lion smelter visit - merafe resources · merafe resources ltd | investor site visit –lion smelter...

Lion Smelter Visit

10 November 2017

Merafe Resources Ltd | Investor Site Visit – Lion Smelter 10 November 2017

Legal notice/disclaimer

This presentation is published solely for informational purposes and does not constitute investment, legal, tax or other advice nor is it to be relied upon in making an investment decision. Information contained herein has been taken from sources considered by MerafeResources to be reliable but no warranty is given that such information is accurate or complete and it should not be relied upon as such. Views and opinions expressed in this presentation reflect the judgment of Merafe Resources as of the date of this presentation and are subject to change. Merafe Resources will not be responsible for any liability for loss or damage of any kind which arises, directly or indirectly, and is caused by the use of any of the information provided. The entire presentation is subject to copyright with all rights reserved. The information contained herein shall not be published, rewritten for broadcast or publication or redistributed in any medium without prior written consent from MerafeResources. Prospective investors should take appropriate investment advice and inform themselves as to applicable legal requirements, exchange control regulations and tax considerations in the countries of their citizenship, residence or domicile. The distribution of the information contained in this presentation in certain countries may be restricted by law and persons who access it are required to inform themselves and to comply with any such restrictions. This information does not constitute an offer or solicitation in any jurisdiction in which such an offer or solicitation is not authorised or to any person to whom it is unlawful to make such an offer or solicitation. Past performance is not a guarantee of future performance. The price of shares can go down as well as up and may be affected by change in exchange rates, market conditions and risks associated with a mining venture.

2


Key Agenda

• Overview

• Glencore Merafe Mines and Smelters

• Lion Smelter Overview

• Lion Smelter Construction

• HSEC

• Community Involvement

3


Overview


Lydenburg ❶

Lion ferrochrome (I & II) ❷

Wonderkop ❸

Boshoek❹

Rustenburg ❺

UG2 Plants – East ⓫

Magareng ❿

Helena ❾

Thorncliffe ❽

UG2 Plants – West ❼

Kroondal ❻

Geographical Positioning and Capacities

5

Design Capacity: 396kt FeCr

Furnaces: 3 Premus and 1 semi-

closed conventional


Furnaces: 6 semi-closed

conventional with Bokamoso

Outokumpu pelletising


Furnaces : 2 Outokumpu closed

with pelletising


Furnaces: 4 Premus

Lion II commissioned H1 2014


Furnaces: 6 semi-closed

conventional with Tswelopele

Outokumpu pelletising

Smelters

❶❷

❸❹❺

❻

Processing Capacity: 1710kt

Production Capacity: 940kt

Mines











❽

❾⓫

Ports

Maputo ●

Richards Bay ●

Durban ●

●

●

●

❼

❿


Glencore Merafe Smelters• World-leading technology and processes:

• 22 furnaces spread across five smelting facilities in South Africa, with a capacity of

2.34 million tonnes per annum. Three technologies are employed; conventional,

Outokumpu and Premus.

• Premus technology is the most sophisticated ferrochrome production technology

currently in existence globally, and is used at the Lion and Lydenburg plants. The

process was designed to reduce electricity consumption in countries with

expensive electricity and reduce reliance on expensive reductants whilst still

maintaining focus on a premium product.

6


Continuous improvement on MWh/t efficiency

7

3.99

3.66

3.46

3.29

3.47

3.33.19 3.15

3.25

3.113.06

3.14

2.95 2.95 2.93

Conventional

Bokamoso

Tswelopele

2

2.5

3

3.5

4

4.5

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

MW

h/t

Lion 1

Lion 2

Conventional Open furnaces(4.1 MWh/t)

Premus (2.4 MWh/t)


Continuous improvement on ore efficiency

8

2.79

2.69

2.60

2.52 2.53

2.40

2.272.30 2.30

2.222.20

2.09

2.00 2.01 2.00

1.8

2

2.2

2.4

2.6

2.8

3

3.2

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

t/t

Conventional Open furnaces (3.1 t/t)

Bokamoso

Tswelopele

Lion 2

Lion 1


Cr Mines and UG2 production

• Mined ore: total capacity of 3.6 million tpa

• Western Mines:

– Kroondal, Waterval

• Eastern Mines:

– Thorncliffe, Helena and Magareng

• UG2 ore: total capacity of 2.35 million tpa

– 8 Operations in West

– 1 Operation in East

9


Lion Smelter


Lion Smelter

11

• Description

• 360ktpa ferrochrome production

per Phase

• Rationale

• Lowest cost (opex) & best return on

capex ferrochrome expansion

• Budgeted Capex

• R1,7 billion including the Helena

mine, Phase 1 - 2006

• R4.9 billion including Magareng

mine, Phase 2 - 2014

• Technology

• Glencore Proprietary Technology -

Premus


Lion I & II addresses the key challenges facing

the SA Ferrochrome industry

12

Challenge Solution

Escalating electricity costs Lowest specific electricity consumption

37% better than nearest rival

Increased fine ore 1 500 000 tonnes per annum pelletizing capacity

Skills shortages In-house training centre

Lagging logistics Close to Maputo Harbor

Rising mining costs ECM ore utilization

Close to Mototolo UG2

Reductant shortages Reduced reliance on coke consumption (20% vs

40%)


Premus is the superior technology choice

Chrome operations have access to a suite of technologies:

• Conventional Process, Semi-closed and pellets

13 of the 22 furnaces in the PSV are conventional furnaces

Lowest capital cost per ton of alloy

• Outokumpu Process

Basis for the 2 Boshoek furnaces

Accounts for most recent expansions in FeCr in South Africa and worldwide

• DC Arc/ Plasma Process

Only 3 furnaces built in South Africa

High technological risk, expertise not generally available

Poor availability and very high specific energy consumption at these installations, but new developments have made the technology much more competitive.

• Premus (Lion)

Developed, optimised and modelled at Lydenburg plant

Implemented at Lion

13


Complex process

14

RAW MATERIALS

BENTONITE

ANTHRACITE

ORE

BATCHING

HOT GAS

DRYINGMILLING

SCREENING

MIXING

PELLETIZING

COAL

MILLING

SCREENING

GRANULATION

LUMPYSLAG

CRUSHING

CHAR, COKE, ANTHRACITE

FLUXES

LUMP

REDUCTANTS

BATCHING

GAS SCRUBBING

USABLE OFF GAS

PRE-HEATING

ROASTING

Complicated Hot loadingsystem


Lion Phase 1 & 2

Construction


Lion Phase I & II Construction

• Entire project managed by in-house project management team

- Wherever possible, fabrication, erection and civil work conducted in-house

• Team has an exemplary track record

- Managed all of Glencore Alloys’ major projects, including the Wonderkop

Smelter, Lion Phase 1 and Lion Phase 2

16

January 2004

October 2004

November 2005

April 2006

July 2006

January 2007

December 2012

July 2013

January 2014

February 2014

March 2014

May 2014


Lion HSEC


HSEC Stats

January2017

February2017

March2017

April 2017 May 2017 June 2017 July 2017August2017

September2017

Oct-17 Nov-17 Dec-17

FFR 0.00 0.00 0.26 0.26 0.26 0.25 0.25 0.24 0.24 0.23

LTIFR 1.83 1.82 1.80 1.55 2.05 2.51 2.74 3.14 2.87 2.86

RWIFR 3.40 3.38 2.57 2.33 2.30 2.01 1.99 1.45 1.67 1.90

TRIFR 6.28 5.98 5.41 4.92 5.12 5.53 5.73 5.55 5.25 5.48

DISR 191.69 224.70 246.93 258.53 241.58 228.40 238.60 250.86 278.96 323.93

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

Fre

qu

en

cy R

ate

s

YTD 2017

31


Safety drive at Lion

• Commitment base safety - 2008

• SafeWork – 2014

• Safe Family campaign 2015

• Positive reinforcement safety drive 2018

– Focused on immediate

32


Consequence Model

33

• Experience is;

– Positive (P)

– Negative (N)

• Occurs after behaviour is;

– Immediate (I)

– Future (F)

• Certainty of consequence after

behaviour;

– Certain (C)

– Uncertain (U)

NIC

PIC

PIU

NIU

NFC

PFC

NFUPFU

Consequence: Relative Power of Consequence

MostPowerful

LeastPowerful


Corporate Social

Investment


Technical InformationCommunity: Sekhukhune and Neighbouring Communities Glencore Alloys Operation: Eastern Leg OperationsSpend: R 40 000 000Percentage complete: 100%

Project DescriptionArtisan Development – 295 QualifiedL2 Eng. Qualifications – 132 QualifiedL1 Generic Eng. Qualification – 242 QualifiedPortable Skills. Eng. Met. & Building – 664 QualifiedOperative Qualification – 259 QualifiedNational Tooling Institution Programme – 75 QualifiedMaths & Science, Cambridge Matric – 75 PassedNATED N1 & N2 – 120 Passed

BeneficiariesLocal communityLocal GovernmentBusiness:• Lion Smelter • Eastern Chrome Mines• Mototolo Platinum Mine• Lydenburg Smelter• Two Rivers• Dwars Rivier• Samancor• Modikwa• Small businesses, providing a service to local operations

Steelpoort Training Centre


Bursary statistics

38%

17%

28%

2%

15%

0%

5%

10%

15%

20%

25%

30%

35%

40%

African Males White Males African Females Coloured Females White Females

47 Glencore Merafe Bursary Holders in 2017

36


Artisan Learnership Program

70%

5%8%

17%

0%

10%

20%

30%

40%

50%

60%

70%

80%

African Males Coloured Males White Males African females

Total number of learners on Artisan Learnership Program is 201

37


Rehlahleng School for

Disabled

Two Class roomsKitchenBoys and Girls BathroomsWaterFencing

38


Katlegong

Primary

Two Class roomsKitchen, stove and fridgeBoys and Girls BathroomsOfficeWater and ElectricityFencing

39


Questions

lion smelter visit - merafe resources · merafe resources ltd | investor site visit –lion smelter...

Documents