Our operations

Petmin's principal mining assets are:

SamQuarz

• SamQuarz, is the largest producer of high-quality silica in South Africa producing about 35% of the country’s total annual consumption. The operation, which produces silica and chert, comprises two pits which are in the process of being joined and has a technologically advanced processing plant. The silica is used in the glass manufacturing industry and the chert is primarily used in the metallurgical sector.

  The current mine design for SamQuarz, which has been in operation since 1957, plans to mine down to 24 level (a maximum depth of 240 metres below surface). In total, 45.12 million tonnes of quartzite and 5.87 million tonnes of chert will be mined.

  SamQuarz has a well-defined and focused marketing programme. It supplies to a number of leading companies: PFG, Consol and Nampak in the glass sector; and Xstrata Chrome, Samancor, the Evraz Group’s Highveld Steel and Vanadium operation, Arcelor Mittal and Siltech in the metallurgical industry. The mine plans to become a far more significant supplier to the construction industry in the years ahead. It has a range of products to offer of which G1 road-building material is an example.

Springlake Colliery

• Springlake Colliery, which has been in operation for 30 years, is South Africa’s largest producer of anthracite. The underground operation consists of one incline shaft and one vertical shaft with the deepest mining taking place 120 metres below surface. The opencast operation comprises two pits which are mined to an average depth of 30 metres.

  The colliery has more than 10 years of mineable proven and probable reserves at a run-of-mine (ROM) production rate of 500,000 tonnes a year and three-and-a-half years of opencast mining at a ROM production rate of 800,000 tonnes a year. The underground mining plan has been revised to develop the northern section of the mine while the recently granted new order mining right for the adjacent Besterdale area adds 500,000 saleable tonnes to the opencast operation, to be mined simultaneously with the Lenteplaas opencast operation.

  Springlake accounts for some 47% of South Africa’s anthracite exports. Brazil and Europe are the principal customers of unsized and sized coal. Springlake’s sized products are well suited to domestic heating requirements, as well as selected metallurgical processes. In recent years, Springlake has increased its exports into India as the demand for sized coal continues to grow there.

  In addition, Springlake supplies 27% of the anthracite consumed in South Africa which is estimated to be about 890,000 tonnes a year and is on the increase.

  Springlake has signed a dollar-based offtake agreement for 350,000 tonnes of its duff material until March 2009. In order to reduce rand volatility and underpin profitability, the mine has entered into forward exchange contracts for 68% of the contracted sales at a rand/dollar exchange rate of R7.36/$.

Somkhele Colliery

• Somkhele Colliery, is a new mine which was commissioned on 1 June 2007 with its first export cargo being dispatched from Richards Bay in the same month. It has a series of opencast mini pits and the plant, which is fully operational, has a nominal capacity of 1.44 million ROM tonnes a year (120,000 ROM tonnes per month).

  The colliery, which comprises three mining areas and two prospecting areas, has 25.47 million mineable in situ tonnes of proven and probable reserves and 51.2 million mineable in situ tonnes of resources (inclusive of reserves). Its life of mine has recently been revised by Snowden Mining Industry Consultants (Pty) Ltd (Snowden), from 11 years to 15 years at a ROM rate of production of 835,000 tonnes in the 2008 financial year, increasing to 1,900,000 ROM tonnes of production a year by 2011.

  Petmin has signed a dollar-based offtake agreement for 400,000 tonnes of its duff material until December 2008. Negotiations are in progress with a number of local customers for medium- to long-term offtake agreements. In order to reduce rand volatility and underpin profitability and reduce risk at this new operation, the mine entered into zero cost collar and cap currency option agreements for 75% of the contracted sales, with a base rate of R7.10/$ and a cap rate of between R7.80/$ and R8.94/$.