ANNUAL INTEGRATED REPORT 2017

OUR BUSINESS MODEL:

HOW WE CREATE VALUE*


OUR BUSINESS

ASSESSING, DEVELOPING AND ECONOMICALLY MINING PGM-BEARING OREBODIES
  • Zondereinde – conventional deep-level, mining UG2 and Merensky ore
  • Booysendal – shallow, fully mechanised UG2 mining operation
MINERALS PROCESSING
  • Merensky and UG2 concentrator plants – crushing, milling, flotation
  • Chrome concentrator plants
  • Zondereinde incorporates metallurgical complex – smelter, base-metal removal plant
REFINING

Northam's production refined at:

  • Heraeus refinery, Hanau, Germany
  • Heraeus plant, Port Elizabeth, South Africa
MARKETING

In-house department responsible for marketing and sales of metals in sponge or ingot form:

  • Domestically
  • To major global markets in Asia, Europe, North America


OUR STRATEGY

EMPOWERMENT

26% HDSA equity holding imperative

  • Empowerment shareholding level 31.4%
  • Toro Trust employee profit share scheme of 4% for Zondereinde
INTERNAL OPTIMISATION

Ensuring appropriate Merensky/UG2 ore mix at Zondereinde
Bringing available ore reserves to production
Expanding smelter facilities
Brownfields growth
Strict cost control

  • Mining ratio currently stabilised at 45:55 (Merensky:UG2) at Zondereinde
  • Deepening project on track at Zondereinde
  • Additional new 20MW furnace to be commissioned by December 2017, with Heraeus contributing €20.0 million
  • Acquisition of Tumela mining rights to support an increase in Merensky ratio at Zondereinde
  • Booysendal South project in progress
DIVERSIFICATION

Geographic expansion
Moving towards shallower workings
Mechanisable orebodies
Reducing risk
Moving down the cost curve

  • Seeking appropriate acquisition opportunities
  • Booysendal establishes firm presence on eastern limb
  • Mining both UG2 and Merensky at all operations
  • Expanding chrome operations
  • New shallow mechanised shaft development at Booysendal South reducing operational risk
  • Acquisition of Eland Platinum in progress
  • Acquisition of PGM recycling assets in the US

INPUTS

F FINANCIAL
  • Capital expenditure: R1.6 billion, plus prepayment of R336.4 million on aerial rope conveyor system
  • Cash balance: R1.8 billion
M MANUFACTURED AND INTELLECTUAL
  • Plant, machinery, equipment and infrastructure: R9.0 billion
  • Investment into research and development in terms of time, people and effort to improve safety, efficiencies and mining methods
H HUMAN
  • 12 405 employees (including indirect employees**)
  • Training and development spend:
    • LA R18.5 million spent at Zondereinde
    • LA R2.4 million spent at Booysendal
N NATURAL
  • Mineral reserve: 25.0Moz
  • Mineral resource: 200.3Moz

OUTPUTS

M MANUFACTURED
  • 4.5Mt milled – 2.0Mt at Zondereinde; 2.5Mt at Booysendal North
  • 474 007oz equivalent refined metal produced
  • Total refined metal sales of R6.9 billion:
    • Platinum 274 062oz
    • Palladium 131 962oz
    • Rhodium 41 742oz
    • Gold 5 815oz
    • Total 453 581oz

OUTCOMES

F FINANCIAL
  • LA R430.2 million to taxes and royalties
  • R123.0 million to providers of capital, excluding Zambezi preference shares
H HUMAN
  • R1.9 billion to salaries, wages and other benefits
SOCIAL
  • R4.3 million to corporate social responsibility
  • R3.4 billion to BEE suppliers


IMPACTS

H HUMAN
Accommodation:
  • LA 397 housing units sold to employees
  • 2 852 single units created
  • Employee accommodation and upgrades:
    R494 million spent at Zondereinde
    R129 million spent at Booysendal
Safety:
  • 1 fatality at Zondereinde
  • Zero fatalities at Booysendal
  • LA 1.65 LTIIR at Zondereinde
  • LA 0.30 LTIIR at Booysendal
Health:
  • R73.1 million contributed to health care funds
  • 5 304 employees received VCT
  • 113 new cases of NIHL
N NATURAL
  • Water recycled increased to 89% from 86%
  • Electricity consumption at Zondereinde increased by 3% to 662 742MWh
  • Electricity consumption at Booysendal increased by 8% to 142 696MWh
  • CO2 emissions 936 692 tonnes
  • SO2 emissions LA 6 747 tonnes
  1. * Data included in business model is at 30 June 2017
  2. ** Indirect employees are those people employed by contracting companies i.e. providers of specialised and/or technical services to the operations.