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PAM
PAM
PAM - Palabora Mining - Reviewed Provisional Results And Dividend Announcement
For The Year Ended 31 December 2009
Palabora Mining
Company Limited and its Subsidiaries
(a member of the Rio Tinto Group)
(Incorporated in the Republic of South Africa)
(Reg. No. 1956/002134/06)
JSE Code: PAM ISIN: ZAE000005245
("Group" or "Palabora" or "the Company")
REVIEWED PROVISIONAL RESULTS AND DIVIDEND ANNOUNCEMENT for the year ended 31
December 2009
COMMENTARY
Overview
Commenting on the full year results for Palabora, Managing Director Matthew
Gili said, "Palabora`s profit in 2009 is pleasing in light of the global
financial crisis."
"Gross revenue was lower in 2009 compared with 2008 because of a 37% decrease
in copper prices which was partially offset by a 35% increase in magnetite
sales over 2008 and a 42% increase in magnetite pricing. In addition, net
revenue was positively impacted by the reduction in hedge related costs.
Mr. Gili said repairs and maintenance in several mine production centers along
with an increase in purchased cathode lead to higher cost of sales and
increased production and sales of magnetite lead to an increase in selling and
distribution costs.
"We remain cautiously optimistic markets will continue to strengthen in 2010,
with demand for Copper and Magnetite remaining buoyant," Mr. Gili said.
The senior term facility was settled in 2009 with the final repayment of R80
million. The Company has outstanding debt totaling R102 million on its
revolving credit facility.
A contractor at Palabora lost his life during 2009. Palabora is saddened by
the
fatality and management continues to focus its efforts to ensure a safe
working environment by increasing management visibility and continued
engagement and education of the work force about accepting personal
responsibility towards safety.
The Board declared a dividend of R6.20 per share.
Group financial results
Reviewed Audited
For the year ended 31 December 31 December
2009 2008
Net profit for the year R284 million R720 million
Basic earnings per share 587 cents 1 489 cents
Earnings before interest, income tax,
depreciation and
amortisation (EBITDA) R1 128 million R1 308 million
Headline earnings (note 8) R289 million R721 million
Headline earnings per share 598 cents 1 493 cents
Net cash (excluding hedge) (note 12) R1 292 million R555 million
Dividend per share (declared) R6.20 R0.82
Net profit
The net profit for the year decreased from R720 million in 2008 to R284
million in 2009, or 1 489 cents per share in 2008 compared with 587 cents per
share for 2009. Headline earnings per share also decreased from 1 493 cents
per share in 2008 to 598 cents per share in 2009.
Sales revenue
Sales of products decreased by R352 million (6%) to R5 831 million in 2009,
mainly as a result of the following:
* Lower average copper prices realised which resulted in a decrease of R1 320
million in sales (the realised average copper price was 231 USc/lb in 2009
compared with 317 USc/lb in 2008);
* A decrease of 26% in other by-products sales of R62 million from R238
million
in 2008 to R176 million in 2009, mainly due to reduced industrial demand for
sulphuric acid; and
* A decline of R13 million in sales due to vermiculite sales volumes
decreasing
by 3% from 188 825 tonnes in 2008 to 183 264 tonnes in 2009;
The decreases were partially offset by:
* An increase in sales of R395 million as a result of higher magnetite sales
volumes. In 2009 magnetite sold were 2 569 thousand tonnes, a 35% increase
compared with 1 899 thousand tonnes in 2008;
* Higher magnetite and vermiculite prices increased sales by R319 million and
R24 million respectively. Magnetite prices increased due to changes in terms
of
sale from Freight-on-Board (FOB) to Cost-Freight-Insurance (CFI)/Cost-Freight-
Rail (CFR) for exported magnetite;
* Higher realised copper premiums increased revenue by R145 million;
* A marginal increase in cathode and copper rod sales volumes from 75 594
tonnes in 2008 to 76 673 tonnes in 2009 contributed an additional R83 million
in revenue; and
* The weakening of the average Rand/US$ exchange rate for the year from 8.26
in
2008 to 8.33 in 2009 increased sales by R77 million.
Product sales as a % of total sales 2009 2008
Copper 64% 78%
Industrial minerals (vermiculite) 7% 6%
Magnetite 26% 12%
Other by-products 3% 4%
Total 100% 100%
The Group achieved an average realised selling price (post hedge) for copper
rod and cathode of R36 307 per tonne(2008: R40 426) and R44 249 per
tonne(2008: R40 433)respectively.
The sales was further positively impacted by lower realised hedging losses
resulting from the contractual reduction in the swap settlement terms from 42
thousand tonnes of copper in 2008 to 22 thousand tonnes in 2009. This
resulted in a R1 031 million reduction in swap settlement costs in 2009.
Production and sales volumes
Copper cathode produced for sale decreased 9% from 75.9 thousand tonnes in
2008 to 69.4 thousand tonnes in 2009. Copper sales volumes increased 2.3%
from 85 thousand tonnes in 2008 to 87 thousand tonnes in 2009. Magnetite sales
volumes increased 35% from 1 898 thousand tonnes in 2008 to 2 568 thousand
tonnes in 2009. Acid sales volumes decreased 22% from 109 thousand tonnes in
2008 to 85 thousand tonnes in 2009.
Cost of sales
The Group has adopted a robust cost containment and cash flow preservation
strategy in response to the world economic recession. Discretionary spending
was curtailed and new labour recruits restricted to critical areas only.
The total Group cost of sales increased by 13%, from R2 761 million in 2008 to
R3 106 million in 2009. The increase in cost of sales was largely impacted by:
* An increase in cathodes purchased. In light of production difficulties faced
during the second half of the year, 7 085 tonnes of cathodes were purchased at
a cost of R343 million, of which 6 231 tonnes were converted into rod and 854
tonnes were sold directly. In 2008 Palabora purchased 753 tonnes of copper
cathode at a cost of R49 million.
* Increased plant maintenance costs. Plant breakdown-related expenses
increased
repairs and maintenance costs by 8% to R645 million in 2009 compared with R595
million in 2008. This was as a result of smelter breakdowns, failure on one of
the auto mill motors and a breakdown of the north winder drum;
* Employee costs increased by R84 million, an increase of 12%. Although a
hiring freeze of non-critical positions was imposed, the annual salary
increase and retention strategies introduced during the previous financial
year impacted on the costs;
* Depreciation expense (a non-cash charge) increased by R81 million compared
with the 2008 year, representing a 17% increase from R470 million in 2008 to
R551 million in 2009. This is attributed to the additions during the second
half of 2008 and during the current year, as well as an escalated depreciation
factor based on the lower copper yield as was assessed in the annual ore
reserve statement at the end of the previous financial year;
* Increases in power tariffs. The 27% tariff increase by Eskom in July 2009
increased costs by R38 million.
Changes in inventory of finished goods and work in progress of R210 million in
2009, compared with a credit of R240 million in 2008, resulted in an increase
of R450 million in cost of sales.
The Group saved R509 million on supplementary copper concentrate purchases due
to the lower copper prices paid in addition to the 44% reduction in volumes
purchased of 8 569 tonnes in 2009 compared with 15 396 tonnes in 2008.
Earnings before interest, income tax, depreciation and amortisation (EBITDA)
The Group achieved earnings before interest, income tax expense, depreciation
and amortisation (EBITDA) of R1 128 million in 2009 compared with R1 308
million in 2008. EBITDA is calculated by adding depreciation and amortisation
charges (refer to note 4) to the profit before net finance costs and tax as
reported on the face of the income statement.
Selling and distribution costs
Selling and distribution costs increased by R599 million. The increase in the
selling and distribution costs from R587 million in 2008 to R1 185 million for
2009 is mainly as a result of higher magnetite volumes sold, the change in
magnetite shipping terms from FOB to CFI/CFR and increased freight and
railage-to-port rates. Administration costs increased by R44 million.
Earnings before Interest and taxes (EBIT)
The Group`s profit before interest and tax was R577 million compared with R838
million in 2008, a decrease of R261 million.
Finance costs
Net finance cost increased by R116 million due to higher foreign exchange
losses on revaluations of financial instruments.
Income taxes
The effective tax rate increased from 13.3% to 37.3% in 2009 mainly as a
result
of the tax legislation changes (Royalty Act) that impacted the recognition of
deferred tax on the State share in 2008. See notes 6 & 10.
Cash flow
For the year ended 31 December 2009, the Group recorded net cash inflows of
R745 million compared with net cash outflows of R175 million in 2008, mainly
due to lower dividend and tax payments, pension fund surplus received,
decrease
in investing activities due to the postponement of non-critical capital
projects until market conditions improve, and lower repayments on borrowings.
Cash generated from operations during the year totalled R1 073 million. After
receiving the pension surplus of R241 million, tax payments of R253 million,
funding the dividend payments of R119 million, net investing activities of
R111
million, repayment of borrowings of R80 million, net interest payments of R6
million and excluding exchange losses of R97 million, the closing cash
position
was R1 395 million (compared with R747 million in 2008).
Capital investment of R132 million was primarily spent on the underground mine
(R65 million), concentrator (R24 million) and the smelter (R26 million). The
main capital costs spent in 2009 for the underground mine relate to committed
development costs of the Western Extension (R27 million), replacement of 4
LHD`s (R15 million) and winder costs (R14 million). The concentrators main
capital projects for 2009 consisted of the construction of the south paddock
tailings dams (R10 million), re- medial work at the dams (R6 million) and
improvements to the Magnetite load out and booster station (R5 million),
whilst
the smelter`s capital costs consisted of statutory replacements of waste heat
boilers one and two. The net cash outflow was offset by other investing
activities of R22 million.
The R80 million used in financing activities was for the final repayment of
the
senior term facility.
Net cash
Net cash increased from R555 million in 2008 to R1 292 million in 2009 as a
result of an increased emphasis on preserving cash through dedicated focus on
the working capital management and efficiency programme. Palabora finally
received the employer`s portion of the pension fund surplus in October 2009,
amounting to R241 milllion.
Black Economic Empowerment (BEE)
It is presently envisaged that 26% of a newly formed, special purpose
subsidiary of Palabora, which subsidiary will acquire all or an appropriate
part of Palabora`s business under the potential broad based BEE transaction
("the transaction"), will be held by a combination of(i) the consortium, (ii)
Palabora employees and (iii) a trust established forthe communities of the Ba-
Phalaborwa area, with the remaining 74% held by Palabora. Mr. George Negota is
leading a consortium of entrepreneurs ("the consortium") to acquire an equity
interest not exceeding 6%. Due to the potential conflict of interest, Mr.
Negota was recused from Board discussions relating to the Transaction at the
Board meeting held on 23 February 2009, and resigned from the Board with
effect from 24 March 2009.
On 30 April 2009, Palabora signed and submitted a Transaction Framework
Agreement (TFA) bearing the signatures of its Broad Based Black Economic
Empowerment (BBBEE) partners to the Department of Minerals and Resources (DMR)
in Polokwane. The negotiations to finalise terms of the agreement have entered
final stages and the new structure is projected to be concluded during 2010.
Declaration of dividend
A cash dividend of R6.20 per share has been declared. Payment in South African
Rand will be made on Monday, 8 March 2010 to shareholders recorded in the
register of Palabora on 5 March 2010. The last day to trade to
qualify for the dividend will be Friday, 26 February 2010 and the shares will
trade ex-dividend from Monday, 1 March 2010. Share certificates may not be
dematerialised or rematerialised between Monday, 1 March 2010 and Friday, 5
March 2010, both days inclusive.
This financial report does not reflect this dividend payable, which will be
recognised in shareholders` equity as an appropriation of retained earnings in
the year ending 31 December 2010. Refer to note 14 for details on the
dividends paid during the year.
Corporate Governance
Mr. George Negota resigned as a non-executive director and Chairman of the
Board, with effect from 24 March 2009 (see BEE).
With effect from 24 March 2009, Mr. Clifford Zungu has been appointed as
interim Chairman of the Board. Mr. Zungu has been an independent non-executive
director of Palabora since April 2002 and held the chairmanship during the
2006 financial year.
Mr. Clive Latcham resigned as a non-executive director of the Board, with
effect from 31 July 2009. With effect from 1 August 2009, Mr. Lindsay
Kirsner was appointed as a non-executive director of the Board. Mr. Kirsner
has in excess of 19 years mining industry experience in a range of roles in
mineral exploration, business development, resource development and
projects. Mr. Kirsner holds a science degree (geology & chemistry) and an
MBA, both from the University of Melbourne and has been with the Rio Tinto
Group since 2000. Presently, he holds the role of Mining Executive, Copper.
Mr. Philip J. Robinson resigned as an alternate non-executive director of the
Board, with effect from 18 September 2009. With effect from 21 September
2009, Mrs Jo-Ann S. Yuen was appointed as an alternate non-executive
director. Jo-Ann is Australian and was based in Rio Tinto`s London office
from 2003 to March 2008 and has been based in North America since April
2008. She is currently the Chief Adviser Finance to Rio Tinto Copper group
and previously the Chief Financial Officer of Rio Tinto copper projects. Jo-
Ann is a chartered accountant with a master of business administration from
the
University of Western Australia, together with a diploma in applied finance
from the Securities Institute of Australia.
At 31 December 2009 the Palabora Board was constituted as follows:
DIRECTORS ALTERNATE DIRECTORS
1. Clifford N. Zungu (Chairman) -
2. Matthew D. Gili (Managing Director)*+ -
3. Charles A. Asubonten (Chief Financial Officer)*+ -
4. Shelley Thomas -
5. Johan C. Posthumus -
6. Kay S. Priestly+ Jo-Ann S. Yuen
7. Lindsay W. Kirsner Coen H. Louwarts#
* Executive Directors +American Australian # Dutch
The following changes occurred since 31 December 2009:
Mr. Charles A. Asubonten`s secondment contract as Chief Financial Officer from
Rio Tinto to the Company ended on 31 December 2009. Charles remains a board
member until further notice. With effect from 1 January 2010, Mr. Marshall
Bruce Snyder has been appointed in the interim as acting Chief Financial
Officer whilst a comprehensive recruitment process for a suitable candidate
is undertaken. Bruce is American and was based in Rio Tinto`s Salt Lake
City office from 2002. He is currently a Business Development Executive for
Rio Tinto in the Copper Group. He has had previous Finance, Accounting,
Treasury and
Investor relations roles with several New York Stock Exchange publicly held
real estate operating companies. Bruce holds BBA Accounting and MBA Finance
and Investment degrees from the George Washington University.
During his tenure Charles Asubonten focused on value and risk management in
improving the balance sheet of Palabora. He was instrumental in the initial
structuring of a Black Economic Empowerment transaction to fit the economics
of Palabora, surrounding communities, and the employees.
Commenting on Charles` tenure as CFO, Clifford Zungu, Chairman of the board
stated: "Charles leaves behind an improved balance sheet with an enhanced cash
position and we appreciate his efforts."
With effect from 11 January 2010, Mr. Ray Abrahams and Ms Francine Ann du
Plessis were appointed as Independent Non Executive Directors. Mr. Abrahams
joins the Company with significant practical experience in operations, design,
construction, maintenance and projects within the mechanical engineering
fields of opencast mining, petrochemical, utilities and manufacturing
industries. Mr. Abrahams is a member of several professional organizations
including the Institute of Directors, Engineering Council of South Africa,
Black Management Forum and Future Leaders Forum. He holds a BSc (Mech Eng)
from Wits University, He is a registered professional engineer and also holds
Government Certificates of Competency in Mining and Factories from the
Departments of Labor and Minerals and Energy respectively. Ms. Du Plessis
joins the Company with extensive experience as a Director. She has held
several positions as director as well as
serving on Board committees in many listed and non listed companies including
SAA (Pty) Ltd, KWV Limited, Sanlam Limited, Naspers Limited. She was admitted
as an Advocate of the High Court of South Africa (Cape Town) in 1994 and she
was a Senior Lecturer at the University of Stellenboch, Department of
Accounting Faculty of Commerce and Department of Commercial Law, Faculty of
Law
in 1985 to 1993. Ms. Du Plessis is a qualified Chartered Accountant and holds
B
Comm (Hons) (Taxation), LLB, and B Comm (Law) degrees from the University of
Stellenbosch.
Appreciation
Once again we offer our thanks and appreciation to all stakeholders for their
continued assistance in Palabora`s quest to deliver value.
C Zungu MD Gili MB Snyder
Chairman Managing Director Chief Financial Officer
(Acting)
8 February 2010
REVIEWED PROVISIONAL
CONDENSED GROUP RESULTS
CONDENSED CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2009
Reviewed Audited
31 December 31 December
2009 2008
Note R`000 R`000
Sales of products 5 830 552 6 183 013
Hedge loss realised (546 677) (1 578 433)
Revenue 5 283 875 4 604 580
Cost of sales (3 105 894) (2 760 701)
Gross Profit 2 177 981 1 843 879
Other income 70 569 83 844
Exploration cost 2 (17 866) (3 283)
Impairment loss 3 (8 830) -
Selling and distribution costs (1 185 195) (586 595)
Administration expenses (447 708) (403 734)
Other expenses (11 930) (96 007)
Profit before net finance costs and tax 4 577 021 838 104
Finance costs - Net 5 (123 671) (8 024)
Finance cost (189 743) (126 284)
Finance income 66 072 118 260
Profit before income tax 453 350 830 080
Income tax expense 6 (169 513) (110 541)
Profit for the year 283 837 719 539
Profit attributable to:
Equity holders of parent 283 837 719 539
Earnings per share from continuing
operations attributable to the
equity holders of the company during
the year (expressed in cents per share):
- Basic and diluted earnings per share 7 587c 1 489c
The notes on pages 11 to 23 are an integral part of these provisional
condensed
group results.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2009
Reviewed Audited
31 December 31 December
2009 2008
Note R`000 R`000
Profit for the year 283 837 719 539
Other comprehensive (loss) / income:
Available-for-sale investments:
- Valuation gain / (loss) taken to equity 16 348 (11 811)
Exchange differences on translation of
foreign operations (35 749) 14 919
Cash flow hedges:
- (Loss) / profit arising during the year (2 100 197) 276 040
- Hedge ineffectiveness 2 840 86 741
- Transferred to profit or loss for the year 546 677 1 578 433
Actuarial gain / (loss) on defined
benefit plans 4 546 (2 491)
Income tax relating to components of other
comprehensive income 6 408 559 (688 925)
Other comprehensive (loss) / income
for the year, net of tax (1 156 976) 1 252 906
Total comprehensive (loss) / income
for the year (873 139) 1 972 445
Total comprehensive (loss) / income
attributable to:
Equity holders of the parent (873 139) 1 972 445
The notes on pages 11 to 23 are an integral part of these provisional
condensed
group results.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2009
Reviewed Audited
31 December 31 December
2009 2008
Note R`000 R`000
Assets
Non-current assets 4 252 699 4 226 751
Property, plant and equipment 9 2 990 083 3 413 767
Intangible assets 4 871 4 105
Other financial assets 360 383 313 988
Deferred income tax asset 10 897 362 494 891
Current assets 2 755 215 2 357 953
Stores 115 226 115 416
Product inventories 618 713 837 059
Trade and other receivables 626 286 658 464
Cash and cash equivalents 12 1 394 990 747 014
Total assets 7 007 914 6 584 704
Equity
Equity attributable to owners of parent
Share capital and premium 629 551 629 551
Other reserves (2 150 042) (923 910)
Retained earnings 3 200 071 2 966 385
Total equity 1 679 580 2 672 026
Non-current liabilities 3 692 211 2 775 816
Derivative financial instrument 11 2 334 899 1 363 206
Provisions:
- Close-down and restoration costs 432 526 391 330
- Post retirement medical benefits 157 334 154 603
Deferred income tax liabilities 10 767 452 866 677
Current liabilities 1 636 123 1 136 862
Trade and other payables 426 833 451 771
Derivative financial instrument 11 877 403 321 348
Borrowings 12 102 871 192 015
Current income tax liabilities 66 790 56 862
Related party payables 162 226 114 866
Total liabilities 5 328 334 3 912 678
Total equity and liabilities 7 007 914 6 584 704
The notes on pages 11 to 23 are an integral part of these provisional
condensed
group results.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2009
Attributable to owners of the parent
Share Share Retained
Capital premium earnings
R`000 R`000 R`000
Balance at 1 January 2008 48 337 581 214 2 398 853
Total comprehensive income for the year - - 717 048
Profit for the year - - 719 539
Other comprehensive income:
Revaluation of available-for-sale
investments - - -
Currency translation differences - - -
Net gain on cash flow hedges - - -
Hedge loss recycled to profit and loss - - -
Over hedged ineffectiveness - - -
Actuarial loss on defined benefit plan - - (2 491)
Tax on other comprehensive income
Items - - -
Dividends paid - - (149 846)
Unclaimed dividends - - 330
Balance at 31 December 2008 48 337 581 214 2 966 385
Total comprehensive income/(loss)
for the year - - 287 110
Profit for the year - - 283 837
Other comprehensive income:
Revaluation of available-for-sale
investments - - -
Currency translation differences - - -
Net loss on cash flow hedges - - -
Hedge loss recycled to profit and loss - - -
Over hedged ineffectiveness - - -
Actuarial gain on defined benefit plan - - 4 546
Tax on other comprehensive income
Items - - (1 273)
Dividends paid - - (119 394)
Unclaimed dividends - - 1 335
Transfer of deferred tax on items included
in other reserves - - 64 635
Balance at 31 December 2009 48 337 581 214 3 200 071
Other
Reserves Total
R`000 R`000
Balance at 1 January 2008 (2 179 307) 849 097
Total comprehensive income for the year 1 255 397 1 972 445
Profit for the year - 719 539
Other comprehensive income:
Revaluation of available-for-sale
investments (11 811) (11 811)
Currency translation differences 14 919 14 919
Net gain on cash flow hedges 276 040 276 040
Hedge loss recycled to profit and loss 1 578 433 1 578 433
Over hedged ineffectiveness 86 741 86 741
Actuarial loss on defined benefit plan - (2 491)
Tax on other comprehensive income
Items (688 925) (688 925)
Dividends paid - (149 846)
Unclaimed dividends - 330
Balance at 31 December 2008 (923 910) 2 672 026
Total comprehensive income/(loss) for the year (1 160 249) (873 139)
Profit for the year - 283 837
Other comprehensive income:
Revaluation of available-for-sale
investments 16 348 16 348
Currency translation differences (35 749) (35 749)
Net loss on cash flow hedges (2 100 197) (2 100 197)
Hedge loss recycled to profit and loss 546 677 546 677
Over hedged ineffectiveness 2 840 2 840
Actuarial gain on defined benefit plan - 4 546
Tax on other comprehensive income
Items 409 832 408 559
Dividends paid - (119 394)
Unclaimed dividends (1 248) 87
Transfer of deferred tax of items included
in other reserves (64 635) -
Balance at 31 December 2009 (2 150 042) 1 679 580
The notes on pages 11 to 23 are an integral part of these provisional
condensed
group results.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2009
Reviewed Audited
31 December 31 December
2009 2008
Note R`000 R`000
Cash flows from operating activities 936 527 404 091
Cash generated from operating
activities 1 072 899 868 484
Pension fund surplus received 241 293 -
Interest paid (35 288) (31 791)
Interest received 29 738 91 180
Dividends paid 14 (119 394) (149 846)
Income tax paid (252 721) (373 936)
Cash flows from investing activities (111 093) (295 418)
Acquisition of property, plant and
equipment 9 (131 532) (308 262)
Acquisition of intangible assets (2 286) (4 656)
Proceeds on disposal of property,
plant and equipment 258 1 256
Invested in available-for-sale
financial assets (30 048) (10 467)
Interest received 27 137 23 802
Dividends received 25 378 2 909
Cash flows from financing activities (79 947) (283 479)
Borrowings repaid (79 947) (283 479)
Net increase / (decrease) in cash and
cash equivalents 745 487 (174 806)
Cash and cash equivalents at beginning of year 747 014 841 110
Effects of exchange rate changes on
the balance of cash held in foreign currencies (97 511) 80 710
Cash and cash equivalents at end of
year 12 1 394 990 747 014
The notes on pages 11 to 23 are an integral part of these provisional
condensed
group results.
CORPORATE INFORMATION
Palabora extracts and beneficiates copper, magnetite and vermiculite from its
mines in the Limpopo Province. It is the primary aim of the Company, a member
of the worldwide Rio Tinto Group, to achieve excellence in all aspects of its
activities and to develop the Company`s resources and assets in a socially and
environmentally responsible way for the maximum benefit of its shareholders,
employees, customers and the community in which it operates. It is the
Company`s firm belief that efficient and profitable operations go hand-in-hand
with high quality products and comprehensive and effective safety, health and
environmental protection programmes.
The provisional condensed consolidated financial statements of Palabora for
the
year ended 31 December 2009 were authorised for issue in accordance with a
resolution of the Board of Directors passed on 8 February 2010.
The Group is incorporated and domiciled in South Africa. The address of its
registered office is 1 Copper Road, Phalaborwa, 1389. The company is a public
limited company which is listed on the JSE Limited.
NOTES TO THE PROVISIONAL RESULTS
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
Basis of preparation
The condensed consolidated provisional financial report for the year ended 31
December 2009 has been prepared in compliance with the South African Companies
Act, 61 of 1973, as amended, the Listings Requirements of the JSE Limited and
International Accounting Standard 34 (Interim Reporting). The condensed
consolidated provisional financial report has been prepared in accordance with
International Financial Reporting Standards.
Audit review
The provisional financial statements have been reviewed by the company`s
auditors, PricewaterhouseCoopers Inc. Their unmodified review opinion is
available for inspection at the company`s registered office.
Significant accounting policies
The condensed consolidated financial report has been prepared in accordance
with the historical cost convention except for certain financial instruments,
which are stated at fair value, and is presented in Rand, which is Palabora`s
functional and presentation currency.
Except as disclosed below, the accounting policies and methods of computation
and presentation applied in the preparation of the condensed consolidated
provisional financial report are consistent with those applied in the most
recent audited annual financial statements for the year ended 31 December
2008.
The following new standards and amendments to standards are mandatory for the
first time for the financial year beginning 1 January 2009.
* IAS 1 (revised), `Presentation of financial statements`. The revised
standard prohibits the presentation of items of income and expenses (that
is `non-owner changes in equity`) in the statement of changes in equity,
requiring `non-owner changes in equity` to be presented separately from
owner changes in equity. All `non-owner changes in equity` are required to
be shown in a performance statement.
Entities can choose whether to present one performance statement (the
statement
of comprehensive income) or two statements (the income statement and statement
of comprehensive income).
The group has elected to present two statements: an income statement and a
statement of comprehensive income.
* IFRS 8, `Operating segments`. IFRS 8 replaces IAS 14, `Segment reporting`.
It requires a `management approach` under which segment information is
presented on the same basis as that used for internal reporting purposes.
This has resulted in an increase in the number of reportable segments
presented, as the previously reported Copper by-products segment has been
split
into Joint-products: Magnetite, and By-products: Other segments. Magnetite has
changed from a by-product to a joint-product due to the increase in sales
value year on year. The costs for the mining and relevant concentrate
processes were allocated on an equivalent revenue per unit basis. The
comparatives were updated to reflect this change. Operating segments are
reported in a manner consistent with the internal reporting provided to the
executive directors. The chief operating decision-maker has been identified as
the executive directors, assisted by the general managers.
* IFRS 7 (amendment), `Amendments to IFRS 7 - Financial Instruments
disclosures: Improving disclosures about financial instruments`. The improved
disclosures will effectively be seen in the annual financial statements for
the
year ended 31 December 2009.
* Annual improvement project: 26 November 2009. Various changes to the
different standards, will only impact on disclosures in the annual report of
the financial year ended 31 December 2009.
The following new standards, amendments to standards and interpretations are
mandatory for the first time for the financial year beginning 1 January 2009,
but are not currently relevant for the group.
* IAS 23 (amendment), `Borrowing costs - Revised`;
* IFRS 2 (amendment), `Amendment to IFRS 2 Share-based payment: Vesting
conditions and cancellations`;
* IAS 32 and IAS 1 (amendment), `Amendment to IAS 32 Financial instruments:
Presentation and IAS 1 Presentation of financial statements - Puttable
Financial Instruments and Obligations Arising on Liquidation`;
* IFRS 1 and IAS 27 (amendment), `Amendment to IFRS 1 First-time adoption of
International Financial Reporting Standards and IAS 27 Consolidated and
separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly
Controlled Entity or Associate`;
* IFRIC 13, `Customer loyalty programmes`;
* IFRIC 15, `Agreements for the construction of real estate`;
* IFRIC 16, `Hedges of a net investment in a foreign operation`;
* IFRS 3, Amendment, `Business combinations and consequential amendments`;
* IFRIC 12, `Service concession arrangements.
The Group has early adopted the Improvements to IFRS 8 - Operating Segments
where a measure of segment assets is only required to be disclosed if the
measure is regularly provided to the chief operating decision maker.
Changes in estimates
Post retirement medical liability
The cost of post employment medical benefits is determined using actuarial
valuations. The actuarial valuation involves making assumptions about discount
rates, mortality rates and income at retirement. Due to the long term nature
of
these plans, such estimates are subject to significant uncertainty. The net
employee liability at 31 December 2009 is valued at R157 million compared with
R155 million at 31 December 2008. The main assumptions are summarised below:
Valuation Date 31 December 2009 31 December 2008
Discount Rate 9.50% p.a. 9.00% p.a.
Health Care Cost Inflation 8.00% p.a. 7.50% p.a.
CPI Inflation 6.00% p.a. 5.50% p.a.
Expected Retirement Age 58 58
Membership Discontinued at
Retirement 0% 0%
The valuation resulted in an actuarial gain of R4.5 million before tax (2008:
R2 million loss) being recognised in the statement of comprehensive income.
Provision for Close-down and Restoration cost
The provision for close-down and restoration costs was impacted by the
following movements during the year ended 31 December 2009:
- A R1 million increase due to a revised present closure obligation;
- An increase in the long-term inflation rate from 5.8% to 7.1% resulted in a
R2 million increase in the provision; and
- Finance charges (unwinding of discount) through the income statement
resulted
in an increase of R38 million in the provision.
Presentation changes
Related parties
Key management, as referred to in IAS 24 Related Party Disclosures, has been
identified as the executive directors. Disclosures were updated to reflect
this
change.
Income statement
Dividends received on the available-for-sale asset of R2 909 thousand, which
was presented as part of "Finance income" in the previous year, was
reclassified and reflected as part of "Other income" on the income statement
in
line with IAS 18 Revenue recognition. This resulted in a change in previous
reported amounts on the face of the income statement as follows:
As reported As reported
currently previously
R`000 R`000
For the year ended 31 December 2008
Other income 83 844 80 935
Profit before tax and net finance costs 838 104 835 195
Finance cost - net (8 024) (5 115)
Finance Income 118 260 121 169
Statement of cash flow
The effects of the exchange rate changes on the balance of cash flow held in
foreign currencies is now separately disclosed from the net increase /
(decrease) in cash in cash equivalents as per IAS 7 Statement of cash flows
requirement.
This presentation change only effects the statement of cash flow, as follows:
31 December 31 December
2009 2008
R`000 R`000
Cash flows from operating activities - as
previously reported 839 016 484 801
Effects of exchange rate change on the balance
of cash held in foreign currencies 97 511 (80 710)
Cash flows from operating activities - restated 936 527 404 091
Cash generated from operating activities - as
previously reported 975 388 949 194
Effects of exchange rate change on the balance
of cash held in foreign currencies 97 511 (80 710)
Cash generated from operating activities -
restated 1 072 899 (868 484)
Net increase/ (decrease) in cash and cash
equivalents - as previously reported 647 976 (94 096)
Effects of exchange rate change on the balance
of cash held in foreign currencies 97 511 (80 710)
Net increase/ (decrease) in cash and cash
equivalents activities - restated 745 487 (174 806)
Property, plant and equipment note
The asset categories disclosed in the property, plant and equipment note were
changed from "Mine development and infrastructure" and "Land, mineral rights
and rehabilitation assets" to the following categories listed below, as it is
believed it improves the quality of the notes to the annual financial
statement:
* Land and buildings;
* Plant and equipment;
* Capital works in progress; and
* Decommissioning asset.
This disclosure change does not have any effect on the carrying value of
property, plant and equipment. See note 9 for details.
2. EXPLORATION COST
Year Year
ended ended
31 December 31 December
2009 2008
R`000 R`000
Exploration cost (17 866) (3 283)
The exploration costs refer to expenditure incurred on the Lift II
pre-feasibility drilling. The area known as Lift II is the copper
mineralisation area below the current footprint. This area is very large and
requires considerable diamond drilling to confirm its tonnage and grade. The
Lift II area has the potential to add at least ten years to the life of mine.
3. IMPAIRMENT LOSS
Year Year
ended ended
31 December 31 December
2009 2008
R`000 R`000
Impairment loss (8 830) -
A write off of unrecoverable costs accumulated up to date on the magnetite
feasibility project relating specifically to the pipeline study, was
recognised
during the year.
4. OPERATING PROFIT
Reviewed Audited
31 December 31 December
2009 2008
R`000 R`000
Operating profit is stated after charging:
Depreciation on property, plant and equipment (549 404) (469 068)
Amortisation on intangible assets (1 520) (551)
Employee benefit expense (788 056) (704 510)
5. NET FINANCE COST
Reviewed Audited
31 December 31 December
2009 2008
R`000 R`000
Finance cost (189 743) (126 284)
Interest expense on borrowings (35 288) (31 791)
Unwinding of discount on close-down and
restoration costs (38 177) (26 899)
Net foreign exchange loss (116 278) (67 594)
Finance income 66 072 118 260
Interest income on short-term bank deposits 29 736 45 361
Interest income on pension surplus fund 22 547 23 802
Interest income on available-for-sale financial
asset 4 590 3 279
Interest income on accounts receivable balances 2 427
Net foreign exchange gain 9 197 42 942
Other finance income - 2 449
Net finance cost (123 671) (8 024)
6. INCOME TAX
The effective tax rate increased from 13.3% at 31 December 2008 to 37.3% at 31
December 2009.
The major components of income tax expense in the consolidated income
statement
are:
Reviewed Audited
31 December 31 December
2009 2008
R`000 R`000
Current income tax
South African
- Mining tax: current period (243 435) (284 847)
- Mining tax: prior period 355 4 267
- Non-mining tax: current period (7 599) (8 784)
- Non-mining tax: prior period - (2 040)
Foreign
- Current taxation (11 970) (19 657)
Deferred income tax
Relating to origination and reversal of
temporary differences:
- South African 93 413 200 456
- Foreign (277) 64
Income tax expense reported in the income
statement (169 513) (110 541)
The tax (charge)/credit relating to components of other comprehensive income
are as follows:
Tax (charge) /
Before tax credit After tax
R`000 R`000 R`000
Year ended 31 December 2009
Available-for-sale
investments:
- Valuation gain / (loss)
taken to equity 16 348 (4 578) 11 770
Exchange differences on
translation of
foreign operations (35 749) - (35 749)
Cash flow hedges (1 550 680) 414 410 (1 136 270)
Actuarial gain / (loss) on
defined benefit plans 4 546 (1 273) 3 273
Other comprehensive income (1 565 535) 408 559 (1 156 976)
Current tax -
Deferred tax 408 559
Income tax relating to
components of other
comprehensive income 408 559
Year ended 31 December 2008
Available-for-sale
investments:
- Valuation gain / (loss)
taken to equity (11 811) - (11 811)
Exchange differences on
translation of
foreign operations 14 919 - 14 919
Cash flow hedges 1 941 214 (688 925) 1 252 289
Actuarial gain / (loss) on
defined benefit plans (2 491) - (2 491)
Other comprehensive income 1 941 831 (688 925) 1 252 906
Current tax -
Deferred tax (688 925)
Income tax relating to
components of
other comprehensive income (688 925)
7. EARNINGS PER SHARE
Reviewed Audited
31 December 31 December
2009 2008
R`000 R`000
Reconciliation of net profit for earnings per
share
Net profit attributable to equity holders from
continuing operations 283 837 719 539
Net profit attributable to ordinary
shareholders from basic and diluted
earnings per share 283 837 719 539
Reconciliation of weighted average number of
ordinary shares
Weighted average number of ordinary shares for
basic and diluted earnings per share 48 337 48 337
Earnings per share 587 cents 1 489 cents
8. RECONCILIATION OF HEADLINE EARNINGS
Taxation and
Profit before tax lease Profit after tax
R`000 consideration R`000
R`000
Year ended 31
December 2009
Net profit per
income statement 453 350 (169 513) 283 837
Profit on disposal
of property, plant
and equipment (256) 96 (160)
Impairment loss 8 830 (3 302) 5 528
Headline earnings 461 924 (172 719) 289 205
Headline earnings
per share 598 cents
Year ended 31
December 2008
Net profit per
income statement 830 080 (110 541) 719 539
Loss on disposal
of property, plant
and equipment 2 208 (294) 1 914
Headline earnings 832 288 (110 835) 721 453
Headline earnings
per share 1 493 cents
9. PROPERTY, PLANT AND EQUIPMENT
Capital
Land and Plant and work in
buildings equipment progress
R`000 R`000 R`000
Carrying value - 1 January 2008 211 791 3 085 313 166 749
Cost 1 061 909 5 134 661 166 749
Accumulated depreciation (850 118) (2 049 285) -
Additions 301 138 791 168 639
Disposals (2) (3 462) -
Currency translation adjustment - 530 -
Depreciation (30 446) (427 191) -
Reclassification 2 241 147 525 (149 766)
Carrying value - 31 December
2008 183 885 2 941 506 185 622
Cost 1 064 421 5 414 791 185 622
Accumulated depreciation (880 536) (2 473 285) -
Additions 214 65 375 65 910
Disposals (1) - -
Impairment loss - - (8 830)
Currency translation adjustment - 33 -
Depreciation (29 106) (509 898) -
Reclassification (643) 60 235 (69 598)
Carrying value - 31 December 2009 154 349 2 557 251 173 104
Cost 1 063 990 5 550 440 181 934
Accumulated depreciation and
impairment (909 641) (2 993 189) (8 830)
Decommis-
sioning
asset Total
R`000 R`000
112 628 3 576 481
Carrying value - 1 January 2008
Cost 161 542 6 524 861
Accumulated depreciation (48 914) (2 948 380)
Additions 1 557 309 288
Disposals - (3 464)
Currency translation adjustment - 530
Depreciation (11 430) (469 068)
Reclassification - -
Carrying value - 31 December
2008 102 754 3 413 767
Cost 163 099 6 827 933
Accumulated depreciation (60 345) (3 414 166)
Additions 3 019 134 518
Disposals - (1)
Impairment loss - (8 830)
Currency translation adjustment - 33
Depreciation (10 400) (549 404)
Reclassification 10 005 -
Carrying value - 31 December 2009 105 379 2 990 083
Cost 166 118 6 962 482
Accumulated depreciation (60 739) (3 972 399)
10. DEFERRED TAX
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities
and when the deferred income taxes relate to the same fiscal authority.
Deferred income taxes are calculated at the tax rates prevailing in the
different fiscal authorities where the asset or liability originates.
Deferred income tax assets are recognised to the extent that future taxable
benefits are generated against which the deferred tax asset can be realised.
At
31 December 2009 the company had no unredeemed capital expenditure (2008:
nil).
The gross movement on the deferred income tax account is as follows:
Reviewed Audited
31 December 31 December
2009 2008
R`000 R`000
At 1 January (371 786) 116 619
Tax charged to equity 408 560 (688 925)
Income statement charge 93 136 200 520
Net deferred tax asset/ (liability) 129 910 (371 786)
Deferred taxation relating to temporary
differences is made up as follows:
Assets
Provisions 77 625 86 387
Derivative financial instrument 896 740 482 330
STC credits 622 12 561
Other - 10 768
974 987 592 046
Liabilities
Property, plant and equipment (841 674) (1 071 245)
Change in tax legislation - 107 413
Other (3 403) -
(845 077) (963 832)
Net deferred tax asset/ (liability) 129 910 (371 786)
Included in the balance sheet as follows:
Deferred tax asset 897 362 494 891
Deferred tax liability (767 452) (866 677)
Net deferred tax asset/ (liability) 129 910 (371 786)
11. OTHER FINANCIAL LIABILITIES
Derivative Financial Instrument - Cash flow hedge
At 31 December 2009, the Group held a commodity swap contract designated as a
hedge of expected future sales under which the Group receives a fixed price in
Rand in relation to a monthly notional quantity of copper sales as detailed
below and pays a floating price based on the arithmetic average (mean) of the
US$ LME Cash Settlement Price. The net receipt/payment is converted to Rand at
the average Rand/US$ exchange rate for the calculation period. The cash flows
paid under the terms of the hedging instrument are designed to reduce
variability in the Rand proceeds of the copper sales as set out in the table
below.
A hedge is considered to be highly effective if the results of the
retrospective and prospective effectiveness tests are within the range of 80%
-
125%. Even if the effectiveness calculation falls within the 80% - 125% range,
an ineffectiveness portion may arise if the change in the hedging instrument
exceeds the change in the hedged item (over-hedge). The ineffective portion of
the change in the fair value of the hedging instrument is recognised directly
in the income statement. As at 31 December 2009 the cashflow hedges of the
expected future sales were assessed to be highly effective and R2 million
over-hedged ineffectiveness was recognised in the income statement.
The combined hedged book amounts to 81 480 tonnes of copper for a total amount
of R3 212 million as at 31 December 2009 spread over 3.75 years.
The terms of the contracts are as follows:
Table of terms: 2009 Average
hedged Hedged Derivative
Quantity price value liability
Maturity Year (t) ZAR/t R`000 R`000
2010 22 188 15 739 349 219 862 803
2011 21 825 15 739 343 500 867 077
2012 21 137 15 739 332 668 832 824
2013 16 330 15 739 256 998 627 851
81 480 1 282 385 3 190 555
Unamortised component of non-observable
inception gain 21 747
Total of derivative financial instrument 3 212 302
Comprising of:
Non-current portion
Derivative financial instrument 2 327 752
Unamortised component of non-observable
inception gain 7 147
Total non-current portion 2 334 899
Current portion
Derivative financial instrument 862 802
Unamortised component of non-observable
inception gain 14 601
Total current portion 877 403
Total of derivative financial instrument 3 212 302
Table of terms: 2008 Average
hedged Hedged Derivative
Quantity price value liability
Maturity Year (t) ZAR/t R`000 R`000
2009 22 265 15 739 350 427 310 964
2010 22 188 15 739 349 219 336 128
2011 21 825 15 739 343 500 350 372
2012 21 137 15 739 332 668 355 761
2013 16 330 15 739 256 998 283 808
103 745 1 632 812 1 637 033
Unamortised component of non-observable
inception gain 47 521
Total of derivative financial instrument 1 684 554
Comprising of:
Non-current portion
Derivative financial instrument 1 326 070
Unamortised component of non-observable
inception gain 37 136
Total non-current portion 1 363 206
Current portion
Derivative financial instrument 310 963
Unamortised component of non-observable
inception gain 10 385
Total current portion 321 348
Total of derivative financial instrument 1 684 554
12. NET CASH
Effective Reviewed Audited
interest rate % Maturity 2009 2008
R`000 R`000
Current
Senior Term Libor+2.0%/
Facility Jibar+2.35% 30.06.2009 - 74 351
Revolving Libor+2.0%/ Semi-
credit Jibar+2.35% annually 102 871 117 664
facility
Total
borrowings 102 871 192 015
Cash and cash
equivalents (1 394 990) (747 014)
Net cash (1 292 119) (554 999)
Net cash consist of borrowings and cash and cash equivalents. It is calculated
consistently year on year.
Approximately 54% of the group`s existing borrowings is denominated in US$ for
a total amount of US$7.5 million. The terms of repayments are consistent with
the information disclosed in the December 2008 annual financial statements.
Senior term facility agreement
Total principal repayments of R80 million were made on the senior term
facility
during the year. This was for the final and complete settlement of the senior
term facility balance.
Loan covenants
No defaults were declared.
13. RELATED PARTY TRANSACTIONS
Reviewed Audited
31 December 31 December
2009 2008
R`000 R`000
The following transactions were carried out
with related parties:
Recovery of travel and staff costs 7 3 695
Purchases of goods and services 492 810 170 124
Key management compensation (executive
directors) 10 976 7 250
Management fee (Rio Tinto London) 29 076 26 777
The increase in purchased goods and services is due to the increased use of
Rio
Tinto Shipping to accommodate the increased magnetite tonnages shipped.
14. DIVIDENDS PAID
The following dividends were paid during the year:
Reviewed Audited
31 December 31 December
2009 2008
R`000 R`000
Previous year final dividend:
82 cents per qualifying ordinary share (2008:
310 cents) 39 637 149 846
Interim dividend:
165 cents per qualifying ordinary share 79 757 -
Dividends paid 119 394 149 846
15. SEGMENT REPORTING
For management purposes, the Group is organised into operating segments based
on the nature of the products and services provided, and has four reportable
operating segments as follows:
* Copper - produces and markets refined copper.
* Joint-product: Magnetite - markets processed current arisings and built-up
stockpiles of magnetite, a joint-product from the copper mining process.
* By-products: Other - includes anode slimes, sulphuric acid and nickel
sulphate.
* Industrial Minerals - produces and markets vermiculite.
Management monitors the operating results of its operating segments separately
for the purpose of making decisions about resource allocation and performance
assessment. Segment performance is evaluated based on operating profit or loss
which in certain respects, as explained in the table below, is measured
differently from operating profit or loss in the consolidated financial
statements. Group financing (including finance costs and finance income) and
income taxes are managed on a group basis and are not allocated to operating
segments.
Transfer prices between operating segments are set on an arm`s length basis in
a manner similar to transactions with third parties.
Year ended 31 December 2009 Industrial Joint-products:
Copper Minerals Magnetite
R`000 R`000 R`000
Revenue
Sales to external customers 3 713 218 427 902 1 512 965
Hedge loss relised (546 677)
Segment Revenue 3 166 541 427 902 1 512 965
Results
Segment results 300 938 40 954 90 480
Unallocated profit before net
finance cost and tax
Profit from operations before tax
and finance costs
Net finance costs
Profit before income tax
Income tax expense
Profit for the year
Year ended 31 December 2009 By-products:
Other Total
R`000 R`000
Revenue
Sales to external customers 176 467 5 830 552
Hedge loss reaised (546 677)
Segment Revenue 176 467 5 283 875
Results
Segment results 128 535 560 907
Unallocated profit before net finance
cost and tax 16 114
Profit from operations before tax
and finance costs 577 021
Net finance costs (123 671)
Profit before income tax 453 350
Income tax expense (169 513)
Profit for the year 283 837
Year ended 31 December 2008 Industrial Joint-products:
Copper Minerals Magnetite
R`000 R`000 R`000
Revenue
Sales to external customers 4 744 324 411 484 789 580
Hedge loss realised (1 578 433)
Segment Revenue 3 165 891 411 484 789 580
Results
Segment results 450 372 56 559 141 306
Unallocated profit before net
finance cost and tax
Profit from operations before tax
and finance costs
Net finance costs
Profit before income tax
Income tax expense
Profit for the year
Year ended 31 December 2008 By-products:
Other Total
R`000 R`000
Revenue
Sales to external customers 237 625 6 183 013
Hedge loss realised (1 578 433)
Segment Revenue 237 625 4 604 580
Results
Segment results 189 505 837 742
Unallocated profit before net
finance cost and tax 362
Profit from operations before tax
and finance costs 838 104
Net finance costs (8 024)
Profit before income tax 830 080
Income tax expense (110 541)
Profit for the year 719 539
16. COMMITMENTS
Commitments contracted for at balance sheet date were R93 million
(2008: R86 million). Capital expenditure that was approved by the board,
but not contracted for at 31 December 2009 amounts to R135 million
(2008: R179 million).
17. CONTINGENT LIABILITIES
Various legal matters, including labour cases before the CCMA, are in
progress.
The potential exposure is approximately R34 million.
18. POST BALANCE SHEET EVENTS
Dividend declaration
The board resolved to declare a dividend of R6.20 per share at a meeting held
on 4 February 2010. This financial report does not reflect this dividend
payable, which will be recognised in shareholders` equity as an appropriation
of retained earnings in the year ending 31 December 2010.
19. GROUP SELECTED STATISTICS
There have been no material changes to the information disclosed in the annual
report in compliance with paragraph 8.63(m) for the year ended 31 December
2008.
2009 2008
Revenue
Copper (including hedge) R` million 3 167 3 166
Copper by-products R` million 176 237
Industrial Minerals R` million 427 411
Magnetite R` million 1 513 790
Net profit before tax R` million 453 830
Copper
Ore hoisted millions of tonnes 11.54 11.76
Average copper grade % Cu 0.611 0.601
Copper in concentrates
produced `000 of tonnes 76.9 84.6
Cathode produced `000 of tonnes 69.4 75.9
Average copper
price realised USc/lb 230.8 316.6
LME Copper Price USc/lb 233.6 315.5
Average sales rand/dollar
exchange rate realised R/USD$ 8.33 8.26
Spot rand/dollar exchange
rate R/USD$ 7.40 9.37
Average copper price
realised (pre-hedge) R/tonne 47 373 57 675
Average copper price
realised (post-hedge) R/tonne 44 249 40 433
Net cash cost R/tonne 16 855 18 198
Copper Rod
Unit selling price
pre hedge USc/lb 232.0 337.5
Unit selling price
post hedge USc/lb 197.7 222.0
Sales tonnes 48 445 51 954
Cathode
Unit selling price
pre hedge (local) USc/lb 222.5 319.5
Unit selling price
post hedge (local) USc/lb 189.6 211.1
Sales (local) tonnes 23 202 15 989
Unit selling price
pre hedge (export) USc/lb 257.0 169.0
Unit selling price
post hedge (export) USc/lb 219.5 111.3
Sales (export) tonnes 5 026 7 651
Vermiculite
Vermiculite sold tonnes 183 264 188 825
Average vermiculite prices
realised R/tonne 2 352 2 094
Operational cash cost R/tonne 782.1 596.4
Production `000 of tonnes 2 845 1 951
Magnetite
Magnetite sold tonnes 2 568 564 1 898 859
Average magnetite prices
realised R/tonne 589 416
Production `000 of tonnes 196 199
Anode slimes
Anode slimes sold tonnes 89 105
Average anode slimes prices
realised R/tonne 1 570 331 1 412 871
Nickel sulphate
Nickel sulphate sold tonnes 370 173
Average nickel sulphate
prices realised R/tonne 24 381 45 503
Sulphuric acid
Sulphuric acid sold tonnes 85 464 109 178
Average sulphuric acid
prices realised R/tonne 326 747
Imported concentrate
Volumes Tonnes copper 11 168 13 562
Cost R` million 469 708
R/tonne of
Unit purchased price copper 42 035 52 220
Marginal ore concentrate
Volumes Tonnes copper 3 632 1 834
Cost R` million 112 68
R/tonne of
Unit purchased price copper 30 842 37 271
Cash flow
Cash from operating
activities R` million 937 404
Cash in bank R` million 1 395 747
Costs
Production cost (excluding
concentrate purchases) R` million 2 181 2 091
Cost of sales R` million 3 106 2 761
Capital expenditure and
commitments
Capital expenditure R` million 134 313
Approved expenditure R` million 135 179
Contracts placed R` million 93 86
Investments
Fair value of unlisted
investments R` million 360 314
Share capital
Authorised ordinary shares
of R1 each R`000 100 000 100 000
Issued ordinary shares
of R1 each R`000 48 337 48 337
Net asset value per share R/share 34.75 55.28
Employees
Number of employees 2 021 2 191
Date: 08/02/2010 16:00:49 Produced by the JSE SENS Department.
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