Download - Mintek

MINTEKANNUALREPORT2007

OUR MANDATEMintek’s mandate is to serve the national interestthrough high-calibre research, development, and technology transferthat promotes mineral technology, and fosters the establishment andand products derived from them.OUR VISIONTo be a global leader in mineral and metallurgical R&D andtechnology transfer.OUR MISSIONTo serve our stakeholders by promoting technology, industrial growthand 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,

MINTEKANNUAL REPORT2007CONTENTSMintek Mandate, Vision, Mission and Compact..................inside front coverHighlights 2006 - 2007..........................................................................2The Mining Value Chain.........................................................................3Chairman’s Review................................................................................4Board Structure...............................................................................................................4CEO’s Report.........................................................................................8Management Structure...................................................................................................8Performance against objectives...........................................................14Technical Review................................................................................16Gold................................................................................................17PGMs..............................................................................................20Ferrous metals..........................................................................................................22Non-ferrous metals.................................................................................................24Industrial minerals.................................................................................................28Quality, Environment and Safety........................................................................29Commercial Activities..................................................................30Participation in operating companies............................................................31Mintek business development projects........................................................31Process control products..............................................................................33Capital equipment........................................................................................35South African Reference Materials............................................................35Minerals Policy and Sustainable Development....................36Mineral Economics and Strategy...............................................................37Resource-Based Sustainable Development............................................38 Kgabane Jewellery Initiative....................................................................41People................................................................................42Human Capital Managment..................................................................43Transformation and Employment Equity................................................43Black Economic Empowerment (BEE)...............................................44Participative Approach: Mintek and NUM................................................44HIV and AIDS..........................................................................................44Wellness................................................................................44Diversity.................................................................................................45SAP and Human Economics...................................................................45Human Capital Development..................................................................45Mintek Publications.............................................................48Financial Statements 2007..................................................51Corporate Governance..............................................................................52Audit Committee Report..............................................................................55Directors’ Report.........................................................................................57Report of the Auditor-General.......................................................................59Financial statements and notes....................................................................62Glossary..............................................................inside back coverContact details.......................................................inside back coverannual report 2007

HIGHLIGHTS OF2006-2007• Independence Platinum agreed to fund a three-year worktechnology.preliminary in vitroin 2007/08.® annual report 2007 2

THE MINING VALUE CHAINTechnologies and services developed by MintekExploration• Geochemical sample analysis;• Mineral/ore characterisation;• Artisanal and small-scale mining (ASSM) projectevaluation.Mining• ASSM technology;• Mining inputs economic studies.ConcentrationComminution/Flotation• • Plant audits;• • Control and optimisation strategies.Physical separation• Bulk sample preparation;• • Separation.Pyrometallurgy• Pelletisation and briquetting;• Pre-heating and pre-reduction;• Modelling and simulation;• SAF control strategy;• Fluidised bed and condenser technologies;• High-temperature solid state and phase• – zinc (PWG to SHG)• Titanium chlorination technology.Hydrometallurgy andBiotechnology• Atmospheric and pressure leaching;metals);• Solvent extraction and ion exchange;• Electrowinning;• Process simulation;• Activated carbon regeneration; 3O 8recovery;• Leach circuit control.Value addition• – Catalysis;– Biomedical;– Nanotechnology;• “Smart” materials and sensors;• PGM-based superalloys;• Low-nickel stainless alloys;Generalprocess mineralogy;and development;installation and commissioning;.3 annual report 2007

Mintek Board of DirectorsMzi KhumaloChairman of the BoardChairman: MawenziResources Ltd. andMetallon Corporation Ltd.Dr. Paul Jourdanof MintekAbe MngomezuluChief Director: MineralInvestment and Policy,Department of Minerals andEnergyDr. Nozibele MjoliManaging Director:Hlathi DevelopmentServicesDr. Frank CrundwellConsultant:CrundwellManagement SolutionsProf. Phuti NgoepeDirector: MaterialsModelling Centre,School of Physicaland Mineral Sciences,University of LimpopoGugu MthethwaManager: AcquisitionsFinance Group,Standard BankRalph HavensteinCEO: Anglo AmericanPlatinum Corporation Ltd.Vinogaren PillayExecutive Director: CSIRMining Technologyannual report 2007 4

CHAIRMAN’S REVIEWI am pleased to report another year of above-averagegrowth – the second such year in succession - for Mintek’s coreresearch and development (R&D) business. Total income for theto R322.02 million, a year-on-year increase of 13.2 per cent, to which theScience Vote (core funding) contributed 32.4 per cent. Total expenditureR13.48 million in the sale of an associated company, as well as earned a sharemillion.Mr Mzi Khumalo,Chairman of Board.Fuelled by the resources boom, which shows little sign of abating, globalspending on mineral exploration reached a new high estimated at US$7.5 billionThis windfall has seen substantial investment in mineral exploration anda long time, and have required relatively little exploration investment, buthave required resolution of technical problems, a change in commodityprice, or changes in political environment, to make them commercialopportunities. Late-stage exploration, which involves a substantialcomponent of metallurgical test work, has also become increasinglydecision.The market for minerals technology is strongly dependent on capitalspending in the mining and metals industries. The current strengthof the market is due to the increasing consumption of metals andthe tight supply-and-demand balance. Supply is constrained bygrade (higher-cost) ore bodies and increased environmental andtechnological requirements.During the year under review, Mintek experienced substantialgrowth in its activities related to the platinum-group metals(PGMs), as a result of the continuing high level of interest in newon the optimisation of gold circuits, cyanide auditing and consulting,cyanide analyser and LeachStar advanced process control strategyhave been rapidly adopted by industry.5annual report 2007

particularly in the areas of PGMs and non-ferrous metals,has focused on the smaller companies, who do not have thebelieve that our ongoing efforts in this regard have made aconsiderable contribution to increasing the competitiveness ofof industrial minerals is usually fairly low-intensity, owing to therelatively small size of the market. However, this year therewas considerable activity in our new diamond characterisationfacility.Mintek is growing its capacity to lead and support multipleemployment in mining, manufacturing, and agriculture at the localand rural levels. Substantial growth was experienced in the areaof sustainable development, due to strong support from the DME,although this activity is expanding rapidly off a low base, and theremust be some caution in future years regarding the potential forcontinued increases.Mintek is playing an increasingly important role in developing the mineralsbased organisation, it is important for Mintek to grow sustainably bythe development of future technologies. In this regard, our biggest challengeis attracting and retaining experienced scientists and engineers in the face ofMintek also initiated a programme to recruit a small number of highly-skilled,experienced engineers from overseas.growth will depend on upgrades to existing technical and pilot-plant infrastructure.Perhaps the most critical bottleneck in operations is our analytical capacity, whichservices the pilot-plant operations as well as external contract work. During the yearbut still approximately twice that of preceding years.annual report 2007 6

Mr Harold Motaung, and new members Mr Simon Sikhosana, MrMohlomi Ntilane, Ms Lindiwe Mhlabeni, Dr The current period is a tremendously exciting time to be involved in theminerals and metals industries. Mintek is well positioned as a premiumprovider of services, products, and technology to the minerals industryworldwide. It has a comprehensive set of strategies that should enable it tomaintain, if not grow, its market share in a highly competitive environment.both realistic and attainable, and adequate provision has been made to covertherefore to be secure. Following its strategic R&D framework, Mintek willcontinue to invest in long-term applied R&D, contributing to the technologiesof the future to underpin the future competitiveness of our minerals sector andhis contribution to strengthening and growing Mintek into the globallylike to wish him well in his future endeavours.Mr Mzi Khumalo7annual report 2007

Dr Paul JourdanDr Roger PaulVimlan GovenderPetrus Fusiannual report 2007 8

CEO’S REPORTAs a result of the phenomenal global commoditiesboom, remains a major producer of the world’s most strategic minerals, andCEO of Mintek.Africa, as well as projects in Zambia and the Democratic Republic of thehave been started around applications for fuel cells and dieselunder our wing, and new projects are planned for the automotiveissues at all levels in South Africa, including participation in theNew Partnership for Africa’s Development (NEPAD) and the AfricanMain pic:An aerial viewof the Mintekcampus.9annual report 2007

Pics from topto bottom:The AtomicForce Microscope.The bioleachingminiplant.Beadmakingfrom recycledglass.Samplepreparation.of granitewaste.economic growth and development issues around mining andresources” for United Nations Economic Commission for Africawhere a large number of potential new projects are beingplan was also formulated for the national and international craftDr Paul JourdanDr Roger PaulVimlan GovenderPetrus FusiDr Nellie MutemeriAgit SinghMuzi NcgoboDr Johan NellAmanda QuadlingDr Elma van derLingenDr Johan Nellas at 31 March 2007Busi Ntuliannual report 2007 10

income grew frommillion in 2006/07,incurring as income fromIncome, R Million Income per employee R ‘000the Compact, which I signed with the then Minister of Minerals and both fundamental and applied research, which has led to a numberPics from topto bottom:Visitors fromthe GambianGeologicalSurvey.Olive spoonsmade by ruralwomen of SouthAfrica.Testingprecious-metalcatalystsfor cleaningup dieselemissions.A sample ofAUROlite TMgold-basedcatalyst.11annual report 2007

Pics from topto bottom:An industrialCIL goldplant.Minfurncarbonregenerationfurnaces.Potterymaking.Transformationinthe industry.SSM trainingat Giyane.success, and plans to scale up the process to a commercial levelthe SADC but also in the rest of the African continent andand products and have provided process development andassisted NEPAD, UNECA and the AfDB in developing coherentgreat potential for creating sustainable livelihoods, it has been ourScience Vote, decentralised divisions into strategic business units (SBUs), andOur concerted drive towards internal transformation has made the organisation muchmore annual report 2007 12

of the Mineral Development Branch at the Department of Minerals andcombines a little focus, a lot of heart, and a pool of talentedPics from topto bottom:The Biomedicalscreeninglaboratory.APIC jiggingtechnology.HaroldMotaung,new boardchairmanand CEOof AnooraqResources.Morake AbielMngomezulu,the newlyappointedCEO ofMintek, as per1 September2007.The Diamondcharacterisationlaboratory.Magnesiummetalproduction.13annual report 2007

PERFORMANCE AGAINST OBJECTIVESStakeholder perspectiveCritical objective KPA Target Summary Performance resultsMandateFinancial perspective Sources of income 2005/2006 2006/2007R million Income, R million Target } Ratio of contract/total income 53.6% 52.4%annual report 2007 14

Organisational perspective Measure 2005/2006 2006/2007 Learning and growth perspective output Transformational perspective Employment equity demographics 15annual report 2007

annual report 2007 16

TECHNICAL REVIEWGOLD INDUSTRYAuTEK – extending the industrial uses of goldProject AuTEK, the joint R&D initiative between Mintek and the three majorSouth African gold producers to develop new industrial uses for gold, is nownanotechnology and biomedical applications.AuTEK BiomedicalBiomedical research under Project AuTEK, jointly funded by Harmony Goldand Mintek, focuses on developing new types of metal-based therapeuticagents, with the emphasis on cancer, malaria, and HIV/AIDS. The past yearin the in-house team. Mintek’s HIV BSL II biomedical laboratory was fullycommissioned, and funding receivedfrom the Technology and HumanResources for Industry Programme(THRIP) allowed for the acquisitionof a Nuclear Magnetic Resonance(NMR) instrument, which will becommissioned in early 2008. Newdevelopment opportunities are beinginvestigated through networkingand collaborative approachesto the large pharmaceuticalcompanies, with the emphasison HIV.More than 170 compoundshave been screened so far foranti-tumour activity, with 30per cent showing promisingresults. Structure-based“Biomedical researchunder Project AuTEK,jointly funded by HarmonyGold and Mintek, focuseson developing new typesof metal-based therapeuticagents, with the emphasison cancer, malaria, andHIV/AIDS.”design has resulted in an increase in the “hit rate” (activity plusselectivity) to 10 per cent. The pharmacological work is largelyundertaken at the universities of Cape Town, Western Cape, andPretoria, with synthetic efforts taking place in-house and at threelocal universities (Cape Town, Johannesburg, and KwaZulu-USA for possible assistance with the further development of themost promising compounds.Under the HIV programme, more than 100 compounds werescreened in the past year (the majority of them in-house), with aninhibitor rate of 16 per cent. Advanced studies on 19 interestingcandidates are under way, and it is planned to submit samples topartners in the USA for further evaluation as a step towards preclinicaltrials.Steady progress has also been made in the anti-malarialprogramme, which like the cancer programme is also largelyuniversity-based. More than 40 ligands have been prepared, andMain pic:Solvent dryingin the AuTEKbiomedicalscreeninglaboratory.17annual report 2007

Pics fromtop tobottom:Thebiomedicallaboratory –preparationof in vitrocell assays.The AtomicForceMicroscopein the nanotechnologycentre.A respiratorcanister andAUROlite TMgold-basedcatalyst.Evaluatingpreciousmetal-basedcatalystsfor dieselexhaustaftertreatmentapplications.complexation studies are in progress. Initial data from screeningtests are expected in the last quarter of 2007.To date, the AuTEK biomedical programme has produced twoPhD and three MSc graduates, and a further eight PhD, six MSc,and four post-doctoral candidates are currently registered. Workunder the programme has won seven awards, and resulted in100 contributions to professional journals and conferences, with49 being international.AuTEK NanotechnologyThe AuTEK nanotechnology programme, which is co-funded byelectrochemistry, molecular recognition (biolabelling), anddrug delivery systems. A novel method has been developedfor producing anisotropic precious-metal nanoparticles, andfurther work is being carried out to control product quality, particlesize distribution, and reproducibility with the aim of impartingdesirable electronic, magnetic, optical, and catalytic properties.Certain systems are being investigated for their possible use inelectrochemical sensors for the detection of glucose and otherbiological structures.The production of organically stabilised gold nanoparticlesfor application in molecular recognition (biolabelling) has beensuccessfully scaled up to 2 litre batches. These will be stabilised andfunctionalised by attaching bio-molecules, with the goal of developingmalaria, HIV, and diabetes. Similar technology involving multiplexing of theunderlying structure will be utilised to adapt the particles for drug delivery awell as diagnostics.To ensure that South Africa remains internationally competitive in this fast-ordinated at national level by the Department of Science and Technology (DST)through its National Nanotechnology Strategy. One of the main pillars of thisinitiative is establishing a number of innovation centres around the country. Twocentres will be established in 2007, one at Mintek and the other at the CSIR. Theprimary aims of the centre at Mintek are to train young scientists who will stimulatethe growth of an emerging nanotechnology industry in South Africa, developprototype products, and add value to the precious metals being produced locally.The DST, the Medical Research Council, and the Water Research Commissionwill be participating in the initiative, which will initially have three focal areas aroundsensors, molecular recognition, and nanotechnology for the water industry.AuTEK CatalysisThe AuTEK catalysis programme, which is co-sponsored by AngloGold Ashanti,seeks to develop gold catalysts for industrial applications. One of the major hurdles toestablishing a gold catalyst market has been a lack of commercially viable quantitiesof material for product testing and screening. Large-scale production of gold catalystsis not easy, owing to issues such as gold particle size, reproducibility, and deactivation,and involves synthesis techniques that are completely different to those currentlyemployed in PGM catalyst production. Research at AuTEK has been directed atovercoming these hurdles and has led to the development of the AUROlite TM range ofgold catalysts.Under the AuTEK catalysis programme, the current production capacity of 20 kgper batch is currently being further scaled-up to the 65 kg scale to meet demand.Construction of the plant, which is sponsored by the DST’s Precious Metals Initiative, isannual report 2007 18

expected to be complete by the fourth quarter of 2007.AuTEK, in conjunction with the World Gold Council (WGC), isactively marketing these gold-based catalysts under the trademarkAUROlite TM , and supplying end-users. The typical AUROliteproduct range includes Au/Al2O3, Au/Fe2O3, Au/TiO2, Au/ZnO. Jointmarketing displays have been held at the North American CatalystsConference and Europacat – generating much interest, which hastranslated into further orders. AUROlite materials have been supplied topetrochemicals, oleochemicals, and respirators and other safety equipment.Gold catalysts are unique in terms of their ability to catalyse oxidationreactions at low temperature and/or by the use of molecular oxygen.Examples of such reactions include:• Carbon monoxide oxidation.• Oxidation/selective oxidation of organics – e.g. glucose to gluconic acid,cyclohexane to nylon precursors.• Epoxidation – e.g. propene to propene oxide.Gold catalysts have also been found to be suitable for the removal of mercuryfrom coal power plant emissions, and the hydrodechlorination (destruction) ofground water pollutants such as trichloroethene.Gold catalysts also offer the ability to oxidise the carbon monoxide inhydrogen feedstock for fuel cells, converting it to “inert” carbon dioxide andthereby preventing degradation of the cell’s performance. Mintek is stillseeking commercial partners to assist in the further development of thistechnology, which has been tested at Johnson Matthey’s laboratoriesand subsequently trademarked and patented under the nameAUROPureH 2TM.Pics from top tobottom:AUROlite TMgold-basedcatalyst.Inspectingemergencyequipmentduring an ICMIaudit of a goldplant.Cyanidespeciation bysegmentedanalysis.Calibratinga Cynoprobebeforeinstallation on agold plant.Cyanide servicesMintek took part in full compliance audits of Sasol Polymers’Sasolburg sodium cyanide plant and of Sasol Infrachem to assessfor compliance with the Producers’ and Transportation codes of theInternational Cyanide Management Institute (ICMI). ICMI-based“gap” audits were also undertaken at the Navachab gold mine inNamibia and Geita in Tanzania. The audits planned for Iduapriemand Bibiani in Ghana were re-scheduled, and will now takeplace in 2007. Mintek takes the role of technical Expert Auditoraccreditation as Lead Auditor.At the end of the year under review, the Cyanide CentreLaboratory underwent an audit in terms of ISO 17025 (TestingLaboratories), and Mintek expects to achieve full compliance withthis standard in mid-2007.Mintek has built a solid foundation in soil, solution, and gas-phaseanalysis and mass-balancing of cyanide, and is currently lookingat extending this expertise to other metals. As part of this process,an advance gold-leach reactor is being commissioned that willenable conditions such as agitation intensity, shear characteristics,temperature, pressure, pH value, and redox potential to becarefully monitored and controlled. The pulp can be sampled duringoperation, with sub-samples taken for analysis and returned to theleach without distorting the mass balance. Cyanide concentration andspecies are monitored using the Cynoprobe on-line analyser, and aSCADA system is used for data capture and trending. The new reactor19annual report 2007

Pics from topto bottom:Apparatusfordeterminingthe rateof oxygenuptakeduring goldleaching.Elutionthe MINIX TMgold-selectiveresin.The controlroom inMintek’sDC arcdemonstrationsmeltingfacility.will initially be used in development work on high-arsenic goldores, incorporating arsenic speciation and mass-balancing. Theequipment will eventually form part of a comprehensive facilityfor characterisation and problem-solving on gold leach andadsorption circuits, from both the process and the environmentalaspects.Process developmentAn extensive suite of testwork, including mineralogy,comminution and gravity concentration, leaching, adsorption,and carbon-in-pulp/carbon-in-leach (CIP/CIL) modelling, wasGold’s Modder East project. On the commercial plant, which isbeing designed by Bateman, about 40 per cent of the gold willbe extracted in a gravity circuit, with the remainder recovered byCIL. The work showed that recoveries of between 87 per cent andnew gold mine on the East Rand in almost 30 years, is scheduledto start production in the third quarter of 2009, and will reach a levelof 110 000 ounces (3.42 tons) a year at full output.Laboratory testwork was conducted to evaluate processing options aspart of the feasibility study, carried out by MDM Engineering, for ManoRiver Resources’ New Liberty gold project in Liberia. This project isproduction targeted for the latter part of 2007.A visit was paid to CVG Minerven in Venezuela to carry out a basicRecommendations were made regarding options for upgrading the plants’capacities and introducing new technology, as well as for tailings retreatmentand cyanide management. Further work, including testing of a bulksample for process development, is anticipated in 2007.The MINIX TM gold-selective resin was tested in a resin-in-leach (RIL) pilot plantat Fairview gold mine, which was run by Gold Fields in collaboration with thethen owners of the mine. Gold Fields, who supply the Biox® technology used atFairview, are continuing work with Mintek to reduce the thiocyanate concentrationin the tailings. The MINIX resin was also tested successfully for scavengingdissolved gold from slimes-dam return water at a Witwatersrand gold mine.A number of service projects were carried out for projects in Botswana, the DRC,Ghana, Mali, Romania, Zambia, and Zimbabwe, as well as South Africa. Ongoingtesting of surfactants (wetting agents) for application in heap leaching was conductedin collaboration with the manufacturer. A new CIP/CIL and resin-in-pulp/resin-in-leach(RIP/RIL) computer modelling programme was developed to interface with standardMicrosoft®Windows-based processes.PLATINUM-GROUP METALS (PGM) INDUSTRYDemonstration of the smelting step of the proposed ConRoast process for recoveringPGMs from high-chromium low-sulphur concentrates continued until the end of the yearunder review. Four major DC furnace campaigns have now been conducted, treating atotal of 28 000 tons of revert tailings and other materials with Cr 2O 3contents of up to 5per cent, at feed rates exceeding 1 000 tons per month. During the last campaign, whichran continuously for 17 months, the availability of the furnace was 91 per cent.The full ConRoast process involves the smelting of dead-roasted sulphide concentrates,with recovery of the PGMs and base metals into an iron-based alloy rather than a sulphideannual report 2007 20

of ore types and concentrate compositions - it removes the limitson the minimum quantities of contained base metals or sulphur, andcan tolerate the high chromite levels in concentrates characteristicof UG2 ores without the necessity for copper cooling elements in thefurnace sidewalls.of material was smelted in a 200 kilovolt-ampere DC arc furnace. A highrecovery was obtained, with 98% of the platinum, palladium, and rhodiumreporting to the iron alloy phase. An engineering feasibility study of theprocess is under way, with Mintek providing design inputs for the proposedcommercial furnace.Laboratory and pilot-plant testwork was carried out in support of thefeasibility study, by SRK Consulting, on Platmin’s Pilanesberg project. Thebench-scale testwork was conducted on diamond drill core samples andthe silicate and UG2 ores in industry-standard primary and secondary circuits,were performed using ore from a trial pit excavated at the Tuschenkomstproperty. The data generated during this work will be used to design theprocessing plant, which will consist of separate concentrators for the silicateore and UG2.A 60-ton representative sample from Ridge Mining’s Sheba’s Ridge projectwas piloted to provide metallurgical design data for the feasibility study.towards the pre-feasibility study (Annual Report 2006), with recoveriesof 86 per cent for copper, 69 per cent for nickel, and 73 per cent foris scheduled for completion at the end of calendar 2007. According tothe pre-feasibility study, completed in March 2005, Sheba’s Ridge willproduce 24 000 ton of nickel, 12 000 tons of copper, and 390 000ounces of PGMs and gold per annum.Three pilot runs, plus extensive laboratory-scale work, werecompleted on different ore types for Barrick Gold’s Sedibeloproject, and this work is continuing into 2007. Other investigationswere carried out for Sylvania Resources on the recovery of PGMsfrom chromite tailings, and for AfriOre’s Akanani project (nowowned by Lonmin).A considerable number of quantitative mineralogicalinvestigations, using the QEMScan and Mineral Liberationcharacteristics of the PGMs, were carried out in conjunction withthe process development work. Mintek also worked closely withthe suppliers of both these technologies to increase the accuracyof the results from rapid, automated scans of PGM-bearingsamples. This is a particular issue with the PGMs, because of theoverlap in spectral windows. In a new development, a quantitativescanning electron microscope was set up on site at Mintek forone of the major PGM producers. Mintek has been running theinstrument on the client’s behalf to provide prioritised mineralogicalsupport during studies of the various plant streams for mass-balancepurposes and other research projects.As part of its research into more cost-effective comminutiontechnologies, Mintek commissioned a pilot-scale high-pressure grindingPics from top tobottom:A furnace tapduring theConRoastsmeltingcampaign.Flotation pilotPilanesbergPics 3 and 4:The QEMSCANand MineralLiberationAnalyserare usedextensively forPGM processdevelopment.21annual report 2007

Pics from topto bottom:A pilot-scalehigh-pressuregrindingroll .Pouringmoltenmetal intoatomisercup.Product fromroll (HPGR). This is a relatively new technology, which uses theprinciple of interparticle crushing between two counter-rotatingconventional crushing in certain applications, the HPGR generatesa product with very favourable characteristics for downstreamprocessing, from incipient crack formation to complete particledisintegration.Testwork has been carried out on a number of ore types, mainlyfrom the PGM sector. While UG2 ores are generally too abrasivefor effective processing, considerable success has been realisedwith Merensky ores. The results show that incorporating a HPGRbefore the primary milling stage could lead to lower comminutioncosts and enhanced metallurgical performance. Locked-cycle teststo investigate whether the HPGR could in some instances replacethe primary milling circuit have indicated that a grind of 100 per centpassing 600 micrometres can be achieved with a circulating load of70 per cent. Mintek is planning to install a second, larger HPGR during2007.Phase 1 of a study in minor element deportment in PGM smelting,which was conducted as part of the AMIRA P671 Project, wascompleted. The results showed the need for further development ofanalytical techniques, which would form a basis for the likely extensionof the project.The Platinum Development Initiative (PDI) is a collaborative programme,supported by the three major platinum producers, to develop new industrialuses for platinum. The initial work of the programme focused on developingplatinum-based analogues of nickel-based superalloys. Experimentalphase-diagram work on the platinum-aluminium-chromium and platinumnickel-rutheniumsystems has been completed, while the establishment of athermodynamic database for the platinum-aluminium-chromium-ruthenium alloysystem is almost complete. The outstanding phase diagram work will be doneat the University of the Witwatersrand under the Centre of Excellence in StrongMaterials.The DST-funded programme for fast-tracking the commercialisation of platinumbasesuperalloys has progressed according to plan. Three projects were initiallyenvisaged – the glass industry, coatings, and powder metallurgy. After a review, theglass component was terminated, since it was felt that this project could not competewith the well-established technology offered by the major players in the sector. A R2million physical vapour deposition system has been commissioned for the coatingswork, which is being undertaken in collaboration with the University of the Free Statealloyed buttons produced at Mintek, and are being characterised at UFS as part of aPhD study.An Atomijet atomisation rig, capable of producing platinum powders in the size rangefrom 30 to 150 micrometres has been commissioned, and an uniaxial compaction pressis being re-furbished and should be delivered in the second half of 2007.In September, six members of the PDI research team gave presentations at theJapanese-South African-German Workshop and Summer School in Bayreuth, Germany.This comprised a gathering of scientists from Germany, Japan, Russia and South AfricaFERROUS METALS INDUSTRYThe titaniferous magnetite layers in the Upper Zone of the Bushveld Complex containsannual report 2007 22

vast resources of iron, vanadium, and titanium, but to date noprocess has been developed that can economically recoverall three of these metals. The high titania levels make the oreunsuitable for smelting in a traditional blast furnace, and theand Vanadium, which operate the Mapochs Mine, processes the ore foriron and vanadium, but discards the low-grade titanium slag.Veremo Holdings has begun an evaluation of the feasibility of utilisingpart of the titaniferous magnetite ore from the Bushveld Complex toproduce iron units that could be used as feed for foundries and steel plants.The initial feasibility study includes the potential recovery of titania andvanadium from the slag.Approximately 5 tons of concentrate was produced from 14 tons of trenchedmaterial and smelted in Mintek’s 200 kilovolt-ampere DC arc furnace.The testwork was aimed at producing slag that could be used in furtherdevelopment work, as well as evaluating the deportment of iron, titanium,and vanadium under varied reducing conditions.additions, the process could be controlled to produce good-quality iron withhigh recoveries and a wide range of titania-containing slag compositions.Further development work will investigate the feasibility of upgrading 2andrecovering the vanadium from the slag.Oriel Resources Plc (Oriel) has been engaged in developing itsShevchenko Nickel project in Kazakhstan since 2004, and conducted amajor ferronickel smelting campaign at Mintek in 2005 (Annual Report2005). Bateman was appointed in late 2004 to conduct a feasibilitystudy that was completed at the end of 2005 based on the work atMintek . The process includes an Aerofall mill and Polcal calcinerfrom Polysius, Germany, and the twin electrode DC arc furnaceis similar to the approach envisaged for the Koniambo ferronickelproject in New Caledonia, now owned by Xstrata.Oriel has continued to develop the Shevchenko project andto evaluate the selected process options so that the mostappropriate approach can be chosen for the project to proceed.Mintek has been conducting additional testwork on these processoptions for Oriel to assist with the project development.In 2005, Mintek began a major collaborative project, fundedby the Innovation Fund and supported by Anglo Platinum, theUniversity of Pretoria, and an industrial partner, to developa more cost-effective grinding ball for the minerals industry.Samples produced in laboratory-scale melts are undergoingscreening, and in parallel with this, reference balls are beingproduced so that the casting methods can be optimised. Batchtests of balls cast from the most promising materials are plannedTrials of the “smart” rockbolt, or SmartBolt TM , are continuing in“highly critical” areas on two deep-level gold mines. Mintek isworking with a team of specialists towards the commercialisation ofboth the SmartBolt and the Hercules TM low-nickel austenitic stainlesssteel, and the Innovation Fund has indicated that it will supportcommercialisation if the two projects merit it.Pics from topto bottom:Small-scalesmeltingtitaniferousmagnetite.Conductinga ferronickelsmeltingcampaign atMintek forOriel ResourcesPlc.A grinding ballsectioned formetallurgicalanalysis.Smartbolt TMausteniticstainless steel.23annual report 2007

Pics from topto bottom:Spiralseparation ofchromite.Densityfractions ofan iron-oresample.TheSarcheshmehmine in Iran.The project proposals and funding agreements for the ferrousand base metals pillars of the Advanced Metals Initiative, whichquarter of 2007. Three projects have been proposed under thisinitiative, all of which are aligned strongly with the automotiveindustry.An investigation was begun on the pre-reduction of manganeseore and the possibility of recovering energy from the liquid slag.These processes hold potential for reducing the carbon dioxideemissions produced during smelting, and possibly for theproduction of hydrogen.Work continued on iron ore characterisation for KumbaResources in support of the Sishen Expansion Project. Inaddition, investigations were carried out on the upgrading ofelutriation, and magnetic separation.Metallurgical testwork, involving investigations of the sizedistribution, comminution characteristics, washability using heavyliquid separation, and gravity separation using tables and spirals,was conducted on material from Chromex Mining’s Mecklenburgchromite project. The results were used as input for the detaileddesign and costing exercise, and to forecast the product split intochemical, and foundry grade).NON-FERROUS METALS INDUSTRYThe bioleaching work package under the European Union’s BioMinEproject, which is co-ordinated by Mintek, has continued to progress well.During the year under review, a number of project partners investigatedthe process engineering development, as well as the more fundamentaltechnology, related to the bio-hydrometallurgical treatment of two low-gradeIntegrated pilot campaigns on the complex polymetallic concentrates from bothof these deposits is scheduled to begin at Mintek in the second half of 2007,and will run through to mid-2008. It is anticipated that a number of our Europeancolleagues in BioMinE will participate in this programme, which, if successful, willlead to pre-feasibility studies. Although the resources are of European origin, theoutcome of the work will be directly relevant to similar deposits in southern Africaand in other parts of the world. BioMinE is funded under the EU’s Sixth FrameworkProgramme (FP6), and is also supported by a major strategic investment by theDST.Large-scale piloting of Mintek’s heap bioleaching technology for chalcopyritebearingcopper ores continued at the Sarcheshmeh Copper Complex in southern2005, a further three 20 kt heaps were commissioned at approximately three-monthlyCopper Industries Company (NICICO) has decided to proceed with the developmentof a commercial plant, with a capacity of 12 kt of copper metal per annum, at theDahrezar copper mine. Mintek will be contributing to the feasibility study for the project,which is scheduled for completion towards the end of 2007, and will remain closelyinvolved in the engineering and commissioning of the planned commercial plant.The successful heap bioleaching of chalcopyritic ores depends on the generation andpreservation of heat of chemical reaction in the heap, and prolonging the permeabilityof the heap. These objectives have been realised by a combination of certain heapconstruction features and operational tactics, and the life cycle of each heap has beenannual report 2007 24

partitioned into several operating stages, each with its own targetsand criteria for completion. This approach has required a newlevel of sophistication in heap leaching. For the Iranian pilot plant,a spreadsheet-based operator advisory and administration systemhas been developed, which tracks the life cycle of each individual cellwithin a heap, and provides operator support for the most essential dailydecisions. These include the allocation of irrigant (intermediate leachor to intermediate leach solution), and adjustment of the irrigation andaeration rates to satisfy the stoichiometry of the reaction and maximiseheat accumulation within the heap. For commercial applications, a moresophisticated package with additional features is being developed, that willintegrate with current industry-standard SCADA and database software.As a result of the success at NICICO, Mintek has undertaken a considerableamount of heap-bioleaching amenability testwork, which could lead to thistechnology being further evaluated for application to low-grade copper, nickel(sulphides and laterites), and uranium deposits in southern and central Africa.Development continued on a novel technique for inoculating bacteria intoleach heaps, with the aim of obtaining a more rapid start-up and enhancedoxidation rates, which will lead to higher heap temperatures and fastercopper leaching. A set of 6 m column leach tests were conducted on a lowgradechalcopyrite ore, and further work is being conducted on techniquesto monitor the process. This project is being carried out with an industrialpartner, with funding from the Biotechnology Partnership and Development(BioPAD) initiative.Mintek is continuing with research on the development and optimisationof molecular techniques for identifying the micro-organisms involved intank and heap leaching, in order to gain an improved understandingviceversa. Work at the University of the Free State and Rhodes Universityon the production of precious-metal nanoparticles by biosynthesisis focusing on the isolation of the proteins and enzymes involved,with the aim of linking these to the varios sizes and shapes ofparticles that are produced. A second round of THRIP funding hasbeen received for investigations into the bioleaching of silicateminerals. Two MSc projects are under way, on nickel laterites (atthe University of KwaZulu-Natal) and the bio-assisted weatheringof kimberlites (at the University of the Witwatersrand), and willbe completed in March 2008. Two BTech projects are beingundertaken at Tshwane University of Technology on the biologicaldegradation of cyanide species.In support of a study of a major expansion at the Nkomatinickel mine, an 80 ton bulk sample of the Chromititic PeridotiteMineralised Zone (PCMZ) was processed in Mintek’s milling andThe plant incorporated a scavenger cleaner circuit and employedoptimised residence times to enhance the recovery of the slow-undertaken on a sample from the Main Mineralised Zone (MMZ).ore, previously regarded as uneconomic, can be processed toyield a saleable concentrate. This, together with improved metalpriceforecasts, made it possible to lower the cut-off grade applied toportions of the resource, thus increasing the open-pit reserves.As a result of applying the lower cut-off grades and including thePics from topto bottom:Heap bioleachingatSarcheshmeh.• Pregnantleach solutionponds.• Pond underconstruction.• Inoculumpreparationplant.• Augersampling ofheap.25annual report 2007

Pics from topto bottom:Flotationpilot-plantcampaign onNkomati ore.The NkomatiNickel Mine(photocourtesyNkomatiNickel).Pilot-plantoperatorstake samplesfrom themanganesesolventextractioncircuitto purifythe cobaltelectrolytebeforeelectro-Copperelectro-the KOVPCMZ, Nkomati’s nickel reserves have increased by 50 percent – to 485 377 tons. The by-product reserves have also43 per cent, and 4.181 million ounces of PGMs, a 70 per centincrease. Based on these positive results, LionOre and ARMcommissioned DRA to proceed with a bankable feasibility studyfor the large-scale expansion of the concentrator plants.The proposed large-scale expansion, planned for 2010, willincorporate mining of the PCMZ, increasing annual productionto approximately 20 000 tons of nickel and extending the life ofthe mine to beyond 2020. An interim expansion exploiting thedisseminated MMZ will maintain nickel production at its currentlevel of about 5 000 tons per year after the massive sulphidemineralisation is depleted in 2008.Mintek has carried out process development work for a numberof copper-cobalt projects in Zambia and the DRC. Among thesea South African mining company in the DRC for many years. Thestarted up in September 2006. The second phase, which will involvecobalt metal on-site at Ruashi, is under construction.Mintek began bench and pilot work, which would be used in the bankablefeasibility study for phase II of the project, in April 2006. Three campaignswere conducted, and the work was completed during March 2007.In the design of the solvent-extraction and electrowinning circuit, Mintekworked closely with Metorex’s design company, TWP Matomo ProcessPlant. The plant has been designed for a capacity of 120 000 tons of ore permonth. When the phase II expansion is completed, production at Ruashi isexpected to increase to 45 000 tons of copper cathode and approximately 3500 tons of cobalt metal and cobalt carbonate per annum.A major process development campaign was conducted for the KOV coppercobaltproject, also in the DRC. A total of 27 tons of material was delivered tolaboratory tests to determine the optimum leach conditions, integrated piloting of theleaching, copper solvent extraction and electrowinning circuit, and Aspen simulationLME Grade A standard (higher than 99.95 per cent copper), were produced. The KOVcomplex, which contains one of the world’s largest high-quality copper and cobaltresources, is being re-developed by Nikanor plc. The project will include a major27 500 tons per year of cobalt products.Dense-media separation, milling, and leaching testwork were carried out to investigate aGreen Team Consultants International.Mintek has been involved in numerous projects to remove iron and manganese fromdilute cobalt sulphate solutions by oxidative precipitation using air/SO 2. This technologyis attractive as it can be done at ambient temperature, relatively low pH, and ferrousiron is quantitatively removed within 1-2 hours. In order to produce cobalt cathode of thedesired quality, iron, manganese, copper, zinc, and aluminium must generally be removedfrom the feed to electrowinning. The requirements to produce an intermediate cobalt saltare generally less stringent, but usually iron, aluminium, and manganese still need to beremoved.annual report 2007 26

The recent interest shown in this technology by emergingcopper-cobalt producers in central Africa has encouraged Mintekto do some work to identify potential scale-up issues. Variousagitators and gas induction systems were investigated, and a highshearimpeller designed and supplied by Outotec was selected forfurther testwork on a 2 m 3 scale to examine the effects of parameterssuch as SO 2and temperature on the process. Optimisation tests remain to be doneon power consumption and various aspects around gas induction.Two smelting campaigns were conducted on discard slag from BCL inBotswana to compare the use of AC and DC furnaces for recoveringnickel and copper. The results showed that both technologies were equallyeffective, and that the company could substantially improve the recoveriesin its slag-cleaning operation by adding reductant to the existing settlingfurnaces.Pics from top tobottom:The Outotechigh-shearimpeller.LaboratoryNicksyn TMreagent insupport of theat Tali Nickel.The thermalMagnesiumProcess demonstrationplant.The Mintek-developed nickel synergist (Nicksyn) was evaluated tooptimise nickel recovery and nickel-calcium separation at Tati Nickel inBotswana. Laboratory test work was conducted at Mintek on the feed to thenickel solvent-extraction circuit to optimise the combination of the synergistand the Versatic 10 commercial extractant, and the results applied on theActivox® hydrometallurgical demonstration plant at Tati using a 0.5 toncommercial batch of Nicksyn.on the organic phase, which could result in gypsum formation inthe extraction circuit if the feed becomes saturated with calcium.Previously, Tati Nickel minimised the problem by diluting the feedstream with fresh water, but this would increase the size of theproduction. Furthermore, with Versatic 10, the pH of extractioncannot be increased as this causes higher calcium loadings -extraction stages).With the synergistic system, the calcium loading was aboutone-tenth that obtained previously, and gypsum formation canbe completely avoided. The Versatic-Nicksyn combination alsoachieved higher nickel recoveries (99.7 per cent comparedwith about 99.3 per cent) using only four stages. In addition,lower reagent losses were experienced, which can be ascribedto the much lower pH of operation and the reduction in crudeformation.Work continued on the production of titanium-aluminium masteralloys by aluminothermic reduction, and a project is in progressat the University of Cape Town on the fundamental aspects of thetitanium-aluminium-oxygen-carbon-nitrogen system to determinethe best criteria for scale-up.Following a review of the economics of the Mintek ThermalMagnesium Process, Anglo American has decided not to pursuecommercialisation, since it is felt that it would not be able tocompete with the low-cost Chinese producers. Mintek will continue tolook for opportunities for applying the technology.27annual report 2007

Pics from topto bottom:Small-scalepressureleaching ofa uraniumcontentrate.uraniumleach liquor.Uraniumoxideprecipitation.Hydrophobicitya diamondbearingconcentrate.INDUSTRIAL MINERALSambient and pressure leaching, gold diagnostic leaching,and CIL adsorption, was done for the Buffelsfontein tailingsrecovery project owned by First Uranium, the gold and uraniumsubsidiary of Simmer and Jack Mines. Based in this preliminaryto recover an uranium concentrate, then pressure leaching,solvent extraction and ion exchange using NIMCIX continuousleach residues would be treated in a CIL plant for gold recovery.Also for First Uranium, pilot-scale leaching was conducted on abulk underground sample from the Ezulweni project to producea feed for solid-liquid separation, countercurrent decantation,and ion-exchange testwork. The results will be used to generatedesign criteria for a possible NIMCIX plant. Both these projectsare continuing into 2007.Testwork was completed on the development of the processMalawi, as part of the bankable feasibility study by GRD Minproc.Paladin gave the go-ahead for the development of the project inFebruary 2007, and commissioning is scheduled for the third quarterof 2008. Kayelekera will be Paladin’s second uranium mine in southernAfrica – Langer Heinrich in Namibia, for which Mintek conducted2007.Mintek’s uranium business continues to grow, and an increasing numberof approaches are being received concerning proposed projects onWitwatersrand-type materials, particularly tailings re-processing for bothuranium and gold. Some of these are potentially very large projects. Mintek’sstrength in this area is the comprehensiveness of the services it can provide,from initial investigations up to large scale piloting.During the year, a new laboratory facility for characterising diamonds accordingto their hydrophobicity (response to grease-table recovery) and luminescence(recovery by X-ray methods) was fully commissioned. The laboratory has met withan extremely favourable response form major industry players, including De Beers,SouthernEra, and Bateman, and work on optimising recovery processes has beendone for a number of projects in South Africa and overseas. Mintek has engagedan internationally recognised expert in kimberlite petrology and diamond studies,and this project will be expanded in 2007/08 to include diamond characterisation forpurposes of marketing valuation and population discrimination.Ongoing heavy-liquid separation testwork was carried out for De Beers to evaluateMintek’s capabilities in chlorination technology were further developed with thecan handle kilogram-size samples, resulting in a much-improved mass balance.A suite of testwork, including sample characterisation, heavy-liquid separation, shaking-conducted on a sample of bauxite. The aim of the work was to simulate a processingannual report 2007 28

oute to remove the quartz and hematite/goethite from thematerial. It was found that around two-thirds of the total silica,and more than half of the Fe 2O 3, could be removed, which as wellas resulting in a higher-quality product, would reduce the formationof “red mud” in the Bayer process.QUALITY, ENVIRONMENT AND SAFETYMintek’s Environmental Management System underwent a successfulaudit, for OHSAS 18001 (Occupational Health and Safety), will take placein 2007, and that for IS0 9001 (Quality) the following year. Re-assessmentThe Analytical Services laboratories underwent a successful surveillanceaudit for ISO 17025 compliance in 2006.At the end of the period under review, the Lost Time Injury Frequency Rate(LTIFR) was 2.0, compared with the target of 1.0. The Client DissatisfactionFrequency Rate (CDFR), after consistently achieving the target of lessthan 10, rose sharply in the second half of the year. This was due to latedelivery of results, and communication problems with the clients, onseveral minor projects undertaken by one of Mintek’s divisions. Stepshave been taken to remedy these problems.Pics from topto bottom:PersonalProtectionEquipment(PPE) forradiationMonitoring abulk sample ofuranium ore.Mintek’s HIVCommittee.Access topotentiallyhazardousareas isrestrictedto trainedpersonnel.During 2006, two new indices were established: the MajorEnvironmental Incidents Frequency Rate (MEIFR) and PublicDissatisfaction Frequency Rate (PDFR). Mintek’s MEIFR is above thetarget of 5 at the moment. The upward trend is possibly the result ofas corrective action is implemented. The PDFR (which is a subsetof the MEIFR) is also above the target – however, the publicMintek is registered as a uranium testwork facility with the NNRand the Department of Minerals and Energy (DME). A RadiationProtection Programme (RPP) has been incorporated as part ofthe overall Safety, Health, and Environment programme, andan internal audit schedule, incorporating site inspections by theNNR, has been implemented.“During the year, a new laboratory facilityfor characterising diamonds according to theirhydrophobicity (response to grease-table recovery)and luminescence (recovery by X-ray methods) wasfully commissioned.”29annual report 2007

annual report 200730

COMMERCIALACTIVITIESMintek’s commercial activities comprise participation in operatingcompanies and joint ventures, sales of equipment and technology licensingagreements. Mintek also actively promotes the establishment of mineralbaseddevelopment projects that could utilise its technologies.PARTICIPATION IN OPERATING COMPANIESMindev (Pty) Ltd. (Mindev) is a wholly owned local holding company thatwas established by Mintek in 2002 to support the commercialisation of itstechnologies via partnerships in operating business ventures.Mogale Alloys (Pty) Ltd. was formed in2003 to recover nickel and chromiumfrom furnace dust produced by ColumbusStainless at Middelburg, using the DCarc furnace at Samancor Ferrochrome’sKrugersdorp facility. During the periodunder review, Mindev concluded the saleof its 25 per cent interest in Mogale anda licence agreement for the DC smeltingtechnology to PGR 17 Investments (Pty)Ltd., the existing management team,for a total consideration of R43.15from the premium that the remainingshareholders were prepared topay in order to gain control of thecompany.Mindev is in the processof divesting its 25 per centshareholding in TollSort (Pty) Ltd., to MikroSort (Pty) Ltd. thevendors of the optical sorting technology, following a decisionbeen made in the optical sorting of low-grade gold, PGM, andother ores, it was decided that the additional investment andtime required to fully develop the technology to a point where itunacceptably high risk.MINTEK BUSINESS DEVELOPMENT PROJECTSMintek’s Business Development group is pursuing severalopportunities for commercialisation of the organisation’sintellectual property.“Several independentanalyses have concludedthat, depending on theimplementation of smelterexpansions by the majorproducers and the numberof new PGM projects thatcome on stream, the SouthAfrican PGM sector willrequire additional smeltingcapacity within the next”Independence ConRoast PGM ProjectIn June 2006, Mintek and Independence Platinum Ltd. (IPt), asubsidiary of Braemore Resources plc, entered into an exclusiveagreement for the commercial development and implementationof the ConRoast process. In terms of the agreement, IPt will fund aMain pic:TappingPGM-bearingalloy duringa Consmeltcampaign.31annual report 2007

Pics from topto bottom:tion testwork.The SAVMINpilot plantat Grootvleigold mine.Metallographiccharacterisationofgrindingballs.US$15 million work programme over three years, including aemerging PGM producers in South Africa.Several independent analyses have concluded that, dependingon the implementation of smelter expansions by the majorproducers and the number of new PGM projects that come onstream, the South African PGM sector will require additionalthan half of the new production will come from UG2 ores,which pose technical challenges for conventional six-in-lineparticularly for nickel, will be needed to enable the processingof Platreef ores.As part of the development programme, IPt will continue with thedemonstration work at a commercial scale (from 1 000 - 2 000tons per month) at Mintek, using a range of high-chromium PGMconcentrates.IPt is evaluating the project in terms of a smelter with a targetcapacity of 360 000 tons of concentrate per annum. The feasibilityannum), which is being conducted by engineering project house TWPSAVMIN development and licence agreementsMintek’s SAVMIN process for purifying sulphate-polluted mine drainagehas undergone two highly successful large-scale demonstrations,Negotiations are now underway to license the technology, on a non-satisfy the environmental obligations of the mining companies in the area, andpilot plant is currently underway.Iron and steelmaking projectsA study was completed for the IDC on cataloguing iron-ore resources in SouthThe results indicated that an expansion of South Africa’s steelmaking capacity tosupply some of the requirements of the increased world demand for steel couldbe feasible.testing and feasibility study services. These include:• Maputo Metallurgical Complex - a plant to produce 3 million tons per annum ofsteel and 1.5 million tons per annum of iron ore pellets using Palabora magnetite.• Coega Steel Complex - a plant to produce 3 million tons per annum of steel and 5million tons per annum of iron ore pellets using Kumba concentrate.• Northern Cape Steel - a plant to produce 3 million tons per annum of steel using• A plant to produce around 1 million tons of steel per annum using Foskor magnetite.• A plant to produce around 1 million tons per annum of iron or steel using BushveldComplex magnetite.annual report 2007 32

Heap leaching of nickel lateritesHeap leaching of low grade nickel laterite ores is receivingconsiderable attention from nickel producers internationally. Iftechnically and commercially viable, it will represent a paradigm shiftin the industry. Mintek is drawing on its experience in heap leaching inother areas to develop expertise in nickel laterite processing, under theauspices of a project with an industry partner. The Mintek technology,at this stage, is not unique - it is rather a general competency in thiswork in this exciting area.Thermal magnesiumFollowing a review of the economics of the Mintek Thermal MagnesiumProcess, Anglo American has decided not to pursue commercialisation,since it is felt that it would not be able to compete with the low-cost Chineseproducers. Mintek will continue to look for opportunities for applying thetechnology.Pics from topto bottom:Columns forheap bioleachprocess development.The FloatStarand optimisationstrategyis installed onthe majority ofSouth Africa’sPGM concentrators.An industrialmilling circuit.PROCESS-CONTROL PRODUCTSthan expected, mainly as a result of timing problems at various clients’sites. FloatStars were implemented on a trial basis at Aquarius Platinum’sEverest operation, and at a major nickel producer in Australia. At thewhich set the limits within which the level setpoints can be moved, wereincorporated into the Grade-Recovery Optimiser. Five more banks ofcells were incorporated into the FloatStar control scheme at Tati Nickelin Botswana, and a successful re-installation was undertaken atthe Crocodile River PGM plant. Service contracts were concludedmajor copper producer in Chile.of minerals in a sample. Such a technique, if successfullydeveloped, could be used to assist in the design andof control schemes.MillStar milling control was implemented on two ball mills at azinc producer in Mexico, and this will probably be followed by aFloatStar installation during 2007. Following a successful trialperiod, MillStar stabilising control was installed on the 3 000ton-per-hour SAG mill - one of the world’s largest - in Chile. Thecompany has requested Mintek to investigate the feasibility ofinstalling stabilising control on two further SAG mills.A new version of the mill power optimiser, which uses dynamicdata to optimise the load setpoint, was implemented at the Mixedand UG2 plants at Lonmin’s Karee operations, and at EasternPlatinum C Stream. The optimiser previously underwent trials interms of the corporate service contract with Lonmin (Annual Report2006), which as well as the servicing of all current process-controlinstallations and software upgrades, includes an agreement forMintek to trial-install new technology at Lonmin’s plants in return forreduced prices on purchases.33annual report 2007

Pics from topto bottom:A Cynoprobewas installedat Polymetallin Russia, andthis will befollowed bya LeachStarcontroller in2007.The measurementcell inthe Cynoprobe.Mintek’s ArcMonitor, orArcmon, isan adjunct tothe FurnStarMinstralsystem thatprovidesadditionalinformationabout theconductionbehaviourwithin theburden in submerged-arcfurnaces.AngloGold Ashanti’s Mponeng gold mine, which installed thepurchased a Cynoprobe online cyanide analyser to complementthe control strategy. Four WAD Cynoprobes, which are ableto measure the concentration of both “free” and weak-aciddissociablecyanide, were installed at local gold plants – twoat Beatrix and two at Driefontein. A unit was purchased byAngloGold Ashanti’s Siguiri gold mine in Guinea and willbe commissioned in 2007, and a very successful trial wasconcluded at Geita in Tanzania.A Cynoprobe was installed at Polymetall in Russia, and thiswill be followed by a LeachStar controller in 2007. Cynoprobeswere purchased by Newmont Mining Corporation’s Midasoperation in Nevada and (together with a LeachStar controller)at Waihi in New Zealand. A trial installation was begun at theNewmont/Peñoles La Herradura joint venture in Mexico, andBarrick’s Henty gold mine in western Tasmania, which previouslyhad an older version installed on a trial basis, purchased anupgrade.Further development of the Cynoprobe is under way, withmeasurement range of the instrument to both higher and lowerconcentrations while retaining the accuracy across the range. Inparticular, the monitoring of “post-mixing” aquatic systems requires themeasurement of free cyanide at parts-per-billion levels.The latest version of the FurnStar Minstral TM control strategy forsubmerged-arc furnaces, which includes power optimisation andresistance optimisation modules, was released. FurnStar control wasimplemented at South Africa’s two newest ferrochromium producers – theXstrata-Merafe Lion project and International Ferro Metals’ Buffelsfonteinsmelter – which have a combined annual capacity of 627 000 tons offerrochromium. Lion Ferrochrome, near Steelpoort in Mpumalanga, whichbegan production in September 2006, utilises two 63 MVA furnaces. Thein mid-January, and the second of the two 66 MVA furnaces came on line in earlyFebruary.New FurnStar installations were also completed on a further two furnaces atupgraded with the latest version of the software.Mintek’s Arc Monitor, or Arcmon, is an adjunct to the FurnStar Minstral system thatprovides additional information about the conduction behaviour within the burden insubmerged-arc furnaces. Arcmon makes it possible to study the detailed behaviourof the electrical circuit in a submerged-arc furnace in real time. Its ability to distinguishbetween arcing and resistive conduction provides useful information about the burdenof a furnace within its reactive zone, including the carbon balance and the metalbath level. Arcing information can also be used to improve the regulation of electrodeExtensive Arcmon studies have been undertaken on the electrical conduction in siliconmetal, ferrosilicon and ferrochromium furnaces, and during 2006 a further trial was2007.annual report 2007 34

CAPITAL EQUIPMENTA 125 kilogram per hour Minfurn carbon-regeneration furnace wascommissioned at Compañia Minera San Simon SA in Peru. Thiswas the second installation of the higher-capacity Minfurn, which wasin a larger unit. The larger furnace has a capacity comparable withconventional regeneration equipment such as rotary kilns, while retainingthe advantages of the unique resistive-heating technology employed in theMinfurn. A 75 kilogram per hour furnace was installed at Yamana Gold’s SãoFrancisco operation in Brazil. Orders were received for a further 75 kilogramper hour unit (Mineração Turmalina, Brazil) and a 125 kilogram per hour unit(COMARSA, Peru), and these will be commissioned early in 2007. These twofurnaces are the latest PLC-based models, with the ability to allow remoteaccess via Ethernet if the appropriate hardware is installed.hopes to break into this market shortly.The latest version of the Atomijet atomiser was installed and commissionedcapacity of 50 kilograms per batch, can operate at temperatures up to morethan 1 600°C, compared with 1 100°C in earlier models. This extends therange of materials that can be processed.SOUTH AFRICAN REFERENCE MATERIALSFour new standards in the series of South African Reference Materials– a ferrochromium metal, a ferrochromium slag, a low-grade nickel-PGM sulphide, and a feed-grade Merensky Reef material. In addition,four uranium standards were produced for a consulting company. Auranium ore standard and a UG2 PGM standard will be releasedFurther gold, uranium, and rock reference materials are plannedto replenish stock levels, as well as new materials for copper,cobalt, nickel, and tantalite ores, Toxicity Characteristic LeachingProcedure (TCLP) standards, and polluted soils and sediments. Avertical stirred mill has been purchased for the fast production ofmicrometres) and a small standard deviation.Metallurgical accounting and geological resource evaluationsdepend to a large degree on the quality of analytical results,and Mintek is seeking opportunities to grow its SARMs business.The SARM programme has joined the recently formed SouthAfrican branch of the ISO Committee on Reference Materials(REMCO), whose aim is to co-ordinate a broad international effortPics from top tobottom:A 125 kilogramper hourMinfurn carbonregenerationfurnace wascommissioned atCompañiaMinera SanSimon SA inPeru.The latestversion ofthe Atomijetatomiser wasinstalled andcommissioned atImpala PlatinumSprings.Four newstandards in theseries of SouthAfrican ReferenceMaterials(SARMs) weremanufacturedMetallurgicalaccountingand geologicalresource evaluationsdepend toa large degreeon the qualityof analyticalresults. Mintekis seeking opportunitiestogrow its SARMsbusiness.“Further development of the Cynoprobe is undercircuitry to extend the measurement range of theinstrument to both higher and lower concentrations”35 annual report 2007

annual report 200736

MINERAL POLICYAND SUSTAINABLEDEVELOPMENTMINERAL ECONOMICS AND STRATEGYMintek’s Mineral Economics and Strategy Unit (MESU) conductsregional commodity-based mineral economic studies to promote valueaddition and sustainable development through the minerals industry, both inSouth Africa and elsewhere in Africa.Regional Mineral EconomicsStrategic regional minerals scans are undertaken to highlight infrastructurerequirements, advantages of ordered development and clustering ofprojects, preliminary economic analysis, and identify downstream and valueadded developmental opportunities frommineral-based projects. Two detailedscans investigated the mineralpotentials of Limpopo and KwaZulu-Natal.The Limpopo scan will be used todevelop a mineral strategy for theyear. The KwaZulu-Natal projectre-investigated the remainingcoal mining potential forthe province, reviewed theindustrial minerals sector,“Mintek also contributed tothe strategy for sustainabledevelopment in mining,of development, indicatorsfor and the development ofguidelines for various aspectsof the environmentaloperations.”impactsof miningthat could be exploited. A key feature of both projects was theuse of GIS software that allowed for different scenarios to beevaluated. Interactive GIS-based datasets formed an integralpart of the deliverables for these projects.MESU played a central role in studies of a number of ironand steel projects in southern Africa. MESU also acted assecretariat in Maputo Metallurgical Corridor Project, whichinvestigated the potential to establish a steel complex in Maputothat would utilise magnetite resources from the Palabora MiningCompany dumps.RESOURCE BASED SUSTAINABLEDEVELOPMENTThe Resource Based Sustainable Development (RBSD) strategyhas three principal themes.• A capital equipment and services focus that supportsMain Hand-sorting pic:magnesite ore small-scale at aoperation the Limpopo inprovince.37annual report 2007

Pics to from bottom: topdevelopingMESU isforaLimpopostrategyProvince supporting forclusteringindustrialof industries. supplierSustainable TheDevelopmentcontinued(SD) unitwithDME’stheDevelopment“SustainableMining”throughprogramme.andWithenergywaterincreasinglybecomingonlyscarce,in SouthnotacrossAfrica butAfricanthethese continent,prove majorcouldconstraintsminingto newinvestments.programmeThe SDundertook alsoa studyto thetourto engageEUwithmineralsthe EUcommunity, and metalsincludingEuropeantheCommission.technology equipment and services solutions to miningcustomers around the globe.• Encouraging the lateral migration of technology from theminerals sector to elsewhere in the economy.products, RBSD brings a perspective of opportunitiesfor industrial, technological, and trade development“upstream” and “side-stream” to the mining industry.MESU is developing a strategy for Limpopo Province forsupporting industrial clustering of supplier industries. Theclient in this project needs to develop a set of responses andincentives to create sustainable industries in some of its miningnodes to ensure that a manufacturing industrial cluster can beestablished that is able to outlive the mining sector. The projectadvice to industry and government on strategies to maximiseeconomic linkages and growth.Economics SupportMESU conducted various empirical analytical studies of miningcommodities, and tracked and evaluated commodity prices cycles.A diagnostic approach was used to identify key challenges facing thesector and design appropriate responses. Models that predict and explainthe current commodities booms were developed. MESU was representedat the G20 Energy and Resources Meeting in Banff, Canada.Sustainable DevelopmentSustainable Development through Mining programmeThe Sustainable Development (SD) unit continued with the DME’s“Sustainable Development through Mining” programme. One of the majorprojects completed was the development of an auditable checklist forprogramming into the Site Inspection Assistance tool being developed for DMEfor sustainable development in mining, and the development of guidelines forvarious aspects of the environmental impacts of mining operations.The SD unit is actively pursuing links with various local and internationalprocessing. The Unit started preliminary work on a project funded by the DST thatinvestigates new technology mixes to conserve water during mining and processing.becoming increasingly scarce, not only in South Africa but across the African continent,these could prove major constraints to new mining investments.annual report 2007 38

REACHAt the beginning of 2006, MESU started investigating the impactof the European Union’s (EU) REACH policy on South Africa’sand Africa’s mining industry. South African mineral exports intothe EU were analysed in terms of REACH and other trade policies.The SD programme also undertook a study tour to the EU to engagewith the EU minerals and metals community, including the EuropeanCommission.SMALL-SCALE MINING AND BENEFICIATIONthe artisanal and small-scale mining sector through researching anddeveloping appropriate technologies, and by providing training andsupport to ensure that development can be as sustainable as possible,even when based on limited resources.A wood-fuelled pottery kiln was designed and commissioned for thepotters at Mapuve village in Limpopo, under the project sponsored byresulting in a higher-quality, more durable product.A pilot plant was installed at the Lyttelton dolomite mine in Marble Halltrials, in which the product was compared with commercial fertiliseron a number of farms in the area, showed this material to be verysuccessful at improving the growth of a variety of vegetables.These trials are continuing into 2007.and mill were set up in Giyani, Limpopo province, and testson vegetable plots have started. Acidulation trials are beingcarried out to test the release of phosphorus from mixtures ofA small iGoli (mercury-free gold-recovery) plant was setup near Springs on the East Rand to recover gold fromconcentrates produced by a small-scale operator. A pilotsizedplant has been commissioned at Mintek to demonstratethe process to potential users. A small group of artisanalminers from Tanzania were trained in the process, anda small iGoli plant will be commissioned and an on-sitedemonstration will be conducted in Tanzania towards the endof 2007.Pics to bottom: from Topconducted MESUempirical variousstudies analyticalmining sector ofas data supply suchanalysis and demandcommodities,and evaluated trackedprices commodity cycles.pottery A wood-fuelleddesigned kiln and wasfor commissionedat Mapuve the pottersLimpopo, village inthe project underthe sponsored WF Kellogg byfoundation.millA crusherwere setandLimpopoup in Giyani,andprovince,vegetabletests onhave started.plots(mercury-freeA small iGoliplantgold-recovery)set upwasSpringsnearthe Eastonto recoverRandconcentratesgold fromaproducedsmall-scalebyoperator.participated Mintekplanning inthe technical offor programme(World the CASMannualBank)Madagascar. conference inMintek participated in the planning of the technical programmeMintek technology for the manufacture of glass has beentransferred to groups of rural people in Limpopo, Kwa Zulu Natal,Gauteng and Mpumalanga.39annual report 2007

Pics top frombottom: toAlmostlearners800trainingreceivedMintek’s atcampusRandburgat satellite andsitesthe country.aroundWomenters werepot-improvehelpedtheirtoingpottery-mak-skillsto marketandtheirat Letsopagoods,Artwork inandPotteryTimbitaBushbuckridge.inOthercialisedspecludedtrainingcraftin-work beads, (glassellery,jew-pottery),andameliorantsoilbrickmaking,production,mentaland orna-carving. stoneThree beadmaking glass-unitsset up,wereUlundiatZulu-Natal,in KwainHazyviewlanga,Mpuma-the Cradleandkind of Human-HeritageWorldtraining Site, withequipmentandsupplied.A strategic marketing plan was formulated for the nationaland international craft market segments. A feasibility studywas conducted to assess the potential of reviving thesandstone industry in Qwa-Qwa. Business and marketingplans were drawn up for a number of individual small-scaleoperations, and assistance given with sourcing funds.The MQA has continued Mintek’s accreditation as a skillsprovider. During the period under review, 789 learnersreceived training at Mintek’s Randburg campus and atsatellite sites around the country. The modules included anintroduction to small-scale mining, legislation, explorationgeology, mining survey, minerals processing, health andadding, and business skills and leadership. The commoditiesOther specialised training included craft work (glass beads,jewellery, and pottery), soil ameliorant production, brickmaking,and ornamental stone carving. Three glass-beadmakingunits were set up, at Ulundi in KwaZulu-Natal, Hazyview inwith training and equipment supplied. Under the DME’s sustainabledevelopment programme, work on training in ornamental stoneprocessing using waste material from commercial dimension-were helped to improve their pottery-making skills and to marketBushbuckridge.The Timbita ceramics incubator based at Mintek is in the processof registering with the MAPPP-SETA, the industry Skills EducationTraining Authority (SETA) responsible for facilitating education andtraining in the media, advertising, publishing, printing and packagingsector, as a service provider for the Unit Standard: Craft Production,according to registered unit standards and nationally recognisednew ceramic items to test the market. Timbita conducts tests on claysfrom different localities for their suitability for ceramics or brickmaking, anda clay database has been set up to record the geographical location ofsuitable deposits.received support from the following organisations:CASM (Communities and Small-Scale Mining); the DME; the DST; Eskom;the MQA; Marble Hall Municipality; the seda Technology Programme of theannual report 2007 40

KGABANE JEWELLERY INITIATIVEThe Kgabane jewellery training programme focuses on themanufacture of jewellery in South Africa, using indigenousskills and traditional designs. It also provides manufacturing andmarketing support, as well as training, to poor rural and urbancommunities. Eight new jewellery workshops were set up at inMpumalanga, Cape. The workshop at Mopumolo in KwaZulu-Natal is notable forat Steelpoort was funded by Xstrata as one of their social developmentinitiatives surrounding the Project Lion ferrochromium-smelting jointventure.Eight existing workshops were upgraded during the year. A further sevennew facilities – two of which will be funded by mining companies as partof their social offsets programmes - and six upgrades, are planned for2007.As part of a DME initiative, Kgabane facilitates a skills exchangeprogramme with the People’s Republic of China. Two teams totallingscheme to date.Mintek also facilitated a platinum casting exhibition, in conjunctionwith the DME and Lonmin Platinum, at the bi-annual Electra Miningexhibition in Johannesburg.Pics bottom: from top tojewellery The Kgabaneprogramme trainingmanufacture focuses on thein of South jewelleryindigenous Africa, usingtraditional skills anddesigns.Swizzle designed sticksan African withtheme.Crochetedhandbagsby the ruralmadeAfrican women.newA furtherworkshopsevenoffacilitieswhich will– twobybeminingfundedpartcompaniesof theirasprogrammessocial offsetsupgrades,- and sixplanned forare2007.“Mintek’s Mineral Economics and StrategyUnit (MESU) conducts regional commoditybasedmineral economic studies to promote valueaddition and sustainable development throughthe minerals industry, both in South Africa andelsewhere in Africa.”41annual report 2007

annual report 2007 42

PEOPLEHUMAN CAPITAL MANAGEMENTMintek attributes its position as one of the world’s leaders in mineral andmetallurgical technology to its workforce of highly skilled engineers, scientistsand technologists, who have been developing groundbreaking technologies,products and services for the local and international mining and mineralsindustries since 1934.For the past few years, the global shortage of hard-core technical skills,such as engineers, scientists and technical personnel has also becomeincreasingly evident in the South African labour market. Here the shortage iscompanies in the mining, minerals and related industries competing for thesame pool of human capital and expertise in order to survive.through competition from local and international companies. To offsetthese losses the organisation embarked on a successful recruitment drive,simultaneously developing and formulating a retention strategy to arrestemployee turnover. As one of the most important measures to retainstrategic human capital, the organisation has made every effort to closethe salary gap with the open market, however this is still a challenge forMintek. Strong focus has also been placed on succession planning.TRANSFORMATION AND EMPLOYMENT EQUITYDespite the greatshortage of engineers,scientists andtechnologists fromthe historicallydisadvantagedgroups atmanagerial andprofessional level,Mintek’s workforcetransformation has improved steadily with the percentageof historically disadvantaged individuals in all categoriesexceeding the 50 per cent mark. The organisation has reachedits Board-approved target of 77 per cent designated group(DG) representation. Transformation in the group’s technicalbusiness units has also improved, and multilateral initiatives arebeing employed to induce scarce scientists, engineers and highlyspecialised technical staff from the historically disadvantaged groupto join the organisation. The table above, extracted from Mintek’s Employment EquityReport, which was accepted by the Department of Labour duringtransformation in respect of previously disadvantaged persons atmanagement and professional levels.Main Transformation pic:of work Mintek’shighly force skilled ofengineers, scientists technologists andhas steadily. improved43annual report 2007

Pics top frombottom: toEmploymentTheEquityDiversityandForum,representswhichcategoriesallemployees, oftoendeavoursenvironmentcreate anembraceswhichdiversity employment andequity.be Mintek providing willhouseintensivelabourin-relationsworkshops,trainingwhich include willNUMstewards.shopofAHIV/AIDShigh levelawareness maintained isregularby thedistribution of posterspamphlets.andBLACK ECONOMIC EMPOWERMENTA joint survey by Mintek and an independent accreditedconsulting organisation to verify the DG-status of thecompanies in Mintek’s preferred supplier base found that thevast majority of suppliers, including recruitment agencies andlabour brokers, were BEE compliant. Mintek has set itselfclear targets, as contained in the Compact with the Minister ofMinerals and Energy, for suppliers’ BEE compliance and willseek alternative suppliers if these targets are not met.PARTICIPATIVE APPROACH: MINTEK AND NUMMintek’s working relationship with the National Union ofMineworkers (NUM) remains positive and NUM continuallyinteracts and consults with Mintek on issues that affect itsmembers in the workplace. With both parties aspiring to createa more participative environment, Mintek will be providingintensive in-house labour relations training workshops, whichwill include NUM shop stewards. This will enable both Mintek andorganised labour to effectively engage on the same level in termsof knowledge and skills in employee relations.HIV AND AIDSMintek’s HIV/AIDS Committee consists of representatives frommanagement, the NUM, the Staff Association, Health and Safety, andMintek’s operating divisions.A high level of HIV/AIDS awareness is maintained by the regulardistribution of posters and pamphlets. During the year Mintek helda tuberculosis (TB) awareness campaign. The focus on TB is veryimportant, since HIV/AIDS usually manifests itself through this disease.The Occupational Health Clinic distributes the Haart Bulletin News on aweekly basis to all Mintek peer educators in order to keep them abreastof the latest information and developments on HIV/AIDS matters. Peergroup counselling training has also been conducted by peer educatorsfrom various divisions at Mintek to develop skills and provide an in-depthunderstanding of HIV/AIDS issues.A dedicated HIV/AIDS site on the Mintek website and intranet is beingdeveloped so that up-to-date information is available at all times.The Mintek Medical Clinic, in association with the Randburg Municipality,also offers voluntary HIV/AIDS testing and counselling. The Mintek HIV/AIDS Committee continues to support the Ikaneng/Itireleng AIDS OutreachProgramme.The “Know Your Status” campaign is an ongoing initiative and approximately 18per cent of all Mintek employees know their HIV/AIDS status and efforts are beingmade to de-stigmatise HIV/AIDS in the workplace.WELLNESSTo promote and encourage the wellness of its employees, Mintek, in conjunctionwith a well-known behavioural risk management partner, has been providing itsworkforce with Employee Assistance Programme (EAP) services. As can be seenfrom the growing utilisation of EAP services across various levels of the organisation,employees are appropriately using the EAP to diminish the potential negative impact ofbehavioural risk factors.Despite the healthy state of the South African economy, statistics have shown that moneyannual report 2007 44

management, relationships, and legal issues were the mostimportant matters dealt with over this period. As such issuesultimately increase stress, Mintek will provide stress managementyear to assist employees in dealing with matters of this nature.Counselling services are offered in all of the most commonly spokenSouth African languages, which enhances the EAP service considerably.The EAP services have been well received by a diverse range of Mintekcallers, who are all aware of the multilingual nature of the service and arecomfortable making use of it.DIVERSITYThe Employment Equity and Diversity Forum which represents allcategories of employees, endeavours to create an environment whichembraces diversity and employment equity. By nurturing diversity andeliminating equity barriers, while conforming to legislation and best practice,the Forum strives to ensure that Mintek’s environment is conducive tomeeting strategic and operational goals. The Forum will consult withmanagement as well as staff with regard to, amongst others matters, thenew Employment Equity Plan 2009.In the past year, the Forum has actively increased the awareness ofappreciating differences across the organisation. This was initiatedand implemented through a series of activities, beginning with theshort project called “In someone else’s shoes”, which was aimed atincreasing understanding of how people with disabilities have tofunction within a work environment.The Forum, in collaboration with the HIV/AIDS Committee, alsosupported the orphans at the Itireleng Home in Soweto.SAP AND HUMAN RESOURCESPhase 1 of the SAP HR module, including payroll administration,year. Phase 1 comprised the upload, set-up and training of allusers, as well as the piloting of the system. It is anticipated thatMintek will implement Phase II of the SAP HR Module in the newPics to bottom: from topMintekset itselfhastargets, asclearcontainedCompact within thetheMineralsMinisterandofEnergy,suppliers’forcomplianceBEEandalternativewill seeksuppliersthese targetsifare not met.supportedMintektrainees by44siteprovidingin-serviceon-enabletrainingstudentstoofattechnologyuniversitiescomplete theirtoyearcompulsoryof practicaloneexperience.staffA totalmembers,of 335additionalas well as annon-permanent57staff,membersreceivedoftrainingdiversedevelopmentandinterventions.HUMAN CAPITAL DEVELOPMENTStaffMintek has been actively developing its human capital in orderto be able to compete effectively in the development of itsintellectual property. A total of 335 staff members, as well as anadditional 57 non-permanent members of staff, received diversetraining and development interventions.Bursary programme and scholarshipsParliamentary Grant, supported 41 undergraduate and 37supported 44 trainees by providing on-site in-service training toenable students at universities of technology to complete theircompulsory one year of practical experience. Ten scholarships werealso awarded to students at universities of technology.45annual report 2007

Pics to from bottom: topThe Miningalso Authoritysix graduates supportscompletinginternship a one-yearMintek. atPics 3:Mintek 2 andpates partici-Technology in theand Resources Humanfor Programme Industry(THRIP), initiative anthe Departmentand of Industry Tradeoftered adminis-National by theFoundation. ResearchMintek a group hostedgirl-learners ofin from and schoolsthe greater aroundJohannesburg area of as the parttional “bringa-girl-childna-to-work” day.The aim of the bursary programme is primarily to meet theskills needs of Mintek’s operating technical divisions, and alsoto provide appropriately-skilled graduates to the broader SouthAfrican minerals and metallurgy sector, as per Mintek’s MissionMintek’s bursary programme.Mintek’s collaboration with the University of Cape Town (UCT)has led to the awarding of a UCT/Mintek Prestige Scholarship,granted on the basis of academic merit to a doctoral studentMintek.The Department of Science and Technology (DST) funds twoinitiatives at Mintek. The Research Professional DevelopmentProgramme, comprising eight Fellows at postgraduate level,aims to address the accelerated development of a group ofpoised to contribute to the South African innovation platforms asInternship Programme, involving seven graduates, aims to providevaluable practical experience at Mintek to graduates over the coursesupports six graduates completing a one-year internship at Mintek.Where possible, Mintek offers permanent employment to outstandinginterns at the end of their training period.Mintek participates in the Technology and Human Resources for IndustryProgramme (THRIP), an initiative of the Department of Trade and Industry administered by theNational ResearchFoundation. Theprogramme aims topromote increasedinteraction anddiffusion of technologybetween industry, highereducation institutions,and science, engineeringand technology institutions,and to provide an enhancededucational experiencethrough customised participation by students in collaborative projects. Three ofMintek’s divisions - Advanced Materials, Hydrometallurgy, and High-temperatureTechnology - make extensive use of this programme as a means to conductcommercially-focused research and development while at the same time exposingstudents to industry-relevant activities.Promoting the engineering profession to girl learnersMintek hosted a group of girl-learners from schools in and around the greaterJohannesburg area as part of the national “bring-a-girl-child-to-work” day.In addition, Mintek hosted a number of secondary schools on tours of its facilities duringthe course of the year.annual report 2007 46

Science, engineering and technology (SET)awareness and promotionsMintek participated in various SET-promotion activities during thecourse of the year based on its own awareness and promotionprogramme, and also in collaboration with the DST and the Departmentof Minerals and Energy (DME). The aim of such engagements is topromote SET among the general public, and also to generate an interestin SET-related careers among learners. Events included the DST’s INSITEexhibition, the Sasol Techno-X exhibition, the DME’s Learner Focus Week,the Sci-Bono Discovery Centre’s Careers Week, the Rand Easter Show, theNational Science Week, and many university open days.Adopt-a-SchoolKwadedangendlale High Schoolin mineral and metallurgicalin Zola North, Soweto, in 2003,and following the success oftechnology to its workforce ofthis initiative, extended theprogramme to the Itirele-Zenzelehighly skilled engineers, scientistsComprehensive High School atand technologists, who haveWaterford Farm, Hartebeespoort,and Ferndale High School inbeen developing groundbreakingRandburg. These schools areassisted with facilities such astechnologies, products andteaching aids, library facilities,and computer and laboratoryservices for the local andequipment, with the aim ofinternational mining and1934.”improving the teaching ofmathematics and science.minerals industries sinceStudents are also exposedto “hands on” sciencerelatedactivities duringvisits to Mintek, including Mintek’s exciting annual Minquizcompetition.Minquiz“Mintek attributes its positionas one of the world’s leadersMinquiz is South Africa’s premier national science competitionfor Grade 12 learners. The competition aims to encourageand to promote an awareness of the importance of mineralsto South Africa. Minquiz started as a local competition forschools located close to Mintek in 1988, and due to thepopularity of the competition this has now become a nationalevent.Mintek aims to continually enhance the prestige andawareness of the event. About 350 schools from all of Southwere given tours of Mintek’s divisional operations. A total ofteam-building exercises as well as a motivational talk, directed atencouraging and motivating both learners and educators.Picsto bottom:from topMinquizAfrica’s premieris Southnationalcompetitionscienceforlearners.Grade 12Learnersattendingthe Gautengeventsgiven tourswereofdivisionalMintek’soperations.Aschoolstotal offrom60allSouthnineAfrica’sofprovinces tookcompetition.Minquiz Finalists 2006.47annual report 2007

PUBLICATIONS1 April 2006-31 March 2007Abdel-Latif M. Pilot Plant Demonstration of the Mintek ThermalMagnesium Process (MTMP). Proceedings of the InternationalSymposium on Magnesium Technology in the Global Age. Conferenceof the Metallurgist, Montreal, Quebec, Canada, 1-4 October 2006.*Barker IJ, Rennie, MS, Hockaday CJ, Brereton-Stiles PJ.Measurement and Control of Arcing in a Submerged-arc Furnace. XIInternational Conference on Innovations in the Ferro Alloy Industry(Infacon XI), Delhi, 18-20 Feb 2007. pp 685-694.*Barkhuizen D, McPherson J and Van der Lingen E. Catalysis of theCO Oxidation Reaction by Au/TiO 2, Au/Al 2O 3& Au/ZnO. Conference:Catalysis Society of South Africa 2006, Mossel Bay, November 14-20(2006).Basson J. Curr TR and Gerricke WA. South Africa’s Ferro AlloysIndustry: Present Status and Future Outlook. XI InternationalConference on Innovations in the Ferro Alloy Industry (Infacon XI),Delhi, 18-20 Feb 2007. pp 4-24.*Bennett C, Knoblauch J, Foggo C, Strobos PJJ, Van der Spuy Automation of the KimberleyNickel Mine Flotation Operation using an Advanced Control System.Metallurgical Plant Design and Operating Strategies (MetPlant 2006),Perth, Australia, 18-19 September 2006. Bis[bis(diphenylphosphino)ethane]rhodium(I) tetraphenylborate. ActaCryst. (2006), E62, m101–m102.*Introduction of Phosphine-Part of Solid Phase Peptide Synthesis. Z. Naturforsch. (2007), 62b,pp 460 – 466.*Butyldiphenylphosphine oxide. Acta Cryst. (2007), E63, pp 1032–1033.*B. cis-1,2-Bis(diphenylphosphino)ethylene Oxide. Acta Cryst. (2007),E63, pp1387-1389. Gold (I) Complexes ofCys-Enkephalin. GOLD2006: New Industrial Applications for Gold,Limerick, Ireland, 2-8 September (2006).*KineticMonte Carlo Simulation of Gold Nanoparticle Growth. GOLD2006:New Industrial Applications for Gold, Limerick, Ireland, 2-8 September(2006).*Nucleation andGrowth of Gold Nanoparticles on Graphite. GOLD2006: New IndustrialApplications for Gold, Limerick, Ireland, 2-8 September (2006).*Experimental and Computational Investigationof Gold Nanoparticle Growth on Graphite. GOLD2006: New IndustrialApplications for Gold, Limerick, Ireland, 2-8 September (2006).*HG. Crystalising gold(I), gold(II) and gold(III) with tetrahydrothiophene.OATA, August (2006), Cape Town, South Africa. , New Pt-based Alloys for High TemperatureApplication in Aggressive Environments: The Next Stage. “PlatinumSurges Ahead”, 2nd International Platinum Conference, Sun City, 8– 12 October 2006. South African Institute of Mining and Metallurgy,Symposium Series S45, pp 57-66.*Cornish LA, Süss R, Buildinga Database for the Prediction of Phases in a Pt-basedSuperalloys. “Platinum Surges Ahead”, 2nd InternationalPlatinum Conference, Sun City, 8 – 12 October 2006.South African Institute of Mining and Metallurgy,Symposium Series S45, pp 91-102.* JH. Crystal Structure Changes in Pt-based SuperalloysDuring in-situ Heating, Microscopy Society of SouthernAfrica Conference, Volume 36, p. 8, Port Elizabeth, 28November – 1st December (2006).D, Cornish LA. Unexpected Ordering Behaviour ofPt 3Al Intermetallic Precipitates, J. Alloys Compounds432 (2007) 96–102.*Iron Redox-Equilibria and Sulphide Capacity of PGMSmelter-type Slags. Miner. Eng. vol. 19 (2006). pp.212-218. J. Critical Assessment of the Quartz CrystalMicrobalance with Dissipation as an AnalyticalTool for Biosensor Development and FundamentalStudies: Metallo phthalocyanine-Glucose Oxidase Bio-Composite Sensors, Biosensors Bioelectronics (2007)in press.*TheFirst Tetrazolylidene Complexes of gold(I), ICCC CapeTown, South Africa, August (2006).Utilisationof Various Bonding modes of N-rich Heterocycles in gold(I)chemistry, OATA, Town, South Africa, August (2006) Utilisationof Various Bonding Modes of N-rich Heterocycles in gold(I)Chemistry, GOLD2006: New Industrial Applications for Gold,Limerick, Ireland, September (2006).*Gericke M. SPL8: Application of Biotechnology in the Miningand Metallurgical Industries. 14 th Biennial Congress of the SouthAfrican Society for Microbiology.Glaner L. Cornish, LA and Joja B. The 1000 deg C IsothermalSection of the Ni-Pt-Ru phase diagram, Microscopy Society ofSouthern Africa Conference, Volume 36, p. 9, Port Elizabeth, 28November – 1 December (2006).Green BR. Alternative Flow Sheets Determined by Ore characteristics.Uranium Africa 2007. 28 –30 March 2007, Balalaika, Sandton.Hewer R, Vorster J, Steffens FE, Meyer D. 1H NMR-basedMetabolic Disorders in HIV Positive / AIDS Patients. IUBMB, Kyoto,Japan, June (2006). Paper no. 5P-B-195,Jones RT and Curr, TR. Pyrometallurgy at Mintek. Southern AfricanPyrometallurgy Conference 2006, South African Institute of Miningand Metallurgy, Johannesburg, 5-8 March 2006, pp 127-150. 2006.*annual report 2007 48

Jourdan PP. Links with Domestic Industry,Downstream Processing and the Provisionof Inputs. Resource based industrialisation inSouth Africa, Mozambique, March 2006.Kalala JT. and Hinde AL. Development ofImproved Laboratory and Piloting Test Proceduresat Mintek for the Design of AG/SAG MillingCircuits. In: Mular et al., Editors, Proceedings ofInternational Autogenous and SemiautogenousGrinding Technology 2006. vol. IX, pp 222-239, CIM,Vancouver, Canada.*Khanye DS, Caddy J, Layh M. Gold(I) PhosphineComplexes Incorporating Alkyl Substituents with Ethaneand Ethylene Backbones. Gold Bull., (2007), 40 (1),pp45-51.*Khanye DS, Caddy J, Layh M, Marques HM, andFernandes MA. Gold(I) Phosphine ComplexesIncorporating Alkyl Substituents with Ethane and EthyleneBackbones. GOLD2006: New Industrial Applications forGold, Limerick, Ireland, 2-8 September (2006).*Kriel FH, Layh M, Caddy J and Fernandes. M.A. SAAWK (Suid Afrikaanse Akademie vir Wetenskap enKuns) Studentesimposium 2006, University of the NorthWest, Potchefstroom, Nov (2006).Kriel FH, Caddy J, Layh M, Marques HM andFernades MA. Gold(I) Phosphine ComplexesIncorporating a Hydrazine Bridge. GOLD2006: NewIndustrial Applications for Gold, Limerick, Ireland, 2-8 September (2006).*Luckos, A. Denton, G and Den Hoed P.Current and Potential Applications of FluidbedTechnology in the Ferroalloy Industry. XIInternational Conference on Innovations in theFerro Alloy Industry (Infacon XI), Delhi, 18-20Feb 2007. pp. 124-132.* Cornish LA, Chown LH and Süss R.Hot Corrosion Behaviour of Pt-alloys forApplication in the Next Generation of GasTurbines. “Platinum Surges Ahead”, 2ndInternational Platinum Conference, SunCity, 8th – 12th October 2006. SouthAfrican Institute of Mining and Metallurgy,Symposium Series S45, pp 81-90,(2006).* R. Synthesis and Characterisation ofDialkyl Tin Bis(diphenylphosphino)-Maleic Acid Adducts, the MolecularStructure of Two Polymorphs. J.Organometall. Chem. (2006), pp 691,717.*Marsland S. Importance and Method ofUsing Reference Materials in MeasuringReliability of Analytical Results and WhyCustomers Should Use Them. SouthAfrican Institute of Mining and Metallurgy,23-24 November 2006. Vol. 107 February2007.pp 75-78. Surface Chemistry andElectrocatalytic Behaviour of Tetra-CarboxySubstituted Iron, Cobalt and ManganesePhthalocyanine Monolayers on Gold Electrode.Electrochim. Acta (2007) accepted.*McEwan JJ, Scott M and Goodwin FE. The Optimisation ofHexadecanethiol Coatings to Improve the Tarnish Resistance ofSterling Silver. South African Institute of Mining and Metallurgy, 8thInternational Corrosion Conference, Saxonwold, Johannesburg, 14-15 November 2006.*McEwan JJ, Scott M and Goodwin FE. Coatings to Retard theFormation of Tarnish on Silver and Silver Alloys. South African Instituteof Mining and Metallurgy, 8th International Corrosion Conference,Saxonwold, Johannesburg, 14-15 November 2006. DramaticPromotion of Gold/titania for CO Oxidation by Sulphate Ions. Chem.Commun., (2007), pp 1044-1046.*Effects of Incorporationof Ions into Au/TiO2 Catalysts for Carbon Monoxide Oxidation TopicCatal., 44, (2007), pp. 167-172.* The Synthesisand Characterization of Gold/polymer Composites. GOLD2006: NewIndustrial Applications for Gold, Limerick, Ireland, 2-8 September(2006).*Mugonda M. The Socio-economic Implications of Mine Closure - ASouth African and Zimbabwean Scenario. First International Seminaron Mine Closure, Perth, Australia, 13-15 September 2006 and at HardRock 2006 conference, Sustainable Modern Mining Applications,Tucson, Arizona, USA, 14 Nov 2006.Muwila A and Papo MJ. A More Corrosion Resistant Hercules(TM)Alloy South African Institute of Mining and Metallurgy, 8th InternationalCorrosion Conference, Saxonwold, Johannesburg, 14-15 November2006.* Using SLASH to Improve AgriculturalProductivity in the Greater Marble Hall Area. A Presentation of theWork in Progress. International Coal Ash Conference, CSIR, Pretoria,2-4 Oct 2006 and The First All-Africa Technology Diffusion Conference,Birchwood Hotel, Benoni, 12-14 June 2006.*Soil Properties and ProcessesDriving the Leaching of Nitrate in the Forested Catchments of theEastern Escarpment of South Africa. 2006. Forest Ecol. Mgmt. J. Characterisation of Pt-rich Alloys in the Pt-Al-Nb system. MicroscopySociety of Southern Africa Conference, Volume 36, p. 11, PortElizabeth, 28 November – 1 December (2006). A Study of the Ternary Phases in the Pt-Al-Ru system. MicroscopySociety of Southern Africa Conference, Volume 36, p. 12, PortElizabeth, 28 November – 1 December (2006).Paul RL. Gold Research to Industrial Products (AuTek). GOLD2006:New Industrial Applications for Gold, Limerick, Ireland, 2-8 September(2006).* Independence PlatinumLimited (IPt) - Formation and Objectives. “Platinum Surges Ahead”,2nd International Platinum Conference, Sun City, 8th – 12th October2006. South African Institute of Mining and Metallurgy, SymposiumSeries S45, 231-236, (2006).*Reinecke IJ and Lagendijk. H. A Twin Cathode DC Arc SmeltingTest at Mintek to Demonstrate the Feasibility of Smelting FeNi fromCalcine Prepared from Siliceous Laterite Ores from Kazakhstan forOriel Resources PLC. XI International Conference on Innovations inthe Ferro Alloy Industry (Infacon XI), (2007). pp 781-797.* Kriel FH and Van Rensburg CEJ. 6-Thioguanine Derivatives as Potential Anti-Cancer Agents, GOLD2006:New Industrial Applications for Gold, Limerick, Ireland, 2-8 September(2006).*49annual report 2007

Development of an EffectiveMethod for Inoculation of Heap Leach Operations. South AfricanMicrobiology Society Congress (SASM 2006), CSIR, Pretoria, 10-12April 2006.Slabbert GA and McEwan JJ. the SMME Industry, 1st All Africa Technology Division Conference, 12-14 June. pp. 1-13. Tshumisano Trust, June (2006).Advancements and Applications in Milling Control.SAIMM/SACAC Colloquium: State of the Art of Automation andControl in the Metals and Minerals Processing Industries. Rand WaterBoard, Rietvlei, SA, 2006. . Investigation of As-CastAlloys in the Pt-Cr-Ru System. J. Alloys Compounds, 416 (2006) pp.80-92 2006.*Süss R and Cornish LA. Microstructural Evolution in the Pt-Al-CrSystem. Microscopy Society of Southern Africa Conference, Volume36, p. 14, Port Elizabeth, 28th November – 1st December (2006).Traut T, The Applicationof Synchrotron Radiation Techniques in the Development of NovelGold-Based Anti-HIV Compound. Science@Synchrotron: Cape Town,February 2007.Tshikhudo TR. Monolayer Protected Clusters (MPCs) of Goldand Silver: Preparation and Potential Bio-Analytical Applications.NanoAfrica Conference, Cape Town, South Africa, 29 November, 2006and Nanotrends Conference, Midrand, South Africa, 19-21 February,(2007).*Tshikhudo RT, Brennan JL, Wang Z and Brust M. DevelopmentApplications. GOLD2006: New Industrial Applications for Gold,Limerick, Ireland, 2-8 September (2006).*Tshikhudo RT, Brennan JL, Wang Z and Brust M. Engineeringof Easily Functionalised Water-soluble Gold Monolayer ProtectedClusters (MPCs) for Potential Bioanalytical Applications,GOLD2006: New Industrial Applications for Gold, Limerick,Ireland, 2-8 September (2006).*Van Hege, B, Van Tonder, D, Bell R, Wyethe J and Kotze M.Recovery of Base Metals Using MetRIX(TM). Conference:Alta 2006, May, 2006, Perth, Australia (2006).*Van Staden PJ. Progress at Mintek in Heap Bioleaching.Proceedings of HydroCopper 2007, IV InternationalCopper Hydrometallurgy Workshop, 16-18 May 2007,Viña del Mar, Chile. Menacho, J.M. and Casas DePrada, J.M. (eds.), pp 17-22.*Watson A, Cornish LA and Suss R. Development ofa Database for the Prediction of Phases in Pt-basedSuperalloys: Cr-Pt-Ru. Rare Metals, Vol.25 No. 5,October 2006.*Bidentate Amino- and Iminophosphine Ligands inMono- and Dinuclear Gold (I) Complexes: Synthesis,structures and AuCl displacement by AuC6F5. Inorg.Chem. Comm. (2007), 10, pp 358-342.*MA, Layh M, Coyanis M and Van Rensburg CEJ.Determination of the Biodistribution of Au-compounds(intended as potential chemotherapeutics) by theUse of Radiolabelled Tracers - Imaging in Pre-clinical& Clinical Drug Development. Boston, USA March2007.* These papers were peer-reviewed.annual report 2007 50

ANNUALFINANCIAL STATEMENTSFOR THE YEAR ENDED31 MARCH 2007CONTENTSCorporate Governance.......................................................................52Audit Committee Report.....................................................................55Directors’ Report.................................................................................57Report of the Auditor-General .............................................................59Statements of Financial Position.........................................................62Statements of Financial Performance..................................................63Cash Flow Statements.........................................................................64Statements of Changes in Net Assets.................................................65Notes to the Annual Financial Statements...........................................6651annual report 2007

CORPORATE GOVERNANCEMintek is committed to the principles of openness, integrity and accountability inits dealings with all stakeholders. It endorses the Code of Corporate Practices and Conduct as set out inthe King Report and the Public Finance Management Act, and believes that the primary objective of thecorporate governance system is to ensure that the Board and Management carry out their responsibilitiesfaithfully and effectively.BOARD OF DIRECTORSMintek’s Board of Directors consists of one executive member and eight non-executive members whoare independently appointed by the Minister of Minerals and Energy in terms of the Mineral Technologythree years, but are eligible for re-appointment. The Board members are chosen for their businessacumen and skills, and bring individual judgement to Board decisions. The Board Secretary isresponsible for ensuring that Board procedures are followed.The Board met twice to review Mintek’s operational performance and to address issues of strategicimportance.Table 1. Attendance of Board Members at Board MeetingsNameJul2006Dec2006Mr. Mzilikazi Godfrey Khumalo (Chairman) Y YMr. Morake Abiel Mngomezulu Y YDr. Frank Crundwell Y NProf. Phuti Esrom Ngoepe Y NDr. Nozibele Pauline Mjoli N NMs. Gugu Mthethwa Y YMr. Ralph Havenstein Y YMr. Vinogaren Pillay Y NNote: All the above are non-executive membersY: Attended meeting. N: Did not attend meeting. A: Alternate attended meeting.AUDIT COMMITTEEThe Audit Committee meets quarterly. It consists of one Board member and two independently appointednon-executive members. The Committee operates in terms of a formal charter, and assists the Board inappropriate accounting policies, internal controls and compliance with laws and regulations are in place. Boththe 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 reportof residual lives/values of assets, asset impairment and revenue recognition. For the year ended 31 March 2007, thethe South African Statements of Generally Accepted Accounting Practice (GAAP).Table 2. Attendance of Audit Committee Members at Audit Committee MeetingsName2006 2006 2006 2006Dr. Frank Crundwell (Chairperson) Y Y Y YMs. Gugu Mthethwa (alternate) Y Y Y YMr. Vinogaren Pillay (alternate) Y Y Y YMr. Pieter Taljaard Y Y Y YMr. Tofara Dube Y Y Y YY: Attended meeting. N: Did not attend meeting.AprJulSepNovannual report 2007 52

INTERNAL CONTROLMintek maintains internal controls and systems designed to provide reasonable assurance asaccountability 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 andevaluate Mintek’s existing internal controls to identify areas that can be improved upon.INTERNAL AUDITMintek’s independent Internal Audit (IA) function has been established in-house and has been capa-assists Mintek to accomplish its objectives by adopting a systematic, disciplined approach to evaluateand improve the effectiveness of risk management, control and governance processes. The IA functionhas direct access to the Audit Committee.RISK MANAGEMENTrisks facing the organisation. The Committee provides the Audit Committee with a risk assessment reportat appropriately scheduled intervals. Mintek utilises the services of insurance brokers on an annual basisto analyse and assess the risks associated with Mintek’s assets, which are insured, together with publicliability and professional indemnity, for the risk assessed.Table 3. Attendance of Corporate Risk Management Committee at Board MeetingsNameSep2006 2007Dr. Roger Paul (Chairman and GM representing technology activities) Y YMr. Vimlan Govender (Business and GM representing corporate services) Y YMr. Nick Maritz (Site services and facilities) Y YMs. Hester Pretorius (Finance) Y YMs. Salwa Duyver (Human Resources) Y YDr. Dave Hulbert (Information Technology) Y YMr. Doctor Gule (Information Technology) Y YMr. Hennie Venter (Secretary and QES) Y YMr. Afzal Patel (Security) Y YMr. Jaques Fourie (Internal Audit) Y YY: Attended meeting. N: Did not attend meeting.HUMAN RESOURCES COMMITTEEthree members of Mintek’s Executive Management. The Committee reviews and determinesthe remuneration and terms of employment for Mintek, and as part of this process, givesconsideration to the annual review of remuneration packages based on independentsurveys. The Committee also looks into HR policies, internal controls, circumstances,conditions and activities that affect material changes to policies and procedures andconditions of service for all employees and compliance with demands and vested interests ofTable 4. Attendance of Human Resources Committee Members at Human ResourcesCommittee MeetingsNameJul Dec2006 2006Mr. Morake Abiel Mngomezulu N YDr. Frank Crundwell N NProf. Phuti Esrom Ngoepe N NDr. Nozibele Pauline Mjoli Y NMs. Gugu Mthethwa N YY: Attended meeting. N: Did not attend meeting.Mar53annual report 2007

FRAUD COMMITTEEMintek has instituted a fraud prevention plan that incorporates principles contained in the Public Sector Anti-Corruption Strategy, and which focuses particularly on creating awareness and promoting ethical businessconduct. The Fraud Committee, which consists of standing members with roles in Finance and Security aswell as a neutral Chairperson, is tasked with an ongoing review of the effectiveness of internal controls.MANAGEMENTMintek is managed by a CEO assisted by four General Managers. Together, they make up Mintek’sExecutive 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 ofMintek’s operating divisions and centralised support functions.OPERATIONAL PERFORMANCEMintek reports to the Department of Minerals and Energy (DME) and is also accountable to theDepartment of Science and Technology (DST) for its Research and Development (R&D) andorganisational, innovation and learning, human resources and transformation perspectives, determinedby the National Council for Innovation (NACI), provide Mintek with a basis for evaluating its activities.should the need arise.Mintek’s Executive Committee meets on a weekly basis and the Management Committee convenesNovember and presented at the December Board meeting for approval.GOING CONCERNSAFETY, OCCUPATIONAL HEALTH AND ENVIRONMENTAL MANAGEMENTAs a responsible corporate citizen, Mintek acknowledges its obligation to its employees and the communitiesit serves to conform in its operations to safety, health and environmental laws and the internationally acceptedstandards and practices.annual report 2007 54

AUDIT COMMITTEE REPORTThe Audit Committee has adopted appropriate formal terms of reference, which havereference.In undertaking 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; users of such information; • 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 ofthe accounting authority in fraud, corruption or gross negligence;• Communicating any concerns it deems necessary to the Mintek Board;• Encouraging communication between members of the Mintek Board, senior executivemanagement, the internal auditors and the external auditors;• Conducting investigations within the terms of reference;• Concurring with the appointment of the in-house internal audit function;• Approving the internal audit work plan; and,• Setting the principles for recommending the use of the external auditor for non-auditservices.during the year under review and that these controls have functioned effectively duringthe period. The Audit Committee considers Mintek’s internal controls and systems to beappropriate in all material respects to:• Reduce the entity’s risks to an acceptable level;• Meet the business objectives of the entity;• Ensure the entity’s assets are adequately safeguarded; and,• Ensure that the transactions undertaken are recorded in the entity’s records.statements for the year ended 31 March 2006 due to non-compliance of generally acceptedaccounting practice in the determination of residual lives/values of assets, asset impairmentand revenue recognition. The audit opinion expressed stated that, except for the effect ofbalance sheet date.55annual report 2007

management and supported by the Auditor-General:• The accounting policies and standard operating procedure were reviewed during the course of 2006 andupdated to comply with South African Statements of Generally Accepted Accounting Practice (GAAP). and is expected to improve the respective internal audit control and reporting measures. undertaken and the appropriate skills have been sourced from other service providers to ensure that the accounting recording and reporting issues will be resolved in the short term.Fraud and theft amounting to R2.9 million was detected ranging from February 2006 to June 2007.A forensic audit was performed to quantify the full extent of the loss. The employees in question areloss that Mintek suffered. Full disclosure of this was made under note 34 in the Annual FinancialStatements.March 2007 and concluded that they fully comply, in all material respects, with the requirements of thePublic Finance Management Act, 1999 (Act No. 1 of 1999), as amended, and GAAP.The Audit Committee has requested management to review and evaluate Mintek’s existing internalcontrols to identify areas that can be improved upon.The Audit Committee agrees that the adoption of the going concern premise is appropriate in preparing thewhich will provide a sound basis for Mintek to meet its obligation to its stakeholders. The Audit CommitteeMr. M Mphomela – Chairman of the Audit CommitteeDated: 31 August 2007Audit Committee Members:Dr. PP JourdanDr. J BredellMs. L MhlabeniMs. FG MthethwaMr. S Sikhosanaannual report 2007 56

DIRECTORS’ REPORTThe directors take pleasure in submitting their report and the Annual Financial Statements forthe year ended 31 March 2007.PROFILEMintek is incorporated as a public company in South Africa in terms of the Companies Act, 1973, asamended, and is listed as a national government business enterprise in schedule 3B of the Public FinanceManagement Act (PFMA), 1999, as amended.The Board of Directors acts as the accounting authority in terms of the PFMA.FINANCIAL RESULTSMindev, for the year 31 March 2007.REPORTING STANDARDSThe Mintek Group’s Annual Financial Statements comply with South African Statements of Generally AcceptedAccounting Practice and the PFMA.ORGANISATIONAL STRUCTUREMintek’s organisational structure is shown on page 8 of the annual report.PRINCIPAL ACTIVITIESMintek, South Africa’s national mineral research organisation, is an autonomous statutory organisationestablished to ensure the sustainability and growth of the minerals industry through technologydevelopment and transfer. In terms of its mandate under the Mineral Technology Act 30 of 1989,Mintek’s major goals are:• to contribute to wealth creation and poverty alleviation; and,• to develop the requisite human capital to sustain the mining and minerals sector.developing competitive and innovative processing technology and equipment;• strengthening South Africa’s international position as a supplier of mineral technologies, capitalgoods and services; and,• developing regional strategies for the mineral processing sector, concentrating onvalue-addition, capacity-building and broad-based development.FINANCIAL AFFAIRSReview of operationsRevenuemillion compared to the previous year.• The increase is due mainly to growth in commercial and earmarked income. This growth canbe attributed to Mintek having adopted a strong commercial focus with an aggressive marketingeffort and the commodities boom.57annual report 2007

AssetsCapital ExpenditureCapital expenditure for the year amounted to R19.3 million (2006: R19.8 million). The Group disposed of assets witha net book value of R0.4 million during the year under review.PropertyThe reassessment of the useful life of all assets resulted in a reversal of R21 063 of previous year’s excessprior to 2005/2006.InvestmentsDuring the year under review, the Group disposed of its entire shareholding in Mogale Alloys (Proprietary)Limited for a consideration of R33 million inclusive of a loan amount of R7 million. This amount is payable intwo installments by 30 April 2008.JUDICIAL PROCEEDINGSThe directors are not aware of any judicial proceedings against Mintek.POST BALANCE SHEET EVENTSFebruary 2006 to June 2007 amounting to R2.9 million. The employees in question are no longer in thesuffered. Full disclosure was made in Note 34 of the Annual Financial Statements.SUBSIDIARIESAnnual Financial Statements.THE DIRECTORS OF MINTEKDr. PP Jourdan Mr. MG Khumalo – ChairpersonMr. MA MngomezuluDr. F CrundwellProf. PE NgoepeMs. FG MthethwaMr. R HavensteinMr. VP PillayDr. NP NjoliMr. TY DubeMr. P TaljaardAs at 1 March 2007, the newly appointed directors of Mintek are: Mr. H Motaung – ChairpersonMs. FG MthethwaMr. R HavensteinMr. S SikhosanaMr. M NtilaneMs. L MhlabeniDr. J BredellMr. M MphomelaDr. B SehlapeloThe secretary of Mintek is Ms. V Moonsamy, and her business and postal addresses are as follows:200 Hans Strijdom Drive Private Bag X3015RandburgRandburg2125 2125annual report 2007 58

REPORT OF THE AUDITOR-GENERALREPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON THE GROUP FINANCIALSTATEMENTS AND PERFORMANCE INFORMATION OF THE COUNCIL FOR MINERALTECHNOLOGY (MINTEK) FOR THE YEAR ENDED 31 MARCH 2007.REPORT ON THE FINANCIAL STATEMENTSIntroductionand other explanatory notes, as set out on pages 62 to 84.statements in accordance with SA GAAP and in the manner required by the Public Finance ManagementAct, 1999 (Act No. 1 of 1999) (PFMA) [Auditor-General Audit Circular 1 of 2005 and the Companies Act ofSouth Africa] Mineral Technology Act, 1989 (Act No.30 of 1989). This responsibility includes:• designing, implementing and maintaining internal control relevant to the preparation and fairerror ;• selecting and applying appropriate accounting policies; and,• making accounting estimates that are reasonable in the circumstances.Responsibility of the Auditor-GeneralAs required by section 188 of the Constitution of the Republic of South Africa, 1996 read withsection 4 of the Public Audit Act, 2004 (Act No. 25 of 2004) and section 12(2) of the MineralTechnology Act, 1989 (Act No.30 of 1989), my responsibility is to express an opinion on theseI conducted my audit in accordance with the International Standards on Auditing and GeneralNotice 645,647 and 648 of 2007, issued in Government Gazette No. 29919 of May 2007 onPFMA or unlisted entities as applicable and General Notice 646 of 2007, issued in GovernmentGazette No. 29919 of May 2007 on auditing of performance information. Those standardsrequire that I comply with ethical requirements and plan and perform the audit to obtainAn audit involves performing procedures to obtain audit evidence about the amounts andstatements, whether due to fraud or error. In making those risk assessments, the auditorstatements in order to design audit procedures that are appropriate in the circumstances, but notfor the purpose of expressing an opinion on the effectiveness of the entity’s internal control.An audit also includes evaluating the:• appropriateness of accounting policies used;• reasonableness of accounting estimates made by management; and,59annual report 2007

Basis of accountingOpinion ended, in accordance with Generally Accepted Accounting Practices (GAAP) and in the manner required by the PFMAand Companies Act of South Africa and the Mineral Technology Act, 1989 (Act No.30 of 1989).Emphasis of MatterWithout qualifying my audit opinion, I draw attention to the followiing matter:contributed to these incidents.Other MattersInternal controlVarious standard operation procedures were not complied with thereby compromising the internal control environment.Furthermore, the following monitoring controls were not always adhered to:• Certain incompatible duties were not always segregated.documents were processed.• Creditors reconciliations were not performed.Material non-compliance with applicable legislation• Contrary to the requirements of section 28 of the Value Added Tax Act, 1991 (Act No 89 of 1991), Value AddedTax (VAT) returns for the periods April to October were only submitted to SARS at the end of October 2006.Consequently fruitless and wasteful expenditure amounting to R263 019 as disclosed in note 34 of the AFS wasincurred.• Property, plant and equipment was understated by R6 446 055 for the current year and R11 433 757 wasprocessed.• Intangible assets were understated by R 4 260 735 and were not separately disclosed as required by IAS 38 (AC129).• Investment Property was not revalued at year-end as required in line with the accounting policy adopted bymanagement. As a result the balance was adjusted by R2 941 266.• Accounts receivable were not disclosed at fair value as required by IAS 21 (AC 112) resulting in an adjustment ofR443 382.• Deferred income was understated by R669 545.• Provisions were overstated by R3 782 698.• Retained earnings were understated by R11 510 529 due to the revision of useful lives of property plant, andequipment.• Performance guarantees of R5 332 807 were not accounted for.annual report 2007 60

OTHER REPORTING RESPONSIBILITIESReporting on performance informationI have audited the performance information as set out on pages 14 to 16.Responsibilities of the accounting authorityThe accounting authority has additional responsibilities as required by section 55(2)(a) of the PFMA to ensure thatthe public entity.Responsibility of the Auditor-GeneralI conducted my engagement in accordance with section 13 of the Public Audit Act, 2004 (Act No. 25 of 2004) readwith General Notice 646 of 2007, issued in Government Gazette No.29919 of May 2007.appropriate evidence about the performance information and related systems, processes and procedures. Theprocedures selected depend on the auditor’s judgement.reported below.APPRECIATIONThe assistance rendered by the staff of the Council for Mineral Technology during the audit is sincerely appreciated.M.A Masemolafor Auditor-GeneralJohannesburg31 August 200761annual report 2007

FINANCIAL STATEMENTS AND NOTES 2007STATEMENTS OF FINANCIAL POSITION AT 31 MARCH 20072007 2006 2007 2006Notes R R R RNon-current assetsGROUP GROUP MINTEK MINTEKProperty, plant and equipment 11.1 142,338,891 142,639,489 142,338,891 142,639,489Intangible assets 11.2 4,260,735 – 4,260,735 –Investment property 12 11,776,682 8,835,416 11,776,682 8,835,416Equity accounted investments 13 – 12,285,939 – –Investment in subsidiary 14 – – 100 100Long-term loans and advances 15 25,143,191 1,151,611 1,877,191 1,151,611Total non-current assets 183,519,499 164,912,455 160,253,599 152,626,616Current assetsInventory 16 3,279,036 2,744,373 3,279,036 2,744,373Loans and advances to subsidiary 14 – – 7,385,486 –Trade and other receivables 17 84,224,481 46,227,992 63,920,923 47,920,700Short-term investments 18 89,491,480 102,830,270 89,491,480 102,830,270Cash and cash equivalents 30,522,665 30,937,858 30,522,665 30,937,858Total current assets 207,517,662 182,740,493 194,599,590 184,433,201Total assets 391,037,161 347,652,948 354,853,189 337,059,817EquityNon-distributable reserves 62,794,971 63,046,831 62,794,971 63,046,831Retained earnings 180,849,632 159,935,184 145,178,332 141,922,781Total equity 243,644,603 222,982,015 207,973,303 204,969,612LiabilitiesNon-current liabilities 22 62,700,000 61,235,000 62,700,000 61,235,000Long-term creditors 23 1,351,778 1,792,727 1,351,778 1,379,91564,051,778 63,027,727 64,051,778 62,614,915Current liabilitiesLoans and advances to subsidiary 14 – – – 8,277,896Trade and other payables 19 41,105,245 27,324,092 40,592,573 26,878,280Deferred income 20 24,666,118 21,674,053 24,666,118 21,674,053Provisions 21 17,569,417 12,645,061 17,569,417 12,645,061Current liabilities 83,340,780 61,643,206 82,828,108 69,475,290Total equity and liabilities 391,037,161 347,652,948 354,853,189 337,059,817PP JOURDANCEO, MintekRandburg, 31 August 2007V GOVENDERGeneral Manager, Mintek Corporate Servicesannual report 200762

FINANCIAL STATEMENTS AND NOTES 2007STATEMENTS OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2007Notes2007R2006R2007R2006RContinuing operations GROUP GROUP MINTEK MINTEKRevenue 2 299,145,738 256,514,904 297,453,030 257,296,154Cost of sales 3 (269,593,895) (242,161,677) (269,590,775) (242,161,677) 29,551,843 14,353,227 27,862,255 15,134,477Other operating income 4 10,411,752 18,162,113 10,571,654 18,224,316 828,669 (81,735) 828,669 (81,735)Investment income 5 12,463,899 9,817,025 12,043,342 9,817,025Finance expenses 6 (526,035) (597,395) (457,487) (502,814)Audit fees 7 (1,518,846) (1,924,160) (1,414,526) (1,884,479)Fees for services 8 (26,856,271) (11,999,983) (26,268,410) (11,999,983)Depreciation 9 (14,884,848) (10,640,635) (14,884,848) (10,640,635)Loss on disposal of property, plant and equipment (387,313) (1,131,011) (387,313) (1,131,011) 28.2 13,483,971 (653,037) – – 10 (4,889,645) (12,828,438) (4,889,645) (12,828,438) 13 9,400,750 2,645,536 – – 27,077,926 5,121,507 3,003,691 4,106,723Taxation 26 (6,415,338) (330,241) – – 20,662,588 4,791,266 3,003,691 4,106,72363annual report 2007

FINANCIAL STATEMENTS AND NOTES 2007CASH FLOW STATEMENTS FOR THE YEAR ENDED 31 MARCH 2007GROUPMINTEK2007 2006 2007 2006Notes R R R RCash receipts from customers 178,018,488 180,821,671 178,018,488 180,638,217Parliamentary grant received 118,664,000 108,880,000 118,664,000 108,880,000Cash paid to suppliers and employees (294,510,679) (276,272,026) (282,646,376) (275,412,646)Cash generated from operations 28 2,171,809 13,429,645 14,036,112 14,105,571Payment of taxation 26 (3,689,088) – – –Investment income 12,826,322 9,817,025 12,405,765 9,817,025Finance costs (526,035) (337,424) (457,487) (242,843)Long term creditor payments (985,622) (595,696) (523,622) (133,697)Provisions utilised 21 (894,508) (5,783,361) (894,508) (5,783,361) 8,902,878 16,530,189 24,566,260 17,762,695Additions to property, plant and equipment (19,274,096) (19,823,232) (19,274,096) (19,823,232)Decrease/(increase) in investment deposits 13,338,790 (1,150,757) 13,338,790 (1,150,757)(Cash advanced to)/receipts from subsidiary – – (15,663,382) 16,767,494 41,880 3,616 41,880 3,616Proceeds from disposal of associate 28.2 – 18,000,000 – –Post-retirement health care payments 22 (3,424,645) (3,022,438) (3,424,645) (3,022,438) (9,318,071) (5,992,811) (24,981,453) (7,225,317)Net (decrease)/ increase in cashand cash equivalents 28.1 (415,193) 10,537,378 (415,193) 10,537,378Cash and cash equivalents at beginning of year 30,937,858 20,400,480 30,937,858 20,400,480Cash and cash equivalents at end of year 30,522,665 30,937,858 30,522,665 30,937,858annual report 200764

FINANCIAL STATEMENTS AND NOTES 2007STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEAR ENDED 31 MARCH 2007Non-DistributableNote Retained Earnings Reserve TotalR R RGROUPBalance at 31 March 2005 as previously reported 150,716,855 – 150,716,855Restatements 4,427,063 – 4,427,063Useful life adjustment 3,902,825 _ 3,902,825Capitalisation of an asset received by way of donation at book value 524,238 _ 524,238Restated Balance as at 31 March 2006 155,143,918 _ 155,143,918Prior Year adjustments 5,072,300 – 5,072,300Fair value adjustment (259,971) – (259,971)Depreciation (21,063) – (21,063) – 4,791,266Revaluation of property 11 – 63,046,831 63,046,831Restated Balance as at 31 March 2006 159,935,184 63,046,831 222,982,015Land and Buildings 251,860 (251,860) – 20,662,588Balance as at 31 March 2007 180,849,632 62,794,971 243,644,603MINTEKBalance at 31 March 2005 as previously reported 133,388,995 – 133,388,995Restatements 4,427,063 – 4,427,063Useful life adjustment 3,902,825 _ 3,902,825Capitalisation of an asset received by way of donation at book value 524,238 _ 524,238Restated Balance at 31 March 2005 137,816,058 – 137,816,058Prior year adjustments 4,387,757Fair value adjustment on trade debtors (259,971) – (259,971)Depreciation (21,063) – (21,063) – 4,106,723Revaluation of property 11 – 63,046,831 63,046,831Restated Balance at 31 March 2006 141,922,781 63,046,831 204,969,612Land and Buildings 251,860 (251,860) – 3,003,691Balance as at 31 March 2007 145,178,332 62,794,971 207,973,30365annual report 2007

FINANCIAL STATEMENTS AND NOTES 2007NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2007the following principal accounting policies, which conform to South African Statements of General Accepted Accounting Practice, and in the mannerRands (R). The accounting policies are consistent with those applied in the previous year, except for certain restatements and changes in accountingpolicies.1.1 Basis of consolidationrespectively.1.2 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 exchangerates ruling at the balance sheet date. Exchange differences arising on the settlement of transactions at rates different from those at the date ofthe transaction and unrealised foreignExchange differences on unsettled foreign currency monetary assets and liabilities, are recognised in the income statement and included in income1.3 Investment in subsidiaryForeign 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 exchangerates ruling at the balance sheet date. Exchange differences arising on the settlement of transactions at rates different from those at the date of thetransaction and unrealised foreign exchange differences on unsettled foreign currency monetary assets and liabilities are recognised in the income1.4 Investment in associatesstatements 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 assetsof the associate, less any impairment in the value of individual investments. Losses of the associate in excess of the group’s investments in thosethe associate at the date of acquisition is recognised according to the group’s accounting policies on goodwill. Where a group enterprise transactsunrealised losses provide evidence of an impairment of the asset transferred.1.5 Goodwillentity at the date of acquisition. Goodwill is capitalised as an asset reviewed annually for impairment. At each balance sheet date goodwill is reviewedcarrying amount of goodwill is fully recoverable. An impairment charge is recognised to the extent that the carrying amount exceeds the recoverableamount.1.6 Intangible assetsannual report 200766

FINANCIAL STATEMENTS AND NOTES 2007NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 20071.7 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 aremet:• 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 isincurred. Internally generated intangible assets are amortised on a straight-line basis over their useful lives.1.8 Impairmentof, then the recoverable amount is estimated and an impairment loss is recognised. Where it is not possible to estimate the recoverable amount foran individual asset, the recoverable amount is determined for the cash-generating unit to which the asset belongs.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 cashWhere an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate ofits recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined hadno impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised as incomeimmediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluationincrease. Impairment losses for goodwill are not reversed in subsequent periods.1.9 Leasesof the leases. Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.Capitalised leased assets are depreciated to their estimated residual values over their estimated useful lives. Finance lease payments are allocatedthe liability to the lessor.line basis over the term of the lease.1.10 Property, plant and equipmentProperties comprise general purpose land and buildings held by the Group for its own use and investment property and buildings for purposesof generating rental income or held for capital appreciation. Properties are initially valued at historical cost and subsequently revalued every twoappropriate.The cost of property, plant and equipment includes all directly attributable expenditure incurred in the acquisition, establishment and installation of67annual report 2007

FINANCIAL STATEMENTS AND NOTES 2007NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2007such 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 theestimated residual value. Useful lives and residual values are reviewed on an annual basis. Residual values are measured as the estimated amountcurrently receivable for an asset if the asset were already of the age and condition expected at the end of its useful life.expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease. All assets under construction are carriedat 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 difference1.11 Investment propertyprofessional valuer based on market evidence of the most recent prices achieved in arms length transactions of similar properties in the samearea.1.13 Post-retirement health care costsThe 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 thepast service obligation at the end of the reporting period before deducting the present value of assumed assets at the same date. Valuations of theseobligations are carried out annually by independent actuaries using appropriate mortality tables, long-term estimates of increases in medical costsand appropriate discount rates. General increases to medical aid contributions were estimated taking into account the projected future changes inan increased estimated liability.1.14 InventoriesInventories are valued stated at the lower of cost or net realisable value. Costs comprise direct materials and, where applicable, direct labour costsand those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weightedaverage method. Net realisable value represents the estimated selling price in the ordinary course of business less any costs of completion and coststo be incurred in marketing, selling and distribution.1.15 ProvisionsThe 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 worksuch as reclamation costs, close down and restoration costs and pollution control is made when such expenditure is probable and the cost can bereasonably estimated.1.16 Financial instrumentsFinancial instruments recognised on the balance sheet include derivative instruments, investments, investments in debt securities, accountsreceivable, cash and cash equivalents, accounts payable and interest bearing debt. Financial instruments are initially measured at cost includingwith in the subsequent notes. When the Group can legally do so and the Group intends to settle on a net basis, or simultaneously, related positiveannual report 200768

FINANCIAL STATEMENTS AND NOTES 2007NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 20071.16.1 Derivative instruments1.16.2 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.1.16.3 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 the1.16.4 Cash and cash equivalentsCash and cash equivalents comprise cash on hand, demand deposits and investment in short-term money market instruments. The carrying amountof cash is measured at its fair value.1.16.5 Financial liabilitiesFinancial liabilities other than derivative instruments are amortised at their original debt value less principal payments and amortisation. Derivativesare subsequently measured at fair value and gains and losses are included in the income statement for the period.then the recoverable amount is estimated and an impairment loss is recognised in accordance with AC133. Financial Instruments and Recognition.1.17 Government grantsrecognised as income in the period in which it is received. These funds are utilised in accordance with a shareholders’ compact that is entered into1.18 Revenue recognitionRevenue is recognised when the sale transactions giving rise to such revenue is concluded and risks and rewards of ownership and title passis recognised based on the percentage of completion determined by reference to the physical amount of work performed in relation to the totalproject.Advance income arising as result of contracts undertaken in terms of commercial work in respect of invoices raised and paid for in advance but forwhich no substantial work has been made to justify the recognition of any revenue, is deferred until the income is earned based on the percentagework completed.Revenue arising from licence fees is recognised on an accrual basis in accordance with the terms of the applicable contracts. Revenue from royaltiesis accrued-based on the nature of the applicable contracts.Interest income is accrued on a time proportion basis recognisng the effective yield on the underlying assets.Dividend income from investments is recognised when the right to receive payment has been established.substance of the relevant agreements.1.19 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 contractactivity at the balance sheet date. The stage of completion is determined by the proportion of contract costs incurred in relation to the estimated totalcontract costs. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed to the customer.69annual report 2007

FINANCIAL STATEMENTS AND NOTES 2007NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2007Where the outcome of the contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred and probablyrecoverable. Contract costs are recognised as expenses in the period in which they are incurred. When it is probable that total contract costs willexceed total contract revenue, the expected loss is immediately recognised as an expense to the income statement. deductible in other years and it further excludes items that are not taxable or tax deductible. The company’s liability for current tax is calculated usingtax rates that have been enacted or substantively enacted by the balance sheet date.available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary differencesarise from the initial recognition (other than a business combination) of other assets and liabilities in a transaction that affects neither the taxableDeferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interest in jointventures, except where the company is not able to control the reversal of the temporary difference and it is probable that the temporary differencewill 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 thatDeferred 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 iswith 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 andwhen 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 netbasis. Irregular 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. Allirregular, fruitless and wasteful expenditure is charged against income in the period in which it is incurred.1.22 Financing costsFinancing costs are recognised in the income statement in the period in which they are incurred.this regard.annual report 200770

FINANCIAL STATEMENTS AND NOTES 2007NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2007GROUPMINTEK2007 2006 2007 2006R R R R2. REVENUEGovernment grantsState Grant 104,120,123 95,508,772 104,120,123 95,508,772Less:Grants received for projects started before year end but not completed – – – – Add:Grant received in prior year for projects completed this year – – – – – – – –Commercial incomeContract research 147,868,051 109,099,645 147,868,051 109,880,895Manufactured products 6,281,941 11,659,357 6,281,941 11,659,357Service income 27,627,810 32,331,773 27,627,810 32,331,773Material sales 8,950,938 7,130,364 8,950,938 7,130,364Royalty income 4,296,875 784,993 2,604,167 784,9933. COST OF SALES299,145,738 256,514,904 297,453,030 257,296,154Staff costs 180,063,646 156,364,750 180,063,646 156,364,750Consumables 35,276,814 33,921,978 35,276,814 33,921,978General running expenses 44,177,053 45,277,850 44,173,933 45,277,850Theft and fraud costs 1,800,579 – 1,800,579 –Repairs and maintenance 8,273,802 5,847,596 8,273,802 5,847,596Bad debts written off 6,066,250 – 6,066,250 –Provision for bad debts (6,064,249) 749.503 (6,064,249) 749,5034. OTHER OPERATING INCOME269,593,895 242,161,677 269,590,775 242,161,677Operating IncomeLibrary services 141,114 137,913 141,114 137,913Breach of contract 58,772 351,723 58,772 351,723Bursary learnerships 1,526,281 3,895,852 1,526,281 3,895,852Commission 467 26,651 467 26,651Conferences 3,500 1,491,139 3,500 1,491,139Mintek cafeteria 628,580 712,467 628,580 712,467Sundry income 1,441,667 209,063 1,441,557 209,063Bad debts recovered 6,000 4,168,421 6,000 4,168,421Refund from Skills Development levies 162,984 – 162,984 -–Other 80,269 137,889 240,171 200,0924,049,634 11,131,118 4,209,536 11,193,321Rental income - properties 1,959,640 1,604,068 1,959,640 1,604,068Investment PropertyRental income 1,461,212 1,528,731 1,461,212 1,528,731Fair value adjustment 2,941,266 3,898,196 2,941,266 3,898,1964,402,478 5,426,927 4,402,478 5,426,92710,411,752 18,162,113 10,571,654 18,224,3165. INVESTMENT INCOMEFinancial income 9,684,028 7,476,604 9,684,028 7,476,604Loans to subsidiary – – 1,329,589 813,178Loans to associates 1,329,589 813,178 – –Interest earned: bank balances 333,281 822,553 333,281 822,553Interest earned: staff debtors 200,898 704,690 200,898 704,690Fair value interest on debtors 495,546 – 495,546 –Long-term debtors 420,557 – – –12,463,899 9,817,025 12,043,342 9,817,02571annual report 2007

FINANCIAL STATEMENTS AND NOTES 2007NOTES TO THE ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2007GROUPMINTEK2007 2006 2007 2006R R R R6. FINANCE EXPENSESInterest paid guaranteed liability 68,548 94,581 – –Interest other 148 129,279 148 129,279South African Revenue Services - interest and penalties 263,019 – 263,019 –Fair value interest on debtors – 259,971 – 259,971 194,320 113,564 194,320 113,564526,035 597,395 457,487 502,8147. AUDIT FEESAudit fees 1,375,658 1,083,000 1,325,658 1,050,000Underprovided prior year 143,188 841,160 88,868 834,4791,518,846 1,924,160 1,414,526 1,884,4798. FEES FOR SERVICESConsultants 25,141,713 11,287,396 24,553,852 11,287,396Legal 1,714,558 712,587 1,714,558 712,58726,856,271 11,999,983 26,268,410 11,999,9839. DEPRECIATIONBuildings 577,199 325,339 577,199 325,339Manufactured items 1,776,586 – 1,776,586 –Plant 3,018,379 2,380,174 3,018,379 2,370,174Equipment 8,426,722 7,409,759 8,426,722 7,409,759Computer software 433,146 – 433,146 –Vehicles 167,604 225,117 167,604 225,117Low value assets 6,163 – 6,163 –Leased assets 332,636 198,801 332,636 198,801 146,413 101,445 146,413 101,44514,884,848 10,640,635 14,884,848 10,640,63510. POST-RETIREMENT BENEFIT OBLIGATIONSActuarial loss - post-retirement medical obligation 3,645,790 8,729,894 3,645,790 8,729,894Interest on post-retirement medical obligation 3,278,855 3,692,544 3,278,855 3,692,544Actuarial (loss)/gain pension fund (2,035,000) 406,000 (2,035,000) 406,0004,889,645 12,828,438 4,889,645 12,828,438Number of employees 498 524 498 524annual report 200772

FINANCIAL STATEMENTS AND NOTES 2007NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2007GROUPMINTEKOpening Closing Opening ClosingBalance Additions Disposals Balance Balance Additions Disposals Balance2007 R R R R R R R R11.1 PROPERTY, PLANTAND EQUIPMENTCostLand 55,408,800 – – 55,408,800 55,408,800 – – 55,408,800Buildings 28,859,940 66,167 – 28,926,107 28,859,940 66,167 – 28,926,107Plant 32,578,228 2,107,171 (114,795) 34,570,604 32,578,228 2,107,171 (114,795) 34,570,604Equipment 91,422,171 11,074,533 (9,170,246) 93,326,458 91,422,171 11,074,533 (9,170,246) 93,326,458Vehicles 990,581 – (1) 990,580 990,581 – (1) 990,580 Finance-leased assets 1,995,394 317,250 – 2,312,644 1,995,394 317,250 – 2,312,644Capital work in progress 1,462,886 862,239 – 2,325,125 1,462,886 862,239 – 2,325,125214,670,339 14,580,215 (9,485,837) 219,764,717 214,670,339 14,580,215 (9,485,837) 219,764,717Accumulated Opening Depreciation Disposals Closing Opening Depreciation Disposals ClosingDepreciation R R R R R R R RLand – – – – – – – –Buildings 9,760,176 577,199 – 10,337,375 9,760,176 577,199 – 10,337,375Plant 12,627,878 3,018,379 (106,126) 15,540,131 12,627,878 3,018,379 (106,126) 15,540,131Equipment 48,519,881 10,209,470 (8,773,619) 49,955,732 48,519,881 10,209,470 (8,773,619) 49,955,732Vehicles 592,516 167,604 (1) 760,119 592,516 167,604 (1) 760,119 Finance-leased assets 198,801 332,636 – 531,437 198,801 332,636 – 531,437Capital work in progress – – – – – – – –72,030,851 14,451,701 (9,056,727) 77,425,826 72,030,851 14,451,701 (9,056,727) 77,425,826GROUPMINTEK2007 2007Net book value R RLand 55,408,800 55,408,800Buildings 18,588,732 18,588,732Plant 19,030,473 19,030,473Equipment 43,370,726 43,370,726Vehicles 230,461 230,461 Finance-leased assets 1,781,207 1,781,207Capital work in progress 2,325,125 2,325,125142,338,891 142,338,89173annual report 2007

FINANCIAL STATEMENTS AND NOTES 2007NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2007GROUPMINTEKOpening Closing Opening ClosingBalance Additions Revaluation Disposals Balance Balance Additions Revaluation Disposals Balance2006 R R R R R R R R R R11.1 PROPERTY, PLANTAND EQUIPMENTCostLand 4,927,776 – 50,481,024 – 55,408,800 4,927,776 – 50,481,024 – 55,408,800Buildings 16,266,961 27,172 12,565,807 – 28,859,940 16,266,961 27,172 12,565,807 – 28,859,940Plant 32,795,382 413,341 – (630,495) 32,578,228 32,795,382 413,341 – (630,495) 32,578,228Equipment 86,949,799 17,631,643 – (13,159,271) 91,422,171 86,949,799 17,631,643 – (13,159,271) 91,422,171Vehicles 2,322,637 – – (1,332,056) 990,581 2,322,637 – – (1,332,056) 990,581 Finance-leased assets – 1,995,394 – – 1,995,394 – 1,995,394 – – 1,995,394Capital work in progress 24,344 1,438,542 – – 1,462,886 24,344 1,438,542 – – 1,462,886145,201,776 21,818,626 63,046,831 (15,396,894) 214,670,339 145,201,776 21,818,626 63,046,831 (15,396,894) 214,670,339Accumulated Opening Depreciation Transfers Disposals Closing Opening Depreciation Transfers Disposals ClosingDepreciation R R R R R R R R R RLand – – – – – – – – – –Buildings 9,434,837 325,339 – – 9,760,176 9,434,837 325,339 – – 9,760,176Plant 10,705,079 2,380,174 – (457,375) 12,627,878 10,705,079 2,380,174 – (457,375) 12,627,878Equipment 53,101,894 7,409,759 180,511 (12,172,283) 48,519,881 53,101,894 7,409,759 180,511 (12,172,283) 48,519,881Vehicles 1,470,673 225,117 – (1,103,274) 592,516 1,470,673 225,117 – (1,103,274) 592,516 Finance-leased assets – 198,801 – – 198,801 – 198,801 – – 198,801Capital work in progress – – – – – – – – – –75,211,974 10,640,635 180,511 (14,002,268) 72,030,851 75,211,974 10,640,635 180,511 (14,002,268) 72,030,851GROUPMINTEK2006 2006Net book value R RLand 55,408,800 55,408,800Buildings 19,099,764 19,099,764Plant 19,950,350 19,950,350Equipment 42,902,290 42,902,290Vehicles 398,065 398,065 Finance-leased assets 1,796,593 1,796,593Capital work in progress 1,462,886 1,462,886Freehold land and buildings comprise:142,639,489 142,639,489GROUP AND MINTEK2007 2006R RAcquired in the prior year - Land and Buildings 11,759,900 11,759,900Land revalued 50,481,024 50,481,024Buildings 12,565,807 12,565,807Revaluation 74,806,731 74,806,731Directors’ Valuation 74,806,731 74,806,731Portion 175 and portion 226 of the farm Klipfontein, 203-IQ Johannesburg, with buildings thereon. year ending 31 March 2006. The latest valuation report was issued on 7 February 2006.The estimated useful life of depreciable property, plant, equipment and vehicles are as follows:Buildings and investment property 50 yearsPlant 10 yearsEquipment 5 -10 yearsVehicles 5 years annual report 200774

FINANCIAL STATEMENTS AND NOTES 2007NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 200711.2 INTANGIBLEASSETSGROUP and MINTEK 2007 GROUP and MINTEK 2006Opening Closing Opening ClosingBalance Additions Revaluation Disposals Balance Balance Reversal Revaluation Disposals BalanceR R R R R R R R R RCostComputer software – 4,693,881 – – 4,693,881 – – – – –– 4,693,881 – – 4,693,881 – – – – –Current YearCurrent YearAccumulated Opening Depreciation Revaluation Disposals Closing Opening Depreciation Revaluation Disposals Closingdepreciation R R R R R R R R R RComputer software – 433,146 – – 433,146 – – – – –– 433,146 – – 433,146 – – – – –Value as at 31 March 2007 4,260,735 Value as at 31 March 2006 –The estimated useful lives of depreciable intangible assets are as follows:Computer software3 years12. INVESTMENT PROPERTYGROUP and MINTEK 2007 GROUP and MINTEK 2006Opening Closing Opening ClosingBalance Reversal Revaluation Disposals Balance Balance Reversal Revaluation Disposals BalanceR R R R R R R R R RBuildings - Billiton 8,835,416 – 2,941,266 – 11,776,682 7,190,526 (2,253,306) 3,898,196 – 8,835,4168,835,416 – 2,941,266 – 11,776,682 7,190,526 (2,253,306) 3,898,196 – 8,835,416FairValue as at 31 March 2007 11,776,682 Fair Value as at 31 March 2006 8,835,416Portion of portion 175 of the farm Klipfontein, 203-IQ Johannesburg, with buildings thereon. The value of the building complex was estimated at R11 776 681 byLyons Financial Solutions (Proprietary) Limited, an independent valuer during the year ended 31 March 2007. The latest valuation report was issued on18 June 2007.75annual report 2007

FINANCIAL STATEMENTS AND NOTES 2007NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 200713. EQUITY ACCOUNTED INVESTMENTSDetails of associates are as follows:PortionPlace of Portion of of voting Financial 2007 2006Name of associate incorporation ownership power held year end R R – 12,285,939– 12,285,939The Group disposed of its shareholdingin Mogale Alloys (Pty) Limited for an amountof R33 000 000 effective 1 December 2006.GROUP2007 2006RRCost of unlisted investmentsMogale Alloys (Proprietary) Limited – 250Share of acquisition reserves: Mogale Alloys (Proprietary) Limited – 5,715,831Fair value of net assets acquired – –Interest bearing loansMogale Alloys (Proprietary) Limited – 6,569,858– 12,285,939Directors’ valuation – 12,285,939Reconciliation between opening and closing balance:Carrying value at the beginning of year 12,285,939 27,945,059Loans to associates 14,039,561 678,622Disposal of associate (33,000,00) (18,653,037) 9,400,750 2,645,536Taxation (2,726,250) (330,241)Carrying value at the closing of year – 12,285,939 Long-term assets – 108,138,022Investment – –Current assets – 78,390,473Total Assets – 186,528,495Current liabilities – 67,622,011Long-term liabilities – 96,042,164Total liabilities – 163,664,175Income – 247,516,635 – 5,216,118 – 3,898,04814. INVESTMENT IN SUBSIDIARYDetails of subsidiary are as follows:Place of Portion of Financial Shares at cost Shares at cost Indebtness IndebtnessName of subsidiary incorporation ownership year end 31 March 2007 31 March 2006 31 March 2007 31 March 2006R R R RMindev (Proprietary) Limited 100 100 7,385,486 (8,277,896)100 100 7,385,486 (8,277,896)way of direct investments in equity and through joint ventures.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. The total amount outstanding as at 31 March 2007 is R 1 726 692 and the amount recognised by Mindev (Proprietary) Limited as R432 173 at 31 March 2007.annual report 200776

FINANCIAL STATEMENTS AND NOTES 2007NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2007GROUPMINTEK2007 2006 2007 2006R R R R15. LONG-TERM LOANS AND ADVANCESLONG-TERM DEBTORPGR 17 investments (Proprietary) Limited 33,000,000 – – –Less:Short-term portion (Note 17) (16,500 000) – – –16,500,000 – – –LONG-TERM DEBTORMogale Alloys (Proprietary) Limited 10,569,558 – – –Less:Short-term portion (Note 17) (3,803,558) – – –6,766,000 – – –STAFF LOANSAdvances to staff 3,070,751 1,979,876 3,070,751 1,979,876Less:Short-term portion of staff loans (Note 17) (1,193 560) (828,265) (1,193,560) (828,265)Staff loans are granted to qualifying staff in terms of schemes approved by the Board of Mintek.1,877,191 1,151,611 1,877,191 1,151,61125,143,191 1,151,611 1,877,191 1,151,611GROUPMINTEK2007 2006 2007 2006R R R R16. INVENTORYConsumables 1,626,776 1,625,333 1,626,776 1,625,333Finished goods – 32,052 – 32,052Contracts in progress 1,949,902 1,086,988 1,949,902 1,086,988Inventories written off during the year (297,642) – (297,642) –3,279,036 2,744,373 3,279,036 2,744,37317. TRADE AND OTHER RECEIVABLESTrade debtors 61,872,651 51,073,604 61,872,651 52,766,312Short-term portion of long-term debtors (Note 15) 20,303,558 – – –Short-term portion of staff loans (Note 15) 1,193,560 828,265 1,193,560 828,265Other receivables 2,810,839 2,346,499 2,810,839 2,346,499Less:Provision for doubtful debts (1,956,127) (8,020,376) (1,956 127) (8,020,376)84,224,481 46,227,992 63,920,923 47,920,70018. SHORT-TERM INVESTMENTSShort-term investments 89,491,480 102,830,270 89,491,480 102,830,270 GROUPMINTEK2007 2006 2007 2006R R R R19. TRADE AND OTHER PAYABLESTrade creditors 32,283,410 10,782,867 32,283,410 10,782,867Other payables 2,963,834 2,528,345 2,883,334 2,495,345Current portion of lease creditor 283,126 221,785 283,126 221,785Current portion of guaranteed liability 432,172 412,812 – –SARS (VAT) 745,574 6,578,183 745,574 6,578,183Other creditors and accruals 4,397,129 6,800,100 4,397,129 6,800,10041,105,245 27,324,092 40,592,573 26,878,28020. DEFERRED INCOMEDeferred income 20,463,394 18,917,629 20,463,394 18,917,629Advanced client billing 4,202,724 2,756,424 4,202,724 2,756,42424,666,118 21,674,053 24,666,118 21,674,053Deferred income arises as a result of contracts undertaken in terms of the National Research Fund and Innovation Fund administered by the Department ofScience 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.77annual report 2007

FINANCIAL STATEMENTS AND NOTES 2007NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 200721. PROVISIONS Opening Additional Utilised and ClosingBalance provisions reversed BalanceR R R RGROUP AND MINTEK – 31 March 2007Provision for leave pay 11,750,553 2,962 – 11,753,515Product warranties 894,508 5,815,902 (894,508) 5,815,90212,645,061 5,818,864 (894,508) 17,569,417GROUP AND MINTEK – 31 March 2006Provision for leave pay 12,873,411 – (1,122,858) 11,750,553Provision for bonus 4,000,000 – (4,000,000) –Product warranties 1,555,011 – (660,503) 894,50818,428,422 – (5,783,361) 12,645,061The provision for leave pay relates to vested leave pay to which employees become entitled upon leaving the employment of the entity. The provisionarises as employees render a service that increases their entitlement to future compensated leave. The provision is utilised when employees who areentitled to leave pay, leave the employment of the entity or when the accrued leave due to an employee, is utilised.The bonus accrual consists of a portion of the employees remuneration cost elected by the employee for payment annually in November each year.The provision for product warranties is the entity recognising its probable liability for meeting its obligations in terms of products and services asstipulated in its contracts with its customers.GROUPMINTEK2007 2006 2007 2006R R R R22. LONG-TERM RETIREMENT BENEFITPost-retirement medical aid 61,800,000 58,300,000 61,800,000 58,300,000 900,000 2,935,000 900,000 2,935,000 62,700,000 61,235,000 62,700,000 61,235,000The amounts included in the balance sheet arising from Mintek’s Present value of obligations as at 31 March 61,800,000 58,300,000 61,800,000 58,300,000Fair value of plan assets as at 31 March – – – – 61,800,000 58,300,000 61,800,000 58,300,000 GROUPMINTEK2007 2006 2007 2006R R R RMovement in the net-liability recognised in the balance sheet 58,300,000 48,900,000 58,300,000 48,900,000Interest cost 3,278,855 3,692,544 3,278,855 3,692,544Contributions paid to service providers (3,424,645) (3,022,438) (3,424,645) (3,022,438)Net-actuarial loss recognised 3,645,790 8,729,894 3,645,790 8,729,894 61,800,000 58,300,000 61,800,000 58,300,000Key assumptionsExpected long-term rate of return on plan assets 8.0% 8.0% Expected increase in health care costs 6.5% 6.5% Amounts recognised in income in respect of the scheme are as follows:Current cost 6,924,645 12,422,438 6,924,645 12,422,438Contributions paid 3,424,645 3,022,438 3,424,645 3,022,438Expected average remaining life of employees (years) 16 16 16 16Medical 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 relevantThese liabilities have been provided in full, calculated on an actuarial basis. The liabilities are unfunded. Periodic valuation of this obligation is carriedout by independent actuaries every two years, the latest one being 31 March 2007.annual report 200778

FINANCIAL STATEMENTS AND NOTES 2007NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 200722. ()GROUPMINTEK2007 2006 2007 2006R R R RMovement in the net-liability recognised in the balance sheetEmployer liability 2,935,000 2,529,000 2,935,000 2,529,000Movement in guaranteed liability – 400,000 – 400,000Actuarial (gain)/loss (2,035,000) 6,000 (2,035,000) 6,000Net-employer liability at end of year 900,000 2,935,000 900,000 2,935,000Current cost (2,035,000) 406,000 (2,035,000) 406,000At 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 members who entered the fund as at 1January 1995. Employer contributions are charged against income in the period in which they are incurred. Contributions so charged were as follows:GROUPMINTEK2007 2006 2007 2006R R R RMRF and MERF 8,267,727 8,814,634 8,267,727 8,814,634Employee contributions to the funds were as follows:MRF and MERF 4,400,771 4,863,246 4,400,771 4,863,2462007 2006 2007 2006Current service costs 6,924,645 12,422,438 12,668,498 13,677,880Interest obligation 3,278,855 3,692,544 – 400,000Actuarial loss/(gain) 3,645,790 8,729,894 (2,035,000) 6,000Total included in employee costs 13,849,290 24 844,876 10,633,498 14,073,88023. LONG-TERM CREDITORSFinance lease obligationAmoun 1,634,904 1,601,700 1,634,904 1,601,700 (283,126) (221,785) (283,126) (221,785)1,351,778 1,379,915 1,315,778 1,379,915Guarantee liabilityLong-term liability 432,171 825,624 – –Less: Current portion of long term liability (432,171) (412,812) – –– 412,812 – –1,351,778 1,792,727 1,351,778 1,379,91523.1 FINANCE LEASE OBLIGATIONCapitalised leased assetsPayable within one year 283,126 221,785 283,126 221,785Payable within 2-5 years 1,351,778 1,379,915 1,351,778 1,379,915Net-lease liability 1,634,904 1,601,700 1,634,904 1,601,700As of 31 March 2007 the aggregate amounts of minimum lease payments and the related imputed interest under capitalised lease contracts payableMinimum Interest Presentlease value of minimumpayments lease paymentsPayable in the years ended 31 March:2008 464,078 180,952 283,1262009 464,078 145,045 319,0332010 444,858 103,003 341,8552011 667,787 35,468 632,3192012 59,157 586 58,5712,099,958 465,054 1,634,90479annual report 2007

FINANCIAL STATEMENTS AND NOTES 2007NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 200723.2 GUARANTEED LIABILITYGROUPMINTEK2007 2006 2007 2006R R R RAssociate company liability 432,173 825,624 – –Less: Current portion included in accounts payable (432,173) (412,812) – –– 412,812 – –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 LIABILITYGROUPMINTEK2007 2006 2007 2006R R R RFuture operating lease charges for vehicles- Payable within one year 195,353 362,672 195,353 362,672 195,353 544,008 195,353 544,008 - Payable within one year 102,370 – 102,370 – 294,237 – 294,237 –396,607 – 396,607 –25. CONTINGENT LIABILITIESLegal liabilitiesMintek has various legal claims relating to disputed performance in sales and supply contracts. The amounts of the disputes are not expected toexceed R 38 100. Mintek also has disputed employment termination contracts with former employees, the aggregate is not expected to exceedR 233 867.GuaranteesA cession in favour of ABSA for R 5 000 000 to meet requirements for credit card and other banking facilities has been registered.26. TAXATIONGROUPMINTEK2007 2006 2007 2006R R R RTaxation on entity share in associate post-acquisition reserves 2,726,250 330,241 – –Capital gains taxation on disposal of shares in associate 3,689,088 – – –6,415,338 330,241 – –No deferred taxation is raised on the assessed losses of Mindev (Proprietary) Limited due to the uncertainty regarding taxable income to utilise theassets 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 provision liabilities are with respect to Mindev and its associated companies and are payable through those entities.27. COMMITMENTSContracted for:GROUPMINTEK2007 2006 2007 2006R R R RCapital expenditure 1,640,173 338,276 1,640,173 338,276Authorised and not contracted for – – – –1,640,173 338,276 1,640,173 338,276Internal funds will be provided to meet the expenditure in respect of these commitments, which have been approved and contracted for.annual report 200780

FINANCIAL STATEMENTS AND NOTES 2007NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 200728. CASH GENERATED FROM OPERATIONSNotes 20,662,588 4,791,266 3,003,691 4,106,723Adjusted for:Investment income (12,826,322) (9,817,025) (12,405,765) (9,817,025)Finance expenses 526,035 337,424 457,487 242,843Non-cash itemsGROUPMINTEK2007 2006 2007 2006R R R RInvestment property fair value adjustment 4 (2,941,266) (3,898,196) (2,941,266) (3,898,196)Depreciation 9 14,884,848 10,640,635 14,884,848 10,640,635Fair value adjustment - debtors 362,423 (259,971) 362,423 (259,971)Fixed asset correction – 180,510 – 180,510 387,313 1,131,011 387,313 1,131,011 (13,483,971) 653,037 – –Provisions raised 20 5,818,864 – 5,818,864 –Increase in post-retirement obligations 21 4,889,645 12,828,438 4,889,645 12,828,438Share of associates’ income (9,400,750) (2,645,536) – –Taxation in associates 6,415,338 330,241 – –Increase in loan to associates (11,125,147) (678,622) – – (1,692,709) – – –Long-term liability raised 262,868 (142,335) 194,319 (221,785) 2,739,757 13,450,877 14,651,559 14,933,183Working capital changes:(Increase)/decrease in loans (725,580) 121,842 (725,580) 121,842Increase in inventories (534,663) (671,502) (534,663) (671,502)Increase in accounts receivables (16,000,223) (7,211,637) (16,000,223) (7,732,914)Increase in payables 13,700,453 8,859,873 13,652,954 8,574,770Increase/(decrease) in deferred income 2,992,065 (1,119,808) 2,992,065 (1,119,808)(567,948) (21,232) (615,447) (827,612)2,171,809 13,429,645 14,036,112 14,105,57128.1 (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTSCash on hand (11,222,531) 4,929,673 (11,222,531) 4,929,673Cash on deposit 10,662,244 5,617,008 10,662,244 5,617,008Foreign currency 145,094 (9,303) 145,094 (9,303)(415,193) 10,537,378 (415,193) 10,537,37828.2 DISPOSAL OF SHARE IN ASSOCIATECost of investment 250 1,600 – –Fair value at acquisition – 5,212,452 – –Post-acquisition reserves 12,390,331 8,438,985 – –Loans and advances 7,125,448 5,000,000 – –Carrying value at disposal date 19,516,029 18,653,037 – –Proceeds (33,000,000) (18,000,000) – – (13,483,971) 653,037 – –81annual report 2007

FINANCIAL STATEMENTS AND NOTES 2007NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 200729. RESTATEMENTS AND RECLASSIFICATIONSGROUP Balance asreported and error restatedR R RIncome statementFair value adjustment on debtors – 259,971 259,971Depreciation 10,619,572 21,063 10,640,635Balance sheetCapital and reservesRetained earnings at beginning of the year 150,716,855 4,427,063 155,143,918Non-current assetsProperty, plant and equipment 138,233,487 4,406,002 142,639,489Trade and other receivables 46,487,963 (259,971) 46,227,992Income statementFinance expenses (337,424) (259,971) (597,395)Depreciation (10,619,572) (21,063) (10,640,635)Cash FlowCash generated from operations 5,072,300 (281,034) 4,791,266Depreciation 10,619,572 21,063 10,640,635Company reconciliation 2006Income statementFair value adjustment on debtors – 259,971 259,971Depreciation 10,619,572 21,063 10,640,635Balance sheetCapital and reservesRetained earnings at beginning of the year 133,388,995 4,427,063 137,816,058Non-current assetsProperty, plant and equipment 138,233,487 4,406,002 142,639,489Trade and other receivables 48,180,671 (259,971) 47,920,700Income statementFinance expenses (242,843) (259,971) (502,814)Depreciation (10,619,572) (21,063) (10,640,635)Cash generated from operations 4,387,757 (281,034) 4,106,723Depreciation 10,619,572 21,063 10,640,635Retained earningsThe entity restated retained earnings reversing depreciation as a result of a change in the estimated residual lives of the underlying assets. As a resultprior years’ depreciation was increased by R3 902 825 while capitalised equipment that was donated in prior years with a net book value of R524 238accounts recievable .Property, Plant and EquipmentThe entity restated retained earnings reversing depreciation as a result of a change in the estimated residual lives of the underlying assets. As a resultprior years’ depreciation was decreased by R 3 902 825 while capitalised equipment that was donated in prior years with a net book value of R524 238and the depreciation charge in F2006 increased by R21 063.annual report 200782

FINANCIAL STATEMENTS AND NOTES 2007NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 200730. INSURANCE AND RISK MANAGEMENTearning capacity and legal obligations against acceptable losses.31. FINANCIAL INSTRUMENTSCredit riskFinancial assets that could subject the Group to credit risk consist principally of bank balances and cash, deposits, trade and other receivablesto associates are presented net of the allowance for doubtful receivables or loan write-offs. Credit risk with respect to trade receivables is limiteddue to the large number of customers comprising the Group’s customer base and their dispersion across different industries and geographic areas.Interest riskThe valuation of interest rate exposure and investment strategies is done by management on a regular basis. Interest-bearing investments are heldwitn reputable banks to minimise exposure.Fair valueAs at 31 March 2007 the carrying amount of bank balances and cash, deposits, trade and other receivables, trade and other payables, contracts inprogress, advances received and short term borrowing approximated their fair values due to the short-term natures of these assets and liabilities.Foreign currency risk currently enter into forward foreign exchange contracts to buy and sell amounts of various currencies at predetermined exchange rate, as the foreigndenominated 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 thesettlement or at year-end rate for outstanding foreign currency.32. BOARD MEMBERS AND EXECUTIVE MANAGEMENT REMUNERATION2007 2006GROUP AND MINTEK R REntity Basic Salary Fees for Performanceservices as bonus anddirector other expenses TOTAL TOTAL MINTEKDr. PP Jourdan Mintek 1,266,717 – 4,880 1,271,597 1,193,917Dr. RL Paul Mintek 1,242,433 – 9,912 1,252,345 1,033,879Dr. NA Barcza (Resigned) Mintek & Mindev – – – – 763,700Dr. M Motuku Mintek 838,768 – 8,949 847,717 782,429Mr. P Fusi Mintek 860,227 – – 860,227 828,478Mr. V Govender Mintek 845,352 – 280 845,632 821,450Ms. K Mzondeki (Resigned) Mintek – – – – 127,166 – 24,021 5,077,518 5,551,019 MINTEKMr. M Khumalo (Chairman) Metallon Corporation – 7,000 – 7,000 9,108Dr F. Crundwell CM Solutions – 10,546 – 10,545 18,668Ms.T Mosery-Eboka (Resigned Jan 2006) Standard Bank – – – – 1,691Dr. NP Mjoli Hlathi Development – 2,976 – 2,976 15,286Ms. L Mojela (Resigned December 2005) WIPHOLD – – – – 5,659Mr. R Havenstein Anglo American Platinum – 5,198 – 5,198 6,764Ms. G Mthethwa Standard Bank – 11,759 – 11,759 15,219Mr. V Pillay CSIR – 5,621 – 5,621 12,423Mr. P Taljaard – 6,889 – 6,889 –Prof. PE Ngoepe University of the North – 1,268 – 1,268 10,146Mr. TY Dube – 5,621 – 5,621 –MINDEVMr. N Morrison Mindev – 1,690 – 1,690 3,382Mr. G Mosinyi Mindev – – – – 5,0735,053,497 58,568 24,021 5,136,086 5,654,43883annual report 2007

FINANCIAL STATEMENTS AND NOTES 2007NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 200733. RELATED PARTYControlling entityThe Group comprises of Mintek and its wholly owned subsidiary Mindev (Proprietary) Limited. Mindev is engaged in the commercialisation of Mintekand Tollsort (Proprietary) Limited. The Group, in the ordinary course of business, enters into various sale and purchase transactions on an arm’s lengthbasis at market rates with related parties.indirect, in any transactions which has affected or will materially affect Mintek or its investment interest or subsidiaries.Associates GROUP MINTEK2007 2006 2007 2006R R R RDuring the year the Group advanced interest bearing loans to associates.Interest bearing loansMogale Alloys (Proprietary) Limited – 6,569,858 – –Apic Toll Treatment (Proprietary) Limited – – – –Tollsort (Proprietary) Limited – 762,500 – 762,500Tollsort (Proprietary) Limited ceased its operations at the end of September 2004.Mindev’s portion of the loan guarantee made to Standard Bank on behalf of Tollsort (Proprietary) Limited.Related party transactionsRelated party transactions exist within the Group. During the year all selling transactions were concluded at arm’s length. Details of materialGROUPMINTEK2007 2006 2007 2006R R R RMintek sales to:Department of Minerals and Energy 7,425,132 6,933,125 7,425,132 6,933,125Department of Science and Technology 10,481,138 3,154,516 10,481,138 3,154,516Mogale Alloys (Proprietary) Limited 2,604,167 6,250,000 2,604,167 6,250,000Mindev (Proprietary) Limited – – 1,519,662 875,38120,510,437 16,337,641 22,030,099 17,213,02234. FRUITLESS AND WASTEFUL EXPENDITURETheft and fraudulent costs 1,800,579 – 1,800,579 – The theft and fraud related to various incidents:2,063,598 – 2,063,598 –A staff member of Mintek produced fraudulent documentation on which payments to various suppliers were based. A total of R2 708 947 was paidalso here criminal proceedings were initiated.The waste and fruitless expenditure was in repect of interest and penalties paid to SARS for the late payment of VAT, PAYE, SDL and UIF. The35. CONTINGENT ASSETSMintek is covered by a Fidelity Guarantee Insurance policy, which covers theft of the company’s assets and a claim has been lodged for the possiblerecovery of the stolen funds.However, the possible outcome of the claim cannot be determined as the claim is still under review.GROUPMINTEK2007 2006 2007 2006R R R R1,800,579 – 1,800,579 –36. EVENTS AFTER BALANCE SHEET DATETheft and fraud amounting to R1 800 579 was detected after the balance sheet date.Details relating to this are disclosed in Note 34 under the subheading of theft and fraud.annual report 200784

AfDB – African Development BankAMI – Advanced Metals InitiativeAMP – African Mining PartnershipASSM – Artisanal and Small-Scale MiningBEE – Black Economic EmpowermentBioPAD – Biotechnology Partnership and DevelopmentCASM – Communities and Small-Scale MiningCDFR – Client Dissatisfaction Frequency RateCIL – Carbon-in-LeachCIP – Carbon-in-PulpDC – Direct CurrentDG – Disadvantaged GroupDME – Department of Minerals and EnergyDRC – Democratic Republic of CongoDST – Department of Science and TechnologyDTI – Department of Trade and IndustryEAP – Employee Assistance ProgrammeERP – Enterprise Resource PlanningEU – European UnionGAAP – General Accepted Accounting PracticeGIS – Geographic Information SystemHPGR – High Pressure Grinding RollIA – Internal AuditICMI – International Cyanide Management InstituteIFRS – International Financial Reporting StandardsKPI – Key Performance IndicatorsLME – London Metal ExchangeLTIFR – Lost Time Injury Frequency RateMLA – Mineral Liberation AnalyserMQAMESU – Mineral Economics and Strategy UnitNACI – National Council for InnovationNEPAD – New Partnership for Africa’s DevelopmentNICICO – National Iranian Copper IndustriesCompanyNMR – Nuclear Magnetic ResonanceNNR – National Nuclear RegulatorNRF – National Research FoundationACRONYMSNUM – National Union of MineworkersPDI – Platinum Development InitiativePFMA – Public Finance Management ActPBCPGMs – Platinum-Group Metals (platinum, palladium,ruthenium, rhodium, iridium, and osmium)PLC – Programmable Logic ControllerPWG – Prime Western Grade (zinc)QES – Quality, Environment and SafetyQEMSCAN – Qualitative Evaluation of Minerals byScanning Electron MicroscopeRBTS – Resource-Based Technology StrategyR&D – Research and DevelopmentREACH – Registration, Evaluation, Authorisationand Restriction of ChemicalsRIL – Resin In LeachRIP – Resin In PulpRPP – Radiation Protection ProgrammeSADC – Southern African DevelopmentCommunitySAG – Semi-Autogenous GrindingSARM – South African Reference MaterialSARS – South African Revenue ServiceSCADA – Supervisory Control and DataAcquisitionSD – Sustainable DevelopmentSETA – Skills Education Training AuthoritySET – Science, Engineering, and TechnologySETI – Science, Engineering, and TechnologyInstituteSHG – Special High Grade (zinc)SMMEs – Small, medium, and micro-enterprisesS&T – Science and TechnologyTHRIP – Technology and Human Resources forIndustry ProgrammeUNECA – United Nations Economic Commissionfor AfricaWGC – World Gold CouncilWAD – Weak Acid Dissociable (cyanide)CONTACTSInternal auditor Jacques Fourie 011-709 4796External auditors Auditor General (AG) 011-276 1800Company Secretary Ms Vanessa Moonsamy 011-709 4906General Managers Contact NumberTechnology Dr Roger Paul 011-709 4934 Corporate Services Mr Vimlan Govender 011-709 4328Mineral Policy & Sustainable Development Mr Petrus Fusi 011-709 4779Division Contact NumberAdvanced Materials Dr Elma van der Lingen 011-709-4471 Biotechnology Dr Tony Pinches 011-709 4397 Conferences & Events Mr Muzi Ntombela 011-709 4140? Engineering Support Mr Nick Maritz 011 709 4094Estate Management Mr Muzi Ntombela 011 709-4140Finance Ms Hester Pretorius 011-709 4698High Temperature Technology Mr Alan McKenzie 011-709 4736Human Resources Mr Muzi Ngcobo 011-709 4373Hydrometallurgy Dr Dave Hulbert 011-709 4382 – Bursars & SET promotions Mr Garth Williams 011-709 4476 – Library Ms Manil Kanniappen 011 709-4277Information Technology Mr Doctor Gule 011-709 4282Kgabane Ms Busi Ntuli 011-709 4034 Minerals Economics & Strategy Unit Mr Sodhie Naicker 011-709-4414Minerals Processing Mr Agit Singh 011-709 4339Mineralogy Ms Amanda Quadling 011-709 4163Pyrometallurgy Mr Tom Curr 011-709 4642Quality, Environment and Safety Mr Hennie Venter 011-709 4103

Specialists in mineral andmetallurgical technology200 Hans Strijdom Drive, Randburg 2194, South AfricaTelephone: +27 11 709 4111 Fax: +27 11 793 2413 www.mintek.co.zaProduced by the Information and Academic Support Division of MintekPrinted by Remata iNathi Communications and Printers (Pty) Ltd.ISBN 978-0-621-37198-7RP 109/2007