ZINCOR OPERATIONS

Contents

• History

• Market

• Process and production data

• Comparisons with other zinc smelters

• Challenges

Corporate History

• 1965: GFSA closes Vogelstruisbult Gold Mine in Springs. Facility is temporarily converted to process uranium

• 1967: Zincor is established (65% GFSA; 35% Iscor)

• 1969, Apr: First ingot cast

• 1999, Feb: GFSA unbundles; Iscor acquires Zincor

• 2001, Nov: Iscor unbundles; mining division of Iscor, including Zincor, is consolidated into a new entity – Kumba Resources

• 2002-2006: Anglo American acquires controlling stake in Kumba Resources

• 2006, Nov: Kumba Resources is unbundled; iron ore business is separated to form Kumba Iron Ore Company; remaining assets and EyesizweCoal are consolidated into a new entity - Exxaro Resources. Zincor is now a division of Exxaro Base Metals

Exxaro Base Metals: 100% Zincor, 26% Black Mt and Gamsberg; 49% of Rosh Pinah; minor shareholding in Chifeng Smelter in China

GFSA – Gold Fields of South Africa

Iscor – now ArcelorMittal South Africa

Slab Production Milestones

• 1969: First ingot is cast

• 1970: 35 kt/a

• 1996: 101 kt/a

• 2002: 111 kt/a

• 2003: 112 kt/a

Zincor’s Role in the Economy

• Zincor is the only primary zinc producer in South Africa

• Slab zinc production of approximately 100 kt/a with inherent capacity up to 115 kt/a

• Sulphuric acid production of approximately 170 kt/a. Supplies 25% of traded sulphuric acid market

Domestic Market: Zinc

74%

4%

3%

19%

Market: Zinc and Acid Usage

Total Galvanizing73%

Zinc Alloys9%

Total Battery2%

Total Chemical9%

Total Other<1%

Brass Alloys7% Sasol

17%

Fertilisers6%

Distributors54%

Other Cust.20%

Exporters3%

Zinc Sulphuric Acid

Product Range: Zinc

Production by TeckCominco, Canada. Distributed by Zincor to general galvanisers. Mitigate effects of reactive steels on galvanising process

1% Ni-Zn master alloyNickel alloy

* CGL – continuous galvanizing line

CGL’s only – ArcelorMittal and Duferco0.6% Al Pre-alloy jumbo ingots

CGL’s and general galvanisers for Al additions to pots

10% Al alloyZincal-10

Battery manufacturer and general galvanisers0.95 – 1.35% PbZn 4

Battery manufacturerSub-grade – Low Cd

Galvanising customers, excluding CGL’sSub-grade – High Pb

Galvanising customers, including CGL’s*Min 99.95% ZnZn 2

Customers requiring lowest impurities

Spot exports

Min 99.995% ZnSHG

UseCompositionGrade

Supply and Product Chain

ZINCOR

IntermediateFertilizerProduct

GalvanisingAlloys

BatteriesChemicals

Chemical Process Applications

AutomotiveTransport

General ConsumersInfrastructureConstruction

Raw Materials Smelter

SulphuricAcid

Zinc metal

Agricultural Industry

Primary Consumers Final Consumers

Primary Consumers Final Consumers

Rosh PinahBlack Mountain

Imports(ZnS)

ZnO(from DRC)

Production Data

112115

176650

105620

165325

103686

170873

92967

129045

101989

153497

89033

129508

60000

80000

100000

120000

140000

160000

180000

Tonn

es

2003 2004 2005 2006 2007 2008

Zinc Acid

2004: Shortage of concentrate2005 – 2007: Poor concentrate grade2006 – 2008: Roaster rebuild

Process Flowsheet

H2S04

Acid Plant

Impure ZnS04

ROASTING

Calcine (Zn0)

S02

residue

Impure ZnS04

Cd CakePurified ZnS04

Cathode Zinc

Zinc products

spent

Concentrate

Dross to process/sale

ZnS

Residue Dam

EFFLUENT TREATMENT

Weak acid bleed to Effluent Treatment

Solution to evaporation dam

Pb/Ag residue

Bleed to treatment

Cu/Co/As Cake

RESIDUE TREATMENT

solutionsolids

calcine

spen

t

Drossex melting

Conc. H2SO4

NEUTRAL LEACH

ELECTROWINNING

Cu Cement

Zn dust to PurificationMELTING/CASTING

PURIFICATIONFe residue

Washed Oxide

Purification

Upgraded Cd Cake

to storage

Impure ZnS04

Zinc Dust

Cu/Co Removal

As2O3 soln

Filtration

Cd Removal

Zinc Dust

Cu/Co/As Caketo further

processing

Filtration

Cd Scavengercake

Hot Purified solution

To Neutral Leach

Cd Upgrading

Spentstorage

Cd-free, Zn-rich solution with Cu solids

To Purified Solutionstorage/Gypsum RemovalZno + M++ = Mo + Zno;

M = Cu, Co, Ni and Cd

Cu Cementation

Cu Cement to storage

Cu-sulphateproduction

Zinc Dust

Spent

Zinc Dust

Filtration

Cell House

• 44 banks; 12 cells/bank; 528 cells

• 21,120 cathodes; 21,648 anodes

• Cathode area: 1.23 m²

• Anodes – 10 mm thick; Pb-Ag-Ca-Al; 0.5% Ag; 0.06% Ca; 0.012 %Al

• Cathodes – 7 mm; 1050 Al alloy

• Cathode current density: 508 –569 A/m2

• Deposition time: 24 hours

• Cathode life = 2 years

• Anode life = 6.5 years

Residue Treatment

Hot Acid Leach

Steam

Neutral Leach Residue

Thickener

Super Hot AcidLeach

SteamConc. H2S04

Weak AcidLeach

Thickener

Pb/Ag Residueto Tailings

Water

O/F

U/F

O/F

U/F

Filtrate

Thickener

Belt Filter

Spent electrolyte

U/F

Solution to Fe Precipitation

Spent electrolyte

O/F

Iron Removal

ZnSO4 Solution to Neutral Leach

Calcine

Iron Precipitation

Fe Residueto Tailings

O/F

U/F

Slurry tank

Water

Spent electrolyte

FiltrateBelt Filter

Thickener

Steam

Slurry tank

Zn OxideProcess

Water

Fe solution(from Weak Acid Leach thickener)

Iron Residue Composition

16.2

1:1

96.7

8.5

40

VM -Goethite

1:1.31: 1.51:1 Fe:Acid

19.2

94.6

10

34

Para-goethite

113.5Zn content, %

3529Fe content, %

2322.5Fe residue, t/100 t concentrate

93.5**97.9Overall Zn recovery, %

Zincor *Jarosite

* paragoethite with 50% oxides)** best

Zinc Industry

• Global slab production in 2008 was 11.6 Mt

• Over 90% of zinc is produced by electrolysis

• Largest smelters: San Juan de Nieva - 480 kt/a; Onsan – 450 kt/a

• Last cyclical peak was in 2006; price peaked at US$4500/t

• Pricing in 2009 is expected to stabilise at $1270/t

• Next predicted cyclical peak is in 2014

• Key to survival, apart from economy of scale: high zinc recovery, diversified product range and by-product recovery

Global Smelter Slab Production (kt/a)

Source: Data from Brook Hunt :

0

50

100

150

200

250

300

350

400

450

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Zincor

92.5

0

50

100

150

200

250

300

350

400

450

500

Ons

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Odd

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Kam

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(Fan

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u 75.0

80.0

85.0

90.0

95.0

100.0

Total Slab Zinc (kt) Typical Recovery (%)

Recovery versus Slab Production

Zincor

73% of Zn is produced at recoveries above 95%

Source: Data from Brook Hunt

Challenges

Environmental issues

• Current residue disposal facility is nearing end of life

• Construction of new a facility and closure of existing one

• Treatment of discharge water to remove sulphates in the near future, in line with new environmental legislation

Electrical Energy

• Uncertainty over electrical energy capping for the next four years

Skills

• A general shortage of skills – common to most industries in South Africa

Challenges

Raw Materials Supply

• Uncertain long-term supply of local concentrates

• High transportation cost associated with imported material

Product Range• Need to diversify value-added product range:

- increase CGL grade production- grow local market for Ni-alloy

• Extract maximum value from associated base metals

Challenges

Metallurgical issues

Zincor needs to increase zinc recovery to 95%:

• Fuming technology, as practiced by Korea Zinc, is the most appropriate technology to treat residues and maximise recovery. This technology is not an option at present due to uncertainty in long-term local concentrate supply and high capital investment

• Eliminate use of calcine in Fe Removal circuit by increased use of fumed zinc oxide as well as basic zinc sulphate

• Recovery of soluble zinc from solution run-off from residue dam as a basic zinc sulphate