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Second quarter 2013 - operations overview and production statistics
PALABORA MINING COMPANY LIMITED
(Incorporated in the Republic of South Africa)
Registration number – 1956/002134/06
JSE Code: PAM ISIN: ZAE000005245
(“Palabora” or “the Company”)
SECOND QUARTER 2013 – OPERATIONS OVERVIEW AND PRODUCTION STATISTICS
Magnetite continues to bolster Palabora during the copper contraction phase of the current
Lift I footprint and the transition to Lift II (currently at pre-feasibility stage) once the project is
approved. Production increased 29% to 1.5Mt from the first quarter which was affected by
rail bridge collapse following a derailment in Mozambique and 4% higher than the
comparative quarter in 2012. Copper production was impacted by disruptions associated
with a major stoppage at the concentrator following a closure order issued in terms of
section 54 of the Mine Health and Safety Act, No 29 of 1996 (“Section 54”) and strike action
at the smelter. Sustaining capital expenditure is being prioritised to plant areas with high
corrosion exposure as part of the safety improvement initiative across the mine.
2Q 3Q 4Q 1Q 2Q 1H 1H
2012 2012 2012 2013 2013 2012 2013
Palabora mine
Tonnes hoisted (‘000 tonnes) 2,729 734 2,403 2,075 2,344 5,488 4,419
Ore treated ('000 tonnes) 2,889 981 2,433 2,139 2,221 5,810 4,360
Underground ore grade: copper (%) 0.59 0.60 0.58 0.56 0.58 0.60 0.57
Copper concentrates produced ('000
tonnes) 54.4 20.3 43.7 35.5 47.8 106.2 83.3
Average concentrate grade: copper (%) 28.8 27.3 27.8 28.4 25.3 29.5 27.0
Copper in concentrates ('000 tonnes) 15.6 5.5 12.1 10.1 12.1 31.3 22.2
Palabora smelter/refinery
New concentrate smelted on site ('000
tonnes) 51.3 6.1 43.6 54.2 57.1 107.4 111.3
Imported concentrate ('000 tonnes) - - - 4.9 7.4 - 12.3
New copper anodes produced ('000
tonnes) 13.8 1.2 10.9 14.1 13.2 28.5 27.3
Refined new copper produced ('000
tonnes) 12.4 4.7 8.7 13.0 12.8 27.4 25.8
Joint product:
Magnetite concentrate ('000 tonnes) 1,420 1,475 1,428 1,146 1,482 2,377 2,628
By-product:
Nickel contained in products (tonnes) 13 2 3 6 11 27 17
Vermiculite plant
Vermiculite produced ('000 tonnes) 29 27 30 32 41 76 73
Ore hoisted increased 13% to 2.3Mt from the previous quarter which was affected by the
south winder bearing failure but is 14% lower than the comparative quarter in 2012 due to
the north winder tails rope tangle and the impact of the Section 54 induced grounding of
trackless mobile machinery. The first half ore hoisted decreased 19% to 4.4Mt compared to
the previous period in 2012 due to the underground industrial action in addition to the
challenges highlighted above.
Ore treated was 23% lower than the corresponding quarter in 2012 mainly due to the lower
underground throughput as well as suspension of concentrator operations following an injury
which resulted in a Section 54 directive being served on the concentrator. Consequently first
half ore treated was 25% lower than the comparative period in 2012. Management is paying
particular focus on compliance procedures as well prioritising corrosion control to ensure a
safe work environment.
Copper concentrate production for the quarter was 12% lower than the corresponding
quarter in 2012 mainly due to the underground and concentrator challenges highlighted
above. Concentrate produced was 35% higher compared to the previous quarter mainly due
to the deliberate reduction of concentrate grade from 28% to 25% and recovery of 8.6kt of
historic low grade concentrates. The concentrate grade was strategically reduced to
increase material smelted which is also blended with imported concentrate. This strategy
reduces the requirements for imported concentrate and helps fill the smelter’s reverbatory
furnace to ensure improved efficiencies.
Copper in concentrate production was in line with concentrate produced except for the
additional impact of lower concentrate grade. The lower grade in concentrate produced
means that the increase in copper in concentrate was lower than the increase in concentrate
produced when compared to the previous quarter.
New concentrate smelted was 5% and 11% higher than the previous quarter and
corresponding quarter in 2012 respectively mainly due to increased processing of high grade
imported concentrate. There were no concentrate imports in 2012.
New anode production was 6% lower than the previous quarter mainly due to the smelter
industrial action and the smelting of historical low grade concentrate from the ponds.
Production remained in line with the comparative quarter in 2012. Smelter operational
challenges, the industrial action and lower throughput partially offset by supplementary
concentrate imports saw the first half production decrease 4% to 27kt compared to the
corresponding period in 2012.
Refined new copper production was largely in line with anode production other than for
normal inventory fluctuations.
Magnetite production picked up from the previous quarter as explained above and in line
with the corresponding quarter in 2012.
Vermiculite production increased 28% compared to the previous quarter and is 41% higher
than the corresponding quarter in 2012. Inventory increased by 13kt for the first half of the
year and production will be monitored to ensure continued alignment with sales in line with
market conditions.
The above information has not been reviewed or reported on by the Company’s auditors.
Phalaborwa
15 July 2013
Investor Relations Contact: Dikeledi Nakene, Palabora +27 15 780 2277
Sponsor: One Capital
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