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mintek annual report
2006
annual report 2006
Our MandateMintek’s mandate is to serve the national
interest through high-calibre research, development, and technology transfer that
promotes mineral technology, and fosters the establishment and expansion of small, medium, and large industries in the field of minerals and
products derived from them.
Our VisionTo be a global leader in mineral and
metallurgical R&D and technology transfer.
Our MissionTo serve our stakeholders by promoting
technology, industrial growth and human development.
Our Compact • add value to South Africa’s mineral resources;• expand the country’s mineral technology industries;• develop the minerals industries in the SADC and
throughout Africa;• support the growth of SMMEs in the minerals sector;
and,• transform Mintek’s business practices and staff
profile.
annual report 2006
annual report 2006
Mintek Mandate, Vision, Mission, and CompactHighlights 2005 - 2006 .......................................2The Mining Value Chain.....................................3Chairman’s Review............................................4 Board Structure.................................................................5
CEO’s Report.....................................................6 Management Structure.....................................................7
Performance against objectives.......................10Technical Review.............................................12 Go ld . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 PGMs............................................................15 Ferrous metals................................................................17
Non-ferrous metals.........................................................18 Industrial minerals..........................................................21 QES......................................................................23
Commercial Activities.......................................24 Participation in operating companies............................24 Mintek business development projects.........................24
Process control products...............................................26
Mineral Policy and Sustainable Development...28 Sustainable development...............................................28 Resource Based Technology Strategies........................30 Kgabane jewellery initiative............................................30
Small-scale Mining (SSM).............................................30
People..........................................................32 Industrial Relations.........................................................32
Employment equity.........................................................32Black Economic Empowerment......................................32Human resources development......................................32
HIV/AIDS....................................................................34 Bursary programme........................................................34
Promoting engineering....................................................35 SET awareness...............................................................35
Corporate Governance.....................................36Report of the Audit Committee.......................39Directors’ Report...............................................41Financial Statements 2006..............................43 Report of the Auditor-General.......................................43 Financial statements and notes.....................................48
Mintek Publications...........................................75Glossary.......................................................77Contact details.................................................77Notes....................................................78
page
Annual Report2006
Annual Report 2006
Highlights 2005-2006Investigations of gold-based catalysts under Project AuTEK, the collaborative initiative for developing new industrial uses for gold, now include fuel cell and photocatalysis R&D. A R7.5 million nano-characterisation facility has been commissioned, and a biomedical screening laboratory is being set up for in-house chemotherapeutic testing.
Large-scale piloting of heap bioleaching technology for chalcopyrite-bearing copper ores began at the Sarcheshmeh Copper Complex in southern Iran, and the first metal was recovered at the end of January. The project, which is being run under a collaborative agreement with the National Iranian Copper Industries Company (NICICO), is expected to run until the last quarter of 2007.
The Dominion uranium project will be South Africa’s first new uranium project in more than 25 years. Mintek carried out testwork for the process design as part of the Dominion feasibility study, as well as for uranium projects in Malawi and Namibia.
Work on copper, cobalt, and nickel in central Africa continued, with major process development being undertaken for projects under development in Botswana, the DRC, Zambia, and Zimbabwe. A modular resin-in-pulp demonstration plant was commissioned, and will be used to demonstrate the potential of RIP technology for treating residues and waste streams at base-metals plants.
The first LeachStar gold circuit controller was commercialised at a South African gold mine. A new instrument has been commercialised for online measurement of cyanide discharges to the environment as well as in process streams.
Mineral development studies were undertaken for several African countries, as well as integrated scans for the continental Spatial Development Initiatives. Research findings were contributed to the DME’s “Sustainable Development through Mining” Programme. The MQA renewed Mintek’s accreditation as a skills provider, and about 250 artisanal and small-scale miners received training both at Mintek and at sites around the country.
page 2
page 3
The Mining Value ChainTechnologies and services developed by Mintek
Exploration• Geochemical sample analysis• Mineral/ore characterisation• Certified Reference Materials• Artisanal and small-scale mining (ASSM)
project evaluation
Mining• Artisanal and small-scale mining technology• ASSM training assistance• Mining inputs economic studies
ConcentrationComminution/Flotation
• Flowsheet design and optimisation, and piloting• Plant audits• Ultrafine milling• Control and optimisation strategies
Physical separation• Bulk sample preparation• Gravity, magnetic, electrostatic and dense media separation• Pneumatic jigging, and Mineral Density Separation
Pyrometallurgy• Pelletisation and briquetting• Pre-heating and pre-reduction• DC arc process development and piloting• Modelling and simulation• SAF control strategy• Fluidised bed and condenser technologies• Refractories performance investigations• High- temperature solid state and phase equilibrium investigations• Ore, slag, matte and alloy characterisation
Hydrometallurgy and Biotechnology
• Atmospheric and pressure leaching• Bioleaching (refractory gold and base
metals)• Solvent extraction and ion exchange• Electrowinning• Process simulation• Reagent development and evaluation• Gold recovery by CIP/RIP• Activated carbon regeneration• Uranium processing expertise, U3O8
recovery• Cyanide measurement, monitoring
and auditing• Leach circuit control
Refining• Gold refining and value-added products/chemicals• Pyrometallurgical refining of – zinc (PWG to SHG) – off-grade ferro-alloy fines• Titanium chlorination technology
Value addition• New industrial applications for gold – Catalysis – Biomedical – Nanotechnology• “Smart” materials and sensors• PGM-based superalloys• Low-nickel stainless alloys• Gold and platinum jewellery alloys• Identification of downstream, metals-based
industrial manufacturing opportunities
General• Ore characterisation, analytical and
process mineralogy• Certified Reference Materials• Materials characterisation, testing
and development• Engineering design, manufacturing,
installation and commissioning• Project management services• Regional minerals-based studies
annual report 2006
annual report 2006
Mr Mzi Khumalo,Chairman
of the Board.
annual report 2006
I’m pleased to report another year of strong growth in Mintek’s core R&D and service work for the South African and continental minerals sector. Mintek managed to maintain its technical excellence despite strong demand for its personnel from the thriving domestic and global mining sector and also to make a small surplus despite several exceptional (once-off) items. Mintek is a Science Council with its core objective “… to promote mineral technology and to foster the establishment and expansion of industries in the field of minerals and products derived therefrom” (Mintek Act, p1) and as such its financial objective is to sustainably service the minerals sector rather than the maximisation of profit.
Exceptional and sustained growth in Asia, particularly China, has provoked unprecedented demand in mineral commodities, giving rise to record price levels and a flurry of new green and brown-fields mining activity. This has caused a sustained increase in the global metals intensity of GDP, after languishing for over two decades. Research in Mintek’s MESU Division indicates that the metals intensity of growth starts tapering off at about $16 000 per capita, for almost all countries. This would imply that the current high intensity could continue for twenty years or more as countries like China and India grow their GDP/capita to this level.
This would imply a unique opportunity for South Africa and Africa to engage in satisfying this demand and to use the rents and market opportunities to invest in downstream and upstream industries that would create sustainable industries post resources depletion. Mintek is undertaking a wide range of R&D and service work to position South Africa to make full use of this opportunity. These include:• Novel groundbreaking R&D into new uses of
precious metals;• Dramatic growth in work on uranium processing;• The development of a new smelting process for
platinum processing;• The successful implementation of an advanced
method of recovering cobalt from low grade feedstocks;
• The development of the world’s first thermal process to continuously extract magnesium from dolomite at atmospheric pressure;
• The successful piloting of a bio-heap-leach process to recover copper from low grade ores;
• Development work on a process to realise the huge titanium reserves contained in the Bushveld magnetites;
• The development of a cyanide control system to lower costs in gold recovery;
• A comprehensive study for NEPAD on the sustainable development of Africa’s huge mineral resource endowment; and,
• Comprehensive support to the sustainable development of artisanal and small-scale mining in South Africa and Africa.
However, the downside of the commodities boom for Mintek is that a severe skills shortage has arisen
in the mining industry, provoking unprecedented “poaching” of experienced Mintek staff by the private sector. This arguably poses the single greatest threat to Mintek in the coming year.
Mintek has made significant progress in improving its financial systems and controls and the implementation of its new MySAP All-in-One ERP system from March 2006 will further streamline corporate management. In
this regard a massive effort was made on asset verification and revaluation which will continue into the 2006/07 year.
Mintek has made great strides in collaborative research programmes and in this regard the recent “System-wide Review of the Science Councils”, commissioned by the Department of Science and Technology (DST), concluded that “Mintek was reported to be an excellent point of contact with university-based Centres of Excellence and shows that it is an affordable way to achieve cutting edge research.” Close collaboration with South African universities has enhanced the research capacity in both and augmented Mintek’s future supply of engineers and scientists through its bursar programme and government’s THRIP programme.
Mintek continued to improve its customer quality rating during the year and the “System-wide Review of the Science Councils” panel recommended that its system “be implemented by all Science, Engineering and Technology Institutions (SETIs) in the country.
Mintek continues to play a vital and essential role in support of technical excellence in the South African and continental mineral sector, ensuring that we remain at the forefront of minerals technology development.
Mr Mzi KhumaloChairman of the BoardJuly 2006
page 4
annual report 2006
Mintek Board Members
Dr. Paul JourdanCEO, Ex-officio
Mintek
Department of Minerals and Energy
Mzi KhumaloChairman of BoardChairman: Mawenzi
Resources Ltd. & Metallon Corporation
Ltd.
Abe MngomezuluChief Director: Mineral Investment & Policy,
Department of Minerals & Energy
Dr. Nozibele MjoliManaging Director: Hlathi Development
Services
Dr. Frank CrundwellConsultant:Crundwell
Management Solutions
Prof. Phuti NgoepeDirector: Materials Modelling Centre,School of Physical
& Mineral Sciences,University of Limpopo
Gugu MthethwaManager: Acquisitions
Finance Group,Standard Corporate
Merchant Bank
Ralph HavensteinCEO: Anglo American Platinum Corporation
Ltd.
Vinogaren PillayExecutive Director:
CSIR Mining Technology
page 5annual report 2006
annual report 2006
CEO’s Report
Dr. Paul Jourdan,CEO, Mintek.
annual report 2006
The past year has seen exceptional growth in the mining and mineral industries world-wide. With the boom in commodity prices, there has been a dramatic upsurge in exploration activity, and companies are fast-tracking new projects into production. As a result, Mintek experienced strong demand for process development and testwork, much of which stemmed from projects in neighbouring African countries.
Work on the recovery of copper, nickel, and cobalt continued at a high level, with process development work being undertaken for projects in Zambia, Zimbabwe, Botswana, and the DRC. Highlights include the commissioning of our demonstration MeTRIX metal recovery plant, which is aimed at the recovery of nickel and cobalt from dilute circulating and effluent streams, and the project work that Mintek did in regard to the Ambatovy Project in Madagascar, which utilised our resources to full capacity.
Another area of expansion was uranium, with test work continuing for the process design for the Langer Heinrich project in Namibia and Uranium One’s Dominion project in South Africa. Mintek is looking to become the service provider of choice for uranium projects in Africa, and to this end, has applied for and has been granted authorisation by the DME and the National Nuclear Regulator (NNR) to possess up to 100 kg of uranium on site at any one time.
Process development work for PGMs also continued at a high level of activity, and two projects on which Mintek has been involved as part of the feasibility studies - Blue Ridge and the Mototolo Joint Venture – received the go-ahead in the latter part of 2005.
Major milestones have been reached in several of our R&D projects. More than 15 000 tons of platinum-bearing waste materials have been smelted, with excellent recoveries, to demonstrate the ConRoast Process, and Mintek anticipates forming an alliance later in 2006 with a commercial partner to further develop and implement the process in industry.
Large-scale piloting of heap bioleaching technology for chalcopyrite-bearing copper ores began at the Sarcheshmeh Copper Complex in southern Iran, and a feasibility study for a demonstration-scale magnesium smelting facility using Mintek’s unique DC arc technology will be completed by the end of 2006.
Under Project AuTEK, to develop new industrial uses for gold, 20 kg batches of custom-
made catalysts are now being prepared for testing by end-users. This programme now includes fuel cell and photocatalysis R&D. Nanotechnology research has also been expanded, and anti-malarial research added to anti-tumour and anti-HIV in the biomedical programme. A R7.5 million nano-characterisation facility, consisting of an Atomic Force Microscope and a high-resolution Scanning Electron Microscope, is being commissioned. This will constitute the most comprehensive facility for nanoscale research on the African continent.
Mintek’s advanced process-control technologies for milling, flotation, and submerged-arc furnaces were installed at plants in west Africa, Latin America, Australia, and India, as well as in South Africa. Newly commercialised technologies include the LeachStar gold circuit controller, and an instrument for online measurement of both free and weak acid dissociable (WAD) cyanide.
Mintek takes an active role in developing the minerals industries in the southern African region and in a number of countries on the African continent – not only through commercial projects, but also through its assistance to the African Mining Partnership and the regional Spatial Development Initiatives (SDIs). During the year under review, Mintek contributed to a workshop on Integrated
page 6
annual report 2006
CEO’s Report
Mintek Management Structure
Chief Executive OfficerMintek
Technology Research and Development
Corporate Services Minerals Policy and Sustainable Development
Analytical ServicesMonde Mtakati
PyrometallurgyTom Curr
Information and Academic SupportHaveline Michau
Finance (Treasury)Hester Pretorius
Small Scale Mining Dr Nellie Mutemeri
Minerals Processing Agit Singh
Biotechnology Dr. Tony Pinches
Human Resources and Training
Monobe Manaka
Mineral Economics and Strategy
Sodhie Naicker
Kgabane Jewellery Project
Busi Ntuli
Measurement and Control
Dr. Dave Hulbert
Advanced MaterialsDr. Elma van der
Lingen
HydrometallurgyDr. Johan Nell
Engineering Support
Nick Maritz
MineralogyDorrit de Nooy
High Temperature Technology
Dr. Johan Nell
Chief Executive Officer
Dr Paul Jourdan
General Manager Technology
Dr. Roger Paul
General Manager Research and Development
Dr. Molefi Motuku
General Manager Corporate Services
Vimlan Govender
General Manager Minerals Policy & Sustainable Development
Petrus Fusi
page 7annual report 2006
annual report 2006
CEO’s Report
Resource Planning: Fostering Mineral Clusters, which built upon the Mineral Cluster Policy studies of SA and Mozambique done for the UN Economic Commission for Africa. This policy was continued by undertaking geological and mineral development studies for the governments of Nigeria, Ghana, the DRC, and Mozambique. A first-phase scan of key African minerals, and a detailed review of South Africa’s platinum industry cluster, were completed.
From a policy point of view, much effort has gone into supporting the Department of Minerals and Energy and the Mining Charter beneficiation initiatives, including equity offset and beneficiation studies. Increased emphasis is also being placed on sustainable development and the role of artisanal and small-scale mining, in order to ensure that the benefits derived from the mining sector contribute to broader-based socio-economic development.The Kgabane jewellery training programme, which focuses on using indigenous skills and traditional designs, now has 25 projects, encompassing about 250 people, throughout South Africa. The Small-Scale Mining (SSM) division conducted projects encompassing ceramics, agrogeology, glass bead manufacturing, ornamental stone carving, and the beneficiation of waste material from the dimension-stone industry.
Mintek has over the years progressively transformed its staff profile and business practices. Under our Employment Equity Plan, which was initiated in 2000, Mintek’s workforce profile progressed from a 61 per cent designated-group representation to 77 per cent by the end of March 2006.
The most pressing challenge is increasing employment-equity representation in the professional, middle and senior management levels, due to strong competition from the private sector.
We have also successfully retained our certifications for Quality (ISO 9001 and ISO 17025), Environment (ISO 14001), and Safety and Health (OHSAS 18001).
Due to the increased amount of uranium-related work, a Radiation Protection Programme (RPP) has been incorporated as part of the overall Quality Management Programme.
The quality of Mintek’s R&D output, as measured by the Client Dissatisfaction Frequency Rate (CDFR), continued to improve, with the index remaining consistently below the new target of less than ten per cent from the beginning of 2006.
Mintek’s total income, as well as income per employee, has continued to increase in real terms. Total income grew from R232.3 million in 2004/05 to R256.5 million, of which commercial income accounted for R161.0 million, a 12.0 per cent increase over 2004/05. International contract funding grew by 16 per cent, and local contract funding by 11.7 per cent. However, the ratio of contract to total income fell slightly, to 53.6 per cent from 54.6 per cent the previous year, mainly as a result of poor economic conditions in a few of our target markets.
The SAP crash at the end of the 2004/05 year took several months to restore and impacted on the year under review, particularly with regard to the months of the manual system. The implementation of the new ERP, MySAP, went live in March and we are anticipating a much improved and streamlined ERP system in the coming year. A major effort was undertaken Mintek to rectify the deficiencies disclosed by the Auditor-General in their 2004/05 Report, however, this was not fully realised for the revaluation of assets by the year-end and will be completed in the 2006/07 year.
0
20
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80
2000 2001 2002 2003 2004 2005 2006
WORKFORCE PROFILE - TRANSFORMATION
% D
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roup
s
page 8
0
100
200
300
400
500
600
0
50
100
19951996
1997 19981999
20012000
20032002
20042005
2006
150
200
250
300
Inco
me,
R M
illio
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Inco
me
per e
mpl
oyee
R Ô
000
Total IncomeIncome/Employee
Total income and income per employee 1995 - 2006(2005 Rand adjusted using PPI, SARB)(2005 Rand adjusted using PPI, SARB)
annual report 2006
CEO’s Report
It should be noted that Mintek’s operational capacity is currently being fully utilised, and further anticipated growth will depend on upgrades to existing technical and pilot-plant infrastructure and the retention/attraction of skilled engineers and scientists. To this end, during 2005/06, Mintek made considerable investments, totalling about R20 million, to upgrade its technical, roads, and electrical infrastructure and switchgear, essential scientific equipment, and IT networks on the campus. Due to the commodities boom (provoked by unprecedented Asian demand) Mintek has experienced an unprecedented loss of skilled personnel to the private sector. This has been partially compensated for by our robust bursar pipeline, but a major problem still remains in retaining/attracting experienced personnel, which remains the single greatest threat to Mintek’s world class R&D capacity.
Key challenges facing Mintek in the 2006/07 financial year will include to:• further increase our operational income in real
terms;• continue to develop and provide internationally
competitive and innovative mineral technologies;• reduce staff turnover and increase employee
retention in the face of a skills shortage and financial attraction into the private sector;
• increase the disadvantaged group representation within Mintek, particularly in the categories of professional scientist and engineer, and with greater emphasis being placed increasingly on female and disabled representation;
• maintain the high level of Mintek’s technical and support infrastructure;
• develop applied technologies for SMMEs; and,
• expand Mintek’s subsidiary company, Mindev (Pty) Ltd.During the past year Ms Louisa Mojela and Ms
Tina Eboka resigned as directors of the Mintek Board. We wish to thank the departed members for their service and would like to extend a warm welcome to our new Board members.
Mintek is a dynamic, growing organisation which is playing an increasingly important role in the development of the minerals industry in South Africa, on the African continent and internationally. As a technology-based organisation, it is important for Mintek to ensure a steady increase - in real terms - of its commercial income, but still maintain a solid scientific base to develop future technologies for sustainable growth. With the implementation in 2004, of a strategic R&D framework, Mintek continues to invest in long-term applied R&D, contributing to the technologies of the future to underpin the future competitiveness of our minerals sector and the provision of the broad scientific base of the country for the upliftment of all South Africans.
Dr Paul JourdanCEO, Mintek31 August 2006
Increased emphasis is also being placed on sustainable development and the role of artisanal and small-scale mining, in order to ensure that the benefits derived from the mining sector contribute to broader-based socio-economic development.
5
10
15
20
25
30
Jul 0
3
Mar
04
Mar
05
Mar
06
Sep
03
May
04
May
05
Nov
03
Nov
04
Nov
05
Jul 0
4
Jul 0
5
Jan
04
Jan
05
Jan
06
Sep
04
Sep
05
19 2018
2118
16 15 14 1512 11
9 9 9 97
8 8 8
1311 12 11 11
1412 13
10 1113
11
7 79
Mintek’s Client Dissatisfaction Frequency Rate (CDFR)
Actual CDFRTarget CDFR
page 9
White Female (8)
5%
Asian Female (4)
3%Coloured
Female (1)1%
STUDENT SUPPORT, 2005 ACADEMIC YEAR
White Male (14)
10%
Asian Male (7)
5%
Coloured Male (2)
1%
Black Female (49)
34%
Black Male (58)41%
annual report 2006
Performance against objectives
annual report 2006page 10
Critical objective KPI Target Summary Performance results
Stakeholder perspective Fulfillingthe Fourmainfocus Valueaddition Fiveindustrysectors: Targetachieved/ CouncilMandate areas through gold,PGMs,ferrous, exceededexcept beneficiation metals,non-ferrous forferrousmetals metals,andbase servicework metals Facilitatinggrowth Exportofsoftware Undertargetdue ofSAmineral controlsystems toeconomic technologyinputs, andpilotplant conditionsinLatin capitalgoodsand services America services Developmentof First-phasescanof Targetachieved regionalstrategies keyAfricanminerals forthemineral completed processingsector Contributingto 200ASSMs Targetachieved growthofSMMEs trained Supportofthe Impactonquality Ruraldevelopment Projectinceramics, Targetachieved NSIR&Dstrategy oflife andpoverty soilameliorant,glass goals alleviation beadmanufacturing, Impactongrowth Sustainable andornamentalstone andwealthcreation livelihoods carvings Broadeningskillsbase ofruralcommunities ImpactonNSIor Foreignexchange Exportofhigh-tech Undertargetdue nationalpriorty earnings plants,technologies, toeconomicconditions andservices inLatinAmerica Technology Theresources-based Ongoing/achieved transfer technologycuster projectpromotesa BroadeningofSA’s shiftfromresources mineralcompetitive dependencetohigh- advantages techgrowthby developingthelocal LeveragingoffMintek’s mininginputssector resourcesand resourcetechnologies Sustainableeconomic growthlinkedto mineralresources Provedabasefor aknowledge-based economy Industrial Introducingnew Ongoing/achieved diversification industrialusesfor goldandpaltinum Ensuringquality Contributiontothe Prioritiseresearch Upholdthebroader Ongoing/achieved ofpolicy/ developmentof nationalobjectivesand decision-making asustainableR&D Strategicapproach ensurethatbasicR&D baseinSA tofunding objectivearewell articulated Drawonavailable industryinputs Financial perspective Financial Sources of 2004/05 2005/06 2005/06 Sustainablity Income R million R million % of total Parliamentarygrant 88.632 95.509 33.5 (CoreFunding) InnovationFund 9.620 9.154 3.2 Externalcontract 89.921 100.420 35.2 funding–local
annual report 2006
Performance against objectives
Externalcontract 45.122 52.352 18.3 funding–international Non-operatingincome 14.225 27.821 9.8 Total 247.520 285.256 100 Ratioofcontract/ 54.6% 53.6% totalincome Organisational perspective Overheadefficiency Ratioofoverhead 2003/04 2004/05 2005/06 costtototalcost 40.9% 44.18%% 39.50% Proportionof PhDand 2005/06 % of total staff researchersto Mastersdegrees (number) totalstaff 62 12% Salariestototal 2003/04 2004/05 2005/06 expenditure 57.9% 54.7% 59%
Bestpractice ResultsofQES 2003/04 2004/05 2005/06 audits ISO9001 ISO9001 ISO9001 (Quality) (Quality) (Quality) ISO14001 ISO14001 ISO14001 (Environment) (Environment) (Environment) ISO18001 ISO18001 OHSAS18001 (Safety) (Safety) (Safety&Health)
Customer Steadydecrease 2003/04 2004/05 2005/06 Services/Quality inCDFR 11 11 9 Learning and growth perspective Qualityof Totalscientific 2003/04 2004/05 2005/06 scientificoutput documents 430 401 421 Qualityofscientific MastersandPhD 66 62 capacity researchers Documentsproduced 2.53 1.05 1.01 peroutputman-year Developmentof 2004/05 2005/06 scientificcapacity Foreigndelegations 13 13 hostedtopromote bilateralresearch. Strategicallianceswith 5 5 otherS&Torganisations. Interactionwith 6 6 professionalbodiesto promoteS&T. Numberofprojectswith 14 15 externalcollaborators. Numberofpublications 12 26 withexternalcollaborators. Transformational perspective Organisational Employmentequity 2004/05 2005/06 demographics demographics Percentageofblack 35.5% 36.9% researchersandmanagers Percentageofwomen 16.0% 24.5% researchersandmanagers Percentageofdisabled 1.02% 1.2% staffmembers HIV/AIDSprogrammes FirstKAPsurvey In-depth andinitiatives completed understanding andskills development
page 11
Data not
available
Data not
available
annual report 2006
Technical Review
Technical Review
annual report 2006
Gold industryThe monitoring of cyanide to ensure compliance with best practice codes is continuing within the gold mining industry. Mintek has developed the expertise to assist in this regard and is contracted by AngloGold Ashanti to routinely monitor relevant effluents from all of its mines in Africa. Mintek participated in ICMI-based gap audits at AngloGold Ashanti’s Sadiola, Yatela, and Morila mines in Mali, and at Gold Fields’ Beatrix plant in South Africa. Audits at Navachab (Namibia), Geita (Tanzania), Iduapriem and Bibiani (Ghana), and Siguiri (Guinea) are scheduled. An audit of Sasol’s sodium cyanide plant at Sasolburg and of Sasol Infrachem for compliance with the ICMI Producers’ and the ICMI Transportation Code respectively has also been scheduled for May 2006, and will be conducted under Mintek team leadership. Monitoring and auditing of sites for compliance with international codes has resulted in Mintek being recognised as a centre of expertise, and requests for related work are increasing.
Cyanide mass balancing and speciation over mine sites has resulted in major advances in the modelling of HCN evaporation. The work is supported by the DTI through the THRIP mechanism and by AngloGold Ashanti, who seconded one of their engineering staff to Mintek to carry out an MSc project on cyanide volatilisation and to develop a cyanide mass balance model for their operations. The project was successfully completed, and the company is implementing the mass balance model at test sites. Further work will be carried out to extend the model to include precipitation, chemical degradation and ultraviolet dissociation. Two BTech projects have also been started on the biodegradation of cyanide and cyanide complexes.
At the request of Office des Mines d’Or de Kilomoto (OKIMO), Mintek conducted a preliminary assessment of potential resources contained in the tailings deposits of Durba and Kalimva in the eastern DRC. The work was undertaken In conjunction with EPC (formerly Grinaker LTA), who are assessing the feasibility of refurbishing the original leaching and cementation plant.
A comprehensive metallurgical test programme was carried out on samples from a deposit in Tanzania consisting of comminution and flotation, leaching, and cyanide destruction. Ongoing work was conducted to optimise the leaching conditions at the Gallery Gold’s mine in Botswana, as well as regular control testwork on plant samples for EPC. Metallurgical testwork and plant simulations were done to provide data for the bankable feasibility studies for Aflease Gold’s new Modder East plant on the Witwatersrand, and for AngloGold Ashanti’s Sadiola project in Mali, and leaching testwork carried out for the Navachab mine in Namibia.
Project AuTEK is a joint initiative between Mintek and the three major South African gold mining houses to develop new industrial uses of gold in the fields of catalysis, nanotechnology and biomedical applications.
The AuTEK catalysis programme continued product development with potential end-users. Production of gold-based catalysts has been scaled up to commercial 20 kg batches, which are being promoted as custom made catalysts with assistance of the World Gold Council. Mintek is collaborating with an international catalyst producer to evaluate the potential for commercial production of gold-based catalysts at the tonnage scale for air purification and
Part of the original gold-recovery plant at Durba in the eastern DRC, which is still operating using a flowsheet comprising milling, gravity separation, and amalgamation.
page 12
Sampling of tailings at Durba, eastern DRC, by auger drilling.
annual report 2006
Technical Review
page 13annual report 2006
annual report 2006
Technical Review
other industrial applications. R&D in the new field of photocatalysis was started during 2005, with the focus on the photodegradation of certain organic pollutants. The addition of gold to traditional metal-oxide photocatalyst materials increases their activity, extends their light adsorption capabilities into the visible region, and enables the catalysis of novel reactions.
In the fuel cell programme, the PureAuroH2 system to remove CO levels from the hydrogen feedstock has been patented. The technology, which was tested at Johnson Matthey’s laboratories in the UK during an exchange visit by a member of the AuTEK team, removes carbon monoxide from hydrogen at room temperature from an initial 10-2000 ppm to less than 1 ppm. Mintek is seeking commercial partners to help develop this innovative technology for use in purifying the onboard-generated hydrogen feed to fuel cells.
A collaborative gold nano-biolabelling R&D project at University of Liverpool has won awards both locally and abroad. AuTEK nanoscale R&D has broadened to involve five local universities. Two PhD projects on nanoparticle structures and
advanced biolabel development have been started at the University of Zululand, and work in the fields of sensors and biosynthesis was initiated at the University of Johannesburg and Rhodes University respectively. A PhD project on nanostructure modelling and simulation will be completed in the second half of 2006.
At the end of the period under review, Mintek commissioned a dedicated nano-characterisation laboratory equipped with a R4.5 million scanning probe microscope (SPM) funded by the Department of Science and Technology (DST) and a high-resolution scanning electron microscope (HRSEM) with a resolution down to 2 nm. Mintek is the only organisation on the African continent with such a comprehensive capacity for nanoscale research. The SPM comprises two main components - a MultiMode and an EnviroScope. One of the modes on the MultiMode allows mechanical properties such as hardness to be measured on the nanometre scale. In the conventional configuration, the MultiMode can measure the electrical and magnetic properties on the surface of a material. The EnviroScope component allows the SPM technique to be carried out in different environments, for example in a vacuum, gases, or liquids, and can also be configured to perform electrochemical investigations on very small areas.
The AuTEK Biomedical Programme focuses on creating new types of metal-based chemotherapeutic agents for health concerns in southern Africa, with the emphasis on those diseases where there is a clear need for improved medicine, such as cancer, malaria, and HIV/AIDS. Research activities are centred mainly on aspects of synthetic gold chemistry and pharmacology, encompassing important aspects of drug design, and the programme involves collaboration with seven local and ten international universities. More than 140 novel gold-based compounds have been screened against various tumour cell-lines, and a number of highly potent classes of compounds have been identified. Extensive structural modification of identified compounds has resulted in higher tumour selectivity and efficacy, and a submission towards a patent application is in progress. Investigations are now aimed at understanding the cytotoxicity and the mechanism by which these compounds affect cancer cells, as well as establishing the relationships between chemical structure and pharmacokinetic properties.
The anti-malarial programme, which began in 2005, is exploring the efficacy of gold complexes on various levels, through the synthesis of bioactive ligand systems and their complexation to gold. A range
page 14
Preparation of in vitro cell
assays by multiple dilution
in the AuTEK Biomedical screening
laboratory.
The high-resolution scanning electron
microscope in Mintek’s nano-
characterisation laboratory.
annual report 2006
Technical Review
of compounds has been subjected to antimalarial screening, and a single compound has been shown to have antimalarial activity against both CQ-sensitive and CQ-resistant strains. A total of 33 compounds have also been screened for anti-HIV activity. It has been observed that the compounds tested may be selectively toxic to HIV-infected cells, while not altering the viability of the non-infected cells. Additionally, three compounds were found to limit the activity of viral enzymes vital to the HIV life-cycle, and these will be further evaluated in Mintek’s in-house HIV screening and research Laboratory.
A biomedical screening laboratory will be fully commissioned by mid 2006, and will see the introduction of in-house chemotherapeutic testing at Mintek. This laboratory has been equipped as a Biosafety Level II (BSL-2) facility to allow for the investigation of infectious agents that are associated with human diseases. Immediate investigations will focus on HIV/AIDS, although research on malaria, TB, and cancer is also envisaged in the future. A wide range of novel gold compounds, synthesised by members of the AuTEK biomedical consortium, will be screened for potential activity against HIV. Compounds exhibiting inhibitory action towards the virus will be further developed and evaluated through extensive pre-clinical tests.
Project AuTEK received two NRF/THRIP awards in 2005. The first award was made for R&D that adds value to South Africa’s natural resources. The second, for the development of quality human resources for industry, was presented to Robert Tshikhudo for his PhD work in the AuTEK biomedical programme at the University of Liverpool.
Platinum group metalsProcess development work for new PGM projects continued at a high level of activity. Pilot milling and flotation work was undertaken on a 60 t sample of ore for the Blue Ridge project. Ridge Mining announced the development of this project in November 2005, and construction will start in the second half of 2006, with the first production scheduled for early 2008. A mini plant campaign was run for Ivanhoe Platinum to confirm that the target grades and recoveries could be achieved, and to generate concentrate for downstream testwork. Laboratory-scale work was carried out to define the flowsheets for Sheba’s Ridge (Ridge Mining) and Tuschenkomst (Platmin), and piloting on both these projects is planned for 2006. Small-scale testwork was also done for African
Platinum (Leeuwkop project), Anooraq Resources (Boikgantsho joint venture), Platinum Australia (Smokey Hills and Kalplats deposits), and Impala Platinum’s Shaft 17 expansion. Reagent testwork and cleaner flowsheet optimisation was undertaken for Impala’s Mimosa platinum mine.
Many new PGM projects involve multiple orebodies and more complex mineralogical characteristics, which require in-depth study. Several potential new milling procedures for PGMs have been identified, including densifiers, HPGR technology, and screening or attritioning technologies. The introduction of ultra-fine grinding into milling circuits in the future is a distinct possibility.
A major review was conducted on the application of recent developments in fine screening technology to the closed-circuit milling of UG2 ores. A techno-economic study indicated that the energy requirements for grinding could be reduced by more than 20 per cent, and that significant improvements in PGM recoveries could be expected. This work will continue during 2006.
The demand for certified PGM reference materials has grown significantly over the past two years, due to the number of new projects being evaluated and more stringent standards for geological resource evaluation and metallurgical accounting. Three new PGM reference materials are currently being manufactured from feed-grade UG2, Merensky, and Platreef, and the round-robin analyses and statistical evaluation will be completed by mid-2006. Ferrochromium metal and slag materials are also in production.
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Flotation testwork.
annual report 2006
Technical Review
Development of the Xanthoprobe, an instrument for the online measurement of free xanthate concentration in flotation cells, is at the prototyping stage, and plant trials are expected to begin by the fourth quarter of 2006. The instrument will form the basis of a control strategy, implemented on the StarCS control platform, to optimse xanthate additions so that the levels are sufficient for effective recovery but wasteful overdosing is avoided. The same principle is used very successfully to control cyanide additions on gold plants using the Cynoprobe.
Work on the AMIRA Project 671 was completed. This project, which was sponsored by Anglo Platinum, Impala Platinum, and Rio Tinto, involved a study of the behaviour of trace elements during matte smelting and an evaluation of methods for the analysis of trace elements in various streams generated during smelting. Sustainable operation of base metal smelters requires detailed knowledge of trace-element behaviour, and since the original project did not fully resolve these issues, a draft proposal for further work has been prepared for AMIRA.
A THRIP project has been launched, with support from Anglo Platinum, Impala Platinum and Lonmin Platinum, to study the containment of slag and matte in the furnaces used for matte smelting and in converting. Individual investigations focus on the corrosion of copper by sulphur and sulphur dioxide, gas-refractory interactions, and matte liquidus temperatures. Three MSc students are being trained at Mintek as part of the project. The project provides a forum for the PGM producers to undertake generic furnace-related studies, and enables Mintek to maintain close contact with industry.
The smelting step of Mintek’s proposed ConRoast process for the recovery of PGMs from high-chromium low-sulphur concentrates and other materials has been conclusively demonstrated in a long-term smelting campaign. By the end of financial 2005, almost 15 000 t of revert tailings and other materials had been processed in the DC arc furnace at feed rates of up to 35 t/day. The PGMs and base metals were recovered into an iron-based alloy that was returned to the smelter. The project showed that the alloy smelting process is efficient (the PGMs were upgraded by more than ten-fold, with more than 99 per cent of the Cr2O3 being rejected in the slag) as well as robust enough for industrial application. Small-scale converting tests in a top-bown rotary converter have shown that the alloy can be blown to a composition close to that of existing converter mattes.
The full ConRoast process involves the DC smelting of dead-roasted sulphide concentrates, with recovery of the PGMs and base metals from the alloy by leaching. ConRoast offers advantages in terms of being able to contain SO2 emissions (by removing essentially all of the sulphur in a continuous enclosed roaster upfront of the smelting), and to accommodate a much wider variety of feed compositions, with no constraint on the minimum quantity of base metal sulphides. Mintek has begun negotiations with a potential partner on a development programme aimed at leading to commercialisation of the process.
In 2004 Mintek was asked, through the Platinum Research Venture, to propose a programme to address issues concerning the industry’s compliance with statutory requirements for sulphur emissions.
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An integrated pilot plant for milling/
flotation flowsheet development.
Crushing a PGM ore sample for a new reference material.
annual report 2006
Technical Review
The first phase of the study, which involved collaborative trials conducted internationally between analytical laboratories to determine the precision and accuracy of sulphur measurements in various smelter streams, has been completed. This is being followed by an investigation of the sulphur balances around an industrial smelter operation.
The Platinum Development Initiative (PDI) is a collaborative programme to develop platinum-based analogues of the nickel-based superalloys used in turbine components. During the year under review, the anomalies identified in the binary phase diagrams which constitute the platinum-chromium-ruthenium system were largely resolved, and the ThermoCalcTM work will be completed in the second half of 2006. Castability tests of the experimental alloys yielded positive results, although further optimisation of the alloy composition will be needed. Discussions were held with the National Institute for Materials Science (NIMS) in Japan regarding the route to possible commercialisation of the current alloy in coatings for the turbine industry. The PDI is supported by Anglo Platinum, Impala Platinum, and Lonmin Platinum, with collaborating institutions NIMS and the universities of Bayreuth, Jena, and Leeds.
The Innovation Fund project on platinum-based jewellery alloys at the University of Cape Town was completed, with successful development of several hardenable ternary alloy compositions.
The Department of Science and Technology (DST) has granted additional funding for fast-tracking the commercialisation of platinum-based alloys in applications not covered by the PDI, including the glass industry, coatings, and powder metallurgy. The National Research Foundation’s Centre of Excellence for Strong Materials also granted funds for the purchase of high-temperature fatigue testing equipment.
Ferrous metalsConfirmatory testwork was done to assist in flowsheet design for Oriel Resources’ Voskhod chromite project in Kazakhstan. A scoping study, managed by SRK and with DRA consulting on the process and plant design, was completed in July 2005. However, the metallurgical input was based on previous technical reports and typical industry practice, since no suitable representative ore sample was available at that time. The subsequent testwork, which included comminution (Bond rod work index, crushability work index, and abrasion tests), gravity separation, and mineralogical studies, showed that the desired product grades for lumpy, chip and fine material could be readily attained using gravity methods. TCLP tests were carried out on the tailings, and the results were within the US Environmental Protection Agency’s specifications.
A major collaborative project has begun to develop a more cost-effective type of grinding ball for the minerals industry. The project, with a budget of R5 million spread over three years, is funded by the DST’s Innovation Fund, which is currently managed by the NRF. The project partners with Mintek are Anglo Platinum, the University of Pretoria, and Prima Industrial Holdings.
Five alloy compositions have been selected for initial investigations. Samples produced in laboratory-scale melts will undergo screening for their mechanical and metallurgical characteristics, and their microstructures will be optimised for the best combination of impact and wear resistance. Balls cast from the three most promising materials will then be evaluated through Mintek’s own quality control system. In the subsequent stages of development, batch tests, and finally full-charge performance trials, will be undertaken on industrial milling circuits. If a
page 17
Tapping molten PGM-enriched
alloy from the DC arc
furnace during demonstration of the smelting step in the ConRoast
process.
Quality control work on grinding balls in the metallographic laboratory.
annual report 2006
Technical Review
ball can be developed that exceeds the performance of current products at a more competitive price, it would result in a significant reduction in processing costs.
The planned trials of the “smart” rockbolt, or SmartboltTM, were completed at a local gold mine. After a review of the data from all the tests in conjunction with SIMRAC, which funded the development of the bolt, it was decided to conduct further trials in the high-stress areas of the mine. The trials are being funded by the Innovation Fund through the University of Kwazulu-Natal. A second mine, which is currently deepening its sub-shaft to below 3 300 m, has also expressed interest in having the bolts installed in critical areas. The Smartbolt, which makes use of a phase transition to warn of impending unstable rock conditions in underground mines, won a SABS 2005 Prototype Award.
Development and prototyping work on the low-nickel austenitic stainless steel for structural applications has been completed. Mintek has identified two potential local partners – one a manufacturer of bolts and the other of roof fasteners – with which to commercialise the alloy, and during 2006 batches of stock material will be supplied to them for the manufacture of test samples for clients.
Extensive characterisation testwork was done on 400 samples of manganese material for CVRD’s new project in Gabon. Characterisation is aimed at evaluating the manganese grade of samples at each size fraction, afterwards using gravity separation to upgrade the material to the target grade.
Testwork was initiated on the recovery of vanadium from and the upgrading of slag obtained from the smelting of the vanadium-bearing titanomagnetite layers that occur in the Upper Zone
of the Bushveld Complex. These layers constitute a significant resource of iron, titanium, and vanadium but technology for the recovery of all three valuable metals has yet to be developed.
A research project, which was begun in 2002 to investigate the mineralogical and geochemical nature of manganese ore alteration in the northern part of the Kalahari Manganese Field (KMF), neared completion. Results from the study will enable geologists working in the KMF to identify areas for selective mining that would benefit downstream beneficiation. Predictions based on the data obtained will guide exploration initiatives in the search for ore of optimum feed quality in metallurgical beneficiation for the ferro-alloy industry, as well as possible parameters to beneficiate the ore itself.
A large amount of service work was performed for Kumba Resources using the mineral density separator in support of the Sishen expansion project.
Non-ferrous metalsMintek is co-ordinator of the bioleaching work package in the European Union’s BioMinE project, which is part of the EU’s Sixth Framework Programme (FP6). Mintek’s major role is to create synergies between various R&D partners that are studying topics that are relevant in both southern African and in Europe. These include technologies for refractory gold deposits, complex polymetallic base metal deposits, and mining and metallurgical waste materials. Particular emphasis is placed on innovative research towards making these processes more sustainable from both the environmental and the economic point of view.
In collaboration with the university members of BioMinE, Mintek is also investigating the more fundamental application of modern biological techniques, such as biomolecular techniques
page 18
The Smartbolt is interrogated with a portable ultrasonic USM 25 DAC device, which measures the longitudinal sound velocity to assess any
stress-induced microstructural
changes that have occurred in
the bolt.
The first copper cathode produced downstream of the bioheap-leach pilot plant at Sarcheshmeh, Iran.
annual report 2006
Technical Review
for identifying microbial strains and monitoring bioleaching processes, and the effect of changes in parameters such as pH, temperature, and metal concentration on the dynamics of microbial populations.
In addition to the EU FP6 funding, Mintek’s contribution to BioMinE is being supported by a major strategic investment by the DST.
Large-scale piloting of Mintek’s heap bioleaching technology for chalcopyrite-bearing copper ores is under way at the Sarcheshmeh Copper Complex in southern Iran. Irrigation of the first 25 kt heap was started in December 2005, with the first metal recovery by solvent extraction and electrowinning at the end of January. The throughput of copper in solution is expected to peak at about 300 kg/day, although this figure will vary according to the stage of the leaching process. A second heap will be started in mid-2006, followed by a third in the last quarter. Each heap contains about 90 t of extractable copper, and will take about 350 days to leach completely. The programme, which is being run under a collaborative agreement with the National Iranian Copper Industries Company (NICICO), is aimed at proving the technology at a large scale, and generating reliable operating information for a commercial-scale operation.
Mintek, in association with an industry partner and funded by the Biotechnology Partnership and Development (BioPAD), completed development of a cost-effective tank bioleaching technology for zinc sulphide concentrates. The novel process, which results in the oxidation of sulphide to elemental sulphur rather than complete oxidation to sulphate, is tailored as a cost-effective roaster debottlenecking tool. Operating in parallel with a roaster, the bioleach process should handle sphalerite feedstocks containing contaminants such as iron and arsenic more effectively than can currently be done by roasting. Mintek will seek to implement this technology in industry, both in southern Africa as well as in Europe through opportunities that may arise through its participation in BioMinE.
A second BioPAD-funded project involves the development of a novel and effective technique for inoculating bacteria into leach heaps. Laboratory-scale work has demonstrated the production of high concentrations of bacteria in a novel growth reactor and the alteration of their adhesive characteristics using appropriate storage conditions. Small-scale column leach tests carried out to simulate the inoculation process have shown that as well as a more rapid start-up, an enhanced rate of pyrite oxidation can be obtained, which will lead to higher heap temperatures and faster copper leaching
kinetics. Mintek is now looking for a potential end-user willing to participate in large-scale piloting testwork at a mine site.
Two MSc projects supported by Mintek were started in 2006, one on the bio-transformation of laterites and one on kimberlites. A MTech project is under way on the development of AFM techniques for studying bioleaching processes.
Laboratory testwork was conducted at Mopani Copper Mines’ Nkana Division in Zambia to purify the cobalt stream to obtain a solution suitable for cobalt metal production. The testwork, which consisted of copper and iron removal by ion exchange and solvent extraction for zinc removal and cobalt recovery and purification, was followed by an on-site pilot plant exercise that tested several different flowsheets. At the end of the year under review a second pilot-plant campaign, which included electrowinning of cobalt metal, was undertaken at Mintek with the participation of technical staff from Nkana to optimise the chosen flowsheet while running in a closed-circuit configuration.
A full flowsheet development exercise, encompassing milling of a 4 t bulk sample, composite sample preparation, leaching, and recovery of copper and cobalt by solvent extraction and electrowinning, was carried out for Africo Resources’ Kalukundi project in the DRC. Kalukundi, which is scheduled to start up in the first quarter of 2008, will have an annual production of about 16 400 t of copper and 3 800 t of cobalt.
A continuous mini-plant exercise, consisting of atmospheric and pressure leaching, various
page 19
The Mintek-Bateman MeTRIX modular resin-in-pulp demonstration plant.
annual report 2006
Technical Review
stages of solution purification by precipitation, ion exchange and solvent extraction, and electrowinning of cobalt and copper, was carried out to develop a hydrometallurgical process for the Idaho Cobalt project (Formation Capital Corp). Further work to optimise the selected flowsheet is planned for 2006. The project, which is currently in the final feasibility and advanced permitting stage, will be the only primary cobalt mine in the western hemisphere, with an annual output of 1 500 t of cobalt metal and cobalt chemicals per year - equivalent to 3.3 per cent of the entire global cobalt supply.
On-site piloting using precipitation and solvent extraction was conducted at Impala’s Springs Refineries to purify the nickel and cobalt streams from the Ambatovy nickel deposit in Madagascar. Although the project was successful, Impala subsequently withdrew from the Ambatovy joint venture due to investment criteria, leaving Dynatec and Sumitomo Corporation as the sole stakeholders.
Under their collaborative agreement to develop and implement resin-in-pulp (RIP) technology for the metallurgical sector (Annual Report 2004), Mintek and Bateman commissioned a modular plant that will be used to demonstrate the potential of RIP technology for improving recoveries at various base-metal plants in southern and central Africa. A particular application will be the re-treatment of residues and waste streams – for which RIP is particularly suited, since it is effective on low-grade streams (less than 5 g/l), and in the case of re-pulped residues, it lessens or eliminates the costly solid/liquid separation step required in competing technologies. A further important benefit is a reduction in the environmental consequences of the waste. The skid-mounted plant consists of four adsorption stages and an elution circuit, and has a design throughput of 10 m3/h. A novel resin concentration meter is used to
monitor the resin concentration in each stage, and is linked to a PLC/Scada system that controls the resin inventory profile and the slurry and resin residence times.
Laboratory work was undertaken for the Kamoto joint venture on solution purification and cobalt solvent extraction, to verify plant performance and assess the option of incorporating solvent extraction to purify the cobalt electrolyte prior to electrowinning. The joint venture is rehabilitating the Kamoto underground mine, concentrator, and Luilu metallurgical plant in the DRC with a view to restoring historical levels of production.
Preliminary bench-scale testwork was carried out on the carbochlorination of zirconium in a bubbling fluidised-bed reactor to produce zirconium tetrachloride, which is an intermediate in the production of zirconium metal and chemicals. However, it was found that the reaction is extremely slow, and consequently the process would not be economically viable.
A study was made into the feasibility of establishing a national fluidised-bed facility in South Africa. Fluidised-bed reactors can process fine, low-grade materials, and offer better energy efficiencies and lower emissions compared with competing processes. However, the companies that displayed interest in the project saw the benefits of fluidised-bed technology in terms of contributing to their energy requirements, for example through the combustion of low-grade coals, biomass, and waste materials, rather than meeting their process needs. In general, the metallurgical industry saw little need for such a facility, since there appears to be no lack of suitable resources to run existing processes.
A further demonstration campaign was run over
page 20
Electrowinning of cobalt metal during testwork
for Mopani Copper Mines.
Overview of the bioheap-leach operation at Sarcheshmeh, showing the pregnant leach solution ponds (blue) and the raffinate pond (green due to the presence of ferric ions), with the ponds for the second heap beyond.
annual report 2006
Technical Review
a period of eight days on Mintek’s novel zinc refining process, which is based on a DC-furnace boiler and a packed-bed distillation column. At steady state, the refined zinc production was 30 kg/h, and the product metal was within specifications for Special High Grade (less than 30 ppm lead, germanium, manganese, and copper). This provides an important step in a possible method of recovering germanium and zinc from slag dumps arising from lead smelters.
An Innovation Fund project on the evaluation of new technologies for the production of titanium metal was continued in 2005/06. The consortium partners working with Mintek on the project are the CSIR, the University of Pretoria, and Risimati Engineers. An initial technology scan was followed by a more detailed techno-economic evaluation of short-listed processes and a market study of titanium metal.
Another Innovation Fund project has succeeded in developing a less expensive method of producing aluminium-titanium master alloy, using titanium dioxide (TiO2) as the starting material rather than titanium metal. A more potent Al-Ti-C grain refiner, with a better refining capability than currently available commercial products, can also be produced using Mintek’s patented process of aluminotherimic reduction of TiO2. The production technology for the aluminium-titanium alloy is being commercialised in conjunction with Zimalco.
Following the successful conclusion of R&D on the technical aspects of the Mintek Thermal Magnesium Process (Annual Report 2005), Mintek and Anglo American reviewed the economics of the process and agreed in principle on a programme of work to take the technology forward. Small-scale testwork has confirmed that the product metal can be refined to commercial purity, and a feasibility study for a demonstration-scale magnesium smelting facility is scheduled for completion by the end of 2006. A possible outcome of this work could be the eventual establishment of a magnesium metal production facility in South Africa, which would support the local automotive sector and complement the region’s fast-growing aluminium industry.
Industrial mineralsMineral separation testwork using a 50 t/h X-ray transmission sorter was carried out. The machine, which sorts material in the size range between –80 mm and +10 mm, discriminates between particles on the basis of their atomic number. Successful results were obtained on a coal sample, and this work will be extended to other mineral separations in the forthcoming year.
A laboratory facility has been set up to characterise the physical properties of diamonds.
page 21
Constructing the pulsed columns for uranium extraction at the Olympic Dam project, Australia. Pulsed-column technology has been chosen for the solvent extraction circuit at the Dominion uranium project in South Africa (Photo courtesy Bateman).
annual report 2006
Technical Review
The first two commercial projects for the diamond characterisation facility commenced towards the end of the 2005/06 financial year. In addition, the electron microscopy section has refined its methods for analysing diamond indicator minerals, and analyses were provided for several national and international clients on a commercial basis. The first of several commercial projects on bauxite ores commenced towards the end of the 2005/06 financial year. HLS testwork for De Beers was done on an ongoing basis to verify plant efficiency.
An investigation on the Marropino tantalum deposit in Mozambique was undertaken to design a suitable scrubber for the plant. The results from the project were used by Bateman to design and build a scrubber that will be installed on the plant.
Mintek was very active in uranium process development until the early 1980s. Although there was limited demand for uranium R&D in the ensuing years, Mintek maintained its expertise in uranium extraction, which has made re-entry into this field relatively easy.
Further laboratory-scale testwork was undertaken to optimise the flowsheet for Paladin Resources’ Langer Heinrich project in Namibia. Process development work on this project, to provide input to the bankable feasibility study by GRD Minproc, was completed during the previous year. The alkaline nature of the ore requires a carbonate/bicarbonate leach, and the clarified leach liquor will be subjected to ion exchange to upgrade the uranium concentration and purity, followed by yellowcake precipitation from the eluate. Mintek is also assisting GRD Minproc with metallurgical testwork to establish a flowsheet for Paladin’s Kayelekera project in Malawi. The project is still at an early stage of development.
The Dominion project of SXR Uranium One will use pressure leaching to obtain the required high recoveries. The clarified leach liquor will be upgraded by solvent extraction, and ammonium diuranate precipitated from the strip liquor. Pilot plant testwork at Mintek has resulted in Bateman Pulsed Column (BPC) technology, as used at Olympic Dam in Australia, being chosen for the solvent extraction step. This will be a first in Africa. Additional stripping tests using the BPC with pH control gave very encouraging results (currently at Olympic Dam only extraction is performed in the BPC). Bateman conducted the feasibility study on this project.
In addition, testwork was undertaken to obtain design criteria for a new elution system at
AngloGold Ashanti’s Vaal River Uranium Plant. The ion exchange resin is prone to silica fouling, a well-known phenomenon that decreases both the loading capacity of the resin and its stripping efficiency, leading to lower recoveries. It was shown that the resin could be regenerated with sodium hydroxide to remove more than 90 per cent of the silica, largely restoring its performance.
Mintek has undertaken mineralogical investigations on a variety of ores from both primary and secondary uranium deposits. Quantitative scanning electron microscope techniques such as MLA and QEMSCAN are used to determine liberation characteristics, particle size distributions and mineral abundances. In particular, a knowledge of the mode of occurrence of unrecovered uranium in tailings and residues should enable upgrading procedures to be improved.
Uranium ores produced in southern African until now have been processed using relatively mild acid leaching conditions followed by ion exchange and/or solvent extraction from simple liquors. However,
page 22
NIMCIX ion exchange columns at the Vaal River uranium plant (photo courtesy AngloGold Ashanti Ltd.).
annual report 2006
Technical Review
many new projects are likely to require more complex technologies. The Karoo sedimentary uranium ores contain calcite and sulphide minerals and are thus both acid- and base-consuming, so the choice of lixiviant would be based on economic grounds. Technical challenges appear to include efficient liquid/solid separation, and the effective handling or recovery of molybdenum. Low-grade calcrete deposits might require heap leaching and recovery of both uranium and vanadium, whereas for a relatively high-grade material, where the uranium appears to be present in the refractory mineral davidite, the challenge would be to achieve adequate leaching efficiency. Ores that are difficult to settle or filter could be amenable to RIP.
Pyritic ores are ideally suited to bioleaching, since the pyrite provide a substrate for bacterial growth and produces the ferric sulphate and sulphuric acid necessary for uranium oxide leaching. The use of thermophilic micro-organisms for uranium leaching can now be considered, and is likely to lead to considerably faster kinetics, resulting in lower processing volumes.
Quality, environment and safetyMintek successfully underwent an assessment audit for ISO 9001 in August 2005. The next assessment audit, for ISO 14000, is due to be carried out in August 2006, and that for OHSAS 18001 the
following year. Assessment audits are performed on a three-yearly basis for certification renewals.
Mintek’s Analytical Services laboratories underwent a successful surveillance audit for ISO 17025 compliance in early 2005. The next audit is due towards the end of 2006.
At the end of the period under review, the Lost Time Injury Frequency Rate (LTIFR) was 1.7, compared with the target of 1.0. The new Client Dissatisfaction Frequency Rate (CDFR) target of less than 10 was achieved at the beginning of 2006, with improved delivery times being identified as a major contributing factor to the decrease. The CDFR is measured by conducting client feedback surveys for all completed projects costing more than R20 000.
During 2006, two new targets will be established: for Public Dissatisfaction Frequency Rate (complaints from the general public) and for Major Environmental Impacts.
Owing to the increase in uranium-related R&D, Mintek has appointed a Radiation Protection Specialist (RPS), who is registered with the National Nuclear Regulator (NNR). A Radiation Protection Programme (RPP) has been incorporated as part of the overall Quality Management Programme, and an internal audit schedule, which incorporates a site inspection programme, has been implemented to ensure that the RPP remains relevant and is updated as approved by the NNR. Mintek is registered as a uranium testwork facility with the NNR and the Department of Minerals and Energy (DME).
In terms of South Africa’s national Energy Efficiency Strategy, Mintek has undertaken to meet an energy saving target of 1.2 per cent each year between 2006 and 2010. Monitoring equipment will be installed at various points around the site, and this will enable Mintek to ascertain the energy requirements of various operations and identify where consumption could be reduced.
Small-scale testwork has confirmed that the product metal can be refined to commercial purity, and a feasibility study for a demonstration-scale magnesium smelting facility is scheduled for completion by the end of 2006.
page 23
Mintek’s Radiation
Protection Officer checks the
radioactivity of a bulk sample
arriving at Mintek for pilot plant
work.
annual report 2006
Commercial activities
annual report 2006
Mintek’s commercial activities comprise participation in operating companies and joint ventures, sales of equipment and technology
licensing agreements. Mintek also actively promotes the establishment of mineral-based development projects that could utilise its technologies.
Mintek Business Development ProjectsMintek’s business development activities are aimed at promoting economic development by furthering the beneficiation of South Africa’s most important mineral resources.
The AuTEK projects for the use of gold catalysts in respirators and other applications are still in the developmental and testing stages. The possible commercialisation of these projects will be considered in the 2008 financial year.
The commercial development of the project to recover platinum from chromite dumps has been deferred due to the differing commercial interests of the project partners.
Mintek is currently exploring alternatives for the development of technology and the establishment of a business for the recycling of PGMs from reject and spent autocatalysts.
Mintek has evaluated an opportunity to develop an alternative or gas-based hot briquetted iron project. However, a study of the current economics of the gas supply concluded that the project would not be economically viable at this time. Mintek is nevertheless confident that there is an opportunity to develop a new steel project based on low-grade iron ore using various coal-based processes.
The viability of producing ferronickel at Coega was investigated, and Mintek has explored the sourcing of nickel ore from various locations. The restricted availability of suitable ores under current strong market conditions does not, however, facilitate the establishment of such a project at this time.
The production of primary magnesium is in the final stages of development, and piloting of the Mintek Thermal Magnesium Process has been successfully completed. Mintek is negotiating with Anglo Base Metals for the installation of a demonstration plant.
A pre-feasibility study for a 20 kt/a electrolytic manganese dioxide production facility in South Africa was completed by Nexant Inc, Hazen Research and Mintek, funded under a US Trade and Development Agency grant. The study concluded that the capital cost of a greenfield plant would be exorbitantly high compared to the expansion of existing facilities elsewhere in the world.
Participation in operating companiesMintek participated in three operating companies — Apic Toll Treatment (Pty) Ltd (Atoll), Mogale Alloys (Pty) Ltd, and Tollsort (Pty) Ltd — through its wholly-owned local holding company Mindev (Pty) Ltd. Mintek’s participation is by way of shareholder loans as well as equity contributions structured through licences for Mintek’s technologies and related expertise.
Atoll is a joint venture between Mintek and Bateman Titaco that was formed to market and exploit the Apic jigging technology. Atoll’s toll jigging business in South Africa has reached a sustainable critical mass, and the company is looking at several overseas opportunities. In view of this. The Mintek and Mindev boards authorised the sale of Mintek’s shares in Atoll. Mindev’s 40 per cent shareholding was sold to Bateman.
The Mogale Alloys consortium is made up of Mindev with a 25 per cent shareholding, Atoll (20 per cent), PGR Investment (25 per cent), and Sebeso (30 per cent). During the year under review, the company produced 30.6 kt of nickel-chromium alloy and 40.1 kt of silicomanganese. Forecast production for 2006 is approximately 38 kt of nickel-chromium-containing alloy and a further 40 kt of silicomanganese.
The Tollsort Company has made major breakthroughs in treating gold waste dumps and UG2 ores by optical sorting. The technology was fully proven in a small commercial tolling operation treating low-grade (0.3 g/t) material at Kloof Gold Mine. Although the operation was suspended in September 2004 due to the low head grade,Tollsort will remain non-operational until commercially viable optical sorting projects have been identified.
page 24
annual report 2006
Commercial activities
page 25
annual report 2006
Commercial activities
Oriel Resources (Pty) Ltd entrusted Mintek with consulting work and ore testing for the design of the chromite ore processing facility at the Voskhod site in Kazakhstan. Some testwork is ongoing, but Oriel is proceeding with project implementation.
A preliminary scan of processes and feasibility studies was begun for the Veremo titaniferous magnetite project, for production of pig iron and titania slag.
Advanced Process Control ProductsFlotation controlMintek’s FloatStar flotation control strategy on the StarCS platform was implemented at AngloGold Ashanti’s Obuasi mine in Ghana, the first such installation in West Africa. FloatStar Flow Optimisers were purchased by Lonmin’s K4 and Karee UG2 plants after successful trial installations, and the Level Stabiliser and Grade-Recovery Optimiser were installed on a trial basis at Anglo Base Metals’ Black Mountain lead-zinc-copper mine. FloatStar Level Stabilisers at five major PGM concentrators in South Africa were upgraded with the latest software, and Tati Nickel in Botswana purchased a service contract.
New installations of FloatStar are increasingly being supplied with monitoring packages to monitor controller performance and usage.
Leaching controlAngloGold Ashanti’s Mponeng gold mine purchased the first LeachStar system for gold circuits after extensive plant trials. Under LeachStar control, the stability of the feed rate from the thickeners to the leach has improved, and the consumption of cyanide and flocculants has been substantially reduced. The new system has also greatly improved carbon management on the plant. A LeachStar system,
together with the Cynoprobe online cyanide analyser, is scheduled for commissioning at Obuasi in Ghana in the second half of 2006, and a trial installation has been ordered by Golden Star Resources’ Bogoso mine, also in Ghana.
After undergoing validation at AngloGold Ashanti’s Savuka gold plant, the WAD Cynoprobe has been fully commercialised. The WAD Cynoprobe is able to measure the concentration of both free and weak-acid-dissociable cyanide online, and can be used to control and optimise cyanide recovery and destruction processes, as well as to assist plants to comply with the International Cyanide Code. Orders for trial installations have been received from four local gold plants.
Milling control The MillStar expansion project was completed at Industrias Peñoles’ Fresnillo operation, with milling control extended to the new SAG milling circuit, and a service contract was concluded for both MillStar and FloatStar. Peñoles has placed a further order for MillStar for their Tizapa plant, and this will be installed in the second half of 2006. MillStar control was also implemented at the Collahuasi expansion project in Chile, and the company has placed an order for a trial on their 3 000 t/h SAG mill, one of the world’s largest. This trial, which will include two modules – cyclone switching control and model-predictive control on the mill discharge – is scheduled for mid-2006.
The MillStar stabiliser and optimiser installation on the sulphide treatment plant at AngloGold Ashanti’s Obuasi operation in Ghana was completed and handed over. At Copper Mines of Tasmania,
page 26
Mintek’s Carbon Activity Analyser
can be used to ascertain when
the carbon in gold-adsorption circuits requires
regenerating.
Tapping molten ferrochromium at Hernic Ferrochrome. A FurnStar Minstral furnace control system was installed on Hernic’s new 78 MVA No. 4 furnace in 2005.
annual report 2006
Commercial activities
crusher control was installed after successful plant trials, and the MillStar trial installation is continuing.A corporate service contract has been concluded with Lonmin, which as well as the servicing of all current process-control installations and sofware upgrades, includes an agreement for Mintek to trial-install new technology at Lonmin’s plants in return for reduced prices on purchases. Under this agreement, a new MillStar power optimiser has been developed that has found application on the Eastern Platinum milling circuit and is being considered for Karee. A new controller for secondary milling applications is also under development.
Furnace controlFive Minstral submerged-arc furnace controllers in South Africa were upgraded to the latest FurnStar Minstral version, and FurnStar Minstrals were installed on the new 78 MVA furnace at Hernic Ferrochrome and on two of the largest furnaces at Assmang’s Cato Ridge plant. Internationally, two Minstrals were purchased by Pechiney in France. DSCL in India upgraded their two existing Minstrals and purchased a third unit for their newly built furnace. Forthcoming installations will include units on the first two 63 MVA furnaces at the Xstrata-Merafe Project Lion ferrochromium joint venture, which are due to be commissioned in the third quarter of 2006.
Considerable effort was devoted to the commercialisation of recently developed products, with sales of the first four Roses electrode temperature simulators and three Slipping Schedulers. The FurnStar products were also transferred to the latest StarCS 6.0 control platform. StarCS provides far more comprehensive data logging facilities, which Mintek plans to utilise for better reporting on control system performance. Investigations of the potential for dynamic tuning of controller parameters and advanced fault detection based on historical performance are also planned.
Trials of the Arcmon arc monitoring system have been undertaken on industrial-scale ferrosilicon, silicon metal, and ferrochromium furnaces. Arcmon is able to distinguish between arcing and resistive conduction, and provides operators with information that can assist with the metallurgical operation of the furnace. The system is also able to measure inductance in the electrical circuit caused by the magnetic fields around the electrodes, and Mintek is developing software on the Star Control System to translate these measurements into information about the bath level and electrode lengths. The patent for the Arcmon system has been finalised and submitted.
Minfurn carbon regeneration furnaceA 125 kg/h Minfurn carbon-regeneration furnace was built for Compañia Minera San Simón SA in Peru. This is the second installation of the higher-capacity 125 kg/h Minfurn, which was designed specifically after several companies had shown interest in a larger unit. The larger Minfurn has a capacity comparable with conventional regeneration equipment such as rotary kilns, while retaining the advantages of the unique resistive-heating technology employed in the Minfurn, which results in a simpler construction and higher energy efficiency. Smaller furnaces were shipped to Brazil (the Yamana Group’s Mina Sao Francisco, 75 kg/h) and Zimbabwe (Jessie Mine, 25 kg/h).
There are currently more than 20 Minfurns in operation world-wide, and Mintek is following up further enquiries from gold producers in the Middle and Far East and Latin America. Companies in Europe and the Far East have also expressed interest in utilising the technology to regenerate carbon used in water treatment plants. Some potential clients are sending carbon samples for testing in Mintek’s 3 kg/h Minfurn.
page 27
A Minfurn carbon-regeneration furnace undergoing testing in Mintek’s workshops before being shipped to a gold plant in Peru.
annual report 2006
Sustainable Development
annual report 2006
Support for Policy and Regional Development – The Mineral Economics and Strategy Unit (MESU) has been restructured into three interlinked units: Regional Mineral Economics (RME), Sustainable Development (SD), and Resource Based Technology
Strategies (RBTS).
Sustainable DevelopmentThe SD unit became party to the DME’s “Sustainable Development through Mining” Programme in September 2005. Since then, the team has been contributing research findings to the individual projects within the programme. These include the absorption of artisanal and small-scale miners into the gold mining value chain (particularly in the closing stages of mining projects), regional closure planning and approaches to granite mining (including the training of previously disadvantaged South Africans in utilising granite waste), and the development of guidelines for the monitoring and performance assessment of mines’ Environmental Management Programmes (EMPs).
During 2006, the focus will be on delivering the audit plans and standards for EMP performance monitoring, further work on sustainable development in the mining sectoral strategy, and the development of focused regional closure strategies for diamond, PGM and coal operations. In the area of small-scale mining, training and skills transfer activities will be centred around actual mine rehabilitation activities where possible.
During the year under review, a number of local and international mineral economics projects were undertaken. On a local level, these included a targeted diamond strategy study for the Northern Cape province, a platinum industry inputs study, a commissioned diamond resource investigation for Nozala Diamonds, and various strategy studies targeting iron, steel, heavy minerals, mining taxation, and South African trade policies. A key international project was a review of the South African chromite industry for a European company.
One of the major aspects of work on minerals policy over the past two years has involved support for the Mining Charter beneficiation initiatives, including the equity offset studies, base beneficiation evaluations, and more recently in the creation and setting up of the PGM Beneficiation Committee (PBC). This initiative was initiated by the CEOs of the three major PGM producing companies in conjunction with the DME. The aim of the PBC is to develop a holistic strategic framework for the development of the South African PGM industry to optimise the linkages, especially between inputs, which encompass government’s objectives of promoting empowerment, widening access to the minerals industry, promoting job creation, alleviating poverty, stimulating skills development and encouraging technology transfer.
On an international level, mineral studies on neighbouring countries as well as integrated scans for the continental Spatial Development Initiative (SDI) process were undertaken. In conjunction with the Small-Scale Mining (SSM) division, geological and mineral development studies were undertaken for the government of Nigeria.
Mineral Policy and Sustainable Development
page 28
Water management is a critical aspect of sustainable development in mining, particularly in semi-arid areas like southern Africa.
Opposite pic: A “Working for Water” team clears alien invasion vegetation to improve water flow for mining.
annual report 2006
Sustainable Development
page 29
annual report 2006
Sustainable Development
Resource Based Technology StrategiesTo maximise the technological and industrial development impact of public sector infrastructure spending programmes, Mintek supported the DPE and DTI regarding leveraging the procurement of mining inputs where there is a large degree of overlap.
A study of explosives and processing chemical inputs to mining is under way with the objective of identifying opportunities to increase exports of domestically manufactured inputs.
The first detailed review of the Platinum Industry Cluster was completed, and recommendations formulated for promoting the cluster, strengthening upstream and downstream linkages, and increasing exports of mining equipment inputs.
Kgabane jewellery initiativeProduction facilities of 5 of the 23 groups have been upgraded to work with precious metals. 23 producer-groups have been established in rural and poor urban areas throughout the country. The Kgabane Jewellery training programme has received provisional accreditation from the Mining Qualifications Authority (MQA), which has resulted in the training of about 420 women, disabled persons and youths in all nine provinces in South Africa. The training activities are supported by marketing efforts, and the products are currently retailed at eight stores in Cape Town, Johannesburg, Pretoria, and Mpumalanga. A 35-bench workshop was set up in Giyani where 35 women are being assisted with production. The legal registration of 16 groups was completed.
Kgabane is currently conducting product development work with a major established retailer.
Kgabane has built links with other African countries that have successfully established jewellery sectors that include indigenous peoples and technologies. The first phase of an indigenous jewellery skills exchange programme, which will run over a period of approximately three years, was completed in partnership with the west African countries of Mali and Ghana.
page 30
Sustainable development and
mining seek to find collaborative
solutions with other sectors for the improvement
of peoples’ livelihoods.
One of the challenges of mining is
to support community
development and reduce
dependencies on the natural
environment for goods such as wood for fuel.
The Kgabane jewellery training workshop at Mintek.
annual report 2006
Sustainable Development
Small-Scale Mining The Small-Scale Mining (SSM) division, contributed as part of Mintek’s partnership in the DME’s “Sustainable Development through Mining” Programme. The department has conducted research and presented findings of the individual projects that were pertinent and specific to the Artisanal and Small-Scale Mining (ASSM) sector. The ASSM School provided training to 37 historically disadvantaged South Africans (HDSAs) on granite quarry rehabilitation and granite waste beneficiation.
The rural pottery project in Giyani, which was sponsored by the WF Kellogg Foundation, has resulted in the setting up of a small factory for the women of Mapuve village. Two of these ladies were taken to the United States as part of a craft exchange programme.
A pilot plant was set up for the production of the SLASH soil ameliorant at Marble Hall. The product is being field-tested by both small-scale and large commercial farms. Trials are at an advanced stage.
A glass bead-manufacturing centre has been established in the Cradle of Humankind World Heritage Site, northwest of Johannesburg. Other bead and jewellery making units have been set up at Marble Hall and Hazyview.
A World Bank-funded project to investigate the establishment of a sustainable gypsum mining
industry in Nigeria was successfully completed. Feasibility studies were carried out on the use of the iGoli mercury-free gold process by small-scale gold miners. The iGoli process is also being tested on a Zenzele TDC project in the Free State. Invitations have been received to consider trials in the DRC and Great Lakes Region, where mercury pollution is a great problem.
The division is supporting seven small-scale entrepreneurs involved in sandstone mining in the Eastern Free State. After helping them to legalise their operations the division started a feasibilty study to set-up a trading network which will supply the local municipality and provide products into other markets through a co-operative marketing arrangement. Other projects on the beneficiation of dimension stone and brick making take place on an ongoing basis.
As part of Mintek’s training programme, about 80 artisanal and small-scale miners received training, both at Mintek and at sites around the country. The MQA renewed Mintek’s accreditation as a skills provider, and has allocated funds for further training in 2006 and into 2007.
page 31
Rural potters in Giyani using the Mintek-designed
manually operated pottery
wheel.
Pilot plant for producing SLASH soil ameliorant at Marble Hall, Mpumalanga province.
annual report 2006
People
annual report 2006
Black Economic EmpowermentMintek is currently putting a project together with an accredited consulting organisation to verify the DG status of the companies in Mintek’s preferred supplier base.
Human Resources DevelopmentMintek continues to train and develop its staff primarily in mineral and metallurgical R&D and technology transfer. Staff are mentored by leading professionals in their areas of expertise, and Mintek endeavours to further create linkages with “Mintek Associates”, the retired core of Mintek, who would be provided with infrastructure on site to enable them to transfer their skills.
Industrial RelationsMintek has a positive working relationship with the National Union of Mineworkers (NUM). NUM continues to interact with Mintek on a consultative basis on issues affecting its members at the workplace. NUM has established active structures within Mintek, which deals with issues relating to gender, training as well as health and safety.
Employment EquityThe Employment Equity and Diversity Forum, which represents all categories of employees, endeavours to create an environment that embraces diversity and employment equity. By nurturing diversity and eliminating equity barriers while conforming to legislation and best practice, the Forum wishes to make Mintek’s environment conducive to meeting strategic and operational goals. The Forum will consult with management as well as staff with regards to, among others, the new Employment Equity Plan 2009.
The table on the right shows the status of Mintek’s workforce transformation. There has been a major improvement at management level as well as professional level, despite of the shortage of scientists and engineers from the previously disadvantaged group at these levels. The percentage of previously disadvantaged individuals in all categories is above 50 per cent, and Mintek has reached its target of 77 per cent designated group representation set by the Board for March 2006.
Mechanisms are in place through the bursary schemes to attract persons from the previously disadvantaged groups.
OCCUPATIONAL CATEGORY
Executive &divisional managers
Professionals
Technicians &associateprofessionals
Clerks
Craft & related trades
Plant & machine operators
Elementary operators
TOTAL PERMANENT
% NO. in group againsttotal
MALE
A A
4 3 77
69 118 12
14 1 2 3
28 4 17
48
49
26 74 15
8 27 47
17 10 59
165 96 58
15 92 90 98
5 16 37 111 85 77
1 9 9 100
23 46 71
50
70 99
36 72
149 515 396 77
77
16
3
68
13 29
21 1 2
36 14
37
32 4
75 2 77 1572 3
8 8 18
247 119 366 57204 19 2
48 23 71 1
8
40 4 5
49
12
39 7 2
24 1 25
50
13
1
C CI IW WTotalTotalDG
Total
FEMALE TOTAL
Grand Total
DG Total
DG%in
Category
ACTUAL MINTEK WORKFORCE PROFILE 31 March 2006
page 32
Peer group education training is an important part of Mintek’s HIV/Aids programme.
annual report 2006
People
page 33
annual report 2006
People
HIV & AIDSMintek’s HIV/AIDS committee consists of representatives from Management, the NUM, the Staff Association, and Health and Safety, together with representatives from Mintek’s operating divisions.
On the recommendation of the Committee, a second Knowledge, Attitude and Practices (KAP) survey was conducted in August 2005. A comparison of the results from those of the previous survey (held in 2003) indicated a shift in risk level from predominantly Level 3 to Level 4. The Aganang HIV Resource Centre, which conducted the survey, recommended that Mintek should now move from an awareness campaign to a programme that will provide in-depth understanding and skills development.
During 2006, Mintek will continue to conduct education of peer groups in all divisions of Mintek by the utilisation of external interventions such as the Township Aids project and MX Health. Peer group counselling training will be conducted for the same employees who are equipped through the peer group education training.
A high level of awareness of HIV/AIDS is maintained by the distribution of pamphlets and posters and knowledge sharing by persons with HIV/AIDS from outside of Mintek, and HIV/AIDS theatre/shows. The HIV/AIDS Committee produced a booklet on HIV/AIDS, which was distributed to all Mintek and labour broker employees on HIV/AIDS Day - 1 December 2005. It is a requirement that Labour Brokers should have strategies in place to combat HIV and AIDS. Voluntary HIV/AIDS testing and counselling is offered by the Mintek Medical Clinic, as well as in partnership with the Department of Health in the area.
It is a Condition of Service for every permanent employee of Mintek to belong to one of Mintek’s four preferred medial aid schemes, which have HIV/AIDS programmes within their benefit structures.
The “Know Your Status” campaign is ongoing. About 15 per cent of Mintek employees know their status on HIV/AIDS, and efforts are being made to de-stigmatise HIV/ AIDS.
Bursary programmeMintek’s continuing efforts to maintain a strong potential flow of academic and technically- trained employees can be dramatically observed in the graph
above, which is increasingly reflecting the broader demographics of the country.
Mintek directly supports 42 undergraduate and 33 postgraduate students at Universities and Universities of Technology through its bursary programme. It also has on its premises a further 27 In-Service Trainees, completing their compulsory one-year practical experience, and 7 DST-funded Researcher Development Fellows. Two graduates are supported in a one-year Graduate Development programme, and a further 12 graduates are supported in a two-year programme sponsored by the MQA. Where possible, some of these trainees are offered employment on completion of their training.
Promoting the engineering profession to black girl-learnersIn 2005, Mintek hosted a group of 15 girl children from 13 schools in Limpopo and three educators. The group spent a week at Mintek learning about the various SET related careers. Part of the visit included presentations by Mintek role models, visits to science centres and guided tours to Mintek divisions so as to enable the pupils to see SET at work. The aim was to enable them to make informed decisions on career choices. These students also receive financial support from Mintek towards their tuition expenses.
MINTEK BURSARS AND TRAINEES 1996 - 2005
020406080
100120140160180200
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
White maleDesignated groupsTOTAL
A group of Limpopo girl-learners who spent a week at Mintek.
page 34
annual report 2006
People
The most promising students are also earmarked for the Mintek bursary pipeline. Mintek also hosted a group of young, Johannesburg-based, girl-learners as part of the annual ”bring-a-girl-child-to-work” day.
SET awareness and promotionsMintek participated in various SET related exhibitions organised by different institutions including the DME and the DST. These exhibitions were targeted at members of the public and aimed at promoting a better understanding of SET. The events included Sasol Techno X, the Rand Easter Show, the National Science Week, the DME/Imery launch, and various University Open Days.
Copies of the Mintek periodic table of elements were also distributed to a number of schools through the DST and direct mail, based on requests from schools across the country.
Adopt-a-SchoolMintek has “adopted” three high schools located in Soweto, Randburg, and Diepsloot, and assists them
with facilities such as teaching aids, computers, and laboratory equipment, with the aim of improving the teaching of mathematics and science. Students are also exposed to “hands on” science-related activities during visits to Mintek.
MinquizAround 800 schools from South Africa’s nine provinces participated in Minquiz competitions aimed at promoting interest in mathematics and science. During the regional competitions, participating schools were given tours of the science facilities at the host institutions to help them make informed career decisions. Science shows were also organised for the students, while their teachers benefited from motivational talks from other educators.
Johannesburg-based learners
who visited Mintek on the
“Bring a girl-child to work” Day.
Ferndale High learners are
part of Mintek’s “Adopt-a-School”
programme.
Kwadeda High learners are part of Mintek’s “Adopt-a-School” programme.
Minquiz 2005 participants from Limpopo provinceBelow: The Minquiz 2005 finalists.
page 35
annual report 2006
Corporate Governance
annual report 2006page 36
Mintek is committed to the principles of openness, integrity and accountability in its dealings with all stakeholders. It endorses the Code of Corporate Practices and Conduct as set out in the King Report and the Public Finance Management Act, and believes that the primary objective of the corporate governance system is to ensure that the Board and Management carry out their responsibilities faithfully and effectively.
Board of DirectorsMintek’s Board of Directors consists of one executive member and ten non-executive members who are independently appointed by the Minister of Minerals and Energy in terms of the Mineral Technology Act No. 30, 1989 (the Mintek Act). Board members, excluding the CEO, hold office for a maximum of three years, but are eligible for re-appointment. The Board members are chosen for their business acumen and skills, and bring individual judgement to Board decisions. The Board Secretary is responsible for ensuring that Board procedures are followed.
The Board meets three times a year to review Mintek’s operational performance and to address issues of strategic importance.
Table 1. Attendance of Board Members at Board Meetings
Name Apr Jul Dec Jan Mar 2005 2005 2006 2006 2006 Mr. Mzilikazi Godfrey Khumalo (Chairman) Y N Y Y Y
Mr. Morake Abiel Mngomezulu Y Y N N Y
Dr. Frank Crundwell Y Y N Y Y
Ms. Louisa Mojela (resigned Dec 2005) Y N Y N/A N/A
Prof. Phuti Esrom Ngoepe Y Y Y N Y
Ms. Tina N. Mosery-Eboka (resigned Jan 2006) Y N N N/A N/A
Dr. Nozibele Pauline Mjoli Y Y Y Y Y
Ms. Gugu Mthethwa Y Y Y Y Y
Mr. Ralph Havenstein Y N Y Y Y
Mr. Vinogaren Pillay Y Y Y Y YNote: All the above are non-executive members
Y Attended meeting N Did not attend meeting A Alternate attended meeting N/A Not a member at date of meeting
Audit CommitteeThe Audit Committee meets three times a year. It consists of one Board member and two independently appointed non-executive members. The Committee operates in terms of a formal charter, and assists the Board in fulfilling its responsibilities for the presentation of Mintek’s financial statements. It also ensures that the appropriate accounting policies, internal controls and compliance with laws and regulations are in place. Both the internal and external auditors have unrestricted access to the Audit Committee.
During the past year, the Committee considered various reports from the internal auditor, as well as the audit report on the financial statements from the external auditor. The Auditor-General had expressed a qualified audit opinion on Mintek’s annual financial statements for the year ended 31 March 2006 due to non-compliance to the determination of residual lives/values, asset impairment and revenue recognition. The Audit Committee considers Mintek’s annual financial statements to be a fair representation of its financial position at year-end in terms of the South African Statements of Generally Accepted Accounting Practice (GAAP) except for the effect of the issues referred to by the Auditor-General.
annual report 2006
Corporate Governance
Table 2. Attendance of Audit Committee Members at Audit Committee Meetings Name Jul Nov Mar 2005 2005 2006
Ms. Louisa Mojela (Chairperson) (resigned Dec 2005) N Y N/A Dr. Frank Crundwell (alternate: appointed Chairperson effective Jan 2006) Y N Y Ms. Gugu Mthethwa (alternate: effective Oct 2005) N/A Y Y Mr. Vinogaren Pillay (alternate: effective Oct 2005) N/A Y Y Mr. Pieter Taljaard Y Y Y Mr. Tofara Dube N/A Y Y
Y Attended meeting N Did not attend meeting N/A Not a member at the date of meeting
Internal control Mintek maintains internal controls and systems designed to provide reasonable assurance as to the integrity and reliability of its financial statements and to safeguard, verify and maintain the accountability of assets. The effectiveness of these controls is monitored by the internal auditors, who report to the Audit Committee.The Audit Committee has requested management to review Mintek’s existing internal controls to ensure that they are adequate.
Internal Audit Mintek’s independent Internal Audit Services (IAS) function is outsourced to a major service provider whose primary business is the provision of audit services. The IAS helps Mintek accomplish its objectives by adopting a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes. The Internal Audit function has direct access to the Audit Committee.
Risk Management A Risk Management Committee reviews the risk management process, internal controls, and significant risks facing the organisation. The Committee provides the Audit Committee with a risk assessment report at appropriately scheduled intervals. Mintek utilises the services of insurance brokers on an annual basis to analyse and assess the risks associated with Mintek’s assets, which are insured, together with public liability and professional indemnity, for the risk assessed.
Table 3. Attendance of Corporate Risk Management Committee at Board Meetings Name Nov Mar 2005 2006 Dr. Roger Paul (Chairman and GM representing technology activities) Y N Mr. Vimlan Govender (Business and GM representing corporate services) Y Y Mr. Nick Maritz (Site services and facilities) Y Y Mr. Naresh Patel (Finance) Y Y Mr. Monobe Manaka (Human Resources) Y Y Dr. Dave Hulbert (Information Technology) Y N Mr. Doctor Gule (Information Technology) Y Y Mr. Hennie Venter (Secretary and QES) Y Y Mr. Afzal Patel (Security) Y N Mr. Edward Okara (Internal auditors Ernst & Young Ngubane consortium) Y Y
Y Attended meeting N Did not attend meeting
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annual report 2006
Corporate Governance
Human Resources CommitteeThe Transformation/Human Resources Committee consists of four Board members and three members of Mintek’s Executive Management. The Committee reviews and determines the remuneration and terms of employment for Mintek, and as part of this process, gives consideration to the annual review of remuneration packages based on independent surveys. The Committee also looks into HR policies, internal controls, circumstances, conditions and activities that affect material changes to policies and procedures and conditions of service for all employees and compliance with demands and vested interests of Mintek’s stakeholders. The Mintek Board ratifies the decisions of the HR Committee.
Table 4. Attendance of Human Resources Committee Members at Human Resources Committee Meetings
Name Mar Jul Nov Jan 2005 2005 2005 2006
Mr. Morake Abiel Mngomezulu Y Y Y N Dr. Frank Crundwell Y N Y Y Prof. Phuti Esrom Ngoepe Y N Y N Dr. Nozibele Pauline Mjoli Y Y Y N Ms. Gugu Mthethwa (alternate: effective Oct 2005) N/A N/A Y Y
Y Attended meeting N Did not attend meeting N/A Not a member at the date of meeting
ManagementMintek is managed by a CEO assisted by four General Managers. Together, they make up Mintek’s Executive Management team, which meets on a regular basis to review strategic and operational issues. Executive Management is supported by 16 formally appointed divisional managers who are in charge of Mintek’s operating divisions and centralised support functions.
Operational PerformanceMintek reports to the Department of Minerals and Energy (DME) and is also accountable to the Department of Science & Technology (DST) for its Research and Development (R&D) and technology-related activities. Various Key Performance Indicators (KPIs), encompassing financial, organisational, innovation and learning, human resources and transformation perspectives, determined by the National Council for Innovation (NACI), provide Mintek with a basis for evaluating its activities. Each KPI is supported by a set of measures, identified by Mintek and the DST, that provide a more specific and consistent base from which to assess progress. There is also a framework for peer review should the need arise.
Mintek’s Executive Committee meets on a weekly basis and the Management Committee convenes on a monthly basis where financial results are presented. Budget for the current year is reviewed in November and presented at the December Board meeting for approval.
Going ConcernThe Mintek Board has reviewed the entity’s financial budgets for the period April 2006 to March 2007 and is satisfied that adequate resources exist to continue business for the foreseeable future.
Safety, Occupational Health and Environmental ManagementAs a corporate citizen, Mintek acknowledges its obligation to its employees and the communities it serves to conform in its operations to safety, health and environmental laws and the internationally accepted standards and practices.
page 38
Report of the Audit Committee
annual report 2006 page 39
The Audit Committee has adopted appropriate formal terms of reference, which have been confirmed by the Mintek Board, and has performed its responsibilities as set out in the terms of reference.
In performing its responsibilities the Audit Committee has reviewed the following: - the effectiveness of the internal control systems; - the effectiveness of the internal audit function; - the risk areas of the entity to be covered in the scope of the internal and external audits;- the adequacy, reliability and accuracy of the financial information provided to management and other users of
such information;- the accounting or auditing concerns identified as a result of the external and internal audits; - compliance with legal and regulatory provisions; - the activities of the internal audit function; - the independence and objectivity of the external auditors; and - the scope and results of the external audit function.
The Audit Committee is also responsible for: - reporting to the Mintek Board and the Auditor-General where the report implicates any members of the
accounting authority in fraud, corruption or gross negligence; - communicating any concerns it deems necessary to the Mintek Board and the Auditor-General; - confirming the internal auditor’s charter and audit plan; - encouraging communication between members of the Mintek Board, senior executive management, the internal
auditors and the external auditors;- recommending the appointment and the removal of the external auditors;- conducting investigations within the terms of reference;- concurring with the appointment and dismissal of the outsourced internal audit function;- approving the internal audit work plan; and- setting the principles for recommending using the external auditors for non-audit services.
The system of internal control was found to be effective except for the control weaknesses as identified in the Auditor-General’s report.
Furthermore the Audit Committee considered Mintek’s internal controls and systems satisfactory in respect to:- reducing the entity’s risks to an acceptable level;- meeting the business objectives of the entity; and- ensuring that the transactions undertaken are recorded in the entity’s records.
In the previous financial year, the Auditor-General was unable to express an opinion on Mintek’s annual financial statements.
The Audit Committee charged management to resolve the significant matters as identified by the Auditor-General. The significant issues pertaining to financial year ended 31 March 2005 have been affected in the comparatives in the 2006 annual financial statements.
As part of addressing the significant matters identified during the 2005 audit, the following action was instituted by management and supported by the Auditor-General:- The accounting policies were reviewed in January 2006 and updated to comply with GAAP;- In March 2006, Mintek implemented a new SAP ERP system, which addressed the shortcomings identified and
is expected to improve the respective internal control and reporting measures; and
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Report of the Audit Committee
- In addressing the significant issues raised, it was apparent that the organisation lacks sufficient skills and depth in finance and administration. In order to address this deficiency, the finance and administration department will be restructured and Mintek will source skills from other service providers to ensure the deficiencies are managed and the entity complies with the laws and regulations as applicable.
The Audit Committee has evaluated the group and company’s annual financial statements for the year ended 31 March 2006 and concluded that they did not fully comply, in all material respects, with the requirements of the Public Finance Management Act, 1999 (Act No.1 of 1999), as amended, and South African Statements of Generally Accepted Accounting Practice (GAAP).
The Audit Committee has requested management to review Mintek’s existing system of internal controls to ensure that they are adequate and function effectively.
The Auditor-General had expressed a qualified audit opinion on Mintek’s annual financial statements for the year ended 31 March 2006 due to non-compliance to the determination of residual lives/values, asset impairment and revenue recognition. The audit opinion expresses that except for the effect of the issues referred to the financial statements fairly present the financial position of Mintek at balance sheet date.
The Audit Committee agrees that the adoption of the going concern premise is appropriate in preparing the annual financial statements. The committee also acknowledges that management made significant progress in addressing the control weakness identified previously and looks forward to the future control environment which will provide a sound basis for Mintek to meet its obligations to its stakeholders. The Audit Committee has therefore recommended the adoption of the annual financial statements by the Mintek Board of Directors.
Dr. F Crundwell Acting Chairman of the Audit CommitteeDated : 4 August 2006
Audit Committee members Dr. PP Jourdan Mr. TY Dube Mr. P Taljaard Mr. VP PillayMs. G MthethwaMs. L Mojela (Resigned)Dr. N Mjoli (Resigned)
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Directors’ Report
annual report 2006
The directors have pleasure in submitting their report and the Annual Financial Statements for the year ended 31 March 2006.
ProfileMintek is incorporated as a public company in South Africa in terms of the Companies Act, 1973, as amended, and is listed as a national government business enterprise in schedule 3B of the Public Finance Management Act, 1999, as amended, (PFMA).The Board of Directors acts as the accounting authority in terms of the PFMA.
Financial ResultsThe financial statements set out fully the financial results of the company and Group for the year ended 31 March 2006.
Reporting StandardsThe Mintek Group’s Annual Financial Statements comply with South African Statements of GAAP and in the manner required by the PFMA.
Organisational StructureMintek’s organisational structure is shown on page 7 of the Annual Report
Principal ActivitiesMintek, South Africa’s national mineral research organisation, is an autonomous statutory organisation established to ensure the sustainability and growth of the minerals industry through technology development and transfer. In terms of its mandate under the Mintek Act of 1989, Mintek’s major goals are to:• foster the establishment and expansion of industries in the field of minerals and related products;• contribute to wealth creation and poverty alleviation; and• develop the requisite human capital to sustain the mining and minerals sector.Specific aims include:• promoting increased beneficiation of South Africa’s minerals and mineral commodities by developing competitive and innovative processing technology and equipment;• strengthening South Africa’s international position as a supplier of mineral technologies, capital goods and
services; and• developing regional strategies for the mineral processing sector, concentrating on value-addition, capacity-
building and broad-based development.
Financial AffairsReview of OperationsThe net profit for the Mintek Group for the year was R5.1 million (2005: R7.2 million as restated).
Revenue• The revenue of R256.5 million (2005: R232.3 million) reflects a 10,4% or an increase of R24.2 million
compared to the prior financial year. • The increase is due mainly to growth in commercial income. This growth can be attributed to Mintek having
adopted a strong commercial focus with an aggressive marketing effort.
Profit before tax• The profit before tax of R5.1 million (2005 : R7.2 million) reflects a decrease of 29,2% compared to 2005
and is attributable mainly to the R12.9 million charge relating to the post retirement medical aid liability,an increase in cost of sales by R17.5 million offset by substantial increases in commercial income of R16.5 million, an increase in investment income of R1.3 million and other operating income increasing by R12.5 million.
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annual report 2006
Directors’ Report
Assets
Capital Expenditure• Capital expenditure for the year amounted to R21.8 million (2005 : R9.2 million) and includes R1.9 million
relating to capitalised leased assets. The Group disposed of assets with a net book value of R1.4 million in the year under review.
Property• During the year under review land and buildings was revalued to R74.5 million and investment property to
R8.8 million.• The useful life reassessment of all assets resulted in a reversal of R19.5 million of prior years excess
depreciation. This review resulted in an additional depreciation charge of R2.1 million for the financial years 2005 and 2006.
Investments• During the year under review the Group disposed of its entire shareholding in Apic Toll Treatment Propriety
Limited for a consideration of R18 million inclusive of a loan amount of R5 million.
Judicial ProceedingsThe directors are not aware of any judicial proceedings againsts the company.
Post-balance Sheet EventsThe directors are not aware of any matters or circumstances arising since the end of the financial year, not otherwise dealt with in the annual financial statements, which significantly affect the financial position of the group or the results of its operations.
SubsidiariesThe information relating to the entity’s financial interests in its subsidiary is disclosed in notes 13 and 14 of the Annual Financial Statements.
The Directors of MintekExecutive director: Dr. PP Jourdan
Non-executive directors: Mr. MG Khumalo – Chairperson Dr. F Crundwell Ms. TN Eboka (Jan 2006) Mr. R Havenstein Dr. NP Mjoli Mr. MA Mngomezulu Ms. L Mojela (Dec 2005) Ms. FG Mthethwa Prof. PE Ngoepe Mr. VP Pillay
The secretary of Mintek is: Ms. V Naidoo, and her business and postal addresses are as follows:200 Hans Strijdom Drive Private Bag X3015Randburg Randburg2125 2125
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Annual Financial Statements 2006
Contents
Report of the Auditor-General.................................................... 43
Balance Sheet............................................................................ 48
Income Statement...................................................................... 49
Cash Flow..................................................................................50
Statements of Changes in Equity...............................................51
Notes to the Annual Financial Statements.................................52
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annual report 2006
Financial Statements and notes
page 43
Report of the Auditor-GeneralREPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON THE FINANCIAL STATEMENTS AND THE PERFORMANCE INFORMATION OF THE COUNCIL FOR MINERAL TECHNOLOGy (MINTEK) FOR THE yEAR ENDED 31 MARCH 2006
1. AUDIT ASSIGNMENTThe financial statements as set out on pages 48 to 73, for the year ended 31 March 2006, have been audited in terms of section 188 of the Constitution of the Republic of South Africa, 1996 (Act No. 108 of 1996), read with sections 4 and 20 of the Public Audit Act, 2004 (Act No. 25 of 2004) and section 12(2) of the Mineral Technology Act, 1989 (Act No.30 of 1989). These financial statements are the responsibility of the accounting authority. My responsibility is to express an opinion on these financial statements, based on the audit.
2. SCOPEThe audit was conducted in accordance with International Auditing Standards (IAS) read with General Notice 544 of 2006, issued in the Government Gazette no. 28723 of 10 April 2006 and General Notice 808 of 2006, issued in the Government Gazette no. 28954 of 23 June 2006. Those standards require that I plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement. An audit includes:• examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements;• assessing the accounting principles used and significant estimates made by management; and,• evaluating the overall financial statement presentation.I believe that the audit provides a reasonable basis for my opinion.
3. QUALIFICATION
3.1 PROPERTy, PLANT AND EQUIPMENT
3.1.1 Determination of residual lives and valuesThe residual lives of fully depreciated assets were reviewed subsequent to year-end, resulting in an adjustment of R19 477 756 to the opening balance of the prior year retained earnings. The following errors were identified in the calculations made by management:(a) Due to a lack of documentation of the process followed, adequate audit evidence could not be obtained to
substantiate the adjustment;(b) The asset acquisition dates used were incorrect;(c) The remaining residual life of a scrapped asset was estimated to be two years, resulting in an incorrect
adjustment of R784 616;(d) Detailed criteria for the determination of residual lives were not documented to ensure consistent
application;(e) Although management estimated the residual life of assets, the exercise was limited to assets with a zero
book value; and, (f) The component approach depreciation method as required by IAS 16 (AC123) was not implemented by
Mintek. Plant and furnaces comprised of various sub-assets with different residual lives.Furthermore, contrary to the requirements of IAS 16 (AC123), Mintek did not review the residual value of individual assets as at 31 March 2006. The financial impact of the non-compliance with this accounting statement could not be quantified.
3.1.2 Asset impairment review Mintek did not perform a detail impairment review of plant and equipment during the year under review, as required by IAS 36, despite the existence of the following impairment indicators:(a) The present value of future economic benefits to be derived from property, plant and equipment was
annual report 2006
Financial Statements and notesmaterially lower than the net book value of property, plant and equipment disclosed in note 11 of the annual
financial statements; (b) Evidence obtained indicated that assets to the value of R1 103 721 were impaired; and,(c) Certain assets that were physically verified were damaged. I could not determine the impact of possible impairment of the carrying value of property, plant and equipment. The impairment review conducted by management was inadequate.
3.2 DEFERRED INCOME AND REVENUERevenue transactions to the amount of R3 418 851 were incorrectly recorded as unearned income as a result of inadequate monitoring controls. Management performed a subsequent review of all unearned income transactions and made an adjustment of R6 743 576 to the balance as at 31 March 2006. Due to the late submission of supporting documentation, audit could not review the accuracy or completeness of the adjustment made. Based on the audit findings, the errors found also pertained to the deferred income balance as at 31 March 2005. Mintek did not review the opening balance of unearned income of R7 600 000.
4. QUALIFIED AUDIT OPINIONIn my opinion, except for the effect on the financial statements of the matters referred to in the preceding paragraph, the financial statements present fairly, in all material respects, the financial position of Mintek at 31 March 2006 and the results of its operations and its cash flows for the year then ended, in accordance with South African Statements of Generally Accepted Accounting Practice and in the manner required by the Public Finance Management Act, 1999 (Act No. 1 of 1999).
5. EMPHASIS OF MATTERWithout further qualifying the audit opinion expressed above, attention is drawn to the following matters:
5.1 PROPERTy, PLANT AND EQUIPMENT
5.1.1 AssetverificationAdequate audit evidence could not be obtained to verify the existence of assets with a collective book value of R517 350 (Cost price: R2 887 817).
5.1.2 Adjustments to opening balances Adequate audit evidence could not be obtained to substantiate a difference of R184 199 between asset retirements in the fixed asset register and asset retirements included in the trial balance as well as depreciation adjustments of R252 115.
5.1.3 Fixed asset adjustments Mintek conducted a review of the fixed asset register subsequent to the financial year-end. This resulted in the retirement of assets with a cost price of R13 724 020 (Net book value: R1 114 043) and the inclusion of 149 newly identified assets recorded at R1 each. The process followed to adjust the fixed asset register had the following weaknesses:• Amendments were done at the discretion of the divisional managers;• Proper count sheets were not used during the exercise; and,• Measures to ensure the completeness and accuracy of the asset counts were inadequate.Although the Mintek Board ratified the asset retirements, Mintek did not report the asset retirements to National Treasury, as required by the Mintek materiality framework.
5.2 UNCONDITIONAL GRANTSDue to inadequate management information, it was not possible to verify that the project costs were in
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Report of the Auditor-General
annual report 2006
Financial Statements and notesaccordance with the budget approved by the executive authority and that there were no misallocations within projects. Furthermore, adequate audit evidence could not be obtained for expenditure to the amount of R512 673 claimed from the Department of Science and Technology in respect of earmarked funding.
5.3 CASH AND BANKMonthly bank reconciliations were not performed and reviewed timely. The lack of proper bank reconciliation and review procedures resulted in the following:(a) Insufficient audit evidence to verify bank clearing accounts with a net value of R25 797; (b) Unallocated payments to the amount of R87 124 were outstanding for a period longer than 12 months.
Audit evidence could not be obtained to verify the validity and accuracy of the payments made;(c) Deposits to the amount of R12 728 were outstanding for more than a year; and, (d) Three staff members who resigned during the 2005-06 financial year were still authorised cheque
signatories of the current bank account.
5.4 VALUE ADDED TAXA difference of R305 137 existed between the VAT Return (R107 375) and the SAP 201 report for the month of April 2005 (R412 512). This resulted in an understatement of the VAT liability as at 31 March 2006.
5.5 PRODUCT WARRANTIESA provision for product warranties to the amount of R894 508 (2004/05: R1 555 011) was based on 5 per cent of product sales during the financial year. The reliability of the estimate made could not be verified due to the unavailability of historic information on the past warranty claims.
5.6 ACCOUNTS PAyABLEThe accounts payable balance was overstated by R294 171 as a result of duplicate payments made and incorrect data capturing.
5.7 REVENUE RECOGNITION(a) Revenue received from debtors was not measured at the fair value of the consideration received or
receivable. When the inflow of cash or cash equivalents was deferred, the fair value of the consideration was not determined by discounting all future receipts, using an imputed rate of interest, as required by IAS 8 (AC111). Revenue and interest received were respectively overstated and understated by approximately R351 729.
(b) Mintek calculated deferred income at year-end by applying the percentage completion method based on actual expenditure incurred. The total costs planned for different projects were incorrectly used as the project value. Consequently, revenue for the financial period under review was understated.
5.8 LONG-TERM DEBTORSIncorrect debtors calculation resulted in the short-term portion of staff loans amounting to R202 260 being incorrectly classified as long-term debtors.
5.9 FINANCIAL STATEMENT DISCLOSUREContrary to the requirements of IAS 20, paragraph 39(b), the nature and extent of government grants recognised in the financial statements and an indication of other forms of government assistance from which the entity directly benefited, were not disclosed in the financial statements.
5.10 INTEREST RECEIVEDAn unexplained difference of R329 796 between interest recognised and the external confirmation was identified.
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Report of the Auditor-General
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Financial Statements and notes5.11 WEAKNESSES IN INTERNAL CONTROLThe following significant weaknesses in internal control were identified during the course of the audit:(a) Debtor credit limits were not determined;(b) Debtors with credit balances were not appropriately monitored. This resulted in revenue of R315 762 not
being recognised;(c) Debtors reconciliations were not performed on a monthly basis;(d) The risk management plan of Mintek deferred the responsibility for accurate financial reporting to the
external auditors; and,(e) Goods received vouchers were not adequately controlled.
5.12 COMPLIANCE WITH LAWS AND REGULATIONS
5.12.1 Value Added TaxContrary to the requirements of section 28 of the Value Added Tax Act, 1991 (Act No. 89 of 1991), Value Added Tax payable for the periods May 2005 to December 2005 amounting to R6 151 371 was only paid over to SARS on the 23 December 2005. SARS may levy interest and penalties for late payment resulting in fruitless expenditure.
5.12.2 Disposal of associateAlthough Board approval was obtained for the sale of an associate with an investment value of R12 312 255 as at 31 March 2005, the National Treasury was not informed of the sale as required by section 54(2)(c) of the PFMA.
5.12.3 Investment policyContrary to Mintek’s investment policy, investments at commercial banking institutions exceeded the maximum investment limit of 25 per cent per institution.
5.12.4 Approval for debtor write-offStaff debtors to the amount of R1 037 482 were written off during the 2005-06 financial year without prior approval from the Mintek Board. Furthermore, in terms of the Mintek materiality framework, debtors written off should be reported to the National Treasury. This requirement was not complied with.
5.13 PROJECT MANAGEMENT The following errors arose as a result of a poor internal control environment with regards to project management:(a) Contrary to the pricing policy, losses of approximately R775 908 were noted on certain projects;(b) Various instances were found where the planned project costs were not allocated to projects. This could
impair the decision making process regarding the profitability of cost centres;(c) An adjustment of R3 368 642 was made as a result of inadequate monitoring of project invoicing which
resulted in excessive profits being made on earmarked funding; and,(d) Significant deviations were found between project budgets and actual expenditure incurred on completed
projects. Mintek did not have any review process in place where deviations were monitored.
5.14 PERFORMANCE BONUSESPerformance bonuses for the 2004-05 financial year were approved by the Mintek Board to the amount of R3 976 859 and were based on 25 per cent of the net profit for the preceding year. The bonuses were paid to staff during the year under review. Due to a number of adjustments made to the prior year financial statements these payments exceeded the approved limit by R2 708 784.
5.15 HUMAN RESOURCE PLANNINGMintek did not have a Human Resources plan for the period under review that included succession planning, staff training and the analysis of the impact of vacancies.
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Report of the Auditor-General
annual report 2006
Financial Statements and notes5.16 FINANCIAL STATEMENTSSignificant deviations from SA GAAP, the PFMA and related Treasury Regulations were identified during a high level review of the financial statements submitted on 31 May 2006 in terms of section 55(1) of the PFMA. A number of financial errors were identified during the course of the audit. Although the errors were corrected, the number of errors found in respect of the financial statements were of concern.Furthermore, weaknesses within the accounting, control, IT and governance environment were identified. These weaknesses were attributable to poor accounting skills, inconsistent control environment and inadequate review and supervision. These weaknesses had a negative effect on the operational effectiveness and additional costs were incurred to address the problems.
5.17 PERFORMANCE OBJECTIVESAdequate audit evidence could not be obtained to verify the accuracy of non-financial information presented in the report of performance against objectives, set out on page 10 and 11 of the annual report.
6. APPRECIATIONThe assistance rendered by the staff of the Council for Mineral Technology during the audit is sincerely appreciated.
Ms. M. A. Masemolafor Auditor-General25 August 2006
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Report of the Auditor-General
annual report 2006
Financial Statements and notes BALANCE SHEET AT 31 MARCH 2006 GROUP MINTEK 2006 2005 2006 2005 Notes R R R R
ASSETS Non-current assets Property, plant and equipment 11 138,233,487 65,562,738 138,233,487 65,562,738 Investment property 12 8,835,416 4,937,220 8,835,416 4,937,220 Equity accounted investments 13 12,285,939 27,945,059 – – Investment in subsidiary 14 – – 100 100 Long term loans and advances 15 1,151,611 1,273,453 1,151,611 1,273,453
Total non-current assets 160,506,452 99,718,470 148,220,613 71,773,511 Current assets Inventory 16 2,744,373 2,072,871 2,744,373 2,072,871 Loans and advances to subsidiary 14 – – – 8,489,598 Trade and other receivables 17 46,487,963 39,016,354 48,180,671 39,927,812 Short-term investments 18 102,830,270 101,679,514 102,830,270 101,679,514 Cash and cash equivalents 30,937,858 20,400,480 30,937,858 20,400,480
Total Current assets 183,000,465 163,169,220 184,693,172 172,570,276
Total assets 343,506,917 262,887,690 332,913,786 244,343,787
Equity Non-distributable reserves 63,046,831 – 63,046,831 – Retained earnings 155,789,155 150,716,855 137,776,752 133,388,995Total equity 218,835,986 150,716,855 200,823,583 133,388,995
Liabilities
Non-current liabilities Long term retirement benefit obligation 22 61,235,000 51,429,000 61,235,000 51,429,000 Long term creditors 23 1,792,727 795,362 1,379,915 –
Total non-current liabilities 63,027,727 52,224,362 62,614,915 51,429,000
Current liabilities Loans and advances to subsidiary 14 – – 8,277,896 – Trade and other payables 19 27,324,090 18,724,190 26,878,278 18,303,509 Deferred income 20 21,674,053 22,793,861 21,674,053 22,793,861 Provisions 21 12,645,061 18,428,422 12,645,061 18,428,422
Total current liabilities 61,643,204 59,946,473 69,475,288 59,525,792
Total equity and liabilities 343,506,917 262,887,690 332,913,786 244,343,787
P.P. JOURDAN V. GOVENDER CEO General Manager Corporate Services Randburg, 17 July 2006
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annual report 2006
Financial Statements and notes INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2006 GROUP MINTEK 2006 2005 2006 2005 Notes R R R R
Continuing operations Revenue 2 256,514,905 232,370,288 257,296,155 233,151,538 Operating expenses 3 (242,161,677) (224,186,842) (242,161,677) (224,186,842) Grossprofit 14,353,227 8,183,446 15,134,477 8,964,696 Other operating income 4 18,162,113 5,685,742 18,224,316 5,685,742 Investment income 5 9,817,025 8,503,391 9,817,025 8,503,391 Finance expenses 6 (337,424) – (242,843) – Audit fees 7 (1,924,160) (752,108) (1,884,479) (725,038) Fees for services 8 (11,999,983) (6,585,089) (11,999,983) (6,585,089) Depreciation 9 (10,619,572) (11,283,459) (10,619,572) (11,283,459) (Loss)/profit on disposal of property, (1,131,011) 34,575 (1,131,011) 34,575 plant and equipment Loss on disposal of associate 28.2 (653,037) – – – Post-retirement benefit obligation 10 (12,828,438) (3,459,724) (12,828,438) (3,459,724) Loss on foreign currency translations (81,735) (570,211) (81,735) (570,211) Share of profit from associates after tax 13 2,315,295 7,514,265 – –
Profitbeforetaxation 5,072,300 7,270,829 4,387,757 564,884 Taxation – – – –
Profitfortheyear 5,072,300 7,270,829 4,387,757 564,884
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annual report 2006
Financial Statements and notes CASH FLOW STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006 GROUP MINTEK 2006 2005 2006 2005 Notes R R R R
Cashflowsfromoperatingactivities
Cash receipts from customers 180,821,671 164,871,616 180,638,217 163,621,616 Parliamentary grant received 108,880,000 88,632,000 108,880,000 88,632,000 Cash paid to suppliers and employees 276,272,026 201,584,127 275,412,647 199,366,941
Cash generated from operations 28 13,429,645 51,919,489 14,105,570 52,886,675
Cashflowfromfinancingcosts Investment income 5 9,817,025 8,503,391 9,817,025 8,503,391 Finance expenses 6 (337,424) – (242,843) – Long term creditor payments (595,696) – (133,696) – Provisions utilised 21 (5,783,361) (10,956,850) (5,783,361) (10,956,850) Netcashinflowfromoperatingactivities 16,530,189 49,466,030 17,762,695 50,433,216 Cashflowsfrominvestingactivities Additions to property, plant and equipment (19,823,232) (9,219,740) (19,823,232) (9,219,740) Increase in investment deposits (1,150,757) (21,679,514) (1,150,757) (21,679,514) Receipts/(cash advanced to) from subsidiary – – 16,767,494 (967,186) Proceeds on disposal of fixed assets 3,616 37,922 3,616 37,922 Proceeds from disposal of associate 28.2 18,000,000 – – – Post-retirement health care payments 22 (3,022,438) (2,698,724) (3,022,438) (2,698,724)
Netcashflowfrominvestingactivities (5,992,811) (33,560,056) (7,225,317) (34,527,242) Net cash outflow from financing activities – – – – Net increase / (decrease) in cash and cash equivalents 28.1 10,537,379 15,905,974 10,537,379 15,905,974
Cash and cash equivalents at beginning of year 20,400,480 4,494,505 20,400,480 4,494,505
Cash and cash equivalents at end of year 30,937,858 20,400,480 30,937,858 20,400,480
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annual report 2006
Financial Statements and notes STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2006 Non Distributable Note Retained-Earnings Reserve Total R R R
GROUP
Balance at 31 March 2004 as previously stated 122,524,086 – 122,524,086 Restatements 29 20,921,940 – 20,921,940
Balance at 31 March 2004 restated 143,446,026 – 143,446,026 NetProfitaspreviouslyreported 12,806,032 – 12,806,032Prior year adjustments Revenue provisions (9,155,011) – (9,155,011) Depreciation (2,561,748) – (2,561,748) Guaranteed liability raised (1,193,043) – (1,193,043) Revenue recognised 2,343,750 – 2,343,750 Stock (18,000) – (18,000) Post-retirement obligations 2,170,648 – 2,170,648 Operating expenses 2,878,201 – 2,878,201
Netprofitfortheyearasrestated 7,270,829 – 7,270,829
Balance at 31 March 2005 restated 150,716,855 – 150,716,855 Revaluation of property 11 – 63,046,831 63,046,831 Net profit for the year 5,072,300 – 5,072,300
Balance as at 31 March 2006 155,789,155 63,046,831 218,835,986
MINTEK
Balance at 31 March 2004 as previously stated 111,759,528 – 111,759,528Restatements 29 21,064,583 – 21,064,583
Balance at 31 March 2004 restated 132,824,111 – 132,824,111 NetProfitaspreviouslyreported 5,331,271 – 5,331,271Prior year adjustments Revenue provisions (9,155,011) – (9,155,011) Depreciation (2,561,748) – (2,561,748) Guaranteed liability raised (1,193,043) – (1,193,043) Revenue recognised 3,125,000 – 3,125,000 Stock (18,000) – (18,000) Post-retirement obligations 2,170,648 – 2,170,648 Operating expenses 2,865,767 – 2,865,767
Netprofitfortheyearasrestated 564,884 – 564,884 Balance at 31 March 2005 restated 133,388,995 – 133,388,995 Revaluation of property 11 – 63,046,831 63,046,831 Net profit for the year 4,387,757 – 4,387,757
Balance as at 31 March 2006 137,776,752 63,046,831 200,823,583
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annual report 2006
Financial Statements and notesNOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
1. SignificantaccountingpoliciesandbasisofpreparationThe annual financial statements are prepared in accordance with the historical cost convention as modified by the revaluation of general purpose land and buildings and investment property and the restatement of certain financial instruments to fair value. The financial statements incorporate the following principal accounting policies, which conform to South African Statements of General Accepted Accounting Practice (GAAP), and in the manner required by the Public Finance Management Act (PFMA). The annual financial statements are expressed in its Functional currency South African Rands (R). The accounting policies are consistent with those applied in the previous year, except for certain restatements and changes in accounting policies.
1.1 Change in accounting policyDuring the year the Group changed its accounting policy with respect to accounting for Land and Buildings, and Investment Property.The change in accounting policy is as a result of the Group considering that the fair value method for accounting for Land and Buildings, and Investment Property will be more appropriate than the cost method .The major effect on the Group’s results are as follows:• The value of Land and Buildings and non-distributable reserves increased by R63 046 831 with no impact on income for the
current year.• A reduction of depreciation on investment property of R143 811 compared to the previous year.• An increase in current income as a result of the fair value adjustment to Investment Property of R3 898 196.
1.2 Basis of consolidationThe Group annual financial statements comprise those of Mintek, its subsidiaries and jointly controlled operations, presented as a single economic entity. The effects of intra-group transactions are eliminated in preparing the Group annual financial statements. Subsidiaries, which are directly or indirectly controlled by the Group, are included in the consolidated financial statements as from the date of acquisition and until the date of disposal where control is ceased. The identifiable assets and liabilities of companies acquired are assessed and included in the balance sheet at their fair values as at the date of acquisition. Equity and net profit attributable to minorities are shown separately in the balance sheet and income statement respectively.
1.3 Foreign currency transactions and balancesForeign currency transactions are recorded at the exchange rate ruling at the date of the transaction.At the balance sheet date, monetary assets and liabilities denominated in foreign currencies are translated into South African Rand at exchange rates ruling at the balance sheet date. Exchange differences arising on the settlement of transactions at rates different from those at the date of the transaction and unrealised foreign exchange.Exchange differences on unsettled foreign currency monetary assets and liabilities, are recognised in the income statement and included in income from investments and financing costs.
1.4 Investment in subsidiarySubsidiary companies are enterprises in which the company holds a long-term equity interest and over which it has the power to control the financial and operating activities of the entities so as to obtain benefits from its activities.All investments in subsidiary companies are initially recognised at cost less impairment loss. The carrying amount of such investments is reduced to recognise any decline, other than a temporary decline, in the value of individual investments. Any carrying value adjustments are charged to the income statement in the period in which they are incurred.
1.5 Investment in associatesAn associate is an entity in which the Group has significant influence, through participation in the financial and operating policy decisions of the investee, but not control over those policies. The results, assets and liabilities of associates are incorporated in these consolidated annual financial statements by using the equity method of accounting, from the effective dates of their acquisition until the effective dates of their disposal. Investments in associates are carried in the balance sheet at cost as adjusted by post-acquisition changes in the Group’s share of the net assets of the associate, less any impairment in the value of individual investments. Losses of the associate in excess of the Group’s investments in those associates are not recognised. Any difference between the cost of acquisition and the
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Financial Statements and notes1.5 Investment in associates (continued)Group’s share of the fair value of the identifiable net assets of the associate at the date of acquisition is recognised according to the group’s accounting policies on goodwill. Where a group enterprise transacts with an associate company, unrealised profits and losses are eliminated to the extent of the Group’s interest in the relevant associate, except where unrealised losses provide evidence of an impairment of the asset transferred.
1.6 GoodwillGoodwill represents the excess of the purchase consideration over the fair value of the Group’s share of the net identifiable assets of the acquired entity at the date of acquisition. Goodwill is capitalised as an asset and reviewed annually for impairment. At each balance sheet date goodwill is reviewed for indications of impairment or changes in estimated future benefits. If such indication exists an analysis is performed to assess whether the carrying amount of goodwill is fully recoverable. An impairment charge is recognised to the extent that the carrying amount exceeds the recoverable amount.
1.7 Intangible assetsAll intangible assets are initially recognised at cost. Intangible assets with a finite useful life are amortised on a straight-line basis over their estimated useful lives. Intangible assets with an indefinite useful life are not amortised. The useful life of intangible assets not amortised is reviewed annually to determine whether events and circumstances continue to support an indefinite useful life assessment for those assets.
1.8 Research and development costsExpenditure on research activities is recognised as an expense in the period in which it is incurred.An internally generated intangible asset arising from the Group’s research and development is recognised only if all of the following conditions are met:• An asset is created that can be identified (such as software and new processes);• It is probable that the asset created will generate future economic benefits;• The development cost of the asset can be measured reliably;• It is technically feasible to complete the intangible asset so that it will be available for use or sale;• The ability to use or sell the intangible asset; and,• It is the intention to complete the intangible asset so that it will be available for use or sale.Where no internally generated intangible asset can be recognised, development expenditure is recognised as an expense in the period in which it is incurred. Internally generated intangible assets are amortised on a straight-line basis over their useful lives.
1.9 Impairment At each balance sheet date, an assessment is made of whether there is any objective evidence of impairment of financial assets. If there is evidence of, then the recoverable amount is estimated and an impairment loss is recognised. Where it is not possible to estimate the recoverable amount for an individual asset, the recoverable amount is determined for the cash-generating unit to which the asset belongs. Intangible assets, with an indefinite useful life, and goodwill acquired in a business combination are tested for impairment annually, irrespective of whether there is any indication that the assets may be impaired.The recoverable amount is the higher of fair value less costs to sell and value in use. Value in use represents the present value of the future cash flows expected to be derived from an asset (cash-generating unit). The expected future cash flows are discounted to their present value using an appropriate discount rate that reflects current market assessments of the time value of money and the risk specific to the asset for which the future cash flow estimates have not been adjusted.Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. Impairment losses for goodwill are not reversed in subsequent periods.
NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
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Financial Statements and notes1.10 LeasesLeases are classified as finance leases where substantially all the risks and rewards associated with ownership of an asset are transferred from the lessor to the lessee. All other leases are classified as operating leases.
The Group as a lessorAmounts due from lessees under finance leases are recorded as receivables at the amount of the Group’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return to the Group’s net investment outstanding in respect of the leases. Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.
The Group as a lesseeAssets subject to finance leases are capitalised at their cash cost equivalent, with the related lease obligation recognised at the same value. Capitalised leased assets are depreciated to their estimated residual values over their estimated useful lives. Finance lease payments are allocated using the effective interest rate method between the lease finance cost which is included in financing costs and the capital repayment, which reduces the liability to the lessor.Operating leases are those leases, which fall outside the scope of the above definition. Operating lease rentals are charged to income on a straight-line basis over the term of the lease.
1.11 Property, plant and equipmentProperties comprise general purpose land and buildings held by the Group for its own use and investment property and buildings for purposes of generating rental income or held for capital appreciation. Properties are initially valued at historical cost and subsequently revalued every two years by an independent professional valuer, to reflect the net realisable open market value using the alternative or existing use as basis where appropriate. The cost of property, plant and equipment includes all directly attributable expenditure incurred in the acquisition, establishment and installation of such assets so as to bring them to the location and condition necessary for it to be capable of operating in the manner intended by management. Interest costs are not capitalised.Depreciation is calculated so as to write off the cost of property, plant and equipment on a straight-line basis, over the estimated useful lives to the estimated residual value. Useful lives and residual values are reviewed on an annual basis. Residual values are measured as the estimated amount currently receivable for an asset if the asset were already of the age and condition expected at the end of its useful life.Property, plant, equipment and vehicles are periodically reviewed for impairment. Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease. All assets under construction are carried at cost and depreciation only commences once the asset is commissioned and ready for its intended use. The gains and losses arising on the disposal or retirement of an item of property, plant, equipment and vehicles is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit and loss.
1.12 Investment PropertyInvestment property is recognised using the fair value model. All fixed property where rentals contracts are in excess of three (3) years and which is occupied by independent organisations are classified as investment property. The fair value is determined at balance sheet date by an independent professional valuer based on market evidence of the most recent prices achieved in arms length transactions of similar properties in the same area.
1.13EmployeebenefitsThe Group operates a number of retirement benefit plans for its employees. These plans include a defined contribution plan and other retirement benefits such as medical aid benefit plans. Current contributions for the defined contribution plan are charged against income when incurred.
NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
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Financial Statements and notes1.14 Post retirement health care costsThis Group has an obligation to fund the medical aid benefits of all its past employees and dependants of past employees who retired or were in the employment of the Group prior to 31 December 1999. The plan liability is unfunded and fully provided for in the financial statements.The Group uses the project unit credit actuarial method to determine the present value of its past service cost. Actuarial gains and losses are recognised in full in the reporting period it relates to and is the excess over the greater of the present value of the past service obligation at the end of the reporting period before deducting the present value of assumed assets at the same date. Valuations of these obligations are carried out annually by independent actuaries using appropriate mortality tables, long-term estimates of increases in medical costs and appropriate discount rates. General increases to medical aid contributions were estimated taking into account the projected future changes in the cost of medical services resulting from both inflation and specific changes to medical costs. The obligation calculated above assumes that the cross subsidy of pensioner’s benefits by the active members will continue as at present. If this cross–subsidy were to be removed, it would result in an increased estimated liability.
1.15 InventoriesInventories are valued stated at the lower of cost or net realisable value. Costs comprise direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling price in the ordinary course of business less any costs of completion and costs to be incurred in marketing, selling and distribution.
1.16 ProvisionsProvisions are recognised when the Group has a present obligation as a result of a past event and it is probable that this will result in an outflow of economic benefits and the amount can be reasonably determined.The Group recognises its obligation for guaranteeing its product and services for periods as stipulated in its contracts with the Group’s customers.The Group is exposed to certain environmental liabilities relating to its operations. Provision for the cost of environmental and other remedial work such as reclamation costs, close down and restoration costs and pollution control is made when such expenditure is probable and the cost can be reasonably estimated.
1.17 Financial instrumentsFinancial instruments recognised on the balance sheet include derivative instruments, investments, investments in debt securities, accounts receivable, cash and cash equivalents, accounts payable and interest bearing debt. Financial instruments are initially measured at cost including transaction costs when the Group becomes a party to their contractual arrangements. The subsequent measurement of financial instruments is dealt with in the subsequent notes. When the Group can legally do so and the Group intends to settle on a net basis, or simultaneously, related positive and negative values of financial instruments are offset within the balance sheet amounts.
1.17.1 Derivative instrumentsThe Group does not use derivative financial instruments including forward rate agreements and forward exchange contracts to hedge its exposure to interest rate and foreign fluctuations. It is the Group’s policy not to hedge its exposure from foreign currency fluctuations, as it does not consider the impact to be significant. It is the policy of the Group not to trade in derivative financial instruments for speculative purposes.
1.17.2 InvestmentsInvestments consist of long-term money market instruments initially recorded at cost, which is the fair value of the cash placed with the institution. Interest is accrued using the effective interest rate method and included in the income statement on an accrual basis.
NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
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Financial Statements and notes1.17 Financial instruments (continued)
1.17.3 Trade and other receivablesTrade and other receivables are stated at cost less an allowance for doubtful debts. The allowance raised is the amount needed to reduce the carrying value to the expected future cash flows. Irrecoverable amounts are written off during the year in which they are identified.
1.17.4 Cash and cash equivalentsCash and cash equivalents comprise cash on hand, demand deposits and investment in short term money market instruments. The carrying amount of cash is measured at its fair value.
1.17.5 Financial liabilitiesFinancial liabilities other than derivative instruments are amortised at their original debt value less principal payments and amortisation. Derivatives are subsequently measured at fair value and gains and losses are included in the income statement for the period.
1.17.6ImpairmentoffinancialliabilitiesAt each balance sheet date an assessment is made of whether there is any objective evidence of impairment of financial assets. If there is evidence then the recoverable amount is estimated and an impairment loss is recognised in accordance with ACT 133 Financial Instruments and Recognition.
1.18 Government grantsGovernment grants, which are unconditional and are intended to compensate expenses and give immediate financial support to the entity with no future related costs and is recognised as income in the period in which it is received. Government grants are fully utilised to finance the operations of Mintek and any additions and expansions fixed assets are financed through cash flows generated from general business activities.
1.19 Revenue recognitionRevenue is recognised when the sale transactions giving rise to such revenue is concluded and risks and rewards of ownership and title pass to the buyer under the terms of the applicable contract and the pricing is fixed and determinable. Revenue arising from the rendering of services is recognised based on the percentage of completion determined by reference to the physical amount of work performed in relation to the total project.Advance income arising as result of contracts undertaken in terms of commercial work in respect of invoices raised and paid for in advance but for which no substantial work has been made to justify the recognition of any revenue, is deferred until the income is earned based on the percentage work completed.Revenue arising from licence fees is recognised on an accrual basis in accordance with the terms of the applicable contracts. Revenue from royalties is accrued based on the nature of the applicable contracts.Interest income is accrued on a time proportion basis recognising the effective yield on the underlying assets. Dividend income from investments is recognised when the right to receive payment has been established.Rental income is derived from rental of investments in fixed property and equipment and is recognised on an accrual basis in accordance with the substance of the relevant agreements.
1.20 Contracts in progressWhere the outcome of a contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the balance sheet date. The stage of completion is determined by the proportion of contract costs incurred in relation to the estimated total contract costs. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed to the customer.Where the outcome of the contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred and probably recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is immediately recognised as an expense to the income statement.
NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
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Financial Statements and notes1.21 TaxationIncome tax represents the sum of the tax currently payable and deferred tax.The tax currently payable is based on taxable profit for the financial year. Taxable profit differs from profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.Deferred tax is recognised on differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary differences arise from the initial recognition (other than a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interest in joint ventures, except where the company is not able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.Deferred tax assets and liabilities are off-set when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income tax levied by the same taxation authority and the company intends to settle its current tax assets and liabilities on a net basis.The principal operating entity Mintek is exempt from normal company taxation as it is a state controlled and financed entity.
1.22 Irregular, fruitless and wasteful expenditureIrregular expenditure means expenditure incurred in contravention of, or not in accordance with, a requirement of any applicable legislation, including:• The PFMA, or,• Any provincial legislation providing for procurement procedures in that provincial government.Fruitless and wasteful expenditure means expenditure that was made in vain and could have been avoided had reasonable care been exercised. All irregular, fruitless and wasteful expenditure is charged against income in the period in which it is incurred.
1.23 Financing costs Financing costs are recognised in the income statement in the period in which they are incurred.
1.24ComparativefiguresWhere necessary, comparative figures have been restated to conform to changes in presentation in the current year. Where comparative figures have been adjusted, the nature, amount of, and reason for, such restatement or reclassification have been disclosed. Refer to note 29 for details in this regard.
NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
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Financial Statements and notesNOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
GROUP MINTEK 2006 2005 2006 2005 R R R R
2. REVENUE Government grants 95,508,772 88,632,000 95,508,772 88,632,000 Commercial income 161,006,133 143,738,288 161,787,383 144,519,538 Contract research 99,945,779 79,147,243 100,727,029 79,928,493 Public sector 9,153,866 9,620,506 9,153,866 9,620,506 Manufactured products 11,659,357 24,292,081 11,659,357 24,292,081 Service income 32,331,773 21,204,465 32,331,773 21,204,465 Material sales 7,130,364 9,473,994 7,130,364 9,473,994 Royalty income 784,993 - 784,993 -
TOTAL REVENUE 256,514,905 232,370,288 257,296,155 233,151,538
3. OPERATING EXPENSES 242,161,677 224,186,842 242,161,677 224,186,842 Staff costs 156,364,750 144,099,295 156,364,750 144,099,295 Consumables 33,921,978 36,167,296 33,921,978 36,167,296 General running expenses 38,043,292 30,195,235 38,043,292 30,195,235 Administration overheads 7,234,557 9,304,457 7,234,557 9,304,457 Repairs and maintenance 5,847,596 1,959,224 5,847,596 1,959,224 Provision for and amounts written off 749,503 2,461,335 749,503 2,461,335
4. OTHER OPERATING INCOME Operating Income 11,131,118 3,263,300 11,193,321 3,263,300 Library services 137,913 142,525 137,913 142,525 Breach of contract 351,723 101,323 351,723 101,323 Bursary learnerships 3,895,852 - 3,895,852 - Commission 26,651 315,606 26,651 315,606 Conferences 1,491,139 920,621 1,491,139 920,621 Mintek cafeteria 712,467 712,650 712,467 712,650 Sundry income 209,063 853,080 209,063 853,080 Bad debts recovered 4,168,421 90,425 4,168,421 90,425 Other 137,890 127,071 200,093 127,071 Rental income - properties 1,604,068 1,256,585 1,604,068 1,256,585 Investment Property 5,426,927 1,165,857 5,426,927 1,165,857 Rental Income 1,528,731 1,309,667 1,528,731 1,309,667 Depreciation - (143,810) - (143,810) Fair value adjustment 3,898,196 - 3,898,196 -
18,162,113 5,685,742 18,224,316 5,685,742
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Financial Statements and notesNOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
GROUP MINTEK 2006 2005 2006 2005 R R R R
5. INVESTMENT INCOME Financial income Interest earned: fixed deposits 7,476,604 7,071,556 7,476,604 7,071,556 Loans to Subsidiary - - 813,178 661,887 Loans to Associates 813,178 661,887 - - Interest earned: bank balances 822,553 561,659 822,553 561,659 Interest earned: staff debtors 704,690 208,289 704,690 208,289 Dividend income - - - -
9,817,025 8,503,391 9,817,025 8,503,391
6. FINANCE EXPENSES Interest paid guaranteed liability 94,581 - - - Interest other 129,279 - 129,279 - Interest on finance lease 113,564 - 113,564 -
337,424 - 242,843 -
7. AUDIT FEES Audit fees Provision for current year 1,083,000 752,108 1,050,000 725,038 Underprovided prior year 841,160 - 834,479 -
1,924,160 752,108 1,884,479 725,038
8. FEES FOR SERVICES Consultants 11,287,396 6,585,089 11,287,396 6,585,089 Legal 712,587 - 712,587 -
11,999,983 6,585,089 11,999,983 6,585,089
9. DEPRECIATION Buildings 325,339 325,339 325,339 325,339 Plant 2,268,203 3,309,972 2,268,203 3,309,972 Equipment 7,549,025 7,209,796 7,549,025 7,209,796 Vehicles 185,956 351,592 185,956 351,592 Leased assets 198,801 - 198,801 - Furniture and fittings 92,248 86,760 92,248 86,760 10,619,572 11,283,459 10,619,572 11,283,459
10. POST-RETIREMENT BENEFIT OBLIGATIONS Actuarial loss/(gain) - post retirement medical 8,729,894 (2,214,069) 8,729,894 (2,214,069) obligation Interest on post-retirement medical obligation 3,692,544 4,512,793 3,692,544 4,512,793 Actuarial /(loss)/gain pension fund 406,000 1,161,000 406,000 1,161,000
12,828,438 3,459,724 12,828,438 3,459,724
Number of employees 524 493 524 493
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Financial Statements and notes
GROUP MINTEK Opening Closing Opening Closing Balance Additions Transfers Disposals Balance Balance Additions Transfers Disposals Balance2006 R R R R R R R R R R 11. PROPERTy, PLANT AND EQUIPMENT Land 4,927,776 - 50,481,024 - 55,408,800 4,927,776 - 50,481,024 - 55,408,800 Buildings 16,266,961 27,172 12,565,807 - 28,859,940 16,266,961 27,172 12,565,807 - 28,859,940 Plant 32,795,382 413,341 - (630,495) 32,578,228 32,795,382 413,341 - (630,495) 32,578,228 Equipment 85,424,741 17,631,643 - (13,159,271) 89,897,113 85,424,741 17,631,643 - (13,159,271) 89,897,113 Vehicles 2,322,637 - - (1,332,056) 990,581 2,322,637 - - (1,332,056) 990,581 Furniture and fittings 1,914,879 312,534 - (275,072) 1,952,341 1,914,879 312,534 - (275,072) 1,952,341 Finance leased assets - 1,995,394 - - 1,995,394 - 1,995,394 - - 1,995,394 Capital work in progress 24,345 1,438,542 - - 1,462,887 24,345 1,438,542 - - 1,462,887
143,676,721 21,818,626 63,046,831 (15,396,894) 213,145,284 143,676,721 21,818,626 63,046,831 (15,396,894) 213,145,284
Current Current year year Accumulated Opening Depreciation Transfers Disposals Closing Opening Depreciation Transfers Disposals Closing Depreciation R R R R R R R R R R
Land - - - - - - - - - - Buildings 9,434,837 325,339 - - 9,760,176 9,434,837 325,339 - - 9,760,176 Plant 11,364,250 2,268,203 - (457,375) 13,175,078 11,364,250 2,268,203 - (457,375) 13,175,078 Equipment 54,206,717 7,549,025 180,511 (12,172,283) 49,763,970 54,206,717 7,549,025 180,511 (12,172,283) 49,763,970 Vehicles 1,679,621 185,956 - (1,103,274) 762,303 1,679,621 185,956 - (1,103,274) 762,303 Furniture and fittings 1,428,557 92,248 - (269,336) 1,251,469 1,428,557 92,248 - (269,336) 1,251,469 Finance leased assets - 198,801 - - 198,801 - 198,801 - - 198,801 Capital work in progress - - - - - - - - - -
78,113,982 10,619,572 180,511 (14,002,268) 74,911,797 78,113,982 10,619,572 180,511 (14,002,268) 74,911,797
GROUP MINTEK 2006 2006 Net book value R R
Land 55,408,800 55,408,800 Buildings 19,099,764 19,099,764 Plant 19,403,150 19,403,150 Equipment 40,133,143 40,133,143 Vehicles 228,278 228,278 Furniture and fittings 700,872 700,872 Finance leased assets 1,796,593 1,796,593 Capital work in progress 1,462,887 1,462,887
138,233,487 138,233,487
NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
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Financial Statements and notesNOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
GROUP MINTEK Opening Closing Opening Closing Balance Additions Transfers Disposals Balance Balance Additions Transfers Disposals Balance2005 R R R R R R R R R R 11. PROPERTy, PLANT AND EQUIPMENT Land 4,927,776 - - - 4,927,776 4,927,776 - - - 4,927,776 Buildings 16,266,961 - - - 16,266,961 16,266,961 - - - 16,266,961 Plant 27,508,403 5,286,979 - - 32,795,382 27,508,403 5,286,979 - - 32,795,382 Equipment 82,095,682 3,834,787 (184,126) (321,600) 85,424,743 82,095,682 3,834,787 (184,126) (321,600) 85,424,743 Vehicles 2,443,835 - - (121,198) 2,322,637 2,443,835 - - (121,198) 2,322,637 Furniture and fittings 1,844,530 73,630 - (3,283) 1,914,877 1,844,530 73,630 - (3,283) 1,914,877 Capital work in progress - 24,344 - - 24,344 - 24,344 - - 24,344
135,087,187 9,219,740 (184,126) (446,081) 143,676,721 135,087,187 9,219,740 (184,126) (446,081) 143,676,721
Current Current year year Accumulated Opening Depreciation Transfers Disposals Closing Opening Depreciation Transfers Disposals Closing Depreciation R R R R R R R R R R
Land - - - - - - - - - - Buildings 9,109,498 325,339 - - 9,434,837 9,109,498 325,339 - - 9,434,837 Plant 8,054,278 3,309,972 - - 11,364,250 8,054,278 3,309,972 - - 11,364,250 Equipment 47,499,577 7,209,796 (184,126) (318,530) 54,206,717 47,499,577 7,209,796 (184,126) (318,530) 54,206,717 Vehicles 1,449,228 351,592 - (121,199) 1,679,621 1,449,228 351,592 - (121,199) 1,679,621 Furniture and fittings 1,344,801 86,760 - (3,004) 1,428,557 1,344,801 86,760 - (3,004) 1,428,557 Capital work in progress - - - - - - - - - -
67,457,382 11,283,459 (184,126) (442,733) 78,113,982 67,457,382 11,283,459 (184,126) (442,733) 78,113,982
GROUP MINTEK 2005 2005 Net book value R R
Land 4,927,776 4,927,776 Buildings 6,832,124 6,832,124 Plant 21,431,132 21,431,132 Equipment 31,218,026 31,218,026 Vehicles 643,016 643,016 Furniture and fittings 486,320 486,320 Capital work in progress 24,344 24,344
65,562,738 65,562,738 Freehold land and buildings comprise: Acquired in the prior year - Land and Buildings 11,759,900 11,759,900 Land Revalued 50,481,024 - Buildings 12,565,807 - Revaluation 74,806,731 11,759,900 Directors’ Valuation 74,806,731 11,759,900
Portion 175 and portion 226 of the farm Klipfontein, 203-IQ Johannesburg, with buildings thereon. The value of the building complex was estimated at R 84 268 740 by Lyons Financial Solutions (Proprietary) Limited, an independent valuer, during the financial year ending 31 March 2006. The latest valuation report was issued on 7 February 2006. The estimated useful lives of depreciable property, plant, equipment and vehicles are as follows: Buildings 50 years Plant 10 years Equipment 5 -10 years Vehicles 5 years Furniture and fittings 10 years
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Financial Statements and notes
GROUP MINTEK Opening Closing Opening Closing Balance Additions Transfers Disposals Balance Balance Additions Transfers Disposals Balance R R R R R R R R R R 12. INVESTMENT PROPERTy Buildings -Billiton 7,190,526 (2,253,306) 3,898,196 - 8,835,416 7,190,526 - - - 7,190,526
7,190,526 (2,253,306) 3,898,196 - 8,835,416 7,190,526 - - - 7,190,526
Current year Accumulated Opening Reversal Transfers Disposals Closing Opening Depreciation Transfers Disposals Closing Depreciation R R R R R R R R R R
Buildings -Billiton 2,253,306 (2,253,306) - - - 2,109,496 143,810 - - 2,253,306
2,253,306 (2,253,306) - - - 2,109,496 143,810 - - 2,253,306
Fair Value as at 8,835,416 4,937,220 31 March 2006 Directors’ Valuation 8,835,416 4,937,220
Portion of portion 175 of the farm Klipfontein, 203-IQ Johannesburg, with buildings thereon. The value of the building complex was estimated at R8 835 416 by Lyons Financial Solutions (Proprietary) Limited, an independent valuer during the year ended 31 March 2006. The latest valuation report was issued on 7 February 2006.
During the year the entity changed its accounting policy for investment property from the cost method to the fair value method as described in Note 1.1 as the entity believes this method to be more appropriate to reflect the investment property.
NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
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annual report 2006
Financial Statements and notesNOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
13. EQUITy ACCOUNTED INVESTMENTS Details of associates are as follows: Portion Place of Portion of of voting Financial 2006 2005 Name of associate incorporation ownership power held year end R R Apic Toll Treatment (Proprietary) Limited South Africa 40% 40% 30 June 2005 - 12,873,565 Mogale Alloys (Proprietary) Limited South Africa 25% 25% 31 March 2006 12,285,939 15,071,494 Tollsort (Proprietary) Limited (discontinued) South Africa 25% 25% 28 February 2006 - - Tollsort Phase II (Proprietary) Limited South Africa Prepayment for pre-incorporation costs 31 March 2006 - - 12,285,939 27,945,059 The Group disposed of its shareholding in Apic Toll Treatment (Pty) Limited for an amount of R18 000 000 effective 1 July 2005. - - GROUP 2006 2005 R R Cost of unlisted investments 250 1,850 Apic Toll Treatment (Proprietary) Limited - 1,600 Mogale Alloys (Proprietary) Limited 250 250 Tollsort (Proprietary) Limited - - Share of acquisition reserves : Apic Toll treatment and Mogale Alloys (Proprietary) Limited 5,715,831 11,839,521 Fair value of net assets acquired - 5,212,452 Interest bearing loans 6,569,858 10,891,236 Mogale Alloys (Proprietary) Limited 6,569,858 5,891,236 Apic Toll Treatment (Proprietary) Limited - 5,000,000 12,285,939 27,945,059 Directors’ valuation 12,285,939 27,945,059 GROUP 2006 2005 Reconciliation between opening and closing balance: R R Carrying value at the beginning of year 27,945,059 18,300,100 Loans to associates 678,622 2,215,462 Disposal of associate (18,653,037) - Share of post acquisition profits after tax 2,315,295 7,514,265 Loss written off - (84,768) Carrying value at the closing of year 12,285,939 27,945,059
The following are details of the significant associate’s assets, liabilities, income and expenses Long-term assets 108,138,022 164,254,982 Investment - 3,000,040 Current assets 78,390,473 139,323,771 Total Assets 186,528,495 306,578,793 Current liabilities 67,622,011 164,523,409 Long term liabilities 96,042,164 94,254,742 Total Liabilities 163,664,175 258,778,151
Income 247,518,635 319,943,600 Profit before taxation 5,216,118 58,590,583 Netoperatingprofit 3,898,048 31,002,883 14. INVESTMENT IN SUBSIDIARy Details of subsidiary are as follows: Place of Portion of Financial Shares at cost Shares at cost Indebtness Indebtness Name of subsidiary incorporation ownership year end 31 March 2006 31 March 2005 31 March 2006 31 March 2005 R R R R Mindev (Proprietary) Limited South Africa 100% 31 March 2006 100 100 (8,277,896) 8,489,598 100 100 (8,277,896) 8,489,598 Mindev (Proprietary) Limited is engaged in the commercialisation of Mintek’s patents and technology through the identification of suitable partners to advance such interests by way of direct investments in equity and through joint ventures.Mintek holds 100% of the issued share capital of Mindev (Proprietary) Limited. The loans granted are unsecured and do not have fixed repayments terms.DISCONTINUED OPERATIONS:TOLLSORT (PROPRIETARy) LIMITEDTollsort (Proprietary) Limited ceased its operations at the end of September 2004. Mindev (Proprietary) Limited has included the operating losses from Tollsort (Proprietary) Limited to an amount of R1 193 043. This represents twenty-five percent of Mindev’s portion of the loan guarantee made to Standard Bank on behalf of Tollsort (Proprietary) Limited. The total amount outstanding as at 31 March 2006 is R 3 309 564 and the amount recognised by Mindev (Proprietary) Limited as R825 624 at 31 March 2006.
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annual report 2006
Financial Statements and notesNOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
GROUP MINTEK 2006 2005 2006 2005 R R R R
15. LONG TERM LOANS AND ADVANCES Staff loans 1,979,876 2,183,523 1,979,876 2,183,523 Less: Short-term portion of staff loans (Note 17) (828,265) (910,070) (828,265) (910,070) 1,151,611 1,273,453 1,151,611 1,273,453 Staff loans are granted to qualifying staff in terms of schemes approved by the Board of Mintek. These loans are subject to a maximum repayment terms of 60 months, by way of fixed monthly instalments. The interest payable on these loans is calculated at the prevailing official interest rate as prescribed in the Seventh Schedule to the Income Tax Act, No. 58 of 1962.
16. INVENTORy Consumables 1,625,333 1,662,141 1,625,333 1,662,141 Finished goods 32,052 32,730 32,052 32,730 Contracts in progress 1,086,988 378,000 1,086,988 378,000 2,744,373 2,072,871 2,744,373 2,072,871
17. TRADE AND OTHER RECEIVABLES Trade debtors 35,292,824 48,458,296 36,985,532 49,369,754 Short-term portion of staff loans (Note 14) 828,265 910,070 828,265 910,070 Other receivables 2,346,499 1,840,656 2,346,499 1,840,656 SA Revenue Services (VAT) – 35,873 – 35,873 Less: – – – – Provision for bad debts (8,020,376) (12,228,541) (8,020,376) (12,228,541) 46,487,963 39,016,354 48,180,671 39,927,812
18. SHORT-TERM INVESTMENTS Short-term investments 102,830,270 101,679,514 102,830,270 101,679,514
Investments in short-term fixed deposits are held with various reputable financial institutions at market value. Fixed investments held with various public financial institutions are partly earmarked as financing for the post-retirement medical aid liability.
19. TRADE AND OTHER PAyABLES Trade creditors 10,782,865 10,672,871 10,782,865 10,672,871 Other payables 2,528,345 1,266,367 2,495,345 1,243,367 Current portion of lease liability 221,785 – 221,785 – Current portion of guaranteed liability 412,812 397,681 – – SA Revenue Services (VAT) 6,578,183 – 6,578,183 – Other creditors and accruals 6,800,100 6,387,271 6,800,100 6,387,271 27,324,090 18,724,190 26,878,278 18,303,509
20. DEFERRED INCOME Deferred income 18,917,629 15,193,861 18,917,629 15,193,861 Advanced client billing 2,756,424 7,600,000 2,756,424 7,600,000 21,674,053 22,793,861 21,674,053 22,793,861
Deferred income arises as a result of contracts undertaken in terms of the Lead Fund and Innovation funds administered by the Department of Science and Technology in respects of amounts received in cash not yet accounted for as revenue. Advance client billing income arises as a result of contracts undertaken in terms of commercial work where invoices are raised based on work that has been done. The quantum of cost incurred provides the basis for the level of revenue recognised in the period.
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annual report 2006
Financial Statements and notesNOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
Opening Additional Utilised and Closing Balance provisions reversed Balance R R R R
21. PROVISIONS GROUP AND MINTEK 31 March 2006 Provision for leave pay 12,873,411 – 1,122,858 11,750,553 Provision for lncentive Bonus 4,000,000 – 4,000,000 – Product warranties 1,555,011 – 660,503 894,508 18,428,422 – 5,783,361 12,645,061
Opening Additional Utilised and Closing Balance provisions reversed Balance R R R R
GROUP AND MINTEK 31 March 2005 Provision for leave pay 8,259,236 12,325,225 7,711,050 12,873,411 Provision for Incentive Bonus 1,097,738 6,148,062 3,245,800 4,000,000 Product warranties – 1,555,011 – 1,555,011 9,356,974 20,028,298 10,956,850 18,428,422
The provision for leave pay relates to vested leave pay to which employees become entitled upon leaving the employment of the entity. The provision arises as employees render a service that increases their entitlement to future compensated leave. The provision is utilised when employees who are entitled to leave pay, leave the employment of the entity or when the accrued leave due to an employee, is utilised. The provision for bonus consists of component elected by the employees from their total cost of employment package and a performance bonus. Bonuses become payable in November annually. The provision represent management’s best estimate of the liability at year end. The performance bonus is calculated on a specific formula based on the consolidated annual financial results. The provision for product warranties is the entity recognising its probable liability for meeting its obligations in terms of products and services as stipulated in its contracts with its customers. GROUP MINTEK 2006 2005 2006 2005 R R R R
22. LONG TERM RETIREMENT BENEFIT OBLIGATION Post-retirement medical aid 58,300,000 48,900,000 58,300,000 48,900,000 Pension benefit liability 2,935,000 2,529,000 2,935,000 2,529,000 Longtermretirementbenefitobligation 61,235,000 51,429,000 61,235,000 51,429,000 Post-retirementmedicalbenefits The amounts included in the balance sheet arising from Mintek’s obligation in respect of post-retirement medical benefits is as follows: Present value of obligations as at 31 March 2006 58,300,000 48,900,000 58,300,000 48,900,000 Fair value of plan assets as at 31 March 2006 – – – – Post-retirementbenefitobligation 58,300,000 48,900,000 58,300,000 48,900,000
Fixed investments held with various public financial institutions is partly earmarked as financing for the post-retirement medical aid liability (refer to statement of changes in equity). Mintek has not assigned a specific fund to hedge against the post-retirement medical aid liability. Movement in the net liability recognised in the balance sheet Net past service benefit liability: Beginning of the year 48,900,000 49,300,000 48,900,000 49,300,000 Interest cost 3,692,544 4,512,793 3,692,544 4,512,793 Contributions paid to service providers (3,022,438) (2,698,724) (3,022,438) (2,698,724) Net Actuarial loss/(gains recognised) 8,729,894 (2,214,069) 8,729,894 (2,214,069) – – – – Netpastservicebenefitliability: End the year 58,300,000 48,900,000 58,300,000 48,900,000
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annual report 2006
Financial Statements and notesNOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
GROUP MINTEK 2006 2005 2006 2005 R R R R 21. LONG TERM RETIREMENT BENEFIT OBLIGATION (continued) Key assumptions Expected long term rate of return on plan assets 7.5% 9.0% 7.5% 9.0% Expected increase in health care costs 6.0% 6.0% 6.0% 6.0% Amounts recognised in income in respect of the scheme are as follows: Current cost 12,422,438 2,298,724 12,422,438 2,298,724 Benefitspaid Contributions (3,022,438) (2,698,724) (3,022,438) (2,698,724) Expected average remaining life of employees (years) 16 16 16 16
Medical cover is provided through a number of different schemes. Post-retirement medical cover in respect of qualifying employees is recognised as an expense over the expected remaining service lives of the relevant employees. The group has an obligation to provide medical benefits to certain pensioners and dependants of ex-employees. These liabilities have been provided in full, calculated on an actuarial basis. The liabilities are unfunded. Periodic valuation of this obligation is carried out by independent actuaries every two years, the latest one being 31 March 2006. PensionbenefitsareprovidedbymembershipoftheMintekRetirementFund(MRF)andtheMintekEmployees Retirement Fund (MERF). Movement in the net liability recognised in the balance sheet Employer liability 2,529,000 1,368,000 2,529,000 1,368,000 Movement in Guaranteed liability 400,000 9,000 400,000 200,000 – – – – Actuarial loss/(gain) 6,000 1,152,000 6,000 961,000 Net employer liability at end of year 2,935,000 2,529,000 2,935,000 2,529,000 Current cost 406,000 1,161,000 406,000 1,161,000
At inception of the Fund a Retirement Reserve was allocated to certain members which will become payable at the time of the members death or withdrawal.The employer also funds a minimum guaranteed pension for the members who entered the fund as at 1 January 1995. For purpose of calculating the valuation investment returns are expected to exceed salary increases by 3 %. Employer contributions are charged against income in the period in which they are incurred. Contributions so charged were as follows : MRF and MERF 8,814,634 9,682,030 8,814,634 9,682,030 Employee contributions to the funds were as follows: MRF and MERF 4,863,246 3,749,733 4,863,246 3,749,733
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annual report 2006
Financial Statements and notesNOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
GROUP MINTEK 2006 2005 2006 2005 R R R R
23. LONG TERM CREDITORS Finance lease obligation 1,379,915 - 1,379,915 - Amount due for finance lease obligation 1,601,700 - 1,601,700 - Less: current portion of finance lease obligation (221,785) - (221,785) - Guarantee liability 412,812 795,362 - - Long term liability 825,624 1,193,043 - - Less: current portion of long term liability (412,812) (397,681) - - 1,792,727 795,362 1,379,915 -
23.1 FINANCE LEASE OBLIGATION Capitalised leased assets Payable within one year 221,785 - 221,785 - Payable within 2-5 years 1,379,915 - 1,379,915 - Net lease liability 1,601,700 - 1,601,700 - It is the group’s policy to lease certain of its equipment under leases. The group has an equipment finance lease agreement with an average lease term of four to six years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental repayments. As of 31 March 2006 the aggregate amounts of minimum lease payments and the related imputed interest under capitalised lease contracts payable Present value in each of the next five fiscal years and thereafter are as follows: Mininimum minimum lease lease payments Interest payments Payable in the years ended 31 March 2007 379,234 157,449 221,785 2008 379,234 133,006 246,228 2009 379,234 105,772 273,462 2010 316,850 74,301 242,549 2011 111,178 22,925 88,253 Thereafter 529,423 - 529,423 2,095,153 493,453 1,601,700 GROUP MINTEK 2006 2005 2006 2005 R R R R
23.2 GUARANTEED LIABILITy Associate company liability 825,624 1,193,043 - - Less: current portion included in accounts payable (412,812) (397,681) - -
412,812 795,362 - -
The Group has assumed its share of the guaranteed liability of an associate company which will be repaid by 15 March 2008 24. FUTURE LEASE LIABILITy Future operating lease charges for vehicles 362,672 324,276 362,672 324,276 - Payable between two and five years 181,336 160,203 181,336 160,203 544,008 484,479 544,008 484,479
25. CONTINGENT LIABILITIES Mintek has various legal claims relating to disputed performance in sales and supply contacts. The amounts of the disputes are not expected to exceed R555 185 .Mintek also has disputed employment termination contracts with former employees ,the aggregate is not expected to exceed R87 674. Mintek has performance guarantees outstanding of R713 503 for services rendered. A cession in favour of Absa for R5 000 000 to meet requirements for credit card and other banking facilities has been registered. The Group’s subsidiary Mindev (Proprietary ) Limited, has ceded its shareholder loan in Mogale Alloys (Proprietary) Limited to the bank as surety for banking facilities granted.
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annual report 2006
Financial Statements and notesNOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
page 68
GROUP MINTEK 2006 2005 2006 2005 R R R R26. TAXATION Taxation on entity share in associate post acquisition reserves (330,241) (2,410,641) - -
No deferred taxation is raised on the assessed losses of Mindev (Proprietary) Limited due to the uncertainty regarding taxable income to utilise the assets in the foreseeable future. No provision for income tax was made as Mintek is exempted in terms of section 10(1)(CA)(i) of the Income Tax Act, No. 58 of 1962. Tax provisions liabilities are with respect to Mindev and its associated companies and are payable through those entities. 27. COMMITMENTS Contracted for: Capital expenditure 338,276 216,346 338,276 216,346 Authorised and not contracted for - - - - Internal funds will be provided to meet the expenditure in respect of these commitments, which have been approved and contracted for. 28. CASH GENERATED FROM OPERATIONS Notes Profitfromoperations 5,072,300 7,270,829 4,387,757 564,884 Adjusted for Investment income (9,817,025) (8,503,391) (9,817,025) (8,503,391) Finance expenses 337,424 - 242,843 - Non Cash items Investment property fair value adjustment 4 (3,898,196) - (3,898,196) - Depreciation - investment property 4 - 143,810 - 143,810 Depreciation 9 10,619,572 11,283,459 10,619,572 11,283,459 Fixed asset correction 180,510 - 180,510 - Loss/(Profit) on disposal of fixed assets 1,131,011 (34,575) 1,131,011 (34,575) Loss on disposal of associates 653,037 - - - Provisions raised/(utilised) 20 - 20,028,298 - 20,028,298 Increase in post retirement obligation 21 12,828,438 3,459,724 12,828,438 3,459,724 Post retirement obligation -restatement of opening balance - 1,368,000 - 1,368,000 Share of associates income (2,315,295) (7,514,265) - - Increase in Loan to associate (678,622) (2,130,694) - - Long term liability raised (142,335) 1,193,043 (221,785) - Prior year restatement 28 - 1,444,184 - 1,586,827 Reversal of long term rental 28 - (1,843,861) - (1,843,861) Cash flow from operations before working capital changes 13,970,819 26,164,561 15,453,125 28,053,175 Working capital changes: (541,174) 25,754,927 (1,347,555) 24,833,499 Decrease in loans 121,842 1,162,893 121,842 1,162,893 (Increase)/decrease in inventories (671,501) 2,326,247 (671,501) 2,326,247 Decrease in receivables (7,471,608) (1,760,598) (8,252,858) (2,672,057) Increase in payables 8,599,901 8,358,980 8,574,770 8,349,011 (Decrease)/increase in deferred income (1,119,808) 15,667,405 (1,119,808) 15,667,405 13,429,645 51,919,489 14,105,570 52,886,675 28.1 INCREASE IN CASH AND CASH EQUIVALENTS Cash on hand 4,929,673 5,521,367 4,929,673 5,521,367 Cash on deposit 5,617,008 10,384,893 5,617,008 10,384,893 Foreign currency (9,303) (285) (9,303) (285) 10,537,378 15,905,975 10,537,378 15,905,975
28.2 DISPOSAL OF SHARE IN ASSOCIATE Cost of investment 1,600 - - - Fair value at acquisition 5,212,452 - - - Post acquisition reserves 8,438,985 - - - Loans and advances 5,000,000 - - - Carrying value at disposal date 18,653,037 - - - Proceeds 18,000,000 - - - Loss on disposal 653,037 - - -
annual report 2006
Financial Statements and notesNOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
29. RESTATEMENTS AND RECLASSIFICATIONS The tables below reflect the changes that were made to the 2005 and 2004 years as a result of certain restatements and balance sheet reclassifications.
Balance Provisions Staffcost Rental Interest Finance Reclassification Subsidiary Balance previously created and reversal adjustment reversal lease and errors consolidation as restated reported corrected adjustment adjustment Reconciliation 2005 R R R R R R R R R
GROUP Income statement Revenue 239,181,549 (9,155,011) - - - - 2,343,750 - 232,370,288 Operating expenses 160,367,724 - - - - - 63,819,117 - 224,186,841 Other operating income 7,186,535 - - - - - (1,500,793) - 5,685,742 Investment income - - - - - - 8,503,391 - 8,503,391 Audit fees 1,190,553 - - - - - (438,445) - 752,108 Fees for services 2,826,026 - - - - - 3,759,063 - 6,585,089 Administrative expenditure 75,800,172 - - - - - (75,800,172) - - Depreciation 8,868,497 2,096,821 - - - - 318,141 - 11,283,459 Post-retirement obligations - - - - - - 3,459,724 - 3,459,724 Share of profit of equity 9,924,906 - - - - - (2,410,641) - 7,514,265 accounted associates Balance sheet Capital and reserves Retained earnings at beginning 122,524,086 (1,368,000) 3,197,862 2,140,050 (2,903,920) - 19,855,948 - 143,446,026 of the year Non-current liabilities Long term retirement 52,231,648 1,161,000 - - - - (1,963,648) - 51,429,000 benefit obligation Rentals in advance 1,768,218 - - (1,768,218) - - - - - Finance creditor - - - - - 795,362 - - 795,362 Current liabilities Trade and other payables 16,954,759 - - - - - 1,769,431 - 18,724,190 Deferred income 15,193,861 7,600,000 - - - - - - 22,793,861 Provisions 18,018,564 1,555,011 - - - - (1,145,153) - 18,428,422 Non-current assets Property, plant and equipment 48,646,730 (2,096,821) - - - - 19,012,829 - 65,562,738 Equity accounted investments 28,029,827 - - - - - (84,768) - 27,945,059 Current assets - - - - - - Inventory 2,090,871 (18,000) - - - - - - 2,072,871 Trade and other receivables 37,447,578 (2,402,480) - - - - 3,971,257 - 39,016,355 Short term investments 100,000,000 - - - - - 1,679,514 - 101,679,514 Cash and cash equivalents 20,292,877 107,603 - - - - - - 20,400,480
Cash Flow Cash generated from operations Profit from operations 5,862,627 5,748,642 - - - - (2,817,363) 12,434 8,806,340 Depreciation - Investment property - - - - - - 143,810 - 143,810 Depreciation 8,868,497 2,096,821 - - - - 318,141 - 11,283,459 Provisions raised 8,661,590 11,366,708 - - - - - - 20,028,298 Long term retirement benefit obligation - 4,827,724 - - - - - - 4,827,724 Share of profit of equity - - - - - - - 7,514,265 7,514,265 accounted associates Rentals in advance - - - (1,843,861) - - - - (1,843,861) Prior year restatements 6,442,779 19,477,756 - - - - (4,998,595) - 20,921,940 Working Capital Decrease in inventory 2,308,247 - 18,000 - - - - - 2,326,247 Increase in receivables (191,823) - - - - - (1,698,984) - (1,890,807) Increase in payables 8,249,668 - - - - - 109,313 - 8,358,981 Increase in deferred income 8,067,404 7,600,000 - - - - - - 15,667,404 Cashinflowfromoperatingactivities Investment income 10,752,591 - - - (2,249,200) - - - 8,503,391 Payments to long term - - (2,698,724) - - - - - (2,698,724) Provisions uitilsed - (10,956,850) - - - - - - (10,956,850) Cashinflowfrominvestingactivities Increase in investment deposits 20,000,000 - - - - - 1,679,514 - 21,679,514 Decrease in equity accounted (3,725,597) - - - - - 2,254,600 533,446 (937,551) associates Increase in short term investment (1,381,711) - - - - - 1,381,711 - - interest Net increase in cash and 15,798,372 107,603 - - - - - - 15,905,975 cash equivalents
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annual report 2006
Financial Statements and notesNOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
29. RESTATEMENTS AND RECLASSIFICATIONS (continued)
Balance Provisions Staffcost Rental Interest Finance Reclassification Subsidiary Balance previously created and reversal adjustment reversal lease and errors consolidation as restated reported corrected adjustment adjustment Reconciliation 2005 R R R R R R R R R
MINTEK Income statement Revenue 239,181,549 (9,155,011) - - - - 3,125,000 - 233,151,538 Operating expenses 160,367,724 - - - - - 63,819,117 - 224,186,841 Other operating income 7,186,535 - - - - - (1,500,793) - 5,685,742 Investment income - - - - - - 8,503,391 - 8,503,391 Audit fees 1,190,553 - - - - - (465,515) - 725,038 Fees for services 2,826,026 - - - - - 3,763,063 - 6,589,089 Depreciation 8,868,497 2,096,821 - - - - 318,141 - 11,283,459 Post-retirement obligations - - - - - - 3,459,724 - 3,459,724 Balance sheet Capital and reserves Retained earnings at beginning of the year 111,759,528 (1,368,000) 3,197,862 2,140,051 - - 17,094,670 - 132,824,111 Non-current liabilities - - Long term retirement benefit obligation 52,231,648 1,161,000 - - - - (1,963,648) - 51,429,000 Rentals in advance 1,768,218 - - (1,768,218) - - - - - Current liabilities Trade and other payables 18,181,759 - - - - - 121,750 - 18,303,509 Deferred income 15,193,861 7,600,000 - - - - - - 22,793,861 Provisions 18,018,564 1,555,011 - - - - (1,145,153) - 18,428,422 Non-current assets Property, plant and equipment 48,646,730 (2,096,821) - - - - 19,012,829 - 65,562,738 Current assets Inventory 2,090,871 (18,000) - - - - - - 2,072,871 Trade and other receivables 11,017,411 - - - - - (2,527,813) - 8,489,598 Short term investments 100,000,000 - - - - - 1,679,514 - 101,679,514 Cash and cash equivalents 20,292,877 - - - - - 107,603 - 20,400,480 Cash Flow Cash generated from operations Profit for the year 5,331,271 (11,453,735) - - - - 8,784,169 - 2,661,705 Depreciation - Investment property - - - - - - 143,810 143,810 Depreciation 8,868,497 2,096,821 - - - - 318,141 - 11,283,459 Provisions raised 8,661,590 11,366,708 - - - - - - 20,028,298 Long term retirement benefit obligation - - 4,827,724 - - - - - 4,827,724 Prior year restatements 6,442,779 - - - - - (4,855,952) - 1,586,827 Rentals in advance - - - (1,843,861) - - - - (1,843,861) Working Capital Decrease in inventories 2,308,247 18,000 - - - - - - 2,326,247 Increase in receivables (191,823) - - - - - (2,480,234) - (2,672,057) Increase in short term (1,062,145) - - - - 1,062,145 - - investment accrual Increase in payables 6,977,262 - - - - - 1,371,749 - 8,349,011 Increase in deferred income 8,067,404 7,600,000 - - - - - - 15,667,404 Cashinflowfromoperatingactivities Investment income - - - - - - 8,503,391 - 8,503,391 Provisions utilised - (10,956,850) - - - - - - (10,956,850) Cashinflowfrominvestingactivities Increase in investment deposits 20,000,000 - - - - - 1,679,514 - 21,679,514 Increase in interest in subsidiary (2,492,697) - - - - - 1,525,511 - (967,186) Payments to long term retirement obligation - - (2,698,724) - - - - - (2,698,724) Increase in short term investment interest 1,062,146 - - - - - (1,062,146) - - Net increase in cash and cash equivalents 15,798,372 - - - - - 107,603 - 15,905,975
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annual report 2006
Financial Statements and notesNOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
29. RESTATEMENTS AND RECLASSIFICATIONS (continued)RevenueThe Entity restated revenue to take account of providing for product and service warranties and reversal of revenue relating to advanced billing and accounting for revenue previously not included which impacted profits for the year ended 31 March 2005 by R6 030 011.Retained earningsThe Entity restated retained earnings expenditure take account of providing for post employment benefits which impacted profits for the year ended 31 March 2005 by R1 368 000, reversal of staff expenditure which increased profits by R3 197 862, restatement of a liability which was incorrect which increased profits by R2 140 050; and reversal of interest incorrectly included in income which reduced retained earnings by R2 903 920. LongtermretirementbenefitobligationThe Entity restated its liability to provide for post employment benefits previously omitted which impacted profits for the year ended 31 March 2005 by R1 161 000 .Rentals in advanceThe Entity reversed a liability which was previously recorded incorrectly for advanced rentals received which increased profits for the year ended 31 March 2005 by R1 843 861.Long term creditorThe Entity recognised a liability which was previously omitted relating to the guarantee of a subsidiary’s debt which impacted profits for the year ended 31 March 2005 by R1 193 043. Deferred incomeThe Entity restated its liability for deferred income to reverse advanced billing where the work was not completed and the revenue so recognised excluded, which impacted profits for the year ended 31 March 2005 by R7 600 000.ProvisionsThe Entity provided for product and service warranties which impacted profits for the year ended 31 March 2005 by R1 555 011.Property, Plant and EquipmentThe Entity revised the useful lives of its fully depreciated assets resulting in a reversal of excess depreciation of R19 477 756 at 31 March 2004 and a charge to depreciation as a result thereof of R2 096 821 for the years ended 31 March 2005 and 31 March 2006.InventoriesThe Entity impaired a part of its inventory, which impacted profits for the year ended 31 March 2005 by R18 000.Trade and other receivablesThe Entity increased its provision for doubtful debts which impacted profits for the year ended 31 March 2005 by R2 402 481.Cash and cash equivalentsThe Entity restated its cash and cash equivalents to recognise a banking account previously omitted which increased the income and cash flow for the year ended 31 March 2005 by R107 603.
RECLASSIFICATIONSIncome StatementThe Entity reclassified and corrected a number of operating and income items to improve compliance of its annual financial statements with the requirements of South African Statements of Generally Accepted Accounting Practice.Balance SheetThe Entity reclassified a number of balance sheet items to improve compliance of its Annual Financial Statements with the requirements of South African Statements of Generally Accepted Accounting Practice.Cash FlowThe Entity restated its cash flow information to take account of the number of reclassifications as indicated above. The change in classifications does not impact its tax position or cash equivalents for the year to 31 March 2006.
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Financial Statements and notesNOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
30. BOARD MEMBERS AND EXECUTIVE MANAGEMENT REMUNERATION
GROUP AND MINTEK Fees for Performance services as bonus and 2006 2005 Entity Basic Salary director other expenses TOTAL TOTAL R R R R R Executive Management MINTEK Dr. P.P. Jourdan Mintek 1,153,972 – 39,945 1,193,917 996,728 Dr. R.L Paul Mintek 818,380 – 215,499 1,033,879 850,324 Dr. N.A Barcza (Resigned ) Mintek & Mindev 650,853 – 112,847 763,700 834,277 Dr. M. Motuku Mintek 705,836 – 76,593 782,429 – Mr. P. Fusi Mintek 629,087 – 199,391 828,478 – Mr. V. Govender Mintek 690,786 – 130,664 821,450 – Dr. F. Petersen – – – – 777,447 Ms. K. Mzondeki Mintek 104,141 – 23,025 127,166 532,000 Non Executive Management Board Members 4,753,055 – 797,964 5,551,019 3,990,776 MINTEK Mr. M. Khumalo (Chairman) Metallon Corporation – 9,108 – 9,108 4,554 Dr. F. Crundwell CM Solutions – 18,668 – 18,668 3,382 Ms. T. Mosery-Eboka (Resigned Jan 2006) Standard Bank – 15,286 – 15,286 3,382 Ms. L. Mojela (Resigned December 2005) WIPHOLD – 5,659 – 5,659 1,691 Mr. R. Havenstein Anglo American Platinum – 6,764 – 6,764 1,691 Ms. G. Mthethwa Standard Bank – 15,219 – 15,219 1,691 Mr. V. Pillay CSIR – 12,423 – 12,423 – Prof. P.E. Ngoepe University of North – 10,146 – 10,146 1,691 Mr. A. Mngomezulu Department of Minerals and Energy – – – – –
MINDEV (Proprietary) Limited Mr. N. Morrison Mindev – 3,382 – 3,382 1,691 Mr. G. Mosinyi Mindev – 5,073 – 5,073 1,691 4,753,055 103,419 797,964 5,654,438 4,015,622
31. INSURANCE AND RISK MANAGEMENT The insurance and risk management policies adopted by Mintek are aimed at obtaining sufficient cover at the minimum cost to protect its asset base, earning capacity
and legal obligations against acceptable losses. All property, plant and equipment are insured at current replacement value. Risks of a possible catastrophic nature are identified and insured while acceptable risks.
32. FINANCIAL INSTRUMENTS Credit risk
Financial assets that could subject the Group to credit risk consist principally of bank balances and cash, deposits, trade and other receivables and loans to associates. The Group bank balances are placed with high credit quality financial institutions. Trade and other receivables and loans to associates are presented net of the allowance for doubtful receivables or loan write-offs. Credit risk with respect to trade receivables is limited due to the large number of customers comprising the group’s customer base and their dispersion across different industries and geographic areas. Accordingly the group does not have significant concentration of credit risk.
The carrying amounts of financial assets included in the balance sheet represent the Group’s exposure to credit risk in relation to these assets. The Group does not have any significant exposure to any customer or counter party. Interest risk The valuation of interest rate exposure and investment strategies is done by management on a regular basis. Interest bearing investments are held with reputable
banks to minimise exposure. Fair values As at 31 March 2006 the carrying amount of bank balances and cash, deposits, trade and other receivables, trade and other payables. Contracts in progress,
advances received and short term borrowing approximated their fair values due to the short term nature of these assets and liabilities. Long term loans to associates and subsidiaries are interest free with no fixed repayment terms and therefore the fair value of these loans can not be calculated. The fair value of the loans to outside shareholders cannot be determined as the loans are interest free with no fixed terms of repayment.
Foreign currency risk The Group undertakes certain risk in certain denominated foreign currencies, hence exposures to rate fluctuations arise. The group does not currently enter into forward foreign exchange contracts to buy and sell amounts of various currencies at predetermined exchange rate, as the foreign currency amounts are not significant in relation to the entity’s income. Forward exchange contracts are entered into with large commercial contracts denominated in foreign currency. As a matter of principle, the Group does not enter into foreign currency exchange contracts for speculative reasons. The estimated fair value gain/(loss) per income statement was determined by comparing the contracted value rate to an equivalent spot rate on the settlement or at year end rate for outstanding foreign currency.
33. RELATED PARTy Controlling entity
The Group comprises of Mintek and its wholly owned subsidiary Mindev (Proprietary) Limited. Mindev is engaged in the commercialisation of Mintek patents and technology through the identification of suitable partners and investments in equity associates, namely Mogale Alloys (Proprietary) Limited and Tollsort (Proprietary) Limited. The Group, in the ordinary course of business, enters into various sale and purchase transactions on an arm’s length basis at market rates with related parties. None of the directors, officers or major shareholders of Mintek Group or, to the knowledge of Mintek, their families, had any interest, direct or indirect, in any transactions which has affected or will materially affect Mintek or its investment interest or subsidiaries. Forward exchange contracts are entered into with large commercial contracts denominated in foreign currency. As a matter of principle, the Group does not enter into foreign currency exchange contracts for speculative reasons. The estimated fair value gain/(loss) per income statement was determined by comparing the contracted value rate to an equivalent spot rate on the settlement or at year end rate for outstanding foreign currency .
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Financial Statements and notesNOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
34. RELATED PARTy (continued) Associates During the year the Group advanced interest bearing loans to Associates. GROUP MINTEK 2006 2005 2006 2005 R R R R Interest bearing loans Mogale Alloys (Proprietary) Limited 6,569,858 5,891,236 6,569,858 - Apic Toll Treatment (Proprietary) Limited - 5,000,000 - 5,000,000 Tollsort (Proprietary) Limited - 762,500 - 762,500 Tollsort (Proprietary) Limited ceased its operations at the end of September 2004. Mindev (Proprietary) Limited has included the operating losses from: Tollsort (Proprietary) Limited for an amount of R1 193 043, which represents twenty-five percent of Mindev (Proprietary) Limited’s portion of the loan guarantee made to Standard Bank on behalf of Tollsort (Proprietary) Limited. Related party transactions Related party transactions exist within the Group. During the year all selling transactions were concluded at arm’s length. Agreement details of material transactions with related parties not disclosed elsewhere in the financial statements are as follows: Mintek sales to Mintek sales to
Department of Minerals and Energy 6,933,125 537,998 6,933,125 537,998 Department of Science and Technology 3,154,516 9,987,661 3,154,516 9,987,661 Mogale Alloys (Proprietary) Limited 6,250,000 - 6,250,000 - Mindev (Proprietary) Limited - - 62,203 -
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annual report 2006
1 April 2005 to 31 March 2006
Abdel-Latif M. Mintek Thermal Magnesium Process (MTMP): Theoretical and operational aspects. Southern African Pyrometallurgy 2006, Edited by R.T. Jones, SAIMM, Johannesburg, 5-8 March 2006, pp.329-341.
Abdel-Latif M. Refining testwork on crude magnesium produced in the Mintek Thermal Magnesium Process. Southern African Pyrometallurgy 2006, Edited by R.T. Jones, SAIMM, Johannesburg, 5-8 March 2006, pp.343-355.
Barker IJ, Rennie MS, Hockaday, CJ and Brereton-Stiles PJ. Modes of electrical conduction in industrial silicon-type furnaces. Silicon for Chemical Industry VIII, Trondheim, Norway, June 12-16 2006.
Berners-Price SJ, Bowen RJ, Fernandes MA, Layh M, Lesueur WJ, Mahepal S, Mtotywa MM, Sue, RE and van Rensburg CEJ. Gold(I) and Silver(I) complexes of 2,3-bis(di-phenylphosphino)maleic acid: Structural studies and antitumour activity. Inorganica Chimica Acta, 24 May 2005.
Biggs T. The hardening of platinum alloys for potential jewellery application. Platinum Metals Review, vol. 49, no. 1. 2005. pp. 2-15.
Bowen RJ, Caddy J, Coyanis ME, Fernandes MA, Layh M, Linganiso LZ, Maboya WK and Omondi B. Synthesis, crystal structures, and reactions of 2-oxomalonyl-bis(arylimidoyl) chlorides and hydroxymethane tris(arylimidoyl) chlorides. Australian Journal of Chemistry 58, 2005 pp.522-530.
Bowen RJ, Caddy J, Fernandes MA, Layh M, Mamo MA and Meijboom R. Synthesis and characterisation of dialkyltin 2,3-bis(diphenylphosphino)maleic acid adducts. Journal of Organometallic Chemistry 691, Oct. 2005, pp 717-725.
Bowen RJ, Fernandes MA, Gitari PW, Layh M and Moutloali RM Synthesis and reactions of mixed NP ligands. European Journal of Inorganic Chemistry, 2005, pp 1955-1963.
Brennan JI, Hatzakis NS, Tshikhudo TR, Dirvianskyte N, Razumas V, Patkar S, Vind J, Svendsen A, Nolte RJM, Rowen EA, and Brust M. Bioconjugation via click chemistry: The creation of functional hybrids of lipases and gold nanoparticles. Bioconjugate Chemistry.
Chown LH, Cornish LA and Joja B Structure and properties of Pt-Al-Co alloys. EMSA, Conference of the Microscopy Society of Southern Africa, Pietermaritzburg, December 2005.
Coetzee SH, Cornish LA and Witcomb MJ. Solidification of selected As-Cast Ni-Ru-Y samples. Proceedings of the Microscopy Society of America, Microscopy and Microanalysis Conference, Honolulu, Hawaii, USA. 29 July – 4 August 2005.
Coetzee SH, Cornish LA, Witcomb MJ and Jain PK. Comparison of as-cast results of Ni-Ru-Y with a 600°C isothermal section. Proceedings of the Microscoscopy Society of Southern Africa, 25, p. 10.
Comins D, Coville N, Derry T, Luyckx S, Lowther T, Nam T, Potgieter H, Sigalis J, Witcomb M, Connell S, Campbell I, Cornish L, Venter A and Taylor S. Getting to grips with strong materials. Quest, 2 (1) 2005, 3-14.
Cornish LA, Suss R, Chown LH, Douglas A, Glaner L, Matema M and Taylor S. A new niche: platinum-based alloys for high temperature applications. SAIMM Physical Metallurgy Colloquium. 17 May 2005, Randburg (Abstract).
Cornish LA and Watson A. Cobalt-copper-silicon. Submitted to MSIT, 2005, to be published in MSIT WorkPlace (on web).
Cornish LA and Watson A. Copper-germanium-nickel. Submitted to MSIT, 2005, to be published in MSIT WorkPlace (on web).
Cornish LA and Witcomb MJ. A study of ternary invariant reactions in as-cast Al-Ru-Y alloys. Proceedings of the Microscopy Society of Southern Africa, vol. 25, p. 7, KwaZulu- Natal, 5th – 7th December 2005.
Cornish LA and Witcomb MJ. Solidification of selected Al-Ru-Y samples. Proceedings of the Microscopy Society of America, Microscopy and Microanalysis Conference, Honolulu, Hawaii, USA. 29 July – 4 August 2005.
Deepnarain, R. Thickener profiler. Minproc SAIMM 2005, Somerset West, 4-5 August 2005.
Denton GM, Barcza NA, Scott PD, and Fulton T. EAF stainless steel dust processing. John Floyd International Symposium on Sustainable Developments in Metals Processing, Melbourne, Australia, July 3-6, 2005, pp 273-283.
Doty RC, Tshikhudo TR, Brust M and Fernig DG. Extremely stable, water-soluble, Ag nanoparticles. Chemistry of Materials, 2005, 17, 4630.
Douglas A, Raphulu MC, Claasens C, van der Merwe C and Compton D. Ultrastructural investigation of Au/polymer composite nanofibres. Proceedings of the Microscopy Society of Southern Africa., Volume 25, p. 11, KwaZulu-Natal, 5th – 7th December 2005.
Du Toit AJ, Gaylard P, Jahanshahi S and Nell J. Iron redox-equilibria and sulphide capacity of PGM melter-type slags. Minerals Engineering 19 (2006) 212-218.
Fourie DJ, Eksteen JJ and Zietsman JH. Calculation of FeO-TiO2-Ti2O3 liquidus isotherms pertaining to high titania slags. SAIMM Journal November 2005, vol. 105, no. 5, pp. 695
Gericke M and Pinches A. Microbial production of gold nanoparticles. Gold Bulletin 2006, 39/1, pp. 22-28.
Gericke M and Pinches A. Biological synthesis of metal nanoparticles. Presented at IBS2005: The International Biohydrometallurgy Conference, Cape Town, South Africa, 25-29 Sep. 2005.
Glaner L and Cornish LA. Investigation of the Ni-Pt-Ru phase diagram. EMSA, Conference of the Microscopy Society of Southern Africa, Pietermaritzburg, December 2005.
Glaner L, Watson A, Cornish LA and Suss R. Calorimetric measurements for a Pt-based thermodynamic database.CALPHAD XXXIV Program and Abstracts, p. 139, Maastricht, The Netherlands, 22-27 May 2005.
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Publications
Jones, RT. An overview of southern African PGM smelting. Nickel and Cobalt 2005: Challenges in Extraction and Production, 44th Annual Conference of Metallurgists, Calgary, Alberta, Canada, 21-24 August 2005, pp.147-178.
Jones RT and Curr TR. Pyrometallurgy at Mintek. Southern African Pyrometallurgy 2006, Edited by R.T. Jones, SAIMM, Johannesburg, 5-8 March 2006, pp.127-150.
Kotze MH, Green BR, Neale JW and Swanepoel L. Mintek’s re-entry into uranium research and development. ALTA 2006, May 2006, Perth. Australia.
Lotz PW. The cyanide management code: using compliance monitoring data for potential cost savings. Presented at Mineral Processing 2005, Somerset West, Western Cape, 4-5 August 2005.
Luckos A and Den Hoed P. A study into the hydrodynamic behaviour of heavy minerals in a circulating fluidized bed. IFSA 2005, Industrial Fluidization, South Africa, SAIMM, Johannesburg, pp 345-355.
Matema M, Douglas A, Suss R, Joja B and Cornish LA. Preliminary investigation of the microstructure of complex Pt-based alloys. EMSA, Conference of the Microscopy Society of Southern Africa, Pietermaritzburg, December 2005.
McEwan JJ, Scott M and Goodwin FE. Coatings to improve the tarnish resistance of sterling silver. 16th International Corrosion Congress in Beijing, China, 16-24 September 2005.
McEwan JJ, Scott M and Goodwin FE. The development of an accelerated tarnish test for Sterling silver. 16th International Corrosion Congress in Beijing, China. 16-24 September 2005.
Moema JS, Paton, R and Papo MJ. The development of a new low nickel stainless steel for structural and long product application. Stainless Steel World Conference & Expo 2005, Maastricht, The Netherlands, 8-10 November 2005. pp177-183.
Mokaleng KP and Papo MJ. Development of aluminium-titanium master alloys by aluminothermic reduction of titanium dioxide. Light Metals Conference - Production of magnesium, aluminium and titanium in the 21st century, CSIR Convention Centre, Pretoria, (SAIMM), 24-25 October 2005.
Nzula M and Cornish LA. Solidification and hardness studies in selected Cr-Ni-Pt alloys. Proceedings of the Microscopy Society of Southern Africa, vol. 25, p. 8.
Prins SN, Cornish LA and Boucher P. Derivation of the liquidus surface projection for the Al-Pt-Ru system from as-cast samples. Journal of Alloys and Compounds, 403 (2005) pp. 245-257.
Reynolds QG. Metallurgy from above - a Google Earth perspective. Southern African Pyrometallurgy 2006, Edited by R.T. Jones, SAIMM, Johannesburg, 5-8 March 2006, pp.357-367.
Reynolds QG and Jones RT. Twin-electrode DC smelting furnaces - Theory and photographic testwork. Minerals Engineering, March 2006.
Robertson SW, Vercuil A and Van Staden PJ A bacterial heap leaching approach for the treatment of low grade primary copper sulphide material. Presented at the 3rd South African Conference on Base Metals, Kitwe, Zambia, 26-28 Jun. 2005.
Robertson SW, Vercuil A, van Staden PJ and Craven PA. Bacterial heap leaching approach for the treatment of low grade primary copper sulphide. SAIMM, The Third Southern African Conference on Base Metals, Kitwe, Zambia, 26-29 June 2005.
Schoukens A, Abdel-Latif M and Freeman M. Technological breakthrough of the Mintek Thermal Magnesium Process. Presented at the Light Metals Conference, Pretoria, South Africa, 24-25 Oct. 2005.
Sull R, Douglas A and Cornish LA. An electron microscope investigation of tensile samples of Pt-based superalloys. EMSA, Conference of Microscopy Society of Southern Africa, Pietermaritzburg, December 2005.
Süss R and Cornish LA. Possible changes to the Cr-Pt binary phase diagram. Proceedings of the Microscopy Society of Southern Africa ,vol. 25, p. 9.
Tshikhudo TR, Demuru D, Wang Z, Brust M, Secchi A, Arduini A and Pochini A. Molecular recognition by Calix[4]arene-modified gold nanoparticles in aqueous solution. Angew, Chemistry International, Ed. 2005, 44, 2913.
Tshikhudo TR, Wang Z and Brust M. Biocompatible gold nanoparticles. Materials Science and Technology, 2004, 20, 98.
Van Hege B, van Tonder, D, Bell R, Wyethe J and Kotze M. Recovery of base metals using MetRIXTM. Alta 2006, May, 2006, Perth, Australia.
Van Staden PJ, Hearne TM, Shaidace, B and Yazdani M. Heap bioleaching of low grade sulphide ore from the proposed Darehzare Copper Mine. 20th World Mining Congress & Expo 2005, Tehran, Iran, 7-11 November 2005 - “Mining and Sustainable Development”.
Van Staden PJ, Shaidaee B and Yazdani M. Heap bioleaching of low grade chalcopyrite ore. Presented at the 3rd Southern African Conference on Base Metals, Kitwe, Zambia, 26-28 June 2005.
Van Staden PJ, Shaidaee B and Yazdani M. A collaborative plan towards the heap bioleaching of low grade chalcopyritic ore from a new Iranian mine. Presented at IBS2005: The International Biohydrometallurgy Conference, Cape Town, South Africa, 25-29 Sep. 2005.
Watson A and Cornish L. Beryllium-copper-nickel, submitted to MSIT, 2005, to be published in MSIT WorkPlace (on web).
Wenderoth M, Cornish LA, Süss R, Vorberg S, Fischer B, Glatzel U and Volkl R. On the development and investigation of quaternary Pt-based superalloys with Ni-additions. Metallurgical and Materials Transactions A, 36A (2005) 567-575.
Wyethe J and Kotze M. The use of selective ion exchange for the recovery of base metals from effluent streams. Presented at the 3rd Southern African Conference on Base Metals, Kitwe, Zambia, 26-28 June 2005.
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AFM Atomic Force Microscope ASSM Artisanal and Small-Scale Mining BioPAD Biotechnology Partnership and Development CDFR Client Dissatisfaction Frequency Rate CVRD Companhia Vale do Rio Doce DC Direct current DG Disadvantaged Group DME Department of Minerals and Energy DPE Department of Public Enterprise DRC Democratic Republic of Congo DST Department of Science and Technology DTI Department of Trade and Industry EMP Environmental Management Programme ERP Enterprise Resource Planning EU European Union GAAP General Accepted Accounting Practice GDP Gross Domestic Product HDSAs Historically Disadvantaged South Africans HLS Heavy Liquid Separation HPGR High Pressure Grinding Roll HRSEM High-Resolution Scanning Electron Microscope IAS Inland Audit Services ICMI International Cyanide Management Institute KAP Knowledge, Attitude and Practices KMF Kalahari Manganese Field KPI Key Performance Indicators LTIFR Lost Time Injury Frequency Rate MLA Mineral Liberation Analyser MQA MiningQualificationsAuthority MRF Mintek Retirement Fund MERF Mintek Employees Retirement Fund MESU Mineral Economics and Strategy Unit
NACI National Council for InnovationNEPAD New Parnership for Africa’s DevelopmentNIMS National Institute for Materials Science (Japan)NNR National Nuclear RegulatorNRF National Research FoundationNSI National System of InnovationNUM National Union of MineworkersPBC PGMBeneficiationCommitteePDI Platinum Development InitiativePFMA Public Finance Management ActPGMs Platinum-Group Metals (platinum, palladium, ruthenium, rhodium, iridium, and osmium)PLC Programmable Logic ControllerPWG Prime Wetern Grade (zinc)QES Quality, Environment and SafetyQEMSCAN Qualitative Evaluation of Minerals by Scanning Electron MicroscopeR&D Research and DevelopmentRIP Resin In PulpRPP Radiation Protection ProgrammeSABS South African Bureau of StandardsSAG Semi-Autogenous GrindingSDI Spatial Development IniatiativeSETI Science, Engineering, and Technology InstituteSHG Special High Grade (zinc)SIMRAC Safety in Mines Research Advisory CommitteeS&T Science and TechnologySPM Scanning probe microscopeTCLP Toxicity Characterisation Leaching ProcedureTHRIP Technology and Human Resources for Industry ProgrammeTSF Tailings Storage FacilityWAD Weak Acid Dissociable (cyanide)
Internal auditors Ernst & Young Ngubane 011-498 1000External auditors Auditor General 011-276 1800Company Secretary Ms Viloshnee Naidoo 011-709 4914
GeneralManagers Contact NumberTechnology Dr Roger Paul 011-709 4934Research& DrMolefiMotuku 011-7094906Development Mineral Policy & Mr Petrus Fusi 011-709 4779 Sustainable Development Corporate Services Mr Vimlan Govender 011-709 4906
Area Contact NumberAdvanced Materials Dr Elma van der Lingen 011-709-4918Analytical Services Mr Monde Mtakati 011-709 4047Biotechnology Dr Tony Pinches 011-709 4617Business development Dr Peter Craven 011-709 4165Conferences & Events Theresa Ditsie 011-709 4266Engineering Support Mr Nick Maritz 011 709 4093Estate Management Ms René Swart 011 709-4140Finance Ms Hester Pretorius 011-709 4794
Area Contact NumberHigh Temperature Dr Johan Nell 011-709 4724 Technology Human Resources Mr Monobe Manaka 011-709 4910Hydrometallurgy Dr Johan Nell 011-709 4724Information & Mr Haveline Michau 011-709 4256Academic Support– Bursars & SET promotions Ms Bon Mathibe 011-709 4648 – Communications Dr Hans Alink 011-709 4265 – Library Ms Manil Kanniappen 011 709-4277 Information Technology Mr Doctor Gule 011-709 4282Kgabane Ms Busi Ntuli 011-709 4034Measurement & Control Dr Dave Hulbert 011-709 4382Minerals Economics & Mr Sodhie Naicker 011-709-4658Strategy Unit Minerals Processing Mr Agit Singh 011-709 4339Mineralogy Ms Dorrit De Nooy 011-709 4744Pyrometallurgy Mr Tom Curr 011-709 4610Quality, Environment & Mr Hennie Venter 011-709 4103 EnvironmentSmall-Scale Mining Dr Nellie Mutemeri 011-709 4902
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annual report 2006page 78
Specialists in mineral and metallurgical technology
200 Hans Strijdom Drive, Randburg 2194, South AfricaPrivate Bag X3015, Randburg 2125, South Africa
Telephone: +27 11 709 4111 Fax: +27 11 793 2413 www.mintek.co.zaProduced by the Information and Academic Support Division, Mintek
Printed by RemataISBN 0 621 36752 4
RP 160/2006
