DOS STATUS, PSJV CSI AND SLP INITIATIVES 1
1. Alexkor 1.1 Introduction 05 1.2 Implementation of DoS & UR 10 2. Pooling and Sharing Joint Venture 2.1 Growth 17 2.2 Job Creation 18 2.3 Social Spending 20 2.4 Enterprise Development 21 2
Alexkor CPA DoS JB RMC RVC PSJV CSI SLP DMR IDP Alexkor SOC Ltd Communal Property Association Deed of Settlement Joint Board Richtersveld Mining Company Richtersveld Community Pooling and Sharing Joint Venture Corporate Social Investment Social Labour Plan Department of Mineral Resources Integrated Development Plan 3
The Deed of Settlement & the Unanimous Resolution is a binding agreement between the Richtersveld Community, Alexkor, the Government of the Republic of South Africa which emanated from the land claim filed by the Richtersveld Community. The Order of Court states in clause 6: By consent the State shall procure that Alexkor shall perform its obligations in terms of the Deed of Settlement & the Unanimous Resolution & that Alexkor shall be in a financial position to do so. 4
Principles of the DoS and UR: Alexkor's land mining rights to be transferred to the RMC. Alexkor to retain its marine mining rights Alexkor and RMC will form a Pooling and Sharing Joint Venture (the PSJV) and put their respective marine mining rights and land mining rights under the control of a JB for purposes of mining both the marine and land diamond resources Participation interest (Alexkor 51% & RMC 49%) Alexkor and RMC will furthermore pledge its land and marine mining rights to the PSJV Alexkor's movable assets relating to its agricultural and maricultural businesses to be transferred to the RVC 5
Alexkor (land & sea mining rights) Land mining rights transferred to RMC Alexkor retains sea mining rights 6
Marine mining Land mining Support services Rehabilitation Township Alexkor mining rights RMC mining rights Pooling and Sharing Joint Venture Assets and operations to be transferred to the Richtersveld Municipality 7
CPA 7 Trustees 4 Community Trustees one from each town 3 Independent Trustees nominated by CPA committee Beneficiaries Community Trust 100% Self Develop Co 11 Directors 4 Community Directors one from each town 4 Persons nominated by each subsidiary co 3 Independent Directors nominated by trustees of Community Trust Agri Holding Co Environ Rehab Co Prop Holding Co Mining Co 6 Directors 4 Community Directors 2 Independent Directors nominated my Self- Devco 8
Condition Date Status Sign MOU 05 Oct 06 Sign DoS 22 Apr 07 Sign UR 31 Aug 07 Make DoS court order 09 Oct 07 Obtain PSJV approval from Competition Authority 06 Apr 11 Register land mining right in name of RMC 06 Apr 11 Form PSJV and Joint Board 07 Apr 11 Appoint an EXCO to manage the PSJV 2012 9
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Number of Employees 2013 2014 2015 2016 Alexkor RMC JV Permanent 88 230 280 290 Alexkor RMC JV Temporary 29 36 55 41 Alexkor SOC Permanent 27 58 39 38 Alexkor SOC Temporary 26 28 26 24 Total 170 352 400 396 11
During 2013, R 1 512 356,52 was spent on various CSI initiatives. During the 2012/13 Financial year no amounts were spent on SLP initiatives as we were finalizing our SLP with DMR and the Richtersveld Municipality. In 2014 R 2 347 574,65 was spent on CSI initiatives and R 1 173 906 and R 376 269 was spent on SLP initiatives. Our Maths and Science initiative was launched at the end of 2014 to encourage learners to study Maths and Science until Matric. We also launched our Bursary program which is currently supporting six University students. Four of the students are studying Mining Engineering and two of the students are studying Environment Management. For the Financial year ending 31 March 2016, an amount of R 3 675 731was spent on SLP initiatives in line with our SLP commitments From 2013 to current all our CSI and SLP initiatives have been aligned with the IDP of the Richterveld Municipality to ensure that they contribute towards poverty eradication, infrastructure development and job creation. Some of our CSI and SLP initiatives include Wellness Campaigns in partnership with the Department of Health, infrastructure improvement project such as renovating of Old age homes as well as Skills Development opportunities for the community. 12
Period CSI SLP January to December 2013 R 1 512 356.52 No amounts were spent on SLP January to December 2014 April 2015 to March 2016 R 2 247 574,68 R 376 269 R 2 542 507 R 2 067 426 TOTAL R 6 302 438,2 R 2 443 695,00 13
71 Mining contracts were awarded of which 43 (60.5%) were awarded to Historically Disadvantaged Individuals as at 31 March 2016. The contractors are from the Richtersveld and the surrounding towns within the Northern Cape Province. Contract revenue paid out to BEE compliant companies was R195m, which include R51m to 100% Black-owned companies for the 12 months ended 31 March 2016. 14
A competent team has been put together to manage the project and get the best results. The team consists of: Mr. Vimal Bansi Resource Geologist and Geo-statistician Mr. Deon Bowers - Mineral Resources Manager and Geologist Mr. Gerone Cloete - Geology Manager at Muisvlak Ms Leilani Swartbooi - Environmental Manager Dr. Tania Marshall - Specialist Diamond Geological Consultant Mr. Leon Engelbrecht - Geophysics Expert A field team comprising experienced geologists, project managers, miners, modelers and data capturers) 15
Recommendations The primary recommendation is based on reducing the Muisvlak cost base and the preservation of jobs for as long as possible. Current fiscal year 2016/2017: Stop a portion of in-house mining activities and focus on dump mining (re-winning). Commissioning of the mobile exploration plant. The excess machinery should be utilized for exploration instead of renting equipment as originally planned. Freeze all appointments and promotions. Stop all weekend production overtime. Freeze all capital expenditure. 16
New fiscal year: The corporate plan should include a Muisvlak business strategy based on some or all of the following: Stop a portion of in-house mining activities and deploy the resources elsewhere, i.e. exploration etc. Increase the amount of land mining contractors, with specific focus on two or three large scale contractors, in and around the Muisvlak area. Use the Muisvlak Plant as a centralised treatment facility and charge treatment cost at an R/t rate to the land mining contractors. Modify the Muisvlak Plant to accept marine gravels from the South to increase the MV DMS utilisation and charge treatment cost at an R/t rate to the marine contractors. Install a wet screening front-end to remove excess sand and increase ROM throughput. Continue with the exploration program independently from the production activities, although the main plant may be used for bulk sampling of tailings dumps in and around the Muisvlak area. 17
Thank You 18