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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 2012 ' OPERATIONS OVERVIEW AND PRODUCTION STATISTICS
Increased magnetite production, taking advantage of increased logistical capacity from road
trucking and rail together with consistent hoisting and smelter operational performance have
been the main highlights for the first half of the year. The higher magnetite production will
alleviate to an extent the lower commodity prices precipitated by the continued sovereign
debt crises in Europe and uncertainties relating to growth in the developed and developing
economies.
Ore hoisted tracked the previous and corresponding quarter in 2011 however the ore grade
declined from 0.66% to 0.60% in the first half of the year compared to the corresponding half
in 2011. This decrease was expected due to alteration of mining tactics and continues to be
monitored. Ore hoisted and copper production will be impacted by the failure of the newly
replaced ore-hoisting guide rope on 4 July 2012 which resulted in damage to the skip
loading station of the production shaft. The Managing Director, Anthony `Tony' Lennox, said
'I am pleased to advise that no one was injured in the accident and efforts are underway to
bring the production shaft back into operation safely and as soon as possible'.
Copper inventory will be used to meet customer requirements with measures in place to
minimize the impact of the incident on our copper customers until full production is restored.
Magnetite production will be increased to utilize full logistics capacity currently available.
2Q 3Q 4Q Q1 Q2 1H 1H
2011 2011 2011 2012 2012 2011 2012
Palabora mine
Tonnes hoisted (`000 tonnes) 2,715 3,024 2,403 2,759 2,729 5,316 5,488
Mined ore treated (`000 tonnes) 2,623 2,969 2,434 2,615 2,691 5,146 5,306
Slag ore treated (`000 tonnes) 341 164 411 306 198 663 504
Total Ore treated ('000 tonnes) 2,964 3,133 2,845 2,921 2,889 5,809 5,810
Underground ore grade: copper (%) 0.65 0.63 0.63 0.60 0.59 0.66 0.60
Slag ore grade: copper (%) 1.53 1.78 1.13 1.66 1.63 1.36 1.65
Copper concentrates produced ('000
tonnes) 61.2 58.2 50.1 51.8 54.4 119.6 106.2
Average concentrate grade: copper (%) 30.7 31.2 29.9 30.4 28.8 30.1 29.6
Copper in concentrates ('000 tonnes) 18.7 18.2 15.0 15.7 15.6 36 31.3
Palabora smelter/refinery
New concentrate smelted on site ('000
tonnes) 62.6 45.4 60.4 56.1 51.3 124.9 107.4
New copper anodes produced ('000 tonnes) 18.2 10.8 15.7 14.7 13.8 32.9 28.5
Refined new copper produced ('000 tonnes) 17.3 10.2 16.7 15.0 12.4 32.1 27.4
2Q 3Q 4Q Q1 Q2 1H 1H
2011 2011 2011 2012 2012 2011 2012
Joint product:
Magnetite concentrate ('000 tonnes) 820 744 985 957 1,420 1,700 2,377
By-product:
Nickel contained in products (tonnes) 28 23 9 14 13 55 27
Copper sold as concentrate ('000
tonnes) 0.4 3 0.6 - - 1.7 -
Vermiculite plant
Vermiculite produced ('000 tonnes) 51 48 23 47 29 94 76
Ore hoisted was 3% higher for the first half compared to the comparative period in 2011
and tracked the previous and corresponding quarter in 2011. The ore grade is showing
natural block cave degradation, and is within the acceptable limits of the declared ore
reserves.
Total ore treated was in line with underground supply and reduced slag processed as the
surface material is depleted.
Concentrate produced for the quarter was 5% higher and 11.2% lower compared to the
previous and corresponding quarter in 2011. The higher concentrate produced during Q2
compared to Q1 is attributed to higher concentrator recoveries in Q2 compared to Q1
following the improvement in the quality of material processed. The lower concentrate
produced against the comparative period in 2011 arose from lower grades realised during
2012 compared to H1 2011. Lower concentrator recoveries during H1 2012 compared to H1
2011 also negatively impacted concentrate produced as a result of higher content of slow
and non floating material in the ore mined.
Copper in concentrate produced was 16.6% lower compared to the corresponding quarter
in 2011 and 13.1% lower than the corresponding half for the same reasons highlighted
above. The recovery rate has since normalised following the implementation of corrective
measures whilst the impact of lower ore grade continues to be monitored.
New concentrate smelted for the quarter was 18% lower than the corresponding quarter in
2011 and 14% lower for the first half compared to the corresponding period in 2011 due to
lower concentrate stocks.
New copper in anodes production was 24.1% lower than the corresponding quarter and
13.4% lower for the first half compared to the corresponding period in 2011 due to lower
concentrate stocks. Scheduled and opportune maintenance in the smelter and the
concentrator is being aligned with the impacts arising from the guide rope failure at the
mining operations.
Refined copper production was 17.3% and 28.3% lower than the previous and
corresponding quarter in 2011 respectively and 14.6% lower than the corresponding half in
line with anode supply.
Magnetite production increased by 48.4% and 73.1% compared to the previous and
corresponding quarter in 2011 in line with improved logistical capacity and the road trucking
initiative to the Maputo port. Compared to the corresponding half, magnetite production
increased by 39.8% for the same reasons highlighted above.
Vermiculite production was 38.3% and 43.1% lower than the previous and corresponding
quarter respectively in line with depressed demand and increased competition on the global
market. The challenges highlighted above saw production for the first half being 19.1% lower
than the corresponding half in 2011.
The above information has not been reviewed or reported on by the Company's auditors.
Phalaborwa
16 July 2012
Investor Relations Contact: Dikeledi Nakene, Palabora +27 15 780 2277
Media Contact: Keith Mathole, Palabora +27 15 780 2224
Gugulakhe Lourie, Rio Tinto South Africa +27 11 911 9700
Sponsor: One Capital
Date: 16/07/2012 04:05:00 Supplied by www.sharenet.co.za
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