investor site visit wonderkop smelter · 2016-05-05 · merafe resources ltd | investor...

INVESTOR SITE VISIT – WONDERKOP SMELTER6 MAY 2016

Presented by Zanele Matlala (CEO) and Amanda Magro (Wonderkop – General Works Manager)

Presented by Zanele Matlala (CEO) and Kajal Bissessor (FD)

Merafe Resources Ltd | Investor Presentation – Wonderkop Site Visit 6 May 2016

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 The information contained herein shall not be published, rewritten for broadcast or publication or redistributed in any medium without prior written consent from Merafe Resources.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.

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PROGRAMME

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1. Depart Lanseria 08h30

2. Arrive Wonderkop Smelter 10h30

3. Welcome by CEO, Zanele Matlala

4. Presentation and Safety Video by Amanda Magro

5. Guests Change in Safety Apparel

6. Site Visit 11h00

7. Lunch 13h00

8. Depart for Lanseria 14h15


TABLE OF CONTENTS

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1. Overview of the Glencore – Merafe Venture

2. Historical projects

3. Challenges facing the SA Ferrochrome Industry

4. Comparison of Smelting Technologies

5. Our Marketing Agents Offering

6. Labour Relations

7. Overview of the Wonderkop Smelter and Bokamoso Pelletising and Sintering

Plant


Glencore – Merafe Chrome Venture

5

Lydenburg ❶

Design Capacity: 396kt FeCr

Furnaces: 3 Premus and 1 semi-

closed conventional

Wonderkop ❸


Furnaces: 6 semi-closed

conventional with Bokamoso

Outokumpu pelletising

Boshoek (PSV) ❹


Furnaces : 2 Outokumpu closed

with pelletising

Lion Ferrochrome (I & II) ❷


Furnaces: 4 Premus

Lion II commissioned during H1

Rustenburg ❺

Design Capacity: 430 kt FeCr

Furnaces: 6 semi-closed

conventional with Tswelopele

Outokumpu pelletising

Smelters

❶❷

❸❹❺

❻❼

UG2 Plants – East ⓬

Kroondal ❻

Processing Capacity: 1,730kt

Production Capacity: 967kt

Mines

Waterval West ❼

Processing Capacity: 480kt


UG2 Plants – West ❽

Production Capacity: 2,220kt

Thorncliffe ❾❿Processing Capacity: 1,380kt


Helena ❿



Magareng ⓫




❽

❾⓫⓬

❿

PortsMaputo ●

Richards Bay ●

Durban ●

●

●

●


Diversified Operations

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• Geographically

– 22 furnaces

– 8 mines (ore and quartzite)

– 9 UG2 concentrator plants Long term contracts

• Technologically

– Conventional Process, Semi-Closed 13 of the 22 furnaces are conventional/semi-closed technology

Ore and reductants are fed cold with minimum pre-processing directly into open submerged arc

furnaces

Lowest capital cost per tonne of alloy

– Outokumpu Process Basis for the 2 Boshoek chrome furnaces and Bokamoso & Tswelopele pelletising plants

A sintering and pelletising plant supplies cold pellets to the pre-heater of the closed submerged

arc furnaces at Boshoek Smelter

Cold pellets are fed directly to the semi-closed furnaces

Result in an increase in chrome recovery, reduction in energy and ore efficiencies

– Premus (Lydenburg and Lion I & II) Developed and modelled at Lydenburg plant

A mixture of fine ore, reductants and binder is milled and pelletised

The pellets are pre-reduced in rotary kilns and the metallized pellets are hot charged to closed

furnaces

The use of metallized pellets results in high chrome recoveries and the lowest specific energy

consumption


Historic Projects Delivered on Time and on

Budget

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Commissioning of Lion II Smelter

Commissioning of Tswelopele

Pelletiser

Waterval Mine Development -

360ktpa of Chrome Ore

Ramp-up of Lion II

Commissioning of Boshoek smelter

Acquired interest in Wonderkop smelter and related mines

Commissioning of Lion I smelter

Commissioning of Bokamoso Pelletiser

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Merger to form Glencore-Merafe Chrome Venture

2011 2012 2013 2014 2015


Growth Through Innovation

8

• Significant investments over the past decade to address:

– Power efficiency

– Power constraints

– Ore efficiency

– Process efficiency

– Escalating costs

• Lion phases 1 and 2

– Development of the Premus Technology

• Bokamoso Pelletising Plant: Western limb, Wonderkop

• Tswelopele Pelletising Plant: Western limb, Rustenburg

• Magareng Mine: Eastern Limb, Steelpoort

• UG2 Operations

– Our own mines

– Long term contracts with platinum producers


Challenges Facing the South African Ferrochrome IndustryGlencore – Merafe Difference

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SA Ferrochrome Challenge The Glencore – Merafe Difference

Rapidly escalating power costs Growth Through Innovation• Lion I & II, Lydenburg: Premus technology

• All other plants: Sintered pelletising technology

Power supply constraints Growth Through Innovation• Lion I & II, Lydenburg: Premus technology


Limited local coke supply Growth Through Innovation• Lion I & II, Lydenburg: Premus technology


Ore costs escalating Growth Through Innovation• Lion I & II, Lydenburg: Premus technology


• Magareng, UG2 , own mines

• Third part ore contracts

Faltering financial backing Financial Stability • Majority owned by Glencore PLC

Non integrated producers Fully Integrated Diversified Operations

Logistics constraints Diversified Port Usage

Diversified Road and Rail Inland Transport

Labour Relations: Industrial Action Diversified Operations

Diversified Logistics


Comparison of Smelting TechnologiesPremus technology provides a significant advantage

68

77

9088

65

70

75

80

85

90

95

Con Outk DC Arc Premus

%

4.1

3.5

4.4

2.4

0

1

2

3

4

5

6

Con Outk DC Arc Premus

60

40

0

18

0

10

20

30

40

50

60

70

Con OutK DC Arc Premus

% o

f D

ry F

ixed C

arb

on

10

Chrome Recovery for Available Technologies

Coke Consumption for Different Technologies

MWh per tonne for Available Technologies

MW

h p

er t

on

ne

allo

y

6% 6%

12%

19%

36%

44%

53% 52%55% 54%

0%

10%

20%

30%

40%

50%

60%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

% o

f A

nth

raci

te

Reduction in Coke Dependency

Substitution with Anthracite which is a low cost reductant

F


Our Marketing Agents Superior Offering

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• Logistics

– Glencore has dedicated logistic teams in all major offices

Direct relationships with shipping lines, port agents and port authorities worldwide

Personnel available on site at load and discharge ports

– Logistics solutions ensure smooth, uninterrupted supply to our customers

– Diversified port usage

Maputo

Richards Bay

Durban

– Dedicated storage areas

– Dedicated warehouse space

• Diversified road and rail inland transport

– Contracts for both rail and road from inland plants to the ports

– Major long term road and freight contracts

• Dedicated global shipping desk

– Caters and adapts to customer delivery requirements


Labour Relations

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• Sound Labour Relations

– Employee Share Ownership Plan agreed with Unions

– Competitive Salary Structure

Home ownership incentivised

No hostels

Full pension contribution from company

Full medical aid from company

• Low level of migrant labour

• Corporate Social Investment Programme

– Community projects

13Wonderkop Plant

WONDERKOP SMELTER

“The home of modern, cost effective charge chrome production”

The plant is in the Bojanala District of the North West Province, South Africa. It is one of the lowest

cost producers of ferrochrome in the world.

Wonderkop which consists of a sinter plan and smelter plant is close to raw material supplies and

able to use a variety of different raw materials effectively making it highly efficient.


Aerial Overview

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Smelter Plant

Bokamoso –

Sinter Plant

Aquarius


Smelter Overview

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Overview

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• Six Furnaces 553,000 tonnes of ferrochrome per annum (incl. Metal Extraction Plant)

– 270 MVA installed furnace Capacity (semi-closed submerged arc)

– Normal Grade Product (>50%Cr)

– Alternative Grade Product (<50%Cr)

• Agglomeration Capacity 1,200,000 tonnes per annum

– Bokamoso Sinter Plant – 1,200,000 tonnes p.a

Outukumpu Technology

High temperature (1200C) sintering process.

High flexibility in fine ore input selection

• Metal Extraction Plant

– Magnetic and gravity separation

– Recovery Product (Typical < 3% slag)


History

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1995 Wonderkop Project started – Greenfields Project

1996 Furnace 1 and 2 commissioned

1997 Alloy Metal Extraction Plant commissioned

1998 Furnace 3 and 4 commissioned

1999 Pelletising South Plant commissioned

2000

ISO 9001 certification (May 1999)

Block Plant commissioned

2001 ISO 14001 certification

Furnace 5 and 6 commissioned (July 2001)

2003 Second Alloy Metal Extraction Plant commissioned

2004 Pelletising North Plant commissioned

2007 Bokamoso Sinter Plant commissioned (August 2007)


Smelter Operation – Process Flow

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F1 & F2

F3 & F4

F5 & F6

RM

BUNKERSRM MIXING

METAL SEGREGATION

PER PRODUCT TYPE,

CRUSHING & SCREENING

SLAG & METAL

TAPPING (DUAL

SKIMMER)METAL INGOT

COOLING &

BREAKING

TRANSIT

SLAG DUMP

METAL

EXTRACTION

PLANT

FINAL SLAG

STOCKPILE

RECOVERED

METALTRUCK OR RAIL

TO PORT

SHIP TO CUSTOMER

RM RECEIPTS & HANDLING

COARSER ORE, REDUCTANTS & FLUXES

FINE ORE

PELLETIZING

RM FLOW SLAG FLOW METAL FLOW


Production Input and

Output

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BOKAMOSO SINTER PLANT

ORE FEED:

• UG2

• LG6 Met Grade

Concentrate

• Other Ore

PELLET QUALITY:

Cr2O3 Depending on

Cr:Fe quality of ore

input

1 250˚C Sinter Steel Belt

• Pellets

• ESKOM

• Dolomite• Quartz• Limestone

REDUCTANTS0.68 t

ORE2.20 t

Cr – 47- 49%

Si – 3.0-7.0%

S – <0.050%

Furnace Availability = 98%

FURNACE

Ferrochrome -

1.0 tonne

Slag – 1.2 tonnes

• ESKOM

FLUX0.436 t

ENERGY(excl aux)3.5 MWh


Bokamoso

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• Bokamoso means “the future” in Tswana (one of South Africa’s 11

official languages)

• The plant has a design capacity of 1.2 million tonnes of pellets per

annum and consists of two similar production lines

Bokamoso has produced 7,981,055 tonnes of sintered pellets for the

period Aug 2007 up to Apr 2016

• During the South African winter period (Jun-Aug), extensive

maintenance is performed on both phases to ensure optimal efficiency

of the plant


Aerial View – Bokamoso Sinter Plant

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Sinter Plant – Process Flow

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RAW MATERIAL

HANDLINGDAY BINS GRINDING

BALL MILL

SLURRY

MIXING TANKCERAMIC

FILTERS

FEED BINS

BENTONITE ANTHRACITE

MIXERPELLETISING

DRUMROLLER

SCREEN

SHUTTLE FEEDER &

ROLLER FEEDER

BOTTOM PELLETSSTEEL BELT SINTERING

FURNACE

BURNERS

PRODUCT

BINS

SCREENS

PRODUCT

STORAGE

BOTTOM PELLETS


Sinter Plant – Raw Material Flow

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Metal Extraction Plant – Process Flow

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Our Team

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• Competitive

• Positive

• Team Players

• Passionate

• Entrepreneurial Culture

• Ownership

• Committed


Thank you for your attendance!

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investor site visit wonderkop smelter · 2016-05-05 · merafe resources ltd | investor...

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