Thando Mkatshana Chief Executive: ARM Copper and ARM Coal COAL ARM * ARM Coal holds the following: – Access to Glencore Operations South Africa’s interest and entitlement in the Richards Bay Coal Terminal (RBCT); and – An export entitlement of 3.2 Mtpa in the Phase V expansion at the RBCT. ** Participating Coal Business (PCB) refers to the Impunzi and Tweefontein operations. Glencore Operations South Africa * Participating Coal Business (PCB)** Goedgevonden (GGV) 51% 20% 10% 70% 49% 49% 51% 100% Glencore Holdings South Africa (Pty) Ltd THERMAL COAL Cyclone Spirals Coarse Small Fine PRODUCTION PROCESS PRODUCT STOCKPILE Opencast mining Raw coal stockpile Primary and secondary crushing SIZING CLEANING Screens DEWATERING 102 INTEGRATED ANNUAL REPORT 2016
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Thando Mkatshana Chief Executive: ARM Copper and ARM Coal
COALARM
* ARM Coal holds the following:
– Access to Glencore Operations South Africa’s interest and entitlement in the Richards Bay Coal Terminal (RBCT); and
– An export entitlement of 3.2 Mtpa in the Phase V expansion at the RBCT.
** Participating Coal Business (PCB) refers to the Impunzi and Tweefontein operations.
Glencore Operations South Africa
*
Participating Coal Business (PCB)**
Goedgevonden (GGV)
51%
20%
10%
70%
49%
49%
51%
100%Glencore Holdings
South Africa (Pty) Ltd
THERMAL COAL
Cyclone
Spirals
Coarse
Small
Fine
PRODUCTION PROCESS
PRODUCTSTOCKPILE
Opencast mining
Raw coal stockpile
Primary and secondary crushing
SIZINGCLEANING
Screens
DEWATERING
102 INTEGRATED ANNUAL REPORT 2016
SALIENT FEATURES
ATTRIBUTABLE HEADLINE LOSS
R297 million (F2015: R93 million)
ATTRIBUTABLE CASH INFLOW FROM OPERATING ACTIVITIES
Management: Governed by a management committee, controlled by ARM Coal, with four ARM representatives and three Glencore
representatives. Operational management of the mine is contracted to Glencore.
Resources* – Measured and Indicated (100% basis) 568 million tonnes
Reserves – (Saleable) Proved and Probable (100% basis) 206 million tonnes
ARM’s economic interest 26.01%
Total labour 1 090 employees, including 203 contractors
* The Measured and Indicated Coal Resources are inclusive of those modified to produce Coal Reserves. Coal qualities are reported in the “Resources and Reserves” section of
the report.
(100% basis) F2016 F2015 % change
Total saleable production million tonnes 6.53 8.34 (22)
Total thermal coal sales million tonnes 6.90 8.26 (16)
Export thermal coal sales million tonnes 3.91 5.16 (24)
Eskom thermal coal sales million tonnes 2.99 3.10 (4)
Average price received
Export (FOB) US$/t 40.99 54.97 (25)
Eskom (FOR) R/t 235.95 208.36 13
On-mine saleable cost per tonne R/t 239.00 188.90 27
Cash operating profit R million 783 1 606 (51)
Operating margin % 26 41
Capital expenditure R million 870 1 011 (14)
ATTRIBUTABLE PROFIT ANALYSIS F2016 F2015 % change
Cash operating profit R million 204 418 (51)
Less: Interest paid R million (183) (150) (22)
Amortisation R million (128) (120) (7)
Fair value adjustments R million (15) (19) (21)
Profit before tax R million (122) 129 (195)
Tax R million 35 (36) 197
Headline (loss)/earnings attributable to ARM R million (87) 93 (194)
Coal washing plant at GGV Mine
108 INTEGRATED ANNUAL REPORT 2016
ARM COAL continued
PARTICIPATING COAL BUSINESS (PCB)
Management: Governed by a supervisory committee with five Glencore representatives and three ARM representatives. Operational
management of the PCB mines is contracted to Glencore.
ARM’s economic interest 20.2%
(100% basis) F2016 F2015 % change
Total saleable production million tonnes 14.63 13.61 7
Impunzi million tonnes 6.53 6.3 4
South Stock million tonnes 0.41 1.9 (78)
Tweefontein million tonnes 7.69 5.4 42
Total sales million tonnes 16.98 13.50 26
Export thermal coal sales million tonnes 14.76 10.73 38
Eskom thermal coal sales million tonnes 1.39 1.74 (20)
Other local thermal coal sales million tonnes 0.83 1.03 (19)
Average price received
Export (FOB) US$/t 41.66 55.12 (24)
Eskom (FOR) R/t 223.13 214.64 4
Domestic (FOR) R/t 384.24 361.99 6
On-mine saleable cost per tonne R/t 272.60 333.39 (18)
Cash operating profit R million 1 967 1 629 21
Operating margin % 21 22
Capital expenditure R million 1 062 2 759 (62)
ATTRIBUTABLE PROFIT ANALYSIS F2016 F2015 % change
Cash operating profit 397 329 21
Less: Interest paid (308) (263) (17)
Amortisation (321) (300) (7)
Fair value adjustments (59) (25) (136)
Profit before tax (291) (259) (12)
Tax 81 73 11
Headline loss attributable to ARM (210) (186) (13)