Platinum in South Africa 2008 Platinum Contents June 2008

June 2008

Sources of platinum 1 South Africa 1 Russia 2 Canada and North America 3 Zimbabwe 4

Global Market 5 Platinum demand 5 Automotive demand 5 Jewellery demand 6 Industrial and investment demand 6 Platinum supply 6 Platinum price 6 Outlook 7

Legislative and policy environment 8

South African PGM production: Western Limb 15 South African PGM production: Eastern Limb 16

Platinum projects currently under development in South Africa 17

Main participants Anglo Platinum 21 Impala Platinum 31 Lonmin 39 Northam Platinum 43 Aquarius Platinum 46 African Rainbow Minerals Platinum 50 Royal Bafokeng Resources 53

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Junior platinum companies and explorers Jubilee Platinum 54 Lesego Platinum 56 Mmakau Mining 57 Nkwe Platinum 58 Platmin 59 Platinum Group Metals 60 Ridge Mining 61 Wesizwe Platinum 62 Xstrata 63

The material contained in this report was compiled by Hilary Klopper 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 June 2008

List of abbreviations

ACP – Angloplat Converting Process Afplats – African Platinum Angloplat – Anglo Platinum AQPSA – Aquarius Platinum South Africa Arm – African Rainbow Minerals ArmGold – African Rainbow Minerals Gold BEE – black economic empowerment BIC – Bushveld Igneous Complex Bits – bilateral investment treaties BMR – Base Metals Refinery BRPM – Bafokeng Rasimone Platinum mine CTRP – Chromite Tailing Retreatment Plant DME – Department of Minerals and Energy DTI – Department of Trade and Industry EMPR – environmental management programme report EPM – Eastern Platinum Mine ETF – exchange-traded fund GFSA – Gold Fields South Africa ICSID – International Centre for the Settlement of Investment Disputes Implats – Impala Platinum IRS – Impala Refining Services Kalplat – Kalahari Platinum Lonplats – Lonmin Platinum MFIC – Molopo Farm Igneous Complex MMZ – main mineralised zone MPRDA – Mineral and Petroleum Resources Development Act MSB – massive sulphide underground body Mvela – Mvelaphanda Resources Nkwe SA – Nkwe South Africa oz – ounces PCMZ – peridotite chromititic mineralised zone PGM – platinum-group metal PLA – Platinum Australia PMR – Precious Metals Refinery PPRust – Potgietersrust Platinum PSA – pool and share agreement PTM – Platinum Group Metals Rom – run of mine RBN – Royal Bafokeng Nation RBR – Royal Bafokeng Resources www.researchchannel.co.za Platinum June 2008

RPM – Rustenburg Platinum Mines SavCon – Savannah Consortium SMC – Selous Metallurgical Complex UG2 – Upper Group 2 ULP – ultralow profile WBJV – Western Bushveld JV Zimplats – Zimbabwe Platinum Mines 4E PGM – four element platinum-group metals – platinum, palladium, rhodium and gold

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Sources of platinum

Platinum is only produced in five countries around the the largest metals-bearing intrusions in the world, the world. Of these South Africa and Russia are the largest Bushveld Igneous Complex (BIC). producers, with small amounts of the metal also being produced in the US, Canada and Zimbabwe. The Bushveld Igneous Complex Key: Platinum supply by region 2003-2007 Anglo Platinum Impala Lonmin Polokwane Million ounces PPRust Others Lebowa Messina Paschaskraal South Africa Russia North America Others Amandelbult Twickenham Northam Marula Modikwa 7 Union Kennedy’s Vale Der Brochen Two Rivers Booysendal 6 Crocodile River Bafokeng- Waterval Everest South Rasimone Impala Sheba’s Ridge 5 Rustenburg Blue Ridge Pretoria Kroondal Pandora Marikana Lonmin 4 Source: Johnson Matthey 3

2 The BIC hosts over one-half of the world’s platinum, chromium, vanadium and refractory minerals. 1 The complex covers over 66 000 km2, and is divided 0 into an eastern and western limb, with a further northern extension, known as the northern limb. The intru- 2003 2004 2005 2006 2007 sion is located in the northern reaches of South Africa, Source: Johnson Matthey Platinum 2008 cutting through the Mpumalanga, North West and Lim- popo provinces. It has a series of distinct layers, three South Africa of which contain economic concentrations of platinum- group metals (PGMs). PGMs include iridium, osmium, A total of 5,29-million ounces of platinum were pro- palladium, platinum, rhodium, and ruthenium. duced in South Africa in 2006, and platinum research company Johnson Matthey stated that 5,04-million The principal PGM-bearing reefs in the BIC are the Me- ounces were be supplied by the country’s mines in rensky reef and the Upper Group 2 (UG2) reef, which 2007. occur around the eastern and western limbs of the complex. A third PGM-rich layer, the Platreef, is found only on the northern limb at the north-eastern bound- PGM Supplies: South Africa ‘000 oz ary. 2007 2006 Platinum 5 220 5 290 The Merensky and UG2 reefs contain most of the Palladium 2 795 2 905 world’s known reserves of PGMs. The Merensky ore- Rhodium 695 690 body, which is about one metre thick and has a thin seam of chromite along the top and bottom, has been Source: Johnson Matthey Platinum 2007 Interim Review the principle source of PGMs since it was first worked Precious metals research and consultancy, GFMS, in 1925. indicated in its GFMS 2008 Platinum Survey that platinum production from South African mines in 2007 The UG2 reef, the structure of which is fairly uniform was 5,07-million ounces. throughout the BIC, is rich in chromite, but lacks the Merensky’s gold, copper and nickel by-products, South Africa’s platinum mines are converged on one of though its PGM reserves may be almost twice those of www.researchchannel.co.za 1 Platinum June 2008 the Merensky reef. The exploitation of the UG2 orebody technological developments in the South African gold began in the 1970s. mining industry have made deposits feasible at a depth of four kilometres and this technology could be trans- The Merensky and UG2 reefs are narrow, and both have ferred to PGM mines over time. been mined using narrow reef methods, with many operations continuing to use these methods today. How- It is estimated that 200-million ounces of PGMs have ever, mechanical and hybrid techniques are progres- already been mined and, between the depths of 1 000 sively being implemented by new and existing mines, m and 5 000 m, 6,8-billion ounces of PGMs still remain, whereby drilling may be carried out either using con- which, at current extraction rates, could meet demand ventional hand-held pneumatic drills, or by means of for at least 780 years. low-profile machines equipped with specialised drilling equipment. The ore is subsequently cleaned from the stopes using low-profile load-haul-dump vehicles. Russia

The Platreef, at between 5 m and 90 m thick, is much Platinum production in Russia declined to 910 000 oz in wider than the other reefs, and is mined using open- 2007 from 920 000 oz in 2006. pit methods. The Platreef was not exploited on a large PGM supplies: Russia (‘000 oz) scale until 1993. Opencast mining is also used on a smaller scale to exploit the UG2 and Merensky reefs 2007 2006 where they outcrop. Platinum 910 920 Palladium In 1999, a new estimate of the platinum and palladium resources of the BIC was published in the South Afri- Primary production 3 050 3 220 can Journal of Science, estimating proven and proba- State sales 1 490 700 ble reserves of platinum and palladium at 203,3-million Rhodium 90 100 ounces and 116,1-million ounces respectively. Inferred Source: Johnson Matthey Platinum 2007 Interim Review resources were estimated at 939-million ounces of platinum, and 711-million ounces of palladium. Platinum supplies from Russia come from three main These figures stand to increase if other PGM-bear- sources: Norilsk Nickel, which produces platinum as ing reefs in the BIC are mined, or if mining extends to a by-product of nickel mining in northern Siberia; allu- depths below two kilometers. Drilling programmes are vial platinum producers, mainly in the far east of Russia; investigating the Merensky and UG2 horizons below and sales from government-controlled stocks. three kilometres, although a significant amount of exploration work will have to be carried out before these The large alluvial platinum deposits in Russia’s Ural potential down-dip extensions can be categorised as a Mountains have been exploited since 1823. The de- PGM resource. posits once represented the richest known underground sources of platinum, but have since been stripped of The capital investment required to work such deposits the highest-grade ore. From the 1920s, production could be considerable, as working temperatures and from the Urals started to decline, to a point where the transportation costs increase with depth. However, deposits now account for less than 1% of Russian plat-

Estimate of platinum and palladium reserves and resources in the BIC as of 1999 Region Proven and probable reserves million ounces Inferred resources million ounces Platinum Palladium Platinum Palladium Northern BIC – Platreef 9,9 11,3 136 136 Eastern BIC – Merensky reef 10,9 4,8 286 165 Eastern BIC – UG2 chromitite 38 32,7 306 301 Western BIC – Merensky reef 66,2 30,6 114 56 Western BIC – 78,3 36,7 97 53 UG2 chromitite Totals 203,3 116,1 939 711 Source: Johnson Matthey www.researchchannel.co.za 2 Platinum June 2008

Russian PGM mining districts and refineries

UNITED KINGDOM NORWAY SWEDEN Kola Koryak Peninsula FINLAND GERMANY Norilsk/Talnakh POLAND

BELORUSSIA

Central Urals Prioksk RUSSIA Kondyor

Yekaterinburg

Krasnoyarsk KAZAKHSTAN Novosibirsk

MONGOLIA CHINA

Source: Johnson Matthey Platinum 2004 pgm refinery pgm mining district inum production. However, the region remains of inter- and, as a result, no platinum shipments were made in est as a prospective source of platinum. Investigations the beginning of 2007. The Russian contracts were re- are being conducted into the possibility of exploiting al- portedly being met from stocks abroad or metal leased luvial platinum in the central Urals area that was too fine or bought from elsewhere, with no indications of when grained to have been recovered by earlier mining op- shipments might return to normal. erations. Formerly unmined placer deposits that have been buried under sediment may also exist, whilst the poorly explored northern Urals area offers the potential Canada and North America to host as yet undiscovered alluvial platinum fields. In 2006, North American platinum production fell by Russia’s most important source of PGM reserves are 5% to 345 000 oz and, according to Johnson Matthey, the PGM-containing copper-nickel deposits on the it fell further, to 325 000 oz, in 2007, owing to lower Tamyr Peninsula, in northern Siberia. Exploitation of production from the former Canadian Inco mines, now these deposits began in 1935. owned by Companhia Vale do Rio Doce, and the Still- water mine, in the US. In 1960, valuable copper-nickel deposits were discovered at Talnakh. Four mines were developed there, all PGM supplies: North America (‘000 oz) of which are still in operation. Small quantities of PGMs 2007 2006 are also produced from copper-nickel deposits on the Kola Peninsula and, in recent years, significant quanti- Platinum 325 345 ties of platinum have been produced from two alluvial Palladium 990 985 operations in the far east of Russia. The larger of these, Rhodium 17 17 Kondyor, is located in a crater-like bowl surrounded by Source: Johnson Matthey Platinum 2007 Interim Review mountains in the Ayano-Maisk region of Khabarovsk. The Koryak deposit is found on the Kamchatka Pe- The majority of PGMs produced in Canada are by-prod- ninsula. Both operations are far-flung and experience ucts of nickel mining. The Sudbury Basin, in central On- harsh winter weather. As a result, mining takes place tario, was discovered in 1883, and has the largest num- only during the summer season, usually from May to ber of PGM-producing mines in the country. PGMs are September. also extracted from the Raglan nickel mine, in northern Quebec, and from a nickel complex, in Man- Johnson Matthey has reported that in January 2007, itoba. In all of these orebodies, palladium is the princi- new legislation was passed in Russia abolishing export pal PGM. quotas for PGMs. As yet the new regulations have not been finalised and approved by the relevant authorities PGM production in the US is restricted to the Stillwater www.researchchannel.co.za 3 Platinum June 2008 and East Boulder mines, located west of Nye, in Mon- The Great Dyke is an igneous intrusion 30 km wide and tana. The metals are extracted from the high-grade J-M 550 km in length, spanning almost the length of Zim- Reef, with palladium accounting for about 75% of the babwe in a north-to-south direction. The dyke exhib- PGMs mined, with the remainder being platinum. its horizontal layering, with distinctive zones of certain rock types being evident, and PGM-bearing ore is found between the surface and 500 m in depth. Zimbabwe There is the potential for platinum production in Zimba- bwe to increase significantly in coming years, although Johnson Matthey reported that Zimbabwe (and oth- the country’s political tensions and ambiguity on indig- ers) produced 270 000 oz of platinum in 2006, while on enous equity ownership may impact on company plans the back of increased production at both the Ngezi and to enter the country. Mimosa mines, production for the country rose to 280 000 oz in 2007. However, the country’s economic crisis Junior greenfields explorer African Consolidated Re- is impacting negatively on the industry, and a delay in sources, however, has insisted that the actual risk of the completion of Mimosa’s incremental expansion has operating in Zimbabwe is not nearly as severe as is been experienced. Further, Ngezi and Mimosa have perceived, and likens mining in Zimbabwe to “being both experienced electricity supply problems. alone in Aladdin’s Cave.”

Platinum was discovered in Zimbabwe’s Great Dyke in Further, the weakening economic situation in the coun- 1925, but initial efforts at mining were for the most part try has made certain aspects of the exploration proc- unsuccessful, and it is only in recent years that plati- ess cheaper, which could serve as an incentive to com- num production has reached significant levels. panies to re-enter the country.

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Global Market

According to Johnson Matthey, the world’s largest refines in 2007, was up on the previous year’s demand of er and fabricator of platinum, platinum demand in 2007 4,14-million ounces, and with global light vehicle pro- was 7,03-million ounces. Platinum supply for the year duction set to exceed 70-million units in 2008, John- was 6,55-million ounces, resulting in a supply shortfall son Matthey anticipates that demand will rise further, to of 480 000 oz. According to the GFMS Platinum Survey 4,24-million ounces. However, the rising platinum price 2008, the shortfall was owing to a 370 000 oz drop in has led carmakers work towards cutting the amount of South Africa’s production, the Survey predicts that the platinum required in autocatalysts, with development market will suffer further setback in 2008 owing to the focusing on the use of palladium as an alternative to South African power crisis. Demand in 2007 was up platinum. on the previous year’s demand for 6,7-million ounces, while supply was down, from almost 6,8-million ounces. The ongoing increase in the use of diesel engines in Europe is a significant force behind the increase in de- Platinum demand mand for platinum. Over 90% of the 2,11-million ounces of platinum used in European autocatalysts in 2007 Automotive were used in diesel vehicles. Diesel vehicles made up 52% of passenger car sales in 2007, with some nation- The automotive industry, which uses platinum in auto- al markets reflecting that three out of every four cars catalysts, continued to dominate usage of the metal in purchased were diesel. 2007. Autocatalysts assist in the reduction of exhaust pollutants. Platinum demand from the US automotive industry Platinum demand from this sector, at 4,23-million ounc- remained relatively steady at 900 000 oz in 2007. Ve-

Platinum supply and demand ‘000 oz 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 Supply South Africa 5220 5290 5115 5010 4630 4450 4100 3800 3900 3680 Russia 820 890 890 845 1050 980 1300 1100 540 1300 North America 340 345 365 385 295 390 360 285 270 285 Others 280 270 270 250 225 150 100 105 160 135 Total Supply 6660 6795 6640 6490 6200 5970 5860 5290 4870 5400 Demand by application Autocatalyst: Gross 4235 4140 3795 3490 3270 2590 2520 1890 1610 1800 Recovery (885) (855) (770) (690) (645) (565) (530) (470) (420) (405)

Chemical 395 380 325 325 320 325 290 295 320 280 Electrical 435 400 360 300 260 315 385 455 370 300 Glass 355 410 360 290 210 235 290 255 200 220 Investment: Small 25 25 30 30 30 45 50 40 90 210 Large 50 (65) (15) 15 (15) 35 40 (100) 90 105 Jewellery 1595 1620 1965 2160 2510 2820 2590 2830 2880 2430 Petroleum 230 185 170 150 120 130 130 110 115 125 Other 490 490 475 470 470 540 465 375 335 305 Total Demand 6925 6730 6695 6540 6530 6470 6230 5680 5590 5370

Average Price (US$) 1256 1143 897 846 691 540 529 545 377 372

Source: Johnson Matthey Platinum 2008) www.researchchannel.co.za 5 Platinum June 2008

Jewellery demand Demand for platinum 2003-2007 Million ounces For the fifth consecutive year, platinum demand from the jewellery sector fell in 2007, to 1,59-million ounces. Autocatalyst Jewellery Industrial Investment (net) The strong and unstable market has posed a challenge to jewellery manufacturers and retailers. Although con- 7 sumer purchasing of platinum jewellery remains solid, 6 stock rationalisation has been reported by the industry. The recycling of used jewellery in the Asian market has lead to headline demand figures, which fall below the 5 rate of manufacturing output.

4 Industrial and investment demand 3 In the industrial sector, demand for platinum grew by 2 2,14% in 2007, to 1,95-million ounces. Demand from each of the chemical, electrical and petroleum refining 1 sectors rose, but platinum purchases by the glass industry fell.

0 The use of platinum in hard-disks remains the driving 2003 2004 2005 2006 2007 force behind an increased demand for the metal in the Source: Johnson Matthey Platinum 2008 electrical industry, while global economic growth has driven the need for the metal in bulk chemicals, explo- hicle sales for the year were poor owing to credit re- sives and fertilisers. strictions arising from the country’s sub-prime lending crisis. However, demand for platinum was bolstered by Platinum supply increased use of the metal on medium and heavy duty diesel trucks. Falling demand for light duty vehicles is Global supplies of platinum fell by two per cent in 2007 likely to cause a one to two per cent drop in their man- to 6,55-million ounces. A large contributor the decline ufacture, which will impact negatively on the US de- was a 370 000 oz reduction in the amount of platinum mand for platinum, as will the continuing switch from sold by South Africa, as well as declines in production platinum- to palladium-rich three way catalysts. from Russian and North American operations. Output from Zimbabwe rose marginally in the year. Demand for platinum in the Japanese automotive sector in 2007, at 615 000 oz, was slightly up on the previ- According to Johnson Matthey, output at South Afri- ous year’s demand for 605 000 oz. Japan has lagged ca’s three biggest platinum producers was less than behind other regions in replacing platinum in autocata- expected – safety concerns caused shutdowns at An- lysts with palladium, although the large difference in the glo Platinum’s operations, a Lonmin furnace was out price of the two metals means that the use of palladium of commission, and a strike at Impala Platinum in the as a substitute is gaining momentum. third quarter of 2007, all of which led to reduced production. China was expected to become the largest Asian market for passenger cars in 2007 with sales growing by Factors negatively affecting the industry in South Afri- one million cars to 5,4-million, increasing autocatalyst ca, such as unstable power supplies, could lead inves- platinum purchases to 210 000 oz. tors to cast their eyes towards Russia.

Globally, about 885 000 oz of platinum was reclaimed Platinum Price from autocatalyst recovery in 2007, and this is set to increase going forward owing to the rise in platinum load- Overall, the movements in the platinum price during the ings on European diesel vehicles sold since the end of first nine months of 2007 reflected the growing tight- the last decade. ness of the market. Months of relative calm were followed by spells of high volatility linked to the wider eco- www.researchchannel.co.za 6 Platinum June 2008

Platinum price 1999 - 2008 Outlook

Yearly 6/2/1998 – 6/2/2008 Heavy-duty diesel is likely to remain a major driving Plat Comdty – Last Price n.a. 2 000

1 800 force behind an increase in platinum use, with the next

1 600 stage of European emissions regulations set to come

1 400 into force at the end of 2008, and US legislation set to

1 200 tighten in 2010, leading to a greater amount of platinum

1 000 being used in autocatalyst formulations.

800

600 The replacement of platinum by palladium in petrol cat-

400 alyst formulations should continue into 2008. Never- theless, some support for platinum demand will come Dec 31 99 Dec 29 00 Dec 31 01 Dec 31 02 Dec 31 03 Dec 31 04 Dec 30 05 Dec 29 06 Dec 31 07 Jun 2 08

Australia 61 2 9777 8600 • Brazil 5511 3048 4500 • Europe 44 20 7330 7500 • Germany 49 69 9204 1210 • Hong Kong 852 2977 6000 from rising vehicle manufacturing in China and India. Japan 81 3 2301 8900 • Singapore 65 6212 1000 • US 1 212 318 2000 Source: Bloomberg) The cost of platinum and the price differential between nomic climate and issues relating to platinum supply. platinum and gold will continue to be a challenge for jewellery manufacturers and retailers. Recycling of jew- Doubts over supply led to a dramatic rise in the price of ellery in China and in Japan is likely to continue. platinum in the first two months of 2008, with the price reaching a record high of $2168,50/oz on February 21, The electricity crisis in South Africa has dampened 2008. Owing to the South African industry’s growth be- growth forecasts in the industry. In January all platinum ing hampered by the country’s electricity supply crisis, mining operations came to a halt for five days, when platinum supply in 2008 is set to remain tight, and pric- producers decided that it was not safe to continue mines are expected to remain high. ing and processing operations owing to a lack of guaranteed power. Although South Africa’s power utility Es- Further, Johnson Matthey has stated that the subprime kom has guaranteed the mining industry some 90% of mortgage crisis, which has contributed to weakness in its electricity supply, the market is expected to remain the dollar, supported precious metal prices in 2007. volatile throughout 2008.

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Legislative and policy environment

The Mineral and Petroleum Resources Development nomic empowerment charter that will form part of the Act (MPRDA), which came into effect on May 1, 2004, Department of Minerals and Energy’s (DME’s) regula- was drafted in an attempt to formulate a regulatory tions and criteria for awarding prospecting and mining framework for South Africa’s mining and minerals in- licences. The development of the charter was provid- dustry. The aim of the legislation is to correct histori- ed for in section 100 of the Mineral and Petroleum Re- cal imbalances in the industry caused by the legacy of sources 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 increased resources. The charter also sets a framework that en- access to mining activity for historically disadvantaged sures that the holders of mining and production rights people, and to enable the State to put an end to the contribute towards the socioeconomic development of hoarding of mineral rights, with a use-it-or-lose-it prin- the areas in which they are operating. ciple 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 will affect mining companies holding unutilised re- considered necessary in order to correct the racial im- serves, as well as those who own projects that have balance of the South African mining industry, which been shut down due to unprofitability. In addition, the remains white controlled. There has been some con- principle allows the State the discretion to force the fusion about how the mining charter will be affected holder of mineral rights to abandon development proj- by the Broad-Based Black-Economic Empowerment ects if it is of the opinion that the project is not produc- Codes of Good Practice, which outline what compa- ing 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. the participation of historically disadvantaged people in applications for prospecting and mining rights. The mining charter requires that 15% of the ownership of existing mining industry assets must be held by his- Government and industry have drafted a socioeco- torically disadvantaged South Africans within five years, www.researchchannel.co.za 8 Platinum June 2008

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 6 For company-provided housing has the mine, in consultation with stakeholders, Yes No established measures for improving the standard of housing, including the upgrading 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 For company-provided nutrition has the mine established measures for improving Yes No the nutrition of mine employees? Companies will be required to indicate what they have done to improve nutrition and show a plan to progress the issue over time and is implementing the 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 9 Platinum June 2008

and 26% within ten years. While the charter does not IThe mining rights for established operations will offer provide clarity on the issue of new mining projects, a security of tenure for an initial 30 years, renewable for 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 year for two years, if market conditions are poor. The new transitional period, and a 26% BEE shareholding if the prospecting rights are valid for a period not exceeding mineral rights were formerly privately held. For pending five years, with a possible one-off renewal for another applications for prospecting rights the same criteria will period of a maximum of three years and, once pros- apply. All applications for rights not falling into these pecting has been completed, the company must reap- categories that are in the custodianship of the State will ply to convert these rights into mining rights if it wishes be subject to a minimum 26% BEE participation. to establish operations.

The targets for the participation of historically disadvan- All new mining licences, including those for existing taged individuals must be reached by individual compa- mineral rights properties, will require evidence of a BEE nies, but companies can earn offset points whereby the plan, a social plan, and an environmental management ownership target will be moderated should the compa- plan. ny facilitate value-addition downstream opportunities. This will be clarified in the future promotion of benefici- Under the MPRDA, a transitional period allows current ation legislation. The charter also requires companies holders of mineral and mining rights to convert their to procure from BEE companies, engage in skills uplift- old-order rights to new-order rights. ment, improve worker housing conditions, and develop social plans for retrenched workers. These obligations Mineral rights holders, which did not hold prospecting cannot be used to offset equity obligations. permits or mining authorisations and which were not actively prospecting or mining on their properties were Further to requiring the involvement of historically dis- given a year from the date on which the Act came into advantaged people, which will be facilitated through effect to apply for prospecting or mining rights under the empowerment charter, the Act also requires that the new legislation. Mineral rights holders, which did companies consult with government should they wish not apply within this period lost their rights, and any to beneficiate locally produced minerals outside the other persons or groups will be able to apply directly to country. This provision is designed to promote the use the State for prospecting or mining rights for the areas of mineral resources for sustainable economic devel- formerly covered by those rights. opment, and to avoid the trap that many developing countries fall into of exporting jobs through the expor- Mineral rights holders, which were actively prospect- tation of unbeneficiated minerals. ing or mining on the properties to which their old-order rights related (with the necessary permits or authorisa- Based on this, the granting of mineral rights will be in- tions from the DME) were given two and five years re- fluenced by the involvement of historically disadvan- spectively, from the date on which the MPRDA came taged people, and by plans to beneficiate the miner- into effect, to convert their old-order rights to new-or- als locally. der prospecting or mining rights.

To give effect to the charter, a scorecard has been re- An application has to be lodged at the relevant DME released by which companies will be evaluated to deter- gional office, depending on where the land is situated. mine whether they have complied with the provisions Within 14 days of lodging an application for the con- contained in the charter and the Act, and thus to de- version of prospecting or mining rights with the DME, a termine whether their old-order mining rights should be decision as to whether or not this application has been converted to new-order rights. The entire scorecard accepted will be made by the department. If an appli will be taken into account in the adjudication by the cation is rejected, the process ends there. In the case Minister of Minerals and Energy. When considering ap- of prospecting rights, if the application is accepted, the plications received on the same date, the Minister will mining company is given 30 days to consult with in- give preference to applications from historically disad- terested and affected parties, and to give the results vantaged people. of this consultation to the DME. In respect of a mining right, the mining company is given 180 days to consult

www.researchchannel.co.za 10 Platinum June 2008 with interested and affected parties. Then, depending the Act to put in place the necessary supporting infra- on whether it is an application for a mining title conver- structure to implement it. A Minerals and Mining De- sion or prospecting right, the mining company is given velopment Board, consisting of no fewer than 14 and either 180 days or 60 days respectively to devise an no more than 18 members, was established in 2005 to environmental management plan. Once this has been advise the Minister on the sustainable development of submitted to the DME, the department has 120 days to the country’s mineral resources, as well as on the trans- assess the application. The applicant is informed with- formation and downscaling of the industry. The board in 30 days for prospecting rights, and 180 days for min- also plays a role in dispute resolution, and in partner- ing rights, as to whether the application is granted or ship with the Mining Qualifications Authority, promotes rejected. If granted, the applicant is called to come and the development of human resources. execute the right, which takes place prior to the registration of the relevant right. The applicant must then To facilitate the passage of the new regulatory environ- lodge the right granted and executed for registration ment, the Act provides for transitional arrangements within 30 days of the execution date. This closes the li- that will be used to phase in the new framework. These censing process. will ensure that security of tenure is protected, and will give the holders of old-order rights and OP26 rights the Mining companies are discontented over the time taken opportunity to comply with the Act. to be awarded new-order rights, and the lengthy application process has been identified by some as causing In spite of the transitional mechanisms, however, un- widespread uncertainty among mining and exploration certainties remain regarding the practical implementa- companies operating in South Africa. Towards tack- tion of the Act, and business has expressed concerns ling such concerns, the Director-General of the DME over this. indicated in September 2006 that mineral rights would be granted to mineral explorers within six months from In late-2006, the DME launched a review of the MPR- the date of application lodgement, while mining-rights DA and, based on submissions made by the mining in- applications would take 12 months to finalise. In May dustry, is developing certain amendments to the legis- 2007, the Minister of Minerals and Energy, in her bud- lation, although it has stressed that such amendments get vote in Parliament, reported that the DME had re- will not alter the spirit of the law, but will rather seek ceived 11 447 applications for prospecting and min- to remove identified obstacles to mining investment. ing rights since the new legislation was introduced, and One such amendment will see mining companies hav- that there was no longer a backlog in the processing ing a period of 180 days after April 30, 2009, in which of these. However, figures continue to show that de- to lodge claims with the DME before mining rights are cisions on whether to grant or refuse a number of ac- expropriated. cepted applications remain outstanding. Other concerns that have been voiced by business with regard to the MPRDA include what they have identi- Legislation, separate from the MPRDA, aimed at over- fied as broad discretionary powers granted to the Min- hauling the registration of mining titles and setting up ister, and the absence of clearly defined recourse to the a central office to regulate all mining and prospecting courts in the event of having to challenge a ministerial rights has been passed. Known as the Mining Titles decision made by virtue of these powers. Registration Amendment Act, this law seeks to bring registration in line with the MPRDA, and aims to estab- Government, however, holds that, in comparison to the lish a central point for the registration and recording of Minerals Act of 1991, the Act limits the extent of dis- all mining titles. cretionary power by containing objective statutory requirements that will be used to determine whether a The MPRDA represents a significant move away from company is granted prospecting or mining rights. Gov- the old regulatory regime, and the DME is required by ernment also emphasises that, as a fundamental right

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 11 Platinum June 2008 contained in the South African Constitution, recourse Holdings Limited, Marlin Corporation Limited, and Red to the courts is implied, and is not excluded under the Graniti SA (Pty) Limited. These investors have lodged a new Act. request for compulsory international arbitration against the South African government under the World Bank’s Concerns have also been raised over what is perceived International Centre for the Settlement for Investment as overregulation of the industry, demonstrated in the Disputes (ICSID) in Washington. The ICSID granted the Act’s requirement that companies consult with govern- request in January 2007. ment should they wish to beneficiate locally produced minerals outside the country. Government feels justi- The request for international arbitration was made un- fied in this, however, as it provides incentives for the lo- der South Africa’s bilateral investment treaties (Bits) cal beneficiation of minerals. with Italy and the Belgo-Luxembourg Economic Union. The request points out that by extinguishing the owner- Further, business is concerned that, through the use- ship of the investors’ South African mineral rights with- it-or-lose-it principle, mineral resources previously held out providing prompt, adequate and effective compen- by companies that were likely to exploit them over a sation, the entry into force of the MPRDA constituted long period, may now be developed in the next few an unlawful expropriation of their investments. Like- years, increasing supply to the market and disrupting wise, the Mining Charter’s forced divestiture of 26% the delicate supply-and-demand balance, thereby ex- of the investors’ investments to historically disadvan- erting downward pressure on metals prices. taged South Africans, as a condition of the conversion of the investors’ old-order rights to new-order rights The Mineral and Petroleum Resources Development under the MPRDA, constitutes a violation of the Bits’ Amendment Bill of 2007 has been criticised for wors- requirement that the investors receive fair and equita- ening regulatory uncertainty in South Africa’s mining in- ble treatment. In the investors’ view, the Mining Char- dustry, with some experts indicating that the Bill fails to ter discriminates against foreign investors in favour of introduce any measurable objectives into the MPRDA’s historically disadvantaged South Africans, and thus vi- licensing requirements and contains certain legislative olates the Bits’ equitable treatment requirements. proposals that will aggravate the MPRDA’s underlying problems. The environmental policies of the MPRDA are expected to ensure responsible mining practices, to some extent, An example of this is the empowerment of the Minister although the enforcement of these policies will be the of Minerals and Energy to refuse to convert an old order ultimate determinant of their effectiveness. mining right, as an applicant must now provide docu- mentary proof as to how it intends giving effect to the Everyone applying for a prospecting or mining right MPRDA’s empowerment, social and labour objectives. must lodge an environmental management programme report (EMPR) evaluating the impact of the proposed As at August 31, 2007, 94 judicial review applications operations on the environment and on the socioeco- had been instituted against the DME’s refusal to grant nomic conditions of affected people. For this EMPR to either a prospecting or mining right, and, as of the same be approved, applicants must make the prescribed fi- date, the High Court had only refused to grant one judi- nancial provisions for the management of environmen- cial review application. tal impacts, and for rehabilitation.

In a legal challenge to the MPRDA, the consequenc- The Act empowers the Minister to force a permit hold- es of which remain unclear, mining lawyer and vice- er to take urgent remedial action to deal with an envi- chairperson of the International Bar Association Peter ronmental hazard, and the Minister is even authorised Leon, contended in February 2007 that the MPRDA is to use State funds to pay for this, although the money in breach of 42 international investment treaties signed must be recovered from the permit holder. by South Africa since 1994. Such treaties are intended to protect foreign investments from expropriation, ex- Although certain other environmental provisions are cept in the case of prompt and effective compensation, made in the Act, it does not represent a definitive piece and require foreign investments in South Africa to be of environmental legislation, and the interrelationship subjected to fair and equitable treatment. between the Act and other environmental laws remains important. Based on this, under international law, a €266-million claim has been brought by the Italian investors in Marlin Firstly, environmental rights are included in the Con- www.researchchannel.co.za 12 Platinum June 2008 stitution, which requires that environmental consid- formula is gross sales minus the cost of transporting erations are accorded appropriate recognition in the the final product to the buyer. South 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 has 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 exists 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- South Africa’s mining sector will soon fall under a royal- las. ty regime. The Mineral and Petroleum Royalty Bill was released in early 2003, and since that time has been re- Refined formula rates will typically range from 1,7% to vised, taking into account consultations with the sec- 2,5%, depending on the profitability of the mines, and tor. there will be a maximum rate of 5% in cases of high profitability. Unrefined formula rates will range from The first two drafts of the Bill proposed that royalties 2,2% to 3,3%, with a maximum of 7%. be levied on turnover, and set specific royalty levels for In June 2007, the Diamond Export Levy Bills were ta- specific minerals. Miners strongly rejected this system, bled in Parliament, providing for a levy on the export claiming that it would reduce the viability of existing op- of rough diamonds from South Africa. While the impo- erations, increase pay limits and, consequently, cause sition of an export tax is already contained in the Dia- job losses. Further, the industry claimed that the legis- monds Act of 1986, amendments to the Diamonds Act lation could substantially increase hurdle rates for new in 2005 have resulted in the need for amendments to and organic growth projects and, ultimately, threaten the export levy on rough diamonds. the long-term viability of the industry. The export levy on rough diamonds in the Diamonds The third version of the Bill, tabled in December 2007, Act of 1986 is currently set at 15%. However, this Act proposed a levy based on profitable earnings. The provided for relatively generous exemptions. The pro- approach incorporated the use of a single formula in posed Diamond Levy Bills of 2007 reduce the export terms of which the royalty rate for each company would levy on rough diamonds to 5% but tighten the relief vary depending on the ratio of earnings to sales. provisions, thereby laying a foundation for increased effectiveness. It should also be noted that the reduced Final amendments to the Bill were released in May 5% rate was not intended to undermine the power of 2008, and the royalties will become payable on miner- the levy as a deterrent. According to informal police es- als transferred as of May 1, 2009. timates, diamond smuggling costs are between 2,5% and 5% of gross diamond values. Therefore, the cur- The Cabinet-approved amendments introduce a dis- rent 15% rate merely enhances smuggling; whereas, tinction between the royalties imposed on refined min- the proposed 5% rate is high enough to deter unpol- erals, such as gold, and unrefined minerals, including ished exports without hidden benefits for smuggling. diamonds, gas and oil, which will have separate formu- las. Platinum group metals could fall into either catego- The proposed relief measures ensure that the local ry depending on whether they had been refined before supply of rough diamonds is commensurate with lo- they are sold. For refined metals the tax base for the cal demand. The core element of these incentives is to www.researchchannel.co.za 13 Platinum June 2008 encourage producers to supply the local market with order to reduce the exporting of unprocessed mineral rough diamonds so that they can export the remainder products and to promote local value-addition. The pro- free from the levy. cess of drafting this bill has been slowed in order to allow for greater engagement with industry, which seems Still to come is the Promotion of Beneficiation Bill, opposed to the idea, claiming that it is not reasonable which is expected to provide incentives for upstream to expect those involved in primary extraction to get in- companies that facilitate downstream investments, in volved in beneficiation.

www.researchchannel.co.za 14 Platinum June 2008

South African PGM production: Western Limb

WESIZWE Rustenburg is the largest of Anglo The Impala lease area is Impala Wesizwe will start construction of Platinum’s mines. Underground largest operation and produced a the Frishgewaagd Ledig mine in operations produced 665,000 oz of record 1,086,000 oz of platinum in 2008. Merensky Reef and UG2 will reﬁned equivalent platinum from the second half of 2007 from a mix of be mined from underground via two 69% UG2 and 31% Merensky at a Merensky and UG2 ore. shafts. Steady state output could 4E average grade of 3.98g/t. reach 350,000 oz of 4E per year by There are currently 14 active shafts 2016 with first production scheduled Various replacement projects and a and plans are in place to maintain for 2011. UG2 expansion project could help production between 1.1 and

output grow to an annual 900,000 oz 1.2 million oz. of platinum over a number of years.

FY 2007 output was 440,000 oz of pgm and this should grow to 500,000 oz, with over 90% of the UG2 ore coming from underground mining.

Lonmin’s Marikana operations produce the majority of its pgm (752,000 oz of platinum in concentrate in 2007) from underground UG2 and Merensky ore. Development of three new shafts should allow enough extra production over the next five years to more than offset the decline in output from current operations.

ELANDSFONTEIN Pandora is a joint venture between Lonmin, Anglo Platinum (42.5% Xstrata acquired 74% of the each) and Mvela Resources and the Elandsfontein mine in 2007. This Bapo-Ba-Mogale tribe (7.5% each). started operation the same year with the first mining in January and the Development is being phased and first concentrate produced at the end current mining is from the Marikana of the year. lease area. 2007 output was 52,000 oz of platinum or 98,000 oz of pgm The mine will initially recover solely (bought by Lonmin). Output could open pit UG2 ore and output should eventually expand to an annual rise to an annual 176,000 oz of 440,000 oz of pgm. platinum.

Source: Johnson Matthey Platinum 2008 www.researchchannel.co.za 15 Platinum June 2008

South African PGM production: Eastern Limb

Twickenham (100% owned by Anglo Platinum) started operations in 2005 and produced 9,300 oz of equivalent refined platinum last year as well as a similar amount of palladium.

The recommencement of development has been approved this year which would allow expansion of current operations and mining of UG2 ore.

- -

The Sheba’s Ridge project is 65% owned by Ridge Mining and 35% by Anglo Platinum. The IDC will take a 26% stake for funding the feasibility study. When developed, it will feature an open pit, mining nickel-rich ore. In pgm terms, this deposit is very palladium-rich. Annual output could rise as high as 395,000 oz of pgms, of which 274,000 oz would be palladium.

Everest is owned by Aquarius. It consists of an open cast pit and one decline, both mining UG2 with an average 4E grade of 2.89g/t. The Anglo Platinum will sell its share of mine had its first full year in 2006 Booysendal to Mvela Resources in and produced 99,000 oz of platinum. 2008. This will subsequently be sold Concentrate is sold to Impala. to Northam. 4E resources are estimated at 103 million ounces. The open pit will close in 2008 but Production could start in 2011 with more underground ore will be mined. the possibility of output reaching Steady state production of 225,000 oz 300,000 oz within three years. of pgm is forecast in the near term.

Source: Johnson Matthey Platinum 2008 www.researchchannel.co.za 16 Platinum June 2008

Platinum projects currently under development

Major platinum projects currently under development in South Africa Owner Project name Location Projected Value Duration Status annual output African Rainbow Two Rivers Mpumalanga 120 000 oz/y R1,3-billion The mine was expected Not stated Minerals (55%) / Platinum (platinum) to reach full production Impala Platinum in the first quarter of (45%) 2008. Anglo Platinum Western North West Not stated $286-million First production is PTM has reported that the (37%) / Africa Bushveld joint Province expected in 2010 WBJV Project 1 feasibility Wide (26%) / venture study, mine design, and PTM (37%) engineering are advancing in accordance with the prefeasibility study. The permitting and the licensing of the project are behind the prefeasibility study schedule and are expected in 2008. Anglo Platinum Rustenburg UG2 North West 227 000 oz/y R2,4-billion The revised phase 2 The project is on schedule phase 2 project Province (platinum) project is expected to reach steady-state production in 2008. Anglo Platinum Waterval Phase North West 52 000 oz/y Not stated Steady state Not stated 3 project Province (platinum) production is expected in 2009 Anglo Platinum Townlands ore North West 70 000 oz/y Not stated Steady state production The project is in its replacement Province (platinum) is anticipated in 2014 execution phase and project progressing towards steady state production Anglo Platinum Paardekraal No North West 120 000 oz/y R2,3-billion Steady state production Construction of the 2 Shaft project Province (platinum) is anticipated in 2015 man and materials shaft commenced in September 2007 and is on schedule. Anglo Platinum Amandelbult Limpopo 106 000 oz/y R1,5-billion Steady state production The project has East Upper UG2 Province (platinum) is anticipated in 2012 commenced and is on project schedule Anglo Platinum Potgietersrust Limpopo 230 000 oz/y R5,8-billion Not stated Progression of the project Platinum Province (platinum) is dependent on the (PPRust) North successful relocation of Expansion people from the expansion project area. Anglo Platinum is facing opposition to its relocation project by as many as 55 families, which are refusing to relocate. Anglo Platinum Brakfontein Limpopo 120 000 t/m R1,1-billion The project began The Brakfonetin Merensky Merensky Province (ore) in July 2004 and is project is well advanced, Project scheduled to reach with first production steady state production expected in the middle of in 2009. 2008.

www.researchchannel.co.za 17 Platinum June 2008

Owner Project name Location Projected Value Duration Status annual output

Anglo Platinum / Syldrift Project North West Not stated R1,2-billion The project began in The Styldrift project’s Royal Bafokeng Province January 2004 and is prefeasibility study is Resources expected to ramp up to reaching finality, following full production by 2009. a rescoping exercise. It is anticipated that the project will move into the feasibility phase, which was expected to be completed by year-end. Anglo Platinum Unki Platinum Zimbabwe 120 000 t/m $200-million First production is The project is making mine (ore) expected in 2008, significant progress with full production towards achieving full expected in 2010. production of 120 000 t/m by the fourth quarter of 2010. Eastern Zandfontein North West 140 000 t/m R150-million Production ramp up is It has been reported that Platinum decline Province (ore) planned for 2009. equipping the 415-m-deep, development 8,5-m-diameter vertical project shaft is progressing well at the Zandfontein section of the Crocodile River mine. The headgear, which previously stood over one of the two 1 000-m deep shafts at Kennedy’s Vale, has successfully been repositioned over the Zandfontein shaft. Impala Platinum No. 16 Shaft North West 190 000 oz/y R4,5-billion No 16 Shaft is Shaft sinking is ongoing Province (platinum) scheduled to start and station development is producing platinum under way. in August 2011, and reach full output in September 2014.

Impala Platinum No.17 Shaft North West Not stated R5,5-billion. The project will span Shaft Sinkers has Province seven years, with completed the erection of a production expected in 218-t headgear at Implat’s August 2011 and full new No 17 ventilation output by September shaft. The headgear will be 2014. used in the sinking of the ventilation shaft, which will also hoist miners, material and rock. Impala Platinum No.20 Shaft North West 150 000 oz/y R2,1-billion The project is already in The development of Province (platinum) the construction phase the shaft is progressing and is scheduled to well. Shaft sinking has achieve full production been completed and in January 2011. shaft equipping and level development have started. Impala Platinum Smelter North West 2,8-million R1-billion The project will be Expansion Province oz/y completed in 2009. (platinum) Impala Platinum Marula Merensky Limpopo 115 000 oz/y R3-billion The project started in Once the full feasibility reef project Province (platinum) January 2008 and will study has been presented be completed in 2015. to the board and funding has been approved, work will begin on the mining of the boxcut and on the construction of the surface infrastructure.

www.researchchannel.co.za 18 Platinum June 2008

Owner Project name Location Projected Value Duration Status annual output

Impala Platinum Leeuwkop North West 160 000 oz/y R3-billion Production is expected The company is completing project Province (platinum) to begin in 2010, an underground mine building up to yearly design, which is scheduled steady state levels in to be put before the board 2013. by the end of 2008. Power for the construction phase of the project has been secured, and the company is in negotiations its long-term power allocation. The outcome of these negotiations will pave the way for the start of project construction. Impala Platinum Zimplats Ngezi Zimbabwe The project $340-million. Full production from The portal 2 underground Expansion will increase portal 1 is expected by project has been Phase 1 the mine’s October 2008, while completed within budget, production to full production from and the operation now 160 000 oz/y portal 4 is scheduled accounts for about 50% (platinum) for 2010. The combined of Zimplats’ production, at full production of four- a much lower cost than at million tons, to yield the opencast mine. Closure 160 000 oz of platinum, of the opencast operation is expected from both is scheduled for the end these portals by 2011. of 2008, by which time a stockpile of about 500 000 t will have been built up . Lonmin Limpopo Limpopo 85 000 oz/y $350-million First production is The project is on budget platinum Province (platinum) expected n 2011 and on time mine phase 2 expansion project Lonmin Akanani Limpopo 500 000 Between A timeframe for the Drilling at Akanani platinum-group Province oz/y (PGMs) $600-million project has not been continues to confirm metals project including and disclosed. Lonmin’s view of the 250 000 oz/y $700-million potential of the project. of platinum Northam Booysendal Limpopo 340 000 oz/y R7,1-billion The initial conceptual Not stated Platinum Province (PGEs) studies suggest potential mine construction and development could start by the end of 2009, after the completion of a bankable feasibility study, by mid-2009. First production is expected in 2011, ramping up to steady state levels in 2014. Jubilee Platinum Tjate Platinum 262 000 oz/y R510-million A timeframe for the Not stated project (platinum) project has not been confirmed.

www.researchchannel.co.za 19 Platinum June 2008

Owner Project name Location Projected Value Duration Status annual output

Lesego Phosiri platinum- Limpopo Not stated A value for Not stated The company is looking to Platinum group metals Province the project list on the JSE during the project has not been course of 2008, possibly disclosed as raising over R250-million. the project These funds will provide is still under the finances required to exploration. undertake a scoping study to confirm the economic viability of the project Platinum Smokey Hills Limpopo 95 000 oz (4E R323-million The project is expected Although heavy rains Australia platinum project Province PGM) to achieve full and unexpected rock production in 2009/10. formations have caused some delays to the project schedule, PLA is still anticipating its first ore feed in July 2008. Platmin Pilanesberg North West 250 000 oz/y R2,65-billion The first production is The civil construction of project Province (3 PGM+ AU) expected in the first the mill and concentrator quarter of 2009. at the project began in October 2007, and will be completed by the middle of 2008. Ridge Mining Blue Ridge Limpopo 125 000 oz/y $143-million Mine development The development at Blue platinum-group Province (PGMs + Au) started in the first Ridge is progressing metals project quarter of 2007 and satisfactorily, and the first production is project is now two- scheduled for the third thirds of the way through quarter of 2008. construction and remains on schedule. Ridge Mining Sheba’s Ridge Not stated $691-million Not stated The company has released (65%) / Anglo platinum-group a revised audited mineral Platinum (35%) metals project resources statement together with details of the mine plan. Wesizwe Frischgewaagd- 350 000 oz/y R5,6-billion The bankable feasibility Wesizwe Platinum has Platinum Ledig platinum (PGE) study envisages a given the go-ahead for project 58-month construction the construction of the programme. The complex, following positive scheduled construction results from a BFS that will begin during the was delivered on time and third quarter of 2008, within budget. with production ramp up starting in 2011, reaching steady state production by 2016.

Xstrata Elandsfontein North West Not stated R1,1-billion Openpit mining at The project has built up platinum project Province the new mine was 600 000-t ore stockpile expected to start by the that is currently being fed second quarter of 2007 through the 250 000-t/m and production from concentrator. underground mining in 2008.

www.researchchannel.co.za 20 Platinum June 2008

Anglo Platinum

Brief history down on the previous year’s production of 2,82-million ounces. PGM production also fell from the previous Anglo Platinum was founded in 1995, following the un- year’s figure of 5,24-million ounces. bundling of JCI. Out of JCI came three companies – JCI, Johnnic, and Amplats. In 2000, Amplats changed The Anglo Platinum board approved projects totalling its name to Anglo Platinum. R10,7-billion in 2007, including expansion and replacement mining projects, as well as processing projects. The major projects include the Rustenburg Townlands Nature of business and market ore replacement project, the expansion of the base position metals refinery, and the Mainstream Inert Grind Proj- ects at various operations. Inflationary pressures have Anglo Platinum is the world’s largest primary platinum impacted on projects and operating costs which, com- producer. It also produces other PGMs, in amounts de- bined with an international project management skills termined by their occurrence in the ores mined, as well shortage, are likely to present challenges going for- as nickel, copper and other base metals, which are by ward. The company expects to spend between R10,5- products of the company’s PGM operations. billion and R11,5-billion on projects in 2008.

The company has its primary listing on the JSE, and Anglo Platinum has made some progress towards has secondary listings on the London Stock Exchange meeting the black economic Empowerment (BEE) re- and on the Brussels bourse. At the end of June 2007, quirements of the South African government’s mining the company had a market capitalisation of $39,2-bil- charter and scorecard, including the September 2007 lion. announcement of two transactions that will result in the creation of two substantial historically disadvantaged Anglo Platinum has three wholly owned operating South African (HDSA)-managed and controlled plati- mines in South Africa – the Rustenburg section, the num producers. Amandelbult section and Potgietersrust Platinums – and four joint-venture mines – Bafokeng Rasimone, the The transactions saw of the sale of 51% of the Lebowa Union section, Modikwa and Lebowa Platinum Mines Mine and 1% of the Ga-Phasha project to Anooraq – as well as several projects under development. The for R3,6-billion, and afforded Mvelaphanda Resourc- company has pool-and-share agreements with Aquar- es 100% ownership of the Booysendal project through ius Platinum, covering the shallow reserves at Aquari- the sale of Anglo Platinum’s 50% interest in the project. us’ Kroondal and Marikana mines, and the Rustenberg A further deal between Mvelaphanda Resources and section, and it is possible that the two companies will Northam Platinum will see Northam Platinum acquiring sign a further pool-and-share agreement at some point 100% of the Booysendal project. in the future. Anglo Platinum also has three smelters, a base metals refinery, and a precious-metals refinery. The company further sold its entire 21,9% stake in In April 2008 Anglo Platinum was granted new order Northam Platinum to Mvelaphanda, which will sell the mining rights over the following Anglo Platinum min- Booysendal project to Northam in exchange for shares, ing operations: Rustenburg – 8 licences; Amandelbult making Northam a subsidiary of Mvelaphanda Re- – 1 licence; Union – 2 licences; Lebowa – 2 licences; sources. The transactions are expected to be conclud- Mogalakwena – 1 licence; Twickenham – 1 Licence and ed in the first half of 2008. Der Brochen (including Mototolo) – 1 licence In December 2006, Anglo Platinum sold a 15% stake in The company is involved in exploration in Canada, Rus- its Union mine and prospecting properties to the Bak- sia, Brazil, and China. gatla-Ba-Kgafla traditional community.

In the year ended December 2007, Anglo Platinum pro- Other aspects of the transformation of Anglo Platinum, duced 2,47-million ounces of platinum and 1,39-mil- as required by the mining charter, are advancing, with lion ounces of palladium from its operating facilities, the company having met the targets of 10% women in contributing to a total PGM production for the year of mining and 40% historically disadvantaged South Afri- 4,79-million ounces. Platinum production in 2007 was cans in management by the end of 2007. www.researchchannel.co.za 21 Platinum June 2008

Anglo Platinum: Financial and production summary for the year ended December 2007 Year ended December Year ended Year ended 2007 December 2006 December 2005 Revenue (R) 46,9-billion 39,3-billion 23,1-billion Revenue ($) 6,7-billion 5,8-billion 3,6-billion Net profit (R) 12,7-billion 11,9-billion 4,5-billion Net profit ($) 1,74-billion 1,76-billion 705-million Total refined PGM production (oz) 4,8-million 5,2-million 4,7- million Total refined platinum production (oz) 2,5-million 2,8-million 2,5-million Average market price achieved – platinum ($/oz) 1 302 1140 894 Tons milled 41,6-million 43,8-million 41,3-million Cash operating costs ($/oz Pt refined) 1 153 849 890 Cash operating costs ($/oz PGM refined) 600 459 471 Anglo Platinum Annual Report 2007 Platinum operations in South Africa Owing to several fatalities at Rustenburg in the first half of 2007, a decision was taken to stop production at five Anglo Platinum has three wholly owned operating mines shafts on the lower mine for seven days so that care in South Africa – the Rustenburg section, the Aman- and maintenance operations could be undertaken. The delbult section and Potgietersrust – and four joint-ven- ramp-up in production following the closures took lon- ture mines – Bafokeng Rasimone, the Union section, ger than anticipated, causing a decline in production Modikwa and Lebowa mines – as well as several proj- in the second half of the year. Further, a decision was ects under development. The company has pool-and- taken in November 2007 to suspend operations at the share agreements with Aquarius Platinum, covering Turffontein shaft in the interest of rehabilitating some of the shallow reserves at Aquarius’ Kroondal and Mari- the shaft steel work. Production was expected to re- kana mines, and the Rustenberg section, and it is pos- start in the second quarter of 2008. sible that the two companies will sign a further pool- and-share agreement at some point in the future. Anglo The Frank and Townlands sections of the Rustenburg Platinum also has three smelters, a base metals refin- UG2 phase 2 project have been ramped up to steady ery, and a precious-metals refinery. state production levels, while the construction of the Boschfontein West capital footprint has been complet- Rustenburg Platinum Mines ed. The surface ventilation was expected to be completed in early 2008. Rustenburg Platinum Mines (RPM), a wholly owned subsidiary of Anglo Platinum, holds the rights to pros- Capex at the Rustenburg section increased to R2,2-bil- pect and mine a 44 499 ha area of the Bushveld Igne- lion in 2007 from R1,7-billion in 2006 , owing largely to ous Complex (BIC) under various old order prospect- the Frank shaft clusters, Paardekraal No 2 shaft and the ing and mining rights, and is exploiting these on a fully Townlands Ore Replacement projects. operational basis at the Rustenburg, Union, and Aman- delbult sections. The Paardekraal No 2 shaft project is designed to re- store Merensky reef output at Paardekraal. The com- Rustenburg section pany aims to mine the Merensky reef as the mine’s base operating horizon to ensure sustained profitabil- The Rustenburg section, on the western limb of the ity. Blasting for the construction of the ventilation shaft BIC, consists of three separate mining units – the started in September 2006, and was followed by the West mine comprising the Frank, Townlands, and start on construction of the man and materials shaft Paardekraal shafts; the East mine comprising the Turf- in September 2007. Steady state production from the fontein, Bleskop, and Brakspruit shafts; and the Wa- shaft is expected to reach 120 000 oz/y of platinum in terval mine. In 2007, the Rustenburg section produced 2015. 665 400 oz of platinum reflecting a 20% drop in production from 2006. Other Rustenburg section replacement projects include www.researchchannel.co.za 22 Platinum June 2008 the Merensky ore reserve replacement projects for the 309 400 oz. The decline was attributed to contractor Frank and Turffontein shafts which are nearing com- dismissals owing to unsafe work in the first half of the pletion; the Waterval Phase 3 project, which is expect- year. The re-organisation of employees to replace the ed to contribute 52 000 oz of steady state production dismissed contractors progressed slower than expect- by 2009; and the Townlands ore replacement project, ed and led to further delays in production. However, aimed at relieving the diminishing Merensky Reef out- the rehabilitation of the declines and increased primary put at the shaft by an extension of the existing decline development resulted in immediately available ore re- shaft. The anticipated completion date for the Town- serves being increased by 23%. lands project is 2014. Capex at the Union section in 2007, at R400-million, Amandelbult section was a 53% increase from 2006. The sharp increase was largely attributable to replacement project capital In 2007, the Amandelbult section produced 576 700 at the declines. oz of platinum, which was 3% down on the previous year’s production of 595 000 oz. Potgietersrust (PPRust) Platinums

Capital expenditure at the Amandelbult section in- PPRust holds a mining licence over an area of 13 603 creased to R1,2-billion in 2007, which was up on the ha on the Platreef in the Mokopane and Mokerong dis- expenditure at the mine in 2006 of R700-million. A large tricts from where it mines PGMs and base metals. The portion of the capex in 2007 was for the East Upper properties over which the company has the rights to UG2 expansion project. mine are situated on the northern (Polokwane) limb of the BIC. Work on the East Upper UG2 project started in 2007 and is on schedule. The project is expected to reach PPRust produced 163 500 oz of platinum in 2007, a steady state production in 2012, producing 106 000 15% reduction on 2006 production figures. The decline oz/y of platinum. was attributed to the North pit encountering a deeper zone of weathering than was initially expected and fur- In support of the East Upper UG2 expansion, devel- ther complexities related to the ore mixes from the ex- opment of the company’s UG2 concentrator began in isting Sandsloot and Zartfontein pits February 2007. Production is to be increased from 75 000 t/m to 210 000 t/m. Design and procurement are Capex at PPRust for 2007 increased by 141% to R4,1- well advanced and civil construction is in progress, billion. Some of the capital projects undertaken include with commissioning planned for the fourth quarter of the North pit project and the relocation of the Motlhotlo 2008. The increase in tonnage will require a new tail- village. ings dam, holding dam and upgraded tailings handling and pumping systems, all of which will be commis- Anglo Platinum is facing opposition to its relocation sioned in 2008. project by as many as 55 families, which are refusing to relocate. The group of families, calling themselves the A feasibility study on the No. 4 shaft has been complet- Motlhotlo resistance committee, is being represented ed and is under review. The project will replace dimin- by lawyer Richard Spoor. The families are looking for ishing Merensky reef resources and will provide a mod- more compensation and larger houses. erate expansion of UG2 chromatite production output at Amandelbult. The project is designed to exploit both Anglo Platinum could evict the families on the basis the UG2 and Merensky reefs simultaneously. of the contracts that the families signed, however, this could create much negative publicity for the compa- Union Section ny. The Motlhotlo resistance committee is the second group to resist the relocation. In 2007, the Motlhotlo Following an empowerment deal concluded in Decem- development committee raised reservations about two ber 2006, between Anglo Platinum and the Bakgatla- Section 21 companies representing the community. ba-Kgafela Traditional Community, the Union section is managed and 85% owned by Anglo Platinum while the Lebowa Platinum Mines remaining 15% is owned by the Bakgatla community. Lebowa Platinum Mines, located on the eastern limb if In 2007, production at the Union section fell by 2% to the BIC, mines Merensky and UG2 ores. www.researchchannel.co.za 23 Platinum June 2008

In April 2008 Anglo Platinum and Anooraq announced Bafokeng-Rasimone Platinum Mine the conclusion of a transaction whereby Anglo Plati- num sold an effective 51% of Lebowa Platinum mines The BRPM mine is a joint-venture (JV) between Ang- to Anooraq. Ore mined and concentrated at Lebowa lo Platinum and Royal Bafokeng Resources, with each will continue to be smelted and refined at Anglo Plat- party holding a 50% interest in the operation. The mine inum’s facilities through a purchase of concentrate exploits the Merensky and UG2 reefs on the Boschko- agreement. ppie, Frishgewaagd and Styldrift farms on the western limb of the BIC, and produced its first concentrate from The operation produced 94 300 oz of platinum in 2007, the Boschkoppie property in December 1999. BRPM an 11% decline from 2006. Production was affected is currently in steady state production. by skilled labour shortages, nationwide power failures, stoppages relating to safety concerns and a shortage In 2007, BPRM produced 193 600 oz of refined plati- of timber for stope support in the first half of the year. num, which was 11% down on the previous year’s production of 217 800 oz. The decrease can be attributed Constrained production and cost difficulties are the re- to labour activism throughout the year, mill breakdowns sult of limited Merensky ore source availability from the in the second quarter and a five day work stoppage extended working of the old shaft. According to Anglo owing to safety concerns. Platinum, the situation will not be completely alleviat- ed until the commissioning of the Brakfontein replace- Anglo Platinum’s share of capital expenditure for 2007 ment declines project. The construction of the surface amounted to R200-million, reflecting a 14% increase infrastructure will be completed in 2008 with a view to from 2006, most of which was incurred on the second reaching steady state production by the end of 2010. phase of the BRPM project and the Styldrift feasibility study. Twickenham The Phase 2 project is being undertaken to deepen the mine’s North and South shafts by an additional five lev- The Twickenham mine, wholly owned by Anglo Plati- els. The project is scheduled for completion in 2010. As num, was developed on the Twickenham and Hackney production from Phase 1 declines, Phase 2 is set to en- farms. The mine was initially intended to be larger but sure constant production at BPRM building up to 110 was scaled back as a result of difficult financial condi- 000 t/m from each shaft. tions. Phase one of the mine is complete and is ramping up to full production. The mine’s R5,9-billion Phase The Styldrift feasibility study is expected to be com- 2 expansion project was approved by the Board in the pleted by mid-2008. The proposed design will allow for first quarter of 2008. initial production of 230 000 t/m of Merensky ore, which will be treated at an expanded concentrator adjacent In 2007 refined platinum production from Twickenham to the existing plant. amounted to 9 300 oz, which was 2 900 oz more than in 2006. The initial mining has proved most valuable with Modikwa Platinum Mine better-than- expected stoping widths and grade having been achieved. This has now laid the foundation to im- The Modikwa platinum mine is a JV between Anglo prove confidence levels on the proposed mining meth- Platinum and African Rainbow Minerals (Arm) Platinum. od as well as the geological model. The JV is not managed by Anglo Platinum.

Total cash on-mine costs increased by 95% to R128- Negatively affected by labour unrest including a strike million owing to the mine employing its own resources lasting 25 days in the first quarter of 2007, the mine’s to manage operations and maintain operational infra- production declined by 13% in 2007 to 117 700 oz. structure. In terms of the JV agreement, all metal produced is Capex of R169-million was reported for the early mining smelted and refined by Anglo Platinum. Fifty per cent project (handed over to operations in 2007), the mining of the ore is attributable to Anglo Platinum’s share in training centre and a feasibility study for Phase 2. the mining operation while the other 50% is purchased from the JV partners. The mining training centre project, an underground mine development centre for the eastern limb of the Capital expenditure at the mine amounted to R129-mil- BIC was approved in the second quarter of 2007 lion in 2007, which was a 40% increase on capex of www.researchchannel.co.za 24 Platinum June 2008

R92-million in 2006. Much of the expenditure was di- eas. The PSA comprises the Marikana orebody, a con- rected towards trackless fleet replacement and second centrator and the No. 4 shaft. phase development. In terms of an orebody offtake agreement, production A feasibility study on deepening the North and South from the Marikana section is sold to Impala Platinum, shafts and a gathering decline system south of South and production from the No. 4 Shaft is refined by An- shaft to maintain current production levels is to be com- glo Platinum. pleted in the fourth quarter of 2008. Marikana continued to ramp up production in 2007 and Mototolo platinum mine delivered 23 200 oz of platinum attributable to Anglo Platinum. The mine is set to continue ramping up pro- The Mototolo mine is a 50:50 JV between Anglo Plat- duction in 2008. inum and the XK Xstrata partnership, which is comprised of the Kagiso Platinum Venture and Xstrata Anglo Platinum’s share of capital expenditure de- South Africa. creased by 5% to R77-million in 2007.

Production at the mine began began in the fourth quar- Kroondal Platinum Mine ter of 2006. In 2007, the mine’s first full year of production, Mototolo produced 95 200 oz of platinum, with an In 2007 the previous JV agreement between Anglo increase expected in 2008. Platinum and Aquarius Platinum was revised, and a reconstituted PSA was put in place. Anglo Platinum’s Capital expenditure at Mototolo decreased by 79% to Boschfontein East shaft system was added to the pre- R86-million in 2007, owing mainly to costs incurred in vious Kroondal JV, while re-allocating the No. 4 shaft 2006 for the Anglo Platinum concentrator not recurring system to the Marikana PSA. in 2007. Anglo Platinum’s share of production decreased by 5% Xstrata South Africa manages the mining operations at to 130 200 oz in 2007, while the company’s share of Mototolo, and Anglo Platinum manages the concentra- capital expenditure rose by 52% to R128-million. tor operations.

Marikana Mine Current capital projects

Anglo Platinum and Aquarius Platinum have pool and Rustenburg section share agreement (PSA) to mine adjacent properties on their respective Rustenburg and Marikana mining ar- The Rustenburg UG2 project was approved in 2002,

Anglo Platinum’s South African operations – refined platinum production (oz) 2007 2006 2005 2004 2003 Rustenburg Section 665 400 942 000 822 100 864 100 802 200 Amandelbult section 576 700 678 000 548 900 605 500 634 600 Union section 309 400 327 200 310 100 319 600 313 200 PPRust 163 500 185 500 200 500 196 000 188 900 Lebowa Platinum Mines 94 300 109 200 110 000 113 600 105 100 Mototolo Joint venture 117 700 12 800 - - - BRPM 193 600 240 600 188 400 183 500 177 600 Twickenham 9 300 Modikwa 117 700 145 600 128 200 114 000 86 200 Kroondal PSA 130 200 148 300 90 000 Marikana PSA 23 200 12 800 - - -

Source: Anglo Platinum Annual Report 2007 www.researchchannel.co.za 25 Platinum June 2008 and, as a result of changed financial circumstanc- Union section es, a change of scope was approved in 2005, reducing planned output from 400 000 t/m to 275 000 t/m The second phases of 4 South and 4B UG2 decline and consequently the investment required to complete projects were approved by the board in the first quar- the project. The Townlands and Frank sections of the ter of 2007. Development of the decline barrels is on project have been completed and successfully ramped schedule. up to steady state production levels. The Boschfontein west capital footprint has been completed. To enable The Spud UG2 conversion project was approved for continued mining at Boschfontein, study work on the implementation in the first quarter of 2007. The project 10- to 14-level ore-replacement project has been com- is designed to access and exploit the UG2 reef through pleted. The prefeasibility report is being evaluated to existing Merensky infrastructure, which will be used to determine the viability of the project. establish production half levels to achieve the project’s steady state UG2 production requirement of 80 000 The Merensky ore-reserve replacement projects for the t/m. Capital development is on schedule. Frank and Turffontein shafts are nearing completion. The Turffontein projecthas been handed over to min- In 2007, a concept study for the 5 South decline project ing operations, while the handover of the Frank project was approved and permission to proceed with a pre- has begun and will be complete mid-2008. Prefeasi- feasibility study granted by the board . Mining devel- bility study work is being completed on the Frank and opment in the 3 South UG2 decline project, which was Turffontein UG2 projects. affected by ground falls in 2006, has restarted. Steady state production from the 3 South decline was sched- The Waterval phase 3 project was approved in Decem- uled for the fourth quarter of 2008. ber 2006, and is progressing. The project will contribute 52 000 oz /y at steady state production in 2009. A scoping study for the Union deep shaft project has The Waterval Phase 4 and 5 replacement studies are been commissioned and a permitting process for a 3D under way. seismic survey of the targeted area has also begun.

The Townlands project aims to replace diminishing Me- Amandelbult section projects rensky reef output at the Townlands shaft by extending the existing decline shaft. The mining of UG2 in The R1,5-billion Amandelbult East-Upper UG2 project, the decline shaft is also being incorporated to ensure which will mine the UG2 reef using existing mining in- maximum use of shaft-hoisting capacity. The project frastructure previously employed to mine the Meren- is in execution phase and progressing towards achiev- sky reef at the vertical number 2 shaft and three de- ing steady state output of 70 000 oz/y of platinum by cline shafts is on schedule. The project is expected to 2014. reach steady state production in 2012, producing 106 000 oz/y of platinum. Further, the recently completed The Paardekraal Two shaft project, approved in 2006, 75 000 t/m UG2 concentrator will be expanded to 210 is a replacement project that will gain access to deep- 000 t/m. Commissioning is planned for the fourth quar- er Merensky reef reserves at a rate of 100 000 t/m. The ter of 2008. project will cost an estimated R2,3-billion to implement. Owing to the increased tonnage the construction of a new tailings dam, holding dam and upgraded tail- The project is the first of this magnitude in more than ings handling and pumping systems are underway and a decade, and includes a downcast vertical man-and- scheduled for completion in the third quarter of 2008. materials shaft, and an adjacent matching vertical up- cast ventilation shaft, which will intersect the existing A feasibility study to replace diminishing Merensky reef horizontal connections. It will also involve the extension resources at the No 4 Shaft is under review. The project of the existing declines at Paardekraalís One shaft proj- will involve an expansion of the UG2 chromatite pro- ect. duction and is designed to co-extract both the Meren- sky and UG2 reefs. Presinking on the main shaft at the project started in March 2007. The project is on schedule and is ex- PPRust project pected to produce 120 000 oz/y of refined platinum by 2015. In 2006, Angloplat’s board approved the PPRust North www.researchchannel.co.za 26 Platinum June 2008 expansion project which will expand milling capacity by placement project is on schedule for completion in 600 000 t/m, in addition to the 385 000 t/m milled by mid-2008. the existing facility. The expansion will produce an additional 230 000 oz/y of platinum to bring total plati- A Middelpunt Hill Phase 3 project was approved in May num production at PPRust to 430 000 oz/y. The cost of 2007, prior to the conclusion of a deal with Anooraq. the expansion project has increased R5,8-billion from a The project’s capital expenditure of R1,7-billion has 2006 estimate of R4,25-billion. since been deferred.

The PPRust North expansion project is progressing on schedule. The relocation of the Ga-Puka and Ga- BRPM projects Sekhaolelo communities started in July 2007, under the guidance of a representative task team, which is BRPM has continued with implementing a R1,2-billion facilitated by the Office of the Premier of Limpopo. The phase two project, which will include extending the ex- relocation is the result of extensive consultations with isting South and North shaft infrastructure by an addi- the communities, tribal authorities, and local and pro- tional five levels. The project remains on schedule for vincial government over the past few years. completion in 2010. Production from six level began in 2007, and production from seven level is anticipated The relocation is expected to cost some R650-million during 2008. Phase 2 will ensure constant production and is being conducted according to World Bank re- from the mine as production from Phase 1 declines. settlement guidelines. However, Anglo Platinum is facing opposition to its relocation project by as many as The feasibility study for the Styldrift project began as 55 families, which are refusing to relocate. The group planned in 2006 and is scheduled for completion by of families, calling themselves the Motlhotlo resistance mid-2008. The project is designed to produce an ini- committee, is being represented by lawyer Richard tial 230 000 t/m of Merensky ore using a combination Spoor. The families are looking for more compensa- of methods. tion and larger houses. Anglo Platinum could evict the families on the basis of the contracts that the families signed, however, this could create much negative pub- Modikwa joint-venture licity for the company. The Motlhotlo resistance committee is the second group to resist the relocation pro- The Modikwa project, a joint-venture between An- cess. In 2007, the Motlhotlo development committee gloplat and Arm Platinum, completed a pre-feasibility raised reservations about two Section 21 companies study to replace phase 1 mining areas in mid-2007. To representing the community. maintain current planned production of 240 000 t/m, the North and South shafts, and a gathering decline The relocation could run five months behind schedule system south of South shaft, will need to be deepened. as a result of construction problems, as well as a strike A feasibility study is underway and is scheduled for by builders. completion in the fourth quarter of 2008.

Lebowa Platinum project In October 2007 funding was approved by both partners to continue deepening the North shaft , and to The R1,1-billion Brakfontein Merensky project is both a equip the 5 and 6 levels to be fully operational. South replacement and an expansion project. It is designed shaft will also be deepened to 6 level while the feasibil- to facilitate a rate of production of 120 000 t/m of ore ity study is being completed. from the surface. Of the 120 000 t/m of ore mined, 85 000 t/m will be replacement, and the remaining 35 Twickenham 000 t/m expansionary. New declines are needed as the operation has advanced beyond an economical point In early 2007 the Hackney shaft mining project was from the main vertical shaft. Construction of the sur- handed over to operations. face infrastructure will be completed during 2008, while steady state production remains on target for the end In February 2008 Anglo Platinum made the decision to of 2010. The mine will provide sufficient feedstock for go ahead with its Twickenham project, where the com- the upgraded Merensky concentrator until 2021. pany has been running a trial mine. The project will expand current operations and exploit the UG2 reef The Middelpunt Hill Phase 2 project, a 45 000 t/m re- zone. www.researchchannel.co.za 27 Platinum June 2008

Ga-Phasha project Precious Metals Refinery project

In September 2007 the successful conclusion of a BEE The second phase of the precious metals refinery proj- transaction resulted in Anglo Platinum selling an ad- ect was started in 2007 with the commencement of a ditional 1% interest in Ga-Phasha to Anooraq to give study to estimate the capital cost required to increase Anooraq control of the project. capacity from 3,5-million ounces-a-year to five-million ounces-a-year. The project is still in concept definition Current feasibility work will continue as normal until the phase. transaction is finalised by mid-2008. Slag cleaning furnace 2 project Der Brochen A project to install a new slag cleaning furnace is cur- The Der Brochen mine, 100% owned by Angloplat, will rently under feasibility study owing to current planning exploit the Der Brochen, Richmond, and Helena farms. that indicates the need for additional slag treatment ca- In 2006, Der Brochen underwent a prefeasibility study, pacity from which the development of a more detailed geological study was approved. Exploration Unki In South Africa, Angloplat’s exploration interests are The Unki project located near Gweru, on Zimbabwe’s mainly focused on the accumulation of geological data Great Dyke, is being developed by Angloplat and Anglo in areas where PGM orebodies are known to occur, American Zimbabwe. The project will involve the devel- rather than searching for unknown mineralisation, and opment of an 120 000 t/m platinum mine. are therefore predominantly focused on measuring ore reserves and mineral resources in the BIC. The project is still subject to certain Zimbabwean and South African regulatory and fiscal approvals, and de- In the 2007 financial year a total of 511 km of diamond velopment costs are under appraisal given the eco- drilling was completed across all of Anglo Platinum’s nomic and exchange-rate environment in Zimbabwe. properties in South Africa to determine resources for both mine planning and conversion of resources to re- While regulatory approvals are being finalised, devel- serves. opment of certain mine surface infrastructure has continued, with the completion of the Lucilliapoort dam, A seismic survey was conducted on the Western Bush- roads and housing infrastructure achieved. Two de- veld Joint Venture properties adjacent to BRPM, and clines have been designed. The concentrator design al- several additional surveys are in planning stages. lows for capacity expansion with minimal capital. A tailings dam will be built approximately one kilometre from The company has continued with foreign exploration the concentrator. Concentrate produced from the mine projects in Russia, China, Brazil and Zimbabwe. will be transported to the Polokwane Smelter. In Russia, two projects are being explored in the Ura- ls and the Kola Peninsula. The locations house dif- Development of the declines is ahead of schedule. ferent styles of mineralisation. In the Urals the alluvi- The orebody was intercepted in September 2007, and al platinum target is reaching an advanced stage and stockpiling has commenced. documentation has been submitted in application for a permit to conduct exploratory mining to validate the exploration results, while exploration through diamond Base Metals Refinery project drilling has revealed two mineralised zones of considerable interest. In May 2007, the Anglo Platinum board approved a R1,9-billion expansion of the Base Metals Refinery at The River Valley project, in Canada, has progressed to Rustenburg. The project will enable increased nickel a prefeasibility study stage, and the property has been processing capacity of 33 000 t/y. The project is ex- taken to lease. pected to ramp-up in late 2009 and reach full capacity by the end of 2010. The company’s primary exploration target area in Chi- www.researchchannel.co.za 28 Platinum June 2008 na is in the extensive Panxi Rift in the south-western chromite and sulphide associated PGEs within igneous Sichuan province. A range of occurrences and anom- intrusives. alies have been identified and the company has said that it will focus on identifying and defining more tar- The Unki resource block in Zimbabwe saw the com- gets in 2008. pletion of an ongoing resource definition and quanti- fication in the 2007 financial year, the study defined Ongoing mapping of the geophysically targeted drill- prospective resources additional to the Unki resource. ing in Brazil continued in 2007. The work is focused Exploration activity has been maintained pending the on geological terrain conducive to the development of finalisation of ongoing government negotiations.

www.researchchannel.co.za 29 Platinum June 2008

Anglo Platinum

Shareholding structure Division, South African As at December 2007: PG Whitcutt, , Alternate Director, South African Anglo South Africa Capital 74,51% TA Wixley, BCom, CA (SA), independent nonexecutive deputy chairperson, South African Annual turnover R46,96-billion (December 2007) Share performance R39,36-billion (December 2006)

Net profit R12,67-billion (December 2007) R11,99-billion (December 2006)

Leadership Neville Nicolau (CEO)

Directors MP Baum, BCom, LLB, H Dip Tax (Law) (Wits), nonexecutive director, South African CB Carroll, BSc (Geology), Msc (Geology), MBA, nonexecutive director, American RMW Dunne, CA (SA), independent nonexecutive director, UK Source: MCGregor BFA) BA Khumalo, D Admin (hc), MA, MBA, Dip in Mng- mt, AEP, independent nonexecutive director, South Contact details African Postal address: RJ King, BA (Hons) Politics, AMP (Harvard), nonex- PO Box 62179 ecutive director, British Marshalltown PJ Louw, , Executive Head: Mining, 2107 NB Mbazima, FCCA, FZICA, Chief Executive Officer: South Africa Scaw Metals, Zambian R Medori, Doctorate in Economics, nonexecutive di- Telephone: rector, French +27 11 373 6111 MV Moosa, BSc (Mathematics and Physics), independent nonexecutive director, South African Fax: N Nicolau, , Chief Executive Officer, +27 11 373 5111 TMF Phaswana, BCom (Hons) (Energy Economics), nonexecutive chairperson, South African Website: AE Redman, MSc (Mining Engineering and Miner- www.anglplatinum.co.za al Production Management), nonexecutive director, British SEN Sebotsa, MA Economic Policy Management, LLB (Hons) International Law, independent nonexecutive director, South African DG Wanblad, BSc (Mechanical Engineering), GDE (Ind), Chief Executive Officer: Copper in Base Metals

www.researchchannel.co.za 30 Platinum June 2008

Impala Platinum

Brief history owned,Implats’ with 25%operations to be andby way strategic of a noncontributoryinterests In November 1968 a lease covering 27 000 acres was stake, and the balance by way of a contribution over granted for what was to become the Impala Platinum N Zambia mine. Production at the operation began in July 1969. In January 1973, a company called Bishopsgate Plati- num, of which Impala Platinum was a wholly owned subsidiary, was listed on the JSE, and in 1978, Bish- Zimplats Harare opsgate changed its name to Impala Platinum Hold- ings (Implats). By the early 1990’s Implats had become Zimbabwe the world’s second largest platinum producer, and to- Great Dyke day produces in excess of two-million ounces of platinum a year. Bulawayo Mimosa Nature of business and market Botswana position

Implats mines, refines and markets PGMs – primarily platinum, palladium and rhodium – and associated base metals from operations situated on the two most South Africa significant PGM deposits in the world, namely the BIC in South Africa and the Great Dyke in Zimbabwe. Marula Bushveld The company has a primary listing on the JSE, in South Complex Two Rivers Impala Platinum Africa, and a secondary listing on the London Stock Everest South Exchange, as well as a level 1 American Depository Re- Rustenburg Impala Refineries Kroondal ceipt programme in the US. Johannesburg Marikana In the year ended June 2007, Implats achieved record Operations Strategic Interests Source: Impala Platinum website production of 2,03-million ounces of platinum, which was a notable improvement on the company’s production of 1,85-million ounces in the year to June 2006. a period of time. Impala Platinum, however, through its Platinum production in the six months to December Zimplats subsidiary, has struck a mining rights deal 2007 was another record at 1,03-million ounces. with the Zimbabwean government, in terms of which Zimplats has agreed to release claims amounting to Implats has three mining interests on South Africa’s 36% of its resource base on the Great Dyke in Zimba- BIC, including the wholly owned Impala mine north of bwe to the State, in exchange for a combination of em- Rustenburg; the Marula mine, in which Implats owns a powerment credits and cash. 77,5% stake; and the Two Rivers project which is expected to reach full production in 2008, in which Im- This deal is also likely to assist the company in com- plats owns a 45% stake. plying with the Indigenisation and Economic Empow- erment Bill, which was signed into law by Zimbabwean In Zimbabwe, Impala Platinum has an 86,9% interest in President Robert Mugabe in March 2008. Zimbabwe Platinum Mines (Zimplats), and a 50% share in Mimosa Platinum, where its joint-venture partner is Together Implats’ operations in South Africa and Zim- Aquarius Platinum. babwe have combined attributable resources amounting to 183-million ounces of platinum. The company’s involvement in Zimbabwe has been pursued cautiously, owing to the Zimbabwean govern- The company also owns refining operations, known ment’s announcement, in March 2006, that 51% of all as Impala Refining Services (IRS), located in Springs, platinum operations in the country are to be State- South Africa. www.researchchannel.co.za 31 Platinum June 2008

Until early 2008, Implats held an 8,4% interest in Aquar- In June 2007 Implats announced that it was planning ius Platinum – the fourth largest platinum producer in capex of R25-billion over the following five years. How- the world – and a 20% interest in Aquarius’s unlisted ever, by the third quarter of that year, the company stat- subsidiary Aquarius Platinum South Africa (AQPSA), ed that it may lift its five-year planned capital spend be- which owns and manages the Kroondal and Marika- yond the R25-billion if further planned expansions were na operations on the western limb of the BIC and the approved. Some R12,5-billion of the total spend will be Everest mine on the eastern limb. In April 2008, how- directed towards maintenance capital at the company’s ever, it was announced that these shareholdings would Rustenburg Lease Area operations, with the balance to be sold back to Aquarius in a deal valued at $790-mil- be spent on growth projects. The Leeuwkop project lion, including $285-million for the Aquarius stake and will receive some R3-billion, with Implats spending the $504,9-million for the AQPSA stake. same amount to develop the Merensky reef at its Mar- ula project. Other major expenditure items include Im- In the second quarter of 2007, Implats bought Lon- plats’ Zimplats assets in Zimbabwe, and on processing don-listed platinum junior African Platinum (Afplats) for and refining operations. R4,2-billion. Through the deal Implats acquired 100% of Afplats’ share capital and by implication a 74% share Platinum operations in South Africa in the Leeuwkop project, situated near the town of Brits on the western limb of the BIC. Implats’ operations in South Africa include the Implats mine and processing facilities; the Marula mine; the Towards meeting its BEE commitments under the South Two Rivers mine; and IRS. African Mining Charter, Impala Platinum has been involved in a number of empowerment deals, such as the Impala mine sale of its share in Lonplats’ Eastern and Western Plati- num mine, which led directly to the establishment of In- The Implala mine and processing facilities, form Im- cwala Resources, now one of the largest black-owned- pala Platinum’s main operational unit, and include the and-controlled mining companies in South Africa. The company’s mining and minerals processing operations company also has BEE partners at its Marula mine and on the western limb of the Bushveld Complex, in the Two Rivers project. North West province, and a refining operation located in Springs, Gauteng. In its biggest BEE transaction to date, the royalties that the Royal Bafokeng Nation (RBN) would have collected The Impala mine, located just north of Rustenburg, from Impala Platinum over the 31-year period starting houses 14 operational shaft systems, five of which in July 2007, were converted into a 12,1% sharehold- have underground decline systems covering some 260 ing in Implats. This shareholding, in addition to an ex- km2 underground, exploiting both the UG2 and Meren- isting 1,3% held by the RBN, brings the RBN’s total sky reefs. Impala holds contiguous old order mining stake in Impala Platinum to 13,4%, worth an estimated and new order prospecting rights for a total area of 33 R16-billion. 188 ha across 20 farms. In the year ended June 2007 the Implala mine pro-

Implats: Financial and production summary Year ended June 2007 Year ended June Six months to De- Six months to De- 2006 cember 2007 cember 2006 Sales (R) 31,48-billion 17,50-billion 16,3-billion 14,86-billion Profit (R) 7,33-billion 4,38-billion 4,6-billion 4,3-billion Total refined PGM 3,85-million 1,19-million 1,75-million 1,69-million production (oz) Gross refined plati- 2,03-million 1,02-million 1,03-million 1,02-million num production (oz) Average market price 1 164 988 achieved ($/oz) Tons milled ex-mine 20,73-million 20,20-million 10,714-million

Impala Platinum Annual Report 2007 www.researchchannel.co.za 32 Platinum June 2008 duced 1,06-million ounces of refined platinum, which mine is 77,5% owned by Implats and 22,5% owned by was down on its production in 2006 of 1,13-million BEE participants. Marula was one of the first opera- ounces. The mine produced a further 575 000 oz in the tions to be developed on the underexploited eastern six months to December 2007. limb of the BIC. The operation consists of an underground mine and a metallurgical plant. The company has devised a strategy to sustain Impa- la mine’s production levels for the next 30 years, and At present Marula is exploiting the UG2 reef from the is currently engaged in a capital programme, started Clapham and Driekop declines, which are 1,3 km apart, in 1993, to prolong the lives of the existing shaft sys- and are expected to reach a depth of 770 m. The initial tems and to develop new shafts. The initial phases of mine plan, using board and pillar techniques, has been the programme concentrated on the expansion of a se- unsuccessful. Production from the new mine plan com- ries of five decline shaft systems below the current third menced in 2008 and drill jig technology has been im- generation vertical shafts. plemented resulting improved rates of advance.

The construction of two new shafts – 16 shaft and 20 Marula produced some 65 000 oz of platinum in the shaft – was given board approval in September 2004. At year to June 2007, which was 63% up on the 37 000 full production the shafts will produce a combined 355 oz produced in the year to June 2006. The six months 00 oz/y of platinum. The 20 shaft project is scheduled to December 2007 saw the mine produce 35 700 oz. to come into production in 2009, while 16 shaft is ex- Full production of 130 000 oz/y from UG2 is scheduled pected to come into production in 2012. The construc- for 2010. tion of a third new shaft, Impala No 17, was approved by the Implats board in February 2008. The shaft is scheduled to start producing platinum in August 2011, Two Rivers and to reach full output in September 2014. The Two Rivers project, a JV between Implats (45%) Implats’ Mineral Processes is located at the Impa- and African Rainbow Minerals (Arm) (55%), is situated la mine and incorporates smelting and concentrat- on the eastern limb of the BIC, near the town of Steel- ing plants. The recovery rates for the year ended June poort, in Mpumalanga. 2007 were 83,3% down from a record 84,5% in 2006. The decline can be attributed to the ore mix supplied. Development at Two Rivers began in 2005 and, for the year ended June 2007, the mine’s first year of produc- To ensure sufficient capacity to meet the group’s tar- tion, two Rivers produced 87 900 oz of platinum-in- get to deliver 2,3-million ounces of platinum a year by concentrate. A concentrator plant was commissioned 2010, large capex programmes have been implement- during the year. The mine is still in a build-up phase, ed at the metallurgical operations. In 2006 an upgrade with full production of 120 000 oz/y of platinum-in-con- to the Mineral processes No 4 contingency furnace was centrate expected to be achieved during the 2008 fi- approved. This R150-million project has progressed nancial year. well, with hot commissioning beginning in June 2007. The R850-million second phase includes the conver- The final cost of the project was R1,38-billion, which sion of the furnace from a contingency furnace to a full- was R187-million less than budgeted. blown facility. Impala Refining Services Implats’ refining facilities in Springs include the Pre- cious Metals Refinery (PMR) and the Base Metals Re- finery (BMR). In May 2007, Implats approved capex to IRS is a dedicated vehicle housing the toll refining and the value of R135-billion for a feasibility study and the metal concentrate acquisitions accumulated by the Im- provision of interim processing equipment for a Phase pala group. IRS enables the company to use its surface IV expansion which will increase the PMR’s capacity to assets and expertise to reduce costs related to Impala 2,8-million ounces. production, and to generate additional revenue.

IRS enters into either metals purchase or toll refining Marula agreements, or a combination of the two, with various partners and clients. In metals purchase agreements, The Marula mine is located on the eastern limb of the an agreed percentage of the metal is bought after a BIC, some 50 km north of Burgersfort, in Limpopo. The fixed processing period, while in toll refining agree- www.researchchannel.co.za 33 Platinum June 2008

Implats’ South African operations – platinum production (oz) Year ended June Year ended June Six months to De- Six months to De- 2007 2006 cember 2007 cember 2006 Impala 1,06-million 1,13-million 575 000 545 000 Marula 65 000 37 000 35 700 33 200 Two Rivers 87 900 - - - IRS 971 000 721 000 455 800 473 000 Impala Platinum Annual Report 2007 and Impala Platinum Reulsts for the six months ended December 2007 ments, IRS charges the client a smelting, refining and Hartley Platinum Mine located at the SMC, which is handling fee and either buys, or returns to the client, currently under care-and-maintenance. a market-related percentage of the metal after an established processing period. During the financial year Implats’ Zimbabwe operations ended June 2007, IRS reported refined platinum production of 971 000 oz, which was a 35% increase from N ZAMBIA 2006. In the six months to December 2007, it produced Musengezi Complex 455 800 oz of refined platinum. Harare SMC Platinum operations in the rest of Hartley Ngezi Complex Africa ZIMBABWE Great Dyke Implats holds stakes in two Zimbabwean platinum mining companies – Zimplats and Mimosa. Selukwe Complex Mimosa The company has reassured its investors that it has Bulawayo We dza Complex planned for the eventuality of the Indigenisation and BOTSWANA Economic Empowerment Bill passed by the Zimba- bwean parliament in November 2007. The company has agreements in place, which will be taken into account when looking at overall compliance with the new SOUTH AFRICA Source: Implat’s website law. These include the agreement reached by Zimplats in May 2006 with the government of Zimbabwe on the release of 36% of its resource base in exchange for In the year ended June 2007, Zimplats produced a a combination of empowerment credits of 19,5% and record 96 500 oz of platinum-in-matte which was up $51-million in cash, or credits of 29,25% if no cash is on the previous year’s 89 000 oz. However, in the six received. Credits will also be received for infrastructure months to December 2007, production of platinum-in- and social spend the amount of which is still to be fi- matte declined by 11,4% to 40 800 oz. nalised. In 2006 plans were approved to increase Zimplats’ an- Zimplats nual production to 160 000 oz by 2010. Phase one of the expansion project is currently underway. This will Implats has an 86,9% shareholding in Zimplats, which include the development of mining portals 1 and 4 at is situated on the Hartley Geological complex on Zim- Ngezi, as well as the construction of a new 1,5-million- babwe’s Great Dyke, south west of Harare. The opera- ton-a-year concentrator. In addition, some 715 new tion consists of opencast and underground mines at staff houses are being constructed near Ngezi, and Ngezi and the Selous Metallurgical complex (SMC), lo- general upgrading of amenities in the area is being un- cated some 77 km north of the mine. The ore mined at dertaken. Ngezi is transported by road trains to the SMC, where it is concentrated and smelted, before being despatched Implats reached an agreement with the government of to Implats’ Mineral Processes in South Africa, in terms Zimbabwe in 2006, securing the ground required for a of a life-of-mine agreement. Zimplats also owns the steady state one-million ounces a year platinum mine www.researchchannel.co.za 34 Platinum June 2008 with a fifty year mine life under two mining licence re- projects, a smelter expansion project and the refineries gimes. In terms of the agreement Zimplats will release expansion project. 36% of its resource base, which amounts to 51-million ounces of platinum, in return for empowerment credits Construction on No 16 Shaft began in October 2004 and/or cash. and, upon completion in 2012, the shaft will have seven production levels and will be 1 675 m deep. The Mimosa shaft is expected to produce 190 000 oz of platinum a year. Total project development costs are expected to be R3,6-billion. Expenditure by June 2007 amounted Mimosa is a 50:50 JV with Aquarius Platinum. The mine to R801-million. is located east of Bulawayo, on the southern portion of the Great Dyke. The operation is a partially mechanised In 2007 the development of the intermediate pumping shallow undergound mine that is accessed by a decline station was completed, sinking of the main and venti- shaft. It also has a mill and concentrator on the sur- lation shafts was on target and construction of the surface. The concentrate produced at the mine is trans- face infrastructure was on schedule. The sinking of the ported by road to Implats’ Mineral Processes, in terms ventilation shaft is scheduled to be completed in 2008 of a life-of-mine offtake agreement with IRS. with main shaft sinking being complete by 2010 and final commissioning in 2011. Mimosa produced 78 200 oz of platinum-in-concentrate in the year to June 2007, which was up on the 72 The Implats board approved the construction of the No 200 oz produced in the year to June 2006. In the six 17 Shaft in February 2008. Like the No 16 Shaft, the months to December 2007 Mimosa produced 39 600 new No 17 Shaft will be a fourth-generation shaft, but oz of platinum-in-concentrate. will be 1 922 m deep, the company’s deepest shaft yet. In April 2008 the headgear at No 17 shaft was erected. This will be used in the sinking of the ventilation shaft, Current capital projects which will also hoist miners, material and rock. Production from No 20 Shaft is scheduled to begin in Implats plans to spend over R25-billion over the next 2009 and full production is scheduled for 2013. Upon five years in an effort to increase its production levels to completion the shaft will be 1 058 m deep and will 2,5-million ounces of platinum by 2012, and 2,8-million house ten production levels producing 150 000 oz/y of ounces a year at a later stage. platinum. Capital expenditure is estimated at R3,4-billion. The company’s major expenditure items include the 16, 17 and 20 shaft projects at the Impala mine; the Leeu- Main and ventilation shaft sinking is to be completed in wkop project, acquired through a deal with African Plat- 2008 with commissioning of the main shaft before the inum; the Merensky project, at the Marula mine; and end of 2008. processing and refining operations. The smelter expansion project is underway and is ex- In the year ended June 2007, Implats’ capital expendi- pected to be complete by February 2009 at an expect- ture amounted to R2,89-billion. ed cost of R1-billion. The project is aimed at increasing capacity at Mineral Processes to 2,8-million ounces of Impala mine platinum.

The are currently five projects under development at Phased expansions to increase the refining capacity at the Implats mine – the 16, 17 and 20 shaft expansion both the Base Metals Refinery and the Precious Metals

Implats’ operations in the rest of Africa – refined platinum production (oz) Year ended June 2007 Year ended June 2006 Six months to Decem- Six months to Decem- ber 2007 ber 2006 Zimplats 96 500 89 000 40 800 46 100 Mimosa 78 200 72 200 39 600 38 400

Source: Impala Platinum Annual Report 2007 and Impala Platinum Reulsts for the six months ended December 2007 www.researchchannel.co.za 35 Platinum June 2008

Refinery are underway. Completion of the PMR Phase Zimplats 3 project is expected in 2008, while BMR Phase 2 and PMR Phase 4 are scheduled for completion in 2010. Subsequent to the 2006 agreement reached with the government of Zimbabwe regarding security of tenure, Marula the Zimplats and Implats boards approved the Ngezi Expansion Phase 1 project. The Marula mine is currently ramping up to full production of 130 000 oz/y of platinum from the UG2 reef. A The project aims to replace the current opencast oper- prefeasibility study has been completed on the Meren- ation with two underground mines, Portal 1 and Portal 4 sky reef at the Marula mine. producing 160 000 oz/y . The concentrator is also being expanded to. A total of 700 houses are being built in The Merensky project will incorporate the development the area as part of the project infrastructure. of a new decline, concentrator and supporting mining infrastructure. Certain synergies will be achieved The expansion is expected to be completed in 2010, with the current surface infrastructure. The project will with Portal 1 scheduled for completion in 2009. A total yield 115 000 oz/y of platinum at a rate of 175 000 t/m of $341-million has been budgeted for the project. mined. The current tailings dam will also be expanded. The life-of-mine of the Merensky operation is expected to be 20 years, although there is potential for this to Exploration activities be extended with the exploitation of deeper areas. On completion of the Merensky project in 2015, Marula will Implats is undetaking significant brownfields explora- produce 245 000-ounces of platinum a year. tion at its existing operations, with much of it aimed at securing the conversion of old-order mining rights The project was expected to start in January 2008 and in South Africa. The company is also pursuing glob- is expected to be completed in 2015. Initial forecasts al greenfields exploration in an attempt to locate new indicate capital expenditure (capex) in the region of R3- orebodies. billion. Capex of R500-million has been budgeted for 2008. South Africa

Leeuwkop project In the 2007 financial year exploration at Impala focused on the No 7 shaft block while the proposed Meren- In February 2007 Implats purchased the entire share sky Reef feasibility study was the focus at the Marula capital of Afplats and by implication an effective 74% mine. stake in the Leeuwkop project. Surface drilling is underway on the Imbasa-Inkosi and The project will mine the UG2 Reef in the Leeuwkop Wolwekraal-Kareepoort extensions of the Leeuwkop area and involves the development of a 1 350-m twin- project and also at the Tamboti project which compris- shaft system to access the orebody. es portions of the farms Tweefontein, Kalkfontein and Buffeldhoek, adjacent to the Two Rivers mine. The development of the mine at Leeuwkop is the first phase of the project, accessing only the south-west- Exploration drilling has begun and new order prospect- ern mineral resource within the project area. Explora- ing tights have been granted for the Paradys project on tion drilling and seismic surveys of the remaining areas the eastern limb of the BIC. The project is a JV with En- are planned over the next five years to determine the vi- dulwini Resources. ability of future expansions on the property and extensions to the planned life-of-mine. Zimbabwe

The total capex over the next five years is expected to At Zimplats, evaluation drilling was focused on proposd be about R3-billion. portals 3 and 6 in the 2007 financial year. Drilling was also undertaken across the deeper area of the resource Production is expected to begin in 2010, building up to area. Detailed drilling around portal six is scheduled for yearly steady-state levels in 2013. 2008 along with increased drill coverage of portal 7.

www.researchchannel.co.za 36 Platinum June 2008

Botswana Madagascar

Implats continues to honour an option agreement with Implats has entered into an option agreement with Botswana-based junior, Health Hive Botswana, at the AIM-listed Jubilee Platinum at the Ambodilafa project. Segwagwa and Masoke intrusions in south-eastern In terms of the agreement, Implats will earn up to a Botswana. In terms of the agreement Implats was ex- 51% interest in the project by spending $5-million in pected to earn 60% interest in the venture by spend- exploration over a period of four years, and can elect to ing R4,5-million. An airborne geophysical survey was increase its interest to 65%. conducted over the intrusions during December 2006 and January 2007 and several anomalies were identi- Canada fied. There is little or no outcrop over these anomalies and favourable anomalies are to be drill tested. In Canada, Implats has entered into an option agreement with Canadian junior, Northern Shield Resources, Mozambique in terms of which Implats has the option of earning a 60% interest in the Highbank Lake property in north- Exploration conducted in conjunction with Falcon- western Ontario by incurring C$5-million in exploration bridge has been terminated at the Tete project. How- expenditure within five years. Although no significant ever, as a result of the Afplats transaction a different PGM mineralisation was intersected through drilling, area of the Tete complex was vended into Implats. Fur- whole rock geochemical studies have provided new in- ther exploration and mapping of the newly acquired formation on the layout of intrusion and delineated ar- area is scheduled for 2008. eas which have not yet been drill tested.

www.researchchannel.co.za 37 Platinum June 2008

Impala platinum

Shareholding structure Executive Director, South African Major shareholders as at June 2007: FJP Roux, BSc, MSc, PhD, MBA, Independent Non- Black Rock Investment Managers 6,07% Executive Chairman, South African Royal Bafokeng Nation 13,4% LC Van Vught, BSc (Hons) (Chemistry), BComm, In- dependent Non-Executive Director, South African Sales R31,28-billion (year to June 2007) Share performance R17,50-billion (year to June 2006).

Profit for the year R7,33-billion (year to June 2007) R4,38-billion (year to June 2006)

Leadership Fred Roux (chairperson) David Brown (CEO)

Number of employees 47 190 (including contractors) (June 2007)

Directors S Bessit, NHD (Metalliferous Mining), Executive Di- rector, South African ISource: McGregor BFA) DH Brown, CA(SA), Chief Executive Officer, South African Contact details D Earp, BCom, B Acc, CA (SA), Chief Financial Of- Postal address: ficer, South African Private Bag X18 F Jakoet, BSc, CTA., CA (SA), Independent Non-Ex- Northlands ecutive Director, South African 2116 JM McMahon, Pr.Eng, BSc Mech Eng, Independent South Africa Non-Executive Director, British MV Mennell, BA, MBA, FCMA, THD, Independent Telephone: Non-Executive Director, South African +27 11 731 9000 TV Mokgatlha, CA(SA), Non-Executive Director, South African Fax: K Mokhele, BSc (Agric), MSC (Food Science), PhD +27 11 731 9254 (Microbiology), Independent Non-Executive Direc- tor, Website: NDB Orleyn, B Juris,B Proc, LLB, Independent Non- www.implats.co.za Executive Director, South African LJ Paton, BSc (Hons) (Geology), B Comm. Pr SciNat FGSSA, Executive Director, South African DS Phiri, BJuris, LLB, LLM HDip Co Law, Non-Exec- utive Director, South African JV Roberts, FCIS, ACMA, MBA, Independent Non-

www.researchchannel.co.za 38 Platinum June 2008

Lonmin

Brief history tion each own 23,56% of Incwala, with the remaining 52,88% of Incwala being held by black investment Lonhro Plc was incorporated in 1909, and over the companies Dema Capital, Andisa Capital and Vantage years has been involved in many diverse business op- Capital; the Bapo Ba Mogale community, which resides portunities. near Lonplats’ operations; Lonplats’ employees; and South African Women in Mining Investment Holdings. In the 1990s the company separated from its African businesses and in 1999 Lonhro Africa Plc changed its Lonplats’ South African mining operations are housed name to Lonmin Plc. in two units – Lonmin Platinum Marikana and Lonmin Platinum Limpopo. From these operations the com- The company started disposing of its noncore busi- pany produced 869 832 oz of platinum in concentrate nesses around 1996, and in 2000 disposed of its last in the year to September 2007, which was a decline on remaining hotel, and insurance broking operations, the 964 958 oz produced in 2006. completing the transformation to a precious metals company. The company aims to increase its annual production capacity to 1,4-million ounces in the period leading up Nature of business and market to 2012. Towards achieving this goal Lonmin is undertaking a number of expansion projects including the position development of the K4 shaft at its Marikana operations, which will come into production late in 2009, and Lonmin is the world’s third largest producer of PGM’s the increase of mechanised tonnages at the Hossy and and is the only PGM producer with its primary listing on Saffy shafts, also at Marikana. Other future prospects the London Stock Exchange. All of the company’s op- include feasibility studies to develop a fully mechanised erations are on the BIC in South Africa, where it is listed mine at the Limpopo expansion project, and continued on the JSE. drilling at the Akanani project.

The company’s South African platinum operations are held by Lonmin Platinum (Lonplats), in which Lonmin Platinum operations in South Africa holds an 82% stake. The remaining 18% of Lonplats is owned by Incwala Resources, a BEE company formed Lonplats’ South African operations are housed in two specifically to enable broad-based equity participation units – Lonmin Platinum Marikana and Lonmin Plati- in Lonmin. num Limpopo. The company currently mines around 92% of its production from the Marikana operations, Lonmin and the Industrial Development Corpora- situated on the Western Limb of the BIC.

Lonmin: Financial and production summary Year ended September Year ended September Nine months to June Nine months to June 2007 2006 2007 2006 Turnover ($) 1,94-billion 1,86-billion * * Profit ($) 556-million 431-million * * Total PGM produc- 1,64-million 1,84-million 951 152 1,02-million tion (oz) Total platinum pro- 869 832 964 958 518 343 536 096 duction (oz) Average price * 1084 1 171 1 030 achieved – platinum ($/oz) Tons milled 14-million 15,16-million 10,93-million 11,13-million

Source: Lonmin Platinum Annual Report 2007; Lonmin Platinum Annual Report 2006; Full production report 2007; Third quarter production report 2006 www.researchchannel.co.za 39 Platinum June 2008

Lonplats’ Marikana operations consist of the Western cline from the 48 640 oz produced in 2006. Produc- Platinum, Eastern Platinum and Karee mines, a smelter tion was hampered by a lack of available developed and a base metals refinery. The Marikana property, lo- ore, and the intersection of an iron rich ultramfic peg- cated on the Western limb of the BIC, hosts both the matoid body affecting the Merensky reef made the ore UG2 and Merensky reefs, which are primarily mined expensive and therefore uneconomical to process. It is underground over a 27 km strike at an average depth anticipated that it will take six months to mine through of 360 m. Some opencast mining takes place. the occurrence.

In the year to September 2007, the Marikana opera- Pandora JV tions produced 778 049 oz of platinum in concentrate, which was an 11% decrease on the 881 068 oz pro- Lonmin owns a 42,5% interest in Pandora along- duced in 2006. side Anglo Platinum (42,5%), Mvelaphanda Resourc- es (7,5%), and the Bapo Ba Mogale Mining Company In 2007 Marikana continued to add mechanised ton- (7,5%). Lonmin buys 100% of the ore produced by the nages from the Hossy and Saffy shafts which are ramp- Pandora joint venture for onward processing. ing up to full production. The shafts are the first of Lon- min’s deep shafts where mechanisation has been fully In 2007 the Pandora JV produced 52 479 oz of plati- implemented. num in concentrate, which was a 54% increase from the 34 125 oz produced in 2006. The K4 mechanised shaft on the western side of the Marikana property is expected to come into production Current capital projects late in 2009, with full production anticipated in 2014. At full production the shaft is expected to contribute an Lonmin is aiming to increase production to 1,4-million additional 180 000 oz/y of platinum. ounces of platinum a year by 2012 and, towards this, is undertaking a range of capital projects. The required The shallower shafts on the property have reached the growth in the period to 2012 will come primarily from end of their lifespan but the decrease in production the development of mechanised shafts at Marikana and will be compensated by three new deep mechanised the completion of the Limpopo eastern expansion. shafts and sub-decline projects that are being completed to deepen the Rowland and K3 shafts. Marikana’s Hossy and Saffy shafts are ramping up to full production, and the K4 mechanised shaft is on Limpopo track to come into production late in 2009, with full production anticipated in 2014. The Limpopo mine on the eastern limb of the BIC was acquired by Lonplats in 2005. The mine area is dislo- A pre-feasibility study on the Limpopo expansion proj- cated by several faults, which form the lateral bound- ect was completed in March 2007, confirming that the aries of the delineated resource blocks from which the project can be developed as a fully mechanised mine. Merensky and UG2 reefs are mined. Lonmin has undertaken further work on the project since the completion of this study to look at the poten- In the year to September 2007 the Limpopo mine pro- tial for a larger project on the property. Permitting for duced 35 567 oz of platinum, which was a sharp de- this project is underway. Opportunities to make optimal

Lonmin Platinum’s South African operations – platinum production (oz) Year ended Septem- Year ended Septem- Nine months to June Nine months to June ber 2007 ber 2006 2007 2006 Marikana production 778 049 881 068 596 908 664 877 in concentrate (oz) Limpopo production 35 567 48 640 27 372 38 594 in concentrate (oz) Pandora JV produc- 52 479 34 125 * * tion in concentrate (oz)

Source: Lonmin Platinum Annual Report 2007; Lonmin Platinum Annual Report 2006; Full production report 2007; Third quarter production report 2006 www.researchchannel.co.za 40 Platinum June 2008 use of existing concentrator capacity at Limpopo in the Another JV, with Wallbridge Mining, covers seven PGM short term are also being explored, including the pos- projects in the Sudbury Basin. In June 2007, Lon- sibility of accessing ore from the expansion to the east min purchased an 18% stake in Wallbridge Mining for where the reef is closer to the surface. $6,10-million.

Drilling at the Akanani project on the northern limb of Gabon the Bushveld complex will continue into 2008. Howev- er, a preliminary evaluation has revealed that the cur- Lonmin has obtained an exclusive permit to explore for rent resource at the site could support an initial mine PGMs and associated minerals at Monts de Christal in development producing around 500 000 oz/y of PGMs, the north-western part of Gabon. Three priority sites on including 250 000 oz/y of platinum. The most distinc- the intrusion have been identified for drilling in 2008. tive aspect of the project is the width of ore body, which from initial investigations is estimated to be around 20 South Africa m in some parts of the property, comparing favourably with the 1 m orebody width at Marikana. Work has started on mine design for high volume mechanised mining Lonmin owns a 22% stake in Canadian-based explora- at Akanani, looking at options which could range from tion junior, Platmin, which has PGM projects in South 400 000 t to one-million tons hoisted a month. The at- Africa. Platmin, through its subsidiary Boynton, is Lon- tributable capital expenditure for mine, concentrator min’s JV-exploration partner at the Loskop property in and infrastructure development is estimated at be- Mpumalanga. tween $600-million and $700-million. The Loskop project, located on the eastern limb of the BIC, has an estimated inferred resource of 1,30-million Exploration ounces of 2PGE and gold on an attributable basis.

Canada Tanzania

Lonmin is involved in a JV with CVRD Inco which cov- In Tanzania, Lonmin, together with JV-partner Gold- ers six properties around the Sudbury Basin. Signifi- stream Mining, has received encouraging results from cant progress was made on the project in 2007, in- drilling at the Luwumbu and Mibango projects. Initial cluding new PGM discoveries and better delineation of results show relatively low PGM grades but a majority mineralisation identified in the previous year. of analyses are still awaited.

www.researchchannel.co.za 41 Platinum June 2008

Lonmin

Shareholding structure Share performance Major shareholders as at September 2007: Lansdowne Partners Limited Partnership 4% Morgan Stanley Security Limited 3,09% Prudential Plc and Group companies 13,84% The Capital Group Companies Inc 7,14% Tradewinds Global Investors LLC 5,95%

Lonmin Platinum is held by: Lonmin Plc 82% Incwala Resources 18%

Annual turnover $1,94-billion (year ended September 2007) $1,86-billion (year ended September 2006)

Profit for the year SOURCE: McGregorBFA) $556-million (year ended September 2007) $431-million (year ended September 2006) Contact details Postal address: Leadership PO Box 98811 John Craven (chairperson) Sloane Park Brad Mills (CEO) 2152 South Africa Directors JA Craven, nonexecutive chairman, British Telephone: K De Segundo, nonexecutive Director, Dutch +27 11 516 1300 IP Farmer, CA(SA), chief strategic officer, South Af- rican Fax: A Ferguson, chief financial officer +27 11 516 1310 PC Godsoe, CA, MBA(Harvard), nonexecutive director, Website: SM Gounden, BEng(Durban Westville), PhD (Phil) www.lonmin.com (Natal), nonexecutive director MJ Hartnall, CA, nonexecutive director BA Mills, Degree in Geology, MA (Minerals Econom- ics)(Stanford University), CEO, USA JRB Phillimore, nonexecutive director, British

www.researchchannel.co.za 42 Platinum June 2008

Northam Platinum

Brief history platinum group minerals-bearing orebody on the eastern limb of the Bushveld Complex. Northam Platinum, a stand-alone company, started its platinum operations when it was still a part of Gold Northam also performs treatment and refining activi- Fields South Africa (GFSA). ties, operating two concentrator plants, a smelter, and a base metals removal plant. GFSA owned the mineral rights to a 6 854 ha area covering a number of farms that were underlain by the Me- A proposed deal announced in January 2008 could see rensky and UG2 reefs, and in 1986 Northam announced Mvelaphanda Resources acquiring, for R4-billion in its intention to begin mining. Production began in Janu- cash, Anglo Platinum’s 50% interest in the Booysend- ary 1993. al project and 121-million new Northam shares traded for Northam to acquire full ownership of Booysendal After the unbundling of GFSA, Northam became an thereby making Mvelaphanda Resources the control- independent company, and acquired two contigious ling shareholder of Northam with a 62,9% sharehold- properties from Anglo Platinum in November 1999, ex- ing. tending the life of Northam Platinum to more than 20 years. Through Mvelaphanda Resources, Northam will acquire a 7,5% interest in the Pandora project upon com- Nature of business and market pletion of the Booysendal transaction. position In the year ended June 2007, Northam mine milled 2,27-million tons of headgrade from both the UG2 and Northam platinum, a broadly-based black economic Merensky Reefs, producing 324 296 oz of precious empowerment company, is listed on the JSE and is metals in concentrate (3PGE + Au). For the same pe- the only independent, fully integrated PGM producer riod Northam sold 212 484 oz of refined platinum. Fur- with ownership of the full beneficiation stream. ther, in the six months to December 2007 Northam produced 150 755 oz of concentrated precious metals The company wholly owns and operates the Northam from 1,02-million tons of milled ore, and a total of 83 PGM mine at the upper end of the Western limb of 818 oz of refined platinum were sold by the company. the BIC, and has made its intention to acquire 100% of the Booysendal platinum project public, through a Difficult mining conditions as well as decreased min- deal with Anglo Platinum and Mvelaphanda Resources ing flexibility persisted on the Merensky reef, reducing which currently own 22,4% and 21,8% of Northam re- the number of square metres mined and producing a spectively. Booysendal hosts a large and well-defined decline in head grade from 6,10 g/t to 5,6 g/t, placing

Northam Platinum: Financial and production summary Year ended June 2007 Year ended June 2006 Six months ended Six months ended December 2007 December 2006 Revenue (R) 3,74-billion 2,38-billion 1,50-billion 1,8-billion Net profit (R) 1,33-billion 703-million 473-million 662 -million Precious metals in con- 324 296 261 599 150 755 180 623 centrate produced (3 PGE + Au) (oz) Total refined platinum pro- 212 484 219 449 * * duction Average price realised – 1 288 918 1 396 1 200 platinum ($/oz) Tons milled 2,27-million 2,30-million 1,02-million 1,25-million

Source: Compiled from Northam Platinum annual report 2007, and Northam Platinum unaudited results for the six months ended December 2007. * Not available www.researchchannel.co.za 43 Platinum June 2008 greater emphasis on the tonnage mined from the UG2 da will hold a 62,7% stake in Northam. reef. In April 2008 Mvelaphanda Resources and Northam Platinum operations Platinum announced Northam’s amended terms and key developments marking the progress on various as- The Northam platinum mine is the deepest platinum pects of Northam’s purchase consideration for 100% mine in South Africa, conducting underground min- of the Booysendal project , including Booysendal Ex- ing operations at depths varying between 1 294 m and tension, from Anglo Platinum. 2 215 m below surface. The mine is located 175 km north-west of Johannesburg and 25 km south-west of The parties have also agreed to increase the extent of Thabazimbi, on the northern part of the western limb the Booysendal project area by 1,3 km along the strike of the BIC, where it mines both the UG2 and Merensky into the southern part of Anglo Platinum’s Der Brochen reefs from a twin shaft system. project area.

Owing to the high temperatures in the deep-level mine, Booysendal is underlain by both the UG2 and Meren- Northam has pioneered deep-level hydropowered min- sky reefs and has an inferred resource of 94-million ing methods, which are now used in other deep-level ounces of 4PGE, while the Booysendal Extension con- mines in South Africa. tains a further nine-million ounces of 4PGE, resulting in a revised total resource of about 103-million ounces Surface infrastructure at Northam mine comprises two of 4PGE. concentrator plants capable of processing both both Merensky and UG2 ore, a smelter and a base metals Pandora removal plant where copper and nickel are extracted from the high grade PGM concentrate. A small-scale mining approach was implemented at Pandora in 2006, based on continued development and Owing to the loss of mining resources on the east of the stoping in Lonmin’s No 3 decline, the operation also mine, focus has shifted to a deepening project, which has an opencast section. The venture approved fund- will see an incremental extension of the mining infra- ing to proceed with a pre-feasibility study. This work structure downdip of the 12 level by a conveyor decline started in 2006 and is expected to be concluded in the to access deeper resources. first half of 2008. It is currently anticipated that further development in Lonmin’s No 3 decline will continue in Current capital projects parallel with the study work.

Booysendal Upon the successful conclusion of the Booysend- al transaction, ownership of the 7,5% interest in the The project at Booysendal, a well-developed area on Pandora Joint Venture, currently warehoused by Mve- the eastern limb of the Bushveld Complex, will involve laphanda Resources, will be re-assigned at cost to the construction of a minimum 400 000 t/m platinum Northam. mine, pending completion of a prefeasibility study in mid-2008. This is a significant increase on the initial Lonmin, which has a 42,5% stake in the JV, buys 100% 240 000 t/m mine anticipated by Anglo Platinum and of the ore produced by the Pandora joint venture for presented to the market in 2007. onward processing.

Previously a joint venture between Anglo Platinum and In 2007 the Pandora JV produced 52 479 oz of plati- Mvelaphanda, the Booysendal project is now expect- num in concentrate a 54% increase from the 34 125 oz ed to be wholly owned by Northam through a deal be- produced in 2006. The project is still ramping up to full tween the two companies, following which Mvelaphan- production.

www.researchchannel.co.za 44 Platinum June 2008

Northam

Shareholding structure Share performance Major shareholders as at June 30, 2007: Angloplat 22,5% Mvela 21,9%

Annual turnover R3,74-billion (June 2007) R2,386-billion (June 2006)

Net profit R1,33-billion(June 2007) R706-million (June 2006)

Leadership Lazarus Zim (chairperson) Glyn Lewis (CEO) Source: McGregorBFA) Number of employees 8 530 Contact details Postal address: Directors PO Box 412694 ME Beckett, BSc, FIMM, nonexecutive director, Brit- Craighall ish 2024 NJ Dlamini, MB M.Ch, MBA, independent nonexecutive director, South African Telephone: R Havenstein, MSc (Chemical Eng), BComm, nonex- +27 11 759 6000 ecutive director ET Kgosi, BCom (Hons), independent nonexecutive Fax: director +27 11 325 4795 GT Lewis, BSc(Min Eng), MBA, CEO, British N Mbazima, nonexecutive director Website: RG Mills, BSc (Eng), FIMM, FSAIMM, nonexecutive www.northam.co.za director PC Pienaar, CA (SA), alternate director BR Van Rooyen, BA, LLB, nonexecutive director PL Zim, nonexecutive chairperson

www.researchchannel.co.za 45 Platinum June 2008

Aquarius Platinum

Brief history An empowerment group Savannah Consortium (Sav- Con) holds a 26% stake in AQPSA. SavCon initially acquired a 29,5% stake, but has since sold 3,5% to Aquarius Platinum first became involved in the plati- Aquarius Platinum for a cash consideration of R342,5- num industry in 1995, when it began to explore the million. Proceeds of the disposal will be used to repay possibility of acquiring platinum mineral rights. In 1996, a significant portion of the third-party funding raised by the company exercised options to acquire three com- SavCon for the BEE transaction, thereby improving the panies (Gemex, Randex and Pacific Platinum) whose long-term sustainability of the transaction. As a result mineral rights were combined to make up the Kroondal of the transaction, Aquarius now holds 54% in AQPSA, lease area, in the North West province of South Africa. up from 50,5%. In 1998, Kroondal Platinum Mines, of which Aquarius In February 2008, Aquarius announced that it had en- now owns 95%, was listed in South Africa. The com- tered into an agreement for the acquisition of a 50% in- pany has since been delisted, as part of the drive by terest in Platinum Mile Resources from a consortium of Aquarius to consolidate its interests. private investors and Mvelaphanda Holdings. Follow- ing completion of the transaction, Aquarius and Mve- Nature of business and market laphanda holdings will have joint control of Platinum position Mile, which owns and operates a tailings retreatment facility located in Rustenburg, adjacent to the Kroon- Aquarius is a dedicated PGM producer, with operations dal mine. on both the eastern and western limbs of the BIC, and on the Great Dyke in Zimbabwe. The company is list- In April 2008 Aquarius announced that it had repur- ed on the London, Australian and Johannesburg Stock chased shares held by larger rival Impala Platinum in Exchanges. itself and AQPSA. The shares, which have since been cancelled, were purchased for $285-million. In the year ended June 2007, Aquarius’ attributable Aquarius’ interest in the Mimosa mine, on the Great PGM production was 530 726 oz, which was up on the Dyke in Zimbabwe, is held through a 50% stake in Mi- previous year’s attributable PGM production of 447 693 mosa investments, with the balance being held by Im- oz. For the nine months ended March 2008, PGM pro- pala Platinum. duction attributable to Aquarius was 389 335 oz.

The company’s South African operations are owned by Platinum operations Aquarius Platinum South Africa (AQPSA) and include the Kroondal, Marikana and Everest mines, for which Aquarius has three operating mines in South Africa – the company has new-order mining rights. At two of Kroondal, Marikana, and Everest – and one in Zimba- its operations –Kroondal and Marikana – AQPSA has bwe – Mimosa. PSAs with Anglo Platinum which enable the two companies to mine neighbouring properties on their re- Kroondal spective lease areas. Aquarius also holds a 50% stake in a Chromite Tailings Retreatment Plant (CTRP) con- The Kroondal mine is one of the lowest-cost PGM pro- tiguous to the Kroondal mine. ducers in the world and is Aquarius’ flagship operation.

Aquarius: Financial and production summary Nine months to March 2008 Year ended June 2007 Year ended June 2006 Revenue ($) - 710,8-million 426,6-million Net profit ($) 90,8-million 187,2-million 85,6-million Total attributable PGM pro- 389 335 530 726 447 693 duction (oz)

Source: Aquarius Platinum Annual Report 2007; Aquarius Platinum results for the quarter ended March 2008. www.researchchannel.co.za 46 Platinum June 2008

Located on the western limb of the BIC in the North 938 oz of PGMs, up from the 97 031 oz produced in West, the mine comprises four decline sections – the 2006. For the nine months ended March 2008 the mine Central, East, No 3 and K5 shafts – descending to a produced 26 667 oz of PGM. depth of 400 m. The operation undertakes mechanised board-and-pillar mining. Chromite Tailings Retreatment Plant In 2003, AQPSA entered into a PSA with Anglo Plati- num relating to Kroondal. In terms of the agreement, The CTRP, which has been in production since January the companies will share revenues, costs and capex. 2005, is situated at Kroondal platinum mine and under- By incorporating the Anglo Platinum reserves adja- takes the processing of PGM-bearing tailings dumps cent to Kroondal into the new mine plan, the life-of- and current tailings streams of neighbouring chromite mine was extended to 2016. Prior to the agreement, mines. The project is owned by a three-member con- Kroondal had an expected mine life to 2008. Under the sortium, which comprises Aquarius, GB Mining and Ex- agreement, the mine is expected to produce 505 000 ploration, and Sylvania South Africa. Aquarius holds a oz/y of PGMs. In the year ended June 2007, Kroondal participation interest of 50%, while each of the partners produced 439 351 oz of PGMs, 219 674 oz of which holds 25%. The CTRP produced 7 408 oz of PGMs in were attributable to Aquarius. In the nine months to the year ended June 2007, 3 703 oz of which were at- March 2008 Kroondal produced 308 055 oz of PGMs, tributable to Aquarius. In the year to June 2006, 6 234 154 027 oz of which were attributable to Aquarius. oz of PGMs were produced at the CTRP.

To refine its production, Kroondal has an offtake agreement with Impala Platinum until 2008, and thereafter with Anglo Platinum. Platinum operations in the rest of Africa Marikana Mimosa The Marikana mine lies eight kilometres east of Kroon- In Zimbabwe, Aquarius owns a 50% stake in the Mimo- dal on the western limb of the BIC. The mine has re- sa mine, with the remaining 50% of the operation being cently undergone transition from opencast to under- owned by Impala Platinum. The mine is situated on the ground mining and is ramping up to full production. Wedza geological complex, on the southern part of the Great Dyke, and is considered to be the lowest cost pri- Commissioned in late 2002, the mine is subject to a mary platinum mine in the world. PSA with Anglo Platinum, under which the mine is targeting annual production of 250 000 oz/y of PGMs, at The Mimosa lease consists of four areas covering an an extended life-of-mine to 2024. Without the PSA, area of 6 590 ha, with an anticipated life-of-mine of at Marikana’s mine-life would have been until 2011. In the least 40 years. The mine comprises a shallow under- year ended June 2007, the mine produced 132 376 oz ground mine, with mining taking place at a depth of 200 of PGMs of which 66 187 oz of PGMs were attribut- m. Mimosa produced 154 448 oz of PGMs in the year able to Aquarius. In the nine months to March 2008 the ended June 2007, with 77 224 oz of PGMs attributable mine produced 97 257 oz of PGMs, 48 583 oz of which to Aquarius. Production in the nine months to March were attributable to Aquarius. 2008 was 142 407 oz of PGMs.

Everest In January 2007, Aquarius and Impala Platinum announced a low capital cost expansion to increase an- Located near Lydenburg on the eastern limb of the BIC, nual production capacity at the Mimosa mine to 195 the Everest mine comprises a single decline shaft and a 000 oz PGMs. The expansion project, known as Wed- small opencast operation. The mine began operations za Phase V, follows four earlier successful expansion in January 2006 and in the 2007 financial year switched projects at Mimosa. The expansion will be made pos- to exclusively exploiting its underground resources sible by increasing concentrator capacity from 150 000 where it is continuing to ramp up to full production of t milled a month to 175 000 t milled a month. The addi- 225 000 oz/y. Everest’s life-of-mine is anticipated to be tional tonnage will be sourced from the existing South ten years. Hill mining infrastructure. As a result of Zimbabwe’s difficult operating environment and difficulties experi- In the year ended June 2007, the mine produced 163 enced with old equipment at the expansion, the proj- www.researchchannel.co.za 47 Platinum June 2008 ect has been delayed, and will now only be completed with BEE company Bakgaga Mining to drill and con- in the first half of 2008. Capital costs for the project duct feasibility work at various prospective sites across have increased by almost 25%, to $28,9-million, from the BIC, where Bakgaga holds new-order prospecting the $23,2-million previously envisaged. rights covering 3 000 ha to the west of the existing Leb- owa platinum mine.

Exploration Ongoing exploration has intersected rock types similar to the Merensky Reef. The highest sample value re- In October 2006, Aquarius signed a farm-in agreement turned reveals a grade of 24,58g/t.

Aquarius production by mine (oz)

Year ended 2007 Year ended 2006

Kroondal 439 351 439 444

Marikana 132 376 85 912

Everest 163 938 97 031

Mimosa 154 448 142 407

CTRP 7 408 6 324

Production by mine attributable to Aquarius (oz)

Kroondal 219 674 219 722

Marikana 66 187 56 617

Everest 163 938 97 031

Mimosa 77 224 71 204

CTRP 3 703 3 119

Source: Aquarius Platinum Annual Report 2007; Aquarius Platinum Annual Report 2006

www.researchchannel.co.za 48 Platinum June 2008

Aquarius

Shareholding structure Contact details Major shareholders in Aquarius as of March 31, Postal address: 2007: PO Box 1282 Nutraco Nominees 6,62% Bedfordview State Street Nominees 4,35% 2008 South Africa Revenue $710,8-million (June 2007) Telephone: $426,6-million (June 2006) +27 11 455 2050

Net profit Fax: $187,2-million (June 2007) +27 11 455 2095 $85,6-million (June 2006) Website: Leadership www.aquariusplatinum.com Stuart Murray (CEO)

Directors DR Dix, (tax law), nonexecutive director T Freshwater, nonexecutive director GE Haslam, nonexecutive director Z Mankazana, alternate director K Morna, nonexecutive director SA Murray, B.Sc. (Chem.Eng), AMI ChemE, CEO, South African WJ Purves, CBE, DSO GBM, nonexecutive director NT Sibley, FCA, nonexecutive chairperson

Share performance

Source: McGregor BFA)

www.researchchannel.co.za 49 Platinum June 2008

African Rainbow Minerals

Brief history eration.

African Rainbow Minerals & Exploration was founded The mine is located on the eastern limb of the BIC, 15 in 1997. The company invested in gold and platinum km north west of Burgersfort, and comprises an under- operations, and changed its name to African Rainbow ground mine, some 450 m deep; three decline shafts; Minerals (Arm) in 1999. and a concentrator. All the metal produced is smelted and refined by Anglo Platinum in terms of a JV agree- The company rose to prominence when it succeeded in ment. turning a number of loss-making shafts acquired from AngloGold into profit earners and, in January 2002, en- In the year to June 2007, Modikwa produced 274 174 tered into a joint-venture with Harmony Gold to acquire oz of PGMs in concentrate, which was a decrease on further AngloGold assets and a Gold Fields operation. the previous year’s production of 293 313 oz. The de- This joint-venture was known as Freegold. cline can be attributed to industrial action at the mine, which resulted in a 24-day production loss. For the six In April 2002, Arm’s gold assets were consolidated into months ended December 2007, the mine produced African Rainbow Minerals Gold (ArmGold). The gold 148 039 oz of PGMs in concentrate. Production out- assets of ArmGold were listed in May 2002, while the put for the six months to December 2007 decreased by platinum assets were bolstered with the development 7% when compared with the same period in 2006 as a of Modikwa Platinum in a joint-venture with Anglo Plat- result of a slower than anticipated ramp-up to normal inum in 2001. In May 2003, ArmGold merged with Har- production levels after the re-introduction of continu- mony and, in May 2004, a range of indivisible trans- ous operations from June 2007. actions involving certain interests of Anglovaal Mining, ArmGold and Harmony resulted in the formation of two Prospects for the 2008 financial year include the deep- entities – Harmony Gold in its current form and Arm. ening of the mine’s north and south shafts to sustain monthly production levels in the medium term, ongoing trial mining of the Merensky reef, and a conceptual Nature of business and market study to investigate an increase in the size of the mine position in a modular and incremental manner.

JSE-listed Arm is a diversified BEE mining group with Two Rivers Platinum Mine three divisions – ARM Ferrous, Arm Platinum and Arm- Coal. These divisions hold the company’s South Af- Two Rivers platinum mine is located near the town of rican operations, while its non-South African explora- Steelpoort, in Mpumalanga, on the eastern limb of the tion portfolio is held by Teal Exploration & Mining. Arm BIC and is 55% owned by Arm, with the balance being also has a significant interest in the gold-mining sector, held by Impala Platinum. The mine comprises an un- through its shareholding in Harmony. derground operation and a concentrator plant. All metal produced is smelted and refined by Impala Refining Platinum operations Services. The mine is exclusively exploiting the more profitable UG2 reef, while an ongoing ramp up of both ARM Platinum’s interests consist of four assets – the the main and north declines continues. Modikwa platinum mine, the Nkomati nickel mine, the Two Rivers platinum mine and the Kalahari Platinum For the year ended June 2007, Two Rivers produced (Kalplat) exploration project. 184 099 oz of PGM concentrate. In the six months to December 2007 the mine produced 95 355 oz of PGM Modikwa in concentrate. The development ore stockpile has been depleted The Modikwa mine is a JV between Anglo Platinum and and underground production is expected to reach the the Arm Mining Consortium, which each hold a 50% in- planned steady state output of 225 000 t/m before the terest. Arm owns 83% of the Arm Mining Consortium end of the 2008 financial year. giving the company an effective 41,5% stake in the op- www.researchchannel.co.za 50 Platinum June 2008

Nkomati Nickel Mine rate of 47 000 t/m, while the two new openpits, Pits 2 and 3, will produce 578 000 t/m of ore at a steady state The Nkomati Nickel mine, managed as a 50:50 JV with of production. The average mill grade for the total proj- Norilsk Nickel, is situated 300 km east of Johannesburg ect will be in the order of 0,4% nickel, over the life-of- in the Machadodorp area of the Mpumalanga province. mine. The operation is one of the lowest-cost nickel producing mines in the world. Arm has been mining the mas- The current 100 000 t/m concentrator will be upgraded sive sulphide underground body (MSB) since 1997 and to 250 000 t/m to process the PCMZ ore and a new 375 has carried out a number of feasibility studies on a 000 t/m concentrator for the MMZ will be constructed combined underground/open-pit operation exploiting to give a total concentrator capacity of 625 000 t/m. the main mineralised zone (MMZ) and peridotite chro- The mine’s related infrastructure will also be upgraded, mititic mineralised zone. including construction of two new tailings facilities and an upgrade of the power supply to 80 MVA. In the year ended June 2007, Nkomati produced 46 101 oz of PGMs, which was down on the previous Construction of the phase 2 large-scale mining expan- year’s production of 49 437 oz. In the six months to De- sion will start in early 2008 and is scheduled to take 24 cember 2007, the mine reported production of 14 742 months from the announcement date. Production will oz of PGMS. be sequenced, targeting the initial production ramp up from the MMZ concentrator during the third quarter of A large scale expansion project at the mine was ap- 2009, with full production by the first quarter of 2010. proved towards the end of the 2007 financial year. The initial PCMZ production ramp up is being targeted for the third quarter of 2010, with full production by Current capital projects 2011. Exploration Nkomati nickel mine phase 2 large-scale mining expansion The Kalplats exploration project is a joint-venture between Arm and Platinum Australia (PLA), Arm’s cur- The phase 2 large-scale mining expansion at Nkomati rent interest in the project is 90%. However, a dilution will exploit two zones of the large layered polymetal- clause exists whereby PLA will earn up to 49% in the lic disseminated sulphide resource, which contains 904 project upon completion of a bankable feasibility study 335 t of nickel. The first is the MMZ, that is currently and through making its proprietary Panton Metallurgi- being mined by the interim phase, which successfully cal Process available to the project at no cost. started commissioning in September 2007, through underground and openpit mining. This is overlayed by the The project lies within the western limb of the Kraaipan peridotite chromititic mineralised zone (PCMZ), which Greenstone belt, some 45 km to the west of the exist- will be mined by openpit methods. In addition to nick- ing Kalahari Goldridge mining project. A total of sev- el, by-products of PGMs, chromite, copper and cobalt en separate PGM deposits and three prospects have will also be recovered. been identified over the 12-km strike length of intrusion, and potential exists for further discoveries in the Mining will continue from the underground mine, at the project area.

www.researchchannel.co.za 51 Platinum June 2008

African Rainbow Minerals

Shareholders JC Steenkamp, National Met Diploma, MDP, Cert Beneficial shareholders with an interest of 5% or Eng, executive director more: ZB Swanepoel, BSc (Mining Eng), BCom (Hons), Arm & Exploration Investments 41,84% nonexecutive director Allan Gray Investment Council 17,49% AJ Wilkens, MDPA (Unisa), RMIIA, CEO Arm Broad Based Empowerment Trust 13,64% Old Mutual Asset Managers 4,87%

Turnover R6,15-billion (June 2007) R4,62-billion (June 2006)

Profit R1,41-billion (June 2007) R764-million (June 2006)

Leadership Patrice Motsepe (executive chairperson) Andre Wilken (CEO)

Directors F Abbott, BCom, CA (SA), MBL, executive director MMM Bakane-Tuoane, BA, MA, PhD, independent Share performance nonexecutive director JA Chissano, independent nonexecutive director, Mozambican Source: McGregor BFA) WM Gule, BA(Hons) Wits, P & DM (Wits Business School), Chief Executive Officer Contact details MW King, CA (SA), FCA, independent nonexecutive Postal address: director PO Box 786136 AK Maditsi, BProc, LLB, LLM, independent nonex- Sandton ecutive director 2146 KS Mashalane, B.Comm (Hons), PMD (Harvard Busi- South Africa ness School), executive director JR McAlpine, BSc, CA, independent nonexecutive Telephone: director +27 11 779 1300 RP Menell, MA, MSc, nonexecutive deputy chairman Fax: PT Motsepe, BA Legal, LLB, executive chairman +27 11 779 1312 LA Lincoln Allison (Stompie), Shiels, Executive Di- rector, Website: RV Simelane, BA (Econ and Acc), MA, PhD (Econ), www.arm.co.za independent nonexecutive director MV Sisulu, MPA, MSc, independent nonexecutive director

www.researchchannel.co.za 52 Platinum June 2008

Royal Bafokeng Resources

Brief history the deal to R12,1-billion. Impala Platinum reported production of 3,85-million ounces of PGM in the year end- The Royal Bafokeng Nation (RBN) is a 300 000 strong ed June 2007. community, based in South Africa’s North West prov- BRPM is an unincorporated 50:50 JV between RBR and ince. The community owns 1 200 km2 of land which Anglo Platinum which gives each partner equal pow- hosts the BIC. The RBN leases portions of this land ers, duties, rights and obligations in relation to man- to, or conducts joint mining operations with, some of agement, although the mine is operated in terms of a the world’s largest mining companies including Impala service agreement with Anglo Platinum. Platinum and Anglo Platinum.

Royal Bafokeng Resources (RBR) was established in Platinum operations in South Africa 2002 to manage and develop the RBN’s mining related The BPRM exploits the Merensky and UG2 reefs on the assets. Boschkoppie, Frischgewaagd and Styldrift farms in the Rustenburg area. Nature of business and market The mine is in steady state production with monthly position milled throughput exceeding the original design capacity. In 2007, BPRM produced a total of 193 600 oz of RBR manages the mining and mining-related interests refined platinum, which was 11% down on the previous of the RBN, which currently include involvements in the year’s production of 217 800 oz. The decrease can be PGMs, base metals, chrome and granite sectors. attributed to labour activism throughout the year, mill breakdowns in the second quarter and a five day work The company’s involvement in the platinum sector is stoppage owing to safety concerns. through a 13,4% shareholding in Impala Platinum, and through the BRPM, a 50:50 JV with Anglo Platinum. Current capital projects The company initially obtained a holding of 1,3% of Impala Platinum in 1999 through an agreement first A phase two project is being undertaken at BRPM to reached regarding Impala’s flagship operation, the Im- extend the existing south and north shaft infrastruc- plala Platinum Mine, which is located on land that is ture by five levels. The project is on schedule, with a owned by the RBN. In terms of a royalty agreement phased transition up to 2011. This will ensure the con- signed in September 2006, RBR received an addition- tinued production of Merensky ore at 100 000 t/m for al 12,1% holding in Impala Platinum effective in March each shaft system for another seven years. 2007. In terms of the new transaction, known as the “royalty transaction”, Implats’ major operating sub- While BRPM has already been in production for some sidiary, the Impala Lease Area, would pay to RBH an time, its infrastructure is to be used as a basis for de- amount of R10,6-billion, being all royalties due to the velopment of the Styldrift property, the venture plans to RBN for the 32-year period from July 1 2007 onwards produce 485 000 oz of refined platinum over a period under the notarial mineral lease between Impala and of five years. the RBN. This figure had been calculated using an exchange rate or R7,50 to the dollar, a platinum price of The Styldrift feasibility study has progressed satisfac- between $900/oz and $1 000/oz and a palladium price torily and will be completed by mid-2008. The design of between $250/oz and $300/oz. RBN would use the allows for initial production of Merensky ore in a combi- money to subscribe for 9,389-million shares in Implats nation of mechanised room-and-pillar and convention- which, together with RBN’s existing holding of one-mil- al mining methods. lion shares, would give it a holding of 13,4% in Implats. Included in the transaction, is a so-called ‘BEE com- The development of the project is expected to cost pensation charge’ of R1,5-billion, raising the value of some R1,2-bilion.

www.researchchannel.co.za 53 Platinum June 2008

Royal Bafokeng resources

Leadership Contact details Kgosi Leruo Molotlegi (chairperson) Postal address: Niall Carroll (CEO) PO Box 55669 Northlands Directors Johannesburg A Jackson, BSc (Geology/Hydrology), University of 2116 Natal, BSc. (Hons) (Geology), University of Natal; South Africa chartered financial analyst (CFA Institute), executive director Telephone: Gillian Kettaneh, BSc (Economics), London School +27 11 219 6000 of Economics, Juris Doctor, Harvard Law School, Master in Public Administration, John F Kennedy Fax: School of Government, Harvard University, execu- +27 11 219 6060 tive: corporate Tshepo Kgage, BCom, University of Cape Town, Website: BCom (Hons), UNISA, Chartered Accountant (SA), www.bafokengholdings.com executive: finance and administration Thabo Mokgatlha, A (SA), BCom, University of the North West and BCompt/CTA (Hons), University of South Africa, Chartered Accountant (SA), nonexecutive director Tshidi Nyama, BCom, University of the North; MBA, University of Bridgeport (USA), non-executive director Steve Phiri, Juris, University of the North; LLB, Vis- ta University, Diploma in Corporate Law, Rand Afri- kaanse Universiteit (RAU), nonexecutive director Mpueleng Pooe, BProc, University of the North, Management Development Programme, Gordon In- stitute of Business Science, Certificate in Advanced Corporate and Securities Law, University of South Africa, executive public affairs

www.researchchannel.co.za 54 Platinum June 2008

Jubilee Platinum

Jubilee Platinum is a mining exploration and develop- 5 143 ha in the eastern Bushveld: namely Dsjate, Fernk- ment company with interests in PGMs, nickel and cop- loof, and Quartz Hill. The farms are downdip of Impala per. The company is listed on both the JSE and Lon- Platinum`s operating Marula platinum mine and Anglo don’s AIM. Platinum`s developing Twickenham platinum mine.

The company’s South African interests are located on The projects value stands at $510-million. The deci- the BIC and include the Tjate platinum project, Dullst- sion to install an estimated 25 MW of electricity gener- room Plats property and Maude mining and Exploration ating capacity will lift the capital cost of the project from which includes the Bokfontein JQ448 and Elandsdrift $470-million to $510-million. JQ467 PGM properties. The Dullstroom Plats property is located on the east- The Tjate Platinum Corporation, in which Jubilee has ern edge of the BIC and is comprised of more than 2 a 48,72% stake, operates the Tjate project. The dev- 500 hectares of land. The two major PGM bearing reefs lopment of the project will involve the construction of a within the BIC, the Merensky and UG2, outcrop to the standalone mine, producing 262 000 oz/y of platinum- north of the tenement area, and host Anglo Platinum’s group metals, plus gold. The mining scenario consid- Der Brochen Mine and Aquarius’ Everest South Project ered is for a single vertical shaft system to a depth of 1 only 21km north of the area of interest. Drilling is still 100 m and initially mining only the Merensky reef. taking place on the property.

The project comprises three contiguous farms, totaling

Jubilee Platinum

Shareholding structure A Sarosi, BSc Metallurgy (Wits), MSc Eng (Wits), Major shareholders as at June 2007: Technical Director, Ambrian Capital Plc, 10.70% AXA Framlington, 3.40% Contact details Barclays Wealth, 3.01% Physical address: Best Asset Class (BAC) AG, 7.10% 4th Floor Colin Bird, 7.67% 2 Cromwell Place Fidelity Managed Funds, 6.87% London JP Morgan Fleming Asset Management, 8.65% SW7 2JE

Leadership Telephone: MA Burne (nonexecutive chairperson) +44 20 7584 2155 C Bird (CEO) Fax: Directors +44 20 7589 7806 C Bird, HND Min Eng, Chartered Eng, Fellow of Insti- tute of Mining & Metallurgy, Cert Mine Manager (UK Website: & SA), Chief Executive Officer, www.jubileeplatinum.com MA Burne, , Non-Executive Chairman, C Molefe, BCom (Unin), Post-graduate diploma (University of Cape Town), Non-Executive Director, South African

www.researchchannel.co.za 55 Platinum June 2008

Lesego Platinum

In 2005, Minex entered into JV with Umbono, form- on the eastern limb of the BIC. A completed exploration ing Lesego Platinum, with new order exploration rights programme has revealed a 27,8-million ounce PGM granted in 2006. The company intends to list on the and AU inferred resource. Additional drilling and feasi- main board of the JSE in the second quarter of 2008. bility work are intended to be done as the next step of The company owns a 100% stake in the Phosiri Project the project.

Lesego Platinum

Leadership R Pitchford (nonexecutive chairperson) P Mbuyazi (CEO)

Contact details Telephone: +27 11 880 3159 Fax: +27 11 880 0486

www.researchchannel.co.za 56 Platinum June 2008

Mmakau Mining

Mmakau Mining is a 100% black owned company in- of platinum in concentrate in the six months to Decem- volved in the mining sector through the provision of ber 2007. contract mining and consultation services, and through investments in the platinum, coal, gold, chrome, vana- At present Marula is exploiting the UG2 reef from the dium and uranium/molybdenum sectors. Clapham and Driekop declines, which are 1,3 km apart and are expected to reach a depth of 770 m. The initial The company’s involvement in platinum is through a mine plan, using board an pillar techniques has been 9% stake in the Marula platinum mine, which is major- unsuccessful. Production from the new mine plan start- ity owned by Impala Platinum; and a 30% stake in the ed in 2008 and drill jig technology has been implement- Madibeng platinum exploration project. ed resulting improved rates of advance.

The Marula mine, situated on the eastern limb of the The Madibeng platinum project, situated in the North Bushveld Complex, near the town of Burgersfort, in West province, is a joint-venture between James Allan Limpopo Province, is 73% owned by Impala Platinum, and Associates (51%), Mmakau Mining (30%), and a with the balance being held by Mmakau and two other community, business and employee trust (19%). The BEE partners – the Marula Community Trust and Tu- DME has awarded the joint-venture prospecting rights batse Platinum. The mine produced 65 000 oz of re- for the property. fined platinum in the year to June 2007, and 35 700 oz

Mmankau Mining

Leadership Bridgette Radebe (chairperson)

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

Telephone: +27 11 880 0206

www.researchchannel.co.za 57 Platinum June 2008

Nkwe Platinum

Australian-listed Nkwe Platinum, through its South Af- Nkwe sold its new order prospecting rights for the De rican subsidiary Nkwe South Africa (Nkwe SA), is fo- Wildt project to Xstrata for $12-million in February cused on the acquisition, exploration, development 2008. and commercialisation of PGM and associated base metal projects in the BIC. Nkwe SA meets the empowerment requirements of South Africa’s mining charter, being 74% owned by The company’s assets include a 74% stake in the farms Nkwe Platinum, with the remaining 26% being held De Kom and Garatouw (also known as the Genorah by BEE companies Blue Nightingale and Genorah Re- farms), which was acquired from Genorah Resources sources. in March 2007. The platinum farms are located immediately down dip of Anglo Platinum’s Modikwa mine and In early 2008 the company Nkwe South Africa was in- Impala Platinum’s Marula mine, on the eastern limb of volved in the resolution of a dispute over the prospect- the BIC, and include an area of about 3 300 ha. The ing rights of five farms, following legal action threat- company is conducting an expedited exploration pro- ened by Anglo Platinum, after the rights were awarded gram and a bankable feasibility study at Garatouw. to Genorah, a major shareholder in Nkwe Platinum.

The company’s Pilanesburg project comprises two Following several meetings between Anglo Platinum, properties, Rooderand and Ruighoek, which are ad- Nkwe, Genorah, African Rainbow Minerals and the De- vanced stage exploration projects. Rooderand is locat- partment of Minerals and Energy (DME), the parties ed on the north-western rim of the Pilanesberg Nation- agreed to abide by the original decisions of the depart- al Park. ment. These decisions included refusing the applications submitted by Anglo Platinum and the awarding of At the Kliprivier/Tinderbox project, Nkwe has success- prospecting licences to Genorah; the legal proceeding fully obtained a new-order prospecting right conver- instituted by Anglo Platinum or its subsidiary compa- sion. The prospect is located on the eastern limb of nies, which was suspended in 2007, will be discontin- the BIC and lies immediately south and along strike ued; and all parties will enter into commercial negotia- of Aquarius Platinum’s Everest South platinum project tions to consider joint exploitation of their respective and Anglo Plainumt’s Booysendal project. mineral resources.

Also on the eastern limb of the BIC is the Eerste Ge- Nkwe has revealed its intention to list on the JSE by luk prospect, where Nkwe is expecting to complete a mid-2008. bankable feasibility study in mid -2008.

Nkwe Platinum

Leadership Telephone: Maredi Mphahlele (MD) +27 11 445 2196 Fax: Contact details +27 11 445 2166 Postal address PO Box 11585 Website: Vorna Valley www.nkweplatinum.com Midrand 1686 South Africa

www.researchchannel.co.za 58 Platinum June 2008

Platmin

Platmin is an exploration company incorporated in The combined proven and probable reserves for Canada focused on the exploration for, and develop- Tuschenkomst and Ruighoek total 37,4-million tons ment of, PGM deposits in South Africa. The company, at 2,04 g/t 3PGM+gold for 4,4-million ounces of through its wholly owned subsidiary Platmin Resourc- 3PGMs+gold. The total capital expenditure over the es, holds a 72,39% interest in Boynton Investments, development of the project is R1,67-billion. First pro- which is Platmin’s South African operating subsidiary. duction from the Pilanesberg project is expected in the first quarter of 2009. Platmin’s BEE partner, the Moepi group of companies, holds an interest of 27,61% in Boynton Investments, Platmin’s M’Phatlele Project is located on the north- Platmin therefore complies with South African law re- eastern limb of the BIC and is the second most ad- quiring that BEE ownership in the mining industry ex- vanced of the company’s projects. Platmin has a ceed 26% by 2014. 54,29% interest in the project held through Boynton. The balance is owned by Platmin’s BEE partner, the The company’s exploration and development efforts Moepi group of companies. are concentrated on four key project areas –Pilanes- berg, M’Phatlele, Grootboom, and Loskop, located on The M’Phatlele project has a 7,9 km strike of Merensky the BIC. and UG2 reefs and is adjacent to Lonmin’s Limpopo Platinum operations. The revised mineral resource has The Pilanesberg project, in South Africa’s North West led to the current pre-feasibility study. Platmin has bud- province, is Platmin’s only project that is located on the geted approximately $3,34-million for exploration, bulk western limb of the BIC. The project scope includes the sampling and metallurgical test work. Tuschenkomst and Ruighoek properties. The Grootboom project currently consists of the farms The preferred mining option for the project is to mine Grootboom and Annex Grootboom on the eastern limb the Tuschenkomst and Ruighoek PGM deposits as two of the BIC. A consultancy has been appointed to lead large opencast mines, with the treatment of the ores a prefeasibility study on the Grootboom project. A min- through two conventional Merensky and UG2 flotation ing right application for the Grootboom 336KT proper- concentrators at a combined production rate of about ty and a separate application for the PGMs contained 250 000 oz/y 3 PGM+gold in concentrate for the first in the tailings dam on the property have been lodged. 11 years. Both applications were accepted by the South African Department of Minerals and Energy and it is expected The Tuschenkomst orebody will be mined over a strike that these mining rights will be granted in December length of 3 km down to a maximum depth of 150 m in 2008. a conventional openpit. The silicate reefs will be bulk- mined at a rate of 320 000 t/m. The UG2 reef will be se- The Loskop project is a JV with Lonmin plc and is at an lectively mined at a rate of 50 000 t/m. advanced exploration stage.

Platmin

Leadership Telephone: Rupert Pardoe (chairperson) +27 12 661 4280 Ian Watson (CEO) Fax: +27 12 661 4139 Contact details Postal address: Website: Private Bag X11 www.platmin.com Highveld 0067 South Africa

www.researchchannel.co.za 59 Platinum June 2008

Platinum Group Metals

Platinum Group Metals (PTM) is a PGM-focused ex- ly access decline and vertical shaft system combina- plorer with projects in South Africa and Canada. The tion which would result in earlier cash flows as ore is company holds a 37% working interest in the West- processed earlier. Both proposals will be investigated ern Bushveld Joint-venture (WBJV). Other partners in as part of a bankable feasibility study, which is near- the joint-venture are Anglo Platinum, which has a 37% ing completion. The three companies have entered into stake, and Wesizwe, which has a 26% interest, ensur- agreements to buy three used mine hoists. ing that the venture complies with the ten-year BEE requirement of the Mining Charter. Drilling is planned to continue on Projects 2 and 3 as Project 1 advances through the final engineering and The WBJV is divided into three distinct project areas: mine design process. Projects 1, 2 and 3. In addition to PTM’s involvement in the WBJV, the com- A prefeasibility study was completed on Project 1 in pany is involved on the northern limb of the BIC, where January 2007. PTM is moving the deposit towards the it holds a 70% stake in two properties – the War Springs completion of a Bankable Feasibility Study expected in property, where exploration has revealed a mineral re- the calendar second quarter 2008. source estimate of 1,7-million ounces of PGMs, and the Tweespalk property, where initial drilling results are The prefeasibility study proposes an underground mine being evaluated. producing 250 000 oz/y of PGMs in concentrate from 140 000 t/m, with a total life-of-mine of 18 years. It The company is also involved in exploration in Canada suggests the use of a vertical shaft system, or an ear- – at Agnew Lake, Lac des Iles, and Lake Mount

Platinum Group Metals

Leadership R Michael Jones (director, president and CEO) John Gould (MD Platinum Group Metals South Af- rica)

Contact details Postal address: Postnet Suite No. 81 Private Bag X12 Rooseveltpark 2129 South Africa

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

Website: www.platinumgroupmetals.net

www.researchchannel.co.za 60 Platinum June 2008

Ridge Mining

Ridge Mining is an Aim-traded company focused on The Sheba’s Ridge project is also located on the east- the development of PGM projects on South Africa’s ern limb of the BIC. A full feasibility study on the proj- BIC. The company is involved in two PGM projects – ect was completed at the end of 2007. The study pro- Blue Ridge and Sheba’s Ridge. poses an openpit mine about 3 km long, 1 km wide and 400 m deep. The ore will be trucked using 250-trolley- The Blue Ridge project is situated on the farm Blaauw- assisted trucks, which will deliver most of their power bank on the eastern limb of the BIC and is Ridge Min- from an overhead electricity line. The ore will be deliv- ing’s most developed project. The company has a 50% ered to a concentrator plant consisting of three sep- stake in the project, and is being partnered by BEE arate streams, each capable of treating 500 000 t/m. company Imbani Platinum. The concentrate will be smelted in two 35-MVA six-in- line furnaces. It is estimated that the project will cost The feasibility study envisages a mine milling 120 000 $691-million to develop. t/m of ore, with a mill head grade of 3,3 g/t of PGMs, producing 75 000 oz of platinum, 35 000 oz of palladi- Sheba’s Ridge is a platinum reef resource contain- um, 13 000 oz of rhodium, and 1 600 oz of gold a year. ing 1,4-million tons nickel, 19-million ounces of three Mine development started in the first quarter of 2007 PGMs, and 0,5-million tons of copper. and first production is scheduled for the third quarter of 2008.

Ridge Mining

Leadership Oliver Baring (chairperson) Terence Wilkinson (CEO)

Contact details Postal address: PO Box 76575 Wendywood 2144 South Africa

Telephone: +27 11 656 1140 Fax: +27 11 802 0990

Website: www.ridgemining.co.za

www.researchchannel.co.za 61 Platinum June 2008

Wesizwe Platinum

Wesizwe Platinum is a broad-based BEE exploration farm Ledig, portions 1 and 2. company, in which the Bakubung-Ba-Ratheo community owns a 33% share, contributing to a total share- The project will consist of an underground mine and a holding by historically disadvantaged South Africans of surface concentrator plant, and takes into account the 52%. In April 2007, Wesizwe Platinum acquired Africa establishment of all surface infrastructure, servitudes Wide Mineral Exploration. The transaction gives Wesiz- for bulk power and water supply, the sinking and equip- we Platinum a 26% interest in the WBJV. ping of ventilation and main shafts, the associated underground infrastructure, the ancillary excavations and Wesizwe Platinum is listed on the JSE and has min- the access development to establish a footprint for full eral rights to four farms located near the Pilanesburg production. in South Africa – Ledig, Frischgewaagd, Mimosa and Zandrivierspoort. The project has an estimated life-of-mine of 35 years at a production rate of 230 000 t/m for an annual output Wesizwe Platinum’s main project is the Ledig-Frischge- of 350 000 oz platinum group elements during steady waagd platinum project. In March 2008, Wesizwe Plat- state production, at an average cash cost of R320/t. inum gave the go-ahead for the construction of the The capital cost estimate for the project is R5,6 billion. Frischgewaagd/Ledig complex, following positive re- The capital cost estimate for the project is R5,6 billion. sults from a BFS that was delivered on time and within This figure includes an overall contingency of R275,3- budget. The project will involve the construction of a million. An additional electrical self-generation contin- platinum mine on Wesizwe Platinum’s core assets on gency of R168-million has been taken into account to the farms Frishgewaagd, portions 3, 4, and 11, and the allow for any electricity supply delays by Eskom.

Wesizwe Platinum

Shareholding structure Certificate of Competency, Chief Executive Officer, Major shareholders as at June 2007: South African Bakubung-Ba-Ratheo Community, 25.7% JC Williams, MCom. CA(SA), Non-Executive Direc- Lincoln Ngculu, 5.7% tor, South African Thuthukile Skweyiya, 5.7% Vunani Capital (Pty) Ltd, 6.6% Contact details Postal address: Leadership Private Bag X16 Michael Solomon (CEO) Northlands 2116 Directors South Africa WM Eksteen, Registered Certificated Engineer, Na- tional Higher Diploma in Mining, Mine Manager’s Telephone: Certificate of C, Independent Non-Executive Direc- +27 11 215 2200 tor, South African L Maloney, BA, Non-Executive Director, South Afri- Fax: can +27 11 268 6885 EM Monnakgotla, Marketing Diploma, Non-Execu- tive Director, South African Website: DJ Phologane, Health Diploma, Non-Executive Di- www.wesizwe.co.za rector, South African RG Rainey, B.Com, CTA, CMA, CA (SA), Independ- ent Non-Executive Acting Chairman, South African MH Solomon, BSc (Eng) (Mining), Mine Manager’s

www.researchchannel.co.za 62 Platinum June 2008

Xstrata

Nature of business and market The Mototolo mine is a 50:50 JV between Anglo Plat- position inum and the XK Xstrata partnership, which is comprised of the Kagiso Platinum Venture and Xstrata Xstrata is a global diversified mining group, listed on South Africa. the London and Swiss stock exchanges, with interests in copper, coking coal, thermal coal, ferrochrome, nick- Production at the mine began in the fourth quarter of el, vanadium and zinc, and has further interest in plati- 2006. The mine produced 95 200 oz of platinum in its num group metals, gold, cobalt, lead and silver. first full year of production, and production levels are expected to increase in 2008. Xstrata entered the platinum sector in August 2005 through the R1,35-billion acquisition of a 50% stake in Xstrata South Africa manages the mining operations at the Mototolo mine. The remaining 50% is held by An- Mototolo, and Anglo Platinum manages the concentra- glo Platinum. In 2006, Xstrata and Kagiso Trust Invest- tor operations. ments announced an agreement to form a black economic empowerment partnership in respect to Xstrata’s Current capital projects 50% interest in the Mototolo Joint Venture, forming XK Xstrata partnership. The Elandsfontein platinum project is located in South Africa’s North West province, on the western limb of the In November 2007, Xstrata acquired Eland Platinum for BIC. Openpit mining was expected to start at the mine $1-billion. As a result, assets, including a 64,99% inter- in mid-2007 and production from underground mining est in Eland Platinum Mines and a 66% controlling in- in 2008. terest in Madibeng Platinum, were transferred to Xstra- ta. The project has built up a 600 000-t ore stockpile that is currently being fed through the 250 000-t/m concen- In February 2008 Xstrata announced that it had ac- trator. The total cost of the project is expected to be quired black-controlled junior Nkwe Platinum’s De about R1,1-billion. Wildt prospect for $12-million. The prospect lies adjacent to the Elandsfontein mine and another property at- Exploration tained in the Eland deal. Xstrata will spend $26-million over two years on exploration at its Beestkraal properties near Rustenburg, Platinum operations which have a potential 100-million PGM resource.

Xtrata

Leadership W Strothotte (chairperson) ML Davis (CEO)

Contact details: Physical address: Suite No 19 Private Bag X1 Melrose Arch 2076

Telephone: +27 11 250 0000 Fax: +27 11 250 0001

Website: www.xstrata.com www.researchchannel.co.za 63 Platinum June 2008

Glossary of mining terms

Backfill Waste material used to fill the void created by mining an orebody

Block caving An inexpensive method of mining in which large blocks of ore are undercut, causing the ore to break or cave under its own weight

By-product A secondary metal or mineral product recovered in the milling process

Concentrate A fine, powdery product of the milling process containing a high percentage of valuable metal

Cut-and-fill A method of stoping in which ore is removed in slices, or lifts, and then the excavation is filled with rock or other waste material (backfill), before the subsequent slice is extracted

Cut-off grade The estimated lowest grade of ore that can be mined and treated profitably in a mining operation

Decline A sloping, underground opening for machine access from level to level or from surface; also called a ramp

Electrowinning Recovery of metal from solution by electrolysis

Environmental impact study A written report, compiled prior to a production decision, that examines the effects proposed mining activities will have on the natural surroundings

Exploration Activities associated with ascertaining the existence, location, extent or quality of mineralised material, including economic and technical evaluation of mineralised material

Flotation A milling process in which valuable mineral particles are induced to become attached to bubbles and float, and others sink

Hanging wall The rock on the upper side of a vein or ore deposit

Head grade A general term referring to the grade of ore delivered to the processing plant

Heap leaching A process whereby valuable metals (usually gold and silver) are leached from a heap, or pad, of crushed ore by leaching solutions percolating down through the heap and are collected from a sloping, impermeable liner below the pad

Hedging The sale of a commodity at fixed future prices in order to guard against price uncertainty and guarantee revenue streams. Commonly practiced in the gold market www.researchchannel.co.za 64 Platinum June 2008

In situ The original natural state of the orebody before mining or processing of the ore takes place

Indicated Mineral Resource An indicated mineral resource is the part of a mineral resource for which tonnage; densities; shape; physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately placed to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed

Inferred Mineral Resource An inferred mineral resource is that part of a mineral resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that may be limited or of uncertain quality and reliability

Level The workings or tunnels of an underground mine which are on the same horizontal plane

Longwall mining An underground high productivity mechanized mining system for extracting panels or blocks of mineral, usually coal

Measured Mineral Resource A measure d mineral resource is that part of a mineral resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence. It is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are spaced close enough to confirm geological continuity.

Metallurgical Plant Processing plan used to treat ore and extract the contained metals

Mill/Milling The comminution of the ore, although the terms have come to cover the broad range of machinery inside the treatment plant where the mineral is separated from the ore

Mineable That portion of a mineralised deposit for which extraction is technically and economically feasible

Mineral Reserve A mineral reserve is the economically mineable material derived from a measured and/or indicated mineral resource. It is inclusive of diluting materials and allows for losses that may occur when the material is mined. Appropriate assessments, which may include feasibility studies, have been carried out, including consideration of, and modification by, realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction is reasonably justified. Mineral reserves are sub-divided in order of increasing confidence into probable mineral reserves and proves mineral reserves

Mineral Resource A mineral resource is a concentration (or occurrence) of material of economic interest in or on the earth’s crust in such form, quality and quantity that there are reasonable and realistic prospects for eventual economic extraction. The location, quantity, grade, continuity and other geological characteristics of a mineral resource are known, estimated from specific geological evidence and knowledge, or interpreted from a well-constrained and portrayed geological model. Mineral resources are subdivided, in order of increasing confidence in respect of geoscientific evidence, into inferred, indicated and measured categories www.researchchannel.co.za 65 Platinum June 2008

Non-refractory ore Ore which is relatively easy to treat for recovery of the valuable substances

Nugget A small mass of previous metal, found free in nature

Open pit A mine that is entirely on surface. Also referred to as an open-cast mine

Overburden Soil, rock and other material which has to be removed to access the economic mineral in open cast mining

Pre-feasibility study A relatively comprehensive analysis that is qualified by the availability and accuracy of fundamental criteria and assumptions to the degree that it cannot be the basis for final decisions

Pre-stripping Removal of overburden (waste rock) in advance of beginning operations to remove ore in an openpit operation

Probable Mineral Reserve A probable mineral reserve is the mineable material derived from a measured and/or indicated mineral resource. It is estimated with a lower level of confidence than a proved mineral reserve. It is inclusive of diluting materials and allows for losses that may occur when the material is mined. Appropriate assessments, which may include feasibility studies, have been carried out, including consideration of, and modification by, realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction is reasonably justified.

Proved Mineral Reserve A proved mineral reserve is the economically mineable material derived from ameasured mineral reserve. It is estimated with a high level of confidence. It is inclusive of diluting materials and allows for losses that may occur when the material is mined. Appropriate assessments, which may include feasibility studies, have been carried out, including consideration or and modification by, realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction is reasonably justified.

Recovery Grade The actual grade of ore realised after the mining and treatment process.

Royalty An amount of money paid at regular intervals by the lessee or operator of an exploration or mining property to the owner of the ground. Generally based on a certain amount per ton or a percentage of the total production or profits. Also, the fee paid for the right to use a patented process

Shaft A shaft provides principal access to the underground workings for transporting personnel, equipment, supplies, ore and waste. A shaft is also used for ventilation, and as an auxiliary exit. It is equipped with a hoist system that lowers and raises conveyances for men, material and ore in the shaft Slag The vitreous mass separated from the fused metals in the smelting process

Smelting Thermal processing whereby molten metal is liberated from beneficiated ore or concentrate with impurities separating as lighter slag

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Stope The underground excavation within the orebody where the main production takes place

Strike The direction in which a horizontal line can be drawn on a plane

Stripping ratio The ratio of tons removed as waste relative to the number of tons of ore removed from an open pit mine

Tailings The portion of the ore from which most of the valuable material has been removed by concentrating and that is therefore low in value and rejected.

Tailings Dam Dams or dumps created from waste material from processed ore after the economically recoverable metal has been extracted.

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Main Sources

African Rainbow Minerals. Annual Report. (2007). Anglo Platinum. Annual Report. (2007). Anglo Platinum. Second quarter 2008 results. (December 31, 2007). Aquarius Platinum. Annual Report. (2007). Aquarius Platinum. Second quarter 2008 results. (December 31, 2007).

Bloomberg. Business Day. Bill scuffs up a golden opportunity. (August 5, 2007) Business Day. Mining royalties. (December 10, 2007). Business Day. Mining royalty law this year. (February 6, 2008). Business Day. JSE turns red on AngloPlat earnings. (February 11, 2008). Business Day. Faster environmental approvals for mines in pipeline. (February 15, 2008). Business Day. Mineral extractors liable for royalties to the state. (March 10, 2008) Business Day. Royalty Bill review likely – Sonjica. (March 18, 2008).

Business Report. Royalty Bill to be finalised soon. (February 5, 2008). Business Report. Production drop bleeds profit from Angloplat. ((February 11, 2008). Business Report. De Beers fights for change to royalty bill (March 11, 2008). Business Report. Relocation troubles bog down R5,8bn Angloplat project. (April 6, 2008).

Impala Platinum. Annual Report. (2007). Impala Platinum. Second quarter 2008 results. (December 31, 2007).

Johnson Matthey. Platinum 2007 Interim Review. Johnson Matthey. Platinum 2008 Industry Review. Lonmin. Annual Report 2007 Lonmin. Second quarter 2008 results. (December 31, 2007)

Mining Weekly. Marula mine. (March 9, 2007). Mining Weekly. Impala Platinum mine, North West. (March 30, 2007). Mining Weekly. Two Rivers mine, Mpumalanga. (April 6, 2007). Mining Weekly. Kroondal mine, North West. (April 27, 2007). Mining Weekly. Everest mine, Mpumalanga. (May 25, 2007). Mining Weekly. SA to amend mining law to boost community stakes. (June 22, 2007). Mining Weekly. Amandelbult section, North West. (July 27, 2007). Mining Weekly. Elandsfontein platinum project, South Africa. (August 3, 2007). Mining Weekly. Lebowa Platinum Mine, Limpopo. (August 3, 2007). Mining Weekly. Marikana mine, North West. (August 3, 2007). Mining Weekly. Smokey Hills platinum project, Limpopo. (August 3, 2007). Mining Weekly. Limpopo mine, Limpopo. (August 10, 2007). Mining Weekly. No sunset clause on black economic empowerment and affirmative action. (August 10, 2007). Mining Weekly. Pilanesberg project, North West province. (August 10, 2007). Mining Weekly. Impala No 16 shaft, Rustenburg. (August 17, 2007). Mining Weekly. Impala No 20 shaft project. (August 17, 2007). Mining Weekly. Angloplat deals shake up SA platinum hierarchy. (September 4, 2007). Mining Weekly. Leeuwkop project, South Africa. (September 7, 2007). Mining Weekly. Zimplats expansion, Zimbabwe. (September 7, 2007). Mining Weekly. Limpopo platinum mine phase 2 expansion, South Africa. (September 14, 2007). Mining Weekly. Styldrift project, South Africa. (September 14, 2008). Mining Weekly. Booysendal platinum project, South Africa. (September 28, 2007). Mining Weekly. Impala No 17 shaft, South Africa. (September 28, 2007). www.researchchannel.co.za 68 Platinum June 2008

Mining Weekly. Marula Merensky reef project, South Africa. (September 28, 2007) Mining Weekly. Mototolo mine, South Africa. (September 28, 2007). Mining Weekly. Rustenburg UG2 phase 2 project, South Africa. (September 28, 2007). Mining Weekly. Bafokeng Rasimone mine, North West. (October 5, 2007). Mining Weekly. Blue Ridge platinum-group metals project, South Africa. (October 5, 2007). Mining Weekly. Potgietersrust Platinums Limited mine, Limpopo. (October 12, 2007). Mining Weekly. Zandfontein decline development project, South Africa. (October 12, 2007). Mining Weekly. Northam mine, Limpopo. (October 17, 2007). Mining Weekly. Modikwa mine, Limpopo. (October 19, 2007). Mining Weekly. MPRDA causing SA’s mining ranking to tumble, says Leon. (October 26, 2007). Mining Weekly. Amandelbult East Upper UG2 project, South Africa. (November 2, 2007). Mining Weekly. Western Bushveld joint venture, South Africa. (November 9, 2007). Mining Weekly. New platinum entrant will have to work hard to grow volumes – Lonmin. (November 14, 2007). Mining Weekly. Act discourages foreign investment – mining law specialist. (November 16, 2007) Mining Weekly. Looming deadlines could land napping mining companies in hot water. (November 16, 2007). Mining Weekly. New Kroondal shaft already producing, says the new MD of Aquarius Platinum SA. (November 16, 2007). Mining Weekly. Aquarius resumes mining at Kroondal, mine loses some 4 000 oz. (November 21, 2007). Mining Weekly. SA mine death toll rises, closed shafts reopen. (November 26, 2007). Mining Weekly. Everest shutdown costs Aquarius 2 000 PGMs oz. (November 29, 2007). Mining Weekly. Platinum giant continues expansion programme within booming market. (December 7, 2007). Mining Weekly. 1 300 contract miners fired at Marikana after illegal strike. (December 19, 2007). Mining Weekly. Aquarius’ claim that mines passed safety audits unfounded – DME. (January 9, 2008). Mining Weekly. Sheba’s Ridge platinu-m-group metals project, South Africa. (January 11, 2008). Mining Weekly. Aquarius Q2 output fell 2% after safety issues, power shortages. (January 24, 2008). Mining Weekly. Aquarius’ Everest production stopped after contractor leaves. (January 25, 2008). Mining Weekly. Akanani platinum-group metals project. (January 25, 2008). Mining Weekly. Tjate platinum project, South Africa. (January 25, 2008) Mining Weekly. Frischgewaagd-Ledig platinum project, South Africa. (January 25, 2008). Mining Weekly. Twickenham project, South Africa. (January 25, 2008). Mining Weekly. Two Rivers Platinum, Mpumalanga, South Africa. (February 1, 2008). Mining Weekly. Unki platinum mine, Zimbabwe. (February 1, 2008). Mining Weekly. Minister Sonjica heaps Indaba praise on Anglo’s Cynthia Carroll. (Febraury 5, 2008). Mining Weekly. Aquarius’ half-year profits rise sharply, output dimmed by power cuts. (February 7, 2008). Mining Weekly. Zimbabwe mining ‘not as bad as it looks’. (February 7, 2008). Mining Weekly. Paardekraal Two shaft project, South Africa. (February 8, 2008). Mining Weekly. Potgietersrust Platinum North Expansion project, South Africa. (February 8, 2008). Mining Weekly. We’re well positioned to meet 51% Zimbabwean ownership, says Implats. (February 14, 2008). Mining Weekly. Aquarius fails to meet production targets. (February 15, 2008). Mining Weekly. Elandsfontein platinum project, South Africa. (February 5, 2008) Mining Weekly. Nkwe Platinum says resolution of prospecting rights opens way for JSE listing by June. (February 15, 2008). Mining Weekly. Zimbabwe platinum mine ups production despite challenges. (February 15, 2008). Mining Weekly. Platinum hits record at $2087 on supply squeeze. (February 18, 2008). Mining Weekly. Xstrata to pay $12m for Nkwe’s De Wildt prospect. (February 22, 2008). Mining Weekly. Amendments worsen SA mining’s regulatory uncertainty, says Leon. (February 29, 2008). Mining Weekly. Xstrata ’07 profit climbs to $5,5bn. (March 3, 2008). Mining Weekly. Xstrata to spend $26m on exploration at North-West asset. (March 3, 2008). Mining Weekly. Styldrift project, South Africa. (March 7, 2008). Mining Weekly. Implats Marula mining rights converted to new-order rights. (April 3, 2008). Mining Weekly. Eastplats secure long-lead items for SA platinum mine. (April 22, 2008). Mining Weekly. Xstrata coal output declines, chrome and copper rise. (May 6, 2008).

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Northam Platinum. Annual Report. (2007) Northam Platinum. Second quarter 2008 results. (De- cember 31,2007) Platinum Group Metals. Annual report. (2006). www.afplats.com www.angloplatinum.co.za www.aquariusplatinum.com www.arm.co.za www.bafokengholdings.com www.implats.co.za www.jubileeplatinum.com www.lonmin.co.za www.nkweplatinum.co.za www.northam.co.za www.mvelares.co.za www.platmin.com www.platinumgroupmetals.net www.platinum.matthey.com www.ridgemining.co.za www.wesiswe.co.za

www.researchchannel.co.za 70 Platinum in South Africa 2008 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.