29 September Chemserve's Mining Chemicals Strategy
Chemical Services Mining Strategy Presentation to Investors 29th September 2009 Global mining production by size of operation Global known ore reserves Strategy
Market Large, expanding and exciting Target: Africa, Australasia, Chile Value added minerals Au, Diamonds, Cu, PGM’s
Value added model Total chemical reagent package High technical service Capital investment at customer sites
Supply chain Strategic raw material supply and production capability
Technology Concerns
Mining projects – cancelled, frozen or delayed
Copper belt (Zambia /DRC ) demands have diminished (coming back)
Diamond mines – production halved (coming back)
Platinum and other major customers are pushing back on suppliers for better pricing and “cutting out reagents”
Sulphur prices have collapsed Total chemical solution
SENMIN (Pty) Ltd Group mining sales
2,500,000
2,000,000
1,500,000
1,000,000 Sale (R mil) (R Sale
500,000
0 2003 2004 2005 2006 2007 2008 2009 H New mining projects in completion phase 2009
o Blue Ridge Q1 o Boynton/ PilanesburgQ1 o Ngezi Plats Zim Q3 o Ruashi DRC Q2 o Tenke DRC Q3 o Kayalekera Malawi Q4 o Lumwana Zambia Q2 Working on new SA projects 2010
BKM Phase 2 Chemwes Goldfield West Wits Uranium One (Drum) Rand Uranium (Cooke Uranium) Atcom coal Working on new Africa projects 2010
Buzwagi Gold Tanzania Unki Plats Zim Anbatovy Madagascar Kolwezi Tailings Kol DRC Benga Coal Mozambique Nkwe plats Zimbabwe Trekkopje Comprehensive customer service
Integrated storage and preparation Comprehensive customer service
Integrated storage and preparation Introduction
Senmin is a combination of previously Chemserve-acquired businesses
Allied Colloids SA based in PE - 1987 Restructured as Chemserve Colloids in 1995 Focus on mining chemicals and tailings treatment Pelichem - 2000 representing Ciba, now BASF
Acquired Sentrachem mining chemicals – 2002 Manufacturing base and technology Success factors
Known brand Operated in SA for 40 years
Key markets Diamonds Uranium Platinum and base metals
Producer in Africa based in Sasolburg Platform for further investment Putting the package together Product portfolio
Speciality liquid thio mineral collectors Mineral froth formation chemicals Unwanted gangue mineral depressants Polyacrylamide thickening polymers Tailings polymer rheology modifiers Senmin adopting model
Service
The chemical solutions provider of choice
Technology Costs Senmin’s business model
Supply and cost World class production and supply chain Back integration into raw materials
Service Investment in bulk and automated storage and handling of chemicals on mine sites On site technical service and reporting Benefit/gain sharing on improvements
Technology Developed and licensed Total chemical reagents “vendor management”
Major mining companies:
Platinum
Diamonds
Copper
Coal
Uranium
Iron ore Senmin speciality chemicals
Create effects in mineral processes Added in small quantities Improve outcome in every stage of extraction Extractive reagents
Xanthates
Secondary collectors Dithiophosphate Dithiocarbamate
Depressants Carboxymethyl cellulose Guar gum
Frothers
Polyacrylamides Senmin site: Sasolburg Progress on projects Guar project completed 2009 Carbon disulphide (CS2)
Key raw material for mining chemicals Replace existing plant and importation New technology based on natural gas World scale with excess capacity for growth Advantages of natural gas
Raw materials Charcoal supply insecure Methane composition stable
Capacity Maximum capacity of old plant = 72 00mt/a vs 20 000mt/a Availability of electricity
Cost effectiveness Fully absorbed cost is lower for methane
Much smaller environmental footprint
140 kWh vs 1600 kWh per ton CS2 Generate steam from exothermic Claus reaction Old charcoal technology
In this technology charcoal is used as source of carbon as supplied by a farmer
C + 2S ↔ CS2 New methane technology
Carbon disulphide (CS2) is formed by the endothermic reaction of methane and sulphur
CH4 +4S↔ CS2 +2H2S
The reaction takes place in the gas phase at elevated temperature and pressure
Sulphur is recovered from the by-product H2S
2H2S + SO2 → 3S + 2H2O CS2 balance
25000
20000
15000
10000
5000
0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Requirement Imports Capacity Old CS2 from Charcoal New CS2 project site September 2008 Progress by May 2009 Progress September 2009
New CS2 methane plant Acrylamide and polyacrylamide
Joint venture New biotechnology Replace importation Supply global partner Local raw materials Overview
Bio plant: manufacture of bio-acrylamide from acrylonitrile
Powder plant: polymerisation of bio-acrylamide and subsequent processing
Joint venture technology agreement with Ciba - BASF Key Raw Materials
• Monomers Acrylamide converted biocatalytically from acrylonitrile Acrylic Acid
Both monomers derived from propylene New AM PAM project site
February 2008 Project progress
August 2008 Start construction
September 2008 Seed and main fermenter Bioconversion Fluidised bed drier Tank farm Utilities Plant nearing completion Products
Polyacrylamide flocculants Thickening: solid liquid separation in the mining industry Clarification Enhanced tailings disposal
Primary use is to recover water and reduce the circulating volume
Almost all mineral processing plants have to use flocculants: uranium, gold, platinum, copper, coal, iron ore, diamonds etc. Tailings settlers Tailings disposal Ciba - BASF joint veture
Nameplate capacity of the plant is 20 000 tpa dry polymer powder
Sales from Senmin into Africa, Ciba-BASF takes some volume to distribute to the rest of the world Flocculant global market
Global market in 2008 for flocculants in mining: 112 000 tpa
Africa: approx 16 500 tpa Growth in uranium, gold, copper, iron ore, coal on the African continent will increase this to over 20,000 tons per annum within the next three years
Australasia: approx 26 000 tpa Strategic investment
Local producer with total reagent suite
Market focus in the extractive industries
Supply and application of flotation reagents
Strategically aligned for market growth