Lion Smelter Visit 10 November 2017
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Key Agenda Overview Glencore Merafe Mines and Smelters Lion Smelter Overview Lion Smelter Construction HSEC Community Involvement 3
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 Capacity: 1710kt Production Capacity: 940kt Lion ferrochrome (I & II) ❷ Design Capacity: 720kt FeCr Furnaces: 4 Premus Lion II commissioned H1 2014 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 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
MWh/t Continuous improvement on MWh/t efficiency 4.5 4 3.99 Conventional Open furnaces(4.1 MWh/t) Conventional 3.66 3.5 3.46 3.29 3.47 3.3 3.19 3.15 3.25 3.11 3.06 3.14 Bokamoso Tswelopele 3 Lion 1 2.95 2.95 2.93 Lion 2 2.5 Premus (2.4 MWh/t) 2 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 7
t/t Continuous improvement on ore efficiency 3.2 Conventional Open furnaces (3.1 t/t) 3 2.8 2.79 2.69 2.6 2.60 2.52 2.53 Bokamoso 2.4 2.2 Lion 1 2.40 2.27 2.30 2.30 2.22 2.20 2.09 Tswelopele 2 2.00 2.01 2.00 Lion 2 1.8 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 8
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
Lion Smelter 10
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 1-2006 R4.9 billion including Magareng mine, Phase 2-2014 Technology Glencore Proprietary Technology - Premus 11
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 1 500 000 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
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
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
Lion Phase 1 & 2 Construction 15
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
January 2004
October 2004
November 2005
April 2006
July 2006
January 2007
December 2012
July 2013
January 2014
January 2014
February 2014
March 2014
May 2014
Lion HSEC 30
Frequency Rates HSEC Stats 10.00 9.00 8.00 7.00 YTD 2017 350.00 300.00 250.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 January 2017 February 2017 March 2017 April 2017 May 2017 June 2017 July 2017 August 2017 September 2017 FFR 0.00 0.00 0.26 0.26 0.26 0.25 0.25 0.24 0.24 0.23 LTIFR 1.83 1.82 1.80 1.55 2.05 2.51 2.74 3.14 2.87 2.86 RWIFR 3.40 3.38 2.57 2.33 2.30 2.01 1.99 1.45 1.67 1.90 TRIFR 6.28 5.98 5.41 4.92 5.12 5.53 5.73 5.55 5.25 5.48 DISR 191.69 224.70 246.93 258.53 241.58 228.40 238.60 250.86 278.96 323.93 Oct-17 Nov-17 Dec-17 200.00 150.00 100.00 50.00 0.00 31
Safety drive at Lion Commitment base safety - 2008 SafeWork 2014 Safe Family campaign 2015 Positive reinforcement safety drive 2018 Focused on immediate 32
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
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: 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
Bursary statistics 40% 35% 38% 47 Glencore Merafe Bursary Holders in 2017 30% 28% 25% 20% 15% 17% 15% 10% 5% 0% African Males White Males African Females Coloured Females White Females 2% 36
Artisan Learnership Program 80% 70% 70% Total number of learners on Artisan Learnership Program is 201 60% 50% 40% 30% 20% 17% 10% 5% 8% 0% African Males Coloured Males White Males African females 37
Rehlahleng School for Disabled Two Class rooms Kitchen Boys and Girls Bathrooms Water Fencing 38
Katlegong Primary 39 Two Class rooms Kitchen, stove and fridge Boys and Girls Bathrooms Office Water and Electricity Fencing
Questions 40