Lion Smelter Visit 10 November 2017

Size: px

Start display at page:

Download "Lion Smelter Visit 10 November 2017"

Brooke Griffith
5 years ago
Views:

1 Lion Smelter Visit 10 November 2017

2 Legal notice/disclaimer This presentation is published solely for informational purposes and does not constitute investment, legal, tax or other advice nor is it to be relied upon in making an investment decision. Information contained herein has been taken from sources considered by Merafe Resources to be reliable but no warranty is given that such information is accurate or complete and it should not be relied upon as such. Views and opinions expressed in this presentation reflect the judgment of Merafe Resources as of the date of this presentation and are subject to change. Merafe Resources will not be responsible for any liability for loss or damage of any kind which arises, directly or indirectly, and is caused by the use of any of the information provided. The entire presentation is subject to copyright with all rights reserved. The information contained herein shall not be published, rewritten for broadcast or publication or redistributed in any medium without prior written consent from Merafe Resources. Prospective investors should take appropriate investment advice and inform themselves as to applicable legal requirements, exchange control regulations and tax considerations in the countries of their citizenship, residence or domicile. The distribution of the information contained in this presentation in certain countries may be restricted by law and persons who access it are required to inform themselves and to comply with any such restrictions. This information does not constitute an offer or solicitation in any jurisdiction in which such an offer or solicitation is not authorised or to any person to whom it is unlawful to make such an offer or solicitation. Past performance is not a guarantee of future performance. The price of shares can go down as well as up and may be affected by change in exchange rates, market conditions and risks associated with a mining venture. 2

3 Key Agenda Overview Glencore Merafe Mines and Smelters Lion Smelter Overview Lion Smelter Construction HSEC Community Involvement 3

4 Overview 4

Geographical Positioning and Capacities Smelters Lydenburg ❶ Design Capacity: 396kt FeCr Furnaces: 3 Premus and 1 semiclosed conventional Ports Maputo Richards Bay Durban Mines Kroondal ❻ Processing

semi-closed conventional with Bokamoso Outokumpu pelletising Boshoek ❹ Design Capacity: 240kt FeCr Furnaces : 2 Outokumpu closed with pelletising Rustenburg ❺ Design Capacity: 430kt FeCr Furnaces: 6

5 Geographical Positioning and Capacities Smelters Lydenburg ❶ Design Capacity: 396kt FeCr Furnaces: 3 Premus and 1 semiclosed conventional Ports Maputo Richards Bay Durban Mines Kroondal ❻ Processing Capacity: 1710kt Production Capacity: 940kt Lion ferrochrome (I & II) ❷ Design Capacity: 720kt FeCr Furnaces: 4 Premus Lion II commissioned H Wonderkop ❸ Design Capacity: 553kt FeCr Furnaces: 6 semi-closed conventional with Bokamoso Outokumpu pelletising Boshoek ❹ Design Capacity: 240kt FeCr Furnaces : 2 Outokumpu closed with pelletising Rustenburg ❺ Design Capacity: 430kt FeCr Furnaces: 6 semi-closed conventional with Tswelopele Outokumpu pelletising ❹ ❺ ❸ ❼ ❻ ❷❽ ⓫❶❿ ❾ UG2 Plants West ❼ Processing Capacity: 3380kt Production Capacity: 2020kt Thorncliffe ❽ Processing Capacity: 1410kt Production Capacity: 850kt Helena ❾ Processing Capacity: 1300kt Production Capacity: 760kt Magareng ❿ Processing Capacity: 1340kt Production Capacity: 730kt UG2 Plants East ⓫ Processing Capacity: 1900kt Production Capacity: 130kt 5

Glencore Merafe Smelters World-leading technology and processes: 22 furnaces spread across five

Three technologies are employed; conventional, Outokumpu and Premus.

globally, and is used at the Lion and Lydenburg plants.

6 Glencore Merafe Smelters World-leading technology and processes: 22 furnaces spread across five smelting facilities in South Africa, with a capacity of 2.34 million tonnes per annum. Three technologies are employed; conventional, Outokumpu and Premus. Premus technology is the most sophisticated ferrochrome production technology currently in existence globally, and is used at the Lion and Lydenburg plants. The process was designed to reduce electricity consumption in countries with expensive electricity and reduce reliance on expensive reductants whilst still maintaining focus on a premium product. 6

7 MWh/t Continuous improvement on MWh/t efficiency Conventional Open furnaces(4.1 MWh/t) Conventional Bokamoso Tswelopele 3 Lion Lion Premus (2.4 MWh/t)

8 t/t Continuous improvement on ore efficiency 3.2 Conventional Open furnaces (3.1 t/t) Bokamoso Lion Tswelopele Lion

9 Cr Mines and UG2 production Mined ore: total capacity of 3.6 million tpa Western Mines: Kroondal, Waterval Eastern Mines: Thorncliffe, Helena and Magareng UG2 ore: total capacity of 2.35 million tpa 8 Operations in West 1 Operation in East 9

10 Lion Smelter 10

Lion Smelter Description 360ktpa ferrochrome production per Phase Rationale Lowest cost (opex) & best return on capex ferrochrome expansion Budgeted Capex

11 Lion Smelter Description 360ktpa ferrochrome production per Phase Rationale Lowest cost (opex) & best return on capex ferrochrome expansion Budgeted Capex R1,7 billion including the Helena mine, Phase R4.9 billion including Magareng mine, Phase Technology Glencore Proprietary Technology - Premus 11

12 Lion I & II addresses the key challenges facing the SA Ferrochrome industry Challenge Escalating electricity costs Increased fine ore Skills shortages Lagging logistics Rising mining costs Reductant shortages Solution Lowest specific electricity consumption 37% better than nearest rival tonnes per annum pelletizing capacity In-house training centre Close to Maputo Harbor ECM ore utilization Close to Mototolo UG2 Reduced reliance on coke consumption (20% vs 40%) 12

13 Premus is the superior technology choice Chrome operations have access to a suite of technologies: Conventional Process, Semi-closed and pellets 13 of the 22 furnaces in the PSV are conventional furnaces Lowest capital cost per ton of alloy Outokumpu Process Basis for the 2 Boshoek furnaces Accounts for most recent expansions in FeCr in South Africa and worldwide DC Arc/ Plasma Process Only 3 furnaces built in South Africa High technological risk, expertise not generally available Poor availability and very high specific energy consumption at these installations, but new developments have made the technology much more competitive. Premus (Lion) Developed, optimised and modelled at Lydenburg plant Implemented at Lion 13

14 Complex process SCREENING BENTONITE RAW MATERIALS ANTHRACITE DRYING MILLING PELLETIZING ORE BATCHING HOT GAS MIXING ROASTING COAL MILLING LUMP REDUCTANTS PRE-HEATING USABLE OFF GAS CHAR, COKE, ANTHRACITE FLUXES BATCHING Complicated Hot loading system GAS SCRUBBING GRANULATION SLAG LUMPY CRUSHING SCREENING 14

15 Lion Phase 1 & 2 Construction 15

16 Lion Phase I & II Construction Entire project managed by in-house project management team - Wherever possible, fabrication, erection and civil work conducted in-house Team has an exemplary track record - Managed all of Glencore Alloys major projects, including the Wonderkop Smelter, Lion Phase 1 and Lion Phase 2 16

17 January 2004

18 October 2004

19 November 2005

20 April 2006

21 July 2006

22 January 2007

23 December 2012

24 July 2013

25 January 2014

26 January 2014

27 February 2014

28 March 2014

29 May 2014

30 Lion HSEC 30

31 Frequency Rates HSEC Stats YTD January 2017 February 2017 March 2017 April 2017 May 2017 June 2017 July 2017 August 2017 September 2017 FFR LTIFR RWIFR TRIFR DISR Oct-17 Nov-17 Dec

32 Safety drive at Lion Commitment base safety SafeWork 2014 Safe Family campaign 2015 Positive reinforcement safety drive 2018 Focused on immediate 32

33 Consequence Model Consequence: Experience is; Relative Power of Consequence Positive (P) Negative (N) Occurs after behaviour is; Immediate (I) PIC Future (F) Certainty of consequence after behaviour; Certain (C) NIC PIU PFC NFC Uncertain (U) Most Powerful NIU PFU NFU Least Powerful 33

34 Corporate Social Investment 34

Steelpoort Training Centre Technical Information Community: Sekhukhune and Neighbouring Communities Glencore Alloys Operation: Eastern Leg Operations Spend: R 40 000 000 Percentage complete:

& Building 664 Qualified Operative Qualification 259 Qualified National Tooling Institution Programme 75 Qualified Maths & Science, Cambridge Matric 75 Passed NATED N1 & N2 120 Passed

35 Steelpoort Training Centre Technical Information Community: Sekhukhune and Neighbouring Communities Glencore Alloys Operation: Eastern Leg Operations Spend: R Percentage complete: 100% Project Description Artisan Development 295 Qualified L2 Eng. Qualifications 132 Qualified L1 Generic Eng. Qualification 242 Qualified Portable Skills. Eng. Met. & Building 664 Qualified Operative Qualification 259 Qualified National Tooling Institution Programme 75 Qualified Maths & Science, Cambridge Matric 75 Passed NATED N1 & N2 120 Passed Beneficiaries Local community Local Government Business: Lion Smelter Eastern Chrome Mines Mototolo Platinum Mine Lydenburg Smelter Two Rivers Dwars Rivier Samancor Modikwa Small businesses, providing a service to local operations 35

36 Bursary statistics 40% 35% 38% 47 Glencore Merafe Bursary Holders in % 28% 25% 20% 15% 17% 15% 10% 5% 0% African Males White Males African Females Coloured Females White Females 2% 36

37 Artisan Learnership Program 80% 70% 70% Total number of learners on Artisan Learnership Program is % 50% 40% 30% 20% 17% 10% 5% 8% 0% African Males Coloured Males White Males African females 37

38 Rehlahleng School for Disabled Two Class rooms Kitchen Boys and Girls Bathrooms Water Fencing 38

39 Katlegong Primary 39 Two Class rooms Kitchen, stove and fridge Boys and Girls Bathrooms Office Water and Electricity Fencing

40 Questions 40

INVESTOR SITE VISIT WONDERKOP SMELTER

INVESTOR SITE VISIT WONDERKOP SMELTER 6 MAY 2016 Presented by Zanele Matlala (CEO) and Amanda Magro (Wonderkop General Works Manager) Presented by Zanele Matlala (CEO) and Kajal Bissessor (FD) Legal notice/disclaimer