Annual Integrated Report 2016

Focus on the business

OUR BUSINESS MODEL: HOW WE CREATE VALUE

Our vision: To grow the business into a long-life, major producer of PGMs, and doing this safely and efficiently while continuously moving down the cost curve.

Our business OUR BUSINESS

ASSESSING, DEVELOPING AND ECONOMICALLY MINING PGM-BEARING ORE BODIES

  • Zondereinde – deep-level, mining UG2 and Merensky ore
  • Booysendal – shallow, fully mechanised UG2 mining operation

MINERALS PROCESSING

  • Merensky and UG2 concentrator plants – crushing, milling, flotation
  • Metal in concentrate produced
  • Zondereinde incorporates metallurgical complex – smelter, base-metal recovery 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 OUR STRATEGY

Our strategy is based on:

GROWTH

  • Underpinned by empowerment transaction
  • Acquisition of Everest
  • Development of Booysendal South
  • Smelter expansion

DIVERSIFICATION

  • Mechanisable orebodies
  • Lower cost production
  • Shallow workings

OPTIMISATION

  • Husbanding Merensky reef
  • LoM extension at Zondereinde to more than 20 years
  • Improved access to Merensky reef on 18 level via decline system
  • Solving metallurgical constraints to treat more UG2 ore
  • Ramp up to full production at Booysendal
  • Extension of Booysendal deepening project

Inputs INPUTS

F FINANCIAL

  • Capital expenditure: R1.2 billion
  • Cash balance: R3.1 billion

M MANUFACTURED AND INTELLECTUAL

  • Plant, machinery, equipment and infrastructure: R7.9 billion
  • Investment into research and development in terms of time, people and effort to improve safety, efficiencies and mining methods

H HUMAN

  • 11 312 employees (including contractors)
  • Training and development spend:
    LA R21.0 million spent at Zondereinde
    LA R3.2 million spent at Booysendal

N NATURAL

  • Mineral reserve: 24.5Moz
  • Mineral resource: 200.3Moz

Outputs OUTPUTS

M MANUFACTURED

  • 4.2Mt milled – 2.0Mt at Zondereinde; 2.2Mt at Booysendal North
  • 13 591kg of metal produced from own operations
  • Total refined metal sales of R6.1 billion:
    • Platinum 270 194Moz
    • Palladium 134 101Moz
    • Rhodium 42 632Moz
    • Gold 5 466Moz
    • Total: 452 393Moz

Outcomes OUTCOMES

F FINANCIAL

  • R479.2 million to taxes and royalties
  • R39.6 million to providers of capital, excluding Zambezi preference shares

H HUMAN

  • R1.8 billion to salaries, wages and other benefits

SOCIAL

  • R3.5 million to corporate social responsibility

Impacts [icon] IMPACTS

H HUMAN

Accommodation:
  • LA 368 housing units sold to employees
  • 2 440 single units created
  • Employee accommodation and upgrades:
    R24.4 million spent at Zondereinde
    R14.3 million spent at Booysendal
Safety:
  • Zero fatalities
  • LA 1.92 LTIIR at Zondereinde
  • LA 0.44 LTIIR at Booysendal
Health:
  • R68.8 million contributed to health care funds
  • 2 153 employees received VCT
  • 72 new cases of NIHL

N NATURAL

  • Water consumption increased by 12% to 4 786 000m³
  • Electricity consumption at Zondereinde increased by 3% to LA 646 785MWh
  • Electricity consumption at Booysendal increased by 15% to LA 132 790MWh
  • CO2 emissions 844 824 tonnes
  • SO2 emissions LA 6 987 tonnes
smart platinum mining