Vision & strategy

Our vision

Petmin’s vision is to develop into an international, multi-commodity mining company focusing on quality cash-producing assets or near-cash assets.

Our strategy

Petmin’s strategy has six pillars:

• Moulding a disciplined and innovative management team
  • that demonstrates entrepreneurial flair at both the corporate and the operational level; and
  • that acts at all times with the sense of responsibility and quality of judgement to be expected of owners.
• Developing a culture of discipline throughout the Group that applies to
  • thought processes,
  • all forms of communication,
  • safety issues, and
  • the execution of all tasks.
• Managing our businesses to ensure sustainable organic growth with a specific focus on
  • margin improvement,
  • cash flow management,
  • return on equity, and
  • building distribution channel and logistics capability.
• Acquiring value-adding businesses to meet our key investment criteria
  • cash-producing or near to being cash-producing,
  • internal rate of return of more than 20%,
  • quality management, and
  • opportunistic value-adding transactions.
• Bringing life to the Mining Charter by
  • embracing the fundamental principles of empowerment at all levels throughout the Group; and
  • ensuring that all mining titles that are required are converted to new order mining rights.
• Improving the rating and tradability of Petmin’s shares by
  • ensuring up-to-date and quality information is provided to all shareholders, and
  • ensuring transparency in our reporting.

Delivering on our strategic promises

What we promised in June 2006	What we delivered by 30 June 2007
To mould a disciplined and innovative management team with an ethic of entrepreneurship at corporate and operational levels.	Detailed areas of responsibility have been allocated to all the members of the Petmin executive team (Exco). Incentive schemes and detailed key performance indicators (KPIs) are in place for management at all the operations. Core operational posts have been filled and attention has been paid to succession planning.
To develop a culture of disciplined thought, communication, safety and action.	All Board committees are functioning well. A comprehensive risk register has been compiled and effective risk management programmes have been implemented at corporate and operational levels. These will be reported on and monitored by the executive team and the Board on a regular basis. All Exco members present an account of their progress at quarterly feedback sessions. Decentralised management structures are in place to ensure that operations function optimally to meet their targets and budgets. Group Health and Safety Committee has been established to oversee health and safety matters and statistical reporting. Group Maintenance Committee has been set up to oversee maintenance strategy and planning. Group Anthracite Marketing and Sales Committee has been established to deal with sales planning. Clear communications strategy has been implemented between management and all key stakeholders.
To manage our businesses to ensure sustainable organic growth, focusing on margin improvements and cash flow management.	SamQuarz performed exceptionally well. Plans are in place to increase the life of mine through a detailed geological work programme that is SAMREC-compliant. The effects of the turnaround strategy at Springlake were evident in the second half of FY2007 when there was a marked improvement in performance. Somkhele’s plant was commissioned on 1 June 2007 and sales of 32,999 tonnes were recorded by year-end. Planned early ramp-up of production at Somkhele will add significant value to the Petmin Group. Drilling of Areas 4 and 5 may result in increased proven reserves by June 2008. There has been an improvement in the quality of information and reporting. See the Directors’ Review of Operations for a detailed account of the performance of SamQuarz, Springlake and Somkhele.
To acquire value-adding businesses that meet our investment criteria.	Petmin continued to evaluate opportunities in terms of its investment criteria. The AIM listing has provided the Group with a strong platform for pursuing growth.
To bring the Mining Charter to life by embracing the fundamental principles of empowerment at all levels of our business.	The BEE shareholding in Petmin is currently 36.9% (there was some dilution after the AIM listing, and with the development of Somkhele). Substantial progress has been made in terms of converting mining rights. New order mining rights were granted to Springlake for Besterdale and Manor Park and to Somkhele for Area 1. New order prospecting rights were granted to Somkhele for Areas 4 and 5. Standardised reporting in terms of meeting Mining Scorecard requirements is being implemented at all operations. Targets have been set for all the elements of the Mining Scorecard and Petmin is making good progress in reaching these. More detail can be found in the Transformation Section of this report.
To improve the rating and tradability of Petmin’s shares.	Petmin successfully listed on AIM and placed 40 million shares at a price of 9 pence (R1.26). Petmin’s institutional shareholding increased with FirstRand becoming a shareholder and Craton Capital raising its stake. Petmin was classified as a ‘liquid share’ by the JSE on 31 October 2007. Focused investor roadshows in SA and UK to create awareness of and raise the visibility of the Group.