NERSA Presentation MYPD 4 - Creating strength. January 2019
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NERSA Presentation
MYPD 4
January 2019
Creating strength.
1Topics
• Introduction to Manganese Metal Co.
o 10 Key Facts About MMC
o Beneficiation Impact in South Africa
• 3 main issues
o 3 Year pricing without a strategy
o Short Term Framework
o Cross subsidies
• Proposal
• Final take away
Creating strength. 210 Key Facts About MMC
1 28,000 tpa nominal production, operating
at full capacity
2 World’s largest producer of
99.9%, selenium-free electrolytic manganese metal
3 Established
experience
1974 44 years’ of industry 4 600 Employees 400 permanent
5 100% locally owned and operated. 6 95% of production is exported, direct
relationships with all customers
7 ISO certification Quality Management
9001 and Environmental Protection 14001
8 Exclusive producer of electrolytic
manganese metal in Southern Africa
9 Beneficiation of 80,000t of Manganese
ore fines from Northern Cape
10 Consistent 40MW offtake from Eskom
with a exceptionally high load factor.
Creating strength. 3Manganese Beneficiation for South Africa
Limpopo
Polokwane MOZAMBIQUE
Beneficiation
Pretoria Mbombela
(Nelspruit) By processing 80,000t of Mn Ore
Mafikeng Maputo
North West
Johannesburg
Gauteng SWAZI- washer tailings to 28,000t of
Mpumalanga LAND Manganese Metal creates an
Hotazel
additional
R950M
Kwazulu-Natal
Free State
Kimberly
Bloemfontein Main ports used: value for SA Inc
Northern
Pietermaritzburg Durban &
Cape
Maputo
Durban
SOUTH
AFRICA
$80m
Eastern Cape Exporting 28,000t ElMn
Bisho
$10m
Western
Cape
Cape Town
Exporting 80,000t Mn Washer Tailings
Creating strength.
4Beneficiation Impact in South Africa – per Annum
600
MANNIKIN GENERAL TRADING CC J & M CONSTRUCTION CC STEWARTS & LLOYDS NELSPRUIT (P DANA TRAVEL AGENCY BROCOM ELECTRICAL LOWVELD COMPRESSOR SERVICES PPE TECHNOLOGIES CC WASA (PTY) LTD BIATON PAVING DU PAINT SPECTRO ANALYTICAL INSTRUMENTS JOHN MOFFAT PROLOCK (PTY) LTD RIEBA CLOTHING
(PTY) LTD
SIZANANE 7 CC FIDELITY SECURITY SERVICES SIZONKE TRADING (PTY) LTD ENVIROENG (PTY) LTD POWERFORCE HYDRAULICS ACTOM ELECTRICAL MACHINES RENOLD CROFTS SA (PTY) LTD EAGLE BURGMANN SEALS S.A. TRU-TRAC ROLLERS (PTY) LTD LOADCELL SERVICES PHOENIX CONTACT(PTY) LTD SGS METLAB (PTY) LTD
LOWVELD GLT CHEMICALS
200 Local
DIRARO LOGISTICS ROCKY'S ARMATURE WINDERS CC FREUDENBERG FILTRATION LOWVELD SCALE SERVICES REINFORCING STEEL CONTRACTORS PARSLEY STUDIOS CC TEMPLE WASTE CC ELITE GAS INSTALLATIONS CC MACDONALD'S TRANSPORT VITRAFORM GLASSWARE CC NON-FERROUS METAL WORKS (SA) (
TECHNOLOGIES BLASTRITE (PTY) LTD UPINGTON LIRA ELECTRICAL CONTRACTORS CC
SASOL OIL (PTY) LTD AGTI MINING SUPPLIES (PTY) LTD ZIMCO ALUMINIUM (PTY) LTD THE SURVEILLANCE FACTORY EZEE-DEX BRAYSHAW DIESEL FILTRATION CC NUSAFRICA BEARINGS AND GAS HANDLING SYSTEMS (PTY) LTD. VAN WETTENS BREAKDOWN SERVICES
BEARING MAN GROUP EPOCH HYDRAULIC ENGINEERING CORRO PUMP MANUFACTURING CC GEOLUFT
SEMICONDUSTOR SOLUTIONS EMS BELTING MPUMALANGA C.C WEIR MINERALS AFRICA (PTY) LTD IMP CALIBRATION SERVICES (PTY) LTD TWEEDIE AUTO ELECTRIC CC CONTACT COMMUNICATIONS BULKMATIC SOLIDS MACHINERY (PTY) ANCHOR INDUSTRIES (PTY) LTD ROTHENBERGER TOOLS SA (PTY) LTD
businesses
AJ DEETLEFS VERVOER NATIONAL QUALITY ASSURANCE NELSPRUIT LTD MONITORING & CONTROL MAN TRUCK AND BUS (SA)
CERTIFICATION (PTY) LTD. LABORATORIES (PTY) LTD
S & R PROJECTS HI-TECH REFRACTORIES (PTY) LTD CMS CONDITION MONITORING ICAT ENVIRONMENTAL SOLUTION ACTOM ELECTRICAL PRODUCTS A TENOVA MINING AND MINERALS AJM ENGINEERING SERVICES CC
NEW COMMUNICATIONS CC SERVICES CC DIVISION OF ACTOM (PTY) LTD PRO.COM PRODUKTA MOTORS (PTY) LTD RUDAMANS NELSPRUIT (PTY) LTD SOUTH AFRICA (PTY)LTD
UPAT SA (PTY) LTD PUMPTEC
LOESCHE SA AIR LIQUIDE (PTY) LTD FIRST CONSULTING ALLIANCE (PTY) MY OFFICE
R70m
NTLEMO PROJECTS DRIZIT ENVIRONMENTAL CC LTD POWERMAN SALES C.C. LABOTEC (PTY) LTD WORKWEAR DEPOT (PTY) LTD BUILDERS WAREHOUSE (PTY) LTD TAZCHEM (PTY) LTD
DEMAG CRANES & COMPONENTS NELSPRUIT ARMATURE WINDERS C.C
Employees
GREEN DOT PARTNERSHIP IMPROCHEM (PTY) LTD (CUSTOMER MOMAR SALES & FINANCE C.C.
ACCOUNT NO. 10830444) DECATYPE (PTY) LTD AMD-ROTOLOK (PTY) LTD VITECH ENGINEERING & SALES DRAGER SOUTH AFRICA (PTY) LTD KLERKSCALE (PTY) LTD ELEN ELECTRICAL ENCLOSURES ZANDERSON ESTABLISHMENTS PTY LTD MPUMALANGA DUCT SHOP
EURO STEEL DE KAAP ELECTRICAL CC
ASM ANTON SMIT MAINTENANCE YOKOGAWA SA (PTY) LTD.
GROWTH-LINK (PTY) LTD FILTAQUIP (PTY) LTD LOWVELD GARAGE EQUIPMENT CC KARCHER MOPANI PHARMACY H2O INTERNATIONAL MPUMALANGA MACSTEEL VRN (PTY) LTD STEEL ROPES CC VIPRO (PTY) LTD
COMPAIR SA (PTY) LTD ARMCO SUPERLITE (PTY) LTD
LECO AFRICA (PTY) LTD PENSAO GUEST HOUSE
R330m R140m
WINMAR DISTRIBUTORS (PTY) LTD JONES & WAGENER CONSULTING ARB ELECTRICAL WHOLESALERS (PTY) INTERWASTE (PTY) LTD PRO PLASTIC SIGNS SACKSPACKAGING NATIONAL SEPARATIONS (PTY) LTD NELSPRUIT TRAILER PARTS CC I S L ENTERPRISES (PTY) LTD
CIVIL ENGINEERS (PTY) LTD LTD JNR ENGINEERING (PTY) LTD BARLOWORLD EQUIPMENT (PTY) LTD
TITAN PROJECTS CC LOWVELD CHEMICALS
DANS ELECTRICAL SERVICES ERNEST LOWE ASTORE AFRICA (PTY) LTD MERCK MILLIPORE (PTY) LTD GIJIMA AST GROUP (PTY) LTD. TEMPERATURE CONTROLS (PTY) LTD DULUX (PTY) LTD
NEDA ENGINEERING GROUP (PTY) L RS COMPONENTS SA LTD MAGNITECH (PTY) LTD MERCURE NELSPRUIT
ELECTRO SYSTEMS ELECTRICAL ENG THE U JOINT AND THE CV JOINT C
TELECONTROLS FILVENT (PTY) LTD AFROX LIMITED MANDLAKAZI ELECTRICAL TECHNOLO HEWLETT PACKARD SOUTH AFRICA THERMOLAG MPUMALANGA TIMBERS
INDUSTRIAL FLUID CONTROL (PTY) HEWLETT PACKARD SOUTH AFRICA LAFARGE INDUSTRIES SOUTH AFRICA (PROPRIETARY) LIMITED (INC) SPERO SENSORS & INSTRUMENTS (PTY)
ENGEN PETROLEUM LTD (PROPRIETARY) LIMITED LTD TRANSPHARM PHARMACEUTICAL
MORSE NURSERIES (PTY) LTD CAREL DE JAGER VERVOER TRUST. ANALYSERS ON-LINE CC PANALYTICAL (PTY) LTD PORETECH CC CAMP AND GAS CENTRE CC (PTY) LTD
ADA INDUSTRIAL SERVICES PTY LTD
CHEMICORP CC
HYTEC (PTY) LTD
EASTERN TRANSVAAL VALVE &
ENGINEERING
STONE STAMCOR (PTY) LTD
JONET ENGINEERING & FIELD
*minimum wage R9,075pm
FIRE CONTROL SECURITY SERVICES MICRON LABORATORY SERVICES CC INDUSTRIAL COOLING TOWERS EMP INDUSTRIAL ANALYTICAL (PTY) LT SERVICES BESTLINE MANUFACTURING ALCO-SAFE (PTY) LTD NELSPRUIT GENERAL & AUTO REPAIRS
COLLIERY TRAINING COLLEGE (PTY) (PTY) LTD BELL EQUIPMENT CO SA (PTY)
BIDVEST PRESTIGE CLEANING SERVICE THOMAS TYRES NELSPRUIT MPUMALANGA COPIERS (PTY) LTD
(PTY) LTD LOWVELD MOBILE CRANE HIRE AND LTD COMMERCIAL MEGA PAINTS NELSPRUIT SPECTRUM COMMUNICATIONS (PTY) BLANES PRESSURE SOLUTIONS CC BIDVEST WALTONS - A DIVISION OF CECIL NURSE BUSINESS FURNITURE NBH SPRINGS NELSPRUIT (PTY)
AGRI-ENVIRO SOLUTIONS (PTY) LTD BIZ AFRIKA 925 (PTY) LTD BIDVEST OFFICE (PTY) LTD
MANDLA AND VELISWA
R44m
OHS CARE CC SEW EURODRIVE (PTY) LTD THE COMBUSTION GROUP (PTY) LTD CONSTRUCTION AND ELECTRICAL SGS SOUTH AFRICA (PTY) LTD LIFT & SHIFT QOTHO LABORATORY SERVICES RIDDS AQUA CENTRE (PTY) LTD LOWVELD AUDIO
MACROBERT ATTORNEYS CHICK HENDERSON DIV OF INMINS ASTORE KEYMAK PROTEA CHEMICALS INLAND
TRADING (PTY) LTD
DW RUBBERLINERS CC IDEAL PATTERNMAKERS & TOOLING ( SIMAGUMBI TRADING CC VEGA CONTROLS SA MINUTEMAN PRESS DAWSON & DOBSON (PTY) LTD. BIDFOOD MPUMALANGA TEST AND MEASUREMENT MAIZEY PLASTICS
PTY)LTD DRAUGHTING AND DESIGNS FESTO (PTY) LTD POWERTECH TRANSFORMERS (PT INSTRUMENTS
MICROSEP
SIMUNYE BOILER REPAIRS NELROH TRADING ENTERPRISES VOLTEX NELSPRUIT TYREHOUSE NELSPRUIT PRO PRESENTATION CC HILTI (SOUTH AFRICA) (PTY) LTD. ENVIROSERV WASTE MANAGEMENT
AQUAFARM & DESIGN CC BRUTES AIR SOLUTIONS (PTY) LTD PEST CONTROL SPECIALISTS (PTY) CUSTOMER NO. 16818317 RJM SYSTEM (PTY) L TD REPAIR AND METROLOGY SERVICES (PTY) LTD
Bambanani Hydraulics (PTY) LTD.
KELSEY CONSTRUCTION CC INTO INSTRUMENTATION & PROTEA TYRES TRUCKENDEN (PTY) LTD ENSafrica COMPAL CRANES (PTY) LTD t/a
WARDS COMPRESSORS AND BABATA PUMPS (PTY) LTD t/a THOMAS TYRES NESLPRUIT COMPAL INDUSTRIES ELEPHANT LIFTING EQUIPMENT (PT PEOPLE RESOLUTIONS ELMADRE BUTCHERY FIRE PROTECTION ASSOCIATION OF
ENGINEERING SERVICES CC KLINGER MZANSI PTY LTD INFRASPEC
HARVEY WORLD TRAVEL BEARING SERVICES NELSPRUIT(PTY) TOOL & PRECISION ENGINEERING C
STEEL TECHNOLOGIES LTD JOHN CRANE (PTY) LTD CROCODILE FIBREGLASS (TVL) CC MPUMALANGA CONSULTING DCD ROLLING STOCK, A DIVISION OF DUPLEIX LIQUID METERS DEMS (PTY) LTD
BLUE CUBE SYSTEMS (PTY) LTD SEMICONDUCTOR SOLUTIONS ENGINEER DCD GROUP (PTY) LTD HEWLETT PACKARD ENTERPRISES
WILZA CRANE HIRE CC CAPE MATERIAL HANDLING
PRAGMA (PTY) LTD MAN AUTOMOTIVE (SOUTH AFRICA) B T INDUSTRIAL SUPPLIES AND QUIPMENTCC T/A CALLON SOLID CHAPMAR INDUSTRIES CC AVENG MANUFACTURING SCAW METALS GROUP
SIVULAMATFUBA RUBBERLINING TYRES MAN DIESEL & TURBO SOUTH AFRICA SUPER BRAKE SERVICES CC VERDER SCIENTIFIC (PTY) LTD AUTOMATION & CONTROL INTRATEC DATA SOLUTIONS
REFRACTORY & FIBRE INSTALLATIONS SERVICES (PTY) LTD (PTY) LTD SOLUTIONS
THE PUMPSMITH NOSA (PTY) LTD BEARINGS 2000 PTY LTD GREEN GAIN CONSULTING (PTY) LTD MAFUNYANE DISTRIBUTORS (PTY) LTD
300 National
FORMS MEDIA INDEPENDENT AFRICA QUADRANT CHEMPLAST (PTY) LTD STAWIRE THE INSTITUTE OF WASTE
RJK MACHINES SERVICES C.C. ADROITLY (PTY) LTD GREEN DOT ADVISORS (PTY) LTD LOWVELD PACKAGING MANAGEMENT OF SOUTHERN AFRICA
LH MARTHINUSEN (A DIVISION OF ELECTRO SURGE PROTECT CC FLSMIDTH SOUTH AFRICA(PTY) LTD FORKLIFTSPARES SPECIALISTS MUSIC DEN
ACTOM (PTY) LTD) ENVIROCON INSTRUMENTATION CC ELLIS - SINGER
BUCO NELSPRUIT MINIAN STEEL CC TOYOTA FORK LIFT BRELKO ENGINEERING CC LATTY INTERNATIONAL SOUTH AFRICA MPRTC RECRUITMENT
DEO WATER SERVICES (PTY) LTD LABSERVE ANALYTICAL SERVICES MICHEM CLEANING SUPPLIES (PTY) LTD CLEAR EDGE FILTRATION S A (PTY) LTD
KONICA MINOLTA SOUTH AFRICA POWERMITE AFRICA (PTY) LTD CERAMOX (A DIVISION OF
businesses
MINERAL MINING TRAINING INSTITUTE ACCTECH SYSTEMS (PTY) LTD ANGUS ENGINEERING MEGA BAGS GROUP CC WONDERSTONE LIMITED). EASTERN TVL RUBBER STAMP CO
R70m
(PTY) LTD GKD BUISMET (PTY) LTD PRO LAB SUPPLIES CC DIESEL ELECTRIC BIDVEST AFCOM (PTY) LTD Tecsa (Pty) Ltd
ELECTRONIC DESIGN TRANSVAAL RUBBER COMPANY (PTY)
BAMBANANI HYDRAULICS HANNA INSTRUMENTS (PTY) LTD MMD TECHNOLOGIES (PTY) LTD GEO-X (PTY) LTD COASTAL HIRE NELSPRUIT CC
HI-TEC GUARDS NELSPRUIT ROCHELLE CHEMICALS & LAB EQ NT SIEMENS NELSPRUIT BRAKE & CLUTCH CENTR TEGNON (PTY) LTD TECSARECO
MACSTEEL TRADING (PTY) LTD EKONIMI-WELD
R180m
KSB PUMPS SA (PTY) LTD BEARING AND POWER TRANSMISSION Mikrons Presisie Komponent HP SOUTH AFRICA PROPRIETARY ROOIKAT WHOLESALERS LIQUER
D HENNING LOODGIETERS RISKWORKS (PTY) LTD PRETORIA MR TRUST SUPPLIES Vervaardiging WURTH SOUTH AFRICA CO (PTY) LIMITED CRAWLEYS LOCKSMITHS SAWSERVE (PTY) LTD
LOWVELD CRANES UNIQUE WELDING ALLOYS (PTY) LTD
YANKA LABORATORIES PE CHEMICALS CC
FREIGHTHAUL HOLDING (PTY) LTD MACSTEEL FLUID CONTROL A DIV OF ACDC EXPRESS SIKHONZA VESTRA 89 CC T/A CHRIS LASEC SA (PTY) LTD SABS COMMERCIAL SOC LTD. ENDRESS & HAUSER (PTY) LTD LOADTECH (PTY) LTD NKOMAZI FUEL & OIL
GSR INDUSTRIAL PRODUCTS C.C. MACSTEEL SERVICE CENTRES SA DAMES KEMPLANT (PTY) LTD
ECHO CRANES & STEEL CC CHICK HENSERSON DIV OF INMINS
GUNNING & SON C.C. RODQUIN MANUFACTURING M BULK SOLIDS HANDLING CC INCLEDON DPI (PTY) LTD. MOBILE HYDRAULIC SERVICES CC BURKERT CONTROMATIC (PTY) LTD TRADING (PTY) LTD BEARINGS INTERNATIONAL CO LTD
ALPHA RESOURCES AFRICA CC NELSPRUIT FASTENERS CC FILING@WORK (PTY) LTD SAFETYDOTCOM
NELSPRUIT RHODES ENGINEERING
AIREF SERVICES CC T.I.S. TECHNICAL INDUSTRY SERVICES BRAYSHAW AUTO ELECTRICAL KWATANI (PTY) LTD LEXISNEXIS BUTTERWORTH TANKMAN SEPTIC SERVICES CC ADLAM ENGINEERING (PTY) LTD TURFMASTER
Creating strength.
NELQUIP AGENCIES BIDVEST CAR RENTAL (PTY) LTD (PTY) LTD LOWVELD VALVE & INDUSTRIAL BATTERY PRO
METALWORLD (PTY) LTD
MORRIS MATERIAL HANDLING SA
(PTY) LTD
ARAMEX SOUTH AFRICA (PTY) LTD
SUPPLY CC.
THERMO FISHER SCIENTIFIC BALTIMORE AIRCOIL CO SA (PTY) MONITOR ENGINEERING (PTY) LTD SPRAY NOZZLE (PTY) LTD WIKA INSTRUMENTS (PTY) LTD 5How did MMC survive 2018
International
Rand
Prices from Use of Mn
Depreciation NERSA 5.2%
$1700 to slime
from R11.80 Increase
$2,800. Back deposits
to R14.50
at $2,100
Creating strength. 6Issue #1 : Increases without a strategy
• The Eskom strategy was due in 2018
• Apparently it will be issued before the budget speech in February 2019
• Presidential task team has been appointed
Comments
• Increases for 3 years should not be approved without an appropriate strategy.
• The 19.5% requested is for Eskom to continue with “business as usual”
• A Presidential task team is confirmation that government has limited faith in current Eskom
Executive.
• RCA’s does not work for business – we can’t claw back from customers.
• Eskom should include claw back in price application so that the full impact can be
shown.
Creating strength. 7Issue #2 : Short Term Framework
Comments
• Unclear if Eskom still support this
• The turn-around time and administration is frustrating
• Markets are dynamic – this process is not
Proposal
• Consider new pricing for all large intensive users based on Short Run Marginal Cost
plus a margin
Creating strength. 8Issue #3 : Cross Subsidies
• Cross subsidies represents 14% of MMC’s electricity costs
• Eskom receives no benefit for cross subsidies
• This is an additional tax
• National Treasury must take an holistic view on whether this is the best way obtain
more money
Indirect Cost
R4 000 000
R3 500 000
R3 000 000
R2 500 000
R2 000 000
R1 500 000
R1 000 000
R500 000
R-
Jan-15
Oct-15
Dec-15
Jan-16
Oct-16
Dec-16
Jan-17
Oct-17
Dec-17
Jan-18
Oct-18
Dec-18
Feb-15
Apr-15
May-15
May-18
Sep-15
Nov-15
Feb-16
Apr-16
May-16
Sep-16
Nov-16
Feb-17
Apr-17
May-17
Sep-17
Nov-17
Feb-18
Apr-18
Sep-18
Nov-18
Mar-15
Jun-15
Aug-15
Aug-17
Jul-15
Mar-16
Jun-16
Aug-16
Jul-16
Mar-17
Jun-17
Jul-17
Mar-18
Jun-18
Aug-18
Jul-18
AFFORDABILITY SUBSIDY (ALL) ELECTRIFICATION AND RURAL SUBS (ALL)
Creating strength. 9Proposal
• Large Industrial users should not be required to pay cross subsidies.
National Treasury should look at the bigger picture
• Multi year increases without an appropriate strategy support “repeat of
yesterday”.
• Only inflation increases to be approved with Eskom taking action to
improve profitability
Creating strength. 10Actual Increase 70% after 3 years = R233M
600
500
R 233M
400
RM 300
200
R 330M R 330M
100
0
FY 20 FY 22
Creating strength. 11Job losses if MMC closes
Direct: Indirect: Induced: TOTAL:
586 2,353 1,045 3,984
Creating strength. 12TAKEAWAY: Please help Eskom with their addiction to:
Massive increases
Surplus employees
Inefficiencies
Avoiding difficult decisions
Creating strength. 13You can also read
