lesego plans to upgrade a large portion of the ploration company MinEx Projects (37%) and Umbo- inferred resource into the measured and indicated cat- no Platinum Mining (63%), owns the Phosiri platinum egories, and complete a BFS. project, for which the company received a new order prospecting right in 2006. The company intended to list on the JSE in July 2008. However, turbulent markets and negative sentiment in The Phosiri project is situated at the northern edge of the platinum sector forced Lesego Platinum to post- the Bushveld Complex’s eastern limb, about 15 km to pone its listing indefinitely. In the interim, the company the southwest of Anooraq’s Lebowa mine and some 20 will raise between $5-million and $15-million privately, km east of Lonmin’s Limpopo operations. The project in order to take the project further. has an inferred mineral resource of 27,8-million ounc-

Lesego Platinum

Leadership Roy Pitchford (non-executive chairperson) Phiwayinkosi Mbuyazi (CEO)

Contact details PO Box 41364 Craighall 2024 South Africa

Telephone: +27 11 880 3159

Fax: +2711 880 0486

www.researchchannel.co.za 59 Platinum Mining in South Africa May 2009

Mmakau Mining

Mmakau Mining is a 100% black owned company in- concentrate in the six months to December 2008. volved in the mining sector through the provision of contract mining and consulting services. The compa- Current mining activities at Marula target the UG2 Reef ny also has investments in the platinum, coal, gold, which is accessed via two declines, Clapham and Drie- chrome, vanadium and uranium sectors and has a 36% kop, which are situated 1,3 km apart and will eventu- shareholding in Shaft Sinkers, a provider of shaft sink- ally reach a depth of 770 m. The mine is currently con- ing and underground construction services. verting to conventional breast mining as the initial mine plan utilising mechanised bord-and-pillar techniques The company’s investments in the platinum sector in- proved unsuccessful owing to steeper dips and unex- clude a 9% shareholding in the Marula platinum mine, pected rolling of the reef. which is majority owned and managed by Impala Plati- num, and a 30% stake in the Madibeng platinum ex- The Madibeng platinum project, which encompasses ploration project. the farm Hoekfontein 432 JQ, on the western limb of the Bushveld Complex, near of the town Brits, in the North Marula Platinum is 73% owned by Implats, with the re- West province, is a joint venture between Mmakau Min- maining 27% held by Mmakau Mining and two other ing (15%), a community, business and employee trust BEE partners – the Marula Community Trust and Tu- (19%) and Xstrata (66%). Prospecting rights have been batse Platinum. The mine, located some 50 km north granted the Madibeng platinum project for the Hoek- of Burgersfort, in the Limpopo province of South Africa, fontein property. is one of the first mining operations to have been developed on the relatively under-exploited eastern limb To date, a detailed high resolution airborne magnetic of the Bushveld Complex. The operation consists of an survey has been completed, outlining the geological underground mine and a metallurgical plant. In 2008, the structures and the layered stratigraphy of the prospect Marula mine was awarded new order mining rights. The area. With regard to exploratory drilling, one diamond mine produced 70 400 oz of platinum-in-concentrate in drill borehole has been completed and the UG2 reef the 2008 financial year, and 36 400 oz of platinum-in- was intersected at a depth of 1 203 m.

Mmakau Mining

Leadership Bridgette Radebe (chairperson)

Contact details Postal address: PO Box 2236 Houghton 2041 South Africa

Telephone: +27 11 268 6780

Fax: +27 11 268 0186

Website: www.mmakaumining.co.za

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Nkwe Platinum

Australian Stock Exchange-listed Nkwe Platinum, be completed by the end of 2009. The company has through its BEE partner Genorah Resources and South until the end of August 2009 to devise a strategy to ac- African subsidiary Nkwe Platinum South Africa, is fo- quire IGC’s shareholding. cused on the acquisition, exploration, development and commercialisation of PGM projects in South Afri- The rationale for the IGC transaction is to clean up the ca’s PGM-rich Bushveld Complex. The company is ful- shareholding of the three farms, which will be added ly compliant with equity and ownership requirements of to Nkwe Platinum’s contiguous Garatouw and De Kom the Mining Charter. properties. The transaction will give Nkwe Platinum and its BEE partner Genorah Resources a 100% sharehold- While Nkwe Platinum has interests on both the eastern ing in the five contiguous farms. and western limbs of the Bushveld Complex, most of the corporate activity has been directed to the consoli- A further benefit of a 100% shareholding in the five dation of the company’s land holdings on the eastern farms for Nkwe Platinum is that, should Xstrata South limb of the Complex, involving its two flagship projects Africa exercise its option in terms of a joint-venture – Garatau and Tubatse – which are down dip of the agreement concluded with Nkwe Platinum and Geno- Anglo Platinum’s Modikwa mine and Impala Platinum’s rah Resources in August 2008, and acquire a 50% Marula mine. stake in the five properties of the Garatau and Tubatse projects, after a bankable feasibility study is complet- The Garatau project, in which Nkwe Platinum has a ed in late 2009, then Nkwe Platinum and Genorah Re- 74% shareholding and Genorah Resources has a 26% sources will own the remaining 50% shareholding in stake, consists of two contiguous properties –Gara- the properties. touw 282KT and De Kom 252KT (also known as the Genorah farms). The company is conducting an expe- In addition, the joint-venture will develop the proper- dited exploration programme and a bankable feasibility ties, with Xstrata South Africa funding the building of a study at Garatouw. mine and a concentrator at the project at an estimated cost of about $1,5-billion. Further, the joint-venture Extending south from the Garatau project is the Tu- will extend to any contiguous properties currently, or batse project, which consists of three contiguous prop- in the future, under the control of any of the joint-ven- erties – Hoepakrantz 291KT, Nooitverwacht 324KT and ture partners, in addition to the five existing proper- Eerste Geluk 327KT. Nkwe Platinum is to issue 250-mil- ties. lion ordinary shares to Genorah Resources, the owner of the three Tubatse project farms, in exchange for a Nkwe Platinum other PGM interests include the Pilans- 59% stake in the farms, which have inferred resources berg project and several prospect areas at different of 20-million PGM ounces. Genorah Resources will be stages of development. left with a 26% shareholding in the properties. Further, the acquisition of the Nkwe shares will increase Geno- The company’s Pilansberg project consists of two rah Resources ownership of Nkwe Platinum from the properties, Rooderand and Ruighoek, which are ad- current 48% to between 60% and 70%. vanced stage exploration projects. Rooderand is located on the northwestern rim of the Pilanesberg National However, Australia’s International Goldfields (IGC) has Park. A new order prospecting right has been issued on a 15% stake in the three properties making up the Tu- this project. Further, Nkwe Platinum has an undivided batse project. Nkwe Platinum is keen to acquire IGC’s 54% share on various portions of Ruighoek, which lies shareholding in the three farms. IGC indicated in Janu- directly to the west of the Pilanesberg National Park, ary 2009 that it was prepared to sell its stake for a cash covering an area of over 2 500 ha. An application for payment of A$60-million. Nkwe Platinum has stated a prospecting right for the property is currently being that if its board agrees to the IGC transaction, the com- processed by the DME. pany is not going to fund the transaction by using its existing cash resources. It is believed that Nkwe Plati- On the eastern limb of the Bushveld Complex, Nkwe num has about A$20-million in cash, and this money Platinum is currently conducting exploration work at its has been earmarked for a bankable feasibility study to Kliprivier and Tinderbox prospects, for which new order be conducted on the two project areas, which should prospecting rights have been awarded. The Kliprivier www.researchchannel.co.za 61 Platinum Mining in South Africa May 2009 prospect lies immediately south and along the strike project to Xstrata South Africa for a cash considera- of AQPSA’s Everest South platinum project and up dip tion of $12-million. At the time, the project had received of Northam’s Booysendal project, while the Tinderbox new order prospecting rights. prospect, located 10km southwest of Kliprivier, is in an early stage of exploration. The company is seeking joint-venture or farm-in partners for its smaller properties, given the focus on the In February 2008, Nkwe Platinum sold its De Wildt Garatauw and Tubatse projects.

Nkwe Platinum

Leadership Maredi Mphahlele (MD)

Contact details Postal address: PO Box 11585 Vorna Valley 1686 South Africa

Telephone: +27 11 445 2161

Fax: +27 11 445 2166

Website: www.nkweplatinum.com

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Platmin

Platmin is a mineral exploration and development reserves on the Tuschenkomst and Ruighoek proper- company with listings on both the Toronto Stock Ex- ties. change (TSX) and London’s Aim. The company’s exploration and development activities are focused on The project has a proven and probable mineral reserve PGM projects located on South Africa’s Bushveld of 4,4-million ounces of 3PGM+Au, of which 3,2-mil- Complex. Platmin’s projects are managed through lion ounces are attributable to Platmin. In addition, the Boynton Investments, the company’s operating sub- properties have measured and indicated resources of sidiary in South Africa, in which Platmin has a 72,39% 5,7-million ounces of 3PGM+Au, with 4,1-million ounc- stake. es attributable to the company.

Platmin’s BEE partner, the Moepi Platinum Group, an The project’s mining plan involves using two opencast empowerment company focusing on mining, energy mines to mine the Tuschenkomst and Ruighoek PGM and financial services, has a 27,61% stake in Boyn- ore deposits, with the processing of the ore to be un- ton Investments. Platmin therefore complies with the dertaken by two conventional Merensky and UG2 flota- MPRDA’s requirement that BEE ownership in a mining tion concentrators with a combined output of 250 000 company must exceed 26% by 2014. oz/y of 3PGM+Au concentrate for the first eleven years of the projected life-of-mine of 16 years. In December In late 2008, the company found itself in serious finan- 2008, Platmin reported that the Pilanesburg project cial difficulty as a result of the sharp drop in the plati- was 85% completed, and the company expected to num price and difficulties accessing funding owing to produce its first concentrate in March 2009. the global credit crunch, which threatened to derail the development of its flagship Pilanesberg project. Plat- Further, the cost of the Pilanesberg project, which is min entered into an agreement with Pallinghurst Re- expected to reach full production in the third quar- sources and the Bakgatla-Ba-Kgafela community in ter of 2009, has risen to R1,97-billion from the June December 2008, which will result in $175-million flow- 2007 bankable feasibility study estimate of R1,67-bil- ing into the company, allowing it to complete the Pi- lion, with a 10 MVA generator being one of the big-cost lanesberg project. items now included in the project.

The transaction will involve Pallinghurst spending Platmin’s Mphahlele project is located on the northern $125-million on acquiring shares in Platmin. Palling- edge of the Bushveld Complex’s eastern limb, contig- hurst is a 49,9% partner in a joint-venture with Bak- uous with Lonmin’s Limpopo mine, and is the second gatla, and the joint-venture will spend some $50-million most advanced of the company’s projects. In terms of acquiring a 27,61% in Platmin’s Boynton Investments. the ownership of the project, Platmin holds an effec- This second stake will be converted into Platmin shares tive 54,29% through Boynton Investments, while the in 2010. As a result, Pallinghurst and the joint-venture Moepi Platinum group and other minorities have an ef- will have a 69,8% shareholding in Platmin once the fective 20,71% shareholding through Boynton Invest- transaction has been completed. ments. The Limpopo Development Corporation has a 20% stake in the project via Mahube Mining and Explo- Platmin’s exploration and development efforts are fo- ration, and a direct 5% has been reserved for a trust for cused on four project areas, namely Pilanesberg, the local Mphahlele community. Mphahlele, Grootboom and Loskop. A preliminary feasibility study on the project, which be- The Pilanesberg project is situated on the Pilanesberg gan in July 2007, was fast tracked into the bankable intrusion, adjacent to Barrick’s Sedibelo project on the feasibility study stage, was expected to be complet- western limb of the Bushveld Complex, 60 km from ed by the 2009 financial year. In addition, 45,5% of the Rustenburg, in the North West province. The project project’s mineral resource was upgraded from the in- covers a project area of 15 019 ha and includes the ferred to indicated category, resulting in an indicated mineral resources on the Tuschenkomst, Ruighoek, mineral resource of 5,69-million ounces of 3PGM+Au Witkleifontein and Rooderand properties, and mineral and an inferred resource of 6,82-million ounces of

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3PGM+Au. The project has incurred costs of $9,53-mil- pling and metallurgical testing programme. An integrat- lion to date. ed feasibility study for the project should be completed during the 2009 financial year. The Grootboom project currently consists of the farms Grootboom and Annex Grootboom, located on the The Loskop project, a joint-venture with Lonmin, com- eastern limb of the Bushveld Complex about 5 km prises the farms Rietfontein, Loskop South, De Wagen- form the town of Steelpoort. Platmin has completed a drift and Kameeldoorn, and is located on the south- prefeasibility study at Grootboom to assess the poten- western end of the Bushveld Complex’s eastern limb tial for designing and constructing a stand-alone mine in the Groblersdal magisterial district of Mpumalanga. producing 86 000 oz/y of 3PGM+Au. Further, the com- Lonmin manages and operates the project and funds pany has completed the flotation test work and plant de- all project exploration expenses except for Platmin’s sign for the retreatment of an existing tailings dump on contribution to the Rietfontein property. the property, containing a significant quantity of PGMs. Lonmin has completed its earn-in on the Rietfontein Platmin reported that the DME had accepted its min- component of the joint-venture. The proposed work ing rights applications for both the Grootboom and the programme on the Rietfontein joint-venture involves Grootboom tailings projects. The company anticipated geological modelling and resource estimation as well that these rights would be granted in December 2008. as evaluation of the scoping study. Earlier stage ex- Going forward, the company intends updating the cur- ploration will continue on the remainder of the Loskop rent mineral resource base through a drilling, bulk sam- project area.

Platmin

Leadership Rupert Pardoe (chairperson) Ian Watson (CEO)

Contact details Postal address: Private Bag X11 Highveld 0067 South Africa

Telephone: +27 12 661 4280

Fax: +27 12 661 4139

Website: www.platmin.co.za

www.researchchannel.co.za 64 Platinum Mining in South Africa May 2009

Platinum Group Metals

Platinum Group Metals (PTM) is a Canadian PGM-fo- duction, for nine years of an estimated 22-year mine cused exploration company with projects in South Afri- life. ca and Canada. The company was established in 2002 with a view to acquiring PGM-rich ground in the Thun- However, construction cost estimates have swollen der Bay and Sudbury areas of Northern Ontario. PTM significantly from the $300-million forecast in the Janu- soon shifted it focus to South Africa’s Bushveld Com- ary 2007 prefeasibility study, with peak funding now es- plex, where it acquired two pieces of property adjacent timated at between $486-million at current metals pric- to Anglo Platinum’s BRPM mine, including important es, and $507-million using three-year trailing averages surface rights, and some promising parcels of land on (Peak funding is calculated as the amount that is re- the northern limb of the Complex. quired to fund the project to full production, net of revenue received, while still investing capital). In 2004, PTM was able to combine its properties Onder- stepoort and Elandsfontein with Anglo Platinum’s land Capital expenditure has been nudged upwards by two holdings in the area to create the Western Bushveld main changes from the earlier plan – the company has Joint-Venture (WBJV), with African Wide as the BEE opted for decline mining only, and has included the ca- partner. Subsequently, African Wide was acquired by pacity to generate as much as 50 MW of its own power Wesizwe Platinum, which effectively gave Wesizwe a until it plugs into the Eskom grid, which is expected to 26% in the WBJV. PTM is the operator for the joint- be in January 2013. venture, and it has been largely responsible for taking unexplored areas through resource definition to engi- The company has opted for declines to access the neering-ready status. The WBJV is divided into three shallow orebody, rather than vertical shafts or a combi- distinct project areas: Project 1, 2 and 3. nation of the two, to accelerate the production ramp up and access higher-grade ore earlier. Initially, PTM held a 37% stake in the joint-venture, with Anglo Platinum and Wesizwe Platinum holding 37% An offtake agreement has yet to be reached with a and 26% respectively. However, in September 2008, smelter, but Anglo Platinum has the right of first refus- it was announced that the parties had agreed to a re- al. A decision on whether or not to proceed with the structuring of the joint-venture, giving PTM the right to project is still expected. buy an effective 74% of the WBJV projects 1 and 3, with Wesizwe holding the balance, as well as 100% of In addition to WBJV, PTM has established a new joint- project 2. Anglo Platinum will sell its 37% holding in venture adjoining the Xstrata Eland Platinum Mine at the WBJV to Wesizwe for a 26,5% stake in the small- the eastern end of the western limb of the Bushveld er company, and PTM will receive an additional 37% Complex. PTM will operate the joint-venture, while a stake in projects 1 and 3 from Wesizwe, in exchange new company, Sable Platinum, will fund it. for PTM’s interest in project 2 (valued at R376,9-million) plus R408,67-million in cash. Wesizwe Platinum has in- Further, the company is involved in the northern limb of dicated that it intends proceeding with Project 2 or the the Bushveld Complex, where it owns a majority stake Frischgewaagd-Ledig project. in the War Springs and Tweespalk properties. PTM has recently applied for a large area at the north end of the PTM’s focus is on Project 1 and 3, with Project 1 be- northern limb. ing the company’s main asset. The bankable feasibility study for Project 1 envisages the construction of a plat- In Canada, the company holds mineral rights surround- inum mine and concentrator to produce between 235 ing the North American Palladium mine. These strategic 000 oz/y and 271 000 oz/y of 4E at steady-state pro- holdings will be held for improving market conditions.

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Platinum Group Metals

Leadership R Michael Jones (president and CEO)

Contact details Postal address: Postnet Suite No. 81 Private Bag X 12 Roosevelt Park 2129 South Africa

Telephone: +27 11 782 2186 Fax: +27 11 782 4338

Website www.platinumgroupmetals.net

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Ridge Mining

Ridge Mining is an Aim-traded mining company en- ing well. The first ore was expected to be processed gaged in the development of PGM projects on South in mid-February and first concentrate produced around Africa’s Bushveld Complex. The company is currently the end of February 2009. The mine is scheduled to involved in two PGM projects – Blue Ridge and She- reach full production by mid-2009. ba’s Ridge. Ridge Mining’s $707-million Sheba’s Ridge PGM The Blue Ridge project is situated on the farm Blaauw- project is located on the eastern limb of the Bushveld bank on the western edge of the Bushveld Complex’s Complex, in the vicinity of the town of Groblersdal, in eastern limb and, of Ridge Mining’s two projects, it is Mpumalanga. The shareholders in the project are Ridge the most developed. The company has a 50% stake in Mining (61,5%), the Industrial Development Corpora- the project, with its BEE partner, Imbani Platinum hold- tion (26%) and Anglo Platinum (12,5%). ing the other 50%. The project entails the development of an openpit The project entails the development of a mine compris- mine. The extracted ore will be trucked using 250-trol- ing two decline shafts, which at full capacity will ex- ley-assisted trucks, which will receive most of their tract 120 000 t/m, for the production of 75 000 oz/y power from an overhead electricity line, to a concentra- of platinum, 35 000 oz/y of palladium, 13 000 oz/y of tor plant consisting of three separate streams, each ca- rhodium, and 1 600 oz/y of gold, totalling 125 000 oz/y pable of treating 500 000 t/m. The concentrate will be over a projected life-of-mine of 18 years. The compa- smelted in two 35-MVA six-in-line furnaces. ny’s acquisition of the adjacent Millennium project in March 2008 has increased the mineral resources at The mineral resource at Sheba’s Ridge has been con- Blue Ridge by over 70%. firmed at 1,45-million tons of nickel, 534 000 t of copper and 22,3-million ounces of PGMs. Ridge Mining An offtake agreement has been signed with Impala Re- plans to extract 18-million tons of ore a year over a fining Services under which Impala has committed to planned life-of-mine of 20 years. acquiring all the proposed production from the Blue Ridge mine. Despite the completion of the technical audit of the BFS to concentrate stage and the subsequent commission- Good progress has been made on the project. The un- ing of a BFS into new smelter facilities, Ridge Mining derground mining development continues to progress has reported that it cannot continue with the project according to plan, and a stockpile of over owing to the global economic slowdown. The compa- 250 000 t of ore is on the surface, ready for processing ny will only take the project forward once the outlook once the plant is commissioned. for commodities improves and the time of this recovery becomes clear. Meanwhile, the company is continuing The commissioning of the Blue Ridge concentrator with the optimisation of the project to attain higher pro- plant started on January 12, 2009, and is progress- duction and lower costs.

Ridge Mining

Leadership Telephone: Oliver Baring (chairperson) +27 11 656 1140 Terence Wilkinson (CEO) Fax: Contact details +27 11 802 0990 Postal address: PO Box 76575 Website: Wendywood www.ridgemining.co.za 2144 South Africa

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Wesizwe Platinum

JSE-listed Wesizwe Platinum is an empowered platinum Despite the global financial crisis and the associat- prospector and producer, with 51% of the company’s ed credit crunch, Wesizwe Platinum intends proceed- shareholding in the hands of HDSAs. In 2007, Wesizwe ing with the development of its R5,6-billion-Frisch- acquired the entire share capital of Africa Wide Min- gewaagd-Ledig project. The company announced ing for R650-million, effectively giving Wesizwe a 26% in November 2008 that the project would not be de- share in the Western Bushveld joint venture (WBJV). layed, as this would be detrimental to shareholder value. However, the project has been split into smaller The WBJV, involving Platinum Group Metals (PTM), An- contracts for which capital will be raised as required. glo Platinum and Wesizwe Platinum, covers 67 km of The company will commence earthworks with existing the platinum-rich western limb of the Bushveld Com- capital in early 2009 while it endeavours to raise further plex. The WBJV is divided into three distinct project ar- capital for the project. eas: Projects 1, 2 and 3. In late 2008, Wesizwe Plat- inum, PTM and Anglo Platinum announced that they The project, which was given approval in March 2008 had agreed to a restructuring of the JV, giving PTM the following positive results from the bankable feasibility right to buy an effective 74% of the WBJV projects 1 study, will consist of an underground mine and a sur- and 3, with Wesizwe left holding the balance, as well as face concentrator plant, and will also entail the estab- 100% of project 2. Anglo Platinum would sell its 37% lishment of all surface infrastructure, servitudes for bulk holding in the WBJV to Wesizwe for a 26,5% stake in power and water supply, the sinking and equipping the smaller company, and PTM would receive an ad- of ventilation and main shafts, the associated under- ditional 37% stake in projects 1 and 3 from Wesizwe, ground infrastructure, the ancillary excavations and the in exchange for PTM’s interest in project 2 (valued at access development to establish a footprint for full pro- R376,9-million) plus R408,67-million in cash. duction.

As a result of the restructuring of the joint-venture, We- The project has an estimated life-of-mine of 35 years at sizwe Platinum increased its ownership of the Frischge- a production rate of 230 000 t/m, producing an average waagd-Ledig project to 100%. The shuffle in ownership of 350 000 oz/y of PGMs at steady-state production, was necessary owing to an overlap in the mineral rights. which is expected to be achieved by 2017.

Wesizwe Platinum

Leadership Michael Solomon (CEO)

Contact details Postal address: Private Bag X 16 Northlands 2116 South Africa

Telephone: +27 11 215 2200

Fax: +27 11 268 6885

Website: www.wesizwe.co.za

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Xstrata

Xstrata is a global diversified mining group, listed on inum and its BEE partner Genorah Resources, which the London and Swiss stock exchanges, with inter- gives Xstrata an exclusive option to acquire a 50% ests in base metals, precious metals and coal. Xstrata stake in five contiguous PGM properties that comprise Alloys, a business unit of Xstrata, is headquartered in Nkwe Platinum’s Garatouw and Tubatse projects, sub- Rustenburg and is one of the largest South African project to the completion of a BFS by the end of 2009. ducers of ferrochrome and vanadium, and has a grow- ing PGM business. Xstrata was unable to conclude the $10-billion takeover of Lonmin, settling instead for a 24,9% stake in the Xstrata is a relatively new entrant to the platinum sec- company in late 2008. tor, making its first foray into the sector in August 2005 when it acquired a 50% stake, worth R1,35-bilion, in The company’s platinum mining operations include the Mototolo mine. The remaining 50% is held by An- the Mototolo mine, located on the eastern limb of the glo Platinum. Xstrata is responsible for the managing of Bushveld Complex, near the town of Steelpoort. the underground mining operations, while Anglo Plati- num manages the 200 000 t/m PGM concentrator. The In 2008, the Mototolo mine produced 87 200 oz of XK Platinum Partnership, composed of Xstrata and its equivalent refined platinum. Production at the mine BEE partner Kagiso Trust Investments, was established was 8% lower than the 2007 figure, owing to disrup- in 2006 with regard to the ownership of Xstrata’s 50% tions in power supply, the shortage of critical skills and stake in the Mototolo joint-venture. geological conditions hampering production at the Borwa shaft. In November 2007, Xstrata purchased Eland Platinum for R7,5-billion. As a result of the transaction, Xstra- Capital expenditure at Mototolo decreased by 28% to ta acquired a 64,99% shareholding in Eland Platinum R61-million from the previous year’s R86-million. Mines and a 66% controlling stake in the Madibeng Platinum project. Xstrata South Africa is responsible for managing the underground mining operations, while Anglo Platinum Xstrata became increasingly acquisitive in 2008. In Feb- manages the 200 000 t/m PGM concentrator. ruary, the company concluded the purchase of Nkwe Platinum’s De Wildt prospect for $12-million, which in- The company owns and operates the Elandsfontein cluded a new order prospecting right for the property. platinum project, which is located on the western limb The prospect is adjacent to the Elandsfontein mine. of the Bushveld Complex, near the town of Brits, in the North West province. The total cost of the project is in In August 2008, Xstrata launched a hostile bid for Lon- the region of R1,1-billion. The mine’s opencast opera- min, the world’s third-largest platinum producer, while tions started in the second quarter of 2007, while under- at the same time signing an agreement with Nkwe Plat- ground mining was expected to get underway in 2008.

Xstrata

Leadership Telephone: W Strothotte (chairperson) +27 11 250 0000 ML Davis (CEO) Fax: Contact details +27 11 250 0001 Postal address: Postnet Suite No. 19 Website: Private Bag X1 www.xstrata.com Melrose Arch 2076 South Africa

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Main sources

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Mining Weekly. Sheba’s Ridge platinum-group metals project, South Africa. (February 6, 2009). Mining Weekly. Limpopo platinum mine phase 2 expansion project, South Africa. (February 6, 2009). Mining Weekly. SA delays imposing mining royalties to save jobs – Manuel. (February 20, 2009). Mining Weekly. Booysendal platinum project, South Africa. (February 20, 2009). Mining Weekly. Styldrift Merensky project, South Africa. (February 27, 2009). Mining Weekly. Tjate project, South Africa. (February 27, 2009). Mining Weekly. Amandelbult East Upper UG2 project, South Africa (February 27, 2009). Mining Weekly. Zimplats expansion, Zimbabwe. (February 27, 2009). Mining Weekly. Twickenham project, South Africa. (February 27, 2009). Mining Weekly. Platinum BEE Mvela outlines plan to unlock R2bn as JSE tightens up. (February 27, 2009). Mining Weekly. Zimbabwe platinum output could easily exceed South Africa’s – Implats. (February 27, 2009). Mining Weekly. Implats slashes capex programme in response to economic meltdown. (February 27, 2009). Mining Weekly. Leeuwkop project, South Africa. (March 6, 2009). Mining Weekly. Marula Merensky reef project, South Africa. (March 6, 2009). Mining Weekly. Implats boss warns of the unintended consequences of section of mine health act. (March 6, 2009).

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www.researchchannel.co.za 71 SOUTH AFRICA’S AUTOMOTIVE INDUSTRY January 2009

Platinum Mining in South Africa 2009 The material contained in this report was compiled by the Research Unit of Creamer Media (Pty) Ltd, based in Johannesburg, South Af- rica. The information contained in this report has been compiled from sources believed to be reliable, but no warranty is made as to the accuracy of such information. This document is designed to be used as a source of information for subscribers to Creamer Media’s Research Channel Online and is not to be reproduced or published for any other purpose. The reports draw on information published in Engineering News and Mining Weekly as well as from a range of other sources, and should provide an invaluable, and easy-to-read snapshot of key industrial sectors.