chemical services · market large, expanding and exciting target: africa, australasia, chile value...

Chemical Services Mining Strategy Presentation to Investors

29th September 2009

Global mining production by size of operation

Global known ore reserves

Strategy

� Market� Large, expanding and exciting� Target: Africa, Australasia, Chile� Value added minerals Au, Diamonds, Cu, PGM’s

� Value added model� Total chemical reagent package� High technical service� Capital investment at customer sites

� Supply chain� Strategic raw material supply and production capability

� Technology

Concerns

� Mining projects – cancelled, frozen or delayed

� Copper belt (Zambia /DRC ) demands have diminished (coming back)

� Diamond mines – production halved (coming back)

� Platinum and other major customers are pushing back on suppliers for better pricing and “cutting out reagents”

� Sulphur prices have collapsed

Total chemical solution

SENMIN (Pty) Ltd

Group mining sales

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2003 2004 2005 2006 2007 2008 2009 H

Sale

(R m

il)

New mining projects in completion phase 2009

o Blue Ridge Q1 o Boynton/ PilanesburgQ1 o Ngezi Plats Zim Q3 o Ruashi DRC Q2o Tenke DRC Q3 o Kayalekera Malawi Q4 o Lumwana Zambia Q2

Working on new SA projects2010

� BKM Phase 2 � Chemwes � Goldfield West Wits � Uranium One (Drum) � Rand Uranium (Cooke Uranium)� Atcom coal

Working on new Africa projects2010

� Buzwagi Gold Tanzania � Unki Plats Zim � Anbatovy Madagascar� Kolwezi Tailings � Kol DRC� Benga Coal Mozambique� Nkwe plats Zimbabwe� Trekkopje

Comprehensive customer service

Integrated storage and preparation

Comprehensive customer service

Integrated storage and preparation

Introduction

� Senmin is a combination of previously Chemserve-acquired businesses

� Allied Colloids SA based in PE - 1987 � Restructured as Chemserve Colloids in 1995 � Focus on mining chemicals and tailings treatment � Pelichem - 2000 representing Ciba, now BASF

� Acquired Sentrachem mining chemicals – 2002 � Manufacturing base and technology

Success factors

� Known brand� Operated in SA for 40 years

� Key markets� Diamonds � Uranium� Platinum and base metals

� Producer in Africa based in Sasolburg� Platform for further investment

Putting the package together

Product portfolio

� Speciality liquid thio mineral collectors� Mineral froth formation chemicals� Unwanted gangue mineral depressants� Polyacrylamide thickening polymers� Tailings polymer rheology modifiers

Senmin adopting model

Technology Costs

Service

Thechemicalsolutions

provider of choice

Senmin’s business model

� Supply and cost� World class production and supply chain� Back integration into raw materials

� Service� Investment in bulk and automated storage and handling of chemicals

on mine sites� On site technical service and reporting� Benefit/gain sharing on improvements

� Technology� Developed and licensed

Total chemical reagents “vendor management”

� Major mining companies:

� Platinum

� Diamonds

� Copper

� Coal

� Uranium

� Iron ore

Senmin speciality chemicals

� Create effects in mineral processes� Added in small quantities� Improve outcome in every stage of extraction

Extractive reagents

� Xanthates

� Secondary collectors � Dithiophosphate� Dithiocarbamate

� Depressants� Carboxymethyl cellulose� Guar gum

� Frothers

� Polyacrylamides

Senmin site: Sasolburg

Progress on projects

Guar project completed 2009

Carbon disulphide (CS2)

� Key raw material for mining chemicals� Replace existing plant and importation� New technology based on natural gas� World scale with excess capacity for growth

Advantages of natural gas

� Raw materials� Charcoal supply insecure� Methane composition stable

� Capacity� Maximum capacity of old plant = 72 00mt/a vs 20 000mt/a� Availability of electricity

� Cost effectiveness� Fully absorbed cost is lower for methane

� Much smaller environmental footprint� 140 kWh vs 1600 kWh per ton CS2� Generate steam from exothermic Claus reaction

Old charcoal technology

� In this technology charcoal is used as source of carbon as supplied by a farmer

C + 2S ↔ CS2

New methane technology

� Carbon disulphide (CS2) is formed by the endothermic reaction of methane and sulphur

CH4 + 4S ↔ CS2 + 2H2S

� The reaction takes place in the gas phase at elevated temperatureand pressure

� Sulphur is recovered from the by-product H2S

2H2S + SO2 → 3S + 2H2O

0

5000

10000

15000

20000

25000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Requirement Imports Capacity

CS2 balance

Old CS2 from Charcoal

New CS2 project site September 2008

Progress by May 2009

Progress September 2009

New CS2 methane plant

Acrylamide and polyacrylamide

� Joint venture� New biotechnology� Replace importation� Supply global partner� Local raw materials

Overview

� Bio plant: manufacture of bio-acrylamide from acrylonitrile

� Powder plant: polymerisation of bio-acrylamide and subsequent processing

� Joint venture technology agreement with Ciba - BASF

Key Raw Materials

• MonomersAcrylamide converted biocatalytically from acrylonitrileAcrylic Acid

Both monomers derived from propylene

New AM PAM project site

February 2008

Project progress

August 2008

Start construction

September 2008

Seed and main fermenter

Bioconversion

Fluidised bed drier

Tank farm

Utilities

Plant nearing completion

Products

� Polyacrylamide flocculants� Thickening: solid liquid separation in the mining industry� Clarification� Enhanced tailings disposal

� Primary use is to recover water and reduce the circulating volume

� Almost all mineral processing plants have to use flocculants: uranium, gold, platinum, copper, coal, iron ore, diamonds etc.

Tailings settlers

Tailings disposal

Ciba - BASF joint veture

� Nameplate capacity of the plant is 20 000 tpa dry polymer powder

� Sales from Senmin into Africa, Ciba-BASF takes some volume to distribute to the rest of the world

Flocculant global market

� Global market in 2008 for flocculants in mining: 112 000 tpa

� Africa: approx 16 500 tpa� Growth in uranium, gold, copper, iron ore, coal on the African continent will

increase this to over 20,000 tons per annum within the next three years

� Australasia: approx 26 000 tpa

Strategic investment

� Local producer with total reagent suite

� Market focus in the extractive industries

� Supply and application of flotation reagents

� Strategically aligned for market growth