Marula Platinum Mine

During the third quarter ended Mar31/09, tonnage at Marula rose by 18% period on period in line with the ramp-up in production. The deterioration in grade was a result of the scaling down of production at the higher grade Driekop shaft coupled with higher on-reef development at the Clapham conventional project. Platinum in matte production at Zimplats declined by 11% to 25 000 ounces compared to the equivalent period a year ago. This was due to a concentrate pipeline build-up which will be processed into matte in the next quarter. The completion of the plant de-bottlenecking at Mimosa resulted in platinum production in concentrate improving by 41% from the previous comparable period to 24,000 ounces.

During the six-months Marula experienced a slower than anticipated ramp up to conventional mining, however full production was still forecasted to be achieved in FY2011. The Marula Merensky project has been deferred until further notice.

Marula produced 70 400oz of platinum-in-concentrate, and 185 700oz of PGMs-in-concentrate an increase of 8% respectively year-on-year. However, this was less than had been planned. Although the year began well, labour disputes and shaft closures following the fatal incidents negatively affected implementation of the new mining plan. This was exacerbated by the problem of skills retention. Consequently, the planned ramp up in production from conventional stoping is somewhat behind schedule. The footwall capital development project is also slightly behind but will achieve full monthly production of 200 000t in FY2010. Tonnes milled increased fractionally to 1.45Mt. Metallurgical recoveries at the UG2 plant of 88.3% remained on plan (FY2007: 88.5%). Minor modifications to the plant are required to meet full capacity of 2.4Mt annually in FY2010. Costs per tonne milled rose by 20.8% to R476/t, largely owing to inflationary pressures and the escalation in prices of inputs, especially labour, steel and diesel. Capital expenditure totalled R345 million, up from R280 million in FY2007. This was spent mostly on the footwall conversion project, replacement of machinery, drilling, engineering related to the Merensky project and housing. The Merensky project feasibility study has been completed and will be presented to the board in November. Its approval will be subject to a guaranteed supply of power sufficient to operate both the existing mine and the plannedMerensky project, and the resolution of outstanding community issues. Should this project be approved, development will begin in FY2009. Production is scheduled to begin in FY2014 with annual production of 115 000oz of platinum scheduled for FY2016. This will take total annual production at Marula to 245 000oz of platinum.