REPORT SCOPE AND BOUNDARY

This annual integrated report is Northam’s first report of this nature. In it we have addressed the sustainability of the business in an holistic way, including both financial and non-financial performance.

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CHIEF EXECUTIVE’S REVIEW

Glyn Lewis

The loss of 65 production days at the company’s only revenue-generating asset, the Zondereinde mine, and the effect these losses have had on production and in turn on earnings has clouded the overall performance of the company in 2011.

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A NOTE FROM THE CHAIRMAN

Lazerus Zim

There was always an acceptance that Northam’s corporate character would be totally transformed post the long-anticipated unbundling and subsequent exit of Mvelaphanda Resources Limited, your company’s major and controlling BEE shareholder, and partner, for 11 years.

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F2011 SALIENT FEATURES

  • Corporate
    • Unbundling by major controlling shareholder, Mvelaphanda Resources Limited (Mvela Resources)
    • Acquisition of entire share capital of Mvela Resources
    • Proposed sale of Booysendal South mineral rights
    • Approximately R1.9 billion in cash available for turning Booysendal to account
    • American Depository Receipt facility launched
  • Operational
    • 65 working days out of 301 lost to strike and safety stoppages
    • 1.6 million tonnes milled (Mt), 22% down on F201
    • PGM production lower at 250 110 ounces (oz)
    • Sales down by 9.5% from R3.9 billion to R3.6 billion owing to lower volumes
    • Lower volumes and increasing input costs drive unit working costs higher
    • Operating profit down by 51%, at R385 million compared to R785 million in F2010
    • Capital expenditure was R268.9 million (F2010: R231.5 million) at Zondereinde, while R688 million was spent at Booysendal (F2010: R132.4 million)
    • Shareholders received R90 million (F2010: R216 million) by way of dividends
    • Good progress at Booysendal Ė on track for 2013 production start-up
  • Safety, health and environment
    • Five fatalities recorded during the year. Both the lost time injury and the reportable injury rate also deteriorated in the year
    • Zondereinde mining operation awarded ISO 14001 certification on 28 February 2011
    • Northam participated in the Carbon Disclosure Projectís (CDP) 2011 survey, as well as the CDPís Water survey. Northam recognised by CDP as a leading performer and reporter in 2010
    • Booysendal establishing a trust to fund conservation in an offset area
  • Governance and compliance
    • The Zondereinde mine has all its mining rights in place
    • All mining rights and permits have been awarded to the Booysendal project following the granting of its water use licence on 17 May 2011
    • Northam remains a constituent of the JSE SRI Index
 

OPERATIONS REVIEW

Zondereinde

Zondereinde

The six-week strike in September/ October 2010 had a predictably adverse effect on production results.

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Booysendal

Booysendal

Progress on site has been satisfactory, and the project remains on track for production start-up in early 2013.

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Also see: PANDORA JV      DWAALKOP JV

OUR PRODUCTS AND OUR MARKETS

PGMs are the platinum group metals platinum, palladium, rhodium, ruthenium, iridium and osmium. They are particularly rare and share a set of unusual chemical properties which have made them indispensable to many critical sectors of the global economy.

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STAKEHOLDER ENGAGEMENT

Northam ensures that the principles of openness, integrity and accountability are adopted at every level of engagement with identified stakeholders and endeavours to report timeous, relevant and meaningful information to all stakeholders.

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BUSINESS AND RISK ENVIRONMENT

The group operates in a South African business environment characterised by the following specific major business risks:

  • country risk
  • market, financial and financing risk
  • geological and ore reserve risk
  • health, safety and environment risk
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Northam Annual integrated report 2011 cover Annual integrated report 2011 (PDF - 1.73MB)