Presentation made by EPPA/ MPBIASA & SMG Technologies Africa (Pty) Ltd

To Mpumalanga Provincial Government ( MPG )

Department of Economic Development & Tourism. 3rd September 2013

Denis Verity – Head of Research & Development MPBIASA &

CEO SMG Technologies Africa (Pty) Ltd.

Associates- Phineas Mohlala

Lot Mthombeni

Sobhuza Nonyane

Agenda

• Key trends in metallurgical industry

• Challenges for industry

• Our product

• Corporate structure & offering

• Supportive environment

Key trends in metallurgical industry include

1. Significant interest in the products and technology to increase profitability

2. Selling prices of nearly all core commodities and metals prices are weak

3. Significant impact of costs incurred by metals processors and recyclers to landfill waste materials

4. Increased environmental regulations imposed upon metals processors and recyclers with respect to landfill waste

5. Strong current focus on alternate sources of energy and the benefits from CO2 credits.

However growth doesn’t = jobs e.g non ferrous metal products

Further challenges • Increasing energy costs pose a major

threat to manufacturing, rendering our historical resource-intensive, processing-based industrial path unviable in the future. (IPAP 2)

• A failure to manage waste and waste water leads to socialised costs through, for example pollution. Dangerous waste (like acid mine drainage) must be treated to prevent damage to ecosystems, infrastructure and health, while the extraction of value from waste streams improves the cost-benefit of waste management overall. (IPAP2)

• The energy sector currently accounts for a large percentage of CO2 emissions, which directly contribute to climate change effects. It is clear that without delay we need to implement practices that will reduce demand, choose cleaner sources and deploy the best available energy technologies that will also create much needed jobs. (Minister of Energy, Minister Dipuo Peters, 18 March 2011)

• We must forge ahead to promote a more inclusive economy (President

Zuma June 2009)

Challenges

• Reuters 23 July 2012: “Anglo American Platinum (Amplats), the world's top platinum producer, signalled on Monday it plans to trim loss-making shafts as producers of the metal grapple with depressed prices and a rise in union militancy”

• Mining Weekly 23 July 2012: “Struggling Amplats going headlong into market development, cost cutting”

Current products

• The patented High-Energy

Products are made principally from recycled aluminum and aluminum oxides into end products

• The technologies mainly use low value by-products and waste materials from landfills, resulting in low raw material costs, and giving the company a strong competitive advantage

• Toxic emission reduction = carbon credits

• Long shelf life

• Safe to transport and handle

• Environmentally friendly

• Fast reactivity

• Excellent flow characteristics

• Multiple market applications

Products Explosives

Current products…. proven products

Tests conducted by the CSIR showed Samite Prill blended with commercial explosives: • Increased energy released by +/-40% • Reduced reaction time from 144 to

11ms An international physicist reported the product: • Releases 1.91 times more energy

with a resultant increase in detonation pressure of 38 – 40%

These have resulted in: • Higher velocity of detonation (VOD) • Greatly improved fragmentation • Reduced drilling & blasting costs by

40% • Improved loading and haulage • Cost savings

Explosives

Current products…. proven products

Prill is blended with fine coal in a pre-combustion strategy for injection into burners to achieve the following results:

– Reduction in noxious gases by

up to 40% – Reduction rates on kilns by

40% – Sulphur and Phosphorous

reduction – Low grade coal utilisation – Increased energy output and

CV modification – Increased metallisation

•

Products have been sold to and tested with a number of companies including:

– Xstrata – Anglo Platinum – Merafe Resources – CSIR – Mittal Steel – Sasol – Khumba

Energy Products tested with

Corporate structure

SMGA Group

SMGTA

Environment/ waste clean up

Production from waste

Energy from waste Trading

SGMA Operations

SMGA Group

Environment/ waste clean up

Medical

Toxic metals / oxides

Landfill

Production from waste

Explosives

Ferro Chrome

Manganese

Ferro Vanadium

Fertilizer

Cement

High energy products

Energy from waste

Power generation

High energy product for reducing power

consumption

Trading

Carbon

Metals

Commodities

SMGA Operations

Group Support

Group support to JV partners

includes

Licence

Group support to JV partners

Presentation material

Marketing material

Group support to JV partners

Assistance with acquiring finance

Assistance with acquiring grants

Assistance with acquiring incentives

Group support to JV partners

Plant design

Technology & resources

Training

Group support to JV partners

On going support

Benefits of on-going R&D

Supportive environment

Government supportive of green industries: • IPAP 2 will focus on the manufacturing aspects of the Green

Economy; namely Green Industries and Industrial Energy Efficiency. (IPAP2)

• National Sustainable Development and Action Plan • R2 billion Green Fund (MTEF 2012 – 14) administered through the

DBSA • EDD & IDC Green Industrialisation Work Programme of R25 billion • Integrated Resources Plan • Tax Incentive Regulations to support Energy Efficiency Regulations

once promulgated • Green Pact • Energy Efficiency Accord

Alignment between government objectives and Samtek

Government policy Objectives Samtek delivery

National Strategy for Sustainable Development & Action Plan

Clean energy & energy efficiency; sustainable infrastructure

Energy from waste

Sustainable waste management practices

Environment/ waste clean up Product from waste

National Growth Path; National Strategy for Sustainable Development & Action Plan; IPAP2

Create and protect jobs Environment waste & clean up; Production of waste; Samtech operations; Either through direct operations or through licenced operations and joint ventures

Alignment between business objectives and Samtek

Examples of business objectives

Samtek delivery

Reduce landfill Environment/ waste clean up

Reduce costs

Product from waste – explosives, energy

Reduce emissions Product from waste – explosives, energy, cement

product

Low cost inputs Product from waste – fertilizer, ferrochrome,

Ferro metals, explosives