Avmin at a glance

Group

Activities

Developers and operators of managed investments in southern Africa in the ferrous, precious and base metals sectors.

Objectives

Create superior returns for shareholders
Ensure all capital projects are completed within budget and on time
Manage the successful funding of new growth initiatives
Ensure
- retention of key skills throughout the Group;
- competitive employee reward structures; and
- continue to develop capacity through transformation, equity and diversity
Continue to manage and implement stated policies and philosophies in terms of safety, health and the environment

Results (at 30 June 2001)

Revenue: R2 806 million Cost of sales: R2 083 million Profit before tax: R572 million Earnings: R281 million Employees: 5 263

Ferrous Metals

Activities

Listed company, Assmang Limited’s manganese ore sales totalled nearly 980 000 tons, excluding deliveries to its manganese alloy plant, during the last year. It also sold 4,3 million tons of iron ore, over 190 000 tons of manganese alloys and 125 000 tons of chrome alloys during the year.

Assmang’s chrome mine produced about 250 000 tons of ore, which was delivered to the chrome alloy plant.

Objectives

Ensure the successful commissioning of a new chrome furnace and pelletising plant to increase chrome alloy capacity to over 300 000 tons a year.
Complete a study to increase chrome ore production to over one million tons a year.
Build-up to over five million tons of iron ore for the year
Continue the development of a new shaft at the Nchwaning manganese mine for completion during late calendar 2003 (currently on schedule)
Obtain ISO 14001 accreditation at all operations

Results (at 30 June 2001)

Revenue: R1 926 million
Cost of sales: R1 402 million
Profit before tax: R350 million
Contribution to Avmin’s earnings: R153 million
Employees: 2 470

Precious Metals

Activities

Listed subsidiary, Avgold Limited, produced over 90 000 ounces of gold for the year, and is currently at an advanced stage of developing a new gold mining operation that will increase the annual production, at low cost, to over 450 000 ounces by the end of the 2003 financial year. Avmin’s recently-formed platinum group metals (PGMs) company, Two Rivers Platinum (Pty) Limited, also forms part of the precious metals division.

Objectives

Ensure the successful commissioning of the Target gold mine within budget and on time and produce gold within the forecast cash cost of below US$150/oz at an annualised full production rate of 350 000 ounces a year
Finalise a decision on the possible sale of the ETC gold mining complex
Obtain sufficient information from the northern Free State gold exploration drilling programme to continue with a possible jointventure and/or alliance during the 2002/2003 financial year
Advance a bankable feasibility study of the new Two Rivers PGM property to enable a decision on the 160-170 000 ounce a year PGM operation early in the 2002/2003 financial year
Introduce strategic empowerment partners to Two Rivers Platinum

Results (at 30 June 2001)

Revenue: R218 million
Cost of sales: R181 million
Profit before tax: R39 million
Contribution to Avmin’s earnings: R39 million
Employees: 1 865

Base Metals

Activities

Chambishi Metals plc currently toll refines cobalt and copper concentrates for clients and is in the process of commissioning a significant plant expansion that will produce, together with continued toll refining, some 6 000 tons of cobalt a year.

Objectives

Ensure the successful commissioning of the new smelter and downstream processes at Chambishi Metals thereby achieving a global position as one of the largest primary cobalt producers
Pursue value-added opportunities in terms of high performance alloys and cobalt oxide production

Results (at 30 June 2001)

Revenue: R326 million
Cost of sales: R353 million
Loss before tax: R92 million
Contribution to Avmin’s earnings: R64 million – loss
Employees: 620

Nickel

Activities

The Nkomati nickel mine produces over 4 000 tons of nickel a year and also produces copper, cobalt and PGMs as by-products.

Objectives

The joint venture partners to decide on whether to proceed with a large expansion of the Nkomati mine to produce about 17 500 tons a year of nickel, nearly 9 000 tons of copper a year and over 80 000 ounces of PGMs from both open pit and underground operations

Results (at 30 June 2001)

Revenue: R327 million
Cost of sales: R140 million
Profit before tax: R187 million
Contribution to Avmin’s earnings: R130 million
Employees: 72