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COMMODITY NEWSBRIEFS: 7 SEPTEMBER 2015 Please note that these articles are available in electronic format and can be requested and delivered via e-Mail.

(http://intra.spoornet.co.za) Natasha.Havenga@transnet.net

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IRON See article “ARM FY PROFIT DOWN 58% ON LOWER PRICES” under heading CHROME & MANGANESE COAL PETMIN EXPECTS FY EARNINGS TO INCREASE 60% (Mining Weekly, 7/9/2015) Following a solid operational performance at its Somkhele anthracite mine, in KwaZulu-Natal, multi-commodity mining company Petmin’s headline earnings for the year ended June 30 are expected to increase by about 60% to 24c apiece, it said on Friday. Despite a flat pricing environment, the strong operational performance was attributed to increased production and sales volumes, improved plant yields and effective cost management. Earnings a share for the year were expected to be about 23c, compared with a loss a share of 20.7c in the prior year, which was the result of a R181-million impairment of its investment in Veremo and a R19-million impairment of its investment in Iron Bird. CHROME & MANGANESE ARM FY PROFIT DOWN 58% ON LOWER PRICES (Mining Weekly, 7/9/2015) African Rainbow Minerals, led by CEO Mike Schmidt, posted a 58% fall in annual headline earnings on Friday reflecting lower commodity prices which forced it to shut down several manganese alloy furnaces. It said above-inflation cost increases, especially for electricity and labour, made manganese alloy operations "unprofitable". It placed all furnaces at its Machadodorp Works and three furnaces at the Cato Ridge Works on care and maintenance. Headline earnings a share, a measure used in South Africa which strips off some one-off items, fell to 803c from 1 900c a year earlier. "The reduction in headline earnings was largely as a result of a decline in average realised US dollar prices for iron-ore, manganese ore, platinum, nickel, export thermal coal and copper," ARM said in a statement outlining the company's results. It said the US dollar price for iron ore fell by about 42%, due to increased supply from the major global producers coupled with a slowdown in demand, especially from China. That resulted in a 61% slump in ARM's iron-ore division. Iron-ore, used in making steel, has recovered from a decade-low of $44.10 in July but expectations of additional supply later in the year have capped further gains. South Africa's miners sell their commodities in dollars while paying costs in rand and the company painted a dim outlook, projecting further price falls. "The business environment for mining will remain challenging and US dollar prices are expected to be low for longer in certain commodities," ARM said.

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MINERAL MINING NATIONALISATION - PARTIES WANT MORE GOVERNMENT CONTROL (Financial Mail, 7/9/2015) Rumblings from the ANC and its alliance partner, the SA Communist Party, suggest nationalisation of the mines has not disappeared from the agenda but is now being couched as a more “interventionist” approach by government to secure jobs. Gordon Institute of Business Science (Gibs) researchers Marius Oosthuizen and Kagiso “TK” Pooe argue limiting the private sector is exactly the wrong approach to creating jobs. In its national general council discussion documents, the ANC refers to the need for the state to maintain “a strategic, interventionist role in key sectors to ensure our natural resources are exploited to effectively maximise the growth and employment potential embedded in such assets and not purely for profit”. The ANC says the state must intervene to ensure local beneficiation of minerals to spur industrialisation. Intervention must be in relation to pricing of strategic minerals like steel, polymers, copper, coal, gas, cement and NPK fertilisers. The state should impose a resource rent tax to capture an equitable share of profits from mining and a mineral export tax to enhance local value addition. The Minerals & Petroleum Resources Development Act Amendment Bill should lay down a minimum to be spent by mining companies on local procurement, training and research and development. The ANC says a State Mining Company Act is envisaged in the longer term. In the shorter term, state mining companies must receive more support than privately owned mines. Pooe says government recognises correctly that mining is a strategic part of growing the manufacturing sector and creating decent jobs. But this requires mining to be as efficient and cost-effective as possible and for government policy to focus on creating a business-friendly operating environment, not on controlling the mines. By making mines state-owned entities, government would be shifting the costs of inefficient businesses onto taxpayers, as happened with Eskom, Pooe says. Oosthuizen says though Gibs cannot predict what government will do, it appears to be trending towards a populist approach, which could see it buying up devalued mining assets in partnership with leading black industrialists. This would be a rather messy model of part state ownership and part private ownership. For mining, the worst-case scenario is one where the state takes ownership of the mines with the backing of China. After discussion with mining executives, Oosthuizen says the best-case scenario is one where business and labour agree on key objectives, with government playing a leadership and facilitating role. This would enable mining to contribute to the growth of peripheral industries. Oosthuizen says tension is growing between SA’s Western-style capitalist business sector and government’s leanings towards state intervention to deliver the expectations of the impoverished majority. CURRENCIES AND PRICES

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ALSI: 3 mnth to 4 Sep 15

(Mail & Guardian, 7/9/2015)

JSE AS AT 17:10PM 4 SEPTEMBER 2015

All Share Index 4/09 49,103

- 1,308.59 - 2.60%

Industrials Index 4/09 43,874

- 779.29 - 1.75%

Financials Index 4/09 42,717

- 846.74 - 1.94%

Top 40 Index 4/09 43,547

- 1,291.80 - 2.88%

Industrial 25 Index 4/09 63,465

- 1,589.10 - 2.44%

Financial 15 Index 4/09 15,882

- 396.90 - 2.44%

Resources 10 Index 4/09 34,507

- 1,915.14 - 5.26%

Alt-X Index 4/09 1,467

+ 11.36 + 0.78%

WORLD INDICATORS

FOREX

Rand/Dollar 06:27 13.8747

+ 0.30 + 2.18%

Rand/Pound

06:30 21.0386

+ 0.36 + 1.72%

Rand/Euro 06:30 15.4650

+ 0.36 + 2.41%

COMMODITIES

Gold (usd/oz) 06:30 1,122.58

- 3.42 - 0.30%

Platinum (usd/oz)

06:30 992.43

- 8.07 - 0.81%

Brent (usd/barrel) 06:30 49.39

- 1.29 - 2.55%

WORLD MARKETS

Wall St (DJIA) 4/09 16,102

- 272.38 - 1.66%

Germany (DAX)

4/09 10,038

- 10.01 - 0.10%

Japan (Nikkei) 06:30 17,817

+ 24.62 + 0.14%

(Business Report, 7/9/2015)

Transnet Freight Rail News Briefs Page 4 of 7

(TFR Commercial Management: Business Performance Dept)

Petrol/ Diesel Price

YR2015

07-Jan-

15

04-Feb-

15

04-Mar-

15

01-Apr-

15

06-May-

15

03-Jun-

15

01-Jul-

15

05-Aug-

15

02-Sep-

15

07-Oct-

15

04-Nov-

15

02-Dec-

15

COASTAL

95 LRP (c/l) 1083.00 990.00 1086.00 1246.00 1246.00 1293.00 1334.00 1283.00 1214.00

95 ULP (c/l) 1083.00 990.00 1086.00 1246.00 1246.00 1293.00 1334.00 1283.00 1214.00

Transnet Freight Rail News Briefs Page 5 of 7

Diesel 0.05% (c/l) 997.49 895.49 969.49 1090.09 1085.09 1134.09 1138.09 1062.27 1008.27

Diesel 0.005% (c/l) 1001.89 899.89 973.89 1096.49 1091.49 1137.49 1141.49 1067.67 1016.67

Illuminating Paraffin (c/l) 697.728 595.728 668.728 690.828 685.828 727.828 733.828 663.828 608.828

Liquefied Petroleum Gas

(c/kg) 1829.00 1679.00 1833.00 1918.00 1935.00 2035.00 2091.00 2002.00 1887.00

GAUTENG

93 LRP (c/l) 1102.00 1009.00 1105.00 1261.00 1261.00 1308.00 1352.00 1301.00 1232.00

93 ULP (c/l) 1102.00 1009.00 1105.00 1261.00 1261.00 1308.00 1352.00 1301.00 1232.00

95 ULP (c/l) 1124.00 1031.00 1127.00 1289.00 1289.00 1336.00 1377.00 1326.00 1257.00

Diesel 0.05% (c/l) 1028.09 926.09 1000.09 1122.79 1117.79 1166.79 1170.79 1094.97 1040.97

Diesel 0.005% (c/l) 1032.49 930.49 1004.49 1129.19 1124.19 1170.19 1174.19 1100.37 1049.37

Illuminating Paraffin (c/l) 747.928 645.928 718.928 743.828 738.828 780.828 786.828 716.828 661.828

Liquefied Petroleum Gas

(c/kg) 2011.00 1861.00 2015.00 2100.00 2117.00 2217.00 2273.00 2184.00 2069.00

YR2014

01-Jan-

14

05-Feb-

14

05-Mar-

14

02-Apr-

14

07-May-

14

04-Jun-

14

02-Jul-

14

06-Aug-

14

03-Sep-

14

01-Oct-

14

05-Nov-

14

03-Dec-

14

COASTAL

95 LRP (c/l) 1320.00 1359.00 1395.00 1398.00 1383.00 1361.00 1392.00 1392.00 1325.00 1320.00 1275.00 1206.00

95 ULP (c/l) 1320.00 1359.00 1395.00 1398.00 1383.00 1361.00 1392.00 1392.00 1325.00 1320.00 1275.00 1206.00

Diesel 0.05% (c/l) 1260.55 1284.75 1311.95 1299.15 1269.37 1245.79 1259.79 1254.17 1228.79 1215.79 1154.79 1101.49

Diesel 0.005% (c/l) 1263.95 1288.15 1316.35 1304.55 1274.77 1249.19 1263.19 1258.57 1234.19 1221.19 1161.19 1106.89

Illuminating Paraffin (c/l) 963.828 975.828 991.828 953.028 934.028 924.028 947.028 940.028 921.028 907.028 855.028 805.728

Liquefied Petroleum Gas

(c/kg) 2260.00 2314.00 2372.00 2350.00 2346.00 2319.00 2377.00 2365.00 2257.00 2269.00 2164.00 2039.00

GAUTENG

93 LRP (c/l) 1336.00 1375.00 1411.00 1416.00 1401.00 1379.00 1408.00 1408.00 1341.00 1343.00 1298.00 1229.00

93 ULP (c/l) 1336.00 1375.00 1411.00 1416.00 1401.00 1379.00 1408.00 1408.00 1341.00 1343.00 1298.00 1229.00

95 ULP (c/l) 1357.00 1396.00 1432.00 1439.00 1424.00 1402.00 1433.00 1433.00 1366.00 1361.00 1316.00 1247.00

Diesel 0.05% (c/l) 1287.15 1311.35 1338.55 1329.75 1299.97 1276.39 1290.39 1284.77 1259.39 1246.39 1185.39 1132.09

Diesel 0.005% (c/l) 1290.55 1314.75 1342.95 1335.15 1305.37 1279.79 1293.79 1289.17 1264.79 1251.79 1191.79 1137.49

Illuminating Paraffin (c/l) 1009.728 1021.728 1037.728 1003.228 984.228 974.228 997.228 990.228 971.228 957.228 905.228 855.928

Liquefied Petroleum Gas

(c/kg) 2442.00 2496.00 2554.00 2532.00 2528.00 2501.00 2559.00 2547.00 2439.00 2451.00 2346.00 2221.00

(SAPIA online)

Daily prices for 4 September 2015

LME Official Prices, US$ per tonne

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Contract Aluminium Alloy Aluminium Copper Lead Nickel Tin Zinc NASAAC

Cash Buyer 1680.00 1601.00 5155.00 1676.00 9780.00 15580.00 1773.00 1630.00

Cash Seller & Settlement 1690.00 1601.50 5155.50 1677.00 9785.00 15595.00 1773.50 1640.00

3-months Buyer 1695.00 1623.00 5145.00 1691.00 9840.00 15150.00 1782.00 1655.00

3-months Seller 1705.00 1623.50 5150.00 1691.50 9845.00 15175.00 1783.00 1660.00

15-months Buyer 14970.00

15-months Seller 15020.00

Dec 3 Buyer 1813.00 5195.00 1770.00 9930.00 1848.00

Dec 3 Seller 1818.00 5205.00 1775.00 10030.00 1853.00

(London Metal Exchange, 7/9/2015)

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