Presentation
by
Impala Platinum Holdings Limited
(“IMPLATS”)
to
the Parliamentary Portfolio Committee on
Minerals and Energy
on
The Precious Metals Bill [B30-2005]
18 October 2005
Presentation
 Introducing Implats
 Submissions of Comments to Precious Metals Bill (“PMB”)
 Brief Market Review of Platinum (Pt), Palladium (Pd)
 Focus on Implats refining business through Impala Refining Services
(“IRS”):
 Impala Refining Services
 Refining
 Implications of Precious Metals Bill on Impala Refining Services
 Proposed way forward re PMB
2
Introducing Implats
Introducing Implats

Implats is in the business of mining,
refining and marketing of platinum
group metals
Contribution by metal
Other, 5.50%

Second largest PGM producer in the
world

Employs 31 000 people

Produced in FY2005 (end June
2005) approx 1.85 Million ounces
refined Platinum (Pt) – around 25%
of global supply
Palladium,
8.50%
Nickel,
10.50%
Platinum,
64.80%
Rhodium,
10.70%
4
Implats …
 Contributed R12.5 billion in sales revenue in FY2005 to
GDP in South Africa
 Income tax – R 962.5 million in FY2005
 Other taxes (PAYE, RSC Levies, UIF, Skills Levy)
 Royalties – R414.9 million in FY2005 (primarily Royal
Bafokeng Nation and other HDSAs)
 Committed to transformation
 Fact sheets with Mining Charter Scorecard as well as
more detail on Implats and its operating companies
5
Implats Group structure
Implats
Mine to market
100% *
IRS
Impala
Marula
Zimplats
Mimosa
Two Rivers
Refining
Services
Strategic holdings
100%
8%
AQP
100% *
86.8%
50%
Concentrate
off-take
agreements
Concentrate
off-take
agreements
50.5%
20%
Aquarius
Platinum SA
45%
Toll Refining
* BEE currently being negotiated
6
Submissions of
Comments to
Precious Metals Bill
Implats Written Submission of Comments
on the PMB
 Implats’ written submission dated 23 September 2005 focus
in detail on concerns relating to the practical implementation
of certain provisions of the PMB for the platinum refining
industry in SA:
 Definitions, in particular of “semi-fabricated precious metal” and
“unwrought precious metal”
 Security of tenure in applying for licences, permits and
permissions
 Import permits and Export written approval
 Transportation and conveyance of precious metal
 Transitional arrangements
 Confidentiality of Information
8
Chamber of Mines Submission of
Comments on the PMB
 Implats has participated in the consultation process in the
preparation of the Chamber of Mines Submission of
Comments on the PMB
 Implats concurs with both the Chamber’s written submission
as well as its verbal submission of Comments on the PMB to
the Portfolio Committee on Minerals and Energy
9
Implats Verbal Submission on Comments
to the PMB
 This verbal submission will focus on:
 the refining business of Implats and
 the implications of the PMB thereon
10
Brief Market Review
Brief Market Review of Platinum,
Palladium
 World Market – autocatalysts, jewellery, industrial
 Price Takers – London AM and PM Fix for Pt and Pd
12
Platinum supply and demand
(000oz)
Calendar years
2002
2003
2004
2005
Automobile
2 615
2 995
3 160
3 280
Jewellery
2 840
2 505
2 210
2 210
Industrial/Investment
1 625
1 465
1 610
1 665
Total demand
7 080
6 965
6 980
7 155
Total supply
6 665
6 830
7 035
7 190
-415
-135
55
35
Balance
13
Palladium supply and demand
(000oz)
Calendar years
2002
2003
2004
2005
Automobile
4 530
4 465
4 515
4 615
Other
2 370
2 325
3 170
3 275
Total demand
6 900
6 790
7 685
7 890
Total supply
7 160
7 415
8 710
8 205
260
625
1 025
315
Balance
14
Focus on Implats refining
business through Impala
Refining Services (“IRS”)
Impala Refining Services (100%)

IRS contributes 32% of Implats total sales revenue (R 12,5 bn) – about
R4 bn

Undertakes processing of third party material
- toll-refining activities and concentrate purchases

One of the world’s largest refiners of used autocatalysts

Headline production of 733,000 oz of platinum in FY2005 - approx 47%
is sourced from abroad (primarily USA and Zimbabwe)
1000
IRS platinum production
900
800
700
600
500
Lonplats
400
300
200
100
0
FY01
FY02
FY03
FY04
FY05
16
Simplified Flow Diagram
DISSOLUTION
ION EXCHANGE
IMPALA PLATINUM MINES
PURIFICATION &
PRECIPITATION
RHODIUM
PURIFICATION &
PRECIPITATION
IRIDIUM
PURIFICATION &
PRECIPITATION
PLATINUM
HYDROLYSIS
PRECIPITATION
RUTHENIUM
PRECIPITATION
PALLADIUM
GOLD
PRECIPITATION
GOLD
DISTILLATION
MOLECULAR
RECOGNITION
TECHNOLOGY
CONCENTRATOR
MILLING - FLOTATION
ION EXCHANGE
DISSOLUTION
PLATINUM METALS REFINERY
SMELTER
DRYING - SMELTING - CONVERTING
NICKEL
REDUCTION
BASE METALS REFINERY
DISSOLUTION OF NICKEL ,
COPPER AND COBALT
COBALT
REDUCTION
COPPER
ELECTROWINNING
BRIQUETTING
AND SINTERING
NICKEL POWDER
OR BRIQUETTES
COBALT POWDER
COPPER CATHODES
ACAD DRG No: PRP_STD_P_0240
17
Impala Refining Services
 Officially created in 1998 as part of Implats’ growth strategy –
limited PGM resources
 Excess capacity at the Impala Platinum Base Metal and
Precious Metal Refinery at Springs
 Dedicated vehicle for toll-refining and metal
concentrate purchases
 Leverage surface assets and expertise - small scale platinum
operators
 Reduce unit costs over entire operations (through economies of
scale)
 Seek growth through strategic alliances and joint ventures
18
Growth
 Implats’ consistent growth in production – 2.3Moz Pt targeted for
FY2010
2500
2000
1500
1000
500
0
FY99
FY00
FY01
Mine to market
FY02
FY03
FY04
3rd party processing
FY05
FY06
Lonplats
FY07
FY08
FY09
FY10
Zimbabwean expansions
19
Key benefits to South Africa and Implats
 Exploitation of smaller deposits possible by third parties:
 reduced barriers to entry into the PGM industry;
 increased supply into the world markets;
 long term employment creation;
 additional revenue for SA and taxes
 Extends current 30 year life of mine of Impala Rustenburg
Mine, with associated:
 Job security
 Employment benefits
 Tax benefits to SA
 Autocatalysts recycled generate additional forex for SA
20
IRS contract structures
 Metal purchase agreements
 Metal purchase after an agreed processing period
 IRS retains agreed proportion of metal value
 Toll refining agreements
 Percentage return of market value
 Refining
 Smelting
 Handling charge
21
Metal purchase agreements
 Metal purchase agreements (Off take agreements)
 IRS purchases precious metal bearing product from the
customer (primary producer). The semi-fabricated precious
metal is then produced as “Impala” brand and sold onto the
market
 Used primarily for local ex-mine contracts as well as our
Zimbabwe operations
 Primarily PGM mine concentrate, PGM bearing matte which falls into
definition of unwrought precious metal in the PMB
22
Toll Refining Agreements
 Toll refining agreements:
 PGM bearing material belonging to third parties is refined - metal
is returned to the customer.
 IRS levy charge for services – part of service fee is to retain
semi-fabricated refined precious metals and sell to Impala who
market precious metals – proposed clause 3(3) will make this
commercial transactions unlawful (“no person may deliver semifabricated precious metal in …. in consideration of any service
rendered or to be rendered to him..”)
 Autocatalysts / industrial catalyst recycling market
 Primarily used autocatalysts and spent industrial catalysts which
may or may not fall into definition of unwrought precious metal
23
Autocatalyst market
 Current recycle market is approximately 700 000 ounces of
platinum
 Globally, by 2010 the recycling of autocatalysts is estimated
to supply:
 1 million ounces of refined Pt per annum
 1.5 million ounces of refined Pd per annum
 0.025 million ounces of refined Rh per annum
 IRS currently has a significant portion of autocatalysts
recycling market and is one of the largest recyclers in the
world
 Approx 90% supplied from abroad – primarily USA
24
Benefits of recycling
 Benefits associated with recycling of autocatalysts:
 Reduce pressure on mining to deliver increased quantities of
PGMs year on year – globally limited resources
 Environmental benefits
 Implats sustainability
 Recycling of autocatalysts and industrial catalysts is
“beneficiation” / added value to South Africa:
 Allows South Africa to obtain value from the same ounce of
metal many times over and again
 Employment
 International competitive position
25
Implications of PMB on IRS
 IRS final product produced: platinum group metals in the form
of a sponge, ingot, salt, powder purity level of above 99.90%
and therefore “semi-fabricated precious metals”.
 Final metal is either returned to the customer or purchased by
Impala Platinum Limited (depending on contractual
arrangements)
 Accordingly, either Impala, or the customer would seem to
require a beneficiation licence – whether the metal is
exported or not.
26
27
Solution
 Application of definitions of “unwrought precious metals”
semi fabricated – not clear in this context
“any article or substance containing or consisting of precious
metal contemplated in paragraph (a), but does not include
any article … that has been processed or manufactured for
one or more specific industrial, professional or artistic uses.”
 Distinguish between metal produced ex SA mine and metal
produced from already beneficiated material imported into
SA
28
Proposed way forward
30