CHAIRMAN'S
STATEMENT

The year under review

Markets for the group's products were favourable over the past financial year. The strength in our markets which was evident in the last quarter of 2017 continued into 2018.

Headline earnings by commodity (R million)
Safety: overall improvement
in LTIFR
Record annual dividend of
R22,00 per share
Full Chairman's Statement

GROUP AT
A GLANCE

Joint-venture entity (Assmang)

Subsidiary companies


Iron Ore division
IRON ORE

Iron ore

Type of operation

  • Mining, crushing, screening and jigging of run-of-mine ore and tertiary recovery of fine iron ore product

Refer to Chief executive officer's report

Description

Iron ore is mined in the Northern Cape province in open-pit operations at the Khumani Iron Ore Mine which is located near Kathu and at the Beeshoek Iron Ore Mine which is located outside Postmasburg. The ore produced is sold both on the export market and locally.

R15 135,3m
(2017: R16 399,0 million)
    Revenue generated
R3 343,5m
(2017: R4 372,6 million)
    Attributable profit

Manganese division

Manganese division

Type of operation

  • Mining, crushing, washing and screening of ore
  • Smelting of ferromanganese
  • Production of refined ferromanganese

Refer to Chief executive officer's report

Description

Various grades of manganese ore are mined at the Nchwaning and Gloria mines, located in the Black Rock area of the Northern Cape province, and manganese alloys are produced at the Cato Ridge Works in KwaZulu-Natal. Cato Ridge Alloys, a joint venture with Japanese partners, produces refined ferromanganese at the Cato Ridge Works. Feed for the Cato Ridge Works is derived mainly from Assmang’s manganese mines. The ore and alloy produced are both sold on the export market and locally. Sakura Ferroalloys, a joint venture smelting operation in Malaysia in which Assmang holds a 54,36% stake, produces high carbon ferromanganese from ores sourced in the market. The smelting plant has been designed to allow for switching production capacity to silico manganese. Alloy produced is sold in the export market.

R12 859,6m
(2017: R10 238,1 million)
    Revenue generated
R3 772,0m
(2017: R2 181,6 million)
    Attributable profit
Manganese

More on Manganese

Dwarsrivier Chrome Mine

Dwarsrivier Chrome Mine

Type of operation

  • Mining, crushing and concentrating of ore

Refer to Chief executive officer's report

Description

Chrome ore is mined at the Dwarsrivier Chrome Mine in the Limpopo province, located near Steelpoort and Lydenburg. The ore produced is sold both on the export market and locally.

R3 892,8m
(2017: R3 410,4 million)
    Contribution to
group revenue
R875,4m
(2017: R843,2 million)
    Attributable profit

Ore   Metal Company

Ore & Metal Company

Type of operation

  • Marketing, sales and shipping of ores and alloys

Refer to Chief executive officer's report

Description

Ore   Metal Company Limited is responsible for the marketing, sales and shipping of all the group’s products, including those produced by the three divisions of Assmang. Strong relationships have been established with customers in Europe, North America, Refer to Chief executive officer's report South America, India and the Far East.

R831,0m
(2017: R783,2 million)
    Contribution to
group revenue
R409,8m
(2017: R383,8 million)
    Attributable profit
Ore & Metal Company

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African Mining and Trust Company

African Mining and Trust Company

Type of operation

Mining, crushing, screening and jigging of run-of-mine ore and tertiary recovery of fine iron ore product.

Description

Iron ore is mined in the Northern Cape province in open-cast operations at the Khumani Iron Ore Mine which is located near Kathu in the Northern Cape and at the Beeshoek Iron Ore Mine which is located outside Postmasburg. The ore produced is sold both on the export market and locally.

R488,1m
(2017: R461,4 million)
    Contribution to
group revenue
R164,6m
(2017: R181,3 million)
    Attributable profit

Minerais U.S. LLC

Minerais U.S. LLC

Type of operation

  • Marketing of minerals and alloys in the USA

Refer to Chief executive officer's report

Description

Minerais U.S. LLC is responsible for marketing and sales administration of the group’s products in the United States of America (USA), in particular manganese alloys, and trades in various related Refer to Chief executive officer's report commodities.

R2 444,8m
(2017: R2 364,4 million)
    Contribution to
group revenue
R65,3m
(2017: R97,3 million)
    Attributable profit
Minerais U.S. LLC

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Wonderstone

Wonderstone

Type of operation

  • Mining and manufacturing of pyrophyllite products

Refer to Chief executive officer's report

Description

The company mines a type of pyrophyllite which, for trade purposes, is referred to as Wonderstone. The bulk of the material mined is beneficiated to produce high-precision components manufactured to customers’ specification and are exported to the United States of America, the United Kingdom and Refer to Chief executive officer's report the Far East.

R53,4m
(2017: R81,1 million)
    Contribution to
group revenue
R1,43m
(2017: R5,07 million)
    Attributable profit
Wonderstone

More on Wonderstone



ORGANISATIONAL GOVERNANCE

Strong corporate governance is an essential part of minimising the risks faced by the group. Corporate governance and risk management ot only enhance sustainability of the group, but are essential to preserving organisational reputation, investor confidence, access to capital when required and sustainable employee motivation

Ethics

Ethical issues are managed by way of executive involvement in day-to-day management processes

The group has recently adopted a code of ethics

Front end loader
4
meetings

Committed to principles

  • Corporate discipline
  • Transparency
  • Independence
  • Accountability
  • Fairness
  • Employment equity
  • Social responsibility

Board of directors – composition

10 directors
5
executives


5 on-executive and independent
2
female

Key roles and functions

The CEO assumes ultimate responsibility for all executive issues



CFO

The CFO assumes responsibility for the group’s financial position and related issues


Lead independent director

The lead independent director provides leadership to the independent directors, and liaises with the CEO on behalf of the independent directors

100%
attendance by members

Committees

Audit and Risk

Monitors the risk profile, reviews and approves financial statements and monitors, supervises and facilitates the work performed by independence of internal and external auditors

3 non-executive
and independent
4
meetings
100% attendance by members

Social and Ethics

Monitors the group’s activities relating to any relevant legislation affecting the group’s activities and prevailing codes of best practice

2 non-executive and
independent


2 executives
2 meetings

100% attendance by members

Remuneration

Recommendations on the broad framework and cost of executive remuneration are made annually to the committee for approval

2 non-executive
and independent

1 executive
3
decisions made by round robin resolutions