Annual Report 2016/17

Presentation to the Portfolio Committee on

Mineral Resources

4 October 2017

1

1. Overview

2. Environmental Scan – industry conditions

4. Financial Performance

5. Making the work for SA

6. Technical Performance

3. Human Capital and Sustainable Development

Outline

2

7. Conclusion

Overview - Mintek

Vision and Mission

3

Vision and Mission

Vision

To be a global leader in mineral and metallurgical

innovation.

Mission

To serve our stakeholders by adding value to

mineral resources through technology, industrial

growth and human development in a sustainable

manner.

4

Mintek’s R&D strategy is aligned to the NDP

Points specifically identified in NDP:

• Improved extraction efficiency to extend ore resources.

• Improved energy and water efficiency.

• Beneficiation to downstream, value-added products.

Mintek’s R&D strategy includes these NDP points, and

additionally includes:

• Mining, industrial and consumer waste treatment.

• Small-scale and artisanal mining.

• Improved extraction technologies for precious, base, ferrous and

energy minerals.

5

Environmental Scan

Industry analysis that had an impact on 2016/17 work

6

Global Mining Industry in Period of Unprecedented Difficulty!

Source: SNL

Metals & Mining

7

Major mining companies are not spending on new projects

whilst critically considering which of their projects are to move

into the developmental and/or start up phases.

The Junior mining companies continue to experience

difficulties in raising money despite the improvement of the

commodity prices. Many will also require government

assistance to overcome the barriers to their entry into the

industry, particularly around the various licences and permits

needed for start up.

8

Global Mining Industry in Period of Unprecedented Difficulty!

What Did This Mean For Mintek?

Although there was less service work from the mining companies and the

design houses in terms of new capital projects, projects which focused on

operational efficiency were undertaken.

Mintek was again fortunate to receive state funding, which continues to

be used to contribute to the pursuit of applied Research & Development

related to the minerals processing concentration, extraction and refining,

ultimately leading into value addition/beneficiation activities.

There was a significant increase in proposals being requested, which

suggests that the industry is emerging from the slowdown, though the full

effects of this will only be seen from late 2017 to early 2018 once the

mining companies have reached financial stability.

9

Concentration RefiningValue Addition

and BeneficiationExtraction

Human Capital and Sustainable

Development

Key trends

10

Staff (direct employees)

11

Occupational LevelsMale Female

TotalA C I W A C I W

Top Management 3 2 1 6

Senior Management 6 1 1 2 1 3 14

Professionals, Specialists and mid-

management19 3 6 27 19 1 8 10 93

Skilled technical, academically-

qualified, junior management &

supervisors

128 7 6 24 144 6 7 23 345

Semi-skilled 92 4 1 32 1 130

Unskilled 57 1 58

Total Permanent 305 16 13 56 197 8 15 36 646

% 47% 2% 2% 9% 30% 1% 2% 6% 100%

Gender % 60% 40%

Employment Equity (targets & actual)

OCCUPATIONAL LEVEL Target

(Designated

Groups)

Actual

(Designated

Groups)

Top Management 71% 67%

Senior Management 77% 71%

Professionals, Specialists and mid-management 77% 71%

Skilled technical, academically-qualified, junior

management and supervisors92% 93%

Semi-skilled 91% 99%

Unskilled 90% 100%

Overall 90% 91%

All Employees

Disability 3% 3%

Women 46% 40%

12

Safety, Health, Environment, Quality (SHEQ)

0.3

0.1 0.1 0.1 0.1 0.1 0.1

0.0 0.0 0.0 0.0 0.00.0

0.2

0.4

0.6

0.8

1.0

1.2

Mintek LTIFRs March 2017

LTIFR Target

13

Client Satisfaction

Frequency Rate

(CSFR)

Lost Time Injury

Frequency Rate

(LTIFR)

Strong focus on Environmental Awareness

14

Making it count….

Key interventions with a direct impact

15

Businesses ( beneficiation & pottery)

were established in Gauteng(1);

Mpumalanga (1) and Northern Cape (3).

Jobs created

Royal Bafokeng community

(North West) – assisted with 2

processes/technologies – to

produce aggregates from

Ferrochrome slag and Portable

pneumatic tile press.

5

Small scale mining ….

41

Also trained 312 learners in

Small Scale Mining

(Mpumalanga), Jewellery

Design/Manufacturing (Mining

Qualifications Authority- MQA)

and Gemstone

Cutting/Polishing (Mali &

Malawi delegates).

16

Number of young people that

were provided On-the-job training and work

experience during the year (in Collaboration and

partnerships with MQA; Department of Science &

Technology (DST); National Research Foundation

(NRF))

Skills Development Work Integrated Learning & Internship

Programmes, (in partnership with MQA and

DST/NRF) – 108 students were provided on-

the-job training in the programme.

36 youth who are currently studying were

placed in 12 Foundries & Steel Engineering

firms during the reporting period.

Science Technology Engineering

Mathematics & Innovation

(STEMi)

Stimulate STEMi from school level

through Minquiz competition.

14 Undergraduate and 10

Postgraduate full time bursaries.

100% absorption of those

that completed.

108

Making a difference….

17

11

6

3

4

UnderGrad PostGrad

Female Male

13

9

1

1

0

2

4

6

8

10

12

14

16

UnderGrad PostGrad

White

African,Indian &Coloured

Number of young people that

received bursaries to pursue their studies24

Making a difference….

18

71%

Female

Non-Aligned Movement Training Programme

19

Trained mineral processing

professionals from different

countries that are part of the Non-

Aligned Movement (NAM) – as

part of governmental multi-lateral

programme.

19 Participants from12 different

countries- Botswana, Egypt, Eritrea,

India, Malaysia, Nigeria, Zambia,

Zimbabwe, Sri Lanka, Sudan,

Uganda and South Africa.

Nelson Mandela Day

Employees spent

their 67 minutes

with children of

Bongani

Community

Development

Centre in Soweto

Donated clothing,

toys and bed linen.

Science research

support.

Provided funding

and support to the

Mineral

Education Trust

Fund.

Corporate Social Responsibility

School Shoes for

Learners

Donated 60 pairs

of school shoes

and a selection of

books to

disadvantaged

school learners at

Bawokuhle

Primary School

in Gembokspruit,

Mpumalanga.

20

In support of

the National

Council for

Persons with

Disabilities in

South Africa,

Mintek

employees

collected

R4 750 towards

the cause

through ticket

sales.

Corporate Social Responsibility

21

The Cancer Assosiation of South Africa (CANSA)

Shavathon

Mintek mobilised support for CANSA Shavathon and raised

R42 720 in the event held in March 2017.

Corporate Social Responsibility

22

Financial Performance

Key statistics

23

1968-2017 Annual Income

-

50

100

150

200

250

300

350

400

450

500

550

600

650

19

68

19

69

19

70

19

71

19

72

19

73

19

74

19

75

19

76

19

77

19

78

19

79

19

80

19

81

19

82

19

83

19

84

19

85

19

86

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

B2

01

9 B

20

20

B

Mill

ion

s

STATE GRANT TOTAL INCOME OTHER REVENUE

24

AGSA Audit Opinions

2005 Disclaimer Qualification on 17 Items

2006 Qualification (PPE & Deferred

Income)

Emphasis of matter on 22 items

2007 & 2008 Unqualified Emphasis of matter on 1 item

2009-2017 Unqualified “Clean” 2011-2013 & 2015-2017

25

Analysis of Audit Findings

0

2

4

6

8

10

12

14

16

18

2012 2013 2014 2015 2016 2017

11

8

11

34

7

1

5

4

11

7

1

1

Nature of findings

Performance information

IT Management

Finance

26

Financial Position

Improved asset base.

Reduced cash and short term investments due to lower commercial income and

capital expenditure.

Reduced trade receivables due to fewer commercial projects.

Reduced state grant revenue due to MTEF funding cycle for specific projects

ending in 2015/2016 (R51m).

Decreased in operational expenditure due to reduced commercial activity.

Additions to property, plant and equipment amounted to R55m of which R27,5m

was funded from state grant.

Cash generated from operations decreased by R27,6m due to lower commercial

income.

Liquidity – current ratio of 2.2:1 (2016: 2.2:1) (norm 2:1).

The ratio remained stable compared to prior year.

27

Key Notes on Financial Statements

28

Major Capital Expenditure

2013 2014 2015 2016 2017

Plant R11,1m R9,2m R8,5m - R6,8m

Equipment R29,8m R9,0m R22,2m R36,9m R46,9m

Facility Upgrades - R10,1m R5,1m R24,3m R1,8m

R40,9m R28,3m R35,8m R61,2m R55,5m

29

Revenue

-

100 000 000

200 000 000

300 000 000

400 000 000

500 000 000

600 000 000

State Grant Products and Services Contract Research Total income

2012 2013 2014 2015 2016 2017

State Grant 59%

Other income 8%

Commercial revenue

33%

30

Distribution of Revenue: Countries

SpainFeasibility study

IndiaSoftware

licence fees

PeruInstruments

PortugalSoftware

licence fees

AustraliaPre-feasibility

study

Software

licence fees

MexicoInstruments

CongoSoftware

licence fees

CanadaTechnology

Fee FinlandTechnology Fee

South AfricaPre-feasibility

studies

Test work

Mineralogy studies

31

0

20000

40000

60000

80000

100000

120000

Precious metals Base Metals Ferrous Metals,Iron

Energy Minerals MineralBeneficiation

Eco Efficiency D&O SMMEdevelopment

Strategic andcapacity

development

2012/2013 Actual 2013/2014 Actual 2014/2015 Actual 2015/2016 Actual 2016/2017 Actual 2017/2018 Budget

State Grant per Commodity •

Deve

lop

ment o

f b

ett

er

pro

ce

sse

s fo

r U

G2

,

Pla

tree

f, &

wa

ste

str

ea

ms

•Im

pro

ve

co

mp

etitive

ness o

f e

xis

ting P

GM

&

Go

ld o

pe

rations

•D

eve

lop

pro

ce

sse

s to

eco

no

mic

ally

min

e fin

e iro

n

ore

to

exte

nd

cu

rre

nt re

se

rve

s a

nd

life

-of-

min

e

•D

eve

lop

pro

ce

sse

s a

nd

co

ntr

ol syste

ms t

o m

axim

ise

the

reco

ve

ry o

f C

hro

mite

fro

m P

GM

s s

trea

ms

•D

eve

lop

pro

ce

sse

s a

nd

te

ch

no

logie

s to

im

pro

ve

&

exte

nd

Ura

niu

m e

xtr

actio

n f

rom

RS

A d

ep

osits

•D

eve

lop

pro

ce

ss a

nd

te

ch

no

logy to

extr

act

Rare

Ea

rth

Ele

me

nts

(R

EE

s)

from

co

mp

lex R

SA

de

po

sits

•S

up

port

Hyd

roge

n S

ou

th A

fric

a w

ith

de

ve

lop

me

nt o

f

ca

taly

sts

fo

r fu

el ce

lls &

hyd

roge

n s

tora

ge

(P

GM

be

ne

ficia

tion)

•D

eve

lop

me

tal-

based

na

no

techno

logy e

na

ble

d

dia

gn

ostic d

evic

es f

or

the

de

tectio

n o

f h

um

an a

nd

an

ima

l d

isea

se

s

• Waterless mineral

processing

• Reduced energy in

comminution and

smelting

• Technology to

minimise mine

discharges

• Waste and residue

recycling

Expenditure Breakdown

-

50

100

150

200

250

300

350

Employee costs Bursaries Operating Expenses Depreciation

2012 241 676 6 411 116 148 13 049

2013 235 704 10 108 194 117 14 607

2014 271 552 12 237 147 635 17 515

2015 303 012 15 574 172 987 15 187

2016 299 294 12 931 185 393 15 385

2017 286 210 12 264 166 207 8 593

Mill

ion

s

Expenditure Breakdown

33

Profitability

0

5 000 000

10 000 000

15 000 000

20 000 000

25 000 000

30 000 000

35 000 000

40 000 000

45 000 000

-

100 000 000

200 000 000

300 000 000

400 000 000

500 000 000

600 000 000

2012 2013 2014 2015 2016 2017

Income Expenditure Net result

34

Research and Development

Key interventions with a direct impact

35

Mineral Beneficiation – Platinum and Gold

Gold (Au)-based Catalyst Products:

Main application: Carbon monoxide (CO)

removal for air purification, including

application in underground mining.

Sold 55+ kg gold-based catalysts to 15+ industrial

customers for application development.

Mintek catalysts distributed through STREM Inc.

Platinum-based Catalyst Products:

Production of catalyst products for the National

Hydrogen South Africa (HySA) programme.

Partnered with Impala Platinum (Implats) on a Pt-metal

loan scheme for co-development of Fuel Cell catalysts.

Loan arrangement extended to 2019.

Manufactured over 20kg of Platinum on Alumina (Pt-

Al2O3) catalyst for a South African client. Product under

client validation.

36

Mineral Beneficiation of Metals in the Nanoscale for

Water Treatment

Pilot plant for membrane assessment acquired to

enable field testing of in-house developed

membranes and bench-marking.

If the project succeeds, it would enable

communities to recycle their waste water.

Pilot plant testing on Mine effluent from Sibanye

Gold Mines for re-use.

SADC Partnership in Water established in 2016/17:

Awarded the LIRA (Leading Integrated Research Agenda)

2030 AFRICA GRANT FOR 2017 – R1.4 million. A Feasibility

Study: Biogas-supported Decentralized Water Treatment

System for communities in Diepsloot (South Africa) and

Chambishi (Zambia) Townships.

37

Use of Minerals for the Development of

Nanotechnology-enabled Membrane and Adsorbent

Technologies for Waste Water Remediation and Potable

Water Production.

Formation of Strategic Commercial and Technical

Partnerships towards Commercialisation and Development

of Diagnostic Kits for Human and Animal Diseases.

Industry Partners - Health

2016: Afri-sky Holdings

South African black owned company for medical devices.

Distribution agreement for HIV and Malaria rapid tests.

Marketing and distribute HIV and Malaria rapid test in the

SADC region.

Collaborators – Animal Diagnostics

2016: CSIR Biosciences – Animal Diseases

MoU signed.

Co-development Brucellosis rapid diagnostic test (RDT).

Potential client Milk-SA.

2016: CSIR Biosciences – Human Diseases

Co- development of aptamer based TB rapid diagnostics

test.

MoU finalised.

Mineral Beneficiation of Nanoscale Gold:

Rapid Diagnostics Kits

38

Process Control & Instrument Installations

For FY2017

Some of the local

clients serviced:

39

Spiral Control System – Patent & Prototype

ON ON ONOFF OFF OFF

Bank of Spirals Concentrate Port Novel Actuation Method

40

Aim was to maximise

mineral recovery

(production) at the

target grade.

A small improvement in

recovery (e.g. 10%) can

result in tens of millions

of Rands in extra

production.

Achieved a patent and

prototype control system.

Iodine Carbon Activity Analyser (CAA) in Gold

Extraction

An APEX Award Received – Mintek Excellence Award.

A Patent has been Awarded.

This is a New Technology (TRL9).

2 Orders of the analysers already received from the mining industry.

41

The method is a replacement

to the toxic and expensive

aurocyanide.

The method allows for more

frequent testing which

reduces the risk of soluble

gold loss to tailings.

Development of a Safe and Cost Effective Iodine-based Carbon Activity Test

for the Extraction of Gold.

Technology

Key interventions with a direct impact

42

Uranium and Acid Mine Drainage Water

Treatment

The aim is to integrate Mintek Technologies to

rehabilitate heavy polluted sites.

Project objective was to remove heavy metals

such as Uranium & potentially Acid Mine Drainage

producing contaminants.

In 2016/17 Mintek commissioned a pilot plant at

Robinson Lake to demonstrate the effectiveness

of the concept.

43

Coal sorting

Demonstration plant at African Exploration Mining and Finance

Corporation (AEMFC) was operated over a 3 months period (Sep

2016 to Nov 2016).

The aim was to evaluate sorter separation efficiency at industrial

throughput rates (125tons/hr of sorter feed).

The results showed that low grade coal can be upgraded to Eskom

specifications.

Also produced a niche high grade coal products.

44

Underground Processing

Aim to find a waste rejection underground technique for Gold and Platinum

Group Metals mines.

Looked at various sorting techniques.

Significant progress made in understanding the issues associated with

processing ore underground. One of the techniques yielded promising

results.

Reviewed a gravity/flotation process for waste rejection at Sibanye Gold.

Can be a paradigm shift, particularly for deep gold and platinum mines.

Working with industry to ensure optimal benefit.

45

Treatment of dumps

The ReFlaut technology was demonstrated at South Deep Pilot

Plant during November / December 2016.

The aim was to re-process the gold mine dump material, through a

flotation circuit, into a smaller mass containing the bulk of the

uranium, sulphide sulphur and gold.

Demonstrated that the remaining gold, uranium and heavy metals

can be removed. Rendering the final tailings environmentally

acceptable.

Proved that some of the dumps that were uneconomic can benefit

from this technology.

46

Rehabilitation Programme

47

48

Derelict and Ownerless Mine Rehabilitation

• Mintek continues to rehabilitate Derelict and

Ownerless Mines programme in collaboration

with the DMR and CGS.

• Cumulative progress to 31 March 2017:

– 31 sites rehabilitated which resulted in 380

jobs since the start of the programme.

– 4 projects commenced in the Streatham

Valley area near Penge in Limpopo

province during 2016/17.

– 5 sites were evaluated, prioritised and will

go into design phase in 2017/18.

• The programme is important for two main

reasons:

– Protection of the Environment by removing

pollutants and restoration of the land to an

acceptable, hazard free standard.

– Protection of the Health and

Safety of the communities

living close to these sites.

Conclusion

We will continue to build on existing improvements, reduce

costs and attract customers through marketing.

All indications point to a possible upturn in the sector, and

Mintek is already seeing a significant increase in proposals

being requested by clients.

Downstream beneficiation continues to be of utmost importance

in supporting the national imperative of growing the economy

and improving job creation.

We will continue to nurture, develop and support economically

sustainable rural and marginalised communities.

49

Thank You

www.mintek.co.za