2012 Annual Report Briefingto the

Parliamentary Portfolio Committee

31st October 2012

• CORE BUSINESS– R&D of efficient mineral processing

technologies– R&D of green technologies– Promotion of mineral based economies – Build world class R&D excellence

• OTHER– Uphold good governance– Ensuring short term viability and long

term sustainability of Mintek– Enhancing Mintek’s visibility and

credibility

The Business of Mintek

• Decent employment through inclusive growth (4)

– R&D of efficient mineral processing technologies and value added products and services

• Skilled & capable workforce to support an inclusive growth part (5)

– Promote the minerals based economies of rural and marginalised communities

– Build world class R&D excellence• Vibrant, equitable and sustainable rural

communities (7)

– Promote the minerals based economies of rural and marginalised communities

Mintek Objectives

• Environmental assets and natural resources that are well protected and continually enhance (10)

– Research and develop green technologies and processes to mitigate the impact of mineral development on the environment

• Efficient, effective & development orientated public service and an empowered, fair & inclusive citizenship(12)

– Enhance Mintek’s visibility and credibility to all stakeholders

– Ensure short term-viability and long term-sustainability of Mintek

– Uphold good governance practices

Mintek Objectives contd.

Global Footprint

1968-2012 Annual income

Audit Opinion History

Audit opinions 08/09 09/10 10/11 11/12

Department of Mineral Resources n/a* n/a* Mine Health and Safety Council (MHSC) Council for Mineral Technology (MINTEK) South African Diamond and Precious Metal Regulator (SADPMR)

State Diamond Trader (SDT) Council of Geoscience

• Qualification

CLEAN AUDIT OPINION: No findings on PDO and Compliance UNQUALIFIED with findings on PDO and Compliance QUALIFIED AUDIT OPINION (with/without findings) DISCLAIMER/ADVERSE AUDIT OPINION

Key focus areas

SHEQ statistics

0.60.80.80.80.80.8

1.00.80.80.80.70.60.70.70.80.80.80.8

0.60.7

0.91.21.21.2

1.10.90.70.80.70.9

0.90.7

0.6

0.10.10.4

0.40.4

0.40.4

0.70.6 0.7

0.70.7

1.01.2

0.90.90.9

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Mintek LTIFR accident statistics LTIFR

Target

FULL TIME BURSARS2008 2009 2010 2011 2012

Undergraduate 68 77 52 49 42

Postgraduate 42 27 23 22 12

TOTAL 110 104 75 71 54

PART TIME BURSARS (Full Time Employees)2008 2009 2010 2011 2012

Undergraduate 22 30 33 26 29

Postgraduate 5 11 16 36 51

TOTAL 27 41 49 62 80

GRAND TOTAL 137 145 124 133 134

Bursary Trends

President & CEODr Paul Jourdan

Finance Hester Pretorius

President & CEOAbiel Mngomezulu

FINANCESakhi Simelane

EstateManagement

ServicesBoni Hewu

(Acting Manager)

Analytical Services

Monde Mtakati

Engineering Support

Khulekani Ngcobo

MineralsProcessingBernard Joja

HydrometallurgyDr Leon Kruger

PyrometallurgyTom Curr

AdvancedMaterials

Dr Elma van der Lingen

BiotechnologyPetrus

van Staden

Measurement &Control

Paul Brereton-Stiles

MineralogyNosiphiwo

Mzamo

High TemperatureTechnology

Tom Curr

Small Scale Mining &

Beneficiation Nirdesh Singh

Information andCommunicationHaveline Michau

Human Resources

Bolekwa Maseti

Mineral Economics &

StrategyGodfrey Mothapo

BUSINESS DEVELOPMENT

Peter Craven

RESEARCH &DEVELOPMENT

Dr MakhapaMakhafola

TECHNOLOGYAlan McKenzie

CORPORATESERVICES

Adv Mamokete Ramoshaba

Mintek Management structure – 31 March 2012

Human Capital

2008 2009 2010 2011 2012

Mintek compliment

546 780 769 688 671

Total Employees resigned

103 84 35 56 57

% Males resigned 16.8 10.2 3.6 9.1 5.3

% Female resigned

22.6 12.0 6.8 6.4 3.1

Av Length of stay(years)

4,5 3.4 2.4 4.5 4.4

Turnover rate 18.9 10.8 4.6 8.1 8.5

Annual resignations

§ Designated groups make up 85% of total staff compliment§ Core make up 74% of the compliment

Demographic profile

Human capital development

Human capital development

Full-Time Bursars as at 31 December 2011

Bursars and trainees

Part-Time Bursars as at 31 December 2011

Bursars and trainees

0

5

10

15

20

25

30

Black Female Total

WIL

WIL as at 31 December 2011

Bursars and trainees

Business Development

* Other than re-vegetation and fencing, which was deferred pending community involvement** Design and cost estimate only; projects will possibly be deferred due to budget limitations

Current funding ends in March 2013

Derelict and ownerless mines

Technology

• ConRoast Technology is being commercialised by Jubilee Platinum– Off-take ASA Metals´ Dilokong chrome mine

to process Cr tailings to recover PGM’s and other projects.

• Bay 2 plant construction started.– Re-employed 19 retrenched staff (currently

only 9 are still not employed)

Pt processing – ConRoast & Bay 2

• Concept is to create a South African Rare Earth Element refinery.

• Partners selected, and negotiations started.

• Technical development work on-going.

Rare Earth Element Refining

• Technology aimed at water treatment, including AMD.

• Signed a cooperation agreement with Veolia to develop and commercialise.

• Laboratory scale development completed

Savmin water treatment

• Completed 18 month ferrochrome project for Cliff Natural Resources – to bankable level

• Canadian deposit– Started with laboratory scale testing– Concluded with large pilot smelting campaign– Included mineral processing and pyrometallurgy.– Over R 20m in total– Over 500t of ore processed

Cliff Resources Chromite

• Identified as a strategic project.• Sensor-based sorting will make

significant impact in the industry.• For example work done for Anglo

American Platinum at Mogalakwena has shown;– The Platreef resource that is being mined can

be doubled.– The cut-off grade is lowered by waste

rejection

Sensor-Based Sorting

Research and Development

SlipCam

DST-Funded Projects• Centre of Competence in Hydrogen Catalysis (HySA)

• Nanotechnology Innovation Centre (NIC)

• Advanced Metals Initiative (AMI)

• DST Technology Assistance Programme (DST-TAP)

• Technology Innovation Agency (TIA) – NanoCeramics and Grinding Media Projects

PGM Beneficiation Technologies

Mintek Gas Atomiser for PGM-based Powder Production

Physical Processing of PGM-based and Precious Metal Powders

• Main aim of the project is to develop different methods for the production of precious metal (PGMs, Au, etc.) and alloyed powders

• Methods include:o Mechanical Alloyingo Water Atomisationo Gas Atomisation

• Atomisation equipment built in collaboration with a local SMME company, Hot Platinum (Pty) Ltd

• The PGM powders produced will further be utilized in the development of precious metals coating for high temperature applications (i.e. Thermal Barrier Coatings)

• A two-year high-temperature heap bioleaching project for BHP Billiton Base Metals concluded in December 2011.

• Highly successful technically in demonstrating that heat accumulation and copper extraction could be controlled within the desired range

• Commercially the project provided a consistent commercial revenue stream over 2 years.

Spence project

• 3 SMME’s started-up in 2011/12 (all still in existence)

• 145 jobs created from start-ups• 165 learners trained in small scale mining,

pottery (including 30 disabled learners), glass beads, jewellery

• Prior 2011/12, 32 of the 46 (70%) SMMEs created are still in existence.

Rural communities

Finance

Mintek Financial statement commentary

The key points to note on the financial statements include:

Statement of comprehensive income:• Total revenue for the

year: R421m (2011: R337m)

• Surplus for the year: R43,4m (2011: Loss R2,1m)

Statement of financial position:• Total assets: R617m (2011:

R529m)

• Total liabilities: R210m (2011: R165m)

• Liquidity ratio 2.0:1 (2011: 2.3:1)

• Group revenue increased by 17% compared to the prior year.

• Products and services revenue increased by 42%.

• Improved surplus (R43.4m)

Revenue

↑ 2012 – more pilot plants↑ 2013 – Bay 2 operations (comparable to 2009 when Bay2 was operational)

Revenue

• International revenue grew by a remarkable 74%.

• Group Commercial revenue is generated primarily in South Africa, USA, UK and Canada.

• Revenue derived from foreign customers relates mostly to pilot plant work.

Distribution of Revenue : Continents

Revenue Analysis

Expenditure

Major capital expenditure for 2012:

Bay 2 upgrade to include atomiser R44millionEstablishment of cleanroom R13millionScanning electron microscope R7millionUpgrading of mineral processing pilot facilities R5millionLift upgrades R2millionCampus facility upgrades R5million

Challenges:- Deteriorating facilities- Ageing equipment

Capital Expenditure

Viability

Financial Position

• Asset base increased by 23% compared to the previous year due to Bay 2 facility, laboratory acquisitions

• Re-assessment of asset useful lives: R12,8m• Funded assets acquired during the year: R21m• Equity increased by R43.4m due to increase in

surplus.• Cash and investments increased due to better debt

collection and inflow of cash received in advance (as reflected in deferred income).

• Deferred income increased for projects to be executed in 2012/2013.

• Trade and other payables increased due to the provision.

Going concern indicators:

• Liquidity – current ration of 2.0:1 (norm 2:1)

• Cash generated from operations grew by R41m from R33.3m, higher than previous financial year.

• Contingent liability not a threat.

• No non-compliance with laws and regulations

Outlook• Positive outlook for 2012/2013

and strong project pipeline for remainder of the year.

• Expected completion and commissioning of Bay 2 to boost cash generating capacity .

• Operation of Bay 2 will result in a large increase in electricity consumptions which will be closely monitored for optimal use.

• MTEF Projects will also commence and significant revenue will be derived from these activities.

Going Concern and Outlook

• Staff turn over• Post Graduate studies• Project based funding

Conclusion

Thank you

www.mintek.co.za