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Edited Transcript of ARI.J earnings conference call or presentation 30-Aug-19 9:00am GMT

Q4 2019 African Rainbow Minerals Ltd Earnings Call

Sandton Sep 4, 2019 (Thomson StreetEvents) -- Edited Transcript of African Rainbow Minerals Ltd earnings conference call or presentation Friday, August 30, 2019 at 9:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Abigail Muelelwa Mukhuba

African Rainbow Minerals Limited - Financial Director & Director

* André Joubert

African Rainbow Minerals Limited - Chief Executive of Arm Ferrous

* Jongisa Magagula

African Rainbow Minerals Limited - Corporate Development & Head of IR

* Michael P. Schmidt

African Rainbow Minerals Limited - CEO & Director

* Patrice Tlhopane Motsepe

African Rainbow Minerals Limited - Executive Chairman

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Conference Call Participants

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* Brian Morgan

Morgan Stanley, Research Division - Equity Analyst

* Ian Cruickshanks;South African Institute of Race Relations;Chief Economist

* J. Timothy Clark

SBG Securities (Proprietary) Limited, Research Division - Head of Metals and Mining

* Johann Pretorius

Renaissance Capital, Research Division - Head of Research of Africa

* Thabang Thlaku

SBG Securities (Proprietary) Limited, Research Division - Research Analyst

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Presentation

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Jongisa Magagula, African Rainbow Minerals Limited - Corporate Development & Head of IR [1]

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Good morning, ladies and gentlemen, and thank you for joining us today for the presentation of the ARM results for the financial year ended 30 June 2019. I do apologize for the slightly late start to our meeting today. I'd like to also, at this stage, acknowledge those of us that are joining remotely via the webcast. And just to remind the webcast participants that you are -- you can log a question at any stage during the presentation, and it will be included in the Q&A at the end of the session.

At this stage, I'd also like to acknowledge some of our partners that are in attendance today, Mr. Tiaan van Aswegen, who's from Assore; Ross Davies from Assore; as well as Kieran, and Bongani Phakathi who are joining us. And then from Sumitomo, we've got [Mr. Kevin Sakanako]. Welcome. And then I'd like to just welcome the media participants, our investors who are here, our research and sell-side analysts who are here, and everyone, welcome. Without any further ado, I'm going to hand over to Mike Schmidt, who will start taking us through the presentation. Thank you.

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Michael P. Schmidt, African Rainbow Minerals Limited - CEO & Director [2]

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Ladies, gents, good morning. I need to apologize in behalf of Patrice. He attended a very early funeral of late Dr. Toni (inaudible), who many of you will know, and he thought he would get out of it as he's been expected in terms of protocol to address their communities. He's asked me sincerely to apologize but to lead the presentation on his behalf.

With that, his side is halfway done with Jongisa with the introductions and formalities. So let me take you through the numbers.

The numbers are self-evident. It's a 9% increase for the year. The dividend is really our highest ever dividend, with an interim of ZAR 4 and a final of ZAR 9, and gives us a dividend of 13% -- ZAR 13 per share. And we're pretty comfortable and happy that we're in a position to do that.

So the group structure, generally, as you know it pretty well, it shows our diversified nature, which through period holds well. You don't really shoot lights out when there's a drive towards a special commodity. But certainly, through the period, the diversified structure has proven and supported us really well. The lost time injury rate was slight regression on that. And we have an absolute commitment to 0 harm. And it obviously is disappointing that there has been a regression where over the last 10 years, consecutively, we've improved on that. And our commitment is to continue driving towards 0 harm.

It is with absolute regret that I have to announce that we did have an unfortunate fatal, which was the first one in 3 years, where Mr. Thomas Maluleke passed away from a fall of ground accident at Modikwa mine. The impact of that we take so seriously that we closed all operations to review all underground standards, commitment to training, and it had a commensurate impact on the second half of Modikwa's production and obviously had an impact on its profitability and earnings that it was our absolute commitment to get standards fixed, make sure people are adequately trained on our road to 0 harm.

I do want to relate, I see on the slide, we've only made mention of Khumani mine, but I do want to take us maybe just to comment on where we stand in terms of the industry, and I don't have them here, so I just want to talk to them. So Black Rock today sits with 7 million fatality-free shifts. Their last fatal, and [Noreen], please correct me if I make a mistake, was back in 2009. Nkomati has 7 million fatality-free shifts, last fatal back in 2008. Two Rivers Platinum, 5 million fatality-free shifts, last fatal back in 2012. Beeshoek, 4 million fatality-free shifts, last fatal back in 2005. Khumani has close to 3 million fatality-free shifts, last fatality was 2015. I think it's a phenomenally good record. So if you take a cumulative amount of fatality-free shifts, Noreen , have you done the sums? It's a phenomenal significant figure. And I would not be surprised if it's probably today stands as the highest in the industry.

Salient features. Well, the headline earnings up 9%, and we speak about the adjusted headline earnings up 35%. Adjusted. Some people like to talk normalized headline earnings. And what it does, it just really discounts the fair value gain and losses based on the restructuring of the Coal loans. So it is quite a prominent number, which we believe we had to talk to. The segmental EBITDA is up 16%. The impact of the basic earnings was primarily driven due to the impairments at in Nkomati and Sakura, which we will talk about a bit later in the slides.

The dividend is up 30%, in line with our earnings and cash position. This is the highest ever dividend we've received from our -- from Assmang. Assmang's operations have just shut the lights out, performed exceptionally well and have been blessed by good prices. We will touch on that. What is pleasing, although there's been a significant drop in the coal price over the last 6 to 8 months, we still managed to reduce the debt, and I'll show you a slide to that a little bit later. And the net cash position is significantly improved, which is obviously very pleasing.

If we can go on the headline earnings analysis, it's just really a proof of the growth over a period of time over the last 5 years.

Okay. So this one really on a par basis compared to earnings. Commensurate with that, we see the dividend increase, and pleasingly, we've shown growth of dividends and obviously giving returns back to shareholders, which is a key driving component of which we've promised.

I'm not going to focus a lot. We touched this last time with you in terms of putting a lot of granularity and expressions to market. What do we want to do with capital and how do we deal with it in terms of capital allocation? And probably, and Abigail is going to deal with that in her slide in a lot more detail, I really want to touch on the next slide, and I will talk to the dividend payment and maybe just highlight 1 or 2 things.

So we wanted to move beyond the principle of just saying we committed to paying dividends on a biannual basis and to show a commitment into range. The range was really derived about what we've looked at, at the past, anticipated flow. And we're saying, it is in that range of 40% to 70%, and that's what we intend to do going forward. So I think it's quite a nice expression and commitment that not only are we committed to paying dividends twice yearly, but actually put down a formulation in that regard.

If we move on to the cost curve position. I think what the real focus there is about margins and maximizing margins. So where we are, in land, lot bound, you are going to always struggle to compete with people close to end users or to ports. But what we need to do is look at our costs, make sure we -- and we do deliver good quality premiums, and we'll touch on a slide, which demonstrates that we're well positioned on the cost curve in general. We focus -- absolute focus going forward is on maximizing margins.

So now I'll move on to the operational slides. So overall, we are very pleased with the results, notwithstanding which has been a very challenging operational period in the mining industry, and we'll note to date that the mining PPI this year is up more than 14%. So we're all challenged with high costs, and we have to focus a lot more in future in getting costs down.

I know Jongisa has done this, but I really do want to acknowledge every one of our partners, the management teams, the operational teams and the support that we've got from our Executive Chairman and certainly from our Board because, without that combination, we could not achieve and deliver on these results. And certainly, to you, the investment committee and the media, we're really pleased you're here and you've always been a staunch supporter of us.

There's 5 key drivers, which cover the theme of ARM going forward, and in particular, this year. We want to maintain a safe, productive working environment. Our drive is on productivity, and that's an endless drive, and we've put a lot of time, effort, commitment and people to achieving that. Our focus is on costs and grade. Grade is a challenge. And what do we do and how we're doing? A lot of work, we'll touch it on, on slides. And we have and do use a -- what we believe is appropriate mechanization and technology to drive up our business. And last, but not least, is that we have a clear and have maintained a clear focus on value enhancer -- enhancing accretive growth. A large part of our last 4 years was consolidating areas of underperformance, but adding on which were bolt-on organic opportunities and to create value and extend life. We've touched with those over the last 4 years. And so we continue to focus not only on organic opportunities, but we do look at value-accretive growth, and there's a dedicated team looking at those opportunities.

This slide really demonstrates what I said earlier in terms of showing what the normalized or adjusted headline earnings is if you take out the fair value adjustments, particularly on the restructuring of the Coal that we announced last year. So our headline earnings last year at ZAR 3.8 billion up to ZAR 5.1 billion is quite a phenomenal jump in this period.

This slide really says we show that we still have very strong contributions coming out of iron and manganese, which is very key to us, the manganese division. We do see, however, that the platinum fundamentals and outlook are improving. Nickel and coal outlook remains under a lot of pressure with a lot of volatility, particularly in the nickel space, how quickly those -- how that position changes. I will spend quite a lot of time on Nkomati nickel because it's been quite a contentious issue, particularly on our side, over the last 3 years driven primarily due to the volatility in nickel price.

Okay. So looking at this slide, we've maintained reasonably good margins in our diversified mix, around about an average of 30% margin right through the cycle. And so with the exception of nickel, we are reasonably well positioned. Coal has gone through a downward cycle, but the 2 coal operations remained well positioned on the cost curve. And I have no doubt that we will make good money out of coal going forward.

Unit costs. This is the one where I believe we have a lot of work to do. PPI is up, I think the exact figure this year is 14.6%. The mining PPI at 14.6%. And we have to drive these costs down. So there is an absolute commitment, focus from every one of us in terms of the managed operations and our partners is to drive these costs down. Maybe if I can touch one or two and explain it. So the iron ore, if we take the last 5 years that they've been below inflation costs, they are very pleased with that performance. I mentioned both GGV and PCB remained well positioned on the global cost curve. The unit costs at our platinum operations were negatively impacted primarily because of grade and the challenges we need to deal with in particularly at Two Rivers, which is moving in -- as it moves westwards and south into a split and a lower grade environment. But we have a number of interventions. And certainly, we're in a position to discuss that, what we're going to do about that. And I'll touch that later.

Black Rock, in this transition of upgrade and modernization, it had impacts on the short joining the previous reporting period, which we closed down for a year, in fact, 10 months. This year, we closed Gloria Mine to upgrade the short and the belt. So all of those had an impact on volume and commensurate would have an impact on costs. But once we're through this, and I'll touch that a little bit later as well, I have no doubt that the Black Rock will be well positioned in terms of costs with the ability to quite significantly ramp up production.

Service division continues to deliver exceptional results. I've touched on that. A 34% increase in the U.S. dollar prices obviously had the positive impact, and the results are self-evident in terms of profitability and appropriate earnings. Sales volumes from all the operations are in line with the allocated rail capacity. We're using that to its full capacity. The unit costs undoubtedly will improve once the underground -- so all the surface infrastructure, shaft infrastructure, the rapid load-out facilities on surface, the plant upgrades, 90% complete. We're busy with the silo and the belt transition. So right now, we're still handling our ore through trucking. And over the next 2 years, we'll convert from trucking to belting, and the cost reductions on that logistics underground are quite significant. We'll have a big positive impact of the -- of our manganese operations.

So a little bit more on the actual iron ore. The operations continues to attract good grade lumpy premiums. And we do produce a high-grade ore body. The lumpy-fine ratio continues to improve, and that's really ongoing improvements in blast designs and improved fragmentation. So the teams are doing phenomenal. It wasn't too long ago that we were on a 50-50. We went to 53%. Last year, we had 56%. This year, the team's up at 60%. I'm not going to commit to 60%. I think the more normalized lump is about 56%, and that's what we committed to do.

Maybe a little bit about Khumani. Just a couple. It's been at steady state for the last 7 to 10 years, producing 14 million tonnes, all export, high-quality material, well positioned on the cut through the on-mine costs are well positioned. It has world-class safety statistics. I mean there was a slide that showed that earlier. There's probably no industry in South Africa that runs with those type of safety statistics. So I'm exceptionally proud of the Assmang, particularly the iron ore division.

Beeshoek -- and Khumani still has a 2024 year life. And the work we're doing and looking at depending price sales, we can push it up quite significantly. And there's quite a significant amount of satellite orebodies at the right time we will acquire. So this mine is really a long-life mine, superb operation.

Khumani, steady state, doing 3.5. Most of the product is moving into the domestic market, around about 3 million tonnes. We do export, give or take, 400,000, which we put that rail link in last year, I touched on it. It's also very high grade, low on the cost curve, well-positioned, also world-class safety statistics.

Maybe the one challenge that the Northern Cape faces is drought, and with drought comes a water supply challenge. So 2, 3 years ago, we had a lot of problems, done a lot of interventions, put in boreholes, helped with upgrading of the pipeline, but that pipeline needs a significant amount of capital, which all the players in the Northern Cape are participating in, but water remains a real challenge for us in the Northern Cape.

So I think this slide demonstrates what we were talking about. If you look at the on-mine cost at $16, world-class. Operation's performing well. And if you look at the quality differential, you look at the Fe equivalent basis, well under 50, high-margin business, well-positioned, costs, in general, are well controlled. We're very proud of the achievements out of the Iron Ore division.

Manganese, I could spend a lot of time, but I do believe I've articulated well. We've committed a couple of years ago to the upgrades, the modernization and allowing ourselves flexibility to meet market demands in terms of quality differentials and the ability to ramp up as we get the allocation. The current MECA2 allocation, Jongisa will have to help you, it's in the region of 3.2 million today, ramping up to 4 million tonnes by 2022, and we are in discussions with MECA3 and André, help. I think we've asked for 5 million tonnes annualized. These operations undoubtedly can produce this once we're in that position. And I think, particularly worldwide, Black Rock is going to be a superb play into the market going forward.

Alloy. The alloy business is taking a lot of strength but I want to qualify that, and I can say that hand in heart that both Cato and Sakura are achieving their respective targets, nameplate capacity, if I may say, and continue to deliver world-class efficiencies on all levels of the operations. You cannot take anything away from what they're doing. But the sustained low alloy prices, coupled with high input ore prices and reductants is putting a lot of pressure on our business. So the midnight oil is being burnt in all aspects to reduce costs and keep these operations going. It's, for now, an integral part of what our business is in the value chain. But obviously, we're keeping a very close eye on these. This has unfortunately led that we had to, in terms of accounting, do impairments on our business. And the payment and the attributable payment on this year was ZAR 507 million for Sakura. And this was really largely driven to a consistent decline in the manganese alloy price outlook and an increase in production costs, primarily from the high manganese ore prices.

Platinum. The platinum division. I want to say that the -- we have had a disappointing return from Platinum this year. Primarily, the platinum reduction in profit came as a result of Nkomati, which took at ZAR 313 million loss for the year. The unit costs at Two Rivers are driven primarily by the lower grade, and I'm going to touch on the next couple of slides, and it is likely to continue for the foreseeable future. There are plans -- however, there are plans in place to increase the output from Two Rivers back to the 380 whereas, I think, this year, Jongisa, it's about 320, 330. And it will get back to the 380, there's no doubt. And it's quite a solid operation, and I will touch. Maybe this slide gets to it.

So TRP has experienced challenges over the period, despite overall pleasing cost controls and delivery against targets in terms of developed mining and mining and milling volumes. It remains a safe, profitable and efficient producer and is expected to be a valuable contribution to the group going forward. With regards to Modikwa, and I did touch that regretfully, we did have a fall of ground accident on the 27th of March, where Mr. Thomas Maluleke was fatally injured. The impact of that taken so seriously that we closed the operations down for 2 weeks, complete retraining, we looked, spent and have committed a lot of time, effort to get the standard compliance, housekeeping and make sure that this -- that we have an absolute commitment to get fatal-free, reduce disabling injuries with the ultimate game of 0 harm.

So the mine today remains focusing on safe production, safe productive workings. What we are doing, we have injected capital, we are accelerating capital development with a primary focus of moving off the conventional footwall development, which are big 6 by 5 meter ends with dump trucks moving and ramping all of these on to reef and we're going on to low profile. It achieves 2 things: it gives us a significant amount of flexibility and gives us the ability to take all development on to mechanization, which is far more productive. Modikwa has shown significant improvement prior to the fatal, and the results in the second half are not reflective of where Modikwa stands today. A lot of good work is being done. I am very positive that we'll see positive returns coming out of Modikwa in its on reef drive, creating flexibility and returning it to significant profitability and to the ramp-up over the next 3 years of getting the tonnage up to 240,000 tonnes per month, which is in line with our plant capacity.

So I did want to come back to Two Rivers. I think it's important and I have to come back. So Two Rivers remains a quality, long life, low on the cost curve, fully mechanized, very efficient, well-run business. It has significant growth potential, not only on UG2 but the overlying Merensky ore bodies. And incidentally, if you take the basket price today of the UG2 in the region of 5 40, the Merensky basket today is over ZAR 600,000. And we've done bulk samples in the last, probably 4, 5 years ago, and many of you will remember, holding it for a better incentive price. So we are dusting that off. I think it's a unique opportunity with some of the new modernization equipment, which allows, if not mechanized, probably autonomous mining, which is highly efficient. So Merensky has the opportunity coming in significantly low on the cost curve in the conventional mechanized UG2. And it's certainly -- we're aware that we have about a year of work to do that before we make any announcement, and I have no doubt we will, which will put Two Rivers undoubtedly back as probably the lowest on the cost curve, world-class operation, which it is and deserves to be.

The other things that we are doing at the -- so that plan really depicts the mined out area. And if you look to the west and the south, the indicator then inferred really demonstrate that there is a grade challenge. So people say, well, maybe your resource doesn't indicate it. But when you look at your resource body, you've got to look at the overlying geotechnical considerations, the stringers, the seams, what needs to be mined with it to get a reserve statement. And it is narrowing and your type of equipment will ultimately lead to dilution. So where we've historically mined for the last 10 years at about 4 grams per tonne, we see ourselves, this mine for the foreseeable future, mining in the region of 3.6 grams per tonne. But there are other interventions in terms of getting the costs down, there's a number of other interventions in turn improving that position. And certainly, we have a commitment to take this mine back up from the 320,000 to 380,000 ounces. And that excludes the Merensky I was talking about. So there is accelerated development taking place at the mine declined. And what -- typically in the industry, and it's not uncommon, is that you can open up one level per year through your conventional approach. This mine has really done that. We do 2 levels a year. And we will continue to do that for the next 2 years until we have the required flexibility, which will put us in a better place. And it's also in line with the ramp-up we want to do. So we've already decided that we are going to ramp up the plant capacity by 40,000 tonnes per month. We're dovetailing that growth with the new tailings dam because our existing tailings dam is at current capacity, and so we'll commence with that plant ramp-up in March next year, which is an 18-month build, taking the mine back up to 380. And it will happen as that plant gets commissioned because we are really building the ore and the stockpiles to accommodate that growth in ramp-up. So that's a really good news story.

We've also, to the south of the mine, gone into what we call in the split reef environment where the reef, which was pretty homogeneous, and I know I spent a lot of time with in previous presentations, is to look at how do we mine that. And we've decided and we've taken on the bottom cut and we've had to cut down on existing phases, go down to 2.5 meters, and we're mining the bottom cut there. That bottom cut, we've moved the grade in the south, which was running at 2 grams a tonne. We're consistently up to 3.5 and experienced areas achieving well over 4. What's quite nice about that on the cut is that the ratio of palladium to platinum is quite significantly -- positively swayed more towards the palladium. As you know, Two Rivers is a 60-40, and this way around, that bottom cut has changed, 60-40 in place of palladium to it. So that's pretty good for where we stand in palladium today.

So overall, I'm very pleased at the way the mine, its teams have responded to these challenges. And I'm not going to lose a moment of sleep that this mine will get back to where it rightfully deserves. And that's the confidence I wanted to get across to the investment committee.

Nickel. So we have been challenged over the last 3 years, primarily with low nickel or volatile nickel prices. They -- and we have come to this conclusion that the open pit portion of the mine has reached the end of its economic life due to 4 or 5 reasons, so it's not only price. It has declining grades. It is subeconomic strip ratios. Cost escalations within that business aren't acceptable. And we have a very volatile nickel price. And probably most important, we don't have the latitude of time. It only has a 6-year life. There is no point in continuing that and hoping that price saves you. And so if the price today is probably the highest it's been in the last 2 years, and no, that doesn't change our position.

So we have come to an agreement, ourselves and our partner metals, we've evaluated over time a number of options for the remaining life of mine. And the option to optimally harvest the remaining life is what we've landed on. We found that to be the least risk, least capital-intensive and certainly will give a positive NPV to the business that way, but we need -- we do need to provide cash for ultimate care and maintenance and closure. We haven't landed on that because we need to understand that dynamic, but the mine will cease mining underground -- of the open pit operations, more or less, the end of June next year. There is a little bit of stockpiled low-grade material. We will do the economics. If it makes sense, we deplete that, then we'll stop towards the end of September 2020, and we will make a final decision.

So I think we, at management, have no doubt that's the right decision to make under these circumstances. And I think if there's one key message I wanted to bring today is then to bring this journey of ARM where it's been struggling with a number of loss-making and marginal assets and repositioning ourselves really brings a close to that chapter, which really spells out a nice, profitable, good margin and diversified business going forward.

Coal business, we touched on that, and I've probably got 2 slides. Tired of listening to me so we'll get the young lady to come up in a sec. ARM Coal, the coal business remains positioned -- well positioned on the cost curve. But -- and post -- I think, very importantly, and if you look at that bottom right-hand slide there, you can see post the restructuring, even with low prices, how we've made significant impact in reducing the debt. When this debt is gone, this is going to be -- and its position and where it stands are going to be a very good earnings and cash contributor to ARM in a couple of years' time. We're very pleased where we've landed this. Obviously, we're not happy with the low prices. We don't believe it's sustainable, but price and exchange rate is not in our hands, we need to manage our businesses and not hide behind price and exchange rate.

The PCB operations this year have been impacted by 3 things and it's probably worth noting. It's important to note them. A lot of the mining taking place in the PCB is stripping what was the historic underground mines, and you do get sinkholes associated, (inaudible) associated. You do get a lot of spontaneous combustion associated with that type of mining. And the coal industry as a whole, and we didn't escape that, were subject to a huge amount of community disruption over a few periods, some of it lasting as long as 2 weeks. I hope that's put behind us and that we can expect and see a lot better results from our colder regions.

I think the last point I wanted to raise is the issue of maybe the capital. So the capital over expenditure was primarily driven to the changes in the rehab provision, which was required by the new NEMA regulations.

With that, I'll hand over to Abigail to do the financial section. Thank you for your indulgence.

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Abigail Muelelwa Mukhuba, African Rainbow Minerals Limited - Financial Director & Director [3]

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Thank you, Mike. Good morning, everybody. So I'm going to handle the capital allocation part of the presentation. On Slide 34 is the guiding capital allocation principles, which we have communicated previously. So I believe you're now familiar with these principles for ARM.

Based on those principles, if we look at how we then allocated the capital, primarily the cash that was generated during the year of about ZAR 2.1 billion as well as dividends received during the same period of about ZAR 3.3 billion. I just want to focus on some of the elements, not everything that's on the slide.

You will note that the largest chunk of the money that we spent was spent on dividends paid to our shareholders of about ZAR 2.2 billion, and these dividends were about 29% higher than what we declared last year or paid last year, which was ZAR 1.7 billion.

Then the next most significant area where we applied the capital was in capital expenditure where we spent just below ZAR 1 billion in investing in sustaining capital. And then the last one that I want to highlight on this slide, you'll see on the investment bar, also part of investing in our existing business, there's an amount of about ZAR 341 million. The majority of that, about ZAR 211 million was the money that we spent in the investment in Harmony when we took part in the placement during the year. We took part at about ZAR 19, and I think we've all seen where the Harmony price is as we speak.

Then if I may move to the next slide, so Slide 36, on the net cash and debt position. So the -- firstly, the cash and cash equivalents on this page is slightly different to the one that we just saw in the previous page because this one does not include the borrowings or the overdrafts. But nonetheless, it's not a major difference. Pleasingly to show that on this slide, our total borrowings, as Mike has said already, our total borrowings have come down from ZAR 2.3 billion to just over ZAR 2 billion, and the majority of that borrowing is the ZAR 1 billion loan that ARM Coal has with Glencore. And then we also have short-term borrowings, which have increased. That increase in the short-term borrowings, it's really just a reclassification of some of the ARM BBEE loans from long term to short term.

Pleasing to see that our net cash to equity ratio has gone up to 8.8% compared to the 3.6%, which we reported last year. And then if you look at our debt position, if you were to adjust it for the -- to the equity loans, particularly the ARM Coal loans and the Modikwa loans, both of which are interest free, you will see that our adjusted net cash then moves from ZAR 2.8 billion to just over ZAR 4 billion. In that number, the ARM Ferrous cash is not included. I show it in the last line where we say ARM cash and cash equivalent at ARM Ferrous, it's just over ZAR 3 billion versus ZAR 2.5 billion reported in the last period.

Then if I move on to Slide 37 on the capital expenditure, you will note that our capital expenditure was about ZAR 775 million, which is about 31% more than 2018 and about 5% above what we previously guided. The main reasons for the expenditure -- or for the increase was a 43% increase at ARM Ferrous. At 100%, it's sitting at about ZAR 4.4 billion versus ZAR 3 billion last year. And a lot of this was due to the life cycle replacement of fleet and mining equipment. We also had an increase in our stripping capitalized. We're stripping both at Khumani and Beeshoek. The manganese business, also the capital expenditure went up by about 80%. We already previously communicated the modernization and optimization of the Gloria Mine.

Then if you look at the capital expenditure at ARM Platinum, it was relatively flat. But I just want to highlight in terms of the Nkomati capital expenditure, there was a reduction because we only capitalized stripping costs for 5 months of the 12 months, as Mike has already alluded to the whole process that led to the impairment.

So we go to the Board, what you call the -- our strategy session with our Board where we finalized our budget and business planning process in June this year. So having done that, we have revisited our forecast and our guideline for the future years. So if you look at F 2020, it's gone up by about 17% from what we previously guided, which is about ZAR 500 million. And 2021 it has also been revised up by about 14%, which is about ZAR 400 million. The majority of the revision relates to mainly higher stripping costs that have been capitalized at Khumani and Beeshoek. Obviously, the Gloria Mine, we've previously communicated, it's going to peak in 2020 and then have a tail end towards the 2021 year. We also have to reverse the UG2 plant expansion, which will be about ZAR 350 million, our share. And then we also have a Two Rivers tailings dam that's about ZAR 444 million. Suffice -- to also remind everybody that the normalized stay-in business capital is about ZAR 2.3 billion to ZAR 2.5 billion. And then in terms of the coal expenditure going forward, that's also slightly higher because of additional box cuts and replacement of mobile equipment that is expected.

Then I think that is all on my side. Thank you very much.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [4]

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Thank you. Thanks -- it's on? Yes. Thank you, Abigail. Thanks, Mike and Jongisa. My apologies, Mike has apparently already apologized. I was at a funeral of one of the most outstanding female entrepreneurs in the country, Dr. Thandi Ndlovu. So I was initially convinced that I would be excused at least 10:00 to be here on time, but it just became very, very difficult. But anyway, most of the presentation has been concluded already. And I'm told that it's question time now. Okay.

And just before I open it, just to express our deep, deep gratitude to all of you. It's important that we meet and report as we do. And I know there's usually a request by some of you to ask questions privately at the end of the presentation, and we'll all stay behind and deal with those one-on-one or private questions. I thought at this stage, if you could just raise your hand and if you have any questions and indicate which company or organization you represent, and we'll try as best we can to answer those questions.

Okay. Where do we start? Yes? I was at the meeting on Wednesday with all of the religious leaders, the leaders of the 35 largest church and faith-based organizations in the country. And there was a left wing for the communists and a right wing for -- I don't know what to call them for -- are we all right wing or what? Right wing for -- and then there was the coming together in the center of all of us. But today, we are all South Africans, and there's no – there’s only one unity wing. Can we start with you? Just introduce yourself. Can you pass on the mic to him? Okay. Good to see you.

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Questions and Answers

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Johann Pretorius, Renaissance Capital, Research Division - Head of Research of Africa [1]

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It's Johann Pretorius here from Renaissance Capital. Just 2 questions. The first one is on your cash position and the possibility of share buybacks. As Abigail just pointed out, on an adjusted basis and adding the -- your attributable cash in Assmang, your cash is close to ZAR 7 billion now and I was just wondering whether that provides some scope for some nice share buybacks, particularly if you might think the ARM share price could offer attractive cash flow return on investment. That's the first one.

And the second one is on the Machadodorp Works. I noticed that you purchased Assore's share in the Machadodorp. So I was just wondering whether you could share with us some of your plans around Machadodorp. It seems to be -- or some might perceive it as a struggling operation. It's a downstream processing facility with some dependence on Eskom. But if you can perhaps share with us the upside that you see in this, that would be interesting.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [2]

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Thank you. You've got a wonderful Chairman who are -- always meet at wonderful meetings, I mean, your global Chairman. Will you deal with the share buyback? And you will deal with the Machadodorp? Okay. Thank you. Any other questions? Let's take, I don't know, 5 questions initially and answer them.

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Brian Morgan, Morgan Stanley, Research Division - Equity Analyst [3]

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It's Brian Morgan, RMB Morgan Stanley. Mike, just on -- just you're talking about the Merensky options at Two Rivers. Could you just give us an idea what sort of indicative timing are you thinking about? Is it something that we can think about in the next 10 years or 5 years or -- and I presume you'll need a concentrator. So maybe just talk about that. And then maybe in terms of scale, concentrator size perhaps that you might be thinking about. Just sort of indicative sort of numbers, just so that we can get an idea of scale.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [4]

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Thank you. Any other questions? I couldn't sleep last night so I saw the Minister of Mines and Energy talk about the mining industry and what impressed me was he was trying very hard to do a sales speech on the mining industry, which is what all ministers are supposed to do to create an environment in all industries. But in that context, it was mining that makes South Africa a globally competitive country for investments in the mining industry. So I was -- it was good to see that -- just like -- I don't want to say a second-hand car salesman because it can be difficult. But if you're a salesman, you've got to focus. And it's good, that's the sort of mentality that's required. I saw a hand here. Yes?

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Thabang Thlaku, SBG Securities (Proprietary) Limited, Research Division - Research Analyst [5]

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It's Thabang Thlaku from Standard Bank.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [6]

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You must say your name slowly.

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Thabang Thlaku, SBG Securities (Proprietary) Limited, Research Division - Research Analyst [7]

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Thabang.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [8]

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With a beautiful name like that, you must say it even slower. Thabang from Standard Bank, yes?

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Thabang Thlaku, SBG Securities (Proprietary) Limited, Research Division - Research Analyst [9]

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Yes. So I've got a few questions from my side. Can we kindly get the EBITDA margin split for your manganese operations? I know it's 42, so ore versus alloy.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [10]

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Sorry, the EBITDA for which operations?

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Thabang Thlaku, SBG Securities (Proprietary) Limited, Research Division - Research Analyst [11]

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For your manganese, so it's 42, but what's the split between...

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [12]

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Oh, manganese. Manganese?

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Thabang Thlaku, SBG Securities (Proprietary) Limited, Research Division - Research Analyst [13]

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Yes. Ore and alloys. And then what is the sort of earnings from Cato Ridge? Because Sakura is quite clear in the release. And then can you give us an indication of the manganese ore that was trapped in this period due to the transmit challenges. And would I be right in saying that the cost of trucking is currently at about ZAR 1,000 per tonne?

And then finally, my question -- my other question comes from iron ore. So it just seems like even though the operations did well, your lump was higher, what was your average Fe content and what was your average received price? Because it just seems like your received price was slightly lower than we expected.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [14]

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Thank you so much. You want to take those questions?

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André Joubert, African Rainbow Minerals Limited - Chief Executive of Arm Ferrous [15]

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I didn't hear the second part of the question, the average...

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Thabang Thlaku, SBG Securities (Proprietary) Limited, Research Division - Research Analyst [16]

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The average realized price for your iron ore.

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André Joubert, African Rainbow Minerals Limited - Chief Executive of Arm Ferrous [17]

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Average realized -- okay.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [18]

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Okay. So you'll deal with those questions? Thank you so much, Thabang. You've got the mic. You know what the name Thabang means, Mr. Mic? You should know.

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J. Timothy Clark, SBG Securities (Proprietary) Limited, Research Division - Head of Metals and Mining [19]

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I think I do know, but I don't want to guess on the mic.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [20]

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Wonderful.

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J. Timothy Clark, SBG Securities (Proprietary) Limited, Research Division - Head of Metals and Mining [21]

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Can I just ask -- it's Tim Clark from Standard Bank. Can I just ask a couple of questions?

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [22]

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You work together, Tim?

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J. Timothy Clark, SBG Securities (Proprietary) Limited, Research Division - Head of Metals and Mining [23]

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Yes, we do. Okay. The first one is you've given us some CapEx guidance on Two Rivers. You gave us a bit of a split, Abigail, which is really helpful. But then if I read the release, it seems like the CapEx for some of the projects is like -- is under consideration by the Board. And I just want to always make sure that I've got a completeness. So is your guidance to CapEx enough CapEx to get to ZAR 380 million? Does it include Merensky? Does it not? Because I'm just a bit sort of like befuddled by what CapEx does to production. Just to marry the 2 together well.

Just on the commodity. I just wondered if you've got any flexibility at all, current prices, or if you're just in a ramp-down phase and if that's just happening.

And then your dividend policy or your dividend guidance, let's call it, for 40% to 70% of dividends received, must we try and then model the dividend received from your various subsidiaries as well and assume a full payout on those? Because the likes of Two Rivers -- the Assmang dividend is simple enough. And has Assmang declared a dividend post-June? I haven't seen the number. I don't see it anywhere. Can you give us the number?

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [24]

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If you read the dividend policy very clearly, if you read it slowly, you will see that indeed it covers because that question is a good question. Yes, it covers all of them. Okay. And then you will deal with some of the questions, Mike, that -- and Abigail, I think? Okay. Any other questions? Any other? Yes? I know you, but for those who may not know you, yes.

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Ian Cruickshanks;South African Institute of Race Relations;Chief Economist, [25]

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Ian Cruickshanks, Institute of Race Relations. Just looking at that slide in front of us.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [26]

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Sorry, they didn't hear. They heard the first -- which company are you from?

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Ian Cruickshanks;South African Institute of Race Relations;Chief Economist, [27]

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Institute of Race Relations.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [28]

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You heard that? United Nations, hey?

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Ian Cruickshanks;South African Institute of Race Relations;Chief Economist, [29]

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Looking at that slide in front of us, it's clear that the mining leaves devastation behind. What is your policy regarding repairing the environment, restoring it? Or do you just walk away from it? Or how far do you go towards restoring it, if you do?

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [30]

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Very, very good question. And at the heart of it is the obligations we have in terms of the International Council for Mining and Metals, which is indeed the most stringent and -- best practices in the world in that regard. Are there any other questions? Okay. You've got people on the -- yes. Do you want to ask them whether they've got a question?

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Jongisa Magagula, African Rainbow Minerals Limited - Corporate Development & Head of IR [31]

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There are currently no questions in...

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [32]

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Okay. I mean it's crystal clear?

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Jongisa Magagula, African Rainbow Minerals Limited - Corporate Development & Head of IR [33]

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Yes. (inaudible)

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [34]

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Good. All right. Where do we start now? Should we start with -- I think we can start this way. Let's start with you, André. You will answer your questions and Abigail and Mike will pick up.

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André Joubert, African Rainbow Minerals Limited - Chief Executive of Arm Ferrous [35]

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All right. I think the only question that was directly directed to me was from you, Thabang. In terms of the Cato Ridge, you asked the split between manganese ore and manganese alloys in terms of the earnings. On Page 53 of the booklet, you can clearly see the manganese ore, the manganese alloy and then the manganese total in terms of sales, operating profit, contribution to headline earnings, capital, depreciation and EBITDA per alloys and then per ore.

And then on that slide, it does not specifically show Cato Ridge Works. So the profit for Cato Ridge Works alone was ZAR 240 million for the year.

Your next question had to do with the trucking that we do on our manganese ore. And I think -- not I think, Assmang certainly has a very reputable arrangement and reputation with Transnet. So we deliver what we say we deliver. So in that regard, we could allocate it -- rail allocation, which Transnet generally delivers for us. But this year, we did have that problem with the bridge. And because of that, we did 73,000 tonnes on road to make up for that bridge incident. And in your modeling, yes, it is more or less the price that you're saying, but it is only ZAR 300 per tonne more than if you had to rail that material. And then on top of that, we also did another 120,000 tonnes by road. But that was an opportunity that we saw because of the better manganese ore prices, and that attributed very well in that context.

In terms of your next question about the iron content at -- and the content of our iron at -- from Khumani mine. As Mike said previously in his presentation that Khumani is a high-grade mine. We regard it as a high-grade mine. So our 62% iron ore that we export, the grade of that is 64.5%. And then our lumpy material that we export, the grade of that is 65%. And then the realized prices that we got is very, very similar to what the index prices was. If you index it back from the grades that we get, the lumpy fines ratios that we get back to CIF, 62%. We are very close in achieving those numbers. If you look at our results, you will not get that number because we sell CIF, we sell FOB and we sell local. So some is sold free-on-mine, some is sold free-on-board and then some is sold CIF. But if you calculate everything back and you know the percentage split of lumpy and fines, CIF, FOB and then free-on-rail, what we get is very, very close to the average price of the index. Thanks.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [36]

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Thank you, André. Abigail?

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Abigail Muelelwa Mukhuba, African Rainbow Minerals Limited - Financial Director & Director [37]

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Thank you. Johann, on the question about the share buybacks given our cash position. Obviously, we always try to strike a balance between what we're investing in the existing business, growth opportunities as well as other value-creative initiatives in terms of allocating the capital. You will have seen, obviously, our share price performance over the last year has gone quite up. So in terms of the trade discount that we had and where the value in terms of if you do a buyback now, would it be a good time to do a buyback, we consider that every time when we take any presentation in terms of an investment opportunity to our Board, and we always compare it to a potential buyback. So to the extent that a project that gets presented has better returns than a buyback, we're currently not in a position to be doing a buyback, but we do always consider it, okay? I think then there was also a question on...

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [38]

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But I think you agree that shares are very underpriced. It should be way above ZAR 200.

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Abigail Muelelwa Mukhuba, African Rainbow Minerals Limited - Financial Director & Director [39]

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It should be way above ZAR 200, but we do have projects that we believe will have better returns than if we were to do a buyback right now.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [40]

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Absolutely.

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Abigail Muelelwa Mukhuba, African Rainbow Minerals Limited - Financial Director & Director [41]

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And then Tim, in terms of the dividend, you said, do you look at the underlying subsidiaries? Yes, you do. So the guiding principle that we have was in case that has been received from all our JVs and all our businesses. So you'll note in your cash flow statement, you'll see easily the likes of Assmang and the Harmony dividends. But then when we publish our ARM Company, you'll be able to pick up also the number that we received from Two Rivers. So that 40% to 70% is for the globular number, not just Assmang.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [42]

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Thank you. What is the Harmony share price?

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Abigail Muelelwa Mukhuba, African Rainbow Minerals Limited - Financial Director & Director [43]

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It's over ZAR 55.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [44]

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It's how much? Over ZAR 55.

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Abigail Muelelwa Mukhuba, African Rainbow Minerals Limited - Financial Director & Director [45]

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Over ZAR 55, yes.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [46]

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Gold. It's very, very -- it is. I hope it also increases.

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Jongisa Magagula, African Rainbow Minerals Limited - Corporate Development & Head of IR [47]

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Abigail didn't speak to the dividend and Assmang question.

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Abigail Muelelwa Mukhuba, African Rainbow Minerals Limited - Financial Director & Director [48]

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Sorry, yes, apologies. The dividend, the line that you didn't have, that's because the Board -- the Assmang Board only approved the dividend yesterday. So it's not in the book yet. We've approved a dividend of ZAR 4 billion, of which ZAR 2 billion then will be attributable to ARM.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [49]

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Okay. Mike?

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Michael P. Schmidt, African Rainbow Minerals Limited - CEO & Director [50]

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Thanks, Patrice. Johann and Brian, on the issue of Machadodorp, I trust the question is the same. So why did we acquire it and what do we intend doing with it? And I just need to contextualize. If you look at particularly manganese production, a fair percentage of what we produce and pay for comes out as ultrafine material, absolutely higher grade but unusable, and we put it onto tailings or facilities and we lose that revenue. So for a number of years, now it's not recently, we've been doing research, and it remains research today. I want to qualify that on how do we get value from that. And part of that was to look at how do you bring that absolute fine into book. And part of that was, well, you amalgamate it and maybe you can put it into a pelletizing conglomerate. And we then working on what we call an alternative smelting because you do raise -- and I picked up that the cost of conventional electricity is pretty prohibitive and really puts us in the position in South Africa where we are.

So the work that's been going now for 5 years is making good traction. We, as ARM, believed we could not lose that opportunity for the value of acquiring it, that opportunity which is R&D so that we can rest on a decision within the next 18 to 24 months. If we do not lend that it's successful or commercially viable, we have more than adequate plans in place to recover any investment which we've so acquired now.

For example, we have a large area of unutilized land, which we will never utilize, doesn't matter what, and there are keen buyers for that. Just that alone will return the absolute investment. We have a -- and these are buy sides. Just to say, well, why take this on with costs? There's a number of players out there, particularly in terms of chrome, that will give us good revenues out of us processing with no risk to us. We have the facility, we have the license, we have the installed capacity, and we're going to get the margins to produce and sign it. So in terms of generating cash, whilst we're doing the R&D work is the main driver as to why we've acquired Machadodorp. I think that really covers it. And I trust, Brian, that, that answers your question as well.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [51]

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There's a last question.

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Michael P. Schmidt, African Rainbow Minerals Limited - CEO & Director [52]

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Sorry. You were then on Merensky. No, sorry, I thought they were both on Machadodorp. Brian, and I come to you on Merensky. So no, we haven't landed on a position. Yes, we believe it will be within the 5-year window. Yes, it will require a concentrated plant because UG2 is MF2. And Merensky requires a more simple plant in terms of fine-ness. It needs an MF1. And obviously, we will do it in a modular stage, probably starting a module at 1 20, ramping it up to 2 40, which dovetails well with the UG2 life of mine. But I do want to qualify to say we have not landed on that, but it looks very promising. Thank you, Brian.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [53]

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In fact, just you reminded me when you spoke about electricity, why the interview with the minister I liked -- part of the reason why I liked it is because he acknowledged that the mining industry is paying way, way too much for electricity. And that's very important. That's one of the factors that you cannot be globally competitive when the cost of electricity is disproportionately high. Okay? Any other questions?

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Michael P. Schmidt, African Rainbow Minerals Limited - CEO & Director [54]

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Sorry, I had one more to answer and that is from Tim. And Tim wanted to know whether there's any flexibility with regards to -- in Khumani. And I think our position is pretty clear, Tim, based on the grade stripping ratios, the high cost, short life. It makes no economic sense, the combination of that. So although price supports that, I think you and I both know the requirements in terms of rehab, which we absolutely committed to do and the requirements of closure are huge, that it's in the best interest of shareholders. So if these prices are and sustain where they are, makes us very pleased that we generate free cash to deal with the closure liabilities in a responsible way.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [55]

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Okay. Are there -- [Imam], you want to ask a question as well? Employees are not allowed to ask questions. They should answer the questions. Yes, Tim?

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J. Timothy Clark, SBG Securities (Proprietary) Limited, Research Division - Head of Metals and Mining [56]

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Sorry, just to clarify on Two Rivers. The CapEx that Abigail has spoken about, the increased CapEx marries to 380. Is there going to be more CapEx when you want to go to 380?

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Michael P. Schmidt, African Rainbow Minerals Limited - CEO & Director [57]

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So the CapEx for the 380, which includes the tailing facility, as she alluded to, is all in the capital, so all in.

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J. Timothy Clark, SBG Securities (Proprietary) Limited, Research Division - Head of Metals and Mining [58]

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So if you -- so if I put that -- all of that CapEx in the model, we can take production towards 380 over what time period?

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Michael P. Schmidt, African Rainbow Minerals Limited - CEO & Director [59]

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It will be around 18 to 24 months. 24 months, and Merensky is not included.

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J. Timothy Clark, SBG Securities (Proprietary) Limited, Research Division - Head of Metals and Mining [60]

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Okay. Sorry, I just got a further question, just on water in the Northern Cape. And it feels like that's a very big number, the capital number. And I wonder if you could just touch on for us -- the problem in South African industry is that where price take is often from government. You don't really have a choice, right? The tariff is set. And I just wondered if you could talk to what the possibilities are or even if today's plan is put in place, what that does to your costs and when we should start assuming this because it feels like we've got a bigger water cost coming.

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André Joubert, African Rainbow Minerals Limited - Chief Executive of Arm Ferrous [61]

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Can I take that? Tim, yes. Water is a serious issue in the Northern Cape. And -- but we've put a team together that we call the Northern Cape Mines Leadership forum, which includes all the mining operations operating in the Northern Cape, and we also engage through that forum with the support from the Mineral Council of South Africa. We engage with what we call the Sedibeng Water Board or the Vaal Gamagara Water Supply Scheme. So in that regard, each one of these senior representatives from each one of these companies then sits on like a Steering Committee of this Water Board. To that effect, there's going to be 2 issues that we're going to deal with. So this water line, which pumps the water from the Vaal River to the Northern Cape, is now 70 years old. And that water line needs an upgrade. So they're going to -- the department is going to -- is now looking at a process where -- what we're going to be charged a capital user charge to cover that capital requirement to upgrade that water supply scheme by -- during the life of the project. And then there will also be a slight increase in the actual water consumption rate that we're going to pay.

But because we are doing this now on a collaborative environment, we're working very hard with them now to look at well-field sourcing of the water, which is much closer to the mines. And in -- and through that process, we should be able to reduce the CapEx of that quite a bit. So that process has not yet been costed. And it is -- we are in the process of establishing that cost. But I can say since the involvement of the mining team in that, we've more than halved the total capital that was required to upgrade that scheme.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [62]

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It's very important because the government as usual, in fact, this is what all governments do, came with a crazy, crazy amount. And if it wasn't for the expertise and the skills to say to them, you guys are crazy, there's no way -- it was about ZAR 18 billion or something or ZAR 16 billion, some crazy amount. And you reduced it, you halved it, yes? Okay.

Are there any other questions? Have we answered your question on the rehabilitation? Okay. Okay. So you want to -- the picture. Who wants to have a go at it? I mean anybody else will end. But I was in New York last week, and it's unbelievable. I shouldn't say it's unbelievable. It's very informative that globally, there's a huge, huge concern about what companies like African Rainbow Minerals and other resources companies are doing in relation to obligations to the environment, rehabilitation, restoration. It's also in the context of climate change and the broader obligations we have. And that's why the -- we took a conscious decision many, many years ago to join the International Council of Mining and Metals. And one of the key issues there is to create -- you cannot be a member of that organization without committing to global best practices as far as rehabilitation and rehabilitation plans and restoration, conservation and to put the land to a condition that it was prior to mining. The incidence at the Vale Mine, as -- and I think what happened in Brazil recently as well on the fires, which is something that's totally separate, and it just creates greater global awareness. Are you happy with that? Sorry?

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Ian Cruickshanks;South African Institute of Race Relations;Chief Economist, [63]

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Can I make a comment?

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [64]

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Please make as many comments as you want to and share with us your pearls of wisdom.

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Ian Cruickshanks;South African Institute of Race Relations;Chief Economist, [65]

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I'm not sure I'll find those.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [66]

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I always find them.

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Ian Cruickshanks;South African Institute of Race Relations;Chief Economist, [67]

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I was taken aback some time ago in asking a similar question to a mining manager who said, if some wandering aborigine came somewhere from the middle of the outback, where he shouldn't have been anyway, managed to find under -- to find a way under the fence, which he shouldn't have done. That would be breaking security. Well, there was a risk they couldn't do too much about. And seeing nobody was likely to develop the ground after they've completed their operations, it was left as is. And it doesn't seem to me to be wholly responsible. So I just wanted to be assured that, that was not your attitude and that there was sufficient capital put aside to be able to rehabilitate.

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Patrice Tlhopane Motsepe, African Rainbow Minerals Limited - Executive Chairman [68]

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Very important. And in fact, what happens nowadays is that -- 3, 4 years ago, some of the -- even more, your shareholders globally were asking these questions. They first started -- 10 years ago, they asked about child labor, your safety obligations and -- 15 years ago. And then it went to equal treatment. And then these questions about -- the questions that you're asking. And some of the major banks in the world and financing institutions, including investors, quite correctly asked questions along the lines as you've asked, it's very important.

Are there any other questions? There's none. Do you want to say something, Jongisa? Mike? I'm happy because I'm not asked to sing, so that's okay. What remains is just to thank everybody and also to thank you, Mike and the management team and the -- for all the -- André. I only say one André, and I get 2 nodding, which is good. André Joubert, Andre Wilkens, Abigail, Thando, not Thabang, Thando. Thabang does good work in her own right as well as Jongisa and the whole of the team, thank you so much. And the thousands and thousands of employees who are -- who makes this company what it is.

Our partners here, you recognize all of them? Is that Patrick there? It's not Patrick? Okay. Okay. All right. Thank you. And all our partners are here. Sumitomo, are they here? Is [Mashimoto] here? [Takaziko] is also here. I'm just making up these names. [Kevin Sakato]. Thank you so much. Can we clap hands for everybody?