[SMM Financial report] Assmang will increase production capacity of Black Rock Manganese Mine to 4 million tons in 2021

SMM3, 12 / 12-this article covers the consolidated annual financial report for the Assore Limited2018 fiscal year (for the period from July 1, 2017 to June 30, 2018). The report covers: Khumani Iron Mine (Khumani), Beeshoek Iron Mine (Beeshoek), Black Rock Manganese Mine (Black Rock), Cato Ridge Works (Ferro Manganese smelter), MachadodorpWorks (Ferro Manganese smelter), Cato Ridge Alloys Proprietary Limited (CRA) (Refining Ferro Manganese smelter) and Sakura Ferroalloys SDN BHD, Malaysia (Ferro-manganese and silicomanganese smelters), of which Assmang owns 54, 36 per cent of (Sakura). SMM selected manganese-related businesses for integration.

Assore is a mining holding company mainly engaged in venture capital, involving base minerals and metals, including a 50 per cent interest in Assmang, which, together with ARM, controls 100 per cent of its interest in Dwarsrivier. Through its various joint ventures and subsidiaries, the Group is involved in the mining of iron, manganese and chromium ores as well as other industrial minerals and manganese alloys. The Group is also responsible for marketing all products produced by the Assore and Assmang groups, most of which are exported and the rest are used in the Group's mineral processing process or locally sold.

Manganese business performance

The company's manganese business is mainly involved in mining, crushing, cleaning and screening ore, smelting ferromanganese, production of refined ferromanganese. The company mines various grades of manganese ore in the Nchwaning and Gloria mines in the Black Rock area of the Northern Cape Province and produces manganese alloys at the Cato Ridge plant in KwaZulu-Natal Province. Cato Ridge Alloys is a joint venture with Japanese partners to produce refined Ferro manganese at the Cato Ridge plant. The feed for the Cato Ridge plant mainly comes from the manganese mine in Assmang. The ores and alloys produced are sold in export markets and locally. Sakura Ferroalloys is a Malaysian joint venture, in which Assmang has a 54, 36 per cent stake in the production of high-carbon Ferro-manganese from ores on the market. The smelter is designed to convert production capacity to silicomanganese, and the alloys will be sold in the export market.

Joint Venture Assmang (as of 30 June 2018):

Future development strategy

The strategy of the Assore Group is to anticipate and respond to changes in the markets in which it operates, to adapt and manage existing and available minerals and production in accordance with international market expectations, and to carry out them on a sustainable basis. The Group seeks to optimize local and global logistics capabilities in a manner consistent with the Group's operations and production.

Assmang will complete the expansion and replacement project on time, carry out sustainability and expansion projects at the Black Rock manganese mine, and is expected to be completed in 2021. increase and maintain the production of the Nchwaning mine to the maximum production, in the long run, To achieve sustainable production of more than 4 million tons of manganese per year. After the successful commissioning and upgrading of the two furnaces in Sakura, Malaysia, the production of high-carbon Ferro-manganese (HCFeMn) was maintained in the two furnaces with an annual production capacity of approximately 240,000 tons. Continue to optimize alloy production at the Group Ferro Manganese Plant to mitigate the increase in electricity prices, which are expected to exceed the rate of inflation, while implementing recently approved projects to readjust and increase production at the Gloria mine.

In the aspect of sustainable mining of mineral deposits, the steady production performance of Khumani iron ore can be maintained by optimizing unqualified washing equipment and wet high strength magnetic separation (WHIMS) plant, so as to ensure the realization of the planned mine life. At the same time, the mine life of Beeshoek iron ore is optimized by mixing the ore from Village Pit with other mines, and the selection of grade products is sought to deal with the historic unqualified yard.

In terms of sales, Assmang will optimize the price and tonnage of each market segment, continue to develop the upper coal seam material market of the Group, as well as the alternative grade of the lower coal seam of the Nchwaning Manganese Mine, and continue to optimize the alloy production of the Group's manganese iron facilities in order to mitigate the increase in electricity prices. Electricity prices are expected to exceed inflation.

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