Our Mandate. Mintek’s mandate is to serve the national interest through high-calibre research, development, mintek annual report and technology transfer that promotes mineral technology, and fosters the establishment and expansion of small, medium, and large industries in the field of minerals and products derived from them.
Our Vision. To be a global leader in mineral and 2 metallurgical R&D and technology transfer. Our Mission. To serve our stakeholders by promoting technology, industrial growth and human development.
Key Objectives. In order to attain its goals, Mintek shall strive to: • Develop efficient mineral processing technologies and sustainable value-added products and services in order to, 0 amongst others, strengthen Mintek’s position as a global supplier of mineral-processing technology, equipment, process design and control-optimisation systems; • Play a significant role in second economy interventions by developing technologies appropriate to the local jewellery, artisanal and small-scale mining (ASSM) industries with the aim of expanding the industry and of lowering entry barriers. Initiate poverty alleviation programmes and 0 support the growth of Small, Medium and Micro Enterprises (SMMEs) in the mineral sector; • Support regional interventions concentrating on value addition and capacity building through mineral-based anchor projects; • Develop human and organisational skills whilst transforming its internal and external business processes and the workforce profile to ensure that it is in line with the socio-economic realities of South Africa today, whilst 9 ensuring broad representation of diverse cultures and 1934 - 2009 people; and, • Uphold good governance practices.
A global leader in mineral and metallurgical innovation acronyms and abbreviations AAS Atomic Absorption Spectrometry AMI Advanced Metals Initiative AMP African Mining Partnership ARC Agricultural Research Council ASSM Artisanal and Small Scale Mining BEE Black Economic Empowerment CBT Cape Biotech Trust * * CDFR Client Dissatisfaction Frequency Rate * * CGS Council for Geoscience COST European Co-operation in the field of Science and Technological Research * CRMs Certified Reference Materials DC Direct Current DME Department of Minerals and Energy (South Africa) * DRC Democratic Republic of Congo * DST Department of Science and Technology (South Africa) DTI Department of Trade and Industry (South Africa) EIFR Environmental Incident Frequency Rate EU European Union GAAP Generally Accepted Accounting Practice GDP Graduate Development Programme (of the MQA) GSM Global System for Mobile communications ** HPGR High pressure grinding roll * HIV Human Immunodeficiency Virus * * ICMI International Cyanide Management Institute ICP Inductively Coupled Plasma * * JOGMEC Japan Oil, Gas and Metals National Corporation * * JSE Johannesburg Securities Exchange * KIC Knowledge Interchange and Collaboration (programme of the * NFF) * KPI Key Performance Indicator LA-ICP-MS Laser Ablation Inductively Coupled Plasma Mass Spectrometer LTIFR Lost Time Injury Frequency Rate MESU Mineral Economics and Strategy Unit (Mintek) MLA Mineral Liberation Analyser MQA Mining Qualifications Authority MTC Metals Technology Centre (at Mintek) mintek global locations MTEF Medium-Term Expenditure Framework NCI National Council for Innovation (South Africa) NIC Nanotechnology Innovation Centre Gold Ferrous Metals drainage puriification. Acid-base Capital Equipment accounting. NIH National Institute of Health (USA) • Evaluation and design of recovery • DC arc smelting processes for • MinfurnTM regeneration furnace NNR National Nuclear Regulator (South Africa) circuits, carbon / resin adsorption, chromite, ilmenite, nickel laterites, • Kimberlite indicator mineral for activated carbon in the gold PFMA Public Finance Management Act elution, electrowinning. Leach investigations. Alluvial diamond NRF National Research Foundation (South Africa) magnetite, magnesium metal processing, water treatment, and PDFR Public Dissatisfaction Frequency Rate optimisation and heap leach / bio- production, metal recovery from slags provenance studies. food industries. PGMs Platinum-Group Metals leaching amenability. and dusts. Uranium • Gold electrowinning cell. PMDN Powder Metallurgy Development Network • Cyanide speciation monitoring, online • Iron ore beneficiation. PLC Programmable Logic Controller cyanide measurement and control, • DC arc furnace. • Materials characterisation (physical, • Ambient, pressure, and heap R&D Research and Development cyanide destruction. Assistance with leaching, solvent extraction, fixed • AtomijetTM atomiser for base and RBTS Resource-Based Technology Strategy mechanical and corrosion properties), ICMI gap or full certification audits. bed and countercurrent (NIMCIX) precious metals. RIL Resin In Leach failure investigations. TM ion exchange, resin-in-pulp, ADU RIP Resin In Pulp • Minfurn technology for granular RME Regional Mineral Economics activated carbon regeneration. Non-ferrous Metals precipitation. Economic and TM ROM Run-Of-Mine • Minataur all-hydrometallurgical gold • Bioleaching of copper, nickel, and • Mintek is registered as a uranium Regional Studies RPDP Research and Professional Development Programme (of the DST) refining process. polymetallic concentrates. Heap testwork facility with South Africa’s RPP Radiation Protection Programme • Regional commodity-based mineral • New industrial uses for gold – catalysis, bioleaching of low-grade chalcopyrite- National Nuclear Regulator (NNR) SADC Southern African Development Community economic studies. biomedicine, nanotechnology. bearing materials. and the Department of Mineral SADPMR South African Diamond and Precious Metals Regulator Resources. • Resource-based technology SARIMA South African Research and Innovation Management Association • Integrated circuit design for metal PGMs strategies. SARM South African Reference Material(s) recovery and purification by leaching/ • Design and optimisation of integrated Process Control Strategies SEDA Small Enterprise Development Agency heap leaching, precipitation, ion • Sustainable development studies. SEM Scanning Electron Microscope comminution and flotation circuits • Advanced process control and * exchange, and SX/EW. SMEs Small and Medium Enterprises • ConRoast smelting technology for optimisation strategies for milling, SMS Short Message Service high-chromium low-sulphur PGM Industrial Minerals flotation, and gold leaching circuits, SOE State-owned enterprise matertals. sumberged-arc furnaces. STEM Science, Technology, Engineering and Mathematics • Physical beneficiation - comminution, THRIP Technology and Human Resources for Industry Programme • Catalyst development for automotive, flotation, gravity, dense media, • Online cyanide measurement and UK United Kingdom fuel cell, and industrial applications. electrostatic and magnetic separation, control. UNECA United Nations Economic Commission for Africa • Novel PGM-containing alloys, powder optical sorting. • Heap leach operator guidance USA United States of America metallurgical processes. • SAVMINTM process for acid mine software and in-heap instrumentation. WAD Weak Acid Dissociable (cyanide) Mintek Mandate – inside flap front cover Ancronyms – inside front cover MINTEK GLOBAL LOCATION - inside front cover 2 75 year’s at a Glance 4 Mining Value chain 5 chairman’s Statement 6 Mintek Board 7 ceo’s Report 9 Management Organogram 11 performance Against Objectives 18 research, Development and Technology 20 Gold Industry 24 Platinum-Group Metals Industry 27 Ferrous Metals Industry 31 Non-Ferrous Metals Industry 34 Industrial Minerals Industry 38 operations and Developments 38 ConRoast Development Programme 39 Capital Equipment 40 Process Control Products 43 Certified Reference Materials 44 Minerals Policy and Sustainable Development 44 Mineral Economics and Strategy 47 Small-Scale Mining and Beneficiation 48 Kgabane Rural Development Programme 50 human Capital Development and Management 51 Employment Equity 51 Unionisation of Mintek 52 SAP and Human Resources 52 Wellness 52 HIV/AIDS 52 Academic Support and Training 56 Mintek Publications 58 Corporate Governance 61 annuaL Financial Statements 2009 62 Audit Committee Report 63 Directors’ Report 65 Report of the Auditor-General 68 Financial Statements and Notes mintek Location Map & Introduction - inside back cover contentsContact details – inside back cover
MINTEK ANNUAL REPORT – 2009 A global leader in mineral and metallurgical innovation
Opening of the MRL in The first mezzanine floor erected in Activity in the MRL. Test on uranium dissolution and Inspecting a model of the July 1935. the MRL. ion-exchange adsorption, GML, Yale Mintek building after Road site ( 1950s). the unveiling. Mintek’s 75 years at a glance Minerals Research Laboratory 1934 - 1942 ► Government Metallurgical Laboratory 1943 - 1965 ►
1934 MRL established at the Department of Metallurgy and 1966 Purlex process piloted. National Institute for Metallurgy Act. Assaying, University of the Witwatersrand. 1967 Harmony U plant converted to solvent extraction. 1935 Andalusite beneficiation project started (Mintek’s 1969 Pyrometallurgy Research Group established at the University longest-running investigation). First sponsored project of the Witwatersrand. (industrial diamonds in drill bits). First scholarships awarded. 1970 Harmony U plant converted to Purlex. 1936 First published papers (reduction of chromite, reduction of 1971 Start of UG2 PGM investigations. titanomagnetite). 1972 Work completed on Rössing flowsheet development. 1938 Early investigations of refractory gold ores. 1973 First S&T outreach programme. 1939 First investigations of PGM concentration. First overseas 1974 First continuous flotation pilot-plant campaign. Certified exhibition (World Fair in New York). Reference Materials programme started (SARM 1, Bushveld 1941 Project on recovery of apatite from Foskorite. granite). First INFACON Congress. Measurement and Control Research Group established at UCT. 1942 Vermiculite investigation. First patent (exfoliating furnace). 1975 First UG2 pilot plant campaign (for Lonmin Western Platinum). 1944 Name changed to the Government Metallurgical Laboratory. 1976 Move to new Randburg premises. CIP investigation starts. 1945 Investigations of Witwatersrand uranium ores began. 1977 Base metals process development (Black Mountain). First 1946 First uranium concentration and leaching tests. commercial NIMCIX (CCIX) plant at Blyvooruitzicht. 1947 First uranium pilot plant (at Western reefs Gold Mine). 1978 Started work on alternative UG2 smelting technology. Guide on 1949 First on-site uranium leaching plant (at Blyvooruitzicht Gold Mine). the preparation of reference materials prepared for the ISO. 1950 Ion exchange incorporated on uranium pilot plants. 1979 Implementation of submerged-arc furnace control (Minstral) (Ferrometals, Witbank). First “plasma” arc smelting tested in UK. 1952 First full-scale uranium leaching plant (at West Rand First application of multivariable milling control (East Consolidated). 1980 Driefontein) Mintek. Secret report on ion exchange for uranium recovery. 1953 1981 Council for Mineral Technology (Mintek) established. 1955 Pilot plant for electrolytic manganese metal (at West Rand Incorporation of the AEB’s Extraction Metallurgy Division. First full- Consolidated). scale CIP plant (at President Brand). 1957 Improvements of apatite recovery process (Foskor). 1982 Pilot 3.2 MVA DC furnace commissioned at Mintek. First micro-processor-based multivariable controller for milling 1959 First solvent extraction testwork for uranium. Philip Lloyd, circuits developed. PhD theses. 1983 First industrial UG2 concentrator commissioned (Western Start of uranium refining programme (by AEB). 1960 Platinum Milling control extended to PGM circuits. Start of 1963 Work started on fundamentals of flotation. Uranium solvent bacterial oxidation studies. extraction piloted at Buffelsfontein. 1984 UG2 smelting technology transferred to industry. First 1965 National Institute for Metallurgy (NIM). investigations of PGM recovery from float tails (MF2).
2 2009 – MINTEK ANNUAL REPORT A global leader in mineral and metallurgical innovation
Foundation stone of the Nearing the end – the Adminstration Laboratory testing and pilot-plant Aerial view of Mintek, 2009. ConRoast DC arc smelter Mintek Randburg Complex Block all but complete, 1976. testing done under strict ISO upgraded, 2008 was laid, November 1971. conditions. Mintek’s 75 years at a glance National Institute for Metallurgy 1966 - 1980 ► Council for Mineral Technology (MINTEK) 1980 - present
1985 Study completed on base metal recovery by solvent extraction. 1998 Bacterial oxidation implemented for refractory gold Improved andalusite recovery process developed. (Beaconsfield, Tasmania). First QEMSCAN acquired for 1986 AS&TS Award for contributions to understanding of the automated mineralogical investigations. CIP process. Work started on strong-base resins for gold 1999 “Own” income passes 50% to total. MINIX gold-selective recovery. First MF2 plant. resin introduced to industry - RIP technology adopted by 1987 Pilot plant development of the MF2 flowsheet for PGM Penjom gold mine, Malaysia. recovery. 2000 Project AuTEK launched. Large-scale demonstration of 1988 DC smelting technology commercialised (Palmiet DC arc ferronickel smelting from laterite ore. Ferrochrome). National Productivity Award for milling control (in 2001 DC smelting technology implemented for cobalt recovery conjunction with Gold Fields). (Chambishi). Cyanide laboratory commissioned. AuTEK 1989 ICP-Mass Spectrometry introduced for analysis of PGMs. Nanotechnology programme initiated. Large-scale demonstration of bacterial oxidation of pyritic concentrates. 2002 Quality system achieves ISO 9001 certification. Bioleaching of copper sulphide concentrates demonstrated at Industrials 1990 First pilot-scale study of atmospheric pollution in the Vaal AuTEK Biomedical programme initiated. Peñoles, Mexico. triangle. Mineral Economics and Strategy Unit formed. Minfurn carbon-regeneration technology implemented (Klipwal 1991 2003 Environmental management system achieves ISO 14001 Gold Mine). Evaluation of flowsheets for heavy minerals certification. concentration. 2004 OSH system achieves ISO 18001 certification. First 1992 First Minstral controllers exported. Initial investigation of ConRoast (DC arc) PGM smelting demonstration (for bioleaching for base-metal sulphides. Lonmin). 1993 FloatStar tested on an industrial PGM concentrator. Development of a low-cost nickel-free stainless steel. NIMCIX 2005 Large-scale demonstration of copper heap bioleaching at tested for water treatment. Sarcheshmeh Copper Complex, Iran. 1994 FloatStar flotation circuit control commercialised. Large- scale 2006 LeachStar gold-circuit controller commercialised (Mponeng). DC smelting facility commissioned. 2007 Braemore Platinum ConRoast demonstration starts. 1995 DC smelting technology implemented for ilmenite (Namakwa Cyanide lab receives ISO 17025 certification. Sands). Expanded support for SSMEs. 2008 100th installation of Minstral furnace controller. ConRoast 1996 Bi-national cyanide study started with AMIRA. Analytical smelter upgraded. laboratory receives SABS 0259 certification. 2009 Diamond provenance project launched. Minfurn 1997 First Minataur hydrometallurgical gold refinery commissioned. technology extended to water purification and food industries. Minfurn carbon-regeneration technology exported to South America (Santa Rosa, Peru).
MINTEK ANNUAL REPORT – 2009 3 the mining value chain Technologies and services developed by Mintek
1. Exploration 2. Mining 3. Concentration b. Physical separation • Geochemical sample analysis; • ASSM technology; a. Comminution/Flotation • Bulk sample preparation; • Mineral/ore characterisation; • ASSM training assistance; and, • Flowsheet design and optimisation, • Gravity, magnetic, electrostatic and and piloting; • Certified Reference Materials; and, • Mining inputs economic studies. dense-media separation; and, • Plant audits; • Artisanal and small-scale mining • Pneumatic jigging, and Mineral • Ultrafine milling; and, (ASSM). Density Separation. • Control and optimisation strategies.
1 2 3 4
5 6 7 8 4. Pyrometallurgy 5. Hydrometallurgy and 6. Refining 8. General • Pelletisation and briquetting; Biotechnology • Gold refining and value-added products/ • Ore characterisation, analytical and • Pre-heating and pre-reduction; • Atmospheric and pressure leaching; chemicals; process mineralogy; • DC arc process development and • Bioleaching (refractory gold and base • Pyrometallurgical refining of: zinc (PWG to • Certified Reference Materials; piloting; metals); SHG),and off-grade ferro-alloy fines; and, • Materials characterisation, testing and • Modelling and simulation; • Solvent extraction and ion exchange; • Titanium chlorination technology. development; • Submerged-arc furnace (SAF) control • Electrowinning; 7. Value addition • Engineering design, manufacturing, strategy; • Process simulation; • New industrial applications for installation and commissioning; • Fluidised bed and condenser • Reagent development and evaluation; gold: Catalysis; Biomedical; and • Project management services; and, Nanotechnology; technologies; • Gold recovery by CIP/RIP; • Regional minerals-based studies. • Refractories performance • Activated carbon regeneration; • “Smart” materials and sensors; investigations; • PGM-based superalloys; • Uranium processing expertise, U3O8 • High-temperature solid state and recovery; • Low-nickel stainless alloys; phase equilibrium investigations; • Cyanide measurement, monitoring and • Jewellery fabrication; • Ore, slag, matte and alloy auditing; and, • Gold and platinum jewellery alloys; and, characterisation. • Leach circuit control. • Identification of downstream, metals-based.
4 2009 – MINTEK ANNUAL REPORT chairman’s review The pace of activity in the minerals industry during the first part of 2008-2009 sustained Mintek to a record financial performance, with actual revenue up 7.3 per cent year-on-year. Total income exceeded the budgeted figure by 8 per cent, while the increase in total expenditure was held at 2 per cent, resulting in a before-tax profit of R39.9 million. This is an outstanding achievement, and I would like to congratulate Mintek’s management and staff on their exceptional performance.
The year saw a notable Increase in Technical co-operation partnerships have investigations to support projects for been launched with the Chilean research uranium, iron ore beneficiation, nickel Centre for Mining and Metallurgy and a steady demand for PGM work. (CIMM) and the MTA in Turkey. Mintek’s Project AuTEK, the joint initiative with training initiatives and second economy industry and other R&D organisations interventions are supported by BHP to discover and develop new uses for Billiton, Xstrata, Shanduka Coal, the gold, continued to make advances in North West Department of Education, the the areas of biomedicine, catalysis, and Small Enterprise Development Agency, nanotechnology. A new area of strategic the Department of Labour (DoL) and the Mr Harold Motaung research was initiated under the umbrella Mining Qualifications Authority (MQA). Chairman of the Board of the DST’s Advanced Metals Initiative, aimed at stimulating the development of The past twelve months have been a a titanium beneficiation industry in South tumultuous period for the mining and full impact of the economic recession Africa. minerals industries. After several years of on Mintek’s activities will only become unparalleled expansion, with commodity apparent well into the 2009 financial Mintek continued to forge new alliances, prices reaching multi-year highs, the year. and strengthen existing ones, with resources sector underwent a dramatic industry partners, other R&D institutions, and rapid decline in the last quarter of During the year, Mintek successfully and government agencies both in South 2008. The unfolding global financial crisis retained its quality, environment, safety, Africa and internationally. Our partnership had a major impact on the mining and and health ratings, and despite a few with Braemore Platinum is progressing minerals sectors, and this has inevitably unfortunate incidents in the last quarter, the lost-time injuries remained below steadily towards the goal of establishing had an effect on Mintek. South Africa’s first independent PGM target. It is particularly pleasing to see a smelter and base-metals refinery. Under At the time of compiling this report, there significant decrease in the staff turnover, project AuTEK, Mintek is collaborating were already some signs that the global which can mainly be attributed to the with a number of organisations, including commodity cycle may have begun to turn measures that Mintek has taken to stem one of the world’s largest pharmaceutical for the better, whether this is sustainable the drain of scientific and engineering companies, the European COST or not in the short term is debatable. talent. However, attracting and programme, the NIH and Emory However, it appears certain that the retaining skilled staff remains one of the University in the USA, the World Gold global economy will not return quickly to company’s greatest priorities, and in this Council, Strem Chemicals, Cranfield the same levels of growth experienced regard we will be looking closely at our University and Moscow State University. during the period 2005 to 2007, and the bursary programme in the coming year.
MINTEK ANNUAL REPORT – 2009 5 At a value of 15, the Client Dissatisfaction Frequency Rate (CDFR) remains above the Mintek Board of Directors 2008/09 allowable target of less than 10, although it is decreasing steadily.
Mineral commodities are required to support economic growth, and in expectation of an eventual recovery, it is important to evaluate Mintek’s potential for future growth, in order to take steps to position the organisation to take advantage when the upturn occurs. At the same time, efforts must be redoubled to rein in costs and conserve resources.
The current low level of investment in Research and Development is one of the Mr Harold Motaung Mr Abiel Mngomezulu Chairman of the Board CEO, Mintek challenges facing South Africa’s mining sector, and it will continue to be a particular challenge in the short term to maintain a balance between fundamental investigations and revenue-generating commercial projects. In this regard, Mintek is greatly encouraged by the Government’s efforts to promote greater interaction between the public and private sectors to stimulate research, and Mintek is committed to play a part in this initiative.
In conclusion, I wish to thank the Board of Mintek, the Management team, and all staff
Mr Mohau Mphomela Mr Mohlomi Ntilane for their support during the year. Although a difficult period lies ahead, I have every confidence that Mintek is able to weather this. Mintek has an increasingly important role to play in developing technologies to boost the competitiveness of South Africa’s mining sector, supporting beneficiation projects that can enhance the value of our exports and create sustainable jobs, and making an impact on growth and development in a sustainable manner in areas that matter to all the people of South Africa.
Dr Jan Bredell Mr Ralph Havenstein
Mr Harold Motaung Chairman of the Board.
Ms Gugu Mthethwa Mr Mosa Mabuza
Ms Lindiwe Mhlabeni Dr Bethuel Sehlapelo
6 2009 – MINTEK ANNUAL REPORT CEO’s report Mintek enjoyed another year of strong growth in 2008/09 owing to the continuing economic boom during the first half of the year. Demand for our products and services remained high, and total income for the financial year rose to R423 million, compared with R392 million for the previous year. A net profit before tax of R39.9 million was realised, which is a record for Mintek in its 75 years of existence. However, a challenging year lies ahead of us as we will be experiencing a serious downturn in our activities due to the economic meltdown, though somewhat delayed in the environment we operate in. For us to weather the storm we will have to drastically reduce costs and identify our strengths, which will place us in a better position to take advantage of the upswing when it occurs. Technical Highlights screening in the USA. An agreement Mr Abiel Mngomezulu One of the major highlights of the was reached with Strem Chemicals to CEO of Mintek. year was undoubtedly the listing of market and distribute small quantities TM Braemore Resources, our partner in the of the Aurolite gold-based catalysts to development of the ConRoast process the international R&D community. In the for PGM smelting, on the Johannesburg field of nanotechnology, an agreement Stock Exchange. The upgrade to the has been signed with the Agricultural DC arc demonstration smelting facility Research Council (ARC) to extend at Mintek, which effectively doubles its the health (diagnostics) programme to capacity, was completed ahead of time include animal health testing. Work has and on budget. These are significant begun on nanotechnology-based water steps towards our goal of establishing treatment systems in collaboration with a new independent smelter and base Cranfield University in the UK. metal refinery to serve Incom e trends, 1998 - 2009 emerging PGM producers 450 in South Africa. Total incom e (real) 400 Total expenditure (real) Under Project AuTEK, our 350 collaborative research 300 programme to discover 250 0 million
0 200
and implement new 0 R industrial uses for gold, 150 a number of gold-based 100 compounds with HIV- and 50 cancer-inhibiting properties 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 are undergoing further Year
MINTEK ANNUAL REPORT – 2009 7 A three-year project to develop a titanium Brazil. The successful commissioning of Executive Committee powder manufacturing process, funded by a Mintek-built furnace to recycle dry-cell 2008/09 the Department of Science and Technology batteries in Switzerland marks the first (DST) as part of the Light Metals application of our DC smelting technology Development Network under the Advanced outside of southern Africa, while use of Metals Initiative (AMI), was started. In the the Minfurn furnace, originally developed first phase of the work, titanium powders for regenerating activated carbon in the with properties very similar to commercial gold industry, is being extended to the powders have been produced at the gram food industry (in the USA) and the water scale, and facilities are being constructed Mr Abiel Mngomezulu treatment industry (in South Africa). for scaling up the process. Chief Executive Officer In support of international efforts to curb Sustainable Development trade in both illicit and conflict diamonds, Mintek continued with regional economic Mintek and the South African Diamond studies in support of mineral project and Precious Metals Regulator (SADPMR) development and related economic launched a project to investigate the diversification in South Africa and further possibilities of determining the geological afield. Projects were completed on iron ore source of rough diamonds using a Dr Molefi Motuku and coal in South Africa, the expansion of GM: Research and Development combination of trace element analysis and the platinum value chain, an evaluation physical characteristics. of a community development strategy for The period under review saw a a junior platinum company, and a study considerable increase in uranium-related of mining supply chains in the Katanga studies, particularly for projects to recover region of the Democratic Republic of Congo uranium and gold from tailings materials. (DRC). A collaborative project with the DST, There was continuing steady demand for the DME, CGS and CSIR was undertaken laboratory and pilot plant feasibility work for to develop a mining and geosciences Dr Roger Paul GM: Technology the local PGM industry, and investigations framework for research and development on the upgrading of iron ore. The across Africa, and economic studies feasibility study, led by Mintek, on the high were prepared for a number of foreign temperature heap bioleaching of low-grade companies that are contemplating mining- chalcopyritic copper ore at Sarcheshmeh investments in various African countries. in Iran was completed, and negotiations for the full-scale implementation of the Five rural small-scale jewellery technology are well advanced. manufacturing enterprises were established Mr Sakhi Simelane Chief Financial Officer Mintek’s line of advanced strategies for in partnerships with Shanduka Coal, metallurgical process control continued Xstrata Coal, and BHP Billiton, and to perform well in the global market, with four new glass-bead businesses were installations in India, Europe, Australia started with funding from the North West and Latin America, as well as in South Department of Education. More than 550 Africa. A particular milestone was the people, mainly from rural communities, implementation of the one-hundredth were provided with skills in small-scale FurnStar™ controller for submerged- mining, business skills, diamond evaluation Ms Shokie Bopape arc furnaces, at a ferro-alloy producer in and beneficiation. GM: Corporate Services
8 2009 – MINTEK ANNUAL REPORT People At the annual strategic session of the certified compliant with the requirements organisation it was strongly felt that of the new OHSAS 18001:2007 To eliminate the use of temporary staff there is a need for Mintek to adopt, standard. Despite several unfortunate employed through the labour broker’s amongst others, a strong focus on lost-time injuries during the last quarter system, a decasualisation process was marketing itself and also have an of the financial year, the lost-time target completed during the course of the economically viable structure. In this of less than 1 is still being met. An year, which resulted in Mintek’s total regard, a revised Mintek structure which incident at the ConRoast demonstration staff complement increasing by 43 per merged some of the business units smelter at the end of March 2009 shook cent to 780 employees. Mintek’s total and also created a more marketing- Mintek employees but fortunately did not staff turnover during the year was also focussed division, was adopted for result in any injuries and caused only reduced to just over 15 per cent, which implementation in the next financial minor damage to equipment. is a considerable improvement on the year. figure of 25 per cent for the previous Although the Client Dissatisfaction year. Quality, Environment, Health and Frequency Rate (CDFR) has decreased further from 18 to 15 during the period Of serious concern is the drop in the Safety under review, it remains above the number of students attached to Mintek Mintek retained its ratings under ISO target of 10. We are continuing with a who are studying for their PhDs. In the 9001: 2000 (Quality Management) concerted effort to further reduce this to next financial year we will be embarking and ISO: 14001: 2004 (Environmental the required levels. on new strategies to try and reverse this Management), while our Safety and trend. Health Management system was
CEO Abiel Mngomezulu
RESEARCH & DEVELOPMENT FINANCE Minerals Policy & TECHNOLOGY Corporate Services Dr Molefi Motuku Sakhi Simelane Sustainable Development Dr Roger Paul Shokie Bopape VACANT
Advanced Materials Finance (Treasury) Small-Scale Mining & Analytical Services Information & Dr Elma van der Lingen Hester Pretorius Beneficiation Monde Mtakati COMMUNICATIONS Sindiswa Gaven Haveline Michau
Human Resources Biotechnology Estate Management Mineral Economics & Engineering & Training Dr Tony Pinches Services Strategy Support Muzi Ntombela Neale Baartjes Nick Maritz Muzi Ngcobo
Measurement & Control Kgabane Jewellery Hydrometallurgy Paul Brereton-Stiles Project Dr Dave Hulbert Busi Ntuli
Mineralogy Minerals Amanda Quadling Processing Alan McKenzie
Pyrometallurgy Mintek Organogram Tom Curr as at 31 March 2009
MINTEK ANNUAL REPORT – 2009 9 Financial summary During the 2008/2009 financial year the organisation achieved a total income of R423 million, thereby crossing the R400 million threshold. This, together with the achievement of a net profit before tax of R39.9 million, is a first for Mintek. Budgeted income of R391 million for this period was exceeded by 8 per cent, which also represents an increase of 8.6 per cent compared to the prior year’s income of R392 million. The increase is largely attributable to more work performed for commercial customers as well as interest earned on short term investments. Total expenditure only increased by 2 per cent compared to the undoubtedly be a testing one, I have previous year, which can be attributed no doubt that Mintekkers will respond to the post retirement liability being paid to the challenges with dedication, as a once-off settlement to most of the innovativeness, and enthusiasm, which pensioners. This resulted in a saving of will enable us to retain our position as R19 million in post-retirement benefit one of the world’s leading specialist obligation. Through the appointment technology organisations in the minerals of temporary labour-broker staff as industry. I would also like to extend permanent employees and exercising our gratitude to all our stakeholders caution on expenditure, a profit of R39.9 who have continued to support us million was achieved - R30 million higher under the difficult circumstances of the than budgeted. In the current economic tough financial climate we are currently climate this will not be repeated in 2010. experiencing. My appreciation also Mintek will limit expenditure where goes to the Board of directors for their possible to minimise the negative effect guidance and the Honourable Minister Buyelwa Sonjica for her warmth and on the financial results. strong leadership. Mintek could never have achieved what it has without the support of its staff, both past and present. I would like to take this opportunity to thank all Mintek staff for their contribution to our success. Abiel Mngomezulu Although the year that lies ahead will CEO, Mintek
10 2009 – MINTEK ANNUAL REPORT performance against objectives 1. Stakeholder Perspective Key Performance Area/Objective: Develop Efficient Mineral Processing Technologies and Sustainable Value Added Products & Services
Strategic Objectives Measures Target Actual Comments
a) Overcoming • Develop Analytical and Mineralogical Methods: Adapt - 10 methods 12 Analytical methods The ‘Alternate Platform’ project delivered patented software towards a new technical existing methods, or develop new methods, for the accurate - 2 papers# 3 Reports analytical platform for PGM’s. A contract with a major international SEM obstacles to and precise analysis of complex geochemical and metallurgical manufacturer to commercialise this IP is in final stages of construction. exploiting samples. mineral • Develop and evaluate new processing technologies: New Viability of resin durability in the RIP process was demonstrated at resources technologies are required for the processing of ore bodies or pilot plant scale. Extra progress was achieved through the leverage of resources that are not currently being exploited due to their low commercial funds from an interested client. grade, impurity levels, complexity, or lack of expertise. * Promising results have been obtained for the removal of copper from − Low grade uranium ores - 8 reports / 1T - 18 reports on “New cobalt electrolytes by the use of resin ion-exchange fibres. Processing Technologies” − Reject iron ore (low grade and/or high impurity) - 1 report The EU-sponsored BioMinE project came to an end during Q3. Mintek’s − High ash coal - 1 report - 5 reports contributions included feasibility studies based on closed circuit piloting at − Low grade copper ores - 11 reports / 1 model - 4 papers Mintek, and our leading role has been recognised by consortium partners and the European commission alike. − Complex copper / nickel / cobalt ores - 8 reports - 21 reports - 17 reports A second phase of the Jogmec project was started, involving high − Smelting of high chromite PGM concentrates - 2 reports temperature heap bioleaching of pure chalcopyrite ore. Results could also − Conversion of titanium slag to metal - 1 report / 1 plant - 3 papers and 2 reports be applicable to local low grade chalcopyrite like Haib, Namibia. - 1 report The application of bacterially produced polymers as mineral surfactants has been demonstrated in the laboratory. Though not comparable to commercially available reagents yet, there is room for further optimisation. ConRoast alloy was successfully treated in a commercial Pierce Smith converter. The Bay 2 furnace was upgraded to 2 000 tons/mth in October 2008 and achieved 68% of this new capacity in February 09. a 10kg/h TiCl4 pilot plant was designed, constructed and 80% installed . Develop and Construct Plant Equipment: Incorporate Mintek’s - 8 plant units - 8 plant units The following plant units were installed: technology and know-how into the development and sale of • Minfurn furnace installed (USA) commercial plant equipment used in the minerals industry. • Commercial electrowinning plant installed at the Kuranach gold plant (Russia) • Batrec – 10Ka furnace (Switzerland) • Minfurn for water treatment Rietvlei (SA) • TiCL 4 plant (Mintek) • KBR- Solis filtration Plant (Wax Filtration) USA • MDS (Magnetic density separator) (SA / India) • Heap-leach column pilot plant (Mintek)
b) Enhance the • Analytical and Mineralogical Services: Provide fast, accurate - 125,000 samples 96,685 samples Unexpected slowdown occurred in the metallurgical samples submitted competitiveness analyses for a wide variety of geochemical and metallurgical 87% average manday by industry. of metallurgical samples. usage for year – exceeded processes target of 70% average. • Development of Advanced Process Control Technologies: - 6 prototypes - 8 prototypes Due to good progress on performance monitoring, 2 more prototypes than Develop, demonstrate and implement advanced process - 10 reports - 13 reports planned were completed. control and performance monitoring for flotation and milling. • Feasibility Studies: Conduct laboratory and pilot scale test - Many commercial projects were undertaken for uranium, base metal and work to obtain the metallurgical parameters necessary for the gold producing clients to support the investigation of the optimisation of preparation of pre- or full-feasibility studies for the ore samples processes or pre-feasibility testing of new process flow sheets. supplied by clients to Mintek. A chloride-based base metal processing flow sheet was developed and − Industrial minerals (chromite, iron / manganese ore, others) - 10 reports 27 Reports evaluated for treating the Braemore Conroast alloy to produce a PGM − Diamonds - 6 reports 7 Reports concentrate that is of the required quality. − Uranium - 8 reports 9 Reports − Base metals - 17 reports/2 papers 44 Reports The increase in reports over what was planned is a reflection of the large − Gold - 7 reports/3 audits 6 Reports number of feasibility studies that were conducted during the “boom”; but − PGMs - 10 reports 28 Reports this is not sustainable. 14 tons calcined nickel laterite were smelted. 7 tons of high grade calcined nickel oxide was smelted. 30 tons of partially calcined nickel sulphide
concentrate was smelted to demonstrate reduced SO2 emissions. 145 tons of titaniferous magnetite was smelted to produce pig iron and a
60% TiO2 slag. • Reduce Processing costs: Develop innovative ways to - 7 reports 5 Reports The trend that Mintek experienced from our clients during the year under lower the costs of processing a variety of feed materials to review was for technology and services to boost supply, and resources final product. were diverted from cost reduction to feasibility studies (see section above). As a result, the number of reports produced was below target. We anticipated more work in this area during 2009/10.
MINTEK ANNUAL REPORT - 2009 11 Key Performance Area/Objective: Develop Efficient Mineral Processing Technologies and Sustainable Value Added Products & Services (continued...)
Strategic Objectives Measures Target Actual Comments
c) Develop new • Certified Reference Materials: Produce new - 10 new reference standards 13 new reference materials Reference materials produced included those for uranium, PGMs and applications or certified reference materials to allow local and base metal ores. markets for minerals international laboratories to check their in-house and metals geochemical and metallurgical analyses. The reference materials facility was commissioned and has been running since December 2008.
• New industrial Uses for Precious Metals: Major accomplishments included: Develop commercial applications for the precious Good results obtained from NIH (USA) screening of biomedical metals, based upon their unique chemical and compounds for cancer, and subsequent submission of PCT patent. physical properties, in the areas of: Nano R&D has progressed very well with the appointment of 8 senior - Biomedicine (Cancer, HIV, malaria) - 50 compounds 107 compounds scientists and good industrial collaboration has been built. AuTEK catalysis has sold more than 100kg of AuroliteTM catalysts to - Catalysis (chemical processing, fuel cells, autocats) - 5 Systems 6 systems potential end-users. The new semi-commercial catalyst plant has been completed. - Nanoscience and nanotechnology - 2 sensors 2 sensors A vision for the approach to biological nanoparticle production has been developed; namely, optimise the proven fungal systems, investigate and optimise the use of bio-templates, then devise larger scale production and shape-classification techniques. • Develop and Construct Plant Equipment: - 2 plant units 1 Test unit The target of two plant units has not been achieved due to budget cuts Incorporate Mintek’s technology and know-how made by the client as a result of drop in the PGM prices. The client into the development and sale of commercial plant remains interested in the technology, but was able to purchase a single equipment for producing precious metal powders. test unit only in the year under review.
d) Sustainable Water in Minerals Processing: Development of water - 7 reports 8 Reports SAVMIN pilot plant test work was conducted to verify operability and a Development efficient flowsheet to optimise water consumption and promising initial indication was obtained for a novel improvement in a enable processing of ore bodies in water stricken critical area of the process. areas by incorporation of novel technologies into Collaboration between Dr Dong of MPD and China on water usage in flow sheet design, and addressing of socio-economic mineral processing was established. implications of water in mining. Completed a water pricing model for the Anglo Technical Division. In addition completed a review of water optimisation of water stressed mining regions, utilising the Olifants River Water Management Area (ORWMA) as a case linked to the platinum sector. • Energy in Mineral Processing: Development - 11 reports - 10 reports A design study shows that a self-baking electrode is feasible for a DC of an energy efficient flow sheet and control - 1 prototypes - 1 prototype furnace. technologies that minimises energy consumption, A paper study shows that a DC furnace may be able to use the 2 billion opex, capex, and carbon emissions by tons of coal wastes in SA to produce hydrogen cost competitively. incorporation of novel technologies into flow sheet design. Three papers presented at international conferences on Energy usage during comminution. South African Patent No. 2008/02704 - A Method of Obtaining Data for Use in the Design of a Grinding Mill Circuit has been registered.
• Emissions and Waste Management in Mineral - 11 reports - 7 reports Mintek has continued with cyanide auditing procedures, with Processing: Attain accreditation as a Lead - 2 prototypes - 1 prototype agreements to do two SASOL re-certification audits. Auditor for measurement of cyanide emissions Complications with matrix separation cell design resulted in delay in from gold plants, establish basic levels of completing second prototype. arsenic measurement, and implement advanced control technologies to reduce emissions. • Plant and Technology: Construct a furnace - 1 furnace 1 furnace A furnace has been supplied to Batrec for the recycling of dry cell for the recycling of waste dry-cell batteries, - 2 reports 2 reports batteries, the plant is now in operation. and undertake the initial concept studies for A report (Water Treatment and Food Processing Industries) that the reactivation of carbon used in potable water describes achievements to date and the future R&D work required in treatment, and for the production of solar-grade order to firmly establish the Minfurn within these two industries was silicon. compiled. A report (Commercial-scale atomisation unit) that outlines the principle of atomisation, the design and the R&D that went into adapting the unit for ultra-high temperature melting and atomisation of metals was compiled.
e) Support the • Technical Assistance: Conduct amenability - 5 reports - 18 Reports 3 tons of chalcocite copper concentrate was smelted and 80 kg of development of and/or feasibility studies for possible JRC the matte product was converted to demonstrate the feasibility of a Junior Research projects, and assist in developing a flow sheet for proposed plant in the DRC. Companies (JRC) the processing of their ore bodies. performance against objectives against performance
12 2009 – MINTEK ANNUAL REPORT Key Performance Area/Objective: Second Economy Interventions
Strategic Objectives Measures Target Actual Comments a) SMME business - Development and support of SMMEs: New - 6 new start-ups - 11 new start-ups Envisaged incubator could not be set up as funding was directed at incubation business started, existing business supported, - 6 existing - 6 existing supported establishing more dispersed SMME’s. establishment of Ceramic Incubator. - 1 incubator - 0 incubator
- SMME Research and Interventions: Develop - 5 reports - 6 reports Work has been done in establishing partnerships but only one of the strategies and partnerships at local and - 7 agreements - 2 international contracts outstanding agreements is certain (Chile on IGoli). All SMME research work international level. done within Mintek. Partnerships with North West DOE and MQA assisted in enhancing SMME research in relevant areas.
- Business Mentoring: Production support for - 23 sites - 23 sites Twelve of the groups have been showing a greater level of independence. existing rural jewellery businesses, structured - 5 new establishments - 4 new enterprise development business coaching, establish new rural groups in Gauteng, Eastern Cape, Free State, Mpumalanga and Limpopo. • Business Commercialisation: Rollout of national - Presence in nine provinces - 3 Provinces Showcasing at various exhibitions has seemingly resulted in a heightened distribution plan, complete sample development, - 1 contract signed - 0 contract awareness of the Kgabane brand. We have been receiving an unprecedented developing sub-brands, local and international - 2 international and - 10 local and amount of commercial enquiries. promotions. 10 local fairs 1 international b) Development • Diamond Recovery: Construct and commission - 1 plant 3 skills transfer of technologies a diamond recovery plant for the processing of - 1 report workshops completed in relevant to SMMEs diamonds in a cost effective manner for SMMEs. lien of constructing a plant
• Alluvial Diamond Finger Printing Competency: - A fully equipped laboratory Fully functional secure All equipment towards a diamond forensic provenance laboratory has been Develop methods and establish infrastructure - Database established clean lab completed. purchased and commissioned. Gas and laser tests have started on the laser to identify the source of diamonds through ablation ICPMS. The first alluvial gem diamond sample has been received. trace element analysis, diamond morphological SADC region political stakeholders were engaged at AMP in February 2009. characterisation and setting up a diamond Underperformance by consultant has resulted in significant delay to method database. development on LA-ICP-MS and output of first dataset.
• Construction Minerals: Establish mineralogical 2 reports - 2 reports A database on construction minerals within the SMME sector had been methods suited to SMME operations in glass, developed, and tests have been completed on the application of norite in the cement, and other minerals. manufacturing of refractory material. 1 report completed on Tiger’s Eye mineralogy.
• Minerals for Agricultural Development: Develop - 1 report - 3 reports Work on phospho-gypsum, Biomin blending and phosphate fractionation new technologies and transfer technologies to - 2 agreements - 0 agreement completed. communities. An agreement with Kenya is in the process of being reviewed.
• Indigenous Knowledge Systems (IKS), - 4 reports - 2 reports Reports completed for the IKS Research project and the DST ceramics and Mining and Beneficiation: Develop strategies, - 10 learners on casting jewellery project. establish partnerships and incorporate indigenous technology Agreement signed with DST on ceramics and jewellery. knowledge systems into jewellery products. - 4 agreements - 1 agreement One casting pilot project completed.
7 Learners from the Witbank jewellery project took part in the casting technology. performance against objectives against performance
MINTEK ANNUAL REPORT - 2009 13 Key Performance Area/Objective: Support of Regional Interventions
Strategic Objectives Measures Target Actual Comments
a) Mineral Strategies • Mineral Scans: Industrial Minerals for LED 3 reports 6 reports • Industrial Minerals for LED support changed to Alluvial Diamond Support support, Spatial Development Programme, for LED Development. Beneficiation Strategy for Commodities Ranked • Eskom contracted work on forward planning. 11 to 20. • Transnet contracted work on bulk commodity logistics is ongoing. • Completed report on the state of mining in Gauteng; comments on the Royalty Bill. • Supported initiatives with other African mining ministries. • Funding could not be raised for envisaged projects.
• Mineral Infrastructure and Logistic Studies: 4 reports 10 reports Target projects were not funded, however alternative projects were Steel Infrastructure Study, Energy Infrastructure, completed. Steel and Carbon Mill Feasibility, Jewellery Manufacturing Precincts.
b) Policy Support • Economic Research and Analysis as per DME 2 reports 2 reports Provided information to the DME and National Treasury on the inputs Request into the Royalty Bill Regulations. Supported the SADPMR information gathering workshops; Commented and provided guidance on the DME Beneficiation strategy.
• Strengthening Economic Diplomacy: Africa - multiple reports 3 reports Organised, hosted and presented a report to UNECA on the UNECA and other International Priority Countries on - 1 major report Private Public Partnership workshop. minerals related projects.
• Socio-Economic Management: Assist - 2 reports 1 report Completed several smaller phases of work for a private sector client that companies in REACH and GHS compliance, - 10 companies assisted was consolidated into a single final report. Women and Mining.
# Includes refereed journals and papers delivered in conferences * Development Technologies $ The reports contain the agreed outputs as contained in the commercial contracts signed with clients performance against objectives against performance
14 2009 – MINTEK ANNUAL REPORT 2. Financial Perspective
Key Performance Area/Objective: Good Governance
Strategic Objectives Measures Target Actual Comments
a) Compliance • IFRS Compliance: Timely and accurate Unqualified Audit report Unqualified Audit report processing of all valid transactions, addressing all audit matters raised in external and internal audits.
b) Financial Management • BEE procurement as a % of total discretionary 22% 17% The accredited agents were appointed by the DTI in February 2009 and spend therefore BEE certificates will only be obtained by Mintek suppliers in the next few months. This will enable Mintek to accurately account for BEE procurement as the current information on BEE status of suppliers is outdated.
• Actual debtors write-off (% of total revenue) <1% of revenue 0.12% Only R505k were written off in the current financial year relating to debt that could not be recovered.
• Total revenue 391,055 389,413 Mintek earned less revenue than expected. This is in line with current market conditions. • Total Science Vote Revenue
- Operational revenue 103,898 104,928 The full Sci-vote funding has been utilised to complete the present outputs. - Capital allocation 10,869 9,839 - Medium Term Expenditure Framework 4,386 4,386
• Net result 9,132 38,767 The profit of R38,8 million for the year represents an achievement of 324,5% compared to target. This is largely attributable to the settlement of part of the post retirement medical aid liability and a focus on minimising expenditure.
• Capital investment 23,822 24,296 Capex spend is within the anticipated range.
c) Efficiencies • Ratio of Science Vote/Total Revenue 25% 29.27% The ratio of Science-vote compared to total revenue is higher than target due to MTEF monies received in the financial year. The additional funds have assisted Mintek to do valuable research work in the uranium environment.
• Total of overhead costs to total costs 30% 30,55% Overhead costs are representing 30,55% of total costs. This is a result of increased electricity charges as well as an increase in the rates and taxes.
• Salaries to Total Expenditure 60% 56,02% performance against objectives against performance
MINTEK ANNUAL REPORT - 2009 15 3. Learning and Growth Perspective Key Performance Area/Objective: Organisational Development
Strategic Objectives Measures Target Actual Comments
a) Human Capital • Workplace Skills Report 1 report 1 report Only 1 report annually in accordance with the Department of Labour Development requirements. • Science, Technology, Engineering and - 4 science exhibitions - 22 science events - “Events” includes exhibitions, conferences, inbound students and Maths Promotion - televised Minquiz™ science - agreement reached with e.tv learner tours and university open days. competition to broadcast highlights of 2009 Minquiz™ on Frenzy
• Under-graduate Bursary Programme 60 bursars 62 bursars
• Post-graduate Bursary Programme (MSc 40 bursars 32 bursars This is dependant on available graduates who enrol for further studies. & PhD)
• Bursar absorption rate into Mintek - Under-graduates 40% 10/75 (13%) - MSc graduates 70% 5/27 (18%) All bursars were absorbed in this financial year. - PhD graduates 80% 2/15 (13%)
• DST Research Professional Programme Figures have declined because some of the fellows in the programme - MSc graduates 15 4 who were meant to have commenced their research in 2008/9 will only be starting in the 2009/10 year. - PhD graduates 5 1
• Management and Executive Development 30 employees 22 graduants Some employees withdrew and others have outstanding modules. Programme
• SMME Training and Development - 640 people trained - 609 people trained Although contracts signed for training exceeded expectations, the Interventions: People trained in bead making, - 3 agreements signed - 5 contracts signed numbers required to train were less than expected. brick making, ceramics, introduction to small- scale mining, and partnerships developed on skills programme.
- Jewellery Training and Development - 5 agreements signed - 5 Agreements The numbers of learners who come forward for training were less than Interventions: Establish new partnerships, - 50 new learners - 10 learners expected. train new beneficiaries in Eastern Cape, - 20 new learners on - 0 Learners Limpopo, Free State, Gauteng and gemstones (As a substitute 12 learners Mpumalanga at NQF level 2, train learners in were trained in stone setting) the Northern Cape in gemstone cutting and polishing. - 350 existing learners - 200 learners
- African Mining Partnership: Providing - 10 South African learners in 0 Project cancelled after the second quarter due to lack of funding jewellery training at NQF level 1 to Senegal expected through the DME. Madagascar. Providing CAD training to - 10 trainees to be trained in 0 Ghana, as per the AMP request. Training Ghana South Africans in jewellery techniques in - 10 trainees to be trained in 0 Senegal. Madagascar performance against objectives against performance
16 2009 – MINTEK ANNUAL REPORT Key Performance Area/Objective: Organisational Development (continued...)
Strategic Objectives Measures Target Actual Comments b) Transformation • Employment Equity Report 1 report 1 report Submitted to the Department of Labour.
• Employment Equity Plan Board-approved targets Loss of employees in middle management due to high staff turnover. - Executive and Senior Management 76% DG 70% DG Retention strategy to be finalised for implementation. - Professional 71% DG 62% DG - Technicians and Associated Professionals 87% DG 82% DG - Clerks 95% DG 98% DG - Crafts and Trades 79% DG 88% DG - Plant and Machine Operators 95% DG 99% DG - Elementary Occupations 91% DG 98% DG c) Talent Leadership • Remuneration Strategy New strategy document Draft Strategy In the process of finalisation.
• Performance Management System New system System implemented
• Retention and Succession Staff turnover <28% Draft Strategy To be finalised in 1st quarter of new financial year for implementation.
• Employee Wellness Programme - 9% HIV prevalence Only a KAB Survey Intense wellness awareness campaigns done with a focus on various - communication projects was conducted and its wellness issues in line with the country’s wellness efforts. recommendations are being implemented. d) Maintain world class • Promote Scientific and Innovation Excellence R&D infrastructure - Proportion of Researchers to Total Staff 33% 35% - No. of Staff enrolled for MSc and PhD 49 50 - % of staff with MSc 4.5 4.9 - % of staff with PhD 6.8 3.4 - No. of Papers and Articles Published 60 50 A further 33 papers are in line for publication. - No. of International collaborations 18 19 - No. of Patents registered by Mintek 2 1 Process of registering patents takes longer than was anticipated. performance against objectives against performance
MINTEK ANNUAL REPORT - 2009 17 Research, Development and Technology
2009 – MINTEK ANNUAL REPORT Mintek provides world-class R&D expertise, testwork, and process optimisation for the precious and base metals, ferro-alloy, industrial mineral and uranium sectors on an international basis. The activities range from initial bench-top investigations to full process flowsheet development and the design, construction and commissioning, and optimisation of industrial plants.
Mintek is strongly committed to delivering high-quality results within strict constraints of budgets and time-frames. To this end, our engineers, scientists and operators work in close liaison with clients and their engineering contractors, who are encouraged to actively participate in project planning and testwork. This interaction enables clients to discuss issues as development work moves forward, and increases Mintek’s own capabilities by drawing attention to areas that require focused, applied R&D. The new knowledge is then fed back into client-oriented services.
Mintek also undertakes medium- and long-term strategic applied R&D, which is aimed at building the organisation’s science and technological base and developing new technologies and products that will convey benefits industry- wide. This activity is funded mainly by the State Science Vote (Parliamentary grant) to Mintek as a Science Council, and also through supplementary sources such as bilateral agreements and other funding and donor agencies. Most of the projects in this category are undertaken as joint ventures or in collaboration with other research institutions, including local and overseas universities, professional bodies, and industry partners.
MINTEKMINTEK ANNUALANNUAL REPORTREPORT – 2009 19 gold industry
2009 – MINTEK ANNUAL REPORT Gold Industry the university, Mintek remains the link to strategy of docking chemically relevant development of promising outcomes from entities into a known protein target has been AuTEK – developing new industrial the university-based research and continues successfully employed in the past and has applications for gold to play a role in the malaria arena within contributed to many new inhibitors being Project AuTEK, the joint R&D South Africa. discovered. initiative between Mintek and the Mintek has been formally accepted into Since its commencement, AuTEK Biomed three major South African gold the COST D39 Action. COST (European has seen the graduation of a total of seven producers to extend the industrial uses Cooperation in the field of Science and PhD and thirteen MSc candidates (with for gold, has been running for nine years. Technological Research) is an EU- two PhDs and six MScs in 2008), with a The project has three main areas, in the supported networking programme, with further eight PhD and four MSc candidates fields of catalysis, nanotechnology, and the D39 Action focussing on metal-based currently working on AuTEK Biomed biomedical applications. drugs for cancer treatment. It is hoped that projects. through this co-operation AuTEK Biomed Biomedical programme will be able to strengthen metal-based drug Catalysis programme The AuTEK Biomedical programme, which discovery activities in South Africa, and to Project AuTEK Catalysis, which is a joint is co-funded by Harmony Gold Mining encourage international groups to evaluate venture between Mintek and AngloGold Company Limited, focuses on the discovery their compounds in South Africa for HIV and Ashanti, continues to advance the of new types of gold-based biomedical malaria. commercialisation of gold-based catalysts. agents with the emphasis on HIV/AIDS, A long-term collaborative project has begun The upgrade of the pilot plant has cancer, and malaria. with Merck, one of the world’s largest been completed, resulting in increased Research under the HIV programme is pharmaceutical companies. Dr Daria Hazuda production, and during the year more than focused on gold-based drugs and the HIV and her colleagues at Merck are regarded as 120 kilograms of the AUROliteTM catalyst integrase enzyme. A major milestone leaders in the field of HIV integrase inhibition, were supplied to end users in R&D and in achieved includes the submission of having recently developed and released industry as a result of marketing efforts in eight compounds to the National Institute IsentressTM, the first clinically-relevant conjunction with the World Gold Council. of Health (NIH) in the USA for further integrase inhibitor and the latest HIV inhibitor Strem Chemicals (USA), a manufacturer screening. These mark the first compounds to be FDA-approved. and distributor of fine specialised chemicals, submitted from the AuTEK HIV programme; has entered into an agreement with Leverage funding in 2008 resulted in the following on the successful submission of Mintek to include AuTEK catalysts in their receipt of seed funding from Cape Biotech compounds from the Cancer programme catalogue and distribute the materials in Trust (CBT). A successful application quantities of less than 2 kilograms, mainly to in 2008 to NIH. Current work within the was made to the South African Research researchers. This will significantly increase HIV programme includes the continued and Professional Development Program AuTEK’s exposure to the R&D community screening for integrase inhibitors and the (RPDP), three researcher-based projects and could lead to discoveries of new design of rational inhibitors using molecular to be established. THRIP funding was applications in gold catalysis. modelling. obtained for further capital equipment, and The AuTEK Biomed cancer programme the award of travel grants from the NRF KIC Product development work continued in- includes both the chemical synthesis programme enabled several international house, and in some cases in conjunction of potential drug candidates and their visits to be undertaken. with SME partners. A major area of investigation is respiratory protection (gas pharmacological evaluation. To date, one Successful application to the NRF resulted masks), and these products are on the patent has been submitted for PCT filing in a Mintek researcher being seconded verge of being entered for accreditation by and a second provisional patent application to take part in a one-year postdoctoral the appropriate regulating bodies. AuTEK is in preparation. Cancer compounds fellowship programme in drug discovery is also involved in developing catalytic submitted to the NIH continue to progress with world renowned scientist Professor materials that show enhanced resistance through the screening cycle, with two key Dennis Liotta (inventor of Emtriva - a drug to deactivation, for long term CO oxidation candidates reaching the in vivo stage. for the treatment of HIV infection in adults applications such as air purification, fire The malaria programme is based at the and children) at Emory University in Atlanta, protection, and mine refuge stations. University of Cape Town. Though most Georgia, USA. Currently, the research of the research activities take place at is focused on molecular modelling. The AuTEK materials are being investigated by
MINTEK ANNUAL REPORT – 2009 21 development of a working generic lateral- is expected to be fully operational by mid- flow prototype device that demonstrates that 2010. specific analytes or diseases of interest can Work has started in-house on nanoscience- easily be detected in solution. The test is based systems for water treatment, and a robust, easy to use and lay the foundation senior scientist was seconded to Cranfield for the development of advanced prototype University in the UK for four months to devices. In particular proof-of-concept work on electrochemical sensors for the prototype devices have been developed for detection of microbes. Cranfield is a leader detecting tuberculosis and malaria. in this field, which constitutes a new area A memorandum of understanding has of expertise for South Africa, and which been signed with the Agricultural Research involves modifying screen-printed electrodes Council (ARC) for the development of lateral for biological applications. flow point-of-care tests for animal health testing, including Rift Valley Fever and Gold process testwork African horse sickness. The ARC supplies Leach optimisation testwork was completed biomarkers and conduct market studies. for Etruscan Resources’ Agbaou gold Similar agreements have been signed with project in Cote d’Ivoire, as part of the the University of Witwatersrand and the feasibility study managed by MDM University of Pretoria for the development of Engineering Etruscan and Coffey Mining. An electrospinning rig in the Nanotechnology Qdots for biolabelling and the development Etruscan announced the results of the Innovation Centre. of targeted drug delivery systems for study in December 2008. Etruscan’s Youga angiogenesis studies respectively. Uptake mine in Burkina Faso, for which Mintek academic researchers for other applications, and toxicity studies are being done in previously carried out similar work, achieved such as the low-temperature oxidation of collaboration with the University of the commercial production in July 2008. methane and propene, the conversion of Western Cape through NIC. Plans are in Regular routine leach testwork continued for D-lactose to D-lactobionic acid, aerobic place to file a provisional patent (through Grinaker-LTA to monitor the performance of oxidation of aldehydes to esters, and Rhodes University) for an electochemical the Segala gold plant in Mali. the production of methyl benzoate from sensor to detect dopamine. TM benzaldehyde and methanol. AUROlite Diagnostic leach and other amenability A Mintek researcher visited the Russian catalysts featured in eight peer-reviewed investigations were conducted on various Academy of Sciences and Moscow State journals during the year. dump materials from South Africa and University together with government officials Central Africa, and a tailings deposit in Nanoscience and Technology and representatives of South Africa’s other central Asia. The Nanoscience and Technology Science Councils. Mintek was requested programmes are coordinated by Project to lead the nano-biotechnology sector Process optimisation studies were AuTEK and DST/Mintek Nanotechnology under the bilateral agreement, and will be conducted for Harmony Gold Mining Innovation Centre (NIC), with co- working closely with the University on the Company’s Kalgold and Doornkop gold sponsorship by Gold Fields Mineral Services development of optical and electrochemical plants. A full leach optimisation investigation Ltd . The aim is to develop nanostructured sensors. A workshop for identifying and was undertaken as part of the feasibility materials and exploit their unique properties finalising thematic areas of cooperation study for Sephaku Holdings’ Monarch gold for applications in health (diagnostics was held in February 2009 in Cape Town project in Mozambique. and therapeutics), water (monitoring and and further discussion is planned towards Two investigations were completed on the remediation) and other related areas. September 2009 in Russia. effect of wetting agents on heap leaching Generally the prototype sensor devices The DST has approved funds for the and carbon activity. It was found that the that are developed are based on optical establishment of a world-class cleanroom wetting agents generally had little effect on (e.g. lateral flow point-of-care) and (to ISO 3 standard) at Mintek. The facility, the carbon activity. electrochemical (e.g. screen printed which will enable pharmaceutical and In September 2008, the Mineralogy division electrodes) output signals. Significant semiconductor systems and products to be secured the appointment of Ms Wendy progress has been made on the produced meeting specified ISO standards, Thompson, a nationally regarded expert in
22 2009 – MINTEK ANNUAL REPORT gold mineralogy. As a result, the division’s commissioned during 2009 will gold service work capacity has expanded, be equipped with reactors for and a considerable number of investigations establishing a complete controlled were undertaken for local producers. mass balance, including Cyanide services gaseous species, as well as the quantification of solution Mintek’s Measurement and Control and species, online monitoring Hydrometallurgy divisions launched a collaborative project on the control and of pH, Eh conductivity and optimisation of oxidation-based cyanide dissolved oxygen (the conditional destruction, with the aim of offering clients parameters), free, WAD and total an enhanced destruction technique as well cyanide, thiocyanate, and other as improved leaching performance. The solution species such as iron and project is prioritising the use of ozone to copper. avoid increasing the salt load in discharge streams, and will also examine the effect of Research and Development pre-oxidation on the leach kinetics and its In a collaborative project with the University ICMI-based “gap” audit for cyanide effect on downstream destruction of arsenic of Pretoria and Imperial College, London, transportation. and cyanide. It is hoped that this project will a robust nonlinear model predictive attract industry sponsorship. control framework has been developed for test campaigns. A similar agreement Monitoring of plant and discharge streams for run-of-mine (ROM) milling circuits. In ROM milling, the feed ore forms part of has been concluded with Rados SA for the at AngloGold Ashanti’s Southern African installation of a pilot sorter based on online region plants continued, as well as borehole the grinding medium, and the variation X-ray fluorescence analysis. Mintek already monitoring at Gold Fields’ operations, to in feed ore hardness and size affects the has an X-ray transmission sorter on site, ensure compliance with the ICMI Code. breakage kinetics. This causes significant uncertainties, which cannot be rectified by also supplied by CommoDaS and owned by Mintek has established an analytical proper design of the milling circuit alone. South Africa’s Central Energy Fund. methodology for arsenic in waste streams The results suggest that if a milling circuit Physical separation processes in general to species level (As3+ and Astotal), by AAS/ regularly experiences large changes in feed hydride formation, and intends to work are notoriously difficult to model in a general ore hardness and composition, for example towards accreditation for this method. sense, and the predictive capabilities when the feed ore is derived from different of existing models are poor. Model At the end of the period under review, Mintek stockpiles, robust nonlinear model predictive development work at Mintek has reached took part in ICMI-based “gap” audits for control could warrant a closer look. Although the stage where flowsheet comparisons Sasol Polymers (cyanide production) and a commercial controller is a long-term goal, can be made by substituting different Sasol Silog (cyanide transportation) in the Mintek is looking into the limitations of the unit operations, which greatly assists the second quarter of 2009, and re-certification framework with a view to developing a useful selection of the most appropriate flowsheet audits are scheduled for the third quarter of prototype. This work was sponsored by the to pilot from appropriate laboratory data 2009. National Research Foundation. and minimises the amount of pilot work Mintek is in the process of extending its A new-generation Mikrosort® secondary necessary. traditional gold leaching service testwork optical sorter from Commodas Mining, to include pre-oxidation, staged reagent incorporating the latest software, addition, adsorption, and cyanide destruction cameras, and optical sensors, was been and arsenic removal. This will enable commissioned. A key feature of the new investigations to focus more closely on facility is its ability to recycle the products leaching kinetics, particularly regarding by- back to the feed, so that throughput tests products such as sulphur species, arsenic, can be conducted to specify the performance and chromium, and their downstream under various loading conditions. Both effects. A new laboratory facility to be Mintek and Commodas will use the sorter
MINTEK ANNUAL REPORT – 2009 23 Platinum-Group Metals (PGM) Industry
2009 – MINTEK ANNUAL REPORT Platinum Group Metals Industry
Conroast Process Development A large-scale converting trial on the Conroast PGM-bearing alloy was conducted at Northam Platinum. A total of 20 t of PGM-bearing alloy produced in the Conroast demonstration smelter was granulated and blended in various proportions with the matte feed. It was found that up to 15 per cent alloy in the feed had no deleterious effect on converter performance. Also as part of the Conroast demonstration project, a roasting test was conducted at a commercial plant in the Johannesburg area on a blend of Merensky reef, Platreef, and UG2 concentrates, to simulate the feed that could be expected to the dead-roasting step in the commercial process. The sulphur content was successfully reduced from about 7 per cent to less than 1 per cent.
Advanced Materials Mintek’s Catalysis Group is involved in a Physical vapour deposition apparatus for the controlled appliaction of very thin (sub-micrometre) films of metals to various substrates. major R&D programme as part of the DST’s AMI-Precious Metals Development Network, Pd/C catalysts and characterised them in was aimed at addressing the problems on the development of palladium-based preparation for initial reaction runs. encountered in the casting and formability diesel autocatalysts, palladium membranes of platinum-based superalloys produced by for hydrogen purification, platinum-catalysed The Hydrogen Catalysis Centre has traditional casting techniques. FeCrAl diesel soot filters, and gold- conducted a round of procuring capital palladium catalysts for epoxidation. equipment to establish the Centre early in The investigations involved the development financial 2009. Major items ordered include; of a complete production route, including the Four papers were presented at the DST’s four fuel cell test stations, a hydrogen production of pre-alloyed powder by water AMI Conference held in November at generator, an ultrasonic spray coater and atomisation, production of green compacts Gold Reef City. The papers discussed oil free air compressor. Final laboratory by uniaxial compression, sintering to give progress in the palladium diesel autocatalyst space for the Centre has been identified and an alloy with the desired two-phase (Pt/ project, the palladium membrane project, Pt Al) microstructure, and characterisation, secured. 3 high-temperature platinum alloys and optimisation, and evaluation of the powder metallurgy of platinum alloys. A three-year project on the development properties of the sintered compacts. The PMDN epoxidation project is a joint of platinum-based superalloys for high- Although the production route was shown venture between Mintek, Sasol, and Cardiff temperature and aggressive environments to be technically feasible, it was found that University, and a steering meeting was via powder metallurgy was completed. water atomisation is not an ideal method held in the UK with all collaborating parties This project, which was undertaken for the for producing pre-alloyed powder, because attending. Mintek has prepared several Au- DST under the Advanced Metals Initiative, it leads to the formation of oxide-bearing
MINTEK ANNUAL REPORT – 2009 25 continued for Lonmin on their Middelkraal Analytical method development and Karee ores, and confirmatory work was Due to the “nugget effect”, it is generally begun for the planned circuit upgrade at accepted that precious metal (gold and Impala Platinum’s Two Rivers project. PGM) assays must be conducted in Laboratory-scale testwork continued for duplicate by splitting the sample and Ridge Mining’s Sheba’s Ridge and Blue analysing both samples separately. Mintek Ridge projects. In the case of Sheba’s has completed preliminary work that Ridge, the work was aimed at simplifying demonstrates that similar results will be the circuit and making it more cost-effective. obtained from all splits if the crushing, splitting, and milling are conducted Bench-scale comminution and flotation rigorously. A major South African client work continued on core samples from has agreed to fund a comprehensive Wesizwe Platinum’s Frischgewaagd-Ledig statistical validation process of milling and project in the Pilanesberg area, and similar splitting. This approach has the potential work was undertaken for Platinum Group to make significant saving in the costs of Metals’ Western Bushveld project. Piloting geochemical analysis by eliminating the campaigns for both of these projects are duplicate assays. anticipated in 2009. A method for the determination of rhodium The concentrator circuit at South Africa’s on ion exchange resins, using fire assay newest PGM project, Platmin’s Pilanesberg followed by either gravimetric or trace ICP Platinum Mine, for which Mintek previously determination, was developed at the request carried out extensive bench-scale testwork of an industrial client, and is in regular use and several pilot-plant campaigns (Annual for evaluating samples of resin. Report 2007), came into operation in March 2009. Mintek is strongly focused on integrating the theoretical classification of PGM minerals A Science Vote funded project was started and their host association with regards to to develop a direct hydrometallurgical route Flotation testwork on a PGM ore. flotation metallurgy. A sampling campaign for the recovery, separation and purification was completed in mid-2008 at a local PGM of PGMs from chloride leach liquor. concentrator, and samples from successive powder particles, with consequent negative Research projects were completed on the rougher cells are being run through the effects on the sintering mechanism and the biochemical mechanisms involved in the auto-SEM facility. As a result of the study, it mechanical and corrosive properties of the synthesis of platinum and gold nanoparticles is hoped that proper statistics on standard sintered compacts. Powders obtained by at Rhodes University and the University deviation, repeatability, and a resolution mechanical alloying had superior properties, of the Free State respectively. Further of the individual minerals’ identification and resulted in better compacts, and it is development will continue at Mintek in a can be produced. Mintek has developed suggested that either mechanical alloying collaboration between the Biotechnology proprietary software for the automated SEM under an inert atmosphere or inert-gas and Advanced Metals divisions, with the identification of the PGMs, which has been atomisation would be more appropriate next step involving larger-scale production. verified against electron microprobe data techniques. from an independent laboratory. In July 2008, the Mineralogy division Process Development and Optimisation achieved renewal of a R1.3 million annual There was a continued steady demand contract for QEMSCAN service work from for laboratory and pilot plant feasibility Impala Platinum, in the face of active assessments for the local PGM industry. competition for this contract from a major On the pilot scale, characterisation work commercial laboratory
26 2009 – MINTEK ANNUAL REPORT Ferrous Metals Industry
MINTEK ANNUAL REPORT – 2009 Ferrous Metals Industry A 9-ton sample of chromite ore fines from Zimbabwe was smelted in the 200 kilowatt DC arc furnace without prior agglomeration to produce ferrochromium, using anthracite as reductant in place of coke. The chromium grade and recovery into the product alloy were both on-target at more than 60 per cent. The smelting process was benchmarked against a process for smelting UG2 chromite.
A techno-economic feasibility study on the calcining and smelting of wastes for a European ferromanganese producer was completed and showed attractive economics.
A pilot-scale smelting campaign was conducted for Xstrata Nickel on the DC Smelting titaniferous magnetite to produce pig iron and titania-rich slag. arc smelting of calcined laterite from the Araguaia deposit in Para State, Brazil. The furnace design and operating conditions per cent, the main impurity being iron, A 250 ton bulk sample of titaniferous were similar to those employed in testwork with smaller amounts of cobalt, carbon, magnetite from the Bushveld Complex was for the Koniambo nickel project in New and sulphur. The main breakthrough was concentrated, and 145 tons of finely sized Caledonia in the 1990s. Nickel recoveries establishing the right flux composition to concentrate smelted in a DC furnace at of more than 90 per cent were consistently generate the appropriate slag. an average power level of 1.2 MW without achieved, with nickel grades of up to 35 prior agglomeration or flux additions. The Mintek conducted pyrometallurgical per cent in the ferronickel product. Xstrata recovery of metallic iron was 90 to 92 per service work for Xstrata Nickel Sudbury completed a scoping study on Araguaia cent, with a typical purity of 98 per cent. A in the last quarter of 2008. The client’s during 2008, but in view of the prevailing by-product slag containing approximately engineers assisted with the smelting economic climate the project has been 60 per cent titanium dioxide was produced. campaign at Mintek, which was aimed at placed on care and maintenance. This work was similar to a campaign carried simulating the operating conditions in the out for the Kermas Group in 2007 (Annual Laboratory- and pilot-scale work was production furnace at the Sudbury smelter Report 2008). carried out on the smelting of a calcined in Ontario. The DC furnace was operated nickel intermediate product, as part of in submerged-arc mode (instead of with an Acid leach tests were conducted on drill a R&D programme by a major nickel open arc as is normally the case) and with samples from African Eagle Resources’ producer to develop a new hybrid route for a “black top” of unreacted feed material on Dutwa nickel laterite project in Tanzania. manufacturing high-purity nickel products. top of the molten slag, to simulate an AC The leach test results showed high nickel A total of 7 tons of material were smelted furnace. The work demonstrated the effect extractions, averaging 83 per cent on to produce 5.4 tons of metal with a nickel of minor changes in the operating conditions a solid basis, and very low sulphuric content ranging from 94 per cent to 98 on the overall process performance. acid consumption, which compare very
28 2009 – MINTEK ANNUAL REPORT A theoretical study was started on the feasibility of using Soderberg self-baking electrodes in DC furnaces. Soderberg electrode material is introduced as a petroleum coke-based paste, which is baked to form graphite as it enters the furnace. The process is thus continuous, and the furnace does not have to be powered down in order to add new electrode lengths.
Bench and pilot scale testwork on the upgrading of iron ore remained in heavy demand. A second phase of a major project for Tata Steel was started on the beneficiation of samples from iron-ore deposits in India. This work, which is focused on upgrading the fine fraction of the ore by various physical separation techniques in order to maximise recovery, resulted in the sale of a Mintek Mineral Density Separator to the company’s research and development unit. The project Nickel smelting, with the DC furnace operating in the submerged-arc mode. is extending into 2009, with extensive mineralogical investigations and further favourably with laterite deposits elsewhere and travel at several kilometers per second. development of the proposed flowsheet. in the world. The mineralogical analyses, Work focussed on the time-dependence Recovery testwork also continued for using X-ray diffraction (XRD) and scanning of the arc motion, and how it interacts with Kumba Iron Ore on the upgrading of electron microscope (SEM), showed that both the liquid slag surface beneath it and materials from the Sishen South and other Dutwa is a unique laterite dominated the freeboard gas space around it, with the projects, and a number of enquiries were by silica and with very low iron and aim of understanding what factors make the received for testwork on projects in West magnesium contents, which accounts for arc stable or unstable. This work formed African countries. the exceptionally low acid consumption the basis of a PhD thesis submitted to the and high nickel recovery. A second phase University of Cape Town. Iron ore from new projects tends to be of metallurgical test work to evaluate of a lower grade, and the mineralogy of A post-doctoral project is under way the leaching options in greater detail is the deposits is more complex. Mintek is at the University of Cape Town on the expected following the scoping study by therefore required to develop novel process GRD Minproc, which is due for completion molecular modelling of multicomponent technology in order to upgrade these ore in mid-2009. pyrometallurgical systems that are too complex for analysis using phase diagrams, types effectively, and a research programme Mintek continued work on the dynamic using computational methods. has been started to build background modelling of the arc in a DC furnace using knowledge in this area. computational fluid dynamics. The plasma Preliminary work has begun on a project arc, the energy source within a DC furnace, to investigate the potential of hydrogen A considerable amount of testwork was is an intense gas jet flow, which at industrial production from organic waste in a DC conducted using the high pressure grinding scale may exceed temperatures of 20 000oC furnace. roll (HPGR), particularly for processing
MINTEK ANNUAL REPORT – 2009 29 Metals Technology Centre
The Mintek Metals Technology Centre (MTC), which provides consultancy and testing services to address materials-related problems in industry, has recorded a record year regarding work completed. The type of work performed ranged from materials characterisation tests (to determine the physical, mechanical and chemical ([corrosion)] properties of materials) to failure investigations to identify the cause of component failures. Over the years, Mintek has grown specific expertise in grinding media technology, and in the past year, again, performed numerous studies to qualify the properties of grinding media (for the purposes of quality control, materials selection, failure analysis and dispute resolution). Another traditionally Different views of the temperature strong area is corrosion, and more than profile in the 3D transient arc model half of the income was generated by for a twin cathode DC arc system. performing corrosion studies - ranging The temperature range is between from sophisticated electrochemical 5000K and 14000K. This model was calculated using the IBM 32-way laboratory testing to in-situ corrosion SMP machines at the Centre for High testing programmes for material selection Performance Computing in Cape purposes. The opportunity offered through Town.. this type of service work helped a vast number of metallurgists in industry to apply iron and phosphate ores. In the case of years of research at Mintek, four promising theory learned in the classroom. During iron ores, the HPGR definitely results in chemistries have been identified and have the year under review, three metallurgical preferred liberation of both hematite and been forwarded to Prima Industrial Holdings, trainees completed their practical training magnetite, making the technology a serious a foundry consortium partner, where with the MTC, and will no doubt be highly contender for inclusion in beneficiation grinding balls will be manufactured under flowsheets. sought after by industry. typical industrial conditions. The industrially- Grinding Media Project manufactured balls will be evaluated under typical ore-milling conditions at one of our The primary objective of the grinding mining consortium partners’ grinding mills. media project, which is sponsored by the This phase of the testwork, which will allow Innovation Fund, is to develop and produce a cheaper and more cost-effective grinding the compositions to be narrowed to about ball for use in the PGM mining industry. one or two products, is scheduled to start This product will provide an alternative in the third quarter of 2009. The final phase to the conventional High Chrome White of the project will involve full mill charge Cast Iron (HCWCI) product. After two experiments in an industrial mill.
30 2009 – MINTEK ANNUAL REPORT Non-ferrous Metals Industry
MINTEK ANNUAL REPORT – 2009 Non-ferrous Metals Industry
Biotechnology
The EU-sponsored BioMinE project came to an end during the third quarter of 2008. Mintek retained its high-profile leading role on this project by contributing techno-economic studies for two integrated bioleaching processes (one for copper- and another for nickel- bioleaching) as final deliverables.
The Mintek-led feasibility study on the application of high temperature heap bioleaching technology at the Sarcheshmeh Complex in Iran was completed, following extensive demonstration-scale testwork at the site over the past three years, and negotiations for the full-scale implementation are expected to be concluded in mid-2009.
The Biotechnology division was invited The 10 kilogram per hour fluidised-bed chlorination facility for producing iClT 4 to submit proposals for several major contracts. An agreement has been signed Resources’ Wetar heap-leach project in alloy. Greater than 96 per cent of the copper with JOGMEC (Japan Oil, Gas and Metals Indonesia. The package will assist the and silver in the feed were recovered, and National Corporation) for a second phase operators to optimise heat accumulation based on the results of the testwork, the of heap leaching test work on refractory in the heap, as well as the aeration and design specifications were developed for chalcopyrite copper ore. The first phase of irrigation schedules, during the 100 000 a 20 000 ton per annum commercial-scale the work was completed in March 2008. ton (5 tons of copper metal per day) plant. These contracts have resulted from a demonstration campaign. general co-operation agreement entered A major bench-scale project, involving into between JOGMEC and Mintek. Small-scale leaching amenability testwork reductive leaching, solid-liquid separation, on the bioleaching of copper ore from and purification, was undertaken on the A contract with a multinational mining Omitiomire in Namibia was conducted on recovery of copper and cobalt from the company for testing the amenability of a behalf of Green Team International. Kalumines project, a joint venture between Chilean copper ore to heap bioleaching TEAL Mining and Vale in the DRC. The under a project that will stretch over more Service Investigations work involved reductive leaching, solid- than 12 months is in an advanced stage of A 10 ton sample of copper concentrate liquid separation, and batch solvent negotiation. from Anvil Mining’s Dikulushi mine in the extraction. Similar work was undertaken A copy of the HeapStar operator DRC was agglomerated and smelted in the for Vale’s Deziwa copper-cobalt project. A guidance software, together with in-heap 300 kVA submerged-arc furnace, and the continuous pilot-plant exercise was carries instrumentation, was supplied to Finders resulting copper-iron matte converted to out a proprietary flowsheet for Mutanda
32 2009 – MINTEK ANNUAL REPORT Mining’s MUMI project, encompassing bleed stream by magnesium oxide products. An upgraded fluidised bed leaching, solvent extraction, and copper addition, maintaining a high cobalt recovery chlorination facility with a capacity of 10 electrowinning, with concomitant generation while minimising the MgO content of kilograms of titanium tetrachloride (the of a cobalt bleed stream. Small-scale the precipitate. It has been found that raw material for titanium metal production) leaching testwork was performed to optimise using carefully controlled conditions, per hour has been constructed, and a copper recovery from Katanga Mining’s the magnesium oxide can be added in laboratory-scale Kroll reactor is being built Kamoto project. slurry form without the formation of a in order to familiarise research staff with the passivatiing magnesium hydroxide film, production and handling processes. A major project was completed on the and magnesium can be recycled as the upgrading of low-grade nickel-copper South Africa accounts for almost half of sulphate by precipitation with ammonia and ore from Tati Nickel’s Selkirk deposit in the world’s titanium slag production, but neutralisation. Botswana by dense media separation and less than 1 per cent of the higher value flotation. Titanium and aluminium titanium dioxide pigment and none of the metal production. Titanium metal and alloys Research and Development The DST is funding a R6.4 million three- combine high strength with low density, year project at Mintek to develop a titanium A Science Vote project is investigating the good high-temperature properties, and powder manufacturing process, as part of microbiology of heap leach processes, in excellent corrosion resistance. However, the the Light Metals Development Network of particular the identification and quantification production route is complex and expensive the Advanced Metals Initiative (AMI). The of the micro-organisms in the heap, with due to the metal’s inherent physical and overall aim is to stimulate the development the techniques being evaluated on samples chemical properties. If the cost of producing of a primary titanium industry in South from 6-metre column tests. Mintek is also components could be reduced, this would Africa, and particularly a downstream examining the use of the extracellular open up new areas of application and titanium component manufacturing industry. polysaccharides that the organisms produce increase consumption. In the first phase of the work, a route as bio-flocculation or bio-flotation reagents. has been identified that can be used to A project was successfully undertaken for An M.Sc. research project was completed at produce titanium powders at the gram a major international aluminium producer the University of the Witwatersrand on the scale from Kroll sponge by hydrogenation- to develop a flowsheet for removing iron bioleaching of nickel laterites. dehydrogenation and milling, with a view and silica from bauxite, to minimise the Two Science Vote funded project are in to assessing the properties required formation of the “red mud” waste product in progress to investigate impurity removal for the production of components by the Bayer process for alumina production from base-metal streams. The first involves powder metallurgy. The material that has and to increase the head grade of the feed. a low-energy process to remove iron from been produced so far has very similar chloride leach liquors by solvent extraction characteristics to currently available and hematite precipitation, while recovering commercial titanium powders. hydrochloric acid. In the second, the focus Subsequent work will focus on verifying is on optimising the energy requirement that the process will yield titanium powder during removal of iron and manganese by suitable for a selection of commercial air/SO injection by removing both metals in 2 applications. A dedicated laboratory is being a single step without the solvent extraction commissioned to house the equipment of manganese. necessary for scaling up the powder A further Science Vote project involves production process, and Mintek is working optimising the conditions for cobalt on an analytical method development precipitation from a purified base-metal programme aimed at analysing the finished
MINTEK ANNUAL REPORT – 2009 33 Industrial Minerals Industry
2009 – MINTEK ANNUAL REPORT Industrial Minerals Industry
Uranium
The period under review saw a considerable increase in uranium-related studies, particularly in projects to recover uranium and gold from tailings materials. Flotation, atmospheric and pressure leaching, preliminary ion exchange tests, and gold diagnostic leaching were conducted as part of the feasibility study being conducted by MDM Engineering on the Buffelsfontein slimes for Simmer and Jack Mines. Bulk atmospheric leaching and ion exchange, including resin abrasion testwork, The new acid-base accounting laboratory. were conducted as part of AngloGold Ashanti’s study for a plant upgrade at the South Uranium plant, Vaal River Operations. result of this work, a research project has and physical properties of the ores under The plant currently uses countercurrent ion been proposed to investigate the optimum simulated heap-leach conditions. The exchange (NIMCIX) to produce 50 000 kg extraction and stripping conditions for the results confirmed that the two main ore recovery and purification of uranium from types leach well in columns, with similar of U3O8 per month. RIP technology is being considered for a future expansion. solutions containing phosphoric acid. recoveries to those obtained earlier in bottle- roll tests that were used in the 2008 scoping A composite sample of drill-core material Initial testwork was conducted on the study for the project. Further testwork in from a greenfield deposit in the Karoo recovery of uranium from samples of larger scale columns will be undertaken was characterised by X-ray fluorescence material from two of Harmony Gold Mining during the feasibility study. scanning and carbonate analysis, and Company’s tailings dams. This will be bench-scale atmospheric (acid) leaching. followed by RIP and RIL work, solvent Similar work was conducted for the This type of ore contains both acid- and extraction, and ammonium diuranate feasibility study for the Chirundu joint alkali-consuming gangue constituents, and precipitation. Alternative recovery options, venture in Zambia (African Energy a decision on which leaching method to use including flotation and pressure leading, Resources and Albidon Ltd) to finalise requires a systematic investigation through may also be investigated. This work forms the design of the process flowsheet and laboratory testwork. part of a comprehensive programme by optimise the process parameters. Harmony to recover uranium and gold from A further phase of testwork was conducted Mintek has shown in a number of studies tailings dams in the Free State goldfield. in support of the definitive feasibility study that the costs associated with the recovery on the Bakouma project in Central African An initial series of column leaching tests of uranium from leach pulps can be reduced Republic for Areva. The investigation was completed on samples from A-Cap significantly using ion-exchange resins consisted of milling, acid leaching, and Resources’ Letlhakane uranium project added directly into the pulp to absorb two stages of solvent extraction. As a in Botswana, to ascertain the leaching dissolved uranium. However, the durability
MINTEK ANNUAL REPORT – 2009 35 ways that mineralogical techniques can be used quickly and cost-effectively to guide metallurgical decision-making.
Acid Mine Drainage
A pilot-scale demonstration of Mintek’s SAVMINTM technology for mine water treatment was conducted at a site near Randfontein, west of Johannesburg. The plant, with a capacity of 4 cubic metres per hour, was constructed and operated for an extended period by Atomaer (RSA) as part of a campaign by the Western Utilities Corporation to evaluate technologies for remediating acid mine drainage emanating from the West Rand Basin.
This campaign highlighted certain aspects of the technology that could be further improved, and Mintek is currently investigating opportunities to reduce capital The mineral liberation analyser for investigations into uranium mineralogy. cost and improve by-product recoveries.
of these resins in abrasive leach pulps research and service work. MLA technology, In response to an increasing demand for has not yet been proven, and the loss which provides quantitative information water-quality investigations, an acid-base accounting laboratory has been set up of resin through breakage and attrition on parameters such as liberation, mineral in Mintek’s Analytical Services division. is an important factor in determining the identification and, grain-size distribution, Acid-base accounting is a set of analytical economic viability of the process. Tests has been extensively used in investigations procedures that can be used to predict were conducted on the MetRIX resin-in-pulp involving the platinum-group metal (PGMs), whether a particular mining operation is demonstration facility using uranium ore and is now being increasingly applied to likely to generate acid mine drainage, so from Harmony. Initial measurements have uranium mineralogy. Uranium minerals that steps can be taken early to remedy indicated that the resin loss is low enough behave very similarly to the PGMs in that it. The Mintek facility is the first laboratory for the test results to be used to promote they exhibit a high backscatter, due to the in South Africa to offer this service. the process for commercial application. high average atomic numbers, and the As preparation for the project, several A metallurgical evaluation indicated that MLA is a valuable tool in helping to select research and commercial laboratories in an improved elution strategy could be the best processing routes, as well as for West Virginia, USA, that offer routine acid- developed that would halve the overall time optimising existing processes. base accounting testwork were visited. that the resin has to spend in the elution With the rise in interest in energy minerals, Information on setting up the laboratory, the circuit. there has been a significant trend towards analytical procedures and equipment used, A new Mineral Liberation Analyser (MLA) gold producers evaluating their potential and data reporting methods. The visits were was commissioned, which was funded for byproduct uranium. In this regards, co-ordinated by Professor Jeff Skousen of through a Medium-Term Expenditure Mintek held a combined gold and uranium West Virginia University, a leading authority Framework (MTEF) grant for uranium workshop in February 2009 to discuss on acid-base accounting.
36 2009 – MINTEK ANNUAL REPORT Diamond Provenance Studies Mintek and the SA Diamond and Precious Metals Regulator (SADPMR) have launched a project to study the possibilities of determining the origin of rough diamonds. The study is aimed at ascertaining whether trace element analysis can be used in combination with physical characteristics to link diamonds to their geological source, particularly in the case of illicitly traded stones. The heart of the project is a new laboratory facility in Mintek’s Mineralogy division, funded by the SADPMR and equipped with a state-of-the art Laser Ablation Inductively Coupled Plasma Mass Spectrometer (LA- ICP-MS) that is capable of analysing over seventy elements at sub-parts-per-billion and lower levels. This laboratory is the first of its kind in Africa, and one of very few such The Laser Ablation Inductively Coupled Mass Spectrometer is capable of analysing more than facilities world-wide. Commissioning was seventy elements at sub-parts-per-billion and lower levels.
completed in November 2008 and method chairmanship of the Kimberley Process (KP) development is underway. The major this year vests with Namibia, and since the challenge is to find a reference material provenance studies are aimed at supporting with a sufficiently high carbon content to the Process, Mintek is hoping to receive allow for calibration, but which ablates in a strong local interest in 2009. manner similar to diamond. Laser ablation Service investigations as an application has unique challenges, since different elements respond differently A project was undertaken to evaluate to ablation, and this divergence of behaviour dense media separation for upgrading the (fractionation) demands a thorough light fraction of a boron ore from Turkey. understanding of how the material is This involved a very low density cutpoint, responding to the analytical hardware. and the main challenge was to select the appropriate media. If proven to be successful, diamond fingerprinting would help to reduce theft Magnetic separation testwork was and illegal mining and assist in preventing conducted to upgrade a phosphate ore from “conflict diamonds” from entering the Mozambique. legitimate trade, which is the objective of the Gravity separation testwork using heavy Kimberley Process Certification Scheme. In liquids continued for De Beers, and February 2009, project members met with mineralogical investigations and heavy delegates at the AMP Plenary in Durban liquid separation were done to characterise Column leach testwork on a uranium ore to discuss SADC support for the project kimberlite indicator minerals for a company sample from Central Africa. in the form of sample submission. The with a project in Canada.
MINTEK ANNUAL REPORT – 2009 37 operations and developments
Operations and Developments Mintek’s wholly-owned local holding PGM recoveries consistently exceeding company, Mindev (Pty) Ltd, was established 98 per cent, even when smelting selected Mintek transfers its unique technologies to support the commercialisation of lower-grade revert tailings. and products to industry by way of sales, its technologies, and to exploit these technology licensing agreements, and The capital cost of the upgrade, which technologies through partnerships in through joint-venture partners and operating involved the installation of a new furnace companies. commercial ventures. Mindev currently shell, modifications to the power supply has no shareholdings, and is retained and cooling, off-gas, and control systems, These technologies and products include as a shell company for the purposes of and incorporation of a flash dryer and DC arc smelting, gold and base metal commercialising select Mintek technologies pneumatic feed system, was R37.7 million, bioleaching, the hydrometallurgical refining as they reach the appropriate stage of of which R32.7 million was funded by TM of gold (Minataur Process), various capital development. Braemore Resources in terms of the long- equipment items such as the Minfurn carbon- term agreement to develop the ConRoast regeneration furnace, Mintek’s extensive ConRoast Development Programme technology. The project was completed range of metallurgical process control Braemore Resources, Mintek’s partner ahead of time and on budget, and the new and optimisation strategies based on the in the commercial development of the facility was officially opened on 2 October StarCSTM platform, and the South African ConRoast DC arc smelting process for PGM 2008. The first alloy was tapped on 21 Reference Materials (SARM) series. concentrates, began trading its shares on October, and throughput ramped up to about the Johannesburg Securities Exchange 1 500 tons per month by the end of the (JSE) in July 2008. period under review. On 27 March 2009, an escape of molten The DC arc demonstration smelting facility metal end-slag came into contact with at Mintek underwent a major upgrade in cooling water, causing a series of minor September 2008, which effectively doubled explosions outside the furnace. There were its capacity to 2 000 tons of feed per month. no injuries, and only minor damage, mainly The previous unit completed nine months’ to peripheral equipment. The furnace was successful continuous operation, produced returned to production within three weeks. a total of more than 700 tons of nickel-iron alloy containing platinum group metals The ConRoast technology is able to (PGMs) from high-chromium material, with recover platinum-group metals (PGMs)
38 2009 – MINTEK ANNUAL REPORT from concentrates and other materials that industries. In 2008, a 25 kilogram per The Kuranakh Mine has been in production contain high levels of chromium and low hour test unit was commissioned at the for more than 40 years. levels of sulphur, which are metallurgically manufacturing facility of PURAC, the world’s A 1.35 MVA DC arc furnace that was challenging for conventional “six-in-line” largest producer of natural lactic acid and designed and constructed for Batrec smelters. Most of the development-stage its derivatives, in Nebraska, USA. Lactic Industrie AG in Switzerland (Annual Report PGM projects in South Africa would produce acid is produced by the fermentation of corn 2008) was successfully commissioned by concentrates with higher chromium and/ (maize), and activated carbon is used to Mintek engineers, and is in full production. or nickel contents. Moreover, established remove residual colour and odour from the The furnace, which replaces a previously smelters are running at, or close to, capacity product. The initial test results have been used induction furnace, is used for for high chromium content feeds. extremely positive, and the current focus is recovering ferromanganese and zinc from Mintek and Braemore Resources on optimising the configuration of the furnace recycled dry-cell batteries. entered into an exclusive agreement to finalise the design for production units. Mintek’s Atomijet TM was originally developed for the commercial development and A 25 kilogram per hour Minfurn is under implementation of the ConRoast process to atomise gold for leaching in Mintek’s construction for the Rietvlei water TM in 2006, in terms of which Braemore would Minataur all-hydrometallurgical gold treatment plant near Tshwane, and will refining process. A second-generation fund a US$15 million work programme over be commissioned in mid-2009. The plant, three years, including a definitive feasibility machine, with a number of improvements which produces 40 million litres of drinking study, for the development and operation of to enable operation at temperatures up water a day (about 10 per cent of Tshwane’s a new independent smelter and base metals to about 1800ºC, was installed at Impala daily requirements) uses granular activated refinery to serve emerging PGM producers in Platinum Refineries in Springs in 2007 carbon to remove dissolved organic matter, South Africa. (Annual Report 2007). Having proven the including colour, odours, and tastes caused technology in industry over a number of Capital equipment by the algae present in the water, before the years, Mintek is now looking to extend the final chlorination step. A 75 kilogram per hour Minfurn carbon range of materials that can be processed regeneration furnace and drier were An electrowinning cell designed and built even further. constructed and commissioned for the at Mintek was installed at the Kuranakh Mineração Serra do Oeste gold mine in gold plant, in the Yakutia Region of eastern Brazil. Siberia. The mine is operated by OAO Mintek has conducted a considerable Aldanzoloto GRK (Aldanzoloto), part Mintek’s Business Development amount of development and testwork to of Polyus Gold, Russia’s leading gold group is pursuing several oppor- extend the applications of Minfurn to other producer. The 12-cathode cell is of highly tunities for commercialisation of industries that use activated carbon, such as efficient design, makes cost-effective use of the organisation’s intellectual
the food, beverages, and water purification materials, and is economical to construct. property. operations and developments
MINTEK ANNUAL REPORT – 2009 39 To this end, a large-scale multipurpose DRA. A second phase of this project will has been tested in the laboratory to ensure Atomijet, designed specifically for operation be undertaken when the new concentrator robustness and validate the accuracy. Based towards the upper end of the refractory circuit at Eland is commissioned in late 2009 on these results, further testing will be done temperature range, has been commissioned. or early 2010. at Mintek’s pilot flotation plant in preparation The new unit, which is capable of processing for industrial trials later in 2009. The FloatStar Flow Optimiser underwent metals with melting points up to 2 300ºC, will successful trials at Aquarius Platinum’s K2 A visual flotation monitoring system has been be used to gather information for the design plant and at Northam Platinum. The Flow tested on an industrial circuit. A common of atomisers for specific metals, in particular Optimiser, which builds on the foundation challenge with flotation circuits is the nickel and the platinum-group metals. The laid by the Level Stabiliser, improves circuit effective monitoring of the performance of product, with a size distribution of around operation by controlling the circulating load all the flotation cells. Any cell not producing 90 per cent smaller than 300 micrometres, and mass pull in the circuit. These variables a concentrate provides no benefit to the is typically used to prepare impure metals are key to ensuring optimal circuit operation. circuit. Mintek’s visual flotation monitoring and ores for further refining or pure metals system is intended to stream live video of as feedstock for powder-metallurgical A Level Stabiliser and Flow Optimiser were every flotation cell in the circuit, to the control applications. purchased by the Ok Tedi copper mine in room. The video is from a perspective that Papua New Guinea following a successful trial can be easily interpreted by the user. The Process control products in 2007. This was a major project, involving system was tested in an industrial circuit, many Level Stabiliser Flow Optimiser control A FloatStar Level Stabiliser was and showed a high degree of robustness and loops. Detailed performance analysis showed commissioned on the UG2 flotation circuit at operator acceptance. The system is currently that the system provided considerable benefit Platmin’s Pilanesberg Platinum Mine, which being extended to provide automatic began operation in March 2009. This project to Ok Tedi. detection of low froth flow, which can then be was carried out in conjunction with DRA, A Level Stabiliser was accepted by highlighted to the operator or acted upon by who supplied the concentrator. Good level an automatic control system. Prototype code control has been achieved on all the banks, Collahuasi’s molybdenum plant in Iquique, has already shown the idea to be feasible. and a further stabiliser will be installed on the Chile, again after a trial period. Mintek’s flotation stabilisation and optimisation Merensky circuit when it is commissioned A general flotation modelling framework has modules have been running on the main later in 2009. Mintek was able to install the been developed that models the behaviour of Collahuasi copper plant for several years. controller during the water-commissioning a specified ore in a flotation circuit, and can phase of construction, ensuring Pilanesberg Development of the Xanthoprobe, which simulate the behaviour of the same ore in was able to benefit from the FloatStar provides an on-line measurement of the different circuit arrangements. The framework system immediately on startup. concentration of the flotation reagent is capable of fitting rate parameters and Level Stabilisation was also implemented xanthate (used as a flotation collector) has solving circuit mass- and volume balances
operations operations and developments at Eland Platinum, again in conjunction with reached prototype stage. The instrument directly from pilot-plant data. This allows
40 2009 – MINTEK ANNUAL REPORT researchers to explore various flowsheet and the reagent controller manipulates to ensure high recoveries in downstream options without expensive repeat pilot-plant thirteen dosage points. flotation processes, and to prevent energy runs. A major focus of the model has been wastage as a result of regrinding ore that is Mintek completed a milling and flotation ensuring the underlying engineering is already of suitable size. The hydrocyclones control and optimisation project at BHP mathematically sound. Thus the model can are arranged in clusters to accommodate Billiton’s Kambalda operation in Western be used without concerns for the accuracy fluctuations in feed and equipment failures. Australia, with the commissioning of a of the mass balance. This is a limiting The MillStar Cyclone Switcher effectively MillStar for control of the feed rate, crusher factor in most flotation models developed manages the number of active cyclones in gap size, and mill power and discharge. to date. Ongoing work is aimed at adding a cluster in order to regulate the pressure FloatStar flotation level stabilisation and flow more advanced models, such as a model for different flows into the cluster, thus optimisation were implemented the previous for particle recovery by entrainment in order allowing the desired milled product size year (Annual Report 2008). to facilitate concentrate grade simulations. sent downstream to be maintained. The The framework will be particularly useful in At the Fresnillo lead-zinc mine in Mexico, a Cyclone Switcher at Kambalda successfully correcting operational issues, comparing Metso Minerals VisioRock image analysis controlled a 12-cyclone cluster, despite a the performance of pilot-scale and full-sized system for on-line measurement of ore number of operational changes effected as plants, optimisation and control, and plant size distribution was integrated into the part of the test campaign. design. MillStar segregated ore feed controller. Significant progress has been made The VisioRock system was connected A combined MillStar and FloatStar towards transferring Mintek’s Circulating directly to the PLC, enabling MillStar to implementaton was started at Hindustan Load Optimiser technology for overflow determine the overall coarseness of the Zinc’s Rampura Agucha concentrator in mills to industry. The capital cost of mills is feed to each mill from the ore sizes for each Rajasthan, India, and will be completed in extremely high, and it is therefore critical feeder. The mill load is then controlled to an the second quarter of 2009. The project that their capacity is fully utilised. Overflow operator-specified setpoint by changing the consists of a mill throughput optimiser mills are notoriously difficult to optimise ratios from each feeder. This results in an on the primary milling circuit, and model since they do not exhibit the defined encompassing, versatile control solution. predictive control of the sump, cyclone relationship between power consumption feed, and cyclone overflow product size Mintek’s MillStar Cyclone Switcher and load that is demonstrated by other types on the secondary mill, which will benefit prototype was successfully demonstrated at of mills. The Circulating Load Optimiser the operation by ensuring a more uniform Kambalda. Hydrocyclones are often used overcomes this difficulty by maximising product size to flotation. The FloatStar in milling circuits to separate material that the total ore in the circuit (circulating load), installation includes Level Stabilisation, has been milled to the correct specification effectively increasing the capacity of the Grade-Recovery Optimisation and Reagent from that which must be returned to the mill. Throughput is therefore optimised Optimisation. The FloatStar system is mill for further grinding. Stable and reliable without sacrificing the material specification installed on both the lead and zinc circuits, operation of the cyclones is therefore critical for downstream flotation processes. The operations and developments
MINTEK ANNUAL REPORT – 2009 41 concept was demonstrated on a lead-zinc thiosulphate, new PLC cards for direct destruction. The Cynoprobe enables the plant in Mexico, and the control strategy connection to the LeachStar controller, WAD cyanide concentration in the residue was incorporated into a prototype control Ethernet connectivity, remote support via streams to be controlled to less than the 50 module for the StarCS control platform. GSM mobile networks, and SMS messaging ppm limit without spikes, resulting in savings The prototype module performed well in a for data such as daily averages and alarms. on the reagents for destruction. Further simulated environment, paving the way for The instrument can also log data and display WAD instruments are on-site and awaiting industrial plant trials in 2009. trends commissioning at Newcrest’s Hidden Valley joint venture with Harmony Gold Mining An upgraded version of the Cynoprobe Seven Cynoprobe on-line cyanide Company in Papua New Guinea and at online cyanide analyser, version 3.0, measurement instruments were delivered to Kencana (PT Nusa) in Indonesia, as well has been launched. The instrument was Newmont’s Boddington gold mine in Western as at Orsu Metals’ Varvarinskoye project in comprehensively re-designed to incorporate Australia, and will be commissioned when Kazakhstan. features requested by AngloGold Ashanti, at the mine begins operation in mid-2009. whose Navachab mine in Namibia the first Boddington will be Australia’s largest gold In South Africa, Cynoprobes were installation was made. Three measurements mine. The Cynoprobes, which comprise two commissioned at AngloGold Ashanti’s (free cyanide, WAD cyanide and pH) are standard instruments for measuring free and Vaal River East Gold Acid and Flotation now taken on three streams, compared with WAD and five dedicated WAD instruments (EGAF) plant and at Harmony Gold Mining two streams on the previous version, and packaged with a small modular laboratory, Company’s Saaiplaas operation. the number of analogue outputs has been will provide online measurements to control The period under review saw the doubled to eight. Further enhancements cyanide additions and prevent overdosing in commissioning of the one-hundredth include the elimination of interference from the gold leach circuit, and to ensure that the FurnStar-Minstral furnace control system, cyanide concentration in the tailings meets as part of an installation on five submerged- international safety standards. This is the arc furnaces at Cia Ferro Ligas da Bahia largest single-site Cynoprobe installation (Ferbasa) in Bahia State, Brazil. This brings to date. Cynoprobes have been installed the total number of installations at Ferbasa Exceptional growth has also previously at Newmont’s Waihi gold mine to six, on submerged-arc furnaces ranging been experienced in the piloting in New Zealand (together with a LeachStar from 18 to 32 MVA capacity. of copper, nickel, and cobalt leaching control and optimisation strategy) recovery circuits for projects Minstrals were also installed on two silicon and at Midas in Nevada. in southern and central Africa, metal furnaces at FerroPem’s Les Clavaux with major campaigns completed A trial LeachStar and WAD Cynoprobe were and Anglefort plants in France, and a in South Africa, Zambia and the commissioned at Newcrest Mining’s Cracow previous installation at Les Clavaux was Democratic Republic of the gold mine in Queensland. This is the first site upgraded to the latest version. FerroPem is
operations operations and developments Congo (DRC). using the instrument for control of cyanide part of the FerroAtlántica Group, which also
42 2009 – MINTEK ANNUAL REPORT owns the Silicon Smelters and Rand Carbide on a second 48 MVA furnace at Transalloys eastern Bushveld Complex, and a lead-zinc operations in South Africa. At Dunkerque in Witbank, and at the Xstrata-Merafe Lion ore from Namibia. New materials planned for Electrometallurgie (Comilog), a PC Minstral smelter an Arcmon arc monitor was installed the coming year include iron, chromium, gold originally installed in 2001 on a 96 MVA for a six-month trial. An Arcmon trial was and PGM ores, further calcrete-type uranium ferromanganese furnace was upgraded. also undertaken at the Boshoek plant. materials, vanadium slag, and industrial materials (coke, charcoal, and sulphur). A Minstral trial was begun at North America’s An electrode length management system largest producer of calcium carbide, USA (ELMS), developed as part of the Furnstar A new production and packaging facility Carbide Industries LLC in Louisville, suite of electrode management and process was commissioned that will cut the turn- Kentucky, and will continue after their annual control tools, has been tested at several around time to produce a new CRM by maintenance outage and subsequent re-start. industrial FeCr furnaces, and shows almost 50 per cent. This facility will enable good correspondence between electrode Mintek to expand its product range of CRMs Minstral control was implemented on two reactance (obtained from the Arcmon arc cost-effectively, and to maintain its leading slag-cleaning furnaces at Konkola Copper monitoring system) and electrode length. reputation and market position in the field. Mines’ new Nchanga smelter in Zambia, This gives for the first time a reliable through a subcontract with Outotec, who indication of the position of the electrode supplied the flash smelting technology. The tips. The first commercial installation is furnaces are used to recover copper and expected in 2009. copper-cobalt alloy from the flash-smelter slag. These are the first furnaces of this type Certified Reference Materials to be placed under Minstral control. Certified Reference Materials (CRMs) are Two previous Minstral installations at used in analytical laboratories throughout Simcoa in Australia were also upgraded. A the world to calibrate instruments and notable feature of this installation is that both ensure consistent results. The South African furnaces can be controlled simultaneously Reference Materials (SARMS), which have from a single server, following the plant’s been produced and marketed by Mintek approach of “dual redundancy” in its since the mid-1970s, now number more than instrumentation. A pre-installation inspection 100. visit was made to Kazchrome, the world’s During 2008/09, ten new SARMS were third-largest ferrochromium producer in produced and certified, comprising six Kazakhstan, where a Furnstar-Minstral trial copper-nickel (four from South Africa and will be commissioned in 2009. two from the DRC), two Witwatersrand-type
Locally, one Furnstar Minstral was installed uranium ores, a UG2-type PGM ore from the operations and developments
MINTEK ANNUAL REPORT – 2009 43 Mineral Policy and Sustainable Development
2009 - MINTEK ANNUAL REPORT Mineral Policy and Sustainable Development
Mineral Economics and Strategy Mintek’s Mineral Economics and Strategy Unit (MESU) continued to conduct regional commodity-based mineral economic studies to enhance the understanding of minerals and support the beneficiation of the minerals in South Africa. MESU has been able to respond to a wider range of project requests in areas not previously attempted, but will continue to add to the competence base of the department. MESU has continued to maintain its project load across Africa.
Regional Mineral Economics (RME)
The mineral scan assemblage has remained a key feature of the A site inspection of one of the asbestos dumps in the Northern Cape product lines, and constitutes one of the most central mineral Province which is scheduled for rehabilitation. intelligence developments to date. The ability to continuously innovate this product and achieve commercial acceptance is, however, linked to ensuring a well established staff competence the infrastructure arena, and this year was able to leverage in to respond to an uptake of this service. The process has been excess of R1-million in earmarked funding from two SOEs. This further trialled in a project for the Mopani District Municipality competence will be further developed in the forthcoming year. (Limpopo Province), where the resolution has been further refined The Sensor Web project is aimed at making measurements and to intelligence up to “farm-level”. observations, mainly of an environmental nature, available via The update of the renowned Profits from Processing manual, standard web services. Although potentially of major benefit for which was last issued by Mintek in 1989, was completed. This the mining sector, this is a novel approach and uptake is slow. project was supported financially by the DTI, and the manual has The project was completed this year, and the emphasis will be been earmarked for inclusion in their economic affairs training on marketing of outputs in the next financial year. This will ideally programme. increase market acceptance at a time when discretionary spend Projects completed during the period under review included a coal is in widespread decline. This project is a clear casualty of the scan of South Africa. This project has kept MESU in the forefront of economic slowdown. coal modelling and market intelligence to support junior resource MESU has an ongoing involvement in local economic development, companies (JRCs). In further support of the prevailing energy and one of the RME projects looked at the utilisation of alluvial security issues, MESU completed an assessment of the viability diamond resources in rural areas to support poverty alleviation of establishing a central uranium processing plant in the Beaufort efforts and enhance economic diversification. West area. Resource Based Sustainable Development (RBTS) There is a general effort to extend iron ore competence in South Africa, and MESU continues to grow its internal skills base through The DST has contracted MESU to develop a Mining and the projects that it conducts. This year the project dealing with the Geosciences Framework for research and development across characterisation of iron ore resources in South Africa also served Africa. This project involved conducting case study research across as a platform for a postgraduate thesis. South Africa and four other African countries (Tanzania, Ghana, Nigeria and Zambia). This was a collaborative project with support MESU has successfully positioned itself to conduct leading from a peer group comprised of senior staff of the DST, the DME, edge research for other state-owned enterprises (SOEs) in CGS and CSIR.
MINTEK ANNUAL REPORT – 2009 45 Ongoing support was directed at beneficiation related matters. Continuing with the previous year’s focus on beneficiation within Special Economic Zones (SEZs), MESU has increased its professional offering in this area by recruiting an SEZ expert. An RME project was completed related to the relocation of parts of the platinum value chain to South Africa from their traditional northern hemisphere bases. The RBTS team has increasingly been involved in identifying areas where technological development can become entrenched in South Africa, where it is also supported by a substantial local resource. To complement the RME study on relocating platinum value chains, the RBTS team investigated the expansion of the platinum value chain in South Africa by expanding the sidestream activities to support economic diversification. This platinum competence being developed led to a project whereby the emergence of a junior platinum company was The UNECA Public Private Partnership workshop was attended by evaluated and its impact on the economy of a local community delegates from around Africa. assessed. This commercial project enabled the company to make a decision to proceed with their community development strategy, The research desk for the study of China/Africa trade, investment since the socio-economic impacts were predominantly positive. and political relations, comprised of an internal team of MESU The model of economic diversification through expansion of the staff organised by the ESU section, was tasked with tracking the commodity value chain has resonated elsewhere on the continent, development of the Chinese economy and identify the linkages and the team participated in a study for the Katanga region of the and opportunities for the African continent. The team, though Democratic Republic of the Congo, in which mining supply chains internally funded, needs to increase its relevance and economic were evaluated for sustainability and as leverage for economic sustainability. diversification. The work being done across Africa has increased the Mintek and MESU, with oversight from the RBTS team, has been invited to MESU profile, and as a result MESU received invitations to make play an advisory role to the Diamond Industry Survival Working presentations overseas (Chile, Sweden, and London) and in Africa Group established by the Johannesburg-based Diamond Council of (the DRC and Egypt) on sponsored visits. During October, 2008 a South Africa. . MESU delegate accompanied the Mintek CEO to the First Meeting of African Ministers Responsible for Natural Resources in Addis Economic Support (ESU) Ababa, Ethiopia. The ESU team focussed on research related to the mining and Sustainable Development (SD) minerals sector and to provide support through rigorous economic analysis to commercial clients as well as other units within Mintek. The applied research platforms relevant to mineral processing The majority of the projects resulted from foreign enquiries include energy saving, reducing water consumption, and the about the mining investment regimes across selected African treatment of low-grade and complex ores – in particular PGM ores. countries. Seven commercial projects were conducted across Indications are that integrated solutions to these problems can be Anglophone and Francophone countries, focussing on investment developed, but more understanding is required of the consumption attractiveness for various stages of the mining value chain. (energy and water) along the major commodity value chains. With financial support from the DTI, MESU completed and The project on the Olifants Water Catchment area and its impact submitted two research papers to a joint DTI/African Union on platinum mining (Annual Report 2008) has been extended to programme for Accelerating Africa’s Industrialisation. The areas include water security in the mining sector. This was complemented of focus in this project were Sustainable Development and by related work in the energy sector, where the SD team Industrial Innovation and Technology. In further support of strategy investigated models of energy efficiency at selected stages of the development, MESU completed a contribution to the Gauteng value chain. These projects serve a dual purpose of increasing Long Term Development Strategy, with an emphasis on the mining Mintek’s profile in these areas and also to increase competence sector. and skills amongst junior SD staff.
46 2009 - MINTEK ANNUAL REPORT The SD team organised, on behalf of Mintek, the UNECA Public Private Partnership workshop, which was attended by delegates from across the continent. This role was made possible due to the standing Mintek enjoys across the continent as a credible and objective partner for both governments and industry. MESU commenced its role as project managers for the DME’s derelict and ownerless mines programme around the rehabilitation of asbestos mines in the Northern Cape. Fieldwork was completed to establish a baseline for rehabilitation work, and this programme will flow into the next financial year.. The project is designed to expose more juniors to the various aspects of project design and execution, thereby increasing MESU’s staff skills
Small-scale Mining and Beneficiation
Training During the period under review, 320 people from predominantly rural communities were trained in diamond evaluation and Field trials of Mintek’s BioMin mineral-based soil ameliorant. beneficiation. Mintek participated in the development of the Level 2 qualification for small scale miners, and 28 learners successfully completed a six-month course on surface mining skills. The course were conducted with communities in Limopopo Province. A new was run in partnership with local business-development company product, Biophos, which is produced by the bio-acidulation of rock VPK Business Venture, who provided the business training phosphates using waste material from the citrus industry, is being aspects of the course. Mintek’s ASSM School was appointed as an developed in partnership with the University of Pretoria and Moi Employment and Skill Development Agency by the Department of University in Kenya Labour, and finalised the pilot training of 28 learners at Rustenburg Mintek’s Small Scale Mining and Beneficiation (SSMB) division on the Business Skills programme. Is part of the team that is currently developing the food security strategy for the DST (soil re-mineralisation), and R70 000 in seed The Mining Qualifications Authority (MQA) awarded Mintek two funding has been granted to develop a proposal around indigenous contracts as a training service provider. The first project involved food production. training 120 learners in small scale mining, and the second 77 women learners in mining. Both projects were run in Mpumalanga, Mintek was invited by the World Bank to present on its KwaZulu-Natal, the Free State and Western Cape. agrominerals research programme at the organisation’s headquarters in Washington DC in September 2008. More than Agrogeology fifty countries were represented at the workshop, including the Mintek teamed up with Lyttelton Dolomite to undertake a field trial World Bank staff. An invited paper on rock phosphate research of the BiominTM mineral-based soil ameliorant on a maize crop was presented at the Geological Society of South Africa’s annual under centre-point irrigation at Marble Hall, Limpopo Province. meeting.. Based on the results, fertiliser manufacturer Afrifert has agreed to iGoli order 40 tons of material per month to blend with their nitrogenous Mintek expects to finalise an agreement with the Chilean Research fertiliser. The DST has agreed in principle to fund construction of Centre for Mining and Metallurgy (Centro de Investigación Minera a production facility in Marble Hall, which would use municipal y Metalúrgica – CIMM) to implement the iGoli mercury-free gold sewage sludge and fly ash and lime from Lyttelton’s Marble Hall recovery process in Chile in 2009. It is envisaged that staff will operations as feedstock. A DME project that will see the large-scale visit the country to train informal gold miners in the process, and if application of Biomin to assist the re-vegetation of asbestos mining the project is a success the CIMM will assist Mintek in transferring tailings is scheduled to begin in late 2009. the technology to other Latin American countries. The process Pilot trials of the rock flour soil additive, which supplies micro- was also demonstrated for small-scale miners operating in the nutrients from finely ground basic igneous or volcanic rocks, Moto gold belt in the north-eastern DRC.
MINTEK ANNUAL REPORT – 2009 47 A manually operated centrifugal separator, which not only has the potential to increase the productivity and efficiency of ASM gold miners but also constitutes an environmentally friendly method of recovering other heavy minerals, has been developed to prototype stage. A demonstration-scale unit, with a throughput of about 0.5 tons an hour, is expected to be available for on-site testwork in the second half of 2009. A method of recovering base metals such as copper and nickel from the iGoli process effluent by ion exchange and precipitation has been developed with the aim of enhancing the marketability and profitability of the process. Field tests are planned to determine the economic benefits of the additional process steps. Extensive investigations have also been carried out into the use of the process for refining gold scrap as well as recycling PGMs from spent autocatalysts. In the latter case, recoveries of up to 85% have been obtained, and the technology could be implemented at the small industrial scale by the end of financial 2009. A ceramic coffee set (top) and a bowl produced in Mintek’s Timbita ceramic incubator. Mineral-based craft sector Four new glass-bead businesses were started with funding from the North West Department of Education. These enterprises will continue to receive technical support to promote their sustainability. Equipment and training were provided to two Seda-funded projects – a marble and granite stone-carving project in Polokwane and a pottery project in Bronkhorstspruit. Three feasibility studies, for a jewellery project in Atteridgeville, a slate project in KwaZulu-Natal, and a clay project in the Eastern Cape, which were funded by the DME through the Council for Geoscience, were completed. The Timbita ceramics incubator has been contracted by the National Lottery Board to set up four pottery unit in 2009 – two in Limpopo and one each in Qua-Qua and the Eastern Cape. Mintek has compiled a draft strategy for ceramics that is intended to assist the establishment of a more diversified and viable craft sector, and position the informal pottery craft sector as a driver of economic growth and poverty alleviation, primarily in the rural areas of South Africa. The strategy incorporates the promotion Mining (ASM) sector was presented. The executive committee of clay beneficiation, as well as enhancing the skills of traditional of the International Agrogeology Association has invited the crafters by introducing contemporary ceramic techniques. Training division to be part of the organising committee for the 2010 Beijing would be delivered in line with the MAPPP-SETA Craft Production Agrogeology conference. SSMB continues to be an adviser to the skills programmme. DST National Indigenous Knowledge Systems Office (NIKSO) on food security, jewellery and pottery issues. SSMB representatives attended the technology transfer workshop organised by the South African Research and Innovation Kgabane Jewellery Management Association (SARIMA) in Stellenbosch in the Western Cape in November 2008, and Mintek has been requested to give The function of Kgabane is to develop and support the indigenous input into discussion topics for the next workshop. Mintek also second economy jewellery sub-sector that will be the driver of job participated in the 1st West Africa Mining and Energy Summit in creation, economic development and sustainable small and micro November 2008, where a paper on the Artisanal and Small Scale enterprises (SMEs) in rural and poor communities.
48 2009 - MINTEK ANNUAL REPORT Kgabane achieves is objectives through a number of programmes, which focus on: • Skills transfer/training; • Production support; • Business mentoring; and, • Marketing support. In the 2008-2009 financial year, the Kgabane Rural Development Programme made some notable progress in the business incubation of five of its rural small-scale jewellery manufacturing enterprises, in the North West, Limpopo, Northern Cape and Mpumalanga provinces and in the continued partnerships with Shanduka Coal, Xstrata Coal, and recently with BHP Billiton. At these sites, forty beneficiaries are benefiting from the Kgabane Rural Development Programme in terms of skills transfer and enterprise development (production support and marketing support). In addition, over 20 manufacturing groups throughout the country were given support to enable them to continue with their business of jewellery making, where 200 people are involved. Following over three years of research and development by an independent jewellery company and mining houses; a low-cost, electricity-free mass production technology was piloted by Kgabane at one of the rural production sites. This technology will see the production capacity of rural producers multiply by 600-fold, to the extent that they will be able to compete favourably on the mass and export markets The long-anticipated Northern Cape gemstone cutting and polishing project got underway with funding from the Small Enterprise Development Agency (SEDA) and in partnership with the Northern Cape Economic Affairs Department. The aim of the Examples from Kgabane’s range of hand-crafted jewellery. project is to create self-sustainable small businesses in gemstone processing, with the initial roll-out in Prieska This is the start of the diversification of the Kgabane rural development offering. Another long-anticipated project, the Gold Zone jewellery incubator, at the Rand Refinery, was rolled out in partnership with a number of other stakeholders; with Kgabane contributing close to R1 00 000 Unfortunately, Kgabane and Foschini could not conclude the raised from the Ekurhuleni Municipality. Renovation of the building agreement that would have seen Kgabane showcasing ranges of was completed, and the process of recruiting beneficiaries started. jewellery at selected stores. As a result of the economic downturn The incubator will provide an enabling environment to aspiring and consequent decline in retail sales, the company felt that it business owners who wish to be successful in the jewellery could not take on board any new brands at present. However, industry. both Foschini and Kgabane intend to maintain their relationship with a view to re-launching the project when the business climate The development of the marketing strategy continued, with improves. Kgabane taking part in ten local exhibitions and one international one in Las Vegas. Print media promotions continued to be From May 2009, Kgabane will be merged with Mintek’s SSMB distributed to boutique jewellery shops. However, sales were division to take advantage of the potential synergies available in disappointingly slow due to the economic downturn. area of small-scale jewellery manufacturing and training.
MINTEK ANNUAL REPORT – 2009 49 Human Capital Development and Management
2009 – MINTEK ANNUAL REPORT Human Capital will resolve inconsistencies in job grades Employment Equity at Mintek, and bring parity and equity in Development and Mintek’s current Designated Group (DG) our salary structure. Management representation among the total permanent Twenty-eight Mintek employees took workforce is 82 per cent, which exceeds Mintek’s total staff turnover part in a the roll-out of a customised the Board-designated target of 77 per this year fell to approximately Management Development Programme cent. However, DG individuals remain 15 per cent, a considerable presented in-house by the University of under-represented at the technical, improvement on the figure of 25 per cent the Witwatersrand Business School in professional, and managerial levels. This for the previous reporting period. This order to upgrade management skills at is due to the general shortage of DG is attributed to the measures instituted Mintek. The target market is employees at engineers and scientists in the country, following the two “climate surveys” executive, senior and middle management which results in extreme competition conducted during 2007/08 (Annual Report levels, including those who have recently between prospective employers to recruit 2008). However, attracting, developing, been promoted into these ranks so that and retain such skills. and retaining skilled technical personnel they can merge their skills with global remains a challenge that needs to be Unionisation of Mintek management skills. Mintek plans to extend continually addressed. this programme in future, as well as to A landmark point was reached in 2008 A new Performance Management System, introduce an Executive Development as the National Union of Mineworkers which was designed from scratch in Programme at the next-highest level. formally reached the legal bargaining relation to other “best practices” systems, has been implemented, and the first assessments under the Employment Equity - March 2009 new system are due at the
end of October 2009. DESIGNATED NON-DESIGNATED Occupational M ale Fem ale W hite M ale Foreign Nationals TOTAL A migration to the Stratified Categories Systems Theory of job A C I A C I W W M ale Fem ale evaluation system was Legislators, senior officials and 7 2 0 3 0 0 3 7 0 0 22 initiated as informed by managers an industry benchmarking Professionals 3 0 2 9 21 2 14 25 50 23 6 182 study conducted, and a Technicians and complete migration done asassociatesociate 5 9 1 5 44 0 6 9 22 4 3 153 professionals during the October 2009 CClerkslerks 2 5 1 0 40 3 2 22 2 0 0 95 salary increases. The new Service and sales 1 0 0 4 0 0 0 0 0 0 5 system is less complex wworkersorkers Craft and related than the previously-used 4 9 6 0 23 0 0 0 14 1 0 93 trades workers Hay System as it interfaces Plant and machine more readily with other operators and 11 4 9 0 2 0 0 0 3 2 0 1 30 assemblers Elementary international systems as 93 occupations 5 0 2 0 0 0 2 0 0 1 02 well as electronic systems, occupati TOTAL and to this end, is better TPERMANENTO TAL 378 26 1 4 139 5 22 59 100 30 9 782 supported by accredited consultants. The migration Source: Employment Equity Report 13 March 2009
MINTEK ANNUAL REPORT – 2009 51 requirement in line with the Labour illness, breast cancer; stress management knowledge and behaviour in respect of Relations Act entitling them to workshops, and a special focus on general HIV/AIDS has improved since the last organisational rights. Processes are health by organising a Health Week. survey conducted in 2005. Between 64 currently being put in place to ensure Voluntary HIV counselling and testing per cent and 66 per cent of the employees compliance with the said legislation. (VCT) sessions were held throughout the that participated in the survey indicated year in order to ensure continuous VCT. that they knew their HIV status, and 68 SAP and Human Resources per cent believed they were not at risk of ICAS South Africa provides Employee infection. During the reporting period, HR processes Assistance Programme services to had to be aligned to changes made in Mintek as a partner in behavioural risk Academic Support some policies and in the various standard management, and provides counselling operating procedures in HR. In light and advisory services on matters such as Bursary programme of some of the changes, some SAP financial management, relationships, and The aim of Mintek’s bursary programme reconfiguration had to be done in order to legal issues. is to ensure a steady supply of trained align our processes to the system. HIV/AIDS and highly skilled technical people in The process of migrating the hardware order to meet Mintek’s operational, Mintek maintains a high level of AIDS of the portal server (the Employee research and development human capital education by means of outreach Self Service or ESS system), which is needs. As a research- and technology- programmes, awareness events, and a used for booking project time, is almost intensive organisation, Mintek needs an dedicated team of peer educators and complete. This project will also include the in-house bursary programme to ensure peer counsellors. All employees are application upgrade. Once the new ESS its long-term sustainability through encouraged to make use of the voluntary is implemented in the second quarter of counselling and testing services 2009/2010 as anticipated, the Solution Bursar demographics, academic year 2008 that are provided through Manager (Sol Man) project will follow, 80 the Mintek Medical Clinic, in 70 Female together with the configuration of the Black association with the Randburg Total Central User Administration function. 60 Municipality. 50
40 Wellness A Knowledge, Attitude and 30 Behaviour (KAB) survey was Mintek’s Wellness Committee meets on 20
a monthly basis, and organises regular conducted by HIV and AIDS 10
events throughout the year. Activities management company Aganang 0 during 2008/09 included awareness in May 2008. The key finding Internships was that Mintek employees’ Undergraduates Postgraduates campaigns on STIs, tuberculosis, mental In-service training
52 2009 – MINTEK ANNUAL REPORT knowledge management. Mintek’s bursary in the student numbers are both the Internship programmes programme supported 62 undergraduate bursary values for postgraduates that are Internships at Mintek offer graduates the and 32 postgraduate students in the perceived to be below market averages opportunity of gaining relevant experience academic year 2008. and graduates reluctant to continue their within a science council environment. studies due to financial pressures. In December 2008 and January 2009 Mintek benefits by offering permanent Mintek hosted 49 of its bursars for The above scenario will be addressed in employment to outstanding interns at “vacation work”. The students are the coming financial year by conducting the end of their training period, where exposed to real-world projects at a benchmarking exercise augmented by possible. Mintek’s campus in Randburg under the implementation of Mintek-wide holistic Mintek participated in the following the supervision of experienced staff, human capital development strategy. internship programmes in 2008: and have the opportunity to present • The Department of Science and In-Service Training programme their work at the end of the period to an Technology Research Professional audience of their peers and co-workers. Students studying towards their national Development Programme (DST RPDP); For the first time, Mintek augmented the diploma are required to complete one year • The Mining Qualifications Authority vacation work with a soft skills training of work-based learning at a host company Graduate Development Programme programme, incorporating Diversity in order to graduate. Mintek’s In-Service (MQA GDP); and, in the Workplace, Time Management, Training Programme formally integrates a • The Department of Science and Research Methodologies, Basic Financial student’s academic studies with relevant Technology/National Research Management, Basic Project Management work experience at Mintek. and Business Communication modules in Foundation (DST/NRF) Internship Programme. order to better equip the students for the Mintek supported 45 trainees in 2008, mostly within the disciplines of chemical workplace. The DST RPDP aims to address the and metallurgical engineering and plans The declining postgraduate bursary accelerated development of a group of to continue with this programme. To scientists and research professionals numbers is of great concern to Mintek. this end, an agreement was reached in at postgraduate level, specifically those The organisation needs not only graduate February 2009 between Mintek and the who are poised to contribute to the engineers and scientists who have Mining Qualifications Authority (MQA) South Africa’s innovation platforms as theoretical understanding in their chosen whereby the MQA will give Mintek a grant identified in the National Research and field, but also engineers and scientists for students studying in the above fields Development Strategy. Mintek hosted who are able to undertake research and among others. This agreement will ensure five fellows (four continuing and one high-level technology development and that the In-Service Training Programme new) in the areas of nanotechnology innovation. becomes sustainable in the 2009/10 year (two projects), HIV inhibition, subsistence The main reasons identified for the decline and beyond. farming and acid mine drainage.
MINTEK ANNUAL REPORT – 2009 53 The DST/NRF Internship Programme Mintek participates in THRIP as a means Child-to-Work” day in May 2008. Again, aims to provide valuable work experience, to conduct commercially-focused research the aim is to present careers in science accelerated and practical learning and development while at the same time and engineering as viable career options opportunities at Mintek to the graduate exposing students to industry-relevant for girl learners. over the course of twelve months in activities. Mintek had one THRIP-supported order to build essential workplace project running in 2008 namely, Project Adopt-a-School Programme competencies. AuTEK focusing on the development of Mintek has adopted the three under- The MQA GDP aims to increase the new industrial uses for gold. resourced schools in Johannesburg, number of technical graduates with the specifically Ferndale High School Girl learner programmes necessary training and qualifications (Randburg), Itirele-Zenzele required for professional employment in Mintek’s Girl Learner Job Shadowing Comprehensive High School (Diepsloot) the mining and minerals sector. The target programme provides the opportunity and the Kwadedangendlale High School group for the GDP is young unemployed for 25-30 grade 10-12 girl learners (Soweto). The aim of the intervention historically disadvantaged South Africans to undertake a limited period of job is to improve the level of teaching of who have competed degrees or diplomas shadowing at Mintek during school Mathematics and Science at the schools. in certain scarce skills disciplines. Mintek holidays. Mintek has established good In 2008 Mintek funded the installation hosted 11 interns (seven continuing working relations with the offices of the of an on-demand multimedia learner- and four new) in the fields of electrical MEC for Education in the North West, support and educator-facilitated resource engineering, mechanical engineering, Limpopo and Western Cape provinces. package - Mindset Datacast Solution - at chemical engineering and analytical The objective of programme is to Ferndale High and Itirele-Zenzele High. chemistry. encourage more black girl learners to The three schools also regularly visit the take up studies in the areas of minerals Technology and Human Resources local Technology Resource Activity Centre and metallurgy, thereby addressing the Industry Programme to do physics and chemistry laboratory sector’s transformation imperatives. As experiments, since they do not have well- The Technology and Human Resources a direct result of this programme, nine equipped on-site science laboratories. Industry Programme (THRIP) aims learners schooled in the Limpopo province The top Grade 10-12 learners also visited to promote increased interaction and obtained Mintek bursaries to study SciFest Africa in Grahamstown in March diffusion of technology amongst industry, chemical engineering at a university of 2009. higher education institutions and science, their choice in 2009. engineering and technology institutions, STEM Promotion and to provide an enhanced educational Mintek also hosted a group of girl learners experience through customised from schools in the greater Johannesburg The aims of STEM promotion activities participation by students in collaborative area for a tour of Mintek and its facilities, are to generate enthusiasm and interest projects. as part of the national Cell C “Take-a-Girl- in Mathematics and Physical Science
54 2009 – MINTEK ANNUAL REPORT amongst learners so that they not only national Science competition for Grade take these subjects at school but excel at 12 learners, and has been running them. Once the interest is developed they since 1988. The aims of Minquiz are to are encouraged to study towards a career encourage interest in careers in Science, in Science, Engineering and Technology Engineering and Technology, especially at the Higher Education level and finally in minerals and metallurgy, and to take up a career in these fields. STEM promote an awareness of the importance promotion activities are also aimed at of minerals and metallurgy to South creating awareness of Mintek’s bursary Africa. A total of 333 schools from all of programmes. South Africa’s nine provinces took part in Minquiz 2008. Mintek participated in various STEM promotion activities in 2008, including The questions in Minquiz cover the learner-focused exhibitions such as areas of Physical Science, Mathematics SciFest Africa, Sasol TechnoX, Cell and general knowledge in Science and C Career Choice, Science Unlimited, Technology. The questions are taken university open days and in-bound from the grade 11 syllabus in line with the tours of learners in the FET (Further Revised National Curriculum Statement, Education and Training) band to Mintek. and are developed and independently Advertisements were also placed in audited by education professionals. learner- and student-focused publications Mintek’s objective is to have the Minquiz to solicit interest in Mintek’s bursary National Finals televised on national programmes to increase the pool of TV and to this end, Mintek signed potential Mintek bursars. Minquiz™ is an agreement with e.tv to broadcast Mintek’s primary annual STEM promotion highlights of the competition on Frenzy™, event and coincides with the National a youth-focused magazine show as a start Science Week. which is to be implemented in 2009. Minquiz combines the rigours of an Olympiad with the excitement of a live on-stage quiz to produce an entertaining competition that promotes excellence in Physical Science and Mathematics. It is South Africa’s premier annual
MINTEK ANNUAL REPORT – 2009 55 Staff Papers published/presented between Govender Y, Riddin T, Gericke M and Mallick K. Frontiers in Transition Metal- 1 April 2008 and 31 March 2009 Whitley CG. Bioreduction of platinum salts Containing Polymers. Platinum Metals Rev, into nanoparticles : a mechanistic perspective. January (2008) 52 (1) pp. 46-47. Biotechnology Letters Vol 31 No 1 January Abdellatif M. Mintek thermal magnesium Mallick K, Mondal K, Witcomb MJ and (2009) pp. 95-100.* process: status and prospective. Advanced Scurrell MS. Gas phase hydrogenation Metals Initiative, Department of Science Harris RA, Swart HC, van der Lingen E, Süss reaction using a ‘metal nanoparticle-polymer’ and Technology. 18-19 November 2008. R and Terblans JJ. Pt-Al thin film diffusion and composite catalyst. Journal of Materials Johannesburg, South Africa. phase formation, Advanced Metals Initiative Science, 43 (2008) pp. 6289-6295 .* Conference, 18 – 19 November2008. Gold Reef Aluha JL, Pattrick G and van der Lingen Mallick K, Mondal K, Witcomb MJ, Scalzullo City Johannesburg. E. A Comparative Study on Palladium-based SM and Maphala, T, Scurrell, M.S. Palladium- Catalysts for Diesel-Engine Exhaust Systems. Hinde, A. L., Kalala, J.T. and Singh, A., polyaniline type composite polymers: Using Advanced Metals Initiative, Department of A simplified approach to modelling semi- catalysis as a monitor of palladium location. Science and Technology. 18-19 November autogenous grinding, Proceedings of the South African Journal of Science, 104, (2008) 2008. Johannesburg, South Africa. International Mineral Processing Conference pp.496-498.* Chetty, D. and Gutzmer, J. (2008) Quantitative (IMPC), 24 – 28 September 2008, Beijing, Vol Mallick K, Islam RU, Witcomb MJ and X-Ray Diffraction as a Tool for Smelting 1, pp. 436 – 449. Scurrell MS. The catalytic performance of Optimisation of Kalahari Manganese Ores. Ninth palladium-polymer functional nanocomposites. International Congress on Applied Mineralogy, Hinde, A.L. and Kalala, J.T., 2008, Pilot and Progress in Nanoparticles Research, United ICAM 2008. 8-10 September 2008 Brisbane, laboratory test procedures for the design of Queensland.* semi-autogenous grinding circuits treating States: Nova Science Publishers, Ed. C.T. platinum ores, Proceedings of the Third Frisiras, (2008).* Chown LH and Cornish LA. Investigation of International Platinum Conference, 5 – 9 Mallick K and Witcomb MJ. Applications of Hot ductility in Al-killed boron steels. Materials October, Sun City South Africa. Science and Engineering A 494 (2008) pp. quantum dots in organic memory devices: 263-275.* Jones RT, Phillips RE and Chennels P. A brief overview. Quantum Dots: Research, Commercialization of the Conroast process. Technology and Application, United States Coates J, Coyanis M, Hewer R, Kriel FH, Third International Platinum Conference : Nova Science Publishers ed. R.W. Knoss, Mphahlele M and Traut T. ORAL - Metallomed “Platinum in transformation” SAIMM, 2008. (2008). pp.651-668.* : from metals to medicine. SA Bio Plan’08, 8 - 9 December 2008. Pretoria, South Africa. Jones RT, Norval D and Chennels P. Water Mallick K, Strydom A and Witcomb MJ. atomization of PGM containing intermediate Charge transport property of one dimensional Coetzee LC, Craig IK and Kerrigan EC. alloys. Third International Platinum Conference gold-polyaniline composite networks. Trends RNMPC vs. PID control of ROM milling circuit. “Platinum in transformation” SAIMM, 2008. in Nanotechnology International Conference Mineral Processing Conference 2008. 3-7 (TNT2008), 1-5 September 2008. Oviedo, August 2009. Cape Town , South Africa. Kriel FH, Layh M and Coates J (nee Caddy), Spain. Anti-Tumour Activity of Gold (I) and Silver (I) Cornish LA, Süss R, Shongwe MB, Love A Bis-Phosphine Complexes. “Metals in Medicine” Maphala T, Mondal K, Witcomb MJ, Scurrell and Douglas A. Derivation of creep properties conference, Andover, New Hampshire, USA, 29 MS, Islam RI and Mallick K. Formation of of two-phase Pt-Al-Cr-Ru alloys by modelling, June – 4 July 2008. metal nanoparticles in a polymer nanofiber: 11 Intnl. Conference on Creep and Fracture A hybrid material for gas-phase catalytic of Engineering Materials and Structures, Bad Kriel FH, Layh M and Coates J (nee Caddy), reactions. Smart Materials and Structures. Vol Berneck, Germany, May 4-9 2008, Programme ORAL - Anti-Tumour Activity of Gold(I) 17, Issue no 4 August (2008). * and Abstracts, CP-129. and Silver(I) Bis-Phosphine Complexes. ISBOMC’08, Missoula, Montana, USA, 6-10 Mashazi PN and T Nyokong. ORAL - Cornish LA, Suss R, Douglas A, Chown LH July 2008. Electrocatalytic Reduction of H O by Metallo and Glaner L. Platinum development initiative: 2 2 Phthalocyanine Polymer Modified Electrodes. platinum based alloys from high temperature Lalla B and van Zyl F. Continuous NIC Workshop, 11 – 12 September 2008, and special applications: part I. Platinum Metals online xanthate monitoring by means of Review Vol. 53(1) 2009. pp 2-10.* spectrophotometry. Mineral Processing Mashazi PN and T Nyokong. Poster rd th Dash B, Das BR, Tripathy BC, Bhattacharya Conference 2008, 3 -7 of August 2008. Cape presentation - Surface and electrochemical IN and Das SC. Acid dissolution of alumina from Town, South Africa. properties of electrodes modified with polymer films and their electrocatalytic properties. 1st waste aluminium dross. Hydrometallurgy. Vol. Lydall M. Assessment of the copperbelt mining International symposium on electrochemistry, 92. (1-2). May 2008. pp. 48-53.* supply chain in the Katanga Province, DRC. ElectrochemSA, 9 – 11 July 2008. University of Supply Chain Workshop, 18th September 2008. Dong H and Hinde AL. Modelling the effects of Western Cape. Cape Town, South Africa. pre-concentration and paste thickening on water Lumbashi . Mashazi PN, Tshikhudo TR and Moutloali usage for the processing of platinum ores. In Mallick K, Scalzullo S, Mondal K, Witcomb RM. Poster presentation - Conjugation Fourie AB, Jewell RJ, Paterson A and Slatter P Polymer- M, Deshmukh A & Scurrell M. and immobilization of biomolecules onto (eds). Paste08: 11th International Seminar on encapsulated metal nanoparticles: optical, functionalized substrates: their electrical and Paste and Thickened Tailings, May 5-9 2008, structural, micro-analytical and hydrogenation optical properties. International Symposium of Kasane, Botswana. Perth, Australian Centre for studies of composite material. Nanotechnology Electrochemistry of Nucleic Acids and Proteins: Geomechanics, 2008. pp. 131 – 140.* 19, no 7 February (2008) (8pp). * New Tools for Biotechnologies, 19 – 22 June Gericke M, Muller HH, van Staden PJ and Mallick K, Islam RI and Witcomb M. Gold 2008. Czech Republic. . Development of a tank bioleaching Pinches A nanoparticles in organic system: Applications in process for the treatment of complex Cu- Mashazi PN and Nyokong T, Surface, catalysis, sensors and electronics (accepted), polymetallic concentrates. Hydrometallurgy, Vol. electrochemistry and electro analytical Nanocomposites: Preparation, Properties 94, (1-4), November 2008. pp. 23-28.* properties of metallo phthalocyanine polymer and Performance. United States : Nova modified electrodes.12th International Gericke M and Govender Y. Biosynthesis Science Publishers. 272p.* of anisotropic metal nanoparticles. Advanced Conference of Electroanalysis, ESEAC 2008, Metals Initiative Conference, 18 – 19 November Mallick K, Mondal K, Witcomb MJ, 15 – 19 June 2008. Prague, Czech Republic. Deshmukh A and Scurrell MS. Catalytic 2008. Gold Reef City, Johannesburg. McCullough SD, Geldenhuys IJ and Jones activity of a soft composite material: RT. Pyrometallurgical iron removal from a PGM- Goode R. Towards ensuring that Africa’s mineral Nanoparticle location-activity relationship. socio-economic linkages are optimized. UNECA containing alloy. Third International Platinum workshop on FDI in mining and ISG Review of Materials Science & Engineering B, vol. 150, Conference “Platinum Transformation, 5-9 African Mining Regimes, 4-5 September 2008. (2008) pp. 43-49.* August 2008. Sun City, South Africa. Addis Ababa, Ethiopia. Mallick K, Witcomb MJ, Scurrell MS and McPherson JS, Holliday RJ, and Thompson Goode R. Scientists, engineers, techno- Strydom AM. In-situ chemical synthesis DT. Poster presentation - Commercial th entrepreneurs : some perspectives on business route for a fiber shaped gold-polyaniline opportunities for gold catalysts. The 14 ICC academic partnerships. RISE Inaugural Meeting. nanocomposites. Gold Bulletin 41 (2008) pp. (International Congress on Catalysis) 13 -18 246-250. July 2008 Coex, Seoul, Korea, Publications7-8 October 2008, Nairobi.
56 2009 – MINTEK ANNUAL REPORT Mdluli PS, N Revaprasadu and Safin DA, One Nell MJ, Wagener JM, Zeevart JR, Kilian Sosibo NM, Dodgen C, Meyer M, Tshikhudo Van der Merwe WAM, Lotz P and Smit pot synthesis of nearly monodispersed silver E, Mamo MA, Layh M, Coyanis M, and van RT, Rees J, van der Lingen E and HS. Weak acid dissociable cyanide analysis nanoparticles using a biphenyl phospine silver Rensburg CEJ, Poster presentation - the Revaprasadu N. Some cellular interactions of required for international cyanide management (I) complex of N-(diisopropylthiophosphoryl anti-tumour properties and biodistribution (as gold MMPCs: Cytotoxicity and delivery aspects. code (ICMI) compliance : recent refinements to thiourea derivatives. AMI Conference 18-19 determined by the radiolabeled equivalent) of 9th International Conference on Particles: Risks an online weak acid dissociable measurement Nov. 2008. Gold Reef City, Johannesburg, potentially chemotherapeutic Au-compounds. and Opportunities, 2-5 September 2008. Cape device. Metallurgical Plant Design and South Africa. 6th International Conference on Isotopes (6ICI), Town, South Africa Operating Strategies (MetPlant 2008), 18-19 August 2008. Perth, WA.* Moema JS, Papo MJ and Paton R. Smart 12-16 May 2008. Seoul, Korea. Sosibo NM, Tshikhudo RT and Neerish materials technology for roofbolting application Revaprasadu. Stable, hydrophilic nitrilotriacetic Van Staden PJ, Robertson SW, Neale JW th Phillpots D. Flotation recirculating load in the mining industry. Proceedings of the 6 acid-capped gold monolayer protected clusters, and Seyedbagheri A. Maximising the value International Symposium on Ground Support stabilisation and optimisation at Newcrest in Quantum-dot and Nanoparticle Bioconjugates derived from laboratory testwork towards heap in Mining and Civil Engineering Construction, Cadia Valley. Mineral Processing Conference : Tools for Sensing and Biomedical Imaging, leaching design. Base Metals Conference rd th 30 March – 3 April 2008. Johannesburg, South (MINPROC) 2008, 3 - 7 August 2008. Cape edited by J. Cheon, H. Mattoussi, C.M. 2009, 27-31 July 2009, Botswana, Africa.* Town South Africa. Niemeyer, and G. Strouse (Warrendale, PA, 2008), 1064- pp. 3-10. Van Staden PJ. Minerals biotechnology Moma J, Parida KM, Mohapatra P, Jordaan Prüssner K, Odusote JK and Süss R. : trends, opportunities and challenges. WA and Scurrell MS. Effects of preparation Isothermal oxidation behavior of Pt-based Sosibo NM and Revaprasadu N. Synthesis Hydrometallurgy 2008 Conference, August methods on gold/titania catalysts for CO superalloys in the system Pt-Al-Cr-Ru, abstract, and characterization of rhodium sulfide thin 2008. Phoenix, Arizona, oxidation. Journal of Molecular Catalysis A: MRS Fall Meeting, Dec. 1-5, 2008. Boston, films and manoparticles, Materials Science and Chemical, 288, (2008) pp.125-130. Engineering B, 2008, 150 (2), pp 111-115. Vilakazi SL. Electrocatalytic behaviour of USA. cobalt phthalocyanine complexes mobilized on Moma J, Pattrick G, Mul G, Carneiro JLP. Suss R, Cornish LA and Witcomb MJ. Robertson S and van Staden P. The glassy carbon electrode towards the reduction The effect of preparation method on the Investigation of isothermal sections at 1000 and progression of metallurgical testwork during of dicrotophos. September 2008. Tohoku photocatalytic behaviour of Au/TiO2 catalysts. 600 degrees Celsius in the Pt-Cr-Ru system. University, Japan, Catalysis Society of South Africa (CATSA) heap leach design. Southern African Institute Journal of Alloys and Compounds 457, Issues Conference, 9-12 November 2008. Parys, of Mining and Metallurgy Hydrometallurgy 1-2 June (2008) pp.310-322.* Wagner J, Tshikhudo TR and Kohler JM. South Africa.* Conference 2009. 24-26 February 2009. Microfluidic generation of metal nanoparticles Muldersdrift, Gauteng South Africa. Suss M, McEwan JJ and Goodwin FE. by borohydride reduction, Chemical Moutloali RM, Mashazi P and Tshikhudo Further development of surface coatings to Engineering Journal, vol. 135, (2008) pp. S104- . Nanomaterials: Applications towards TR Scott M, McEwan JJ and Goodwin FE. improve the tarnish resistance of silver alloys. S109.* improving the quality of life, Electrochemistry Further development of surface coatings to 17th International Corrosion Congress. 8 for Nanotechnology: 9–10 April 2008. UK-SA improve the tarnish resistance of silver alloys. October Las Vegas, USA.. Witcomb MJ, Islam RU and Mallick K. Bilateral workshop, CSIR-ICC, Pretoria, 17th International Corrosion Congress. 8 Metal-polymer nanocomposites for Heck and Süss R, Watson A, Cornish LA and Compton Suzuki cross-coupling reactions. Proceedings Moutloali RM, Pattrick G and van der October 2008. Las Vegas, Nevada, USA. DN. Development of an Al-Cr-Ru database. of the 46th Annual Conference of MSSA, 37, 32 Lingen E. Methanol electro oxidation using CALPHAD XXXVII Conference, Saariselkä, Scott M. Analyzing corrosion related failure (2008). Gaborone, binary and ternary gold based electrocatalysts; Finland, June 15-20 2008, Program and ElectrochemSA, 8–11 July 2008. University of investigations through lessons learnt from case d Abstracts, 59 pgs. the Western Cape, Cape Town. studies on recent corrosion failures. Annual Course presentations Corrosion Control Conference, 23 -25 April Süss R, Cornish LA and Witcomb MJ. Sorensen P. Principles of Minerals Moutloali RM, Mashazi P, Dyan B, Tshikhudo 2008. Johannesburg, Gauteng. South Africa Ternary invariant reactions in the Pt-Al-Cr TR and van der Lingen E. The use of system. Microscopy Society of Southern Africa Beneficiation presented at Course: Small Scale polyaniline-gold nanoparticle composites Shongwe MB, Cornish LA and Süss R. Conference, Volume 38, 21 -25 July 2008. Exploration, Mining and Beneficiation. Minerals as interface for electrochemical biosensor Optimisation of compositions and heat Gaborone, Botswana. * and Energy Education and Training Institute applications, Particles Conference, 1– 5 treatments of Pt-based superalloys. Microscopy (MEETI). 17-19 November 2008. Randburg. Süss R, Douglas A, Chown LH, Glaner L, South Africa. September 2008. Lagoon Beach, Cape Town, Society of Southern Africa Conference, Volume Maledi M, Tshawe W and Cornish LA. Pt- Moutloali and Ferraile G, Deposition, 38, 21 -25 July 2008. Gaborone, Botswana,* Based alloys for aggressive environments. Sorensen P. Beneficiation of Precious Metals characterization and electrocatalytic application presented at Course: “Small Scale Exploration, . Advanced Metals Initiative Conference, of nanoporous platinum film of gold screen Shongwe MB, Cornish LA and Süss R Mining and Beneficiation. Minerals and Energy Improvement of ~Pt Al volume fraction and 18 – 19 November 2008. Gold Reef City, printed electrode; SACI2008, 1–5 December 3 Johannesburg., South Africa. Education and Training Institute (MEETI). 17-19 2008. University of Stellenbosch . Stellenbosch. hardness in a Pt-Al-Ru-Cr Pt-based superalloy, November 2008. Randburg. South Africa. Advanced Metals Initiative Conference, Thompson DT and McPherson J. Selectivity Mwamba A, Chown LH and Süss R. 18th – 19th November 2008. Gold Reef City, of gold catalysts for applications of commercial * These publications were peer-reviewed Development of platinum-based superalloy Johannesburg. South Africa. interest. A poster presented at the 14th ICC pre- components for high temperature and corrosive symposium, 8-12 July 2008. Kyoto. environments via powder metallurgy, Advanced Sithole G. Examining and strategizing Metals Initiative Conference, 18 – 19 November laboratory expenses to improve efficiency. Thulare T, Vos P and Phiri C. Developments in 2008. Gold Reef City, Johannesburg, South Intelligent Lean Laboratories Conference, 25 resin in pulp (RIP) for uranium recovery. ALTA 2008 Uranium Conference, 19 -20 June 2008. Africa. September 2008. Australia: Melbourne. Sheraton Hotel, Perth, Australia. Muwila A, Paton R, Slabbert GA, Moema Sithole H. Examining and strategizing J and Zimba J. Typical gear failures from Tshikhudo TR. Using nanoparticles to improve laboratory expenses to improve efficiency. industry, Failures 2008, 6 May 2008. Strand, the quality of life. Nanoparticles 2008, 4-5 South Africa. Intelligent Lena Laboratories Conference, 25 February, 2008, National Media Museum, September 2008. Australia: Melbourne. Bradford, UK.* Ndala SM. 2008. Rock phosphates in sustainable agriculture. The World Bank Sithole G. QA_QC Management for Tshikhudo TR, Sosibo N, Mdluli P, Dyan B Development Marketplace. 22 -26 September Laboratories. 4th Annual Laboratory and van der Lingen E. Metal nanoparticles 2008, Washington DC, USA. Management Forum. 2 June 2008 Sandton for point-of-care diagnostics and targeted Convention Centre: Johannesburg, South drug delivery. 9th International Conference Ndala SM. 2008. Local beneficiation Africa. on Particles: Risks and Opportunities, 2-5 of phosphates for soil phosphorus September 2008, Cape Town, South Africa. supplementation. Keynote address; Geological Slabbert GA. The use of metallurgical Tshikhudo TR. Engineering safe gold Society of South Africa, Industrial Minerals laboratory testing as an aid to root cause Conference, 31 July to 01 August 2008. nanoparticles for health and water analysis. Reliability Plant Centred Maintenance Rosebank, South Africa. applications. 20 August 2008. The University of Conference. 20 February 2008, Johannesburg, Witwatersrand, Johannesburg, South Africa. Neale JW, Robertson SW, Muller HH, South Africa. and Gericke M. Intergrated piloting of a Ukpong AM, Cornish LA, Süss R and thermpophilic bioleaching process for the Sorensen P. Funding for Mine Closure. IIR’s Watson A. The addition of niobium to the treatment of a low grade nickel-copper sulphide 2nd Annual Mine Closure and Rehabilitation thermodynamic database for platinum-based concentrate. Hydrometallurgy Conference Conference 2008. 27-29 May 2008.Southern superalloys, Advanced Metals Initiative 2009. SAIMM 2009. Muldersdrift, Gauteng Sun Garden Court, OR Tambo International Conference, 18th – 19th November 2008. Gold South Africa. Airport. Johannesburg, South Africa. Reef City, Johannesburg. South Africa.
MINTEK ANNUAL REPORT – 2009 57 corporate governance Mintek is committed to the principles of openness, integrity and accountability in its dealings with all stakeholders. It endorses the Code of Corporate Practice and Conduct as set out in the King Report and the Public Finance Management Act, and believes that the primary objective of the corporate governance system is to ensure that both the Board and Management carry out their responsibilities ethically and effectively. Board of Directors The Audit Committee considers Mintek’s annual financial statements Mintek’s Board of Directors consists of one executive member and to be a fair representation of its financial position at year-end in terms nine non-executive members who are independently appointed by the of the South African Statements of Generally Accepted Accounting Minister of Minerals and Energy in terms of the Mineral Technology Practice (GAAP). Act No. 30, 1989 (the Mintek Act). Board members, excluding the Attendance of Audit Committee Members at Audit Committee Meetings CEO, hold office for a maximum of three years, but are eligible for re- May Jul Nov Jan appointment. The current Board has been in office since March 2007. Name The Board members are appointed based on their business acumen 2008 2008 2008 2009 and skills, and bring individual experiences to the Board. The Board Mr. Mohau Mphomela (Chairperson) Y Y Y Y Secretary is responsible for ensuring that Board procedures are followed in line with the various frameworks. Mr. Abiel Mngomezulu Y Y Y Y Attendance of Board Members at Board Meetings Dr. Jan Bredell Y Y Y Y Jun Aug Nov Feb Name Ms. Lindiwe Mhlabeni N N Y Y 2008 2008 2008 2009 Ms. Nopasika Lila (Independent member) N N N Y Mr. Harold Motaung (Chairperson) Y Y Y Y Mr. Abiel Mngomezulu Y Y Y Y Mr. Bongani Mbewu (Independent member) Y Y N Y Dr. Jan Bredell Y Y Y Y Internal control Mr. Ralph Havenstein Y Y N Y Mintek maintains internal controls and systems designed to provide Ms. Lindiwe Mhlabeni N N Y N reasonable assurance as to the integrity and reliability of its financial Mr. Mohau Mphomela Y Y Y Y statements and to safeguard, verify and maintain the accountability of assets. The effectiveness of these controls is monitored by the internal Ms. Gugu Mthethwa N N Y N auditors, who report to the Audit Committee. The Audit Committee Mr. Mohlomi Ntilane Y Y N Y has requested management to review and evaluate Mintek’s existing Dr. Bethuel Sehlapelo* Y N/A N Y internal controls to identify areas that can be improved upon. Mr. Mosa Mabuza** N/A N/A Y Y Internal Audit * Re-appointed after Aug 2008 as an independent after representing the DST previously Mintek’s independent Internal Audit (IA) function assists the ** Appointed: 1 Sep 2008 to replace Mr Simon Sikhosana as a DME representative organisation to accomplish its objectives by adopting a systematic, Audit Committee disciplined approach to evaluating and improving the effectiveness of The Audit Committee has six members consisting of three Board risk management, control and governance. The IA function has direct members, two Independent members and Mintek’s CEO with the access to the Audit Committee and regular meetings are held with Auditor-General as a standing invitee . The Committee operates the Chairperson of the Committee. in terms of a formal charter, and assists the Board in fulfilling its responsibilities in respect of financial and risk matters. It also Risk Management ensures that the appropriate accounting policies, internal controls The Risk Management Committee reviews the risk management and compliance with laws and regulations are in place. Both the process, internal controls, and significant risks facing the organisation. internal and external auditors have unrestricted access to the Audit The Committee provides the Audit Committee with a risk assessment Committee. report at appropriately scheduled intervals. Meetings are held on During the past year, the Committee considered various reports a quarterly basis or as required, and Mintek’s Risk Plan and Risk from the internal auditor, as well as the audit report on the financial Management Framework are updated as required. Mintek utilises statement from the external auditor. The Auditor-General expressed the services of insurance brokers on an annual basis to analyse an unqualified audit opinion on Mintek’s annual financial statements and assess the risks associated with its assets, which are insured, for the year ended 31 March 2009 mainly due to the remarkable together with public liability and professional indemnity, for the risk improved running of Mintek. assessed.
58 2009 – MINTEK ANNUAL REPORT Attendance of Corporate Risk Management Committee at Technical Committee Committee Meetings The Technical Committee consists of four Board members and the Apr Oct Jan Mar Name CEO. The main purpose of the Technical Committee is to assist the 2008 2008 2009 2009 Board in discharging its duties relating to the legal mandate of Mintek Mr Abiel Mngomezulu - CEO N Y N Y in as far as its core business is concerned. It provides a forum for Dr Roger Paul - Chairman and GM discussing technical issues for developing relevant recommendations Y Y Y Y representing technology activities for consideration by the Board in informing strategy development Mr Vimlan Govender - Chief Financial Officer N N/A N/A N/A and implementation in Mintek. Furthermore, they are set up to advise on utilisation of expertise, project proposals and financing thereof, Mr Sakhi Simelane - Chief Financial Officer N/A N Y Y looking into various co-operatives and related strategies and the Ms Shokie Bopape - GM: Corporate Services N/A Y Y Y possible expansion of Mintek business within the said mandate. Mr Nick Maritz - Site services and facilities Y Y Y Y In addition to the above, the Committee must ensure that there is compliance with any other function or responsibility as may be Ms Hester Pretorius - Finance Y N Y Y prescribed by relevant legislation and in line with national priorities. Mr Imraan Laher - Finance N/A Y N N Attendance of Technical Committee Members at Technical Mr Muzi Ngcobo – Human Resources N Y N N Committee Meetings Ms Thembi Mkhabela Y N/A N/A N/A Name Nov 2008 Jan 2009 Mr Lemeke Ramoshaba – Human Resources N/A N/A Y Y Dr. Bethuel Sehlapelo (Chairperson) N Y Mr Afzal Patel - Security Y N/A N/A N/A Mr. Abiel Mngomezulu Y Y Mr Muzi Ntombela – Security N/A N Y Y Mr. Ralph Havenstein Y Y Mr Elias Lesunyane – Security N/A Y Y Mr. Mohlomi Ntilane Y Y Mr Michael Mamotheti – Internal Audit N/A Y Y N Mr. Mosa Mabuza** Y N Ms Busi Hlubi – Internal Audit Y Y N N/A **Appointed: 1 Sep 2008 as DME representative Ms Kedibone Mokgalaka – Internal Audit Y N N Y Fraud Committee Mr Tom Curr – feedback on ConRoast Project Y N/A N/A N/A Mintek has instituted a fraud prevention plan that incorporates Mr Hennie Venter – Information Technology principles contained in the Public Sector Anti-Corruption Strategy, Y Y Y Y and QESH, Secretary and which focuses particularly on creating awareness and promoting ethical business conduct. The Fraud Committee, which consists N/A Not appointed of standing members with roles in Finance and Security as well Human Resources Committee as a neutral Chairperson, is tasked with an ongoing review of the effectiveness of internal controls. The Human Resources Committee consists of three Board members and the CEO. The Committee reviews and determines the Management remuneration and terms of employment for Mintek, and as part of this Mintek is managed by a Chief Executive Officer assisted by four process, gives consideration to the annual review of remuneration General Managers. Together, they make up Mintek’s Executive packages based on independent surveys. The Committee also looks Management team, which meets on a weekly basis to review strategic into HR policies, internal controls, circumstances, conditions and and operational issues. activities that affect material changes to policies and procedures and Executive Management is supported by 16 formally appointed conditions of service for all employees in compliance with demands divisional managers who are in charge of Mintek’s operating divisions and vested interests of Mintek’s stakeholders. The Mintek Board and centralised support functions. ratifies the decisions of the HR Committee. Operational Performance Attendance of Human Resources Committee Members at Human Mintek reports to the Department of Minerals and Energy and is Resources Committee Meeting also accountable to the Department of Science and Technology Name Aug 2008 Nov 2008 Feb 09 (DST) for its technology-related Research and Development (R&D) activities. Various Key Performance Indicators (KPIs), encompassing Mr. Ralph Havenstein (Chairperson) Y Y Y financial, organisational, innovation and learning, human resources Mr. Abiel Mngomezulu Y Y Y and transformation perspectives, provide Mintek with a basis for Ms. Gugu Mthethwa Y Y Y evaluating its activities in the identified key performance areas. Each KPI is supported by a set of identified measures, that provide Mr. Mohlomi Ntilane Y Y Y a more specific and consistent base from which to assess progress.
MINTEK ANNUAL REPORT – 2009 59 There is also a framework for peer review should the need arise. Mintek’s Executive Committee meets on a weekly basis and the Management Committee convenes on a monthly basis where both the business plans and financial results are presented. Budget for the current year is reviewed in September by executive management in order to keep track of overall sound financial management. Going Concern The Mintek Board has reviewed the entity’s financial budgets for the period April 2008 to March 2009 and is satisfied that adequate resources exist to continue business for the foreseeable future. Quality, environment, safety, and health During August 2008, Mintek’s quality management system underwent The following major incidents occurred during the period under a major three-yearly reassessment audit against the requirements review. of ISO 9001:2000. Mintek passed the audit with no major findings raised. Mintek also passed the external surveillance audit that was Following the accidental contamination of the hot water supply conducted on the ISO 14001:2004 environmental management to Mintek’s administration building with sodium nitrite, five staff system. Our safety and health management system was certified members showed symptoms of having ingested the contaminated compliant with the requirements of the new OHSAS 18001:2007 water, and one person required hospital treatment. It was determined standard. that maintenance staff mistakenly added the chemical, which is used The Analytical Services laboratory underwent a successful for rust prevention, to the hot water header tank instead of to the surveillance audit for ISO 17025 (Testing and Calibration Laboratories) header tank feeding the air conditioning system. compliance in 2008. The surveillance audit for the Cyanide Services While a cyclone assembly was being moved, the refractory sleeve laboratory was postponed until the second quarter of 2009. slipped out of the casing and crushed the fingertips of a staff member, At the end of the period under review, the Lost Time Injury Frequency resulting in the loss of the last joints (nail area) of three fingers. Rate (LTIFR) was 0.8, compared with the target of 1.0. Mintek has At the end of March 2009, molten metal and slag escaped from an managed to keep its LTIFR below 1 since October 2007, with one operating furnace and came into contact with water, which instantly exception in July 2008, where the LTIFR was 1.0. This is indicative of vaporised, causing a series of minor explosions outside the furnace. a mature and effective safety management system. The site was evacuated as a routine procedure and to allow access At a value of 15, the Client Dissatisfaction Frequency Rate (CDFR) for emergency vehicles. No-one was exposed to any fumes or remains above the allowable target of less than 10. However, the danger during the evacuation, and staff returned to work after safety CDFR is decreasing steadily since the divisions are addressing each personnel gave the all-clear. Randburg Emergency Services were problem area identified in client surveys. The main cause of the notified and arrived promptly, but no further intervention was required. CDFR being above target is late delivery of reports. Radiation protection programme The Environmental Incident Frequency Rate (EIFR) for March 2009 was zero, thus meeting the target of 1 (or less). The EIFR target was Mintek is registered as a uranium testwork facility with the National decreased from 5 to 1 in May 2008. Nuclear Regulator (NNR) and the Department of Minerals and Energy (DME). A Radiation Protection Programme (RPP) has been The Public Dissatisfaction Frequency Rate (PDFR) for March 2009 incorporated as part of the overall Safety, Health, and Environment was 2, thus not meeting the target of 1 (or less). Each public complaint programme, and an internal audit schedule has been implemented is addressed as a matter of urgency by Mintek Management. All the to ensure that the RPP remains relevant and is updated as approved public complaints were noise-related. by the NNR. Mintek achieved 100 per cent compliance in the on-site Worker Radiation Protection Programme inspection conducted in March. The inspection was conducted to verify that Mintek’s safeguards for researchers working with radioactive materials comply with the NNR’s requirements regarding training, monitoring and recording of individual doses, personal protective equipment, demarcation of classified areas, and the calibration and maintenance of radiation monitoring instruments. This is the first time that Mintek has scored 100 per cent, although in previous inspections Mintek regularly achieved an “acceptable” rating of above 80 per cent.
60 2009 – MINTEK ANNUAL REPORT a n n u a l f i n a n c i a l s t at e m e n t s for the year ended 31 March 2009
62 Audit Committee Report
63 Directors’ Report
65 Report of the Auditor-General
68 Statements of Financial Position
69 Statements of Financial Performance
70 Cash Flow Statements
71 Statements of Changes in Net Assets
72 Notes to the Annual Financial Statements contents
MINTEK ANNUAL REPORT – 2009 61 audit committee report The Audit Committee has adopted formal terms of reference, which have been confirmed by the Mintek Board, and has performed its responsibilities as set out in the terms of reference. In understanding its responsibilities, the Audit Committee has reviewed the following: • The effectiveness of the internal control system; • The effectiveness of the internal audit function; • The risk areas of the entity to be covered in the internal and external audits; • The adequacy, reliability and accuracy of the financial information provided to management and other users of such information; • The accounting or auditing concerns identified as a result of the external and internal audits; • Compliance with legal and regulatory provisions; • The activities of the internal audit function; • The independence and objectivity of the external auditors; and, • The scope and results of the external audit function. The Audit Committee is also responsible for: • Reporting to the Mintek Board and the Auditor-General where the report implicates any members of the accounting authority in fraud, corruption or gross negligence; • Communicating any concerns it deems necessary to the Mintek Board; • Confirming the internal auditor’s charter and audit plan; • Encouraging communication between members of the Mintek Board, senior executive management, the internal auditors and external auditors; • Conducting investigations within the terms of reference; • Concurring with the appointment of the in-house internal audit function; • Approving the internal audit work plan; and, • Setting the principles for recommending the use of the external auditor for non-audit services. The Audit Committee is satisfied that internal controls and systems have been put in place during the year under review and that controls have functioned effectively during the period. The Audit Committee considers Mintek internal controls and systems to be appropriate in all material respects to: • Reduce the entity’s risk to an acceptable level; • Meet the business objectives of the entity; • Ensure the entity’s assets are adequately safeguarded; and, • Ensure that the transactions undertaken are recorded in the entity’s records. The Audit Committee has evaluated the group and the company financial statements for the year ended 31 March 2009 and concluded that they fully comply, in all material aspects, with the requirements of the Public Finance Management Act (PFMA) No.1 of 1999, as amended, and South African Statements of Generally Accepted Accounting Practice (SA Statements of GAAP). The Audit Committee has requested management to review and evaluate Mintek’s internal controls to identify areas that can be improved upon. The Audit Committee agrees that the adoption of the going concern premise is appropriate in preparing the annual financial statements. The Committee acknowledges that Mintek has made significant progress in addressing the control weakness identified previously and looks forward to the future control environment, which will provide a sound basis for Mintek to meet its obligation to its stakeholders. The Audit Committee therefore recommends the adoption of the annual financial statements by the Board of Directors.
Mr Mphomela Audit Committee Members: Chairperson of the Audit Committee. Mr A Mngomezulu Date: 31 July 2009 Mr B Mbewu Dr J Bredell Ms L Mhlabeni Ms N Lila
62 2009 – MINTEK ANNUAL REPORT directors’ report The directors of Mintek take pleasure in submitting their 2009 report together with the Annual financial statements as at 31 March 2009. PROFILE Mintek was established by the Mineral Technology Act 30 of 1989, incorporated as a public company in South Africa in terms of the Companies Act, 1973, as amended, and is listed as a national government business enterprise in schedule 3B of the Public Finance Management Act (PFMA), 1999, as amended. FINANCIAL RESULTS The financial statements represent the financial result of Mintek and the consolidated results of its subsidiary, Mindev (Pty) Ltd, for the year ending 31 March 2009. REPORTING STANDARDS The Mintek Group’s Annual Financial Statements comply with South African Statements of Generally Accepted Accounting Practice (GAAP) and the PFMA.
ORGANISATIONAL STRUCTURE Mintek’s organisational structure is shown on page 9 of the annual report.
PRINCIPAL ACTIVITIES Mintek, South Africa’s national mineral research organisation, is a state owned enterprise established to ensure the sustainability and growth of the minerals industry through technology development and transfer. In terms of its mandate under the Mineral Technology Act 30 of 1989, Mintek’s main objectives are to promote mineral technology and to foster the establishment and expansion of industries in the field of minerals and products derived therefrom through research. Specific aims include to: • Develop efficient mineral processing technologies and sustainable value added products; • Play a significant role in second economy interventions by developing technologies appropriate to the local jewellery, artisanal and small-scale mining (ASSM) industries; • Support government regional and continental initiatives; • Develop human and organisational skills whilst transforming its internal and external business processes and the workforce; and, • Uphold good governance practices.
FINANCIAL AFFAIRS Review of operations Due to the prevailing economic climate in the mining industry, there was a complimentary slowdown in the demand of research project work in the current year which resulted in an increase of only 7,3% in revenue. The signs of distress in the industry is manifested by the prolonged periods beyond the normal credit terms that the clients are taking to settle their accounts. The average period to settle the accounts is 63 days, which is 30 days longer than the normal credit terms. Mintek has however put a number of stringent measures in place to improve the average collection period of debtors. Mintek has a liability to pensioners and employees that were part of the medical aid on 31 December 1999 for post-retirement medical aid relating to past service. This liability was valued at R78,8 million on 31 March 2008. Due to the high increases in medical aid inflation, Mintek decided to settle the beneficiaries of this liability during the past financial year. During the current year, negotiations were concluded with most of the pensioners in respect of post-retirement medical benefits. An offer for a once-off payout was agreed upon with 204 pensioners, this represents 56% of the total number of members covered by this scheme. As a result of the number of pensioners opting to take up the payoff, the obligation for providing these benefits in future reduced to R31.4m (R78m - 2008). It is hoped that negotiations to pay out the remaining pensioners (Groups 1 and 2) will be concluded in the ensuing year. The amount relating to current employees who were employed prior to January 2000 (Group 3 and 4) will be ring-fenced. An insurance claim will be lodged with the insurers in respect of an accident that occurred at Bay 2 on 27 March 2009. The cost of the resulting damage is yet to be confirmed. Subsequent discussions with the insurers indicate that the claim will be settled in the ensuing financial year. Revenue In reporting Group revenue of R389 million, Mintek achieved a 7,3% growth in revenue compared to FY 2008.
MINTEK ANNUAL REPORT – 2009 63 The major source of revenue continues to be from commercial activities, which account for 62% of our total revenue and the balance from government grants and earmarked funding. Whilst government expectations were met in terms of the shareholder compact, Mintek successfully increased revenues from the commercial activities by 6% compared to the FY 2008. The government grant fully ring-fenced on research projects grew by 9% on year to year comparison. It is hoped that other sources of commercial revenue will improve once the economic conditions improve. The higher interest rate environment during the year was also beneficial to us and interest income is now a significant revenue stream. Mintek’s profit before tax of R38,8 million (2008: R12,9 million), reflects an increase of 201% compared to the previous year. This marks a new target in the history of Mintek finances and this is attributable to the increase in investment income and savings in increased medical aid costs through settling the medical aid liability. In addition, there are various measures that have been introduced to reduce expenses as a percentage of the total revenue.
CASH FLOW ANALYSIS The working capital decreased from R132 million (2008) to R130 million (2009). Normal operations generated an investment of about R107 million in the current year, significantly increasing from the R31 million invested in the previous financial year. This was mainly as a result of the settlements made on the post-retirement medical aid payments. A net increase in cash and cash equivalents also improved by approximately R12 million from the R18,5 million of the previous year.
ASSETS Capital expenditure Mintek expanded its asset base by R24,3 million (2008: R19,9 million) in the 2009 financial year. R13,4 million was funded by the Science-Vote grant received. This grant was specifically allocated to fund capex requirements. Assets with a net book value of R0,3 million were written off in the current year. JUDICIAL PROCEEDINGS The directors are not aware of any significant judicial proceedings against Mintek, except those as disclosed in note 24 of the annual financial statements. POST-BALANCE SHEET EVENTS Termination of operating lease The tenant leasing the investment property terminated the lease agreement, effective 31 March 2009. Management has decided to use the facilities as an extension of its operating activities. The activities to be undertaken will be similar to those carried out by the tenant, hence no significant impairment in the value of the property. The property will now be classified under property, plant and equipment as required by the IAS 40 – Investment Property, as it is deemed to be owner-occupied property.
SUBSIDIARIES The information relating to the entity’s financial interest in its subsidiary is disclosed in note 14 of the Annual Financial Statements.
THE DIRECTORS OF MINTEK AS AT 31 MARCH 2009 Executive Director Mr MA Mngomezulu Non-executive Directors Mr H Motuang – Chairperson Ms FG Mthethwa Mr R Havenstein Mr M Ntilane Ms L Mhlabeni Dr J Bredell Mr M Mphomela Mr M Mabuza Dr B Sehlapelo The board secretary of Mintek is Ms S Bopape, and the business and postal addresses are as follows: 200 Malibongwe Drive Private Bag X3015 Randburg Randburg 2194 2125
64 2009 – MINTEK ANNUAL REPORT report of the auditor-general REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON THE GROUP FINANCIAL STATEMENTS AND PERFORMANCE INFORMATION OF THE MINTEK GROUP FOR THE YEAR ENDED 31 MARCH 2009 Introduction 1. I have audited the accompanying group financial statements and separate financial statements of Mintek which comprise the consolidated and separate statement of financial position as at 31 March 2009, and the consolidated and separate statement of financial performance, the consolidated and separate statement of changes in equity, and the consolidated and separate cash flow statements for the year then ended, a summary of significant accounting policies and other explanatory notes, and the accounting authority’s report as set out on pages 68 to 95. The accounting authority’s responsibility for the financial statements 2. The accounting authority is responsible for the preparation and fair presentation of these financial statements in accordance with the South African Statements of Generally Accepted Accounting Practice (SA Statements of GAAP) and in the manner required by the Public Finance Management Act (PFMA), 1999 (Act No. 1 of 1999) and the Minerals Technology Act, 1989 (Act No. 30 of 1989) and for such internal control as the accounting authority determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The Auditor-General’s responsibility 3. As required by section 188 of the Constitution of the Republic of South Africa, 1996 read with section 4 of the Public Audit Act, 2004 (Act No. 25 of 2004) and section 12(2) of the Mineral Technology Act, 1989 (Act No. 30 of 1989), my responsibility is to express an opinion on these financial statements based on my audit. 4. I conducted my audit in accordance with the International Standards on Auditing read with General Notice 616 of 2008, issued in Government Gazette No. 31057 of 15 May 2008. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 5. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 6. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion 7. In my opinion these financial statements present fairly, in all material respects, the consolidated and separate statement of financial position of Mintek as at 31 March 2009 and its consolidated and separate statement of financial performance and its consolidated and separate cash flows for the year then ended, in accordance with South African Statements of Generally Accepted Accounting Practice (SA Statements of GAAP) and in the manner required by the Public Finance Management Act, 1999 (Act No. 1 of 1999) and the Mineral Technology Act, 1989 (Act No. 30 of 1989). Other matters Without qualifying my opinion, I draw attention to the following matters that relates to my responsibilities in the audit of the financial statements: Governance framework 8. The governance principles that impact the auditor’s opinion on the financial statements are related to the responsibilities and practices exercised by the accounting authority and executive management and are reflected in the internal control deficiencies and key governance responsibilities addressed below: Key governance responsibilities 9. The PFMA tasks the accounting authority with a number of responsibilities concerning financial and risk management and internal control.
MINTEK ANNUAL REPORT – 2009 65 Fundamental to achieving this is the implementation of key governance responsibilities, which I have assessed as follows: No. Matter Y N Clear trail of supporting documentation that is easily available and provided in a timely manner 1. No significant difficulties were experienced during the audit concerning delays or the availability of requested information. Quality of financial statements and related management information 2. The financial statements were not subject to any material amendments resulting from the audit. 3. The annual report was submitted for consideration prior to the tabling of the auditor’s report. Timeliness of financial statements and management information 4. The annual financial statements were submitted for auditing as per the legislated deadlines. [Section 55 of the PFMA]. Availability of key officials during audit 5. Key officials were available throughout the audit process. Development and compliance with risk management, effective internal control and governance practices 6. Audit committee • The entity had an audit committee in operation throughout the financial year. • The audit committee operates in accordance with approved, written terms of reference. • The audit committee substantially fulfilled its responsibilities for the year, as set out in section 77 of the PFMA and Treasury Regulation 27.1.8. 7. Internal audit • The entity had an internal audit function in operation throughout the financial year. • The internal audit function operates in terms of an approved internal audit plan. • The internal audit function substantially fulfilled its responsibilities for the year, as set out in Treasury Regulation 27.2. There are no significant deficiencies in the design and implementation of internal control in respect of financial and risk 8. management. There are no significant deficiencies in the design and implementation of internal control in respect of compliance with 9. applicable laws and regulations. 10. The information systems were appropriate to facilitate the preparation of the financial statements. A risk assessment was conducted on a regular basis and a risk management strategy, which includes a fraud prevention plan, 11. is documented and used as set out in Treasury Regulation 27.2. 12. Powers and duties assigned are in place, as set out in section 56 of the PFMA. Follow-up of audit findings 13. The prior year audit findings have been substantially addressed. 14. SCOPA resolutions have been substantially implemented. n/a Issues relating to the reporting of performance information 15. The information systems were appropriate to facilitate the preparation of a performance report that is accurate and complete. Adequate control processes and procedures are designed and implemented to ensure the accuracy and completeness of 16. reported performance information. A strategic plan was prepared and approved for the financial year under review for purposes of monitoring the performance 17. in relation to the budget and delivery by Mintek against its mandate, predetermined objectives, outputs, indicators and targets [Treasury Regulations 29.1 and 30.1] There is a functioning performance management system and performance bonuses are only paid after proper assessment 18. and approval by those charged with governance.
Investigations 10. The internal audit of Mintek conducted an investigation into fraudulent payments which revealed that a payment of R86 080,00 due to a Mintek supplier was fraudulently paid to two ex Mintek employees who had defrauded the entity previously. Furthermore an additional Mintek employee was involved in facilitating the payment and was subsequently dismissed. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS Report on performance information 11. I have reviewed the performance information as set out on pages 11 to 17.
66 2009 – MINTEK ANNUAL REPORT The accounting authority’s responsibility for the performance information 12.The accounting authority has additional responsibilities as required by section 55(2)(a) of the PFMA to ensure that the annual report and audited financial statements fairly present the performance against predetermined objectives of the entity. The Auditor-General’s responsibility 13. I conducted my engagement in accordance with section 13 of the PAA read with General Notice 616 of 2008, issued in Government Gazette No. 31057 of 15 May 2008. 14. In terms of the foregoing my engagement included performing procedures of an audit nature to obtain sufficient appropriate evidence about the performance information and related systems, processes and procedures. The procedures selected depend on the auditor’s judgement. 15. I believe that the evidence I have obtained is sufficient and appropriate to provide a basis for the findings reported below. Findings for performance information Usefulness and reliability of reported performance information 16. The following criteria were used to assess the usefulness and reliability of the information on the entity’s performance with respect to the objectives in its annual performance plan: • Consistency: Has the entity reported on its performance with regard to its objectives, indicators and targets in its approved annual performance plan? • Relevance: Is the performance information as reflected in the indicators and targets clearly linked to the predetermined objectives and mandate. Is this specific and measurable, and is the time period or deadline for delivery specified? • Reliability: Can the reported performance information be traced back to the source data or documentation and is the reported performance information accurate and complete in relation to the source data or documentation? The following findings relate to the above criteria: Reported performance information not reliable Lack of appropriate information systems generating performance information 17. Sufficient appropriate audit evidence with regards the reported performance information of the following strategic objectives, overcoming technical obstacles to exploiting mineral resources, and enhance the competitiveness of metallurgical processes, was not obtained as the information system used for generating performance information was not appropriate to facilitate the preparation of accurate and complete actual performance information. Source information not accurate and complete 18. The audit evidence provided to support the reported performance information with regards to the following strategic objective, overcoming technical obstacles to exploiting mineral resources and enhance the competitiveness of metallurgical processes, did not adequately support the accuracy and completeness of the actual reported information.
APPRECIATION 19. The assistance rendered by the staff of Mintek during the audit is sincerely appreciated.
Johannesburg 30 July 2009
MINTEK ANNUAL REPORT – 2009 67 financial statements and notes 2009 STATEMENTS OF FINANCIAL POSITION AT 31 MARCH 2009
GROUP MINTEK 2009 2008 2009 2008 Notes R R R R
Assets Non-current assets Property, plant and equipment 11 187,732,163 192,315,728 187,732,163 192,315,728 Intangible assets 12 4,135,480 4,432,339 4,135,480 4,432,339 Investment property 13 12,458,808 13,357,057 12,458,808 13,357,057 Investment in subsidiary 14 - - 100 100 Long-term loans and advances 15 85,690 4,174,233 85,690 791,233 Total non-current assets 204,412,141 214,279,357 204,412,241 210,896,457 Current assets Inventory 16 5,088,576 2,947,828 5,088,576 2,947,828 Trade and other receivables 17 82,422,822 110,934,781 78,977,747 87,286,498 Short-term investments 18 136,206,148 96,621,434 136,206,148 96,621,434 Cash and cash equivalents 79,617,943 49,030,989 79,617,943 49,030,989 Total Current assets 303,385,489 259,535,032 299,890,414 235,886,749 Total assets 507,747,630 473,814,389 504,302,655 446,783,206
Equity Revaluation surplus 110,256,095 111,153,884 110,256,095 111,153,884 Retained earnings 230,107,153 189,591,765 191,055,357 151,390,957 Total equity 340,363,248 300,745,649 301,311,452 262,544,841 Liabilities Non-current liabilities Long-term retirement benefit obligation 22 32,585,000 79,921,378 32,585,000 79,921,378 Financial lease obligation 23 667,380 1,025,054 667,380 1,025,054 33,252,380 80,946,432 33,252,380 80,946,432
Current liabilities Loans and advances from subsidiary 14 - - 35,665,938 11,169,625 Trade and other payables 19 54,773,871 51,664,961 54,714,754 51,664,961 Deferred income 20 78,510,292 40,047,741 78,510,292 40,047,741 Provisions 21 847,839 409,606 847,839 409,606 Current liabilities 134,132,002 92,122,308 169,738,823 103,291,933
Total equity and liabilities 507,747,630 473,814,389 504,302,655 446,783,206
A Mngomezulu Sakhi Simelane CEO, Mintek CFO, Mintek Randburg, 31 July 2009
68 2009 – MINTEK ANNUAL REPORT financial statements and notes 2009 STATEMENTS OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2009
GROUP MINTEK 2009 2008 2009 2008 Notes R R R R
Continuing operations Revenue 2 389,413,133 363,026,928 389,413,133 363,026,928 Other operating income 3 8,130,036 10,266,154 8,130,036 10,266,154 Foreign currency gains 3,466,892 3,028,593 3,466,892 3,028,593 Investment income 4 25,270,245 18,379,297 24,088,317 14,793,626 Staff costs (216,432,816) (210,093,474) (216,432,816) (210,093,474) Other operating expenses 5 (118,018,857) (99,292,308) (118,018,857) (99,292,308) Finance expenses 6 (8,545,590) (6,133,670) (8,545,590) (6,110,685) Audit fees 7 (1,500,734) (1,883,625) (1,500,734) (1,883,625) Fees for services 8 (30,157,188) (29,581,436) (30,157,188) (29,581,436) Depreciation 9 (15,500,025) (15,332,325) (15,500,025) (15,332,325) Loss on disposal of property, plant and equipment (302,908) (720,916) (302,908) (720,916) Post-retirement benefit obligation 10 4,126,351 (15,168,967) 4,126,351 (15,168,967) Profit before taxation 39,948,539 16,494,251 38,766,611 12,931,565 Taxation 25 (330,940) (1,033,178) - - Profit for the year 39,617,599 15,461,073 38,766,611 12,931,565
MINTEK ANNUAL REPORT – 2009 69 financial statements and notes 2009 CASH FLOW STATEMENTS FOR YEAR ENDED 31 MARCH 2009
GROUP MINTEK 2009 2008 2009 2008 Notes R R R R Cash flows from operating activities Cash receipts from customers 338,533,156 262,933,761 315,218,771 246,123,663 Parliamentary grant received 135,834,000 124,569,000 135,834,000 124,569,000 Cash paid to suppliers and employees (361,127,826) (348,754,411) (361,127,826) (348,673,911) Cash generated from operations 27 113,239,330 38,748,350 89,924,945 22,018,752 Payment of Taxation - (1,305,000) - - Interest received 20,135,737 15,855,147 18,953,809 12,269,476 Finance costs (191,324) (168,588) (191,324) (145,603) Provisions utilised 21 (1,759,040) (2,981,515) (1,759,040) (2,981,515) Net cash inflow from operating activities 131,424,703 50,148,394 106,928,390 31,161,110
Cash flows from investing activities Additions to property, plant and equipment and intangible assets (10,922,508) (19,880,257) (10,922,508) (19,880,257) Increase in investment deposits (39,584,714) (7,129,954) (39,584,714) (7,129,954) Receipts from subsidiary - - 24,496,313 18,555,111 Proceeds on disposal of fixed assets - - - - Net cash outflow from investing activities (50,507,222) (27,010,211) (26,010,909) (8,455,100)
Cash flows from financing activities Long-term creditor payments (322,923) (717,188) (322,923) (285,015) Post-retirement health care - contributions 22 (3,860,467) (3,912,671) (3,860,467) (3,912,671) Post-retirement health care - settlements 22 (46,147,137) - (46,147,137) - Net cash outflow from financing activities (50,330,527) (4,629,859) (50,330,527) (4,197,686)
Net increase in cash and cash equivalents 27.1 30,586,954 18,508,324 30,586,954 18,508,324
Cash and cash equivalents at beginning of year 49,030,989 30,522,665 49,030,989 30,522,665
Cash and cash equivalents at end of year 79,617,943 49,030,989 79,617,943 49,030,989
70 2009 – MINTEK ANNUAL REPORT financial statements and notes 2009 STATEMENTS OF changes in the net assets for the year ended 31 March 2009
Retained Earnings Non Distributable Reserve Total
Note R R R
group
Balance as at 31 March 2007 173,232,903 62,794,971 236,027,874 Revaluation - Land and Buildings 11 - 49,256,702 49,256,702 Depreciation on revaluation of buildings 897,789 (897,789) -
Net profit for the year 15,461,073 - 15,461,073
Balance as at 31 March 2008 189,591,765 111,153,884 300,745,649 Depreciation on revaluation of buildings 897,789 (897,789) - Net profit for the year 39,617,599 - 39,617,599
Balance as at 31 March 2009 230,107,153 110,256,095 340,363.248
MINTEK
Restated Balance as at 31 March 2007 137,561,603 62,794,971 200,356,574 Revaluation - Land and Buildings 11 - 49,256,702 49,256,702 Land and Buildings 897,789 (897,789) - Net profit for the year 12,931,565 - 12,931,565
Restated Balance as at 31 March 2008 151,390,957 111,153,884 262,544,841 Depreciation on revaluation of buildings 897,789 (897,789) - Net profit for the year 38,766,611 - 38,766,611
Balance as at 31 March 2009 191,055,357 110,256,095 301,311,452
MINTEK ANNUAL REPORT – 2009 71 financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
General Information The Group consists of Mintek, a schedule 3B public entity and Mindev (Pty) Ltd., a wholly-owned subsidiary incorporated in South Africa. The principal activities of the Company and its subsidiaries (the “Group”) are to undertake research, development and transfer or commercialisation of mineral technology.
1. Significant accounting policies and basis of preparation The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The consolidated financial statements have been prepared on the historical cost basis except for certain properties and financial instruments, which are measured at revalued amounts or fair values, as explained in the accounting policies set out below. The financial statements have been prepared in accordance with the South African Statements of General Accepted Accounting Practice (GAAP), and in the manner required by the Public Finance Management Act (PFMA) and Treasury Guidelines. The annual financial statements are expressed in its functional currency SouthAfrican Rands (R). The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. There are no areas that would have involved a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements.
1.1 Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and entities (including special purpose entities) controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group. All intragroup transactions, balances, income and expenses are eliminated on consolidation. Minority interests in the net assets of consolidated subsidiaries are presented separately from the Group’s equity therein. Minority interests in the net assets consist of the amount of those interests at the date of the original business combination and the minority’s share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority’s interest in the subsidiary’s equity are allocated against the interests of the Group except to the extent that the minority has a binding obligation and is able to make an additional investment to cover the losses.
1.2 Foreign currency transactions and balances At the balance sheet date, monetary assets and liabilities denominated in foreign currencies are translated into South African Rand at exchange rates prevailing at the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are recognised in profit or loss in the period in which they arise, except for exchange differences arising on a monetary item that forms part of the Company’s net investment in a foreign operation, in which case, such exchange differences are recognised in equity in the consolidated financial statements. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity, in which cases, the exchange differences are also recognised directly in equity.
72 2009 – MINTEK ANNUAL REPORT financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
1.3 Investment in subsidiary Subsidiary companies are enterprises in which the company holds a long-term equity interest and over which it has the power to control the financial and operating activities of the entities so as to obtain benefits from its activities. All investments in subsidiary companies are initially recognised at cost less impairment losses. The carrying amount of such investments is reduced to recognise any decline, other than a temporary decline, in the value of individual investments. Any carrying value adjustments are charged to the income statement in the period in which they are incurred.
1.4 Investment in associates An associate is an entity over which the investor has significant influence and that is neither a subsidiary nor an interest in a joint venture. An associate is an entity in which the group has significant influence and that is neither a subsidiary nor an interest in a joint venture, through participation in the financial and operating policy decisions of the investee, but not control over those policies. The results, assets and liabilities of associates are incorporated in these consolidated annual financial statements by using the equity method of accounting, from the effective dates of their acquisition until the effective dates of their disposal. Under the equity method, investments in associates are carried in the balance sheet at cost as adjusted by post-acquisition changes in the Group’s share of the net assets of the associates, less any identified impairment loss. When the Group’s share of losses of an associate equals or exceeds its interest in that associate (which includes any long-term interests that, in substance, form part of the Group’s net investment in the associate), the Group discontinues recognising its share of further losses. An additional share of losses is provided for and a liability is recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of that associate. Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately in profit or loss. Where a group enterprise transacts with an associate of the Group, unrealised profits and losses are eliminated to the extent of the Group’s interest in the relevant associate, except where unrealised losses provide evidence of an impairment of the asset transferred.
1.5 Goodwill Goodwill represents the excess of the purchase consideration over the fair value of the Group’s share of the net identifiable assets, liabilities and contingent liabilities of the acquired entity at the date of acquisition. Such goodwill is carried at cost less any accumulated impairment losses. At each balance sheet date, goodwill is reviewed for impairment or changes in estimated future benefits. When the recoverable amount of goodwill is less than its carrying amount, the impairment loss is recognised directly in the consolidated income statement. An impairment loss for goodwill is not reversed in subsequent periods. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
1.6 Intangible assets Intangible assets acquired separately and with finite useful lives are carried at costs less accumulated amortisation and any accumulated impairment losses. Amortisation for intangible assets with finite useful lives is provided on a straight-line basis over their estimated useful lives. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the consolidated income statement when the asset is derecognised. The estimated useful lives of the major categories of intangible assets are: Computer Software 3 - 5 years
MINTEK ANNUAL REPORT – 2009 73 financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
1.7 Research and development costs Expenditure on research activities is recognised as an expense in the period in which it is incurred. An internally-generated intangible asset arising from the Group’s research and development is recognised only if all of the following conditions are met: - An asset is created that can be identified (such as software and new processes); - It is probable that the asset created will generate future economic benefits; - The development cost of the asset can be measured reliably; - It is technically feasible to complete the intangible asset so that it will be available for use or sale; - The ability to use or sell the intangible asset; and, - It is the intention to complete the intangible asset so that it will be available for use or sale. Where no internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the period in which it is incurred. Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses, on a straight-line basis over their useful lives.
1.8 Impairment At each balance sheet date, the Group assesses the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as revaluation decrease. Where it is not possible to estimate the recoverable amount for an individual asset, the recoverable amount is determined for the cash-generating unit to which the asset belongs. In addition, intangible assets with indefinite useful lives, intangible assets not yet available for use and goodwill acquired in a business combination are tested for impairment annually, and whenever there is an indication that they may be impaired. The recoverable amount is determined as the higher of fair value less costs to sell and value in use. Value in use represents the present value of the future cash flows expected to be derived from an asset (cash-generating unit). The expected future cash flows are discounted to their present value using an appropriate discount rate that reflects current market assessments of the time value of money and the risk specific to the asset for which the future cash flow estimates have not been adjusted. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. Impairment losses for goodwill are not reversed in subsequent periods.
1.9 Leases Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards associated with ownership of an asset to the lessee. All other leases are classified as operating leases. The group as a lessor Rental income from operating leases is recognised in the consolidated income statement on a straight-line basis over the term of the relevant lease. The group as a lessee Assets held under finance leases are recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the consolidated balance sheet as a finance lease obligation.
74 2009 – MINTEK ANNUAL REPORT financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Group’s general policy on borrowing costs. Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are recognised as a reduction of rental expense over the lease term on a straight-line basis.
1.10 Property, plant and equipment Property, plant and equipment, other than land and buildings, are stated at cost less any accumulated depreciation, any grant funding and any accumulated impairment losses. Costs include all directly attributable expenditure incurred in the acquisition, construction and installation of such assets so as to bring them to the location and condition necessary for them to be capable of operating in the manner intended by management. Land and buildings held for use in the production or supply of goods and services or for administrative purposes are stated in the balance sheet at their revalued amounts, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent impairment losses. Land is not depreciated. Properties were initially valued at historical cost. Revaluations are performed every two years by an independent professional valuator, such that the carrying amount does not differ materially from that which would be determined using fair values at the balance sheet date. Depreciation is provided to write-off the cost or fair value of property, plant and equipment other than land less their estimated residual values on a straight-line basis, over the estimated useful lives. Useful lives and residual values are reviewed and adjusted if appropriate at each balance sheet date. Where significant parts (components) of an item have different useful lives or depreciation methods to the item itself, these parts are depreciated separately if they have a cost that is significant in relation to the cost of the remainder of the asset. The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. If any such indication exists and when the carrying values exceed the estimated recoverable amount, the assets or cash generating units are written down to their recoverable amount. Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the consolidated income statement in the year in which the item is derecognised. Any revaluation increase arising on revaluation of land and buildings is credited to the non-distributable reserves, except to the extent that it reverses a revaluation decrease of the same asset previously recognised as an expense, in which case the increase is credited to the income statement to the extent of the decrease previously charged. A decrease that offsets previous revaluation increases of the same asset is charged against the non- distributable reserve. A decrease in net carrying amount arising on revaluation of an asset is dealt with as an expense to the extent that it exceeds the balance, if any, on the non-distributable reserve relating to a previous revaluation of that asset. On the subsequent sale or retirement of a revalued asset, the attributable revaluation surplus balance is transferred to retained profits. At balance sheet date, the difference between depreciation based on the revalued carrying amount of the asset (the depreciation charged to the income statement) and the depreciation based on the asset’s original cost is transferred from non-distributable reserves to retained earnings.
MINTEK ANNUAL REPORT – 2009 75 financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
The estimated useful lives of the major categories of property, plant and equipment are: Buildings 50 years Plant 10 years Equipment 5-10 years Vehicles 5 years Furniture and fittings 10 years The gains and losses arising on the disposal or retirement of an item of property, plant, equipment and vehicles are determined as the difference between the sales proceeds and the carrying amount of the assets disposed and is recognised in profit and loss.
1.11 Investment Properties Investment properties are properties held to earn rentals and/or for capital appreciation. On initial recognition, investment properties are measured at cost, including any directly attributable expenditure. Subsequent to initial recognition, investment properties are measured at their fair values using the fair value model. Gains or losses arising from changes in the fair value of investment property are included in profit or loss for the period in which they arise. An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposals. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated income statement in the year in which the item is derecognised. The fair value is determined at balance sheet date by an independent professional valuator based on market evidence of the most recent prices achieved in arms length transactions of similar properties in the same area.
1.12 Employee benefits The Group operates a number of retirement benefit plans for its employees. These plans include a defined contribution plan and other retirement benefits such as medical aid benefit plans. A defined contribution plan is a scheme under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. A defined benefit plan is a scheme that is not a defined contribution plan. Typically defined benefit plans define an amount of benefits that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. Post-retirement pension obligations The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognised past-service costs. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in the statement of recognised income and expense in the period in which they arise. Past-service costs are recognised immediately in income, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, the past-service costs are amortised on a straight-line basis over the vesting period. For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognised past-service costs. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method.
76 2009 – MINTEK ANNUAL REPORT financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in the statement of recognised income and expense in the period in which they arise. Past-service costs are recognised immediately in income, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, the past-service costs are amortised on a straight-line basis over the vesting period. For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions recognised as employee benefit expense when incurred, are charged against income. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.
1.13 Post-retirement health care costs This Group has an obligation to fund the medical aid benefits of all its past employees and dependants of past employees who retired or were in the employment of the Group prior to 31 December 1999. The plan liability is unfunded and fully provided for in the financial statements. The Group uses the projected unit credit actuarial method to determine the present value of its past service cost. Actuarial gains and losses are recognised in full in the reporting period it relates to and is the excess over the greater of the present value of the past service obligation at the end of the reporting period before deducting the present value of assumed assets at the same date. Valuations of these obligations are carried out annually by independent, qualified actuaries using appropriate mortality tables, long-term estimates of increases in medical costs and appropriate discount rates. General increases to medical aid contributions were estimated taking into account the projected future changes in the cost of medical services resulting from both inflation and specific changes to medical costs. The obligation calculated assumes that the cross subsidy of pensioner’s benefits by the active members will continue as at present. If this cross–subsidy were to be removed, it would result in an increased estimated liability.
1.14 Inventories Inventories are valued stated at the lower of cost or net realisable value. Costs comprise direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling price in the ordinary course of business less any costs of completion and costs to be incurred in marketing, selling and distribution.
1.15 Provisions Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that this will result in an outflow of economic benefits and the amount can be reasonably determined. The Group recognises its obligation for guaranteeing its product and services for periods as stipulated in its contracts with the Group’s customers. The Group is exposed to certain environmental liabilities relating to its operations. Provision for the cost of environmental and other remedial work, such as reclamation costs, close down and restoration costs and pollution control, is made when such expenditure is probable and the cost can be reasonably estimated.
1.16 Financial instruments Financial instruments recognised on the balance sheet include derivative instruments, investments, investments in debt securities, accounts receivable, cash and cash equivalents, accounts payable and interest bearing debt. Financial instruments are initially measured at cost including transaction costs when the Group becomes a party to their contractual arrangements. The subsequent measurement of financial instruments is dealt with in the subsequent notes. When the Group can legally do so and it intends to settle on a net basis, or simultaneously, related positive and negative values of financial instruments are offset within the balance sheet amounts.
1.16.1 Derivative instruments The Group does not use derivative financial instruments, including forward rate agreements and forward exchange contracts, to hedge its exposure to
MINTEK ANNUAL REPORT – 2009 77 financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
interest rates and foreign fluctuations. It is the Group’s policy not to hedge its exposure from foreign currency fluctuations, as it does not consider the impact to be significant. It is the policy of the Group not to trade in derivative financial instruments for speculative purposes.
1.16.2 Investments Investments consist of short- to long-term money market instruments initially recorded at cost, which is the fair value of the cash placed with the institution. These investments are held to maturity of financial assets. Interest is accrued using the effective interest rate method and included in the income statement on an accrual basis.
1.16.3 Trade and other receivables Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of a provision account, and the amount of the loss is recognised in the income statement. When a trade receivable is uncollectible, it is written off in the year in which it is identified. Subsequent recoveries of amounts previously written off are credited in the income statement.
1.16.4 Cash and cash equivalents Cash and cash equivalents comprise cash on hand and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet. The carrying amount of cash is measured at its fair value.
1.16.5 Financial liabilities Financial liabilities other than derivative instruments are amortised at their original debt value less principal payments and amortisation. Derivatives are subsequently measured at fair value and gains and losses are included in the income statement for the period.
1.16.6 Impairment of Financial liabilities At each balance sheet date an assessment is made of whether there is any objective evidence of impairment of financial assets. If there is evidence, then the recoverable amount is estimated and an impairment loss is recognised in accordance with IAS 39 Financial Instruments and Recognition.
1.17 Government grants Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the group will comply with all attached conditions. Government grants, which are intended to give immediate financial support to the entity, are recognised as income in the period in which they are received. Government grants relating to costs are deferred and recognised in the income statement over the period necessary to match them with the costs that they are intended to compensate. Government grants earmarked for specific fixed asset acquisitions are netted-off against the cost value of the fixed asset to the extent of the funds received.
1.18 Revenue recognition Revenue is recognised when the sale transactions giving rise to such revenue is concluded and risks and rewards of ownership and title pass to the buyer under the terms of the applicable contract and the pricing is fixed and determinable.
78 2009 – MINTEK ANNUAL REPORT financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods sold and services provided in the normal course of business, net of discounts and sales related taxes. Revenue from the sale of goods is recognised when the goods are delivered and title has passed. Revenue arising from the rendering of services is recognised when services are provided. Where the outcome of a commercial work contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the commercial work contract at the balance sheet date, as measured by the proportion that costs incurred for work performed to date bear to the estimated total contract costs, except where this would not be representative of the stage of completion. Where the outcome of a commercial work contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. Advance income arising as result of contracts undertaken in terms of commercial work in respect of invoices raised and paid for in advance but for which no substantial work has been made to justify the recognition of any revenue, is deferred until the income is earned based on the percentage work completed. Interest income from a financial asset excluding financial assets at fair value through profit or loss is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount. Royalty revenue is recognised on an accrual basis in accordance with the substance of the relevant agreement. Royalties determined on a time basis are recognised on a straight line basis over the period of the agreement. Royalty arrangements that are based on production, sales and other measures are recognised by reference to the underlying arrangement. Revenue arising from licence fees is recognised on an accrual basis in accordance with the terms of the applicable contracts. Rental income is derived from rental of investments in fixed property and equipment and is recognised on an accrual basis in accordance with the substance of the relevant agreements.
1.19 Contracts in progress Where the outcome of a contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the balance sheet date. The stage of completion is determined by the proportion of contract costs incurred to date in relation to the estimated total contract costs except where this would not be representative of the stage of completion. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed to the customer. Where the outcome of the contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is immediately recognised as an expense to the income statement. Where contract costs incurred to date plus recognised profits less recognised losses exceed progress billings, the surplus is shown as amounts due from customers for contract work. For contracts where progress billings exceed contract costs incurred to date plus recognised profits less recognised losses, the surplus is shown as amounts due to customers for contract work. Amounts received before the related work is performed are included in the consolidated balance sheet, as a liability, as deferred income. Amounts billed for work performed but not yet paid by the customer are included in the consolidated balance sheet under trade and other receivables.
1.20 Taxation Income tax represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the financial year. Taxable profit differs from profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
MINTEK ANNUAL REPORT – 2009 79 financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
Deferred tax is recognised on differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary differences arise from the initial recognition (other than a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interest in joint ventures, except where the company is not able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are off-set when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income tax levied by the same taxation authority and the company intends to settle its current tax assets and liabilities on a net basis. The principal operating entity, Mintek, is exempt from normal company taxation as it is a state controlled and financed entity.
1.21 Irregular, fruitless and wasteful expenditure Irregular expenditure means expenditure incurred in contravention of, or not in accordance with, a requirement of any applicable legislation, including: - The PFMA; or, - Any provincial legislation providing for procurement procedures in that provincial government. Fruitless and wasteful expenditure means expenditure that was made in vain and which could have been avoided had reasonable care been exercised. All irregular, fruitless and wasteful expenditure is charged against income in the period in which it is incurred.
1.22 Financing costs Financing costs are recognised in the income statement in the period in which they are incurred.
1.23 Comparative figures Where necessary, comparative figures have been restated to conform to changes in presentation in the current year. Where comparative figures have been adjusted, the nature, amount of, and reason for, such restatement or reclassification have been disclosed.
80 2009 – MINTEK ANNUAL REPORT financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
GROUP MINTEK 2009 2008 2009 2008 R R R R 2. REVENUE Government grants 105,777,683 98,921,930 105,777,683 98,921,930 State Grant 119,152,632 109,271,053 119,152,632 109,271,053 Less: Grants received for projects started before year end but not completed - - - - Portion of grant utilised to acquire fixed assets (13,374,949) (10,349,123) (13,374,949) (10,349,123) Add: Grant received in prior year for projects completed this year - - - - Portion of grant recognised as income from fixed assets purchased - - - - Revenue 283,635,450 264,104,998 283,635,450 264,104,998 Commercial 243,045,372 228,243,408 243,045,372 228,243,408 Earmarked 40,045,372 35,861,590 40,045,372 35,861,590 389,413,133 363,026,928 389,413,133 363,026,928 3. OTHER OPERATING INCOME Operating Income 4,950,555 5,226,172 4,950,555 5,226,172 Library services 17,098 149,583 17,098 149,583 Breach of contract 158,487 56,967 158,487 56,967 Bursary learnerships 2,931,592 529,709 2,931,592 529,709 Bad debts recovered 5,098 66,108 5,098 66,108 Sundry income 1,838,280 4,423,805 1,838,280 4,423,805 Rental income - properties 1,908,743 1,912,335 1,908,743 1,912,335 Investment Property 1,270,738 3,127,647 1,270,738 3,127,647 Rental Income 1,270,738 1,547,272 1,270,738 1,547,272 Fair value adjustment - 1,580,375 - 1,580,375 8,130,036 10,266,154 8,130,036 10,266,154 4. INVESTMENT INCOME Interest earned: fixed deposits 18,564,615 12,171,376 18,564,615 12,171,376 Loans to Associates 1,181,928 3,585,671 - - Interest earned: bank balances 272,161 225,236 272,161 225,236 Interest earned: staff debtors 117,033 (186,176) 117,033 (186,176) Fair value Interest on debtors 5,134,508 2,583,190 5,134,508 2,583,190 25,270,245 18,379,297 24,088,317 14,793,626 5. OTHER OPERATING EXPENSES Consumables 47,715,971 47,394,636 47,715,971 47,394,636 General running expenses 59,547,987 51,352,125 59,547,987 51,352,125 Theft and fraud costs - 1,811,009 - 1,811,009 Repairs and maintenance 9,516,063 (1,269,536) 9,516,063 (1,269,536) Fair value adjustment - investment property 898,249 - 898,249 - Bad debts written off 505,642 505,906 505,642 505,906 Provision for bad debts (165,055) (501,832) (165,055) (501,832) 118,018,857 99,292,308 118,018,857 99,292,308
MINTEK ANNUAL REPORT – 2009 81 financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
GROUP MINTEK
2009 2008 2009 2008
R R R R
6. FINANCE EXPENSES Interest paid guaranteed liability - 22,985 - - Interest other 9,115 1,001 9,115 1001 Fair value interest on debtors - (59,040) - (59,040) Fair value interest on creditors 1,556,689 - 1,556,689 - Interest on post-retirement medical obligation 6,797,577 5,965,082 6,797,577 5,965,082 Interest on finance lease 182,209 203,642 182,209 203,642 8,545,590 6,133,670 8,545,590 6,110,685 7. AUDIT FEES Audit fees 1,500,734 1,883,625 1,500,734 1,883,625 Underprovided prior year - - - - 1,500,734 1,883,625 1,500,734 1,883,625 8. FEES FOR SERVICES Consultants 28,189,203 28,174,163 28,189,203 28,174,163 Legal 67,985 1,407,273 67,985 1,407,273 30,157,188 29,581,436 30,157,188 29,581,436 9. DEPRECIATION Property, plant and equipment Buildings 1,308,966 1,225,906 1,308,966 1,225,906 Plant 2,292,137 2,458,097 2,292,137 2,458,097 Equipment 9,920,497 9,955,658 9,920,497 9,955,658 Vehicles 107,643 107,643 107,643 107,643 Leased assets 512,671 512,671 512,671 512,671 Furniture and fittings 300,448 235,409 300,448 235,409 14,442,362 14,495,384 14,442,362 14,495,384 Intangible assets - Amortisation Computer software 1,057,663 836,941 1,057,663 836,941 15,500,025 15,332,325 15,500,025 15,332,325 10. POST-RETIREMENT BENEFIT OBLIGATIONS Actuarial (gain)/loss - post-retirement medical obligation (4,189,973) 14,947,589 (4,189,973) 14,947,589
Actuarial (loss)/gain - pension fund 63,622 221,378 63,622 221,378 (4,126,351) 15,168,967 (4,126,351) 15,168,967
Number of employees 785 546 785 546
82 2009 – MINTEK ANNUAL REPORT financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
GROUP MINTEK Opening Additions Revaluation/ Disposals Closing Opening Additions Revaluation/ Disposals Closing Balance Transfers Balance Balance Transfers Balance
R R R R R R R R R R 11. PROPERTY, PLANT AND EQUIPMENT 2009 Cost Land 80,300,908 - - - 80,300,908 80,300,908 - - - 80,300,908 Buildings 56,156,960 2,165,649 902,531 - 59,225,140 56,156,960 2,165,649 902,531 - 59,225,140 Plant 41,614,440 306,395 493,786 (1,489,537) 925,084 41,614,440 306,395 493,786 (1,489,537) 925,084 Equipment 91,811,129 13,524,775 (2,337,360) (788,729) 102,209,815 91,811,129 13,524,775 (2,337,360) (788,729) 102,209,815 Vehicles 990,580 - - - 990,580 990,580 - - - 990,580 Furniture and 2,277,909 383,607 114,073 (12,010) 2,763,579 2,277,909 383,607 114,073 (12,010) 2,763,579 fittings
Finance-leased 2,312,644 - - - 2,312,644 2,312,644 - - - 2,312,644 assets
Capital work in 5,928,760 212,075 (5,603,893) - 536,942 5,928,760 212,075 (5,603,893) - 536,942 progress
281,393,330 16,592,501 (6,430,863) (2,290,276) 289,264,692 281,393,330 16,592,501 (6,430,863) (2,290,276) 289,264,692
Accumulated Opening Current Year Transfers Disposals Closing Opening Current Year Transfers Disposals Closing Depreciation Depreciation Depreciation
R R R R R R R R R R Land ------Buildings 11,582,593 1,308,966 (51,697) - 12,839,862 11,582,593 1,308,966 (51,697) - 12,839,862 Plant 24,246,180 2,292,137 (21,568) (1,286,415) 25,230,334 24,246,180 2,292,137 (21,568) (1,286,415) 25,230,334 Equipment 50,339,481 9,920,497 72,904 (690,370) 59,642,512 50,339,481 9,920,497 72,904 (690,370) 59,642,512 Vehicles 643,115 107,643 - - 750,758 643,115 107,643 750,758 Furniture and 1,210,779 300,448 294 (10,583) 1,500,938 1,210,779 300,448 294 (10,583) 1,500,938 fittings Finance-leased 1,055,454 512,671 - - 1,568,125 1,055,454 512,671 - - 1,568,125 assets
Capital work in ------progress
89,077,602 14,442,362 (67) (1,987,368) 101,532,529 89,077,602 14,442,362 (67) (1,987,368) 101,532,529
GROUP MINTEK 2009 2009 Net book value R R Land 80,300,908 80,300,908 Buildings 46,385,278 46,385,278 Plant 15,694,750 15,694,750 Equipment 42,567,303 42,567,303 Vehicles 239,822 239,822 Furniture and fittings 1,262,641 1,262,641 Finance-leased assets 744,519 744,519 Capital work in progress 536,942 536,942 187,732,163 187,732,163
MINTEK ANNUAL REPORT – 2009 83 financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
GROUP MINTEK
Opening Additions Revaluation/ Disposals Closing Opening Additions Revaluation/ Disposals Closing Balance Adjustments Balance Balance Adjustments Balance
R R R R R R R R R R
11.2 PROPERTY, PLANT AND EQUIPMENT
2008
Cost Land 55,408,800 - 24,892,108 - 80,300,908 55,408,800 - 24,892,108 - 80,300,908
Buildings 28,926,107 1,463,059 25,767,794 - 56,156,960 28,926,107 1,463,059 25,767,794 - 56,156,960
Plant 31,840,341 842,236 9,114,344 (182,481) 41,614,440 31,840,341 842,236 9,114,344 (182,481) 41,614,440
Equipment 93,421,475 10,339,588 (8,635,938) (3,313,996) 91,811,129 93,421,475 10,339,588 (8,635,938) (3,313,996) 91,811,129
Vehicles 990,580 - . - 990,580 990,580 . - 990,580
Furniture and 1,931,091 410,407 3,961 (67,550) 2,277,909 1,931,091 410,407 3,961 (67,550) 2,277,909 fittings
Finance- 2,312,644 - - - 2,312,644 2,312,644 - - - 2,312,644 leased assets
Capital work 2,325,125 5,490,315 (1,886,680) - 5,928,760 2,325,125 5,490,315 (1,886,680) - 5,928,760 in progress 217,156,163 18,545,605 49,255,589 (3,564,027) 281,393,330 217,156,163 18,545,605 49,255,589 (3,564,027) 281,393,330
Accumulated Opening Current Year Adjustments Disposals Closing Opening Current Year Adjustments Disposals Closing Depreciation Depreciation Depreciation
R R R R R R R R R R Land ------
Buildings 10,337,375 1,225,906 19,312 - 11,582,593 10,337,375 1,225,906 19,312 - 11,582,593
Plant 17,072,635 2,458,097 4,891,685 (176,237) 24,246,180 17,072,635 2,458,097 4,891,685 (176,237) 24,246,180
Equipment 47,892,565 10,001,223 (4,941,434) (2,612,873) 50,339,481 47,892,565 10,001,223 (4,941,434) (2,612,873) 50,339,481
Vehicles 535,472 107,643 - - 643,115 535,472 107,643 - - 643,115
Furniture and 1,044,995 189,844 29,943 (54,003) 1,210,779 1,044,995 189,844 29,943 (54,003) 1,210,779 fittings
Finance- 542,783 512,671 - - 1,055,454 542,783 512,671 - - 1,055,454 leased assets
Capital work ------in progress
77,425,825 14,495,384 (494) (2,843,113) 89,077,602 77,425,825 14,495,384 (494) (2,843,113) 89,077,602
84 2009 – MINTEK ANNUAL REPORT financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
GROUP MINTEK
11.2 2008 (continued...) 2008 2008
Net book value R R Land 80,300,908 80,300,908
Buildings 44,574,367 44,574,367
Plant 17,368,260 17,368,260
Equipment 41,471,648 41,471,648
Vehicles 347,465 347,465
Furniture and fittings 1,067,130 1,067,130
Finance-leased assets 1,257,190 1,257,190
Capital work in progress 5,928,760 5,928,760
192,315,728 192,315,728
The financial lease assets with a net book value of R 744 519 (2008 - R1 257 190) was secured against the financial lease obligation as disclosed in note 23.
Freehold land and buildings comprise: GROUP AND MINTEK
2009 2008
Land and Buildings - original costs 11,759,900 11,759,900
Revaluations - until 31 March 2006 75,373,132 75,373,132
Revaluation - 31 March 2008 49,324,836 49,256,702
Additions and transfers - 31 March 2009 3,068,180 -
Revaluation at cost 139,526,048 136,389,734
Directors Valuation Portion 175 and portion 226 of the farm Klipfontein, 203-IQ Johannesburg, with buildings thereon. The value of the building complex was estimated at R 136 457 868 by Lyons Financial Solutions (Pty) Ltd., an independent valuator, during the financial year ending 31 March 2008. The latest valuation report was issued on 18 April 2008. The key assumption used was that the value of the property be based as sale of a vacant buildings for rental investment using varoius rental income figures for different areas of the Mintek property. These calcualated rentals were then capitalised at 13%. The estimated useful lives of depreciable property, plant, equipment and vehicles are as follows: Buildings and investment property 50 years Plant 5-10 years Equipment 5-10 years Vehicles 5 years Furniture and fittings 10 years
MINTEK ANNUAL REPORT – 2009 85 financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
GROUP AND MINTEK GROUP AND MINTEK 2009 2008 Opening Additions Adjustments Disposals Closing Opening Additions Adjustments Disposals Closing Balance Balance Balance Balance R R R R R R R R R R 12. INTANGIBLE ASSETS Cost Computer 5,699,468 940,319 (179,515) - 6,460,272 4,653,881 1,004,475 1,112 - 5,699,468 software 5,699,468 940,319 (179,515) - 6,460,272 4,653,881 1,004,475 1,112 - 5,699,468
Accumulated Opening Current Year Transfer Disposals Closing Opening Current Year Transfers Disposals Closing Depreciation Depreciation Depreciation
R R R R R R R R R R Computer 1,267,129 1,057,663 - - 2,324,792 433,146 836,941 (2,958) - 1,267,129 software 1,267,129 1,057,663 - - 2,324,792 433,146 836,941 (2,958) - 1,267,129
Value as at 31 March 2009 4,135,480 Value as at 31 March 2008 4,432,339
The estimated useful lives of depreciable intangible assets are as follows: Computer software: 3-5 years
GROUP AND MINTEK GROUP AND MINTEK 2009 2008 Opening Reversal Revaluation Disposals Closing Opening Reversal Revaluation Disposals Closing Balance Balance Balance Balance R R R R R R R R R R 13. INVESTMENT PROPERTY
Buildings 13,357,057 - (898,249) - 12,458,808 11,776,682 - 1,580,375 - 13,357,057 -Billiton 13,357,057 - (898,249) - 12,458,808 11,776,682 - 1,580,375 - 13,357,057
Fair Value as at 31 March 2009 12,458,808 Fair Value as at 31 March 2008 13,357,057
Portion of portion 175 of the farm Klipfontein, 203-IQ Johannesburg, with buildings thereon. The value of the building complex was estimated at R 12 458 808 by Resurgent Projects (Pty) Ltd., an independent valuator for the year ended 31 March 2009. The latest valuation report was issued on 30 April 2009. The key assumptions used by the independent valuator were the utilisation of the income capitalisation method based on an average investor’s risk rate (13%) and applying additional adjustment due to the specialised nature of the property (1%) and the fact that the building is ostensibly vacant (1%). The revised capitalisation rate of 15% was then applied to a conservative and competitive rental.
Note that in the 2010 financial year, investment property will be reclassified as Property, Plant and Equipment due to the termination of the lease agreement by the previous tenant and also additional operational space required by Mintek.
14.1 INVESTMENT IN SUBSIDIARY Details of subsidiary are as follows:
Name of subsidiary Place of Portion of Financial year Shares at cost Shares at cost Indebtness Indebtness incorporation ownership end 31 March 2009 31 March 2008 31 March 2009 31 March 2008 R R R R Mindev (Pty) Ltd. South Africa 100% 31 March 2009 100 100 (35,665,938) (11,169,625) 100 100 (35,665,938) (11,169,625)
Mindev is engaged in the commercialisation of Mintek's patents and technology through the identification of suitable partners to advance such interests by way of direct investments in equity and through joint ventures. Mintek holds 100% of the issued share capital of Mindev (Pty) Ltd. The loans granted are unsecured and do not have fixed repayments terms.
14.2 INVESTMENT IN ASSOCIATES SUBSIDIARY ASSOCIATE: TOLLSORT (PTY) LTD. Tollsort (Pty) Ltd. ceased its operations at the end of September 2004 and as such there are no current financial statements available for Tollsort to provide adequate disclosure. Mindev has included the operating losses from Tollsort (Pty) Ltd. to an amount of R1 193 043 which represents twenty-five percent of Mindev’s portion of the loan guarantee made to Standard Bank on behalf of Tollsort (Pty) Ltd.
86 2009 – MINTEK ANNUAL REPORT financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
GROUP MINTEK
2009 2008 2009 2008
Notes R R R R
15. LONG-TERM LOANS AND ADVANCES
LONG-TERM DEBTOR - - - -
PGR 17 investments (Pty) Ltd. - 18,710,003 - -
Less: Short-term portion 17 - (18,710,003) -
LONG-TERM DEBTOR - 3,383,000 - -
Mogale Alloys (Pty) Ltd. 3,445,076 8,049,457 - -
Less: Short-term portion 17 (3,445,076) (4,666,457) - -
STAFF LOANS 85,690 791,233 85,690 791,233
Advances to staff for vehicle loans 734,934 1,525,168 734,934 1,525,168
Less: Short-term portion of staff loans 17 (649,244) (733,935) (649,244) (733,935)
85,690 4,174,233 85,690 791,233 The two long-term debtors’ loans related to the disposal of an associate company within the group and a related technology loan. These loans bear interest at prime overdraft rates with fixed terms of repayments. The amounts disclosed represent the fair value of the loans. The staff loans were advanced to qualifying staff to finance purchases of a motor vehicles. The monthly instalments are being deducted from the employees salaries. These loans bear interest at prime overdraft rates less 3% and are repayable within 36 months. The amounts disclosed represents the fair value of the loans.
16. INVENTORY
Consumables 1,728,102 1,112,795 1,728,102 1,112,795
Finished goods 3,360,474 1,835,033 3,360,474 1,835,033
5,088,576 2,947,828 5,088,576 2,947,828
17. TRADE AND OTHER RECEIVABLES
Trade debtors 69,290,225 80,281,220 69,290,225 61,872,651
Short-term portion of long-term debtors 15 3,445,076 23,376,460 - -
Short-term portion of staff loans 15 649,244 733,935 649,244 80,281,220
Project work in progress 8,470,129 5,564,907 8,470,129 5,564,907
Unearned interest on fair value of debtors 530,698 - 530,698 -
Other receivables 1,090,361 1,924,400 1,090,361 5,564,907
South African Revenue Services - 271,823 - -
Less: Provision for bad debts (1,052,910) (1,217,964) (1,052,910) (1,217,964)
82,422,822 110,934,781 78,977,747 87,286,498
The following is an aged analysis of trade receivables at balance sheet date:
0 - 30 days 27,123,160 47,057,764 27,123,160 47,057,764
31 - 60 days 13,125,012 13,229,550 13,125,012 13,229,550
61 - 90 days 7,496,791 5,452,767 7,496,791 5,452,767
90 + days 21,545,262 14,541,139 21,545,262 14,541,139
69,290,225 80,281,220 69,290,225 80,281,220
MINTEK ANNUAL REPORT – 2009 87 financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
GROUP MINTEK
2009 2008 2009 2008
Notes R R R R
17. TRADE AND OTHER RECEIVABLES (continued...)
Provision for doubtful debts The entity’s trade receivables are stated after allowance for doubtful debts based on management’s assessments of the credit worthiness. An analysis of the allowance is as follows:
Balance at the beginning of the year 1,217,965 1,956,127 1,217,965 1,956,127
Impairment losses recognised on receivables 1,052,910 - 1,052,910 -
Amounts written off as uncollectible (605,060) (236,330) (605,060) (236,330)
Amounts recovered during the year (612,905) (501,833) (612,905) (501,833)
Impairment losses reversed - - - -
Balance at the end of the year 1,052,910 1,217,964 1,052,910 1,217,964 When management determines if a debtor is impaired, management considers if there has been any change in the credit quality of the debtor, changes in the payment history and any other evidence that the debtor is impaired.
18. SHORT-TERM INVESTMENTS
Short-term investments 136,206,148 96,621,434 136,206,148 96,621,434 Investments in short-term fixed deposits are held with various reputable financial institutions at market value, and interest has been earned at prime overdraft rates, less varied percentage over the year. Fixed investments held with various public financial institutions is partly earmarked as financing for the post-retirement medical aid liability.
19. TRADE AND OTHER PAYABLES
Trade payables 23,457,019 27,568,399 23,457,019 27,568,399
Unpaid interest – creditors 290,946 - 290, 946 -
Salary related payables 1,087,594 3,226,018 1,087,594 3,226,018
Current portion of lease creditor 359,586 324,835 359,586 324,835
SA Revenue Services - Other 10,582,837 1,659,908 10,582,837 1,659,908
SA Revenue Services - Income Tax 59,117 - - -
Provision for leave pay 11,157,215 11,240,775 11,157,215 11,240,775
Accruals 7,779,557 7,645,026 7,779,557 7,645,026
54,773,871 51,664,961 54,714,754 51,664,961 The following is an age analysis of the trade and salary payables and accruals at balance sheet date:
0 - 60 days 32,324,170 38,439,443 32,324,170 38,439,443
61 - 90 days - - - -
90+ days - - - -
32,324,170 38,439,443 32,324,170 38,439,443
20. DEFERRED INCOME
Deferred income 59,576,740 25,781,743 59,576,740 25,781,743
Advanced client billing (Unearned income) 18,933,552 8,701,091 18,933,552 14,265,998
78,510,292 34,482,834 78,510,292 40,047,741 Deferred income arises as a result of contracts undertaken for the Department of Science and Technology and other government departments in respects of amounts received in cash not yet accounted for as revenue. Advance client billing income arise as a result of contracts undertaken in terms of commercial work where invoices are raised based on work that has not been done. The quantum of cost incurred provides the basis for the level of revenue recognised in the period.
88 2009 – MINTEK ANNUAL REPORT financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
Opening Balance Additional Utilised and reversed Closing Balance provisions R R R R
21. PROVISIONS GROUP AND MINTEK 31 March 2009 Product warranties 409,606 2,197,273 (1,759,040) 847,839 409,606 2,197,273 (1,759,040) 847,839 GROUP AND MINTEK 31 March 2008 Product warranties 483,095 2,908,026 (2,981,515) 409,606 483,095 2,908,026 (2,981,515) 409,606
The provision for product warranties is the entity recognising its probable liability for meeting its obligations in terms of products and services as stipulated in its contracts with its customers.
GROUP MINTEK 2009 2008 2009 2008 R R R R
22. LONG-TERM RETIREMENT BENEFIT Post-retirement medical aid 31,400,000 78,800,000 31,400,000 78,800,000 Pension benefit liability 1,185,000 1,121,378 1,185,000 1,121,378 Long-term retirement benefit obligation 32,585,000 79,921,378 32,585,000 79,921,378 Number of employees/members 166 389 166 389 Post-retirement medical benefits The amounts included in the balance sheet arising from Mintek's obligation in respect of post-retirement medical benefits is as follows:
Present value of obligations as at 31 March 2009 31,400,000 78,800,000 31,400,000 78,800,000 Fair value of plan assets as at 31 March 2009 - - - - Post-retirement benefit obligation 31,400,000 78,800,000 31,400,000 78,800,000 Fixed investments held with various public financial institutions are partly earmarked as financing for the post retirement medical aid liability. Mintek has not assigned a specific fund to hedge against the post-retirement medical aid liability.
Movement in the net liability recognised in the balance sheet Net past service benefit liability: Beginning of the year 78,800,000 61,800,000 78,800,000 61,800,000 Interest cost 6,797,577 5,965,082 6,797,577 5,965,082 Contributions paid to service providers (3,860,467) (3,912,671) (3,860,467) (3,912,671) Net Actuarial (gain)/loss recognised (4,189,973) 14,947,589 (4,189,973) 14,947,589 Settlements (46,147,137) - (46,147,137) - Net-past service benefit liability: End the year 31,400,000 78,800,000 31,400,000 78,800,000 Key assumptions - - Expected long-term rate of return on plan assets 8.5% 9.5% 8.5% 9.5% Expected increase in health care costs 9.5% 7.5% 9.5% 7.5% Amounts recognised in income in respect of the scheme are as follows:
Current cost - 20,912,671 - 20,912,671 Benefits paid Contributions paid (3,860,467) (3,912,671) (3,860,467) (3,912,671)
MINTEK ANNUAL REPORT – 2009 89 financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
GROUP MINTEK
2009 2008 2009 2008
R R R R
22. LONG-TERM RETIREMENT BENEFIT (continued...) Expected average remaining life of employees (years) 16 16 16 16 Sensitivity Analysis On Past Service Cost Discount rate increased by 1% p.a 27,200,000 70,800,000 27,200,000 70,800,000
Discount rate decreased by 1% p.a 36,700,000 88,500,000 36,700,000 88,500,000
Subsidy inflation increase by 1% p.a 36,700,000 88,600,000 36,700,000 88,600,000
Subsidy inflation increase by 1% p.a 27,100,000 70,600,000 27,100,000 70,600,000
Retirement age 58 34,400,000 83,000,000 34,400,000 83,000,000 Medical cover is provided through a number of different schemes. Post-retirement medical cover in respect of qualifying employees is recognised as an expense over the expected remaining service lives of the relevant employees. The group has an obligation to provide medical benefits to certain pensioners and dependants. These liabilities have been provided in full, calculated on an actuarial basis. The liabilities are unfunded. Periodic valuation of these obligations is carried out by independent actuaries every year, the latest one being on 31 March 2009.
Pension benefit liability Pension benefits are provided by membership of the Mintek Retirement Fund (MRF) and the Mintek Employees Retirement Fund (MERF). Movement in the net-liability recognised in the balance sheet
Employer liability 1,121,378 900,000 1,121,378 900,000
Prior year adjustments 622,622 - 622,622 -
Payments (972,000)* - (972,000)* - Interest costs 133,000 - 133,000 -
Actuarial loss 280,000 221,378 280,000 221,378
Net employer liability at end of year 1,185,000 1,121,378 1,185,000 1,121,378
Current cost 63,622 221,378 63,622 221,378 At inception of the Fund a Retirement Reserve was allocated to certain members which will become payable at the time of the members death or withdrawal. The employer also funds a minimum guaranteed pension for a member who entered the fund as at 1 January 1995. For purpose of calculating the valuation investment returns are expected to exceed salary increases by 3 %.
* These payments are made from within the MRF and Mintek has no direct control over it. Contributions are charged against income in the period in which they are incurred. Contributions so charged were as follows :
MRF and MERF 16,263,908 14,055,107 16,263,908 14,055,107
90 2009 – MINTEK ANNUAL REPORT financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
GROUP MINTEK
2009 2008 2009 2008
R R R R
23. FINANCE LEASE OBLIGATIONS
Amount due for finance lease obligation 1,026,966 1,349,889 1,026,966 1,349,889
Less current portion of finance lease obligation (359,586) (324,835) (359,586) (324,835)
667,380 1,025,054 667,380 1,025,054 As of 31 March 2009 the aggregate amounts of minimum lease payments and the related imputed interest under capitalised lease contracts payable in each of the next five fiscal years and thereafter are as follows: Capitalised leased assets
Payable within one year 359,586 324,835 359,586 324,835
Payable within 2-5 years 667,380 1,025,054 667,380 1,025,054
Net lease liability 1,026, 966 1,349,889 1,026, 966 1,349,889 It is the group's policy to lease certain of its equipment under leases. The group has an equipment finance lease agreement with an average lease term of four to six years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental repayments.
24. CONTINGENT LIABILITIES
Legal liabilities Mintek has disputed employment termination contracts with former employees, the aggregate is not expected to exceed R 380 912.
Guarantees Cessions in favour of ABSA Bank for R 3 852 000 to meet requirements for credit card and other banking facilities has been registered.
GROUP MINTEK
2009 2008 2009 2008
25. TAXATION R R R R
South African normal taxation 330,940 1,033,178 - -
330,940 1,033,178 - - No provision for income tax was made for the company as Mintek is exempted in terms of section 10(1)(CA)(i) of the Income Tax Act, No. 58 of 1962. Tax provisions and liabilities are with respect to Mindev and its associated companies and are payable through those entities. The effective tax rate payable by Mindev was 28% (2008 - 29%).
MINTEK ANNUAL REPORT – 2009 91 financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
GROUP MINTEK
2009 2008 2009 2008
Notes R R R R
26. COMMITMENTS
Capital expenditure
Authorised and contracted for 1,265,985 145,570 1,265,985 145,570
Operational expenditure
Contracted for 446,335 6,427 446,335 6,427 The future aggregate minimum lease payments under operating leases are as follows:
Future operating lease charges for vehicles
- Payable within one year 463,118 413,022 463,118 413,022
- Payable between two and five years 308,744 689,459 308,744 689,459
771,862 1,102,481 771,862 1,102,481 Future operating lease charges for office equipment
- Payable within one year 233,183 34,123 233,183 34,123
- Payable between two and five years 164,061 - 164,061 -
397,244 34,123 397,244 34,123 The group leases vehicles and office equipment under operating lease agreements. The lease terms are between 3 and 5 years.
27. CASH GENERATED FROM OPERATIONS
Profit from operations 39,617,599 15,461,073 38,766,611 12,931,565
Adjusted for
Prior year adjustments 29 - (7,616,731) - (7,616,731)
Investment income (25,270,245) (18,379,297) (24,088,317) (14,793,626)
Finance expenses 8,545,590 6,133,670 8,545,590 6,110,685
Investment property fair value adjustment 4 898,249 (1,580,375) 898,249 (1,580,375)
Depreciation 9 15,500,025 15,332,325 15,500,025 15,332,325
Fair Value adjustment - debtors 5,134,508 2,524,150 5,134,508 2,524,150
Fair Value adjustment - creditors (1,556,689) - (1,556,689) -
Loss on disposal of fixed assets 302,908 720,916 302,908 720,916
Provisions raised 21 2,197,273 2,908,026 2,197,273 2,908,026
Increase in post retirement obligations (4,126,351) 15,168,967 (4,126,351) 15,168,967
Taxation 10 330,940 1,033,178 - -
Long term liability raised - 326,724 - 326,724
Cash flow from operations before working capital changes 41,573,807 32,032,626 41,573,807 32,032,626
Working capital changes: 71,665,523 6,715,724 48,351,138 (10,013,874)
Decrease in loans 4,088,543 20,968,958 705,543 1,085,958
(Increase)/decrease in inventories (2,140,748) 331,208 (2,140,748) 331,208
Decrease/(increase) in accounts receivables 28,240,136 (20,873,570) 8,308,751 (17,800,668)
Decrease in payables 3,015,041 (6,881,385) 3,015,041 (6,800,885) Increase in deferred income 38,462,551 13,170,513 38,462,551 13,170,513
113,239,330 38,748,350 89,924,945 22,018,752
92 2009 – MINTEK ANNUAL REPORT financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
GROUP MINTEK
2009 2008 2009 2008
Notes R R R R
27.1 INCREASE IN CASH AND CASH EQUIVALENTS
Cash on hand 9,464,316 10,515,256 9,464,316 10,515,256 Cash on deposit 22,851,380 (9,827,707) 22,851,380 (9,827,707)
Foreign currency (1,728,742) 17,820,775 (1,728,742) 17,820,775 30,586,954 18,508,324 30,586,954 18,508,324
28. DISPOSAL OF SHARE IN ASSOCIATE The insurance and risk management policies adopted by Mintek are aimed at obtaining sufficient cover at the minimum cost to protect its asset base, earning capacity and legal obligations against acceptable losses. All property, plant and equipment are insured at current replacement value. Risks of a possible catastrophic nature are identified and insured with acceptable risks.
29. FINANCIAL INSTRUMENTS
Credit risk Financial assets that could subject the group to credit risk consist principally of bank balances and cash, deposits, trade and other receivables, short-term investments and loans to associates. The group bank balances and short-term investments are placed with several financial institutions with high credit ratings assigned by credit agencies. The Group reviews its trade and other receivables and loans to associates at each balance sheet date to ensure adequate allowances for doubtful receivables or loan write-offs are made, the level of this provision is disclosed in note 17. Credit risk with respect to trade receivables is limited due to the large number of customers comprising the group’s customer base and their dispersion across different industries and geographic areas. Accordingly the group does not have significant concentration of credit risk. The Group considers its short-term investments to be secured and readily available as cash should the need arise for the conversion of the investments. The carrying amounts of financial assets included in the balance sheet represent the group’s exposure to credit risk in relation to these assets. The Group does not have any significant exposure to any customer or counter party.
Interest risk The valuation of interest rate exposure and investment strategies is done by management on a regular basis. The risk arises from substantial interest-bearing assets or long-term borrowings issued at variable interest rates. To minimise exposure to this risk, the Group uses a mixture of variable and fixed interest rates.
Liquidity risk Prudent liquidity risk management implies maintanining cash resources to meet the Group’s cashflow requirements. Management monitors forecasts of its liquidity reserve on the basis of expected cash flow. Analysis of the varoius requirements are disclosed in notes 17, 23 and 19 of the financial statements.
Collateral The Group has a collateral over its financial lease obligation. The extent of the liability outstanding is disclosed in note 23 and the book values of the effected fixed assets are disclosed in note 11.
Fair values As at 31 March 2009 the carrying amount of bank balances and cash, deposits, trade and other receivables, trade and other payables. Contracts in progress, advances received and short-term borrowing approximated their fair values due to the short-term natures of these assets and liabilities. Long-term loans to associates and subsidiaries are interest free with no fixed repayment terms and therefore the fair value of these loans can not be calculated. The fair value of the loans to outside shareholders cannot be determined as the loans are interest free with no fixed terms of repayment.
Foreign currency risk The group undertakes certain transactions denominated in foreign currencies, hence exposures to rate fluctuations arise. The group does not currently enter into forward foreign exchange contracts to buy and sell amounts of various currencies at predetermined exchange rates, as the foreign currency amounts are not significant in relation to the entity’s income. Forward exchange contracts are entered into with large commercial contracts denominated in foreign currency. As a matter of principle, the Group does not enter into foreign currency exchange contracts for speculative reasons. The Group has performed a sensitivity analysis and the estimated fair value gain/(loss) per income statement was determined by comparing the contracted value rate to an equivalent spot rate on the settlement or at year-end rate for outstanding foreign currency.
MINTEK ANNUAL REPORT – 2009 93 financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
2009 2008 GROUP AND MINTEK R R Entity Basic Salary Fees for services as Performance bonus director and other expenses TOTAL TOTAL
30. BOARD MEMBERS AND EXECUTIVE MANANGEMENT REMUNERATION Executive Management - MINTEK Mr M.A. Mngomezulu Mintek 1,417,500 - - 1,417,500 787,500 Dr P.P. Jourdan Mintek (Resigned 31/08/2007) - - - - 560,181 Dr R.L. Paul Mintek 1,270,500 - - 1,270,500 1,155,000 Dr M. Motuku Mintek 1,037,295 - - 1,037,295 938,950 Mr P. Fusi Mintek (Resigned 31/08/2008) 412,500 - - 412,500 945,000 Mr V. Govender Mintek (Resigned 30/04/2008) 69,818 - - 69,818 930,050 Mr S. Simelane Mintek (Appointed 01/07/2008) 720,000 - - 720,000 - Ms R. Bopape Mintek (Appointed 01/06/2008) 780,714 - - 780,714 -
Total Executive Management 5,708,327 - - 5,708,327 5,316,681
Non-executive Management Board members - MINTEK Mr H. Motaung Anooraq Resources Corporation (Appointed - 35,752 - 35,752 39,540 (Chairman) 1 April 2007) Ms L. Mhlabeni Bali Engineering Consultants (Appointed 1 April - 26,330 - 26,330 29,475 2007) Mr M.A. Ntilane Kwane Minerals Processing (Appointed - 35,840 - 35,840 21,615 1 April 2007) Dr J. Bredell Minerals Development Consultant (Appointed - 44,250 - 44,250 44,592 1 April 2007) Mr M. Mphomela Rand Merchant Bank (Appointed 1 April 2007) - 63,858 - 63,858 88,098 Mr R. Havenstein Norilsk Nickel International - 54,138 - 54,138 35,466 Ms G. Mthethwa Standard Bank - 30,260 - 30,260 25,545
Independent Audit Committee members - MINTEK Mr B. Mbewu Self Employed (Appointed 1 April 2007) 13,440 - 13,440 - Ms N. Lila Astute Intellect (1 April 2007) - 8,960 - 8,960 -
MINDEV Mr G. Mosinyi Mindev - - - - 1,691 Mr N. Morrison Mindev - - - - 1,691 5,708,327 312,828 - 6,021,155 5,604,394
94 2009 – MINTEK ANNUAL REPORT financial statements and notes 2009 NOTES to the annual financial statements FOR THE YEAR ENDED 31 MARCH 2009
31. RELATED PARTY
Controlling entity The group comprises of Mintek and its wholly owned subsidiary Mindev (Pty) Ltd. Mindev is engaged in the commercialisation of Mintek patents and technology through the identification of suitable partners and investments in equity associate, namely Tollsort ( Pty) Ltd. The Group, in the ordinary course of business, enters into various sale and purchase transactions with related parties. None of the directors, officers or major shareholders of the Mintek group or their families, to the knowledge of Mintek, had any interest, direct or indirect, in any transactions which has affected or will materially affect Mintek or its investment interest or subsidiaries. Tollsort (Pty) Ltd. ceased its operations at the end of September 2004. Mindev has included the operating losses from Tollsort (Pty) Ltd. to an amount of R1 193 043 which represents twenty-five percent of Mindev’s portion of the loan guarantee made to Standard Bank on behalf of Tollsort (Pty) Ltd.
Related party transactions Related party transactions exist within the group. During the year all selling transactions were concluded at arm's length. Details of material transactions with related parties not disclosed elsewhere in the financial statements are as follows:
Transactions GROUP MINTEK 2009 2008 2009 2008 R R R R Mintek sales to : Department of Minerals and Energy 122,521 7,421,902 122,521 7,421,902 Department of Science and Technology 24,245,580 10,514,459 24,245,580 10,514,459 Other Government Departments 10,105,455 3,213,043 10,105,455 3,213,043 NRF 1,851,931 2,941,547 1,851,931 2,941,547 36,325,487 24,090,951 36,325,487 24,090,951
Trade receivables
Department of Minerals and Energy 24,341 3,490,165 24,341 3,490,165
Other Government Departments 3,870,663 - 3,870,663 3,810,476
3,895,004 3,490,165 3,895,004 7,300,641
Deferred income (Current liabilities)
Department of Minerals and Energy 16,968,823 436,306 16,968,823 436,306
Other Government departments 41,102,586 25,345,437 41,102,586 25,345,437
58,071,409 25,781,743 58,071,409 25,781,743
32. FRUITLESS AND WASTEFUL AND IRREGULAR EXPENDITURE
Theft and fraudulent costs Irregular - 1,811,009 - 1,811,009 Penalties and fines on late payment of VAT/PAYE/SDL/UIF - 1,811,009 - 1,811,009 Less: insurance claim received from Fidelity Guarantee Insurance policy - (2,478,744) - (2,478,744)
- (667,735) - (667,735)
No theft or fraud was identified at Mintek in 2008/2009. In the prior year comparatives R1 181,009 relates to fraudulent documentation submitted for payment in 2007/2008. The employee’s service was terminated and criminal proceedings were initiated. Payment has been received from fidelity insurance. The claimed amount is reflected under the Other Operating Income note 4 in the previous year.
MINTEK ANNUAL REPORT – 2009 95 notes ______
96 2009 – MINTEK ANNUAL REPORT mintek contacts
CEO’s Office Ms Lentheng Letsholo 011-709 4900 Internal Auditor Mr Michael Mamotheti 011-709 4796 External Auditors Auditor General (AG) 011-276 1800 GM’s Secretary Ms Christa Scheepers 011-709 4908 GM’s Secretary Ms Bongi Nthini 011-709 4906
General Managers Contact Number Technology Dr Roger Paul 011-709 4934 Research and Development Dr Molefi Motuku 011-709 4485 Corporate Services Ms Shokie Bopape 011-709 4680 Business Development VACANT 011-709 4779 mintek location Finance Mr Sakhi Simelane 011-709-4328 Mintek, South Africa’s national minerals-research Division Contact Number organisation which was founded in 1934 to assist the mining Advanced Materials Dr Elma van der Lingen 011-709-4471 industry to operate more effectively and profitably, has achieved international recognition for its contributions. Our mining and Analytical Services Mr Monde Mtakati 011-709 4053 minerals industry has been extremely innovative, and many notable Biotechnology Mr Petrus van Staden 011-709 4397 advances in extraction, refining, and manufacturing technology that originated in South Africa have impacted on the minerals industry Business Development Mr Peter Craven 011-709 4165 world-wide. Conferences and Events Ms Zinhle Dladla 011-709 4321 Mintek works with industry and other R&D organisations to Engineering Support Mr Nick Maritz 011 709 4094 research, develop, and implement new and improved technologies in the minerals and metallurgical sectors. South Africa has become Estate Management Mr Muzi Ntombela 011 709-4140 a world leader in this technological niche, with a successful record of technology export, and Mintek itself has become an international High Temperature Technology Mr Tom Curr 011-709 4736 player in the field. Human Resources and Training Ms Makgomo Umlaw 011-709 4373 Mintek’s research complex is situated in Randburg, about – Bursars and SET promotions Mr Garth Williams 011-709 4476 15 kilometres north of Johannesburg, within easy reach of Johannesburg International Airport. Hydrometallurgy Dr Dave Hulbert 011-709 4382 With a total staff of about 800, Mintek employs a highly qualified Information and Communications Mr Haveline Michau 011-709 4256 and motivated workforce with a wide range of skills, including – Communications Dr Hans Alink 011-709 4265 metallurgical, chemical, and electronics engineers, chemists, physicists, and mineralogists. Many of our engineers and scientists – Library Ms Manil Kanniappen 011 709-4277 are recognised as leaders in their fields of specialisation. Information Technology Mr Hennie Venter 011-709 4103 Mintek provides world-class R&D expertise, testwork, and process Measurement and Control Mr Paul Brereton-Stiles 011-709 4355 optimisation for the precious and base metals, ferroalloys, and Minerals Economics and Mr Neale Baartjes 011-709-4414 industrial minerals sectors on an international basis. The activities range from initial investigations to process development, and Strategy Unit the design, construction, and commissioning of industrial plants. Minerals Processing Mr Alan McKenzie 011-709 4339 Working closely with clients, and in conjunction with engineering Mineralogy Ms Amanda Quadling 011-709 4163 partners, Mintek supplies a flexible package of technology for process development and optimisation. Pyrometallurgy Mr Tom Curr 011-709 4642
RP 27/2009 Quality, Environment and Safety Mr Hennie Venter 011-709 4103 ISBN: 978-0-621-38487-1 Small-Scale Mining & Beneficiation VACANT 011-709 4942 Compiled by the Information and Communications Division, Mintek. – Kgabane Ms Busi Ntuli 011-709 4034 Printed by Remata iNathi Communications and Printers (Pty) Ltd. “It should be the policy of any Government, to see that our mineral assets are brought to fruition for the benefit of the people, for increased employment and for the promotion of The start of the construction of Mintek in 1971. our national wealth.” Speech made by Mr Patrick Duncan, then South Africa’s Minister of Mines (The Star, 1934), at the opening of the new mineral research laboratory at the Witwatersrand University.
An aerial view of Mintek in 2009.
200 Malibongwe Drive, Randburg, South Africa. Private Bag X3015, Randburg 2125, South Africa Telephone +27 11 709 4111 Fax +27 11 793 2413 www.mintek.co.za