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Creating strength.
NERSA Presentation MYPD 4
January 2019
1
Creating strength.
• Introduction to Manganese Metal Co.
o 10 Key Facts About MMC
o Beneficiation Impact in South Africa
• 3 main issues
o 3 Year pricing without a strategy
o Short Term Framework
o Cross subsidies
• Proposal
• Final take away
2
Topics
Creating strength. 3
10 Key Facts About MMC
28,000 tpa nominal production, operating
at full capacity 1 World’s largest producer of
99.9%, selenium-free electrolytic manganese metal 2
Established 1974 44 years’ of industry
experience 3 600 Employees 400 permanent 4
100% locally owned and operated. 5 95% of production is exported, direct
relationships with all customers 6
ISO certification Quality Management
9001 and Environmental Protection 14001 7 Exclusive producer of electrolytic
manganese metal in Southern Africa 8
Beneficiation of 80,000t of Manganese
ore fines from Northern Cape 9 Consistent 40MW offtake from Eskom
with a exceptionally high load factor. 10
Creating strength. 4
Manganese Beneficiation for South Africa
Mbombela (Nelspruit)
Durban
Gauteng North West
Northern Cape
Eastern Cape
Western Cape
Kimberly Free State
Polokwane
Limpopo
Mpumalanga
Mafikeng
Bloemfontein
Bisho
Cape Town
Pietermaritzburg
Johannesburg
Pretoria
Maputo
Kwazulu-Natal
Hotazel
Main ports used: Durban &
Maputo
MOZAMBIQUE
SWAZI-
LAND
SOUTH
AFRICA $80m Exporting 28,000t ElMn
$10m Exporting 80,000t Mn Washer Tailings
Beneficiation
By processing 80,000t of Mn Ore
washer tailings to 28,000t of
Manganese Metal creates an
additional
R950M value for SA Inc
Creating strength.
MANNIKIN GENERAL TRADING CC
SIZANANE 7 CC
DIRARO LOGISTICS
SASOL OIL (PTY) LTD
SEMICONDUSTOR SOLUTIONS
S & R PROJECTS
LOESCHE SA
GREEN DOT PARTNERSHIP
ASM ANTON SMIT MAINTENANCE
LECO AFRICA (PTY) LTD
TITAN PROJECTS CC
ELECTRO SYSTEMS ELECTRICAL ENG
ENGEN PETROLEUM LTD
ADA INDUSTRIAL SERVICES PTY LTD
BIDVEST PRESTIGE CLEANING SERVICE
(PTY) LTD
OHS CARE CC
DW RUBBERLINERS CC
SIMUNYE BOILER REPAIRS
KELSEY CONSTRUCTION CC
HARVEY WORLD TRAVEL
WILZA CRANE HIRE CC
REFRACTORY & FIBRE INSTALLATIONS
RJK MACHINES SERVICES C.C.
BUCO NELSPRUIT
MINERAL MINING TRAINING INSTITUTE
(PTY) LTD
HI-TEC GUARDS NELSPRUIT
D HENNING LOODGIETERS
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GUNNING & SON C.C.
AIREF SERVICES CC
METALWORLD (PTY) LTD
J & M CONSTRUCTION CC
FIDELITY SECURITY SERVICES
ROCKY'S ARMATURE WINDERS CC
AGTI MINING SUPPLIES (PTY) LTD
EMS BELTING MPUMALANGA C.C
HI-TECH REFRACTORIES (PTY) LTD
AIR LIQUIDE (PTY) LTD
IMPROCHEM (PTY) LTD (CUSTOMER
ACCOUNT NO. 10830444)
GROWTH-LINK (PTY) LTD
WINMAR DISTRIBUTORS (PTY) LTD
DANS ELECTRICAL SERVICES
TELECONTROLS
MORSE NURSERIES (PTY) LTD
FIRE CONTROL SECURITY SERVICES
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SEW EURODRIVE (PTY) LTD
IDEAL PATTERNMAKERS & TOOLING (
PTY)LTD
AQUAFARM & DESIGN CC
WARDS COMPRESSORS AND
ENGINEERING SERVICES CC
BLUE CUBE SYSTEMS (PTY) LTD
SIVULAMATFUBA RUBBERLINING
SERVICES (PTY) LTD
ADROITLY
MINIAN STEEL CC
ACCTECH SYSTEMS (PTY) LTD
BAMBANANI HYDRAULICS
KSB PUMPS SA (PTY) LTD
YANKA LABORATORIES
ECHO CRANES & STEEL CC
NELSPRUIT RHODES ENGINEERING
MORRIS MATERIAL HANDLING SA
(PTY) LTD
STEWARTS & LLOYDS NELSPRUIT (P
SIZONKE TRADING (PTY) LTD
FREUDENBERG FILTRATION
TECHNOLOGIES
BEARING MAN GROUP
AJ DEETLEFS VERVOER
NEW COMMUNICATIONS CC
NTLEMO PROJECTS
DECATYPE (PTY) LTD
FILTAQUIP (PTY) LTD
JONES & WAGENER CONSULTING
CIVIL ENGINEERS (PTY) LTD
NEDA ENGINEERING GROUP (PTY) L
INDUSTRIAL FLUID CONTROL (PTY)
CHEMICORP CC
COLLIERY TRAINING COLLEGE (PTY)
LTD
MACROBERT ATTORNEYS
DRAUGHTING AND DESIGNS
BRUTES AIR SOLUTIONS (PTY) LTD
BABATA PUMPS (PTY) LTD
STEEL TECHNOLOGIES
PRAGMA (PTY) LTD
THE PUMPSMITH
LH MARTHINUSEN (A DIVISION OF
ACTOM (PTY) LTD)
KONICA MINOLTA SOUTH AFRICA
ELECTRONIC DESIGN
MACSTEEL TRADING (PTY) LTD
LOWVELD CRANES
GSR INDUSTRIAL PRODUCTS C.C.
ALPHA RESOURCES AFRICA CC
NELQUIP AGENCIES
ARAMEX SOUTH AFRICA (PTY) LTD
DANA TRAVEL AGENCY
ENVIROENG (PTY) LTD
LOWVELD SCALE SERVICES
ZIMCO ALUMINIUM (PTY) LTD
WEIR MINERALS AFRICA (PTY) LTD
CMS CONDITION MONITORING
SERVICES CC
DRIZIT ENVIRONMENTAL CC
AMD-ROTOLOK (PTY) LTD
LOWVELD GARAGE EQUIPMENT CC
ARB ELECTRICAL WHOLESALERS (PTY)
LTD
RS COMPONENTS SA LTD
HEWLETT PACKARD SOUTH AFRICA
(PROPRIETARY) LIMITED
HYTEC (PTY) LTD
THOMAS TYRES NELSPRUIT
COMMERCIAL
THE COMBUSTION GROUP (PTY) LTD
SIMAGUMBI TRADING CC
NELROH TRADING ENTERPRISES
INTO INSTRUMENTATION &
BEARING SERVICES NELSPRUIT(PTY)
LTD
MAN AUTOMOTIVE (SOUTH AFRICA)
NOSA (PTY) LTD
ELECTRO SURGE PROTECT CC
DEO WATER SERVICES (PTY) LTD
GKD BUISMET (PTY) LTD
ROCHELLE CHEMICALS & LAB EQ NT
RISKWORKS (PTY) LTD
MACSTEEL FLUID CONTROL A DIV OF
MACSTEEL SERVICE CENTRES SA
NELSPRUIT FASTENERS CC
BIDVEST CAR RENTAL (PTY) LTD
BROCOM ELECTRICAL
POWERFORCE HYDRAULICS
LOWVELD
BLASTRITE (PTY) LTD
EPOCH HYDRAULIC ENGINEERING
NATIONAL QUALITY ASSURANCE
CERTIFICATION (PTY) LTD.
UPAT SA (PTY) LTD
DEMAG CRANES & COMPONENTS
EURO STEEL
COMPAIR SA (PTY) LTD
JNR ENGINEERING (PTY) LTD
MAGNITECH (PTY) LTD
LAFARGE INDUSTRIES SOUTH AFRICA
EASTERN TRANSVAAL VALVE &
ENGINEERING
MPUMALANGA COPIERS (PTY) LTD
MANDLA AND VELISWA
CONSTRUCTION AND ELECTRICAL
VEGA CONTROLS SA
VOLTEX NELSPRUIT
PROTEA TYRES TRUCKENDEN (PTY) LTD
t/a THOMAS TYRES NESLPRUIT
JOHN CRANE (PTY) LTD
B T INDUSTRIAL SUPPLIES AND
BEARINGS 2000 PTY LTD
FLSMIDTH SOUTH AFRICA(PTY) LTD
LABSERVE ANALYTICAL SERVICES
PRO LAB SUPPLIES CC
SIEMENS
PRETORIA MR TRUST
ACDC EXPRESS
RODQUIN MANUFACTURING
T.I.S. TECHNICAL INDUSTRY SERVICES
(PTY) LTD
LOWVELD COMPRESSOR SERVICES
ACTOM ELECTRICAL MACHINES
REINFORCING STEEL CONTRACTORS
THE SURVEILLANCE FACTORY
IMP CALIBRATION SERVICES (PTY) LTD
ICAT ENVIRONMENTAL SOLUTION
FIRST CONSULTING ALLIANCE (PTY)
LTD
VITECH ENGINEERING & SALES
KARCHER
INTERWASTE (PTY) LTD
ERNEST LOWE
FILVENT (PTY) LTD
CAREL DE JAGER VERVOER TRUST.
MICRON LABORATORY SERVICES CC
MEGA PAINTS NELSPRUIT
SGS SOUTH AFRICA (PTY) LTD
MINUTEMAN PRESS
TYREHOUSE NELSPRUIT
ENSafrica
TOOL & PRECISION ENGINEERING C
CAPE MATERIAL HANDLING
QUIPMENTCC T/A CALLON SOLID
TYRES
FORMS MEDIA INDEPENDENT AFRICA
(PTY) LTD
TOYOTA FORK LIFT
ANGUS ENGINEERING
HANNA INSTRUMENTS (PTY) LTD
BEARING AND POWER TRANSMISSION
SUPPLIES
SIKHONZA VESTRA 89 CC T/A CHRIS
DAMES
FILING@WORK (PTY) LTD
LOWVELD VALVE & INDUSTRIAL
SUPPLY CC.
PPE TECHNOLOGIES CC
RENOLD CROFTS SA (PTY) LTD
PARSLEY STUDIOS CC
EZEE-DEX
TWEEDIE AUTO ELECTRIC CC
ACTOM ELECTRICAL PRODUCTS A
DIVISION OF ACTOM (PTY) LTD
POWERMAN SALES C.C.
DRAGER SOUTH AFRICA (PTY) LTD
MOPANI PHARMACY
PRO PLASTIC SIGNS
ASTORE AFRICA (PTY) LTD
AFROX LIMITED
ANALYSERS ON-LINE CC
INDUSTRIAL COOLING TOWERS EMP
(PTY) LTD
AGRI-ENVIRO SOLUTIONS (PTY) LTD
CHICK HENDERSON DIV OF INMINS
TRADING (PTY) LTD
MICROSEP
Bambanani Hydraulics
KLINGER MZANSI PTY LTD
SEMICONDUCTOR SOLUTIONS
MAN DIESEL & TURBO SOUTH AFRICA
(PTY) LTD
GREEN DOT ADVISORS (PTY) LTD
BRELKO ENGINEERING CC
MEGA BAGS GROUP CC
MMD TECHNOLOGIES (PTY) LTD
Mikrons Presisie Komponent
Vervaardiging
LASEC SA (PTY) LTD
M BULK SOLIDS HANDLING CC
BRAYSHAW AUTO ELECTRICAL
THERMO FISHER SCIENTIFIC
WASA (PTY) LTD
EAGLE BURGMANN SEALS S.A.
TEMPLE WASTE CC
BRAYSHAW DIESEL FILTRATION CC
CONTACT COMMUNICATIONS
NELSPRUIT
PRO.COM
LABOTEC (PTY) LTD
KLERKSCALE (PTY) LTD
H2O INTERNATIONAL MPUMALANGA
SACKSPACKAGING
MERCK MILLIPORE (PTY) LTD
MANDLAKAZI ELECTRICAL TECHNOLO
PANALYTICAL (PTY) LTD
INDUSTRIAL ANALYTICAL (PTY) LT
SPECTRUM COMMUNICATIONS (PTY)
LIFT & SHIFT
DAWSON & DOBSON (PTY) LTD.
PRO PRESENTATION CC
COMPAL CRANES (PTY) LTD t/a
COMPAL INDUSTRIES
CROCODILE FIBREGLASS (TVL) CC
CHAPMAR INDUSTRIES CC
GREEN GAIN CONSULTING (PTY) LTD
FORKLIFTSPARES SPECIALISTS
MICHEM CLEANING SUPPLIES
DIESEL ELECTRIC
NELSPRUIT BRAKE & CLUTCH CENTR
WURTH SOUTH AFRICA CO (PTY)
SABS COMMERCIAL SOC LTD.
INCLEDON DPI (PTY) LTD.
KWATANI (PTY) LTD
BALTIMORE AIRCOIL CO SA (PTY)
BIATON PAVING
TRU-TRAC ROLLERS (PTY) LTD
ELITE GAS INSTALLATIONS CC
NUSAFRICA BEARINGS AND
BULKMATIC SOLIDS MACHINERY (PTY)
LTD
PRODUKTA MOTORS (PTY) LTD
WORKWEAR DEPOT (PTY) LTD
ELEN ELECTRICAL ENCLOSURES
MACSTEEL VRN (PTY) LTD
NATIONAL SEPARATIONS (PTY) LTD
GIJIMA AST GROUP (PTY) LTD.
HEWLETT PACKARD SOUTH AFRICA
(PROPRIETARY) LIMITED (INC)
STONE STAMCOR (PTY) LTD
BELL EQUIPMENT CO SA (PTY)
BIZ AFRIKA 925 (PTY) LTD
ASTORE KEYMAK
FESTO (PTY) LTD
PEST CONTROL SPECIALISTS (PTY)
ELEPHANT LIFTING EQUIPMENT (PT
MPUMALANGA CONSULTING
ENGINEER
SUPER BRAKE SERVICES CC
QUADRANT CHEMPLAST (PTY) LTD
ENVIROCON INSTRUMENTATION CC
POWERMITE AFRICA (PTY) LTD
TRANSVAAL RUBBER COMPANY (PTY)
EKONIMI-WELD
UNIQUE WELDING ALLOYS (PTY) LTD
KEMPLANT (PTY) LTD
SAFETYDOTCOM
BATTERY PRO
DU PAINT
LOADCELL SERVICES
MACDONALD'S TRANSPORT
UPINGTON
CORRO PUMP MANUFACTURING CC
MONITORING & CONTROL
LABORATORIES (PTY) LTD
PUMPTEC
NELSPRUIT ARMATURE WINDERS C.C
DE KAAP ELECTRICAL CC
ARMCO SUPERLITE (PTY) LTD
BARLOWORLD EQUIPMENT (PTY) LTD
MERCURE NELSPRUIT
SPERO SENSORS & INSTRUMENTS (PTY)
LTD
JONET ENGINEERING & FIELD
SERVICES
BLANES PRESSURE SOLUTIONS CC
QOTHO LABORATORY SERVICES
BIDFOOD MPUMALANGA
HILTI (SOUTH AFRICA) (PTY) LTD.
CUSTOMER NO. 16818317
PEOPLE RESOLUTIONS
DCD ROLLING STOCK, A DIVISION OF
DCD GROUP (PTY) LTD
VERDER SCIENTIFIC (PTY) LTD
STAWIRE
ELLIS - SINGER
CERAMOX (A DIVISION OF
WONDERSTONE LIMITED).
GEO-X (PTY) LTD
HP SOUTH AFRICA PROPRIETARY
LIMITED
ENDRESS & HAUSER (PTY) LTD
MOBILE HYDRAULIC SERVICES CC
LEXISNEXIS BUTTERWORTH
MONITOR ENGINEERING (PTY) LTD
SPECTRO ANALYTICAL INSTRUMENTS
(PTY) LTD
GLT CHEMICALS
LIRA ELECTRICAL CONTRACTORS CC
GEOLUFT
MAN TRUCK AND BUS (SA)
RUDAMANS NELSPRUIT (PTY) LTD
BUILDERS WAREHOUSE (PTY) LTD
ZANDERSON ESTABLISHMENTS PTY LTD
STEEL ROPES CC
NELSPRUIT TRAILER PARTS CC
TEMPERATURE CONTROLS (PTY) LTD
THERMOLAG
PORETECH CC
BESTLINE MANUFACTURING
BIDVEST WALTONS - A DIVISION OF
BIDVEST OFFICE (PTY) LTD
PROTEA CHEMICALS INLAND
POWERTECH TRANSFORMERS (PT
RJM SYSTEM (PTY) L TD
ELMADRE BUTCHERY
DUPLEIX LIQUID METERS
AVENG MANUFACTURING
AUTOMATION & CONTROL
SOLUTIONS
LOWVELD PACKAGING
LATTY INTERNATIONAL SOUTH AFRICA
(PTY) LTD
BIDVEST AFCOM (PTY) LTD
TEGNON (PTY) LTD
CRAWLEYS LOCKSMITHS
LOADTECH (PTY) LTD
BURKERT CONTROMATIC (PTY) LTD
TANKMAN SEPTIC SERVICES CC
SPRAY NOZZLE (PTY) LTD
JOHN MOFFAT PROLOCK (PTY) LTD
PHOENIX CONTACT(PTY) LTD
VITRAFORM GLASSWARE CC
GAS HANDLING SYSTEMS (PTY) LTD.
ANCHOR INDUSTRIES (PTY) LTD
TENOVA MINING AND MINERALS
SOUTH AFRICA (PTY)LTD
TAZCHEM (PTY) LTD
MPUMALANGA DUCT SHOP
VIPRO (PTY) LTD
I S L ENTERPRISES (PTY) LTD
DULUX (PTY) LTD
MPUMALANGA TIMBERS
CAMP AND GAS CENTRE CC
ALCO-SAFE (PTY) LTD
CECIL NURSE BUSINESS FURNITURE
RIDDS AQUA CENTRE (PTY) LTD
TEST AND MEASUREMENT
INSTRUMENTS
REPAIR AND METROLOGY SERVICES
(PTY) LTD.
INFRASPEC
HEWLETT PACKARD ENTERPRISES
INTRATEC DATA SOLUTIONS
THE INSTITUTE OF WASTE
MANAGEMENT OF SOUTHERN AFRICA
MPRTC RECRUITMENT
EASTERN TVL RUBBER STAMP CO
COASTAL HIRE NELSPRUIT CC
ROOIKAT WHOLESALERS LIQUER
PE CHEMICALS CC
CHICK HENSERSON DIV OF INMINS
TRADING (PTY) LTD
ADLAM ENGINEERING (PTY) LTD
WIKA INSTRUMENTS (PTY) LTD
RIEBA CLOTHING
SGS METLAB (PTY) LTD
NON-FERROUS METAL WORKS (SA) (
VAN WETTENS BREAKDOWN SERVICES
ROTHENBERGER TOOLS SA (PTY) LTD
AJM ENGINEERING SERVICES CC
MY OFFICE
MOMAR SALES & FINANCE C.C.
YOKOGAWA SA (PTY) LTD.
PENSAO GUEST HOUSE
LOWVELD CHEMICALS
THE U JOINT AND THE CV JOINT C
TRANSPHARM PHARMACEUTICAL
(PTY) LTD
NELSPRUIT GENERAL & AUTO REPAIRS
NBH SPRINGS NELSPRUIT (PTY)
LOWVELD AUDIO
MAIZEY PLASTICS
ENVIROSERV WASTE MANAGEMENT
(PTY) LTD
FIRE PROTECTION ASSOCIATION OF
DEMS (PTY) LTD
SCAW METALS GROUP
MAFUNYANE DISTRIBUTORS (PTY) LTD
MUSIC DEN
CLEAR EDGE FILTRATION S A (PTY) LTD
Tecsa (Pty) Ltd
TECSARECO
SAWSERVE (PTY) LTD
NKOMAZI FUEL & OIL
BEARINGS INTERNATIONAL CO LTD
TURFMASTER
5
Beneficiation Impact in South Africa – per Annum
R70m
R330m
200 Local
businesses
R70m
300 National
businesses
R180m
600 Employees
R140m *minimum wage R9,075pm
R44m
Creating strength. 6
How did MMC survive 2018
Rand Depreciation from R11.80
to R14.50
International Prices from
$1700 to $2,800. Back
at $2,100
NERSA 5.2% Increase
Use of Mn slime
deposits
Creating strength.
• The Eskom strategy was due in 2018
• Apparently it will be issued before the budget speech in February 2019
• Presidential task team has been appointed
Comments
• Increases for 3 years should not be approved without an appropriate strategy.
• The 19.5% requested is for Eskom to continue with “business as usual”
• A Presidential task team is confirmation that government has limited faith in current Eskom
Executive.
• RCA’s does not work for business – we can’t claw back from customers.
• Eskom should include claw back in price application so that the full impact can be
shown.
7
Issue #1 : Increases without a strategy
Creating strength.
Comments
• Unclear if Eskom still support this
• The turn-around time and administration is frustrating
• Markets are dynamic – this process is not
Proposal
• Consider new pricing for all large intensive users based on Short Run Marginal Cost
plus a margin
8
Issue #2 : Short Term Framework
Creating strength.
• Cross subsidies represents 14% of MMC’s electricity costs
• Eskom receives no benefit for cross subsidies
• This is an additional tax
• National Treasury must take an holistic view on whether this is the best way obtain
more money
9
Issue #3 : Cross Subsidies
R-
R500 000
R1 000 000
R1 500 000
R2 000 000
R2 500 000
R3 000 000
R3 500 000
R4 000 000
Ja
n-1
5
Fe
b-1
5
Ma
r-15
Ap
r-1
5
Ma
y-1
5
Ju
n-1
5
Ju
l-15
Au
g-1
5
Se
p-1
5
Oc
t-1
5
No
v-1
5
De
c-1
5
Ja
n-1
6
Fe
b-1
6
Ma
r-16
Ap
r-1
6
Ma
y-1
6
Ju
n-1
6
Ju
l-16
Au
g-1
6
Se
p-1
6
Oc
t-1
6
No
v-1
6
De
c-1
6
Ja
n-1
7
Fe
b-1
7
Ma
r-17
Ap
r-1
7
Ma
y-1
7
Ju
n-1
7
Ju
l-17
Au
g-1
7
Se
p-1
7
Oc
t-1
7
No
v-1
7
De
c-1
7
Ja
n-1
8
Fe
b-1
8
Ma
r-18
Ap
r-1
8
Ma
y-1
8
Ju
n-1
8
Ju
l-18
Au
g-1
8
Se
p-1
8
Oc
t-1
8
No
v-1
8
De
c-1
8
Indirect Cost
AFFORDABILITY SUBSIDY (ALL) ELECTRIFICATION AND RURAL SUBS (ALL)
Creating strength.
• Large Industrial users should not be required to pay cross subsidies.
National Treasury should look at the bigger picture
•Multi year increases without an appropriate strategy support “repeat of
yesterday”.
•Only inflation increases to be approved with Eskom taking action to
improve profitability
10
Proposal
Creating strength. 11
Actual Increase 70% after 3 years = R233M
R 330M R 330M
R 233M
0
100
200
300
400
500
600
FY 20 FY 22
RM
Creating strength. 12
Job losses if MMC closes
Direct: 586
Indirect: 2,353
Induced: 1,045
TOTAL: 3,984
Creating strength. 13
TAKEAWAY: Please help Eskom with their addiction to:
Surplus employees
Massive increases
Avoiding difficult decisions
Inefficiencies
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