DISCOVER DEVELOP DELIVER DIVERSIFY
Integrated Annual Report 2019
CONTENTS
1 OVERVIEW
Group profile
Investment case
Group strategy
Competitive strengths
ESG highlights
Scope and boundary
Group statistics
Financial and non-financial highlights
Group structure and overview
Group history
2 STRATEGIC REVIEW
Chairman’s review
Chief executive officer’s review
Chief finance officer’s review
Market review
How Tharisa creates value
Stakeholder engagement
Principal business risks
3 OPERATIONAL REVIEW
4 SUSTAINABILITY
Safety and health
Human resources
Social development
Human rights
Environment
MINERAL RESOURCE AND MINERAL
RESERVE STATEMENT
5
6 GOVERNANCE
Board of directors
Corporate governance
King IV™* application
Remuneration report
Directors’ report
Report of the Audit Committee
1 – 13
1
2
3
4
5
6
7
8
10
12
14 – 35
14
15
17
20
24
28
30
36 – 43
44 – 57
44
47
49
51
52
58 – 63
64 – 97
64
66
76
86
94
96
7 FINANCIAL REVIEW
Condensed consolidated financial
statements
Notes to the annual financial statements
8 SHAREHOLDER INFORMATION
Investor relations report
Notice of annual general meeting
Glossary
Form of proxy
Corporate information
98 – 137
100
106
138 – 159
138
140
150
157
159
* Copyright and trademarks are owned by the Institute of Directors
in Southern Africa NPC and all of its rights are reserved.
INTEGRATED CO-PRODUCER
OF PGM AND CHROME
CONCENTRATES
www.tharisa.com
GROUP
PROFILE
Engineering the mining
company of the future
THARISA IS AN INTEGRATED
RESOURCE GROUP INCORPORATING
EXPLORATION, MINING,
PROCESSING, AND THE
BENEFICIATION, MARKETING, SALES
AND LOGISTICS OF PLATINUM
GROUP METALS (‘PGMS’) AND
CHROME CONCENTRATES. THE
GROUP IS TARGETING PRODUCTION
OF 200 KOZ OF PGMS AND
2.0 MT OF CHROME CONCENTRATES
IN 2020, ON AN ANNUALISED BASIS
Mission
To maximise shareholder returns through
innovative exploitation of mineral resources in a
responsible manner
Values
(cid:3)• The safety and health of our people is a core value
(cid:3)• We take responsibility for the effect that our
operations may have on the environment
(cid:3)• We are committed to the upliftment of our local
communities
(cid:3)• We conduct ourselves with integrity and honesty
(cid:3)• We strive to achieve superior returns for our
shareholders
(cid:3)• We originate new opportunities and will continue to
challenge convention through innovation
Strategic initiatives
Leading natural resources group
– Globally significant, diversified low-cost
operations
Innovation – Innovative research and
development feeding organic growth
Optimisation initiatives – Maximise
value extraction through process
engineering
Leveraging existing platforms –
Marketing, sales and logistics, expansion
into multi-commodities, building
geographic diversity
Capital discipline – Disciplined capital
distribution with a dividend policy of
distributing at least 15% of net profit
after tax (‘NPAT’) and capital allocation to
low-risk projects
THARISA PLC INTEGRATED ANNUAL REPORT 2019
1
Group profile
ESG highlights
Scope and boundary
Group statistics
Financial and non-financial highlights
Group structure and overview
Group history
1
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• Large-scale resource mining five MG Chromitite Layers
• Long life, low-cost co-producer of PGM and chrome concentrates
• Highly prospective exploration projects in Zimbabwe
Discover
• Innovative approach to viable mineral extraction and beneficiation
• Independent processing plants providing operational flexibility at
the Tharisa Mine
• Sustainable polymetallic business model
Develop
Deliver
• Safe production, strive for zero harm
• Integrated marketing, sales and logistics
platforms
• Disciplined capital allocation = growth + dividends
• Cash generative through commodity cycles
• Maximise value of the commodities we produce
Diversify
• Into a multi-asset, multi-commodity,
multi-jurisdictional business
• Using technology as our catalyst
2 THARISA PLC INTEGRATED ANNUAL REPORT 2019
INVESTMENT
CASE
Positioned for value creation
The Tharisa Mine produced 139.7 koz of PGMs and 1.29 Mt of chrome concentrates in
FY2019 and has provided FY2020 production guidance of between 155 koz and 165 koz of
PGMs (on a 5PGE + Au basis) and 1.45 Mt to 1.55 Mt of chrome concentrates.
The Group is targeting production of 200 koz of PGMs and 2.0 Mt of chrome concentrates in
2020, on an annualised basis.
(cid:3)• Tharisa is the only JSE and LSE listed co-producer of PGM and
chrome concentrates
(cid:3)• It is the sixth largest South African PGM producer
(cid:3)• South Africa’s fourth largest chrome producer and the largest
producer from a single resource
(cid:3)• One of the world’s largest producers of speciality grade
chrome concentrates
(cid:3)• In FY2019, Tharisa’s production accounted for 11.3% of
Chinese chrome ore concentrate imports from South Africa
(cid:3)• Developing PGM and chrome projects in Zimbabwe and fine
chrome recovery project in South Africa
Marketing and sales
The majority of PGM concentrate is sold
to Impala Platinum under an offtake
agreement, and also to Sibanye-Stillwater
under a research and cooperation
agreement.
The Group has a marketing platform for
the sale of its metallurgical chrome
concentrates to end-users, stainless steel
producers and global commodity traders.
Metallurgical chrome concentrate is
mainly shipped to China where it is
consumed primarily by the stainless
steel industry.
Speciality chrome concentrates, which
include chemical and foundry grades,
are sold into European and Asian markets.
Production of speciality grade chrome
concentrates made up 24.2% of the
year’s total chrome production.
Extraction and beneficiation
The Group’s key differentiators are its
large-scale open pit resource that allows
for the extraction of five MG Chromitite
Layers. The Tharisa Mine, located in the
South African Bushveld Complex, the
world’s largest PGM deposit, taps into
one of the world’s largest single chrome
resources of 890.7 Mt.
The Tharisa Mine has a 14-year life of
mine (‘LOM’) and the ability to extend
operations underground by a further
40 years. The open pit is planned with a
strike length of 5 km and a high wall
height of approximately 200 m.
The mechanised nature of the open pit
operation has ensured that the operations
remain within the lowest cost quartile
of PGM and chrome producers.
Tharisa Minerals has two independent
processing plants with a combined
4.8 Mtpa nameplate capacity. The
integrated process involves primary
extraction of chrome followed by PGM
flotation, then secondary chrome
extraction from the tailings. The two
plants offer operational flexibility,
allowing one plant or a portion thereof to
be shut down without impacting the
entire operation.
GROUP
STRATEGY
THARISA PLC INTEGRATED ANNUAL REPORT 2019
3
Group profile
ESG highlights
Scope and boundary
Group statistics
Financial and non-financial highlights
Group structure and overview
Group history
1
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Tharisa’s core strategy is to generate value by becoming a globally significant low-cost
producer of strategic commodities.
We meet global demand for our products through integrated mining, processing, marketing, sales and logistics operations.
The Group’s expansion strategy focuses on growth through value-accretive acquisitions and development of large-scale, low-cost
projects that are in, or close to production.
DISCOVER
DEVELOP
DELIVER
Tharisa seeks to grow and expand its
business by investing in operations or
projects which demonstrate opportunities
for value accretion. The Group proactively
seeks out investment or acquisition
opportunities in strategic commodities
and in countries offering geographic
diversity.
The Group gives preference to
opportunities to develop large scale and
low-cost projects that are in, or close to
production. Such opportunities must
meet Tharisa’s stringent investment
criteria, including a minimum
return on investment of 25%.
In FY2018, the Group diversified
geographically by making low-risk
entry options in two projects – Karo
Holdings and Salene Chrome. Both
are highly prospective opportunities
on the mineral-rich Great Dyke in
Zimbabwe.
DISCIPLINE
With management of costs and improved
efficiencies, Tharisa continues to be
positioned in the lowest cost quartile
for both PGM and chrome concentrates.
The Group subscribes to a capital
allocation framework where potential
projects are assessed against stringent
investment criteria. The basis for the
framework is investment in low-risk
entry points and the staged capital
investment and development of
new projects.
Tharisa is cash flow positive, which
has allowed it to maintain its returns
to shareholders. The company has a
dividend policy of distributing a
minimum of 15% of consolidated net
profit after tax. It declared an interim
dividend of US 0.50 cent per share
in FY2019. A final dividend of
US 0.25 cent per share was proposed,
resulting in a proposed total dividend
of US 0.75 cent per share for FY2019.
The Group has shown that it has the skills
to develop a mine from exploration
through to steady state operations. Its
phased approach to development has
derisked the current operations, allowing
it to look beyond its boundaries for its
next low-cost, large-scale operation. Its
innovative approach has ensured
continual improvement through
increased volumes and recoveries at
its operations.
Tharisa continues to explore ways to
expand its marketing and sales
capabilities to enable the Group to
capture additional margin by leveraging
its existing capability, experience and
relationships through third-party sales
and logistics. Tharisa effectively competes
with other commodity traders based on
its tailored and high-quality service
offering, market knowledge and strong
customer relationships.
PGM recoveries at the Tharisa Mine
have improved from 48.8% in 2014 to
82.1% in 2019 and chrome recoveries
of 62.0%.
At Tharisa Minerals, the Vision 2020
projects aim to deliver 200 kozpa
of PGMs and 2.0 Mtpa of chrome
concentrates in 2020, on an
annualised basis.
DIVERSIFY
Strategically adding development projects to the portfolio that will ensure diversification
while maintaining the focus on being a mechanised, low cost miner and beneficiator
of metals.
We will use technology as our enabler and as our differentiator.
TOTAL PROPOSED DIVIDEND FOR THE YEAR
US 0.75 cent per share
4 THARISA PLC INTEGRATED ANNUAL REPORT 2019
COMPETITIVE
STRENGTHS
> Shallow and large-scale
PGM and chrome
resource, one of the
world’s single largest
chrome resources,
enabling Tharisa to be a
large-scale producer for
several decades
> Mining of five MG
Chromitite Layers
allowing for the
co-production of PGM
and chrome concentrates
> Extensive research and
development
programmes developing
new technologies and
beneficiation capabilities
> Independent
> Exploring large-scale
> Capacity to produce
processing plants
providing operational
flexibility
> Direct relationships
with South African and
international customers
Karo Platinum resource
> Salene Chrome offers
rapid path to production
metallurgical and higher
margin chemical and
foundry grade
concentrates for
different markets
> Positioned in the lowest
cost quartile of the PGM
and chrome concentrate
cost curves, underpinned
by low-risk mining and
beneficiation processes
> Profitable through the
cycle
> Mechanised operations
and skilled labour force
> Integrated marketing,
sales and logistics
platforms
> Leverage existing
platforms with third-
party operations and
trading
> Pioneering innovative
and unique approach to
viable mineral extraction
and beneficiation
> Replication of phased
development in
exploration projects
> Capital discipline with a
dividend policy of
distributing at least 15%
of NPAT
> Derisked major capex
complete
> Optimisation for
Vision 2020
– Extensive industry and
management experience
with a successful track
record of identifying,
developing and
operating open pit and
underground mining
operations
ESG
HIGHLIGHTS
THARISA PLC INTEGRATED ANNUAL REPORT 2019
5
Group profile
ESG highlights
Scope and boundary
Group statistics
Financial and non-financial highlights
Group structure and overview
Group history
1
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Letter from the Chairman of the SHE Committee and Lead independent non-executive director, David Salter
2019 was an important year for Tharisa, as
the business grew and we delivered a solid
safety performance and continued to make
real advances in ingraining sustainability in
our operations. Key to this is the evolving
manner in which we monitor, control and
report on our activities that impact and
benefit all elements of society that we
work with and the environment.
Sustainability
“Progressed development of a
framework to evaluate and verify
the benefits of our actions, in
collaboration with others.”
Tharisa believes that sustainability should
function as a type of blueprint for shared
value. Sustainability enables Tharisa to
create value for all of its stakeholders
including employees, investors, contractors,
suppliers, the communities in which it
operates, and the governments,
municipalities and provincial authorities
which host our operations.
One of the necessities of a modern mining
company is its social licence to operate.
We are proud of our relationships and
commitments to our stakeholders and
certainly believe in a life-long partnership.
This, I believe, is one of the reasons why we
have been successful in maintaining our
social licence, no matter how tough the
circumstances. We believe in effective
stakeholder relationships based on shared
value and mutual benefit.
At the highest level, Tharisa has built its
sustainability strategy around the Equator
Principles. We have also embraced the
Ten Principles of the UN Global Compact
(‘UNGC’). The Equator Principles comprise
a risk management framework, adopted by
financial institutions, for determining,
assessing and managing the environmental
and social risks facing projects. The
Principles provide a minimum standard for
due diligence to support responsible risk
decision making.
operations with universal principles on
human rights, labour, environment and
anti-corruption. The Ten Principles of the
UNGC aim to help advance societal goals.
In future, Tharisa will not only continue to
exceed its obligations to create social
capital as enshrined in South Africa’s
MPRDA, but will also strive to replicate this
approach in ways that create positive
socioeconomic and environmental impacts
in all the territories in which we operate.
Much work remains to be done, but we
will continue to minimise our
environmental impact by reducing water
and energy consumption, investigating the
use of renewable energy solutions and
creating further efficiencies in mining,
processing and logistics. We also remain
committed to continuing our work in close
partnership with communities and host
governments to entrench shared value,
while delivering zero harm for our people.
The UNGC is the world’s largest corporate
sustainability initiative. It calls for
companies to align strategies and
David Salter
Highlights
(cid:3)• Total Tharisa operations achieved four years fatality free
(cid:3)• Tharisa Minerals achieved 5 000 fatality-free production shifts at its process plant operations and three
million fatality-free shifts for the total Tharisa Minerals operations
(cid:3)• Tharisa Minerals is committed to the Minerals Council’s Khumbul’ekaya “remember home” safety initiative
which aims to ensure that the mining industry becomes fatality free
(cid:3)• Enrolment for adult education and training (‘AET’) has grown from 82 learners to 224, including community
members
(cid:3)• Tharisa Minerals trained 20 interns and graduates from local communities specialising in mining,
metallurgy and engineering
(cid:3)• New environmental protection initiatives including launch of innovative soil remediation and bee
conservation projects
6 THARISA PLC INTEGRATED ANNUAL REPORT 2019
SCOPE AND
BOUNDARY
Tharisa is pleased to present this, its sixth Integrated Annual Report, since listing on the JSE
and the fourth since the standard listing of its depositary interests on the LSE. This Integrated
Annual Report presents the Group’s operations in Cyprus and South Africa, its exploration
activities in Zimbabwe, as well as its governance, strategy, risks, opportunities and prospects.
The report covers the financial year to 30 September 2019.
Approach
The approach in this Integrated Annual
Report is to inform investors and
stakeholders of the fundamentals of
Tharisa’s operating context and business
model, risks and strategic approach to
value creation to enable them to make a
more informed assessment of Tharisa, its
prospects and the sustainable value it
creates. The Integrated Annual Report
presents a concise view of the Company,
its progress and strategy, with readers
directed to relevant sections on the
Group’s website – www.tharisa.com –
for additional disclosure. While written
primarily to address the interests of
providers of capital, this report also
addresses matters considered important
to a wide range of stakeholders.
Frameworks
Tharisa applies the principles of King IV™
to its decision making, strategy
formulation and implementation and
these principles have also been applied in
compiling this report. The Company
further adheres to the JSE Listings
Requirements and complies with the LSE
Listing Rules and Disclosure and
Transparency Rules applicable to a
standard listing.
Tharisa accepts that integrated reporting
is a journey and in line with its
commitment to the principles of
integrated reporting, it has expanded on
its broader social, environmental and
economic performance as far as possible
throughout this report. While the
Company has been guided by the
International Integrated Reporting
Committee’s Framework, it will only be
fully applied to future reports.
In line with these frameworks,
recommendations and what it considers
to be best practice, this report contains
a number of forward looking statements.
Various factors, conditions and
developments beyond the control of the
Company and its management may cause
the conditions predicted and implied in
these forward looking statements to be
materially different to those envisaged at
the time of writing. Such variance
between expectation and future realities
may have a material impact on the
Company’s future performance and
results.
Assurance
The Board acknowledges its responsibility
for ensuring the integrity of this
Integrated Annual Report. The Audit
Committee recommended the 2019
Integrated Annual Report to the Board for
approval, which approval the Board
consented to give, believing that the
report addresses all material issues and
gives a balanced and truthful
representation of the Company’s
performance.
The condensed consolidated financial
statements on pages 99 to 137 of this
Integrated Annual Report and the
consolidated annual financial statements
on the website have been prepared in
accordance with IFRS as issued by the
International Accounting Standards Board
and the Cyprus Companies Law.
A glossary of abbreviations, definitions and
technical terms appears on pages 150 to 156.
GROUP
STATISTICS
THARISA PLC INTEGRATED ANNUAL REPORT 2019
7
Group profile
ESG highlights
Scope and boundary
Group statistics
Financial and non-financial highlights
Group structure and overview
Group history
1
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Reef mined
Stripping ratio
Reef milled
PGM flotation feed
PGM rougher feed grade
PGM recovery
PGM ounces produced
Average PGM basket price
Average PGM basket price
Cr2O3 ROM grade
Chrome recovery
Chrome yield
Chrome concentrates produced
Metallurgical grade
Speciality grades
Third-party chrome production
Chrome concentrates sold (including third
party)
Metallurgical grade chrome concentrate
contract price
Metallurgical grade chrome concentrate
contract price
Average exchange rate
Group revenue
Gross profit
Net profit for the year
EBITDA
Headline profit
Headline earnings per share
Gross profit margin
Net cash flows from operating activities
Net debt
Capital expenditure
On-mine lost-time injury frequency rate**
On-mine employees including contractors
Other Group employees
2019
2018
2017
2016
2015
kt
m3 waste: m3 reef
kt
kt
g/t
%
5PGE + Au koz
US$/oz
ZAR/oz
%
%
%
kt
kt
kt
kt
4 627.1
8.3
4 836.0*
3 605.9
1.47
82.1
139.7
1 081
15 531
18.1
62.0
26.7
1 290.0
977.9
312.1
241.1
4 875.0
7.9
5 105.3
3 718.1
1.51
84.1
152.2
923
12 038
18.2
66.0
28.4
1 448.0
1 080.3
367.7
221.8
5 025.1
7.5
4 916.2
3 599.2
1.56
79.7
143.6
786
10 492
17.8
64.1
27.1
1 331.2
1 008.1
323.1
20.0
4 837.2
7.3
4 656.3
3 575.6
1.65
69.9
132.6
736
10 881
18.0
62.7
26.7
1 243.7
974.3
269.4
–
4 183.2
10.7
4 400.4
3 446.2
1.62
65.8
118.0
885
10 593
18.3
58.0
25.5
1 122.2
1 009.4
112.8
–
kt
1 408.0
1 644.3
1 317.3
1 196.2
1 124.4
US$/t CIF China
162
186
200
120
158
ZAR/t CIF China
ZAR:US$
US$ million
US$ million
US$ million
US$ million
US$ million
US cents
%
US$ million
US$ million
US$ million
2 322
14.4
342.9
60.4
8.4
51.6
12.8
5
17.7
69.9
12.0
43.9
0.27
2 826
129
2 415
13.1
406.3
108.5
51.0
101.9
49.1
19
26.7
89.8
10.6
48.2
0.18
2 430
86
2 667
13.4
349.4
122.7
67.7
115.6
57.8
22
35.1
75.7
(0.1)
26.4
0.07
2 256
75
1 751
14.8
219.6
54.5
15.8
43.0
14.3
6
24.8
22.2
41.4
12.3
0.36
2 187
52
1 903
12.0
246.8
43.1
6.0
29.0
4.7
2
17.5
41.4
40.7
24.6
0.06
2 000
59
Includes the processing of 99.0 kt of commissioning tails through the processing plants
*
** Per 200 000 man hours worked
8 THARISA PLC INTEGRATED ANNUAL REPORT 2019
FINANCIAL AND
NON-FINANCIAL
HIGHLIGHTS
REEF MINED
4.63 Mt
down 5.3%
(2018: 4.88 Mt)
PGM PRODUCTION
(5PGE + Au)
CHROME CONCENTRATE
PRODUCTION
139.7 koz
1.29 Mt
down 8.2%
(2018: 152.2 koz)
down 10.9%
(2018: 1.45 Mt)
REVENUE
OPERATING PROFIT
EBITDA
US$342.9 m US$24.2 m
US$51.6 m
down 15.6%
(2018: US$406.3 m)
down 66.6%
(2018: US$72.5 m)
down 49.4%
(2018: US$101.9 m)
PROFIT BEFORE TAX
EARNINGS AND HEADLINE
EARNINGS PER SHARE
PROPOSED TOTAL DIVIDEND*
US$11.2 m
US 4 c/5 c
US 0.75 cent
down 82.8%
(2018: US$65.0 m)
down 78.9%/73.7%
23.7% of NPAT
(2018: US 19 cents/US 19 cents)
(2018: US 4 cents)
* Includes interim dividend of US$0.5 cent
PGM
production
Chrome
production
Group
revenue
(5PGE + Au koz)
(kt)
(US$ million)
160.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
0.0
.
2
2
5
1
.
6
3
4
1
7
.
9
3
1
.
6
2
3
1
.
0
8
1
1
2015
2016 2017 2018 2019
1 600.0
1 400.0
1 200.0
1 000.0
800.0
600.0
400.0
200.0
0.0
0
.
8
4
4
1
0
.
0
9
2
1
.
2
1
3
3
1
.
7
3
4
2
1
.
2
2
2
1
1
2015
2016 2017 2018 2019
450.0
400.0
350.0
300.0
250.0
200.0
150.0
100.0
50.0
0.0
.
3
6
0
4
.
4
9
4
3
.
9
2
4
3
.
8
6
4
2
6
.
9
1
2
2015
2016 2017 2018 2019
THARISA PLC INTEGRATED ANNUAL REPORT 2019
9
Group profile
ESG highlights
Scope and boundary
Group statistics
Financial and non-financial highlights
Group structure and overview
Group history
1
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SAFETY AWARDS*
NUMBER OF FATALITIES
NUMBER OF EMPLOYEES WHO
ATTENDED WELLNESS DAY
2
(2018: 2)
0
(2018: 0)
414
(2018: 400)
NUMBER OF PERMANENT
EMPLOYEES*
NUMBER OF PERMANENT
CONTRACTORS*
FEMALE EMPLOYEES*
1 747
(2018: 1 672)
1 079
(2018: 758)
21%
(2018: 20%)
TOTAL SPENT ON TRAINING
US$3.5 m
(2018: US$3.3 m)
* Data is applicable to Tharisa Minerals
EMPLOYEES AWARDED
STUDY ASSISTANCE*
INTERNS AND GRADUATES*
20
(2018: 9)
20
(2018: 21)
Gross profit
margin
EBITDA
Net cash flows from
operating activities
(%)
.
1
5
3
7
.
6
2
.
8
4
2
.
5
7
1
7
.
7
1
2015
2016 2017 2018 2019
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
(US$ million)
(US$ million)
140.0
120.0
100.0
80.0
60.0
40.0
20.0
0.0
.
6
5
1
1
9
.
1
0
1
6
.
1
5
0
.
3
4
0
.
9
2
2015
2016 2017 2018 2019
100.0
80.0
60.0
40.0
20.0
0.0
.
8
9
8
7
.
5
7
9
.
9
6
.
4
1
4
2
.
2
2
2015
2016 2017 2018 2019
10 THARISA PLC INTEGRATED ANNUAL REPORT 2019
GROUP STRUCTURE
AND OVERVIEW
INVESTMENT
HOLDING COMPANY
Tharisa plc (Cyprus)
Operating/
producing companies
1
Tharisa Minerals (South Africa) 74%
BEE shareholders
Tharisa Minerals produces PGM concentrate
and metallurgical and chemical grade chrome
concentrates from a shallow open pit mine
near Rustenburg, North West province.
The Genesis and Voyager plants have a
combined design capacity of 4.8 Mt of
Run of Mine (‘ROM’) ore per annum.
2
3
4
Arxo Metals (South Africa) 100%
Thari Resources (South Africa) 20%
The Tharisa Community Trust (South Africa) 6%
Arxo Metals produces specialised higher margin chemical and foundry grade chrome concentrates,
operates Sibanye-Stillwater’s K3 UG2 chrome plant in Rustenburg and is the Group’s research and
development arm. It also commissioned a 1 MW DC furnace to produce PGM rich metal alloys on a
pilot scale. Arxo Metals conducts extensive research and development into technologies and
beneficiation opportunities.
Trading and
service provider
companies
5
Arxo Resources (Cyprus) 100%
Arxo Resources markets and sells metallurgical and chemical grade chrome concentrate
to customers primarily in Asia.
6
Arxo Logistics (South Africa) 100%
Arxo Logistics manages the rail and road distribution of PGM concentrate and chrome
concentrates produced by the Tharisa Mine and chrome concentrates from the Sibanye-Stillwater’s
K3 UG2 chrome plant. These products are transported to customers in South Africa and
international customers via port facilities in Richards Bay and Durban.
Exploration and
growth projects
7
Karo Mining Holdings (Cyprus) 26.8%
Karo Holdings is establishing an integrated PGM mining and refining complex in Zimbabwe
with a planned 300 MW solar power generation plant. The project is in the exploration stage.
Karo Platinum, an indirect subsidiary of Karo Holdings, has been awarded a Special Grant over
23 903 ha in the Great Dyke, to develop PGM mining complex.
Karo Power, an indirect subsidiary of Karo Holdings, will develop the planned solar generation plant.
8
Salene Chrome (Zimbabwe) Option for 90%
Tharisa is undertaking the exploration programme for chrome adjacent to the
Great Dyke in Zimbabwe.
THARISA PLC INTEGRATED ANNUAL REPORT 2019
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Group profile
ESG highlights
Scope and boundary
Group statistics
Financial and non-financial highlights
Group structure and overview
Group history
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London
London - LSE: THS
UK
Europe
Africa
Russia
China
Tianjin
Lianyungang
Shanghai
5
Quinzhou
Asia
Indonesia
Bahodopi
Cyprus
7
5
China
China
India
Zimbabwe
Great Dyke
8
7
3
2
1
4
Johannesburg - JSE: THA
1
South Africa
6
Richards Bay
6
Durban
12 THARISA PLC INTEGRATED ANNUAL REPORT 2019
GROUP
HISTORY
2012
February
Secured project finance facility of ZAR1 billion
May
First bulk rail shipment
July
Tharisa Minerals water use licence granted
December
Voyager Plant is commissioned at 300 ktpm capacity
1
2011
January
y
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US$95 million investment by Fujian Wuhang and HongKong HeYi Mining
April
il
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US$150 million prelisting capital raised
t
August
Genesis Plant is commissioned at 100 ktpm capacity
Tharisa Community Trust registered
November
Tharisa Community Trust acquires 6% of Tharisa Minerals
February
Tharisa Limited incorporated
September
Mining rights for Tharisa Mine granted
October
Commenced trial mining
December
US$65 million seed capital raised
2008
2006
February
Prospecting rights granted
March
Tharisa Minerals incorporated
March
Acquired 74%
shareholding
in Tharisa Minerals
November
Commenced production
of first chrome
concentrate
2009
THARISA PLC INTEGRATED ANNUAL REPORT 2019
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Group profile
ESG highlights
Scope and boundary
Group statistics
Financial and non-financial highlights
Group structure and overview
Group history
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2013
July
Challenger Plant
is commissioned
April
Listed on JSE, capital raised
of US$47.9 million
September
Commissioning of high
energy PGM flotation circuit
2014
2016
March
Annualised steady state of mining and PGM production
June
Listed on the LSE
November
Project completion achieved
roject completion achieved
istribution to shareholders
Maiden distribution to shareholders
2017
May
Agreement entered into for the purchase of mining fleet and transfer of
employees from mining contractor to move to an owner-operated mining model
August
upply
Entered into strategic cooperation agreement with Tisco for chrome concentrate supply
Secured first third-party operating and trading agreement
October
Transaction for the acquisition of mining fleet effective
November
Increased dividend declared and an improved dividend policy
2019
Approval of
Vulcan Plant, a
groundbreaking use
of existing technologies in
fine chrome recovery
Secondary listing on A2X
Achieved three million
fatality-free shifts
2018
2018
March
March
Maiden interim dividend declared
June
Shareholding acquired in Karo Holdings
September
Record operational year
Salene Chrome’s shareholder grants call
option for 90% shareholding
14 THARISA PLC INTEGRATED ANNUAL REPORT 2019
CHAIRMAN’S
REVIEW
Dear Stakeholder
The year under review was an important one in Tharisa’s strategic development, as we
progressed our plans to create a platform for both our organic and long-term growth following
on from Tharisa’s acquisition of advanced exploration assets outside of South Africa.
relationship with the people of Zimbabwe
and their government.
We will continue to create value from our
stated intent – to discover, develop,
deliver and now diversify our quality
assets to create stakeholder value. This
clear strategy is backed by our culture of
innovation, skilled and resilient people
and an approach to operating sustainably
and with the highest ethical standards
that has made Tharisa an investment and
partner of choice.
Loucas Pouroulis
Executive Chairman
In 2018 we announced our investment in Karo Mining and
Salene Chrome, establishing a presence on the highly
prospective Great Dyke of Zimbabwe, the world’s second largest
(PGM) and chrome geological formation.
The acquisition of Karo Mining and
Salene Chrome is a strategic step in
diversifying Tharisa’s geographic presence,
and a compelling development in the
Company’s continued growth and
success. Based on preliminary exploration
results, Karo Platinum represents a
massive untapped palladium and
platinum resource in close proximity to
existing producing PGM mines, with the
potential to become one of the world’s
next generation low-cost PGM mines,
with a potential prill split favouring metals
in demand. We see immense promise
given its large scale and shallow resource.
The addition of these key assets into the
Tharisa portfolio is in line with our stated
intent of discovering next generation
low-cost, large-scale operations through
exploration of multi-commodities that
provide us with geographic diversification.
It will also contribute to our plans to
develop our Company into a globally
significant low-cost producer of strategic
commodities. We will achieve this as we
deliver growth from an established
platform that maximises value extraction.
Our Group’s vision proven through the
Tharisa Minerals model is based on
approaching mining and processing
differently. We have always looked for
ways to operate more innovatively, and
to realise opportunities and value in areas
where others have not. This approach has
enabled us to establish a track record of
creating value, delivering projects of real
scale and international significance.
We broke through convention by
successfully mining the full suite of the
MG Chromitite Layers of the Bushveld
Complex’s South-Western Limb ore
bodies. To do this, we built on our
collective prior experience as an early
pioneer in UG2 mining and developed
mining and processing solutions which
brought these assets to account to create
shareholder value through co-production
of PGM and chrome concentrates.
The success to date of Tharisa Mine,
which owns one of the world’s single
largest chrome resources, demonstrates
that the heritage of innovation has
allowed us to reduce project risk and
deliver value. We are now well placed to
bring this experience to bear as we
develop our next generation of projects,
from the innovative Vulcan Plant to Karo
Platinum. This approach will also allow us
to operate effectively in new jurisdictions
and develop high-value assets in these
territories. We are confident that our
presence in Zimbabwe will help us reach
a new scale and impact as we work to set
Tharisa apart from its peers.
Tharisa has also demonstrated its ability
to balance the complex needs of, and
relationships with, a diverse range of
stakeholders including investors,
government, our exceptional staff,
communities, suppliers and customers.
This has created a strong reputation as
an ethical operator as we have built our
business in South Africa over the last
decade.
We look forward to working closely with
the government in Zimbabwe. We will
leverage our extensive experience in
South Africa to deliver wider stakeholder
value, job creation and investment in
Zimbabwe. We will comply with the
regulations governing mining, the
environment and investment in this key
mining jurisdiction and have already
created a strong and effective working
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Chairman’s review
Chief executive officer’s review
Chief finance officer’s review
Market review
How Tharisa creates value
Stakeholder engagement
Principal business risks
2
The year under review saw Tharisa position itself to deliver on our strategy to increase
production of both PGM and chrome concentrates from the Tharisa Mine. At the same time,
we have also made significant progress with our exploration assets in Zimbabwe.
We are immensely proud that we came through the year
safely. I am pleased to report on another fatality free year,
in which we achieved three million fatality free shifts. As
members of the Minerals Council, we are participating in
the Council’s recently launched “Khumbul’ekaya”
“remember home” safety initiative to ensure that our
industry becomes fatality free.
FY2019 saw curtailed production at the
Tharisa Mine, as we embedded our
owner-miner approach at the asset and
redesigned the mining operation with
investment in training and machinery to
support the long-term production goals.
Despite the curtailed operational output,
which effectively saw Tharisa run at 85%
production efficiency, we managed to
generate cash at the Tharisa Mine, which
is testimony to both the engineering and
operational skills, as well as the co-
product business model, coupled with the
owner-mining operating model utilising a
high skill set.
In Zimbabwe our efforts to develop a
significant new PGM and chrome complex
were given a major boost with the
granting of Special Economic Zone status
post financial year end. This will add
momentum to our strategy as we now
have the key fiscal framework in place to
guide development of the project. We
have also progressed studies on the
Salene Chrome asset after receiving
approvals from the Environmental
Management Authority (‘EMA’).
Tharisa has set itself high performance
targets and Vision 2020 is one of these.
It is the drive to attain the maximum value
out of the non-renewable resource that
we mine that delivers these ambitions.
We have spent the last 15 months
reconfiguring the open pit to allow us to
access more ore. The pit progressed well
in finalising hauling access, ensuring
smoother transport routes that lead to
longer benches, allowing more controlled
blasting, all with the aim of achieving the
economies of scale and mining
efficiencies required to attain Vision 2020.
The Vision 2020 target envisages
production of 2 million tonnes of chrome
concentrate and 200 000 ounces of
PGMs on an annualised basis.
At the same time, we are acutely aware
of our responsibilities towards our social
licence to operate and in particular the
environmental, social and governance
requirements that investors are
increasingly focused on. At Tharisa, we
not only comply with our international
sustainable development framework, but
we endeavour to exceed these where we
can and will continue to look for
innovative ways that will help us create a
mining company which is operationally,
technically and socially fit for the future.
Long-term shareholders that believe in
impact investing as much as we do,
ensure that the social licence under which
we operate is maintained and endorsed
by all stakeholders. We have included
more information on our approach to
sustainability in this report on page 44.
Mining plays a major role in the
economies of the countries we operate
in. In South Africa, mining accounts for
7.7% of total GDP. Significantly,
manganese, iron ore and chrome are the
only commodities that have seen real
production growth over the last 15 years.
South Africa hosts the world’s largest
chrome resources and the country
remains the major supplier of chrome to
the global ferrochrome industry. I firmly
believe mining could play an even bigger
role in South Africa, but the backlogs in
critical infrastructure across the country
and the mining value chain are hindering
expansions by the chrome and other bulk
miners, and thus the advantage to access
competitively priced logistics and
electricity to access downstream
opportunities.
Challenges remain for mining companies,
and these are more pronounced in
emerging markets. In South Africa, the
precarious situation facing the state-
owned electricity provider, Eskom, not just
operationally, but also financially, is
having a stunting effect on the revival of
the economy. Tharisa is a relatively
modest user of power and given the
modular nature of our processing plants,
we have ensured we have been able to
reduce our electricity demand at times
when other users required power more
urgently during times of load shedding.
We have installed stand-by generator
capacity that can sustain level 4 load
shedding allowing us to continue
operations.
16 THARISA PLC INTEGRATED ANNUAL REPORT 2019
CHIEF EXECUTIVE OFFICER’S
REVIEW CONTINUED
In Zimbabwe, we have taken a proactive
approach and are looking at developing
two large scale solar power plants as part
of our investment drive into the country.
The aim is not to generate the power
exclusively for our mining operations, but
to feed it directly into the grid to benefit
the country.
The mining industry’s evolving technical
parameters, and the requirements of
investors who focus increasingly on
sustainability and climate change, means
that change in the industry will continue
to be at the rapid pace we have seen in
recent years. Mining is changing, and at
Tharisa we are nimble and flexible enough
to lead this change and be at the
forefront of it. In South Africa, the change
has only been too evident, where the
decline of deep level mining and the
focus on lower cost opencast mechanised
mining has had a profound effect on
production of certain commodities, most
notably gold. However, as evidenced in
one of our primary commodities, chrome,
production has increased over time.
Opencast mining means grade profiles
that were previously uneconomical have
become more viable, but, while mining is
one part, processing needs to be
considered as part of the economic
viability of an integrated mining complex.
Tharisa has always been at the forefront
of innovation in methods of extracting
maximum value out of the ore body we
mine. We pushed the limits of PGM
recoveries, and we achieved a step
change in chrome recovery at the Tharisa
Mine. Not content with this progress, our
research team in Arxo Metals has proven
our proprietary fine chrome recovery
technology in a demonstration scale
environment. This led to the Company
approving an investment of US$54 million
on constructing our new Vulcan Plant,
which will increase production of chrome
concentrate by some 25%, while
lowering unit costs.
We firmly believe that technology and
technological innovation are major
enablers of our success. Although the
concepts of mining and technology may
seem inherently opposed to some, we
have been advancing and sometimes
leapfrogging existing status quos.
Technology is central to our strategic drive
and will be key to our future as we
further explore vertical integration.
A critical aspect of Tharisa’s approach has
been to create value throughout the
commodity value chain – with an
important contribution to the business
made by our processing, logistics and
marketing operations.
The innovative, modern approach Tharisa
has taken when developing its projects, is
one of our key successes. I am confident
that our growth ambitions, fulfilled by
both external options and our innovative
approach to organic growth via our
chrome and platinum recovery projects,
will be successful. Our established
reputation as an ethical operator with a
strong social conscience has guided our
approach, and we will continue to add
value to all our stakeholders as we
deepen our commitment to the critical
areas of ESG impacting our business,
ultimately ensuring that we are well
placed to achieving our ultimate goal of
“Engineering the mining company of the
future”.
I would like to thank the Board,
management, employees, customers,
suppliers and partners who have worked
with us and I look forward to our
continued partnership in the years ahead.
Phoevos Pouroulis
Chief Executive Officer
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THARISA PLC INTEGRATED ANNUAL REPORT 2019
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Chairman’s review
Chief executive officer’s review
Chief finance officer’s review
Market review
How Tharisa creates value
Stakeholder engagement
Principal business risks
2
With an operating environment of volatile commodity prices, and the requirement for
sustaining investment in both the mining fleet and processing optimisation at the Tharisa
Mine, together with investment in external growth opportunities, a strong focus during this
year remained on the determination and implementation of the Company’s capital
requirements. We matched these requirements with the internally generated cash and
external forms of capital available to the Company. Critical in this process is an understanding
of capital markets trends, the changing nature of the Company and the capital sources
available in its lifecycle.
Tharisa’s growth has been measured by,
and aligned with, the above financial
strategy, creating a business that is cash
generative, with a development pipeline
that sees both internal growth projects
and external diversification projects being
implemented within managed risk and
return parameters.
Balancing the above growth aspirations is
the commitment to capital discipline and
to provide returns to shareholders. Tharisa
has a stated dividend policy of returning a
minimum of 15% of consolidated NPAT
to shareholders. The Board has proposed
paying a dividend for the third successive
year, comprising the interim dividend
of US 0.5 cent per share and a
US 0.25 cent per share final dividend,
being 23.7% of NPAT. This dividend
demonstrates our commitment to capital
discipline notwithstanding the capital
opportunities being pursued, including as
part of Vision 2020.
The Group’s commodities are priced in
US$ and the base cost currency for the
Group’s South African mining operation, is
mainly in ZAR. The ZAR exchange rate
remained volatile on the back of global
markets suffering from ‘trade wars’, a
weak South African economy and a
possible sovereign downgrade by Moody’s
to sub-investment grade, with the ZAR
depreciating on average against the
US$ by 9.9% to ZAR14.4 (2018: ZAR13.1).
Group revenue totalled US$342.9 million
(2018: US$406.3 million), of which
US$130.1 million (2018: US$117.4 million)
was derived from the sales of PGM
concentrate and US$177.9 million (2018:
US$250.4 million) derived from the sale of
chrome concentrates. The agency and
trading segment contributed
US$34.9 million (2018: US$38.5 million).
Overall, revenue decreased by 15.6%, as a
result of lower sales volumes and a decrease
in the chrome price compared to FY2018.
As a co-producer of PGMs and chrome
concentrates, the shared costs of
production for segmental reporting
purposes are based on the relative
contribution to revenue on an ex-works
basis, allocated 55% to the PGM segment
and 45% to the chrome segment. This is
in accordance with the accounting policy
of the Group and IFRS. The comparable
period allocations were equally to the
PGM and chrome segments. The change
to the basis of allocation of the shared
costs is, in effect, a 10% increase in
respect of the allocation to the PGM
segment and a 10% decrease in respect
of the allocation to the chrome segment.
Gross profit amounted to US$60.4 million
(2018: US$108.5 million) with a gross
profit margin of 17.7% (2018: 26.7%).
The major factors contributing to the
reduced gross margin were the lower
production levels, with the embedded
fixed cost component and an increase in
The financial results of the Group once
again benefited from the co-product
business model for both PGMs and
chrome concentrates, with prices for our
key commodities reflecting vastly
opposing trends. The PGM basket price
on a 6E basis increased by 17.1% to
US$1 081/oz (2018: US$923/oz), as
palladium (16.7%) and rhodium (9.8%)
showed robust price increases based on
strong market fundamentals. The
metallurgical grade chrome concentrate
price, however, decreased by 12.9% to
US$162/t (2018: US$186/t).
The contribution to revenue and gross profit from the respective segments is
summarised below:
30 September 2019
30 September 2018
US$ million
Revenue
Cost of sales
Manufacturing
Selling costs
Freight services
Gross profit
Gross profit margin
PGM
Chrome
130.1
101.7
100.8
0.9
–
28.4
21.8%
177.9
148.1
88.9
41.3
17.9
29.8
Agency
and
trading
34.9
32.7
17.0
10.0
5.7
2.2
Total
342.9
282.5
206.7
52.2
23.6
60.4
PGM
Chrome
117.4
88.2
87.8
0.4
–
29.2
250.4
174.7
106.5
48.4
19.8
75.7
Agency
and
trading
38.5
34.9
21.6
9.7
3.6
3.6
Total
406.3
297.8
215.9
58.5
23.4
108.5
26.7%
Sales volumes
134.7 koz 1 200.5 kt
207.5 kt
152.2 koz 1 429.6 kt
216.6 kt
16.9%
6.3%
17.7% 24.9%
30.2%
9.4%
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CHIEF FINANCE OFFICER’S
REVIEW CONTINUED
the stripping ratio moving 0.7% more
waste while producing 5.1% fewer
ROM tonnes.
Overall inflationary pressures in South
Africa as measured by the PPI were well
contained at 4.1% (2018: 6.2%), there
were, however, a number of above
inflation pricing pressures such as diesel
and electricity. Diesel consumption
comprises 14.3% of the on-mine cost
of production, with an increase in the
average price per litre of diesel from
ZAR12.7 to ZAR14.25. Electricity costs,
while not being a significant input cost at
6.4% of the on-mine cost of production,
increased by 6.8% per kilowatt hour.
On a unit cost basis, the reef mining cost
per tonne increased by 17.6% from
US$21.0/t to US$24.7/t. This cost per reef
tonne was incurred on a stripping ratio of
8.3 (m³ waste: m³ reef). On a per cube
mined basis i.e. including both waste and
reef, the cost increased by 11.0% from
US$8.2/m³ to US$9.1/m³ (the prior year
stripping ratio was 7.9).
The consolidated cash cost per tonne
milled (i.e. including mining but excluding
transport and freight) increased by 11.7%
from US$37.5/t to US$41.9/t.
EBITDA amounted to US$51.6 million
(2018: US$101.9 million).
Selling costs incurred with the transport
of the metallurgical grade chrome
concentrate from the mine to the
customer at China main ports increased
marginally by 1.6% from US$62.0/t to
US$63.0/t.
Administrative expenses decreased from
US$39.2 million to US$37.3 million. After
accounting for administrative expenses,
the Group achieved an operating profit of
US$24.2 million (2018: US$72.5 million).
Finance costs (totalling US$8.8 million)
principally relate to the term loan and
various OEM financing facilities due by
Tharisa Minerals for the funding of
mining fleet additions, the trade finance
facilities of Arxo Resources and the limited
recourse discounting of the PGM
receivables.
The Group generated a profit before tax
of US$11.2 million compared to the
comparable period of US$65.0 million.
The major constituents of the on-mine cash cost of sales of PGMs and chrome
concentrate are depicted in the graphs below:
19
25
1
PGM cash cost of sales
Chrome cash cost of sales
27
24
%
%
15
8
5
27
5
(cid:79) Mining
(cid:79) Diesel
(cid:79) Utilities
(cid:79) Reagents
(cid:79) Steel balls
(cid:79) Labour
(cid:79) Overheads
(cid:79) Mining
(cid:79) Diesel
(cid:79) Utilities
(cid:79) Reagents
(cid:79) Steel balls
(cid:79) Labour
(cid:79) Overheads
24
13
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2
Chairman’s review
Chief executive officer’s review
Chief finance officer’s review
Market review
How Tharisa creates value
Stakeholder engagement
Principal business risks
transactions are disclosed in the ensuing
condensed consolidated annual financial
statements (refer to note 22).
Dividend
In accordance with Tharisa’s dividend
policy of distributing at least 15% of
annual NPAT, the Board has proposed a
final dividend of US 0.25 cent per
ordinary share subject to the necessary
shareholder approval. The Company
declared an interim cash dividend during
the year of US 0.5 cent per share.
The tax charge amounted to
US$2.8 million, an effective rate of
24.9%. The cash tax paid amounted to
US$4.4 million. The Group has fully
utilised its tax losses, however, at the year
end, the Group had unredeemed capex
for tax purposes available for offset
against taxable mining income of
US$100.2 million. The net deferred tax
liability amounted to US$25.0 million.
Basic earnings per share for the year
amounted to US 4 cents
(2018: US 19 cents) with headline
earnings per share of US 5 cents
(2018: US 19 cents). Diluted earnings per
share were US 4 cents (2018: US 18 cents),
with diluted headline earnings per share of
US 5 cents (2018: US 19 cents).
The total debt amounted to
US$71.2 million, resulting in a debt-to-
total equity ratio of 24.7% and a net
debt-to-total equity ratio of 4.2%.
The current capex spend focused on stay
in business capex, additions to optimise
the mining fleet and ongoing projects
aimed at improving recoveries of both
PGMs and chrome concentrates.
Additions to property, plant and
equipment for the year amounted to
US$43.9 million of which US$27.5 million
related to additions to the mining fleet.
The depreciation charge amounted to
US$27.2 million (2018: US$29.9 million).
In FY2018 Tharisa acquired 26.8% of the
shares in Karo Holdings for a total cash
consideration of US$4.5 million. An
amount of US$2.5 million was paid to
Leto Settlement in the prior financial year,
with an amount of US$2.0 million paid
during the period under review. This
investment is equity accounted.
The Company has an option to acquire a
shareholding in Salene Chrome. It has a
commitment to fund the exploration
spend of up to US$3.2 million. This
investment is accounted for as other
financial asset at the cost of the
exploration spend.
The Group generated net cash from
operations of US$69.9 million (2018:
US$89.8 million) and after taking into
account the capex, a free cash flow of
US$26.0 million (2018: US$49.3 million).
Cash on hand amounted to
US$59.2 million (2018: US$66.8 million).
There is continued focus on working
capital management, with the current
ratio at 1.6 times.
From time to time the Group concludes
transactions with related parties. These
Michael Jones
Chief Finance Officer
20 THARISA PLC INTEGRATED ANNUAL REPORT 2019
MARKET
REVIEW
South Africa is home to the world’s largest PGM and chrome deposits; and its mining
industry is therefore an essential component of the global commodity supply chain.
According to statistics published by South
Africa’s Minerals Council, of which Tharisa
is a member, South Africa hosts 70% of
the world’s chrome resources and 80%
of the world’s PGM reserves.
The US dollar PGM basket price continued
to improve in the year under review,
with a strong performance from all PGMs,
but driven mainly by a continued strong
performance in palladium and rhodium
prices, resulting in an average contained
metal basket price received of US$1 081,
an improvement of over 17.1% versus
the 2018 price of US$923.
The price of 42% metallurgical grade
chrome concentrate declined in the year,
from a high of US$190/t to a low of
US$142/t, with an average price received
by Tharisa for the year under review of
US$162/t, a decline of 12.9% compared
to the previous year.
Tharisa is the fourth largest primary
producer of chrome concentrates and
the sixth largest producer of PGMs in
South Africa, accounting for around 9%
of South African chrome production.
Tharisa remains one of the world’s largest
producers of speciality grade chrome
concentrates.
Tharisa’s co-producer business model
allows the Group to benefit from higher
pricing environments and conversely
absorb the effects of price shocks.
PGM market
PGMs are vital industrial metals valued for
their durability, resistance to corrosion
and catalytic properties. The automotive
industry is the world’s largest consumer
of PGMs, which are used in catalytic
converters for vehicle exhaust systems.
Other drivers of demand are jewellery,
industrial uses and investment.
With its rich mineral wealth, South Africa
is home to the world’s largest PGM
deposits and remains the world’s principal
producer, responsible for roughly 70% of
the total refined platinum production in
2019.
The South African Minerals Council states
that in 2018, South Africa accounted for
4 318 koz out of a total world primary
production of 5 959 koz. Tharisa’s
production means the Company
contributes roughly 3% of South Africa’s
primary PGM production. Tharisa’s prill
split also contains a higher content of
rhodium and ruthenium than other
Bushveld Complex concentrates. The
increased demand for palladium, rhodium
and ruthenium is likely to continue as
structural demand changes take place in
autocatalytic demand from India, China
and Europe as a result of tightening
emission standards. Further advances in
the deployment of fuel cell technology,
influenced by the pressure to reduce
carbon footprints, should be supportive
for continued platinum demand.
PGM prices
(US$/oz)
5 000
4 500
4 000
3 500
3 000
2 500
2 000
1 500
1 000
500
0
7
1
0
2
r
e
b
o
t
c
O
8
1
0
2
y
r
a
u
n
a
J
l
i
r
p
A
8
1
0
2
y
l
u
J
8
1
0
2
8
1
0
2
r
e
b
o
t
c
O
9
1
0
2
y
r
a
u
n
a
J
l
i
r
p
A
9
1
0
2
y
l
u
J
9
1
0
2
9
1
0
2
r
e
b
m
e
t
p
e
S
(cid:81) Platinum
(cid:81) Palladium
(cid:81) Rhodium
(cid:81) Iridium
(cid:81) Ruthenium
Source: JPM
Global production
(Mt)
60
50
40
30
20
10
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
(cid:81) Stainless steel
(cid:81) High-carbon ferrochrome
(cid:81) Chrome ores
Source: ISSF
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THARISA PLC INTEGRATED ANNUAL REPORT 2019
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Chairman’s review
Chief executive officer’s review
Chief finance officer’s review
Market review
How Tharisa creates value
Stakeholder engagement
Principal business risks
2
Chrome market
South Africa hosts the largest chromite
reserves in the world with annual
production, measured both in local sales
and export sales making up two-thirds of
the world’s total production. Of the total
sales of over 21 Mt annually in 2018, just
under half was exported (46.1%), with
the remainder supplying mainly the local
ferrochrome industry. Of South Africa’s
exports, over 90% were destined for
China, with Indonesia becoming
increasingly important in the downstream
chrome industry. China is heavily reliant
on imports of chrome ores and
concentrates to supply its ferrochrome
and stainless steel manufacturing
industries. A study released by PwC,
“SA Mine 2018” stated that chrome was
one of only three commodities in South
Africa, the others being iron ore and
manganese, which showed production
growth over the past 15 years.
Chrome end uses
Chrome ore demand is driven by ferrochrome use, with more than 90% of chrome ore
being used for metallurgical purposes. Approximately 4% of demand is derived from
the chemical industry and the balance from the foundry and refractory industries. The
majority of metallurgical grade chrome concentrate is utilised in the production of
ferrochrome. In turn, the largest consumer of ferrochrome is stainless steel. As such,
the dynamics in the stainless steel industry have an impact on both the ferrochrome
and chrome ore industries.
93%
4%
Metallurgical grade
– Cr2O3 – 30% to 45%
– SO2 – <4%
– Chrome is the key
ingredient for stainless
steel
Chemical grade
– Cr2O3 – 45% to 47%
– SO2 – <1.2%
– Used to produce sodium
dichromate
2%
<1%
Foundry grade
– Cr2O3 – >46%
– SO2 – <1%
– High-thermal conductivity and
low-thermal expansion
– Moulds for metal castings
Refractory grade
– Cr2O3 – 46%
– SiO2 – <1.2%
– 98% <2 mm
– Refractory bricks for furnace
linings
22 THARISA PLC INTEGRATED ANNUAL REPORT 2019
MARKET
REVIEW CONTINUED
To produce one tonne of stainless steel
CHROME ORE
0.6 tonnes
FERROCHROME
0.25 tonne
STAINLESS STEEL
1 tonne
Prices for metallurgical grade chrome concentrate ranged from US$190/t to a low of US$142/t for the year under review as trade
war pressures had a marked impact on a commodity where demand remained strong, when measured against stainless steel
demand. The product has seen compound annual growth rates of 5.84% since 1950 according to The International Stainless Steel
Forum (‘ISSF’), with production of 50.7 Mt in 2018. The ISSF stated most recently that it sees demand year-on-year changes forecast
at 2.4% for 2019 and at 4.4% for 2020.
Tharisa commodity
prices
Chinese imports of chrome 2018
(Price re-based to 100)
2
2
8
1
1
1
85
%
120
115
110
105
100
95
90
8
1
0
2
r
e
b
o
t
c
O
8
1
0
2
r
e
b
m
e
v
o
N
8
1
0
2
r
e
b
m
e
c
e
D
9
1
0
2
y
r
a
u
n
a
J
9
1
0
2
y
r
a
u
r
b
e
F
9
1
0
2
h
c
r
a
M
(cid:81) Platinum
(cid:81) Chrome
l
i
r
p
A
9
1
0
2
y
a
M
9
1
0
2
e
n
u
J
9
1
0
2
y
l
u
J
9
1
0
2
9
1
0
2
t
s
u
g
u
A
9
1
0
2
r
e
b
m
e
t
p
e
S
(cid:79) South Africa
(cid:79) Turkey
(cid:79) Iran
(cid:79) Zimbabwe
(cid:79) Albania
(cid:79) Oman
(cid:79) Rest of world
THARISA PLC INTEGRATED ANNUAL REPORT 2019
23
Chairman’s review
Chief executive officer’s review
Chief finance officer’s review
Market review
How Tharisa creates value
Stakeholder engagement
Principal business risks
2
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24 THARISA PLC INTEGRATED ANNUAL REPORT 2019
HOW THARISA
CREATES VALUE
Business model
Tharisa’s vision is to be
a leading natural
resources company,
generating value by
being a globally
significant low-cost
producer of diversified
strategic commodities.
The Group
incorporates
exploration, mining,
processing,
beneficiation,
marketing, sales and
logistics. Tharisa
Minerals is a low-cost
producer of PGM and
chrome concentrates,
resulting in two
distinct revenue
streams from a single
resource with costs
shared between the
commodities.
The Group continues
to explore
beneficiation
opportunities through
innovation and
technology.
Inputs
People
• Skilled workforce
• Experienced entrepreneurial leadership
• Human resource development
• Fully committed to zero harm culture
Assets and infrastructure
• Mining and exploration rights
• Significant resource
• Long-term open pit life of mine
• Processing plants
• Regulatory compliant
• Road and rail networks
• Port facilities
Financial
• Cash – operationally cash flow positive
• Capital expenditure – stay-in-business capex, mining fleet and
optimisation projects
• Access to capital
• JSE and LSE listing – capital markets
Innovation
• Optimisation – mining and processing
• Research and development
– New technology
– Development of niche products
– Piloting PGM rich alloy smelting technology
Stakeholders
• Employees
• Shareholders
• Communities
• Customers
Environment
• Suppliers
• Government
• Municipalities
• Regulators
• Resource management i.e. energy use and water availability
• Land management, including biodiversity conservation,
rehabilitation and closure planning
• Environmental compliance
• Managing and minimising waste streams
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Chairman’s review
Chief executive officer’s review
Chief finance officer’s review
Market review
How Tharisa creates value
Stakeholder engagement
Principal business risks
Outputs
2
Products
• PGM concentrate
• Metallurgical grade chrome
concentrate
• Chemical grade chrome
concentrate
• Foundry grade chrome
concentrate
Services
• Marketing and sales
• Logistics
Waste
• Process tailings
• Waste rock
Please see next page
for continuation of
How we create value
What we do
1
Mineral extraction
• Mining of five MG Chromitite Layers
• Owner model
• Exploration for the future
2
Beneficiation
• Producing PGM and chrome
concentrates, including
– metallurgical grade
– chemical grade
– foundry grade
3
Research and development
• Improving recoveries
• 1 MW DC furnace to pilot
production of PGM rich alloys
4
Marketing and sales
• Sales of PGM concentrate
• Marketing and sales of chrome
concentrates to customers globally
• Agency agreement to third-party
businesses
5
Logistics
• Road transport of PGM concentrates
• Road and rail transport of chrome
concentrates to port
• Shipment of product to customers
Mineral extractio
n
1
B
e
n
e
fi
c
i
a
t
i
o
n
2
t
n
e
What
we do
3
h
c
r
a
e
s
e
R
m
p
o
l
e
v
e
d
d
n
a
4
M arketing and sales
5
s
c
i
t
s
L o g i
26 THARISA PLC INTEGRATED ANNUAL REPORT 2019
HOW THARISA
CREATES VALUE
Business model continued
Outcomes
People
• Employment: more than 500 people from local community
• A total of 20 interns and graduates enrolled in intern programme
• Skills development: US$3.5 million spent on training
• Low LTIFR: 0.27 per 200 000 man hours worked
• Four years fatality free
For more on our people
go to page 47.
Assets and infrastructure
• Production of saleable product: 4.8 Mt reef milled with 139.7 koz PGMs
and 1.29 Mt chrome concentrates produced
• Depletion of resources: 4.6 Mt reef mined
• Responsible management and efficient use
Financial
• Operating profit: US$24.2 million
• Cash generated from operations: US$69.9 million
• Social upliftment: US$0.2 million spent on CSI
• Direct and indirect taxes and royalties: US$56.7 million
• Total dividend: US 0.75 cent per share
For more on assets and
infrastructure go to
page 36.
For more on financials
go to page 98.
Innovation
• Process improvements
• Operates across the value chain – from mine to end customer
• Large-scale open pit resource for extraction of five MG Chromitite Layers
Stakeholders
• Wages, salaries, bonus schemes and share award plans: US$36.7 million
• Shareholder returns (‘HEPS’): US 5 cent per share
• Community upliftment: US$0.3 million spent on education
• Customers – quality of products, consistent deliveries
For more on stakeholders
go to pages 28 and 47.
Environment
• Total energy consumption: 175 329 MWh
• Cumulative rehabilitation provision: US$13.1 million
• T otal water consumption: 4 082 908 m3
• Total CO2 emissions (Scope 3): 2 235 100 tCO2e
For more on environmental
management go to
page 52.
Our full
value chain
1. Tharisa Minerals
Resource
• 890.7 Mt resources
at 1.49 g/t 5PGE + Au
and 20.3% Cr2O3
Mining
• 14-year open pit LOM
• 40-year underground
extension
• Mined 4.6 Mt
of ROM reef
Processing
• 4.8 Mt nameplate
design capacity
• Production of
139.7 koz of PGMs
• 1.29 Mt of chrome
concentrates
Large scale
• One of the
world’s largest
single chrome
resources
Mechanised
• Mechanised open
pit mining with
a skilled labour force
Derisked
• In production
• Major capex complete
OUR FULL VALUE CH
Tharisa Minerals
1
2
AIN
O
U
R
F
U
L
L
Arxo Metals
V
A
L
U
E
C
H
A
I
N
Arxo Resources
O
U
R
F
U
L
L
V
A
L
U
E
C
H
A
I
N
4
Arxo Logistics
O
U
R
F
U
L
L
V
A
L
U
E C
H
Customers
AIN O
UR FULL VALUE CH
3
5
Mid-tier
open pit
PGM & chrome
concentrate co-
producer with
an integrated
marketing,
sales and
logistics
platform
66666666
6
7
Karo Holdings
Salene Chrome
U
R FUL
L
VALUE CHAIN
AIN O
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Chairman’s review
Chief executive officer’s review
Chief finance officer’s review
Market review
How Tharisa creates value
Stakeholder engagement
Principal business risks
2
2. Arxo Metals
Beneficiation
• Production of speciality grade chrome
concentrates
R&D
• New technologies
• Development of niche products
• Piloting PGM rich alloy technology with
1 MW DC smelter
Third party
• Improving quality of K3 UG2 chrome
plant production
3. Arxo Resources
Marketing and sales
• Significant trader of chrome
concentrates
• Global reach for speciality chrome
concentrates
• Third-party trading
4. Arxo Logistics
Logistics
• Road transport of PGMs
• Road/rail transport, warehouse and port
facilities for bulk chrome concentrates
5. Customers
• PGM offtake agreement – Impala
Platinum and cooperation agreement
with Sibanye-Stillwater
• Speciality chrome offtake/joint
marketing agreement
• Metallurgical chrome agency agreement
– Noble Group
• Strategic volume off-take chrome
agreement – Tisco
• Relationships with stainless steel and
ferrochrome producers and global
commodity traders
6. Karo Holdings
• Development of highly prospective
integrated PGM mining complex
• Replication of phased development and
innovative approach
7. Salene Chrome
• Potential quick to market chrome
business expansion
• Addition of higher grade chrome
concentrate to the Tharisa basket of
chrome products
28 THARISA PLC INTEGRATED ANNUAL REPORT 2019
STAKEHOLDER
ENGAGEMENT
Tharisa believes that stakeholder engagement is a business imperative and that strong
lines of communication between stakeholders ensure the success of the Group and secure
its place within the community. The Group’s stakeholder engagement strategy aims to
maintain good working relations, manages social risk and develops solutions to social
challenges faced by its stakeholders. Tharisa’s stakeholder engagement framework will be
further developed for the new jurisdictions that it is entering as those operations
are established.
SHAREHOLDERS
(cid:83)
(cid:3)• Interim and integrated annual
reporting
(cid:3)• Quarterly production updates
(cid:3)• Annual general meeting (‘AGM’)
(cid:3)• SENS/RNS announcements
(cid:3)• Annual report
(cid:3)• Company website
EMPLOYEES
(cid:83)
(cid:3)• Regular employee engagement forum meetings at the Tharisa Mine
(cid:3)• Tharisa newsletters and posters
(cid:3)• Tharisa induction and ongoing skills development training
(cid:3)• Company website
(cid:3)• Daily supervisor/manager interaction
(cid:3)• Ongoing safety training on the Tharisa Mine
(cid:3)• Tharisa wellness programmes and campaigns
LABOUR UNIONS
(cid:83)
(cid:3)• Union recognition and negotiations at
Tharisa Minerals
(cid:3)• Monthly liaison with shop stewards
(cid:3)• Regular contact with union leadership
(cid:3)• Tharisa Mine labour forum meets once a
month
COMMUNITIES
(cid:83)
(cid:3)• AET, leadership and bursaries
(cid:3)• Community forums
(cid:3)• Local upliftment and wellness
programmes and projects
(cid:3)• Regular meetings with various community
leadership structures
(cid:3)• CSI programmes
(cid:3)• Career-sharing information for pupils
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Chairman’s review
Chief executive officer’s review
Chief finance officer’s review
Market review
How Tharisa creates value
Stakeholder engagement
Principal business risks
2
CUSTOMERS
(cid:83)
(cid:3)• Regular customer meetings
(cid:3)• Electronic and telephonic
communication
(cid:3)• Customer site visits
(cid:3)• Commodity conferences
GOVERNMENT
(cid:83)
(cid:3)• Monthly, quarterly and integrated annual reports to the DMRE
(cid:3)• Regular engagement with local and provincial government and municipalities
(cid:3)• Scheduled and unannounced site visits by regulators
SUPPLIERS
(cid:83)
(cid:3)• Procurement policies, tender process
(cid:3)• Verbal and electronic communication
(cid:3)• Contract terms negotiated and agreed
(cid:3)• Standard contract terms for suppliers of goods
SOUTH AFRICAN
STATE-OWNED
ENTITIES
(cid:83)
(cid:3)• Regular face-to-face meetings
(cid:3)• Electronic communication
(cid:3)• Joint task team with Transnet to develop rail
siding
FINANCIERS
(cid:83)
(cid:3)• Reporting on a monthly,
bi-annual and annual basis
(cid:3)• Presentations and meetings
with management
(cid:3)• Tharisa Mine site visits by debt
providers at least twice a year
(cid:3)• Telephonic and electronic
communication, particularly
on working capital facilities
(cid:3)• Annual review of working
capital facilities
ANALYSTS
(cid:83)
(cid:3)• Roadshows and analyst
briefings
(cid:3)• Interim and annual
reporting
(cid:3)• Annual report
(cid:3)• Company website
(cid:3)• SENS/RNS announcements
30 THARISA PLC INTEGRATED ANNUAL REPORT 2019
PRINCIPAL
BUSINESS RISKS
Tharisa regards principal business risks as issues that may, if they materialise, substantially
affect the Group’s ability to create and sustain value in the short, medium and long term.
Risk review
The risks that are material to Tharisa and its stakeholders are determined by an analysis of the Group’s risks, the external environment
and the Group’s engagement with stakeholders.
Material risks may impact the achievement of the Group’s strategy. Each risk also carries with it challenges and opportunities. The
Group’s strategy takes into account known risks, but risks may exist which the Group is currently unaware of.
Material risks are considered and reported on, on an ongoing basis by those members of the management team responsible for risk
management. The Tharisa Risk Committee comprises all members of the Board.
Risks are identified in the Group risk register and are considered by management on a quarterly basis. They are reported to the Board
at least twice a year.
Below are the material risks identified by management in consultation with stakeholders and with reference to the Group’s business
model and strategy.
Risk
Safety
Impact
Mitigation
Keeping people safe is of
paramount importance to Tharisa.
Mining and processing safely is a
key performance indicator for all
executives and managers at Tharisa
(cid:3)• Disruptions to operations
pending root cause investigations
(cid:3)• Potential section 54 and section
55 instructions from the DMRE in
terms of the South African Mine
Health Safety Act
(cid:3)• Strive for zero harm working environment
(cid:3)• Comprehensive training on standard operating
procedures
(cid:3)• Implement culture of safety risk intolerance
(cid:3)• Transparent and open relationships with DMRE
inspectorate
(cid:3)• Key performance indicator in Group cash bonus
scheme to incentivise safe behaviour
(cid:3)• Ensuring Zimbabwe operations align with Group
safety standards
Political uncertainty
South Africa – the burgeoning
unemployment, increasing
government debt and negligible
GDP growth have been aggravated
by political uncertainty
Negative business confidence
Zimbabwe – international
sanctions still apply and may affect
the stability of the economy
Hyperinflation and exclusion of
foreign currencies as legal tender
Negative business confidence
Lack of currency liquidity
(cid:3)• Unattractive investment
(cid:3)• State President Cyril Ramaphosa has shown
destination(s) for international
investors
(cid:3)• Potential for sovereign credit
rating downgrade
(cid:3)• Political/civil unrest adversely
impacting mine production
commitment and intent in ensuring South Africa
remains politically stable and that the economy
advances
(cid:3)• Pledges by global concerns to invest in the country
which will serve to improve business confidence,
unlock investment by local concerns and build
GDP growth
(cid:3)• The President’s willingness to attract international
investment by his declaration that “Zimbabwe is
open for business”
(cid:3)• Investor-friendly laws and dispensations
(cid:3)• Lifting of certain indigenisation requirements
(cid:3)• Establishment and awarding of Special Economic
Zones to assist capital flows and investment
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Chairman’s review
Chief executive officer’s review
Chief finance officer’s review
Market review
How Tharisa creates value
Stakeholder engagement
Principal business risks
2
Risk
Impact
Mitigation
Regulatory compliance
Tharisa Minerals’ right to mine is
dependent on strict adherence to
various legal and legislative
requirements
Non-compliance with the MPRDA
and/or Mining Charter and/or the
Group’s Social and Labour Plan.
Routine audits are carried out by
the DMRE to ensure compliance
The Group is required to comply
with a range of health and safety
laws and regulations in connection
with its mining, processing and
mine logistics activities. Regular
inspections are conducted by the
DMRE to ensure compliance.
Any perceived violation of the
regulations could lead to a
temporary shutdown of all or a
portion of the Group’s mining
activities
Non-compliance with the Mines
and Minerals Act of Zimbabwe and
mining regulations promulgated
under such Act
Production/location concentration
Tharisa currently owns and operates
one producing asset, located in
South Africa
The Group has made early entry
investments into Zimbabwean
exploration projects; however, the
Group is still exposed to the
potential of political risk and
instability within the country of
its operation
(cid:3)• Cost of compliance to changes in
(cid:3)• Ensure compliance with current MPRDA and
the Mining Charter
applicable legislation
(cid:3)• Non-compliance resulting in
(cid:3)• Mining Charter has been published and provides
potential legal sanction including
fines, penalties and risks to the
right to mine via a forfeiture or
cancellation
certainty
(cid:3)• Ensure compliance with the terms of the Mining
Charter while making use of the phasing in period
(cid:3)• Ensure compliance with the Group’s Social and
(cid:3)• Capital raising hindered
Labour Plan
(cid:3)• Engagement with regulatory authorities and industry
organisations
(cid:3)• Ongoing communication and awareness with
investors
(cid:3)• Ensure compliance with all relevant Zimbabwean
legislation including the Mines and Minerals Act,
Mining regulations promulgated under section 403
of the Mines and Minerals Act, the Labour Act,
Exchange Control regulations and other laws and
enactments governing investment
(cid:3)• Exposure to potential
(cid:3)• Third-party operations such as the operations of
macroeconomic, social and
sociopolitical risks and instability
(cid:3)• Sovereign ratings downgrades of
the country of operation can limit
the Group’s ability to raise
financing and increase the cost
thereof
(cid:3)• Exposure to only two main
commodities
K3 UG2 chrome plant, provides additional revenue
from an alternate operation
(cid:3)• Exploration projects in Zimbabwe provide
geographic diversification as well as higher grade
chrome products
(cid:3)• Considering opportunities to diversify commodities
as they arise
32 THARISA PLC INTEGRATED ANNUAL REPORT 2019
PRINCIPAL
BUSINESS RISKS CONTINUED
Risk
Impact
Mitigation
Global commodity prices and currency volatility
The Group’s revenues, profitability
and future rate of growth depend
on the prices of PGMs and chrome
The state of the world’s economies
impact demand and market prices
for commodities
Volatility in the ZAR:US$ exchange
rate affects the Group’s profitability
of which South Africa’s technical
recession, land reform uncertainty
and effects of other emerging
markets are contributing factors
(cid:3)• Downward pressure on the prices
of PGMs and/or chrome may
negatively affect the Group’s
profitability and cash flows
(cid:3)• The Group’s reporting currency is
US$. The Group’s current
operations are predominately
based in South Africa, with a ZAR
cost base while the majority of
the revenue stream is in US$,
exposing the Group to the
volatility and movement in the
currencies
(cid:3)• Risk of competitor product
dumping and undercutting
market prices
(cid:3)• Monitor costs closely to ensure that the Group
remains in the lowest cost quartile
(cid:3)• Stringent cost control
(cid:3)• Improved operating efficiencies and production
driving down unit costs
(cid:3)• Service providers appointed to manage the Group
foreign exchange and PGM hedging policy
(cid:3)• Production of higher margin speciality grade chrome
concentrates comprising 25% of Group chrome
concentrate production
Financing and liquidity
The activities of the Group expose
it to a variety of financial risks
including market, commodity
prices, credit, foreign exchange
and interest rate risks
Relatively low share liquidity
(cid:3)• Significant changes in the
(cid:3)• Positioned as a low-cost producer of both PGM and
financial assumptions made by
the Group could impact its ability
to continue operating and
jeopardise its ability to raise
financing in the future
(cid:3)• Adverse impact on the ability to
raise capital for growth and
acquisitions
chrome concentrates
(cid:3)• Production of higher value-add speciality grade
chrome concentrates
(cid:3)• Leveraging third-party operations
(cid:3)• Diversified customers and markets
(cid:3)• Stable Group performance assisted by free cash
flows generated from operating activities
(cid:3)• Undrawn banking facilities
(cid:3)• Trade finance facilities assist with working capital
requirements
(cid:3)• Secondary listing on the LSE and an additional listing
on A2X in South Africa provide additional trading
platforms and increased liquidity
(cid:3)• Marketing and roadshow efforts have enhanced the
Group’s profile and investor awareness
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THARISA PLC INTEGRATED ANNUAL REPORT 2019
33
Chairman’s review
Chief executive officer’s review
Chief finance officer’s review
Market review
How Tharisa creates value
Stakeholder engagement
Principal business risks
2
Risk
Impact
Mitigation
Market/customer concentration
The bulk of Tharisa’s chrome
production is exported to China.
This gives the Group a significant
exposure to a single market in
respect of chrome. For PGMs, we
rely on Impala Platinum for the
offtake of at least 80% of our PGM
production.
Environment
Tharisa is obliged in terms of its
undertaking to stakeholders,
including government, providers
of capital and the community, to
monitor, minimise and mitigate our
impact on the physical environment
and not to infringe on the rights to
a safe and healthy environment.
Non-compliance with this
undertaking may infringe on the
terms of the mining licence and
the ability to continue mining
Climate change as defined in global
or regional climate patterns
Local stakeholders
Tharisa Minerals’ neighbours are
impacted by its operations in terms
of dust, noise, water and security
The perceptions of stakeholders,
including different sections of the
community and various levels of
government, are varied and
multi-layered
Consultations with Zimbabwean
stakeholders have taken place in
line with legislated requirements
(cid:3)• Customer base largely located in
(cid:3)• No reliance on a dominant customer within that
China, with accompanying
exposure to Chinese markets
market
(cid:3)• Tharisa has strategically diversified its production
through the increase of speciality grade chrome
concentrates, which make up approximately 25%
of Tharisa’s total chrome production
(cid:3)• Chemical and foundry grade chrome concentrates
sold into diversified global markets
(cid:3)• Exploration project in Zimbabwe is focusing on
higher grade chrome products
(cid:3)• PGM concentrate sold to leading precious metal
refiners on a long-term offtake basis
(cid:3)• Harm to the environment
(cid:3)• Increased costs of remediation
and rehabilitation due to
legislative changes
(cid:3)• Potential legal sanction and class
action suits
(cid:3)• Conduct all mining and processing operations in an
environmentally responsible manner
(cid:3)• Compliance with applicable national and local laws
and regulations
(cid:3)• Monitor compliance against Equator Principles
(cid:3)• Financial provision for rehabilitation and mine
(cid:3)• Poor image of mining companies
closure
(cid:3)• Ongoing environmental impact monitoring
(cid:3)• In Zimbabwe, we are fully compliant with all relevant
legislation governing the environment, including the
Environmental Management Act, and legislation
covering air quality, emissions, land-use planning,
soil conservation/soil improvement, waste
management, hazardous substances, hazardous
waste, water quality standards and biodiversity
(cid:3)• Impact on climatic working
(cid:3)• Creating awareness of climate change and the
conditions for employees possibly
resulting in adverse health
outcomes
impact on the individual and how individuals can
contribute to mitigating this risk as individuals or as
a collective
(cid:3)• Impact on seasonal weather
patterns having an effect on
operational availability or causing
possible disruptions
(cid:3)• Use of new technologies and renewable energies,
making older equipment more energy efficient, or
changing management practices or consumer
behaviour
(cid:3)• Local stakeholder discontent has
the potential to disrupt
operations
(cid:3)• Safety and health of community
(cid:3)• Complaints to regulatory
authorities and risk of
intervention
(cid:3)• Potential for adverse litigation
(cid:3)• Poor image of mining companies
(cid:3)• Ongoing environmental impact monitoring
(cid:3)• Agreements concluded with local landowners
(cid:3)• Partner with government and local municipality to
develop identified land within the municipal spatial
development area to which the community may be
relocated
(cid:3)• Ongoing discussions with the DMRE
(cid:3)• Positive engagements with the local community with
focus on sustainable community projects
(cid:3)• Focus on recruiting from local communities as much
as possible if there is a skills match
34 THARISA PLC INTEGRATED ANNUAL REPORT 2019
PRINCIPAL
BUSINESS RISKS CONTINUED
Risk
Impact
Mitigation
Access to resources and infrastructure
Tharisa’s mining, processing and
marketing operations rely on
sustainable access to water,
electricity, and road and rail
infrastructure
(cid:3)• Production interruptions
(cid:3)• Failure to meet delivery
commitments
(cid:3)• Two independent processing plants provide flexibility
in times of electricity and water curtailments
(cid:3)• Multi-modal transport optionality via bulk or
containers, road and/or rail
(cid:3)• Integrated agreement for rail transportation and
port facilities concluded with Transnet
(cid:3)• Improved water supply through application for a
permanent conversion of temporary rights and
transfer of water rights from Buffelspoort Dam
(cid:3)• Open pit diesel powered mining fleet reduces
reliance on electricity
(cid:3)• Generators installed at the processing plants to
mitigate load shedding
Labour
The consistent, assured availability
of appropriately skilled human
resources at economical rates is
essential to the sustainability of
Tharisa’s operations. Similarly
important is the efficiency and
discipline of the Group’s workforce
(cid:3)• Labour disruptions in South
(cid:3)• Recognition agreement with the relevant trade
Africa remain a risk, particularly
with the current political climate
which may contribute to
heightened labour and
community unrest
(cid:3)• Potential damage to property
(cid:3)• Loss of production exacerbated
by low ROM stockpiles ahead of
the plants
union
(cid:3)• Two-year wage agreement with majority union
provides certainty and stability
(cid:3)• Monthly liaison with shop stewards and regular
contact with regional leadership
(cid:3)• Ongoing training programmes
(cid:3)• Adequate insurance cover in the event of damage to
property arising from unrest
(cid:3)• All levels of employees incentivised through
incentive schemes leading to improved productivity
and employee retention
Management of resources and reserves
Management and planning of the
extraction of the multiple MG layers
of reef is critical to its business
model
Tharisa’s success depends on it
extracting the maximum value per
tonne of reef while avoiding in-pit
dilution and undue sterilisation of
the resource
(cid:3)• Sub-optimal quantity and quality
of reef results in poor processing
plant recoveries, which impacts
production and financial
performance
(cid:3)• Sterilisation of resources reduces
life of mine and inhibits mining
flexibility
(cid:3)• Loss of production as a result of
low ROM stockpiles ahead of the
plants
(cid:3)• Owner mining model enables in-house management
and control of all mining activities, with a focus on
correct mining practices with optimal quality and
quantity of ROM
(cid:3)• In-house mining skills
(cid:3)• Accuracy and execution of mine plan
(cid:3)• Mining employees managed on KPIs
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35
Chairman’s review
Chief executive officer’s review
Chief finance officer’s review
Market review
How Tharisa creates value
Stakeholder engagement
Principal business risks
2
Risk
Impact
Mitigation
Unscheduled breakdowns
The Group’s performance is reliant
on the consistent mining and
production of PGM and chrome
concentrates from the Tharisa Mine
Cybersecurity
The Group performance may be
materially and adversely impacted
by a cyber attack on its IT system
(cid:3)• Any unscheduled breakdown
leading to a prolonged reduction
in mining and/or production may
have a material impact on the
Group’s financial performance
and results of operations
(cid:3)• Loss of production as a result of
low ROM stockpiles ahead of the
plants
(cid:3)• Optimisation of the existing mining fleet
(cid:3)• Developed engineering and geological skills that are
integral to in-house mining
(cid:3)• Preventative maintenance programme for the fleet
and plant
(cid:3)• Long lead item spares in stock
(cid:3)• Purchase of ROM from third parties to alleviate low
ROM stockpiles
(cid:3)• The processing plants at the mine
are controlled by a supervisory
control and data acquisition
operating system and a cyber
attack could potentially subject
the Group to a ransomware
demand and/or cause a
shutdown of the processing
operations until a back-up system
is operational or a work-around
solution is obtained
(cid:3)• The Group has carried out an audit of its potential
exposure to a cyber attack in respect all its IT and
has implemented mitigating measures which limit its
exposure to internal and third-party access
(cid:3)• The Group is implementing globally accepted
best-in-class software and protocols to filter
malicious and criminal content, as well as the latest
antivirus and security programmes
(cid:3)• Insurance against cyber attack including back-up
and restoration assistance
(cid:3)• Internal backups and scheduled backup tests for
integrity and continuity
36 THARISA PLC INTEGRATED ANNUAL REPORT 2019
OPERATIONAL
REVIEW
Tharisa’s operational performance
in FY2019, despite a decline from
record levels in FY2018, delivered
strong production numbers at a
time when the focus was on
redeveloping the open pit to a
more efficient model. The Tharisa
processing plants continued to
deliver industry leading recoveries,
while the marketing and logistics
businesses have benefited from
the development of the third-party
business.
THARISA PLC INTEGRATED ANNUAL REPORT 2019
37
Operational review
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REEF MINED
4.63 Mt
down 5.1%
(2018: 4.88 Mt)
PGM PRODUCTION
(5PGE + Au)
139.7 koz
down 8.2%
(2018: 152.2 koz)
CHROME CONCENTRATE
PRODUCTION
1.29 Mt
down 10.9%
(2018: 1.45 Mt)
CHROME CONCENTRATE
SALES
1.40 Mt
down 15.1%
(2018: 1.65 Mt)
W3
PRODUCTION STATISTICS
FY2019
FY2018
LTIFR
Reef mined (ROM)
Stripping ratio
Rougher PGM grade
PGM recovery
PGM production
ROM chrome feed grade
Chrome recovery
Chrome yield
Chrome concentrate production
– Metallurgical grade
– Speciality grade
Third party
per 200 000 hours
kt
m3 waste: m3 reef
g/t
%
5PGE + Au koz
% Cr2O3
%
%
kt
kt
kt
kt
0.27
4 627.1
8.3
1.47
82.1
139.7
18.1
62.0
26.7
1 290.0
977.9
312.1
241.1
0.18
4 875.0
7.9
1.51
84.1
152.2
18.2
66.0
28.4
1 448.0
1 080.3
367.7
221.8
Tharisa Minerals
Tharisa Minerals is 74% owned by Tharisa
and is uniquely positioned as the world’s
only co-producer of both PGM and
chrome concentrates. Tharisa Minerals’
core asset is the Tharisa Mine, which is
situated on South Africa’s Western Limb
of the Bushveld Complex – home to more
than 70% of the world’s platinum and
chrome resources.
Tharisa Minerals mines and processes
five MG Chromitite Layers. Through
innovative engineering, the mined reef is
processed at two independent integrated
plants extracting both PGMs and chrome
concentrates, thereby reducing unit costs
and positioning Tharisa Minerals in the
lowest cost quartile of operating costs in
South Africa for both PGMs and chrome.
Tharisa Minerals’ low unit costs and
multiple polymetallic products have
ensured that it was well placed to
manage commodity price volatility and
exchange rates.
Its dual revenue streams provide a natural
hedge against different commodity cycles
with the products being used in different
applications. PGMs are primarily used in
the automotive, technology and jewellery
industries while chrome is primarily used
in the manufacture of stainless steel.
Safety
Tharisa acknowledges that the safety of
its people is critical to its success. The
LTIFR for FY2019 was 0.27 (2018: 0.18)
per 200 000 man hours worked. The
mine achieved three million fatality-free
shifts.
Refer to the Safety and Health section of the
sustainability report on page 44.
Mining operations
Tharisa Minerals holds a Mining Right
over 5 475 ha of land near the town of
Rustenburg in the North West province
of South Africa. The Mining Right was
granted on 19 September 2008 for an
initial period of 30 years, providing access
to MG Chromitite Layers which outcrop
with a strike length of approximately 5 km.
The Tharisa Mine is a 14-year open pit
operation with a projected 40-year
underground life of mine extension. The
mining operation, which is divided into
the east pit and west pit, extracts reef
from five MG Chromitite Layers.
Refer to the Mineral Resource and Mineral Reserve
statement on page 62.
Mining
(Mt)
0
5
.
9
4
.
8
4
.
6
.
4
2
.
4
2015
2016 2017 2018 2019
5.2
5.0
4.8
4.6
4.4
4.2
4.0
3.8
38 THARISA PLC INTEGRATED ANNUAL REPORT 2019
OPERATIONAL
REVIEW CONTINUED
Tharisa Minerals’ two independent
processing plants are designed specifically
to treat the MG Chromitite Layers of the
Bushveld Complex. The smaller 1.2 Mtpa
Genesis Plant, with the 100 ktpm chrome
circuit, was commissioned in August 2011
with the PGM circuit being commissioned
in December 2011. The larger 3.6 Mtpa
Voyager Plant was commissioned in
December 2012. Both plants operate at
above nameplate capacity and milled
collectively 4.8 Mt. The plants have a
similar process flow that includes crushing
and grinding, primary removal of chrome
concentrate by spirals, followed by PGM
flotation from the chrome tails and a
second spiral recovery of chrome from
the PGM tails.
Operating in parallel, the independent
plants provide processing flexibility and
production stability by allowing one plant
to be shut down without hampering the
production of the other. The modular
design of the processing circuits allows
sections of the plant to be stopped
without affecting the rest of the
operation (i.e. a crushing circuit can
be stopped independently of the
comminution, spiral and flotation circuits).
Using off the shelf technology, the
processing circuits are uniquely
engineered to deliver both PGM and
chrome concentrates. This innovative
approach to production has made
Tharisa a world-class PGM and chrome
co-producer.
The PGM rougher feed grade was
marginally lower for the year at
1.47 g/t, while the Cr2O3 ROM feed
grade was virtually unchanged at
18.1% for the year.
Plant
feed
(Mt)
1
.
5
9
.
4
7
.
4
8
.
4
4
.
4
2015
2016 2017 2018 2019
PGM
production
(koz)
2
.
2
5
1
6
.
3
4
1
7
.
9
3
1
6
.
2
3
0 1
8
1
1
.
2015
2016 2017 2018 2019
5.2
5.0
4.8
4.6
4.4
4.2
4.0
160.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
0.0
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
PGM recovery (%)
% x 100
The change in operating model from
contractor to owner-operator mining was
implemented in FY2018. This change
represented a logical progression given
the long life of the open pit, allowing
Tharisa Minerals to take direct control of
its mining operations, thereby controlling
the reef grades and the delivery of
improved quality ore to the processing
plants and optimising the feed,
throughout and within the plants.
FY2019 saw Tharisa Minerals invest
heavily in new equipment and machinery
including a new Caterpillar 6050 face
shovel.
Tharisa Minerals’ mining division mined
4.6 Mt of ROM for FY2019, a 5.1%
decrease year on year. A total of 11.1
Mm3 of waste rock was mined for the
year, as the stripping ratio improved to
8.3 on a m3:m3 basis, representing a
5.1% increase from the previous year.
Mining for the year needs to be viewed in
the context of Tharisa focusing on the
development areas in its open pit; a
redesign that saw over 1.7 Mm3 of
previously mined material moved, with
the aim of creating smoother benches
and thus better drilling, blasting and
hauling continuity. Hauling continuity was
enhanced by access roads that previously
ran north-south now running parallel to
the pit as the pit advances. Capital
investment into machinery increased to
US$27.5 million as fleet replacement
accelerated.
Processing
The PGMs in the MG ore mined by
Tharisa Minerals occur in the silicates
and are not associated with the chromite,
thus enabling the process to extract
chrome before PGMs without sacrificing
PGM recovery.
This lowers the chrome content in the
PGM circuit and results in much lower
chrome content in the PGM concentrate
compared to typical UG2 operations.
Base metal content in the MGs is also
significantly lower than Merensky and
UG2 ores, resulting in a low matte fall
during smelting, reducing base metal
refining requirements.
THARISA PLC INTEGRATED ANNUAL REPORT 2019
39
Operational review
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Chrome
production
(Mt)
4
.
1
3
.
1
3
.
1
2
.
1
1
.
1
2015
2016 2017 2018 2019
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
Chrome recovery (%)
% x 100
Prill split for FY2019
%
55.1
(cid:79) Platinum
(cid:79) Palladium
(cid:79) Rhodium
(cid:79) Gold
(cid:79) Ruthenium
(cid:79) Iridium
Tharisa chrome production
split for FY2019
W3
Products
The Tharisa Mine produces the following products:
PGM concentrate: PGM concentrate is produced from both
processing facilities. The concentrate produced from the
Voyager Plant is a higher grade than the concentrate from the
Genesis Plant due to the different chromitite reefs treated by
the respective plants. The major component of the PGMs is
platinum, followed by palladium and ruthenium.
Average market price
FY2019
US$/oz
FY2018
US$/oz
Change
%
Platinum
Palladium
Rhodium
Ruthenium
Iridium
Source: Johnson Matthey
878
1 490
2 531
235
1 317
909
996
1 957
207
1 156
(3.4)
40.6
29.3
13.5
13.9
Metallurgical grade chrome concentrate: The typical
metallurgical grade produced by Tharisa is 40.0% to a 42.0%
chrome (as Cr2O3) with the silica (SiO2) lower than 5.0%.
Chemical grade chrome concentrate: The typical chemical
grade produced by Tharisa is 44.0% to 46.0% Cr2O3 with the
SiO2 lower than 1.0%. This is a higher value chromite product
than the metallurgical grade chrome concentrate.
Foundry grade chrome concentrate: The typical foundry
grade produced by Tharisa is 45.0% to 46.0% Cr2O3 with the
SiO2 lower than 1.0%. The American Foundryman Society
Grain Fineness Number (AFS Number) is managed between
45 and 50. As with the chemical grade chromite, this is a
higher value chrome concentrate than the metallurgical grade
chrome concentrate.
%
42% metallurgical grade
162
186
(12.9)
Average chrome price
FY2019
US$/t
FY2018
US$/t
Change
%
63.9
(cid:79) Tharisa metallurgical grade
(cid:79) Tharisa specialty grade
(cid:79) Third-party product
4.3
14.0
0.2
9.5
16.9
15.7
20.4
40 THARISA PLC INTEGRATED ANNUAL REPORT 2019
OPERATIONAL
REVIEW CONTINUED
Tharisa targets recoveries of 80.0% for
PGMs and 65.0% for chrome. In FY2019
PGM recoveries were 82.1% while
chrome recoveries were 62.0%.
During the year, the Group produced
PGM concentrates containing 139.7 koz
of contained PGMs (5PGE + Au) and
chrome concentrates of 1.29 Mt with
312.1 kt being speciality grade
concentrates. Third-party chrome
concentrate produced was 241.1 kt.
Speciality chrome recovery circuits are
integrated into the feed circuit of the
Genesis Plant, known as the Challenger
Plant. The Challenger Plant, which is
owned by fellow subsidiary Arxo Metals,
was commissioned in July 2013 and
produces chemical and foundry grade
chrome concentrates.
Production of speciality grade
concentrates accounted for 24.2% of
Tharisa’s chrome production in FY2019,
and will be maintained at current levels
to ensure that it maintains a strategic
market share.
Vision 2020
The Vision 2020 projects are targeting an
increase in Tharisa’s production to 200
kozpa of PGMs and 2.0 Mt of chrome
concentrates in 2020 on an annualised
basis. The FY2020 production guidance
for the Tharisa Mine is 155 koz to 165
koz of PGMs and 1.45 Mt to
1.55 Mt of chrome concentrates.
Crusher circuit at the Genesis Plant
The additional crusher circuit at the
Genesis Plant aims to increase the
Genesis Plant throughput by 15% or
about 180 ktpa, targeting an increase in
the higher value speciality grade chrome
concentrates by adding approximately
24 ktpa of chemical grade chrome
concentrate, approximately 18 ktpa of
foundry grade chrome concentrate, and
approximately 19 ktpa of metallurgical
grade chrome concentrate.
PGM optimisation at the Voyager
Plant
The addition of flotation capacity and the
installation of high-energy mechanisms
at the Voyager Plant is aimed at improving
the PGM recoveries and increasing
PGM production. The project is being
implemented via a staged approach.
Vulcan Plant
Tharisa’s R&D team has developed the
Vulcan process to extract the fine chrome
from current in-line tailings from the
combined feed of the Genesis and
Voyager Plants. The primary aim of the
Vulcan Plant is to increase chrome
recovery from the current 65% target to
82% at the Tharisa Mine, capable of
adding an additional 400 ktpa (ca. 30%
of current production) of chrome
concentrate output. Vulcan will use a
proprietary process using existing
technologies to improve chrome
recoveries with the process having been
rigorously tested and proven through pilot
plant test work and the operation of a
production scale demonstration plant.
The total capital cost of US$54.2 million
includes contingency and owner’s cost.
Sales and marketing
The Group’s market advantage is its
exposure to both the PGM and chrome
markets. This dual exposure gives the
Group a hedge against volatility in either
of the commodity prices.
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Arxo Metals continues to evaluate low
capital, low energy, value-adding
beneficiation projects through in-house
research and development.
Arxo Resources
Arxo Resources has the exclusive right
to sell the metallurgical grade chrome
concentrate produced by Tharisa Minerals
to customers in China and other
international markets. It has established
a strong platform with global customers
in China including stainless steel and
ferrochrome producers, as well as global
commodity traders.
Arxo Resources has a marketing
agreement with Noble, a global
commodities trading company listed on
the Singapore Stock Exchange, whereby
Noble acts as an agent for the marketing
of 600.0 ktpa of metallurgical grade
chrome concentrate produced by
Tharisa Minerals.
Arxo Resources also has a joint marketing
agreement for Tharisa Minerals’ chemical
grade chrome concentrate production.
In FY2019, Arxo Resources sold 1.1 Mt
(2018: 1.3 Mt) metallurgical grade chrome
concentrates, of which 0.9 Mt was
produced by Tharisa Minerals.
The scale of Arxo Resources operations
allows for direct access to market and
price discovery. Its established contacts
with customers also directly creates an
excellent platform for additional sales of
third-party products.
Tharisa Minerals continues to supply the
majority of its PGM concentrate to
Impala Platinum in terms of its offtake
agreement and is paid a variable
percentage of the contained PGMs and
base metals contained within each tonne
of concentrate in terms of an agreed
market formula.
The PGM basket price improved by
17.1% to US$1 081/oz in FY2019.
Chrome concentrate sales totalled 1.4 Mt,
314.7 kt of which was Tharisa’s higher
margin speciality chemical and foundry
grade chrome concentrates. The bulk of
the Tharisa sales are derived from
metallurgical grade chrome concentrate,
sales of which included 207.5 kt of
third-party chrome concentrates.
Speciality grade chrome concentrates
produced within the Group are sold in
terms of an agency and offtake
agreement. The chemical grade chrome
concentrate is jointly marketed with
Tharisa and an independent third party.
Spot metallurgical chrome concentrate
prices were volatile during the financial
year, but overall lower than in the
previous year, with prices received ranging
between US$190/t and US$142/t with the
average price for metallurgical grade
chrome concentrate on a CIF main ports
China basis decreasing in US dollar terms
to US$162/t from US$186/t for the
previous year.
The production of the higher value
speciality chrome concentrates, which
typically command a premium of greater
than US$50/t provided additional margin.
The Group continued to deliver
metallurgical grade chrome concentrate
in terms of its five-year strategic
cooperation agreement with Taiyuan Iron
& Steel’s (‘Tisco’s’) joint venture company
Shanxi Taigang Wanbang Furnace Charge
Co. In terms of the agreement, which was
effective as of September 2017, Arxo
Resources will supply Tisco with a
minimum of 240.0 ktpa of metallurgical
grade chrome concentrate.
Arxo Metals
Arxo Metals owns the Challenger Plant,
which is integrated into Tharisa Minerals’
Genesis Plant. The Challenger Plant is
dedicated to the production of speciality
grade chrome concentrates, namely
chemical and foundry grade concentrates.
Speciality grade concentrates carry more
stringent specifications and therefore
fetch a higher selling price. Arxo Metals
has an offtake agreement for the sale of
its concentrates to customers in the
chemical and foundry industries globally.
Arxo Metals accounted for 64.3 kt of
chemical grade chrome concentrate
(2018: 81.9 t) and 15.5 kt of foundry
grade chrome concentrate (2018: 26.0 kt)
in FY2019. The decrease in production
was driven both by the overall reduction
in mining and milling, as well as a
reduced demand for the product in the
chosen markets.
In August 2017, Arxo Metals entered into
an agreement with Western Platinum, a
subsidiary of Lonmin (subsequently
acquired by Sibanye-Stillwater), on the
operations of its K3 UG2 chrome plant
and for the sales and marketing of the
UG2 chrome concentrate produced.
Arxo Metals unlocks greater value from
the K3 UG2 chrome plant using
innovative processing already in use at our
operations. The chrome production for
FY2019 from K3 UG2 chrome plant was
241.1 kt, up from 221.8 kt in FY2018.
Arxo Metals is also the beneficiation,
research and development arm of the
Group. Arxo Metals conducts extensive
research into technologies and
downstream beneficiation opportunities
that have the potential to improve yields
and recoveries at the Tharisa Mine. The
creation of increased value PGM and
chrome products through the expansion
and optimisation of the Group’s
processing operations is its core focus.
Arxo Metals has commissioned a 1 MW
DC furnace to produce PGM-rich alloys
on a pilot scale. The furnace, operated by
Tharisa Minerals, has produced its first
PGM alloy, and is ramping up to full
production.
Metallurgical chrome production is
shipped in bulk and containers via South
African ports to major stainless steel and
ferrochrome producers in China.
The production of PGM-rich alloys will
further develop Tharisa’s beneficiation
capability and thereby the profitability
of Tharisa’s PGM segment.
42 THARISA PLC INTEGRATED ANNUAL REPORT 2019
OPERATIONAL
REVIEW CONTINUED
Arxo Logistics
Arxo Logistics provides an integrated
logistics platform that reduces the risk
and costs of transporting concentrates.
It manages the road transportation of
Tharisa’s PGM concentrates to Impala
Platinum and the long haul transportation
of chrome concentrates from the Tharisa
Mine and K3 UG2 chrome plant to
international customers through bulk and
container vessels. Exports take place via
the Richards Bay Dry Bulk Terminal and
the Durban container port on the South
African coast.
Arxo Logistics has a good relationship
with both South Africa’s transport
parastatals, Transnet and the port
authorities. Arxo Logistics currently has
the exclusive use of the Marikana railway
siding for chrome exports.
Arxo Logistics shipped a total of 1.1 Mt
(2018: 1.3 Mt) of chrome concentrate in
FY2019 mostly to main ports in China,
including third-party materials.
Of this, 99.6% was shipped in bulk with
bulk shipments being preferred by
customers due to ease of handling and
reduced port charges, as well as reduced
levels of administration.
The logistics arm of the Group has the
necessary road and rail transport capacity,
warehousing facilities and port facilities at
the Richards Bay Dry Bulk Terminal and
the Durban container port to manage
Tharisa Minerals’ full production capacity.
It also serves as a platform from which
the Group can provide services to
additional third-party customers.
Arxo Logistics provided third-party
logistics services during the year under
review and is planning to expand this
service offering in the year ahead.
Exploration projects
The Great Dyke in Zimbabwe is a
geological feature of great significance
as it hosts the world’s second largest
deposits of PGMs and chrome, outside
of South Africa’s Bushveld Complex. The
Great Dyke is over 550 km long and up
to 11 km wide. There are two mineralised
horizons, namely the main sulphide zone
(‘MSZ’) and the lower sulphide zone
(‘LSZ’). Current mining operations located
on the Great Dyke exploit the MSZ, while
the LSZ is largely under explored.
Karo Holdings
In June 2018, Tharisa acquired a 26.8%
shareholding in Karo Holdings. Karo
Holdings entered into an investment
agreement with the Republic of
Zimbabwe on 22 March 2018, in terms
of which Karo Holdings has undertaken
to establish an integrated PGM mining
complex. The project will include PGM
mines, concentrators, smelters, a base
metal and precious metals refinery, as
well as renewable power generation
capacity made available to the
Zimbabwe power grid.
Karo Platinum, an indirect subsidiary of
Karo Holdings, applied for and was
awarded PGM rights under a Special
Grant under the Zimbabwe Mines and
Minerals Act, covering an area of 23 903
ha. The licence area is situated on the
Great Dyke in the Mashonaland West
District of Zimbabwe. This area of land
had been released by Zimbabwe Platinum
Mines (Private) Limited from its mining
lease area in support of the government
of Zimbabwe’s efforts to enable
participation by other investors in the
platinum mining industry in Zimbabwe. In
terms of the Special Grant, Karo Platinum
will be entitled to mine PGMs situated
THARISA PLC INTEGRATED ANNUAL REPORT 2019
43
Operational review
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Outlook
We believe the fundamentals for PGMs
and chrome remain solid. Our speciality
chrome products are in demand and
given the premium pricing of this product,
we benefit from stronger margins.
With our solid foundation, we believe the
planned organic and external growth
opportunities are well suited to advancing
our portfolio.
Tharisa’s FY2020 production guidance is
155 koz to 165 koz PGMs (5PGE + Au
basis) and 1.45 Mt to 1.55 Mt of chrome
concentrates.
within the licence area. Karo Platinum will
be responsible for the mine development
and mining operations, which will deliver
ROM ore to Karo Refining. Karo Refining,
a subsidiary of Karo Holdings, will build,
own and operate the concentrators and
smelters, as well as the base metal and
PGM refinery.
Most recently Karo Platinum completed
238 boreholes, comprising 32 400 m
drilled. Drilling has focused on the
western boundary of the Great Dyke,
with average depths of 50 m to 150 m
below surface targeted. Various approvals
have been received. Significantly, the
Zimbabwe Special Economic Zones
Authority has declared a portion of Selous
measuring 50 667 hectares as a special
economic zone. The zone is located on
certain pieces of land covered by special
mining grants issued to a subsidiary of
Karo Holdings.
Karo Holdings, through its subsidiary,
Karo Power, has agreed to identify and
establish a phased development of a
renewable energy source of 300 MW of
solar power, to be fed into the national
grid. Technical and financial partners have
been identified for this project.
Salene Chrome
Tharisa was granted a call option to
acquire a 90% shareholding in Salene
Chrome, exercisable on completion of the
exploration programme. Salene Chrome
was awarded three Special Grants
covering an area of approximately
9 500 ha on the eastern side of the Great
Dyke in Zimbabwe. The Special Grants
entitle Salene Chrome to mine the
minerals thereon, including illuvial
chrome, being at surface chrome fines
generated from seams as a result of
weathering.
In the year under review, Salene Chrome
completed 78 boreholes or 3 000 m of
drilling, the ultimate aim being the mining
of surface chrome and gravity separation
with lumpy product being sold to local
offtakers.
44 THARISA PLC INTEGRATED ANNUAL REPORT 2019
SUSTAINABILITY
Safety and health
Tharisa’s business is reliant on a
healthy, skilled, competent and
committed workforce. The safety
of the Group’s people is of the
utmost importance to Tharisa and
takes precedence over all
production objectives. Tharisa aims
to explore, mine, process, market
and distribute its products to
customers without harming
anyone.
Tharisa Minerals continued to deliver a
solid safety performance which compared
well with the Company’s key industry
peers. In recognition of these
achievements, the Mine Health and Safety
Committee (‘MHSC’) presented Tharisa
Minerals an award for 5 000 fatality-free
production shifts at its process plant
operations and three million fatality-free
shifts for the total Tharisa operations.
Tharisa Minerals’ mining division achieved
two million fatality-free shifts on the
28 September 2019 and the total Tharisa
operations achieved four years fatality
free on the same day.
Tharisa is pleased to report that there
have been no fatalities during FY2016,
FY2017, FY2018 and FY2019. We
endeavour to replicate this performance
at our Zimbabwe operations.
Tharisa became a member of the Minerals
Council in 2018 and as an active
participant in all their structures, joined
the Council’s recently launched the
Khumbul’ekaya “remember home” safety
initiative to ensure that our industry
becomes fatality free.
While open cast operations are
considered safer than underground
mining operations, Tharisa Minerals has
taken extra care to ensure its processes
and policies are adhered to and that
employees are kept well informed of
potential safety hazards through continual
training. Focus continues to be placed on
supervisory training and holding
supervisors accountable for their actions.
The quality of incident investigations is of
utmost importance, ensuring that
corrective and preventive actions focus on
eliminating, redesigning and separating
risks in line with the hierarchy of controls.
The Safety, Health and Environment
(‘SHE’) Committees, at both the holding
Company and operating subsidiary levels,
are responsible for overseeing compliance
with health and safety legislation and
policies. All mining and processing
employees, including contractors, receive
safety training. Where injuries have
occurred, Tharisa Minerals’ focus has
been on completing effective
investigations and root cause analysis to
prevent repeat incidents from occurring.
At 30 September 2019, Tharisa Minerals
achieved 29 175 020 fatality-free hours
and 3 294 453 fatality-free shifts.
The Group employs a safety management
system. The system requires a baseline risk
assessment to identify the major risks at
the operations. These risks are then
examined further by conducting issue-
based risk assessments and continuous
risk assessments with the identification of
appropriate control measures to mitigate
these risks. Measures can include
standards and procedures updates,
operating checklists, as well as training
lesson plans. To ensure compliance, a
system of “over-inspection” by
supervisors and safety staff is
implemented. Further mitigation
measures include visible felt leadership
and ongoing training.
As required by South African regulations,
Tharisa Minerals has established a mine
SHE Committee that approves and
implements all mandatory safety training.
Safety staff oversee inspections of work
performance, site conditions and identify
and allocate any necessary corrective
actions.
Tharisa is committed to the health of its
employees and has implemented a
number of programmes to facilitate
wellbeing among those who work for the
Group. Chief among these programmes is
the Tharisa Minerals’ occupational health
programme, which has as its key focus
tuberculosis (‘TB’), HIV/AIDS, dust
exposure and noise-induced hearing loss.
TB and HIV/AIDS are being addressed via
a strong focus on prevention through
education and awareness initiatives.
Antiretroviral treatment (‘ART’) is offered
through state funded and medical aid
funded resources to eligible persons and
the programme is managed through our
wellness service provider.
SAFETY
0
NUMBER OF FATALITIES
0.00
FATALITY FREQUENCY RATE
(‘FIFR’)
5
SAFETY MILESTONES
11
NUMBER OF MEDICAL
TREATMENT CASES
2
SAFETY AWARDS
9
NUMBER OF LOST-TIME
INJURIES
(‘LTI’)
0.00
TARGET LTIFR
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THARISA PLC INTEGRATED ANNUAL REPORT 2019
45
Safety and health
Human resources
Social development
Human rights
Environment
4
HEALTH
4 660
NUMBER OF EMPLOYEES AND
CONTRACTORS VOLUNTARILY
TESTED FOR HIV/AIDS
536
NUMBER OF EMPLOYEES
WHO TESTED POSITIVE FOR
HIV/AIDS
12%
HIV/AIDS PREVALENCE RATE
AMONG EMPLOYEES AND
CONTRACTORS
5 784
NUMBER OF EMPLOYEES AND
CONTRACTORS SCREENED
FOR TB/SILICOSIS
(VIA MEDICAL SURVEILLANCE
PROGRAMME)
5 784
NUMBER OF EMPLOYEES AND
CONTRACTORS WHO
UNDERWENT HEARING TESTS
(VIA MEDICAL SURVEILLANCE
PROGRAMME)
414
NUMBER OF EMPLOYEES
WHO ATTENDED WELLNESS
DAYS
Data is applicable to
Tharisa Minerals for FY2019
Medical surveillance
programme includes initial,
periodic and exit medicals
for employees and
contractors
The HIV prevalence rate among Tharisa
Minerals’ own employees is 13%. The
prevalence rate, including contractors, is
12%. This information is derived from
medical examinations which all employees
undertake (initial, periodical and exit
medicals) at which employees, including
contractors, are encouraged to undergo
voluntary counselling and testing (‘VCT’).
In addition, Tharisa Minerals employees
attend a Wellness Day and a World AIDS
Day at which VCT engagements are
undertaken. Through these processes,
every employee that tests positive is
provided counselling and is encouraged
to participate in the ART programme.
The Tharisa Minerals Thusanang Wellness
Programme has been running since
December 2011 with the aid of Calibre
Clinical Consultants (‘Calibre’).
“Thusanang” is a Setswana word meaning
“helping each other”. The programme
was designed to provide support,
counselling and training to employees,
their families, and the community about
their lifestyle, wellbeing and work
environments. Campaigns have included
cancer awareness presentations and
World AIDS Day awareness education and
counselling.
The Tharisa Minerals’ Peer Educator
Programme was launched in September
2012. The course trains a group of
employees who champion the
programme and provide further wellness
education to employees and the
community. Tharisa Minerals has 25 active
peer educators and 43 trained peer
educators. In 2019, the peer educators
underwent refresher training.
The Tharisa Mine has also implemented
random testing for drugs and compulsory
testing for alcohol in a bid to ensure the
safety of all of its employees. Employees
who test positive are not permitted on
site and are subject to disciplinary
procedures. They are also offered
counselling and/or rehabilitation. Tharisa
Minerals also initiated an alcohol and
drug support group where employees and
community members can receive the
necessary support in order to overcome
their addictions.
Hearing
The MHSC 2025 Health and Safety
Milestones stipulate that no employee’s
standard threshold shift (‘STS’) should
exceed 25 dB from the baseline when
averaged over 2 000 Hz, 3 000 Hz and
4 000 Hz in one or both ears by
December 2016. This milestone is
monitored during annual medical
examinations. High-noise zone areas have
been identified and Tharisa Minerals
ensures that personnel working in these
high-risk areas are issued with
personalised hearing protection. These
high-noise zones are assessed and
updated annually. The issuing of
personalised hearing protection has been
extended to the medium-risk areas.
All cases of noise induced hearing loss
have been reported to the DMRE as per
the legislated requirements.
The MHSC has also set a December 2024
target where the total operational or
process noise emitted by any equipment
must be below 107 dB (A). Tharisa
Minerals has achieved this target.
Engineering staff continue to ensure that
all new equipment meets this
requirement.
Tuberculosis
Tharisa Minerals actively campaigns to
increase awareness of TB and its
symptoms. These campaigns encourage
all employees, including contractors, to
participate in screening.
The MHSC’s 2025 milestones aim to
reduce the rate of TB among mineworkers
to the national incident rate or below.
Tharisa Minerals’ interventions to address
and reduce TB among its workforce
include increased TB screening, TB
awareness campaigns, questionnaires to
identify symptoms and the enlisting of
trade union involvement in and
commitment to improving TB awareness
and lowering incident rates among
employees and their families.
TB screening is done on an ad hoc basis
and during the occupational medical
examinations. Sputum tests are
conducted on employees who are
potentially at risk of having TB.
Where isolated cases of TB have been
detected, however, the outcomes of the
investigations have indicated that they
were non-work-related cases. The
individuals were treated and have all
returned to their working environments.
46 THARISA PLC INTEGRATED ANNUAL REPORT 2019
SUSTAINABILITY CONTINUED
Safety and health continued
To further prevent the spread of TB,
contact screening is being done on
employees who may have been exposed
to the disease by being in contact with
other employees working in the same
homogenous exposure group as
themselves.
All cases of TB have been reported to the
Medical Bureau of Occupational Diseases,
Compensation for Occupational Injuries
and Diseases and the DMRE as per the
legislated requirements.
HIV
As legislated, HIV screening at Tharisa
Minerals is voluntary. Tharisa Minerals
actively campaigns to increase awareness
of HIV, its cause, its symptoms and
treatment. All employees, including
contractors, are encouraged to participate
in the screening.
All of Tharisa Mine’s employees are
offered haematocrit blood tests annually
and all eligible employees are counselled
and asked if they would like to join an
ART programme, which is run and
managed by a third-party service provider,
Calibre. Tharisa Minerals, the
Occupational Medical Practitioner and
Calibre work together to increase the
uptake of ART. These interventions
include pre- and post-test counselling,
awareness programmes, roadshows and
are a focus of the Peer Educator
Programme. HIV statistics are based on
HIV testing done during medical
examinations.
Furthermore, Tharisa Minerals has a
Community Peer Educator who conducts
home visits in the community and health
campaigns are being conducted in the
community by the service provider. The
main objective is to help prevent HIV in
our community as well as make an impact
against the stigma attached to HIV. This is
done through community outreach and
the distribution of HIV and TB information
as well as information on where to seek
assistance. The Tharisa Mine also
distributes condoms in the community
shops and taverns. Tharisa Minerals has a
Wellness Clinic, which will make the
Employee Assistance Programme (‘EAP’)
programme more accessible to both
employees and community members.
Silicosis
In compliance with the MHSC 2025
Health and Safety Milestones, levels of
respirable crystalline silica have to be
reduced in 95% of all individuals
(not averages) to below occupational
exposure limits (‘OEL’) of 0.05 mg/m3 by
December 2024. Tharisa Minerals is using
quality dust masks and compliance is
monitored during visible field leadership
and inspections. Tharisa Minerals
complies with the 95% milestone as
stipulated.
Wellness campaigns
A TB campaign awareness presentation
was held in March 2019, where
employees were encouraged to
participate in an education programme.
Other campaigns and interventions
successfully held in the year under review
include:
Sexually transmitted infection (‘STI’)
awareness presentation – February 2019
Community STI awareness –
February 2019
Community TB campaign – March 2019
Wellness Days – September 2019
An innovative approach to safety
performance
Over the last three years, Tharisa has
evolved its safety culture from one of
compliance to one that places the
individual at the heart of safety, as
part of a system which sees safety
driven by values. This innovative
approach differs from industry norms
in that it allows individuals to own
their safety programme.
Tharisa Minerals’ core values – care,
safety, empowerment, integrity and
innovation have supported this
success. By placing people at the
heart of the safety management
system, the value of care
is brought into effect to support
safety performance.
This approach has paid off with one
of the lowest LTIFRs in the South
African mining industry. Tharisa
Minerals was recognised with the
2019 Chrome Dinner Safety Award,
and Tharisa Minerals’ soccer team
won the most organised team at the
South African Mining Soccer
Association awards, a strong
indication of the teamwork,
camaraderie and focus that the
Tharisa Mine’s people bring to their
work and safety in particular.
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47
Safety and health
Human resources
Social development
Human rights
Environment
4
HUMAN RESOURCES
91%
HDSA
100%
HDSA MANAGEMENT
(TOP MANAGEMENT PETERSON GRADE F)
44%
HDSA MANAGEMENT
(SENIOR MANAGEMENT PETERSON GRADE E)
1 747
NUMBER OF PERMANENT EMPLOYEES
1 079
Human resources
Tharisa’s employees are the heart of its business and operations.
Employees are vital to the Group’s success and crucial to its future.
Aligning individual growth to corporate growth fosters a positive
environment in which all individuals seek to be part of the Group’s
success.
Employees
To ensure that Tharisa Minerals has the
right people in the right roles doing the
right work, employees are efficient,
effective, engaged and attuned to the
culture and values of the organisation.
Various workshops have been held with
the senior and middle management to
discuss Tharisa’s strategy. These
meaningful engagements resulted in the
formulation of departmental goals to
assist the Company in attaining planned
volumes, and to increase recoveries.
Subsequent to the announcement that
Tharisa Minerals was to implement its
vision of becoming an owner miner in
FY2018, the employees were transferred
to Tharisa Minerals’ business as from
1 May 2017 and 1 October 2017. The
departmental goals mentioned above
were further rolled out and cascaded
down to the entire workforce, including
the mining divisions, through workshops.
This approach aids in the alignment of the
workforce to the vision, culture and
values of Tharisa Minerals. As emanated
from the concluded wage negotiations
post-2018 financial year, the
Harmonisation Task Team consisting of
management and majority trade union
stakeholders concluded terms of
reference with an objective to harmonise
the conditions of employment. The next
round of wage negotiations will be held
in the 2020 financial year.
Human Resources Development
(‘HRD’)
Built on the solid foundation of
accreditation by the Mining Qualifications
Authority (‘MQA’), 41 of the 43 registered
mineral processing learners have passed
their examinations and obtained an
NQF Level 2 qualification. As part of the
quest for zero paper usage, the training
centre has added standard operating
procedures (‘SOPs’) for all occupations to
the CBT grid. Re-certification of
ISO 9001:2015 has also been achieved
by the training centre.
The subscription to the notion of being
a “learning organisation” is demonstrated
by 67% of Tharisa Minerals employees
having approved individual development
plans. A total of 239 mining employees
were trained on the A-B-C of Mining,
blasting ticket, trackless mining machinery
skills programme and original equipment
manufacturer technical competency.
Educational assistance is also given to
employees. The organisation’s culture is
maintained through structured
interventions like “Care and Growth”
and “Grow to Care”.
Enrolment for AET has grown from 82
learners to 224. The table below shows the
AET enrolment statistics for both own
employees and community members in
FY2019:
AET level
Enrolments Completed
NUMBER OF PERMANENT CONTRACTORS
0
LOST DAYS TO LABOUR ACTION
21%
WOMEN
51.3%
AMCU
9.7%
NUM
Level 1
Level 2
Level 3
Level 4
(NQF level 1)
50
46
71
57
9
9
11
13
Skills programme
Tharisa Minerals is passionate about
improving the skills and knowledge of its
employees and has consistently
demonstrated compliance with legislation
by submitting workplace skills’ plans and
annual training reports timeously over the
past two years. This year Tharisa Minerals
spent 5.0% of its wage bill on training and
development, an amount of
US$3.5 million. This spending included
training in SOPs and is well above South
Africa’s regulatory requirement of 1.0% of
a company’s total salaries or wage bill to be
paid monthly to the skills development levy.
Learnerships
The primary aim of the learnership
programmes is to enable a learner to
assume a higher level of responsibility in
the workplace. These learnerships also tend
to facilitate the entry of historically
disadvantaged South Africans (‘HDSAs’)
48 THARISA PLC INTEGRATED ANNUAL REPORT 2019
SUSTAINABILITY CONTINUED
Human resources continued
In FY2019, Tharisa Minerals had 20 interns
and graduates from local communities
specialising in the following disciplines:
(cid:3)• mining
(cid:3)• metallurgy
(cid:3)• engineering (mechanical, electrical and
chemical).
During FY2019, 20 vacation students from
various tertiary institutions completed their
vacation work requirements at the Tharisa
Mine.
Tharisa Minerals’ bursary scheme allows
selected learners (excluding employees) to
study full time. Employees wishing to
further their studies do so on a part-time
basis. In FY2019 there were three bursaries
awarded, and 20 employees studying at
different institutions in South Africa.
Training centre
As a centre of excellence, the training
centre facilitates skills development via
a number of statutory and developmental
training interventions. Full accreditation
from the MQA was received and migration
to ISO 9001:2015 was achieved in July and
September 2018 respectively. As a result,
most of the training interventions are
sourced internally.
Black Economic Empowerment
Tharisa Minerals complies with the HDSA
ownership criteria in the Mining Charter,
through Thari Resources and the Tharisa
Community Trust holding 20.0% and 6.0%
unencumbered equity interests in Tharisa
Minerals respectively.
Tharisa Minerals’ compliance with the
Mining Charter extends beyond the
ownership criteria, to black representation
in management, procurement from
black-owned companies and a
commitment to surrounding communities.
into the mining and minerals industry.
Tharisa Minerals’ learnership programmes
comply with the NQF for the particular field
of study. These learnerships are registered
with the MQA and will be demand led, in
that they will address the identified
educational and workforce needs of the
Company. The current learnership
programmes are provided to employees of
Tharisa Minerals and members of the local
community.
The learnership programme includes, but is
not limited to:
Mining programme – a learner miner will
undergo training at the training centre and
practical on-the-job training will be done at
the mine to equip the learner to manage a
production section. Depending on the
competence of a learner, it takes a period
of 12 months to qualify as a miner.
Engineering programme – learners
participating in the engineering programme
are divided into electricians, fitters,
boilermakers, millwrights, instrumentation
and diesel mechanics. A competent
engineering student takes a period of three
years to complete their training as an
artisan.
Tharisa Minerals had 22 learners in the
learnership programme during FY2019.
Internships and bursary plans
The internship and bursary plan supports
the skills development plan and provides
opportunities for entry into and
development in the professional disciplines
of engineering, mining, metallurgy and
other professional fields.
Through its SLP, Tharisa Minerals has
developed an internship and bursary plan
which conforms to the skills development
plan, and which focuses on building
capacity in various skills and careers for
HDSAs. Through offering internship
opportunities to unemployed graduates,
Tharisa Minerals increases these
participants’ chances of finding
employment in the future.
The Tharisa Mine offers experiential
training for students who are in the tertiary
education system in the core mining
disciplines. These internship students
receive a stipend of ZAR7 000 per month,
per student, in line with the regulations
stipulated by the MQA.
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TRAINING AND
DEVELOPMENT
5 343
EMPLOYEES AND
CONTRACTORS RECEIVED
INDUCTION
224
NUMBER OF EMPLOYEES AND
COMMUNITY MEMBERS ON
AET PROGRAMMES
24
INTERNS AND GRADUATES
20
EMPLOYEES AWARDED
STUDY ASSISTANCE
US$3.48 m
TOTAL SPEND ON TRAINING
Social development
Tharisa is committed to the
socioeconomic upliftment of the
host communities in which it
operates and strives to minimise
potentially negative social
impacts while promoting
opportunities for the local
communities in its areas of
operation. Tharisa Minerals is
committed to community
initiatives through its SLP in
South Africa, which addresses
job creation, poverty alleviation,
basic infrastructure, education
and development needs. We
have also begun the process of
assessing the potential
requirements of host
communities around our
operations in Zimbabwe.
Community
Tharisa Minerals is situated in the
Bojanala District Municipality within the
Rustenburg Local Municipality, close to
the town of Marikana. The Tharisa Mine’s
immediate neighbour is the community of
Mmaditlhokwa. Approximately one-third
of employees at the Tharisa Mine are
from this community.
Tharisa Minerals’ strategy for social and
economic advancement of host
communities is informed by the local
municipality’s Integrated Development
Plan and is translated into action through
local initiatives incorporated into the
mine’s SLP. Key municipal initiatives
include local economic development
projects, bursary awards to local
qualifying Grade 12 students, internships,
work integrated learning opportunities,
and apprenticeship opportunities for
youth.
Community relationships
Tharisa Minerals prefers to work directly
with its host communities rather than
through charitable organisations. In this
way, Tharisa Minerals engages more
immediately and in greater depth with
these communities.
Within Ward 32, the municipal area in
which Tharisa Mine operates, there are a
number of villages and smallholdings. This
has resulted in a diverse range of
stakeholders ranging from employee
families to farmers. Tharisa Minerals has
engaged with both the small farm owners
and communities in a bid to address their
diverse needs and cultures.
The small farm owners have formed a
representative engagement structure
while the broader community is
represented by an elected ward
committee, led by a ward councillor.
In FY2018, this structure was expanded
to include an additional three wards and
tribal authority representation that
surrounds the mine. This resulted in a
more inclusive engagement forum, which
meets quarterly to address the issues that
impact both Tharisa Mine and the
communities.
Monthly meetings are held with the ward
committee to address issues affecting
both Tharisa Mine and the surrounding
communities.
Mine management is proactive in building
and maintaining stakeholder relationships
with the local communities and a
dedicated management team has been
mandated to monitor, measure and
manage the social and economic impacts
in terms of the SLPs and other CSI
initiatives.
Tharisa Minerals has an established
engagement forum, which liaises with the
steering committee for the local
community neighbouring Tharisa Mine.
On a more formal level, Tharisa Minerals
maintains its relationship with the
community through a dedicated
community liaison officer and via
engagement forums, which include the
local municipality.
SLP and CSI
Tharisa Minerals continues its
commitment to community initiatives
through its SLP to address job creation,
poverty alleviation, basic infrastructure
and education and development needs.
Tharisa Minerals also supports informal
enterprise development through
engagement forums in the community.
Consistent with its corporate and social
responsibility, the Group established the
Tharisa Community Trust, which holds a
direct unencumbered 6.0% equity
interest in Tharisa Minerals, for the
benefit of the local community in which
Tharisa Mine is located.
50 THARISA PLC INTEGRATED ANNUAL REPORT 2019
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Social development continued
Tharisa Minerals aims to recruit from the
local communities and surrounding areas
to the fullest extent possible. To this end,
a number of programmes have been
implemented to train the youth in the
communities to provide them with the
necessary skills to make them employable,
not only by Tharisa Minerals, but also by
other mines in the area.
During FY2019, 36 community members
completed AET modules training provided
by Tharisa Minerals. This training was at
no cost to the beneficiaries. Other
development interventions include the
award of 22 engineering learnerships
(2018: 4). The learnerships were awarded
to members of the local community. On
completion of their training, these
learners will qualify as artisans. Interns are
recently qualified graduates who require
workplace experience prior to entering
the job market. Although the interns are
sourced nationally, in FY2019, 12 of 20
interns and graduates were from the
North West province, the province where
Tharisa Mine is located.
Being a mechanised operation, Tharisa
Mine is not labour intensive, making it
impossible for Tharisa Minerals alone to
meet the employment needs of its local
communities. Tharisa Minerals, in
collaboration with the local communities,
has established a database of candidates
from which participants are identified for
recruitment and training interventions.
Regular feedback is given at the inclusive
stakeholder forum relating to recruitment.
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Human rights
Tharisa is committed to the upholding of human rights. It is
vehemently opposed to modern slavery and human trafficking and
undertakes to ensure that none of its businesses are, or ever will be,
involved in human rights violations. It endeavours to raise
awareness of human rights among its staff, suppliers and the
communities in which it operates.
colleagues or practices within the
business or supply chain, without fear
of reprisal. It is overseen independently
and operates 24 hours a day, seven days a
week, 365 days a year.
Recruitment policy
Tharisa has a robust recruitment policy in
place to ensure that potential employees
are screened ahead of joining the Group.
The recruitment process ensures that
suitable candidates are selected.
Candidates are asked to grant their
permission to conduct the necessary
background checks during the screening
process. This allows the Group to
safeguard against human trafficking and
ensures individuals are not being forced
to work against their will. All D band
employees undergo psychometric
evaluation as part of the recruitment
process.
Code of business conduct
The code reaffirms the high standards of
business conduct required of the Group’s
employees, officers and directors. It was
developed as part of Tharisa’s continuing
efforts to ensure that it complies with all
applicable laws and that it has an
effective programme to prevent and
detect violations of law, and for the
education and training of employees,
officers and directors.
While Tharisa does not consider there to
be a risk of slavery or human trafficking
within its operations or supply chain, it
does proactively ensure that all of its
suppliers comply with local and
international legislation through risk
identification, policies and due diligence
processes carried out as part of its
business supply chain management.
Supplier management
Tharisa’s goods and service suppliers are
closely managed by the Group through its
financial and procurement departments.
All new suppliers undergo a rigorous
vetting process, which includes bank and
background checks before they are
permitted to become an approved
supplier or vendor. Tharisa maintains
good relationships with its suppliers and
encourages open dialogue so that any
potential risks to either business can be
identified as they arise.
Anti-corruption policy
Tharisa does not tolerate corruption,
fraud and bribery and does not allow
donations to any political parties by its
operations. The Group’s anti-corruption
policy is built into its Code of Business
Conduct and Ethics. It outlines potential
risks, steps to mitigate the risk of bribery
and corruption, and a reporting guideline.
A detailed bribery risk assessment is
performed regularly to determine whether
further mitigation measures are needed
to stamp out any unlawful behaviour. All
employees, suppliers and other associated
persons are made aware of these policies
and procedures with regard to ethical
behaviour, business conduct and
transparency.
Whistleblower policy
The safety and ethics hotline was
established with the aim to enhance an
honest work ethic and simultaneously
provide employees with a mechanism to
bring any unethical business practices or
safety concerns to the attention of
management. The hotline allows
employees to raise concerns about
untoward conduct, the treatment of
52 THARISA PLC INTEGRATED ANNUAL REPORT 2019
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Environment
ENVIRONMENT
175 329 MWh
TOTAL ENERGY CONSUMPTION
2 235 100 tCO2e
TOTAL CO2 EMISSIONS (SCOPE 3)
US$13.1 m
CUMULATIVE REHABILITATION
PROVISION
4 082 908m3
TOTAL WATER CONSUMPTION
Mining by its very nature has
an impact on the environment.
Tharisa aims to manage and
mitigate its impacts in an
environmentally responsible
manner and to ensure the
wellbeing of all stakeholders.
Growing regulatory and social
pressures, increasing demands
for limited and threatened
natural resources and changing
energy and water costs all
highlight the business
imperative of responsible
environmental management.
Environmental management involves
taking measures not only to address
security of resource supply (through
efficiency and recycling), but also to
actively minimise the Group’s impacts on
natural resources and on the communities
around its operations. Taking such
measures has direct benefits in terms of
reduced costs and liabilities, enhanced
resource security and improved security
of its licence to operate.
Tharisa Minerals’ Environmental
Management Programme (‘EMP’) aims
to minimise its impact on the natural
environment and reduce its consumption
of scarce natural resources. Tharisa
believes that its commitment to
responsible mining and beneficiation
helps it achieve its strategic goals and
also establishes a sustainable competitive
advantage.
A precautionary approach is exercised in
all processes and this includes the
exploration, planning, licensing,
construction, operation, closure and
rehabilitation stages of all operations and
projects.
Tharisa Minerals has the relevant and
applicable environmental authorisations
required for its licence to operate,
including an approved Environmental
Management Programme Report (‘EMPR’)
in terms of MPRDA, a positive Record of
Decisions in terms of National
Environmental Management Act (No. 107
of 1998) (‘NEMA’) and an Integrated
Water Use Licence (‘IWUL’) under the
National Water Act (No. 36 of 1998)
(‘NWA’).
In Zimbabwe, we are fully compliant with
all relevant legislation governing the
environment, including the Environmental
Management Act of 2007, and all
relevant legislation covering air quality,
emissions, land-use planning, soil
conservation/soil improvement, waste
management, hazardous substances,
hazardous waste, water quality standards
and biodiversity.
Tharisa’s material environmental matters
are:
(cid:3)• resource management, particularly
energy use and water availability
(cid:3)• land management, including
biodiversity conservation, rehabilitation
and closure planning
(cid:3)• environmental compliance – ensuring
that operations remain legally
compliant with new and changing
legislation
(cid:3)• managing and minimising waste
streams
(cid:3)• implementation of the new regulations
on financial provisions for rehabilitation
– ensuring compliance and appropriate
funding mechanisms to provide
adequately for concurrent
rehabilitation, as well as rehabilitation
at mine closure and post-closure stages,
to be implemented by February 2020
(cid:3)• climate change and the effects thereof.
Water management remains a key
challenge for Tharisa Minerals’ operations.
While water scarcity is not currently a
challenge, it does pose a potential
constraint on current production and
future expansion, and water availability
is a concern for local communities. The
reliability of current water infrastructure
and the long lead time in rolling out new
infrastructure is a risk for current
operations and future expansion plans.
Tharisa Minerals is also dependent on a
reliable and sufficient supply of energy.
Interruptions to energy supply have the
potential to affect production efficiencies
and can impact the safety of workers.
The potential reputational and financial
implications of non-compliance with the
rapidly evolving environmental regulatory
framework are significant as are the direct
and indirect costs of ensuring compliance.
Proposed legal developments, among
others, that are likely to have a significant
impact on the business include the
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Carbon Tax Bill, the Greenhouse Gas
Reporting Regulations, Company level
carbon budgets and the revised financial
provisions for rehabilitation and closure.
Climate change is recognised in the
mining industry as one of the most
material issues that can have potential
impacts on its ability to achieve its
milestones through its effect on energy
prices, access to natural resources,
weather-related production disruptions
and related impacts on its value chain.
The Board ultimately holds responsibility
for sustainable development and
delegates the monitoring of this area to
the SHE Committees at both the Tharisa
Group and the Tharisa Minerals Board
level. The Environmental Coordinator,
together with the SHE Manager, is
responsible for managing and reporting
on environmental performance, impacts
and mitigation, as well as ensuring that
all operations are legally compliant with
the applicable environmental legislation
and associated regulations. This is further
driven through the functional reporting
structure where the SHE Manager reports
to the Head: Sustainable Development,
who has a direct reporting line to the
Group Chief Technical Officer and the
Group Chief Operating Officer. The SHE
policy is reviewed annually and was
revised and signed off by the Chief
Technical Officer and union
representatives on 26 August 2019. The
policy is being effectively implemented at
mine level. Employees and contractors
receive environmental training at their
initial induction and through regular
refresher courses and job-specific training.
Tharisa Minerals monitors its
environmental compliance on an ongoing
basis, including the status of its EMPR,
IWUL and environmental impact
assessments (‘EIAs’). In addition to
internal operational compliance
monitoring, external environmental
compliance audits are conducted
biennially (or as specified in the respective
environmental authorisations) and as part
of the Board’s instruction to monitor
compliance in areas of safety,
occupational health and environmental
management.
Environmental expenditure for measuring,
monitoring and mitigating risks and
impacts represents a sizeable proportion
of the operations’ operating and capital
budgets. In the year under review,
ZAR12.1 million was spent on
environmental management including,
among others, pollution control and
prevention and environmental operational
expenditure (2018: ZAR9.0 million).
There were no significant fines or
non-monetary sanctions for non-
compliance with laws and regulations
in the year under review.
Water management
Water is used at the Tharisa Minerals
operations for milling, beneficiation and
for dust suppression during blasting, on
haul roads and at ore transfer points. The
operation is situated in a water scarce
region of the North West province of
South Africa, where water conservation
is a priority for all the mining houses in
the area. Tharisa Mine has undertaken to
educate the community and employees
on the importance of conserving water
as a natural resource and security of
supply is the mine’s prioritised business
risk. This is achieved through the use of
posters and banners strategically placed
inside the mine and in the neighbouring
community of Mmaditlhokwa, which has
assisted in creating a greater awareness
of this invaluable resource.
Water for the Tharisa Mine operation is
sourced from boreholes strategically
drilled within the mining right area, the
regional water utility, an allocation from
the Buffelspoort Irrigation Scheme (strictly
for agricultural usage), a portion from
Randwater and water pumped from the
open cast pits during mining.
All water is reused and recycled as far as
practically possible to achieve effective
and efficient utilisation of water resources
based on reducing water demand, reusing
process water and preventing any
discharges to the environment. Dirty and
clean water is separated, and Tharisa
Minerals implements a hierarchy of water
use to ensure that “dirty” or process
water is recycled for reuse in the
operations before clean water is
abstracted from the natural environment.
Water consumption is metered as required
by Tharisa’s IWUL and regular reporting of
the quality and quantities of the mine’s
water is submitted monthly, (when
necessary), quarterly and annually,
respectively, to the Department of Water
and Sanitation (‘DWS’).
The drought conditions experienced
regionally have impacted the availability of
water in surface impoundments at the
operations. This has required Tharisa
Minerals to be more reliant on
groundwater and thus increased its
borehole water consumption during the
year under review.
Tharisa Minerals has submitted an
application to amend its IWUL, which
includes both minor amendments to the
licence as well as new water uses. The final
technical report in support of this
amendment application was submitted
to the DWS in September 2017 and
although constant liaison is being
maintained with DWS in this regard, the
approval thereof is still outstanding. Tharisa
Minerals is optimistic that its application
will be approved soon.
Tharisa Mine provides water for the nearby
community of Mmaditlhokwa by drilling
and equipping boreholes to supply water
for domestic purposes. The pumped water
is then piped and purified using on-site
purification systems located in the
community.
Water quality is monitored to assess the
impact on the receiving environment, to
immediately warn management when
mitigation action is required and to
measure compliance with the IWUL
conditions. Ground and surface water
levels and quality are monitored regularly
by biomonitoring of aquatic/riverine
environments as appropriate and as
stipulated in the IWUL conditions.
Materials
Measuring explosives used is important,
as explosives contribute to greenhouse
gas (‘GHG’) emissions. The following
materials were consumed at Tharisa
Minerals’ operations during the year:
Consumed
materials
FY2019
FY2018
Explosives (t)
10 597
11 878
54 THARISA PLC INTEGRATED ANNUAL REPORT 2019
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Energy
A consistent supply of electricity is critical
for efficient operations. Electricity is
sourced from the existing Eskom supply.
From Tharisa Mine’s on-site substation,
power is distributed throughout the
operations. The most significant impact
electricity supply interruptions have on
operations are on workplace safety,
production efficiencies and diesel
consumption with resulting emissions
when generators are used to supply
electricity to critical functions.
Tharisa Minerals’ direct and indirect
energy consumption has been calculated
as part of its GHG inventory in December
2018. Fuels consumed in operations
include diesel, acetylene and liquid
petroleum gas (‘LPG’). Diesel is the most
used fuel at 28.7 million litres in FY2019
and accounts for 99% of carbon
emissions from fuel use.
Tharisa Minerals’ indirect energy
consumption is from grid electricity. For
the year under review, Tharisa Minerals
used 175 329.7 MWh of electricity.
Managing energy consumption also
reduces GHG emissions since electricity
for South African operations is generated
mainly from fossil fuels and is included in
Scope 2 emissions below.
Carbon emissions
The GHG inventory for Tharisa Minerals
was calculated for the base year in
December 2016. These calculations have
been updated for FY2018 and will be
used to conduct energy optimisation
studies and to set practical energy and
emission targets to drive reductions in the
operations. These calculations are based
on the Greenhouse Gas Protocol –
Corporate Standard (GHG Protocol),
published by the World Resources
Institute and World Business Council for
Sustainable Development in March 2004.
GHG emissions are measured and
reported in terms of Scope 1, Scope 2
and Scope 3 emissions. Direct GHG
emissions (Scope 1) are emissions from
sources that are owned or controlled by
Tharisa Minerals. These include the
emissions generated by the fuels that are
purchased and subsequently combusted
by the Tharisa Mine. Energy indirect GHG
emissions (Scope 2) are from the
consumption of grid electricity.
Other indirect GHG emissions (Scope 3)
are the emissions (other than energy
indirect GHG emissions) that are created
as a result of Tharisa Minerals’ activities
but occur at sources owned or controlled
by another company. These emissions will
include the emissions generated by the
mining contractors on site, by the
combustion of fuels that they purchase
(emissions from explosives) and fuel
consumption. Other indirect emissions
can either occur upstream or downstream
of business operations. Upstream
emissions are typically related to
purchased or acquired goods and services.
Downstream indirect GHG emissions are
those pertaining to sold goods and
services.
The GHG inventory for FY2018 is
provided in the infographic below. The
assessment for FY2019 will be conducted
from December 2019.
Emission sources: FY2018
DIRECT EMISSIONS
Direct emissions relate to fuel
combustion emissions. The direct
emissions of Tharisa Mine are
relatively small, as most of the fuel
purchases are undertaken
by contractors
INDIRECT EMISSIONS
Electricity indirect emissions
are related to the electricity
consumption at the mine.
It is relatively high due to the
predominantly coal-fired and
emissions intensive electricity
grid in South Africa
Indirect emissions relate to
emissions upstream and
downstream in Tharisa Mine’s
value chain. Much of Tharisa’s
operations were contracted out
and thus most of Tharisa’s emissions
are indirect
Fuel combustion
Purchased electricity
Other indirect emissions
Processing of
sold product
Fuel and energy
related activities
Downstream
transportation
Scope 1
84 000
tCO2e
Scope 2
156 200
tCO2e
Scope 3
2 235 100
tCO2e
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An additional water bowser was acquired
to cater for dust suppression at the
tailings facility. Dust suppression trials
were undertaken in 2019 to determine a
solution best suited for managing finer
dust particles at the tailings.
Waste management
Tharisa Minerals manages its activities to
ensure compliance with the relevant
waste legislation and to minimise its
impact on the natural environment and
surrounding communities. Tharisa
Minerals’ current activities and
infrastructure do not trigger the
requirements for a Waste Management
Licence (‘WML’) as stipulated in the
National Environmental Management
Waste Act (‘NEMWA’). However, for the
planned expansion projects an application
for a WML was submitted in
September 2018 to the relevant
regulatory authorities for the tyre storage
facility, sewage treatment plant and waste
rock dump as well as the tailings storage
facility.
Domestic waste generated at the
operations is disposed of in licensed
municipal landfill sites. Hazardous waste
such as used oil is recycled through
specialist service providers while other
hazardous waste such as oil contaminated
material and used filters is sent to
registered waste disposal facilities and
safe disposal certificates are obtained.
Mineral waste produced by the operations
includes tailings and waste rock. Waste
rock is non-ore bearing rock removed in
the mining process and is disposed of on
waste rock dumps or used to backfill
open pit workings to rehabilitate and
minimise aesthetic impact. Tailings
generally consist of finely milled waste
material suspended in water and are
disposed of in tailings dams. These dams
Tharisa Minerals’ direct (Scope 1)
emissions for FY2018 amounted to
84 000 tCO2e. Diesel purchased and
consumed directly by the mine decreased
by 5% in FY2018 when compared to
FY2017.
Energy indirect (Scope 2) emissions
amounted to 156 200 tCO2e. Electricity
consumption reduced by 4% between
FY2017 and FY2018. This change is
related to the increasing levels of
renewable energy being fed into the
national grid, which subsequently reduces
the carbon intensity of the grid electricity
and hence results in decrease in the grid
emission factor.
Tharisa commissioned a report from
advisory firm Deloitte to fully understand
the possible impact of carbon tax on the
business. The key finding is that:
“Tharisa Minerals will not
have a carbon tax liability, as
all emissions from diesel
consumption will be paid as
part of the fuel levy paid at
the pump.”
There are no processes or fugitive
emissions source codes that describe the
primary processing of PGMs or chrome
that takes place at Tharisa.
Overall, Tharisa Mine’s Scope 3 emissions
increased by 13% to 2 235 100 tCO2e in
FY2018 compared to FY2017 levels due
to an increase in the quantity of chrome
produced in these respective years. The
processing of sold products is the largest
contributor to Tharisa Mine’s Scope 3
emissions, comprising 89% of Scope 3
emissions.
As a result, Tharisa Minerals will have a
purely administrative burden in respect
of carbon tax. Tharisa Minerals, will
however, be required to register, licence
and submit an annual return, based on
the South African Revenue Service rules.
It is important to note that some of the
legislation governing these areas is still in
draft form and may change.
Air quality
Dust originating from mining and
processing operations is rigorously and
continuously monitored, both in terms of
occupational health (dust that may
contain silica and that is harmful to
health) and fall-out dust (particulate
matter/fugitive dust). Fugitive dust is
monitored at various locations within the
operation as well as specific sites in
neighbouring areas, to ensure compliance
with applicable legislation. A dust
suppression spray system through the use
of water bowsers reduces fugitive dust
levels from the respective crushers,
conveyors and transfer points. In addition,
Tharisa Minerals applies a dust
suppressant on its access roads to further
reduce the mine’s dependence on water
for dust suppression.
Carbon tax
South Africa is a significant global emitter
of GHG, with an ongoing reliance on
fossil fuels. The country is therefore
required to honour international emission
reduction commitments and reduce its
GHG emissions in line with the National
Development Plan (‘NDP’) policy
framework.
As part of these commitments, the South
African Carbon Tax Act was passed in
Parliament on February 19, 2019. The Act
includes a ZAR120 per tonne carbon tax
for primary GHG emitters, a carbon tax
on liquid fuels, economic incentives for
energy efficiency and carbon offsets to
reduce the tax burden and it will be
introduced in a phased approach.
Investor sentiment around the impact of
the tax has been largely muted for Phase
One, owing to carbon allowances and
offsets, which will result in an effective
tax rate of between ZAR6 and ZAR48 per
tonne. Phase Two, from 2022 onwards,
will see a higher tax as the programme
aligns with global rates.
56 THARISA PLC INTEGRATED ANNUAL REPORT 2019
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Environment continued
FY2019
FY2019
11.1
3.5
697.6
330
258.9
10.8
2.1
525.9
82.7
271
Mm3
Mm3
t
kℓ
t
The EIA and the EMP include land-use
planning that involves engagements with
community forums, local municipalities
and other affected stakeholders.
Awareness training is planned for
employees, contractors and communities
regarding sensitive and endangered
species around the operation.
are lined appropriately to prevent
pollution of groundwater. Groundwater
around tailings disposal facilities is closely
monitored and groundwater modelling
assists in predicting the potential impact
of tailings disposal on aquifers.
Waste produced
Waste rock
Tailings
Domestic waste
Ongoing monitoring of surface water
runoff and groundwater in the vicinity of
the infrastructure alerts operations to any
negative impact from waste disposal.
Tharisa Minerals has the relevant
authorisations for the disposal and
storage of both tailings and waste rock.
Waste inventories describing the source,
volume, and type of waste generated by
each process at the operation, as well as
the disposal method, are being managed
and give management a better sense of
volumes of waste generated on site to
effectively manage the waste generated.
In the next financial year, the focus will be
on operational efficiencies, which will
include reducing the amount of waste
produced as well as recycling wherever
possible, including paper, oil and scrap
metal.
Hazardous waste: used oil
Hazardous waste: other
Biodiversity
Mining has a direct impact on the physical
environment and both mining and
beneficiation can affect the biomes in
their vicinity. Ensuring that the processes
and controls are in place to safeguard the
biodiversity in the biomes in which Tharisa
Minerals operates is an important aspect
of its sustainability model. Biodiversity
Action Plans (‘BAPs’) are in place at the
operations and were compiled as part of
the initial EIA process. Tharisa Minerals is
currently implementing the biodiversity
management programmes. The BAPs
include commitments to conserve
protected areas such as wetlands, zones
of endemism, archaeological and heritage
sites and protected and endangered
species.
Case study: Environmental education
The 22 May was proclaimed the International Day for Biological Diversity. The 2019 theme was “Our Biodiversity, Our Food,
Our Health”. The theme aimed to spread awareness on biodiversity as the foundation for our food and health. The theme
also celebrated the diversity provided by our natural systems for human existence and wellbeing.
From individual species through to entire ecosystems, biological diversity is vital for human health and wellbeing. The quality
of the water we drink, the food we eat and the air we breathe all depend on keeping the natural world in good health.
To increase understanding and awareness of biodiversity issues, Tharisa Minerals’ environmental department in collaboration
with the SLPs, celebrated the day in Machadam Secondary School raising awareness among grade 11 and 12 learners. Some
of the topics covered were the meaning of biodiversity, the importance of biodiversity, threats faced by biodiversity as well as
the role each one of us can play in protecting biodiversity. Tharisa Minerals also donated biodiversity banners, food and
back-packs to learners.
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THARISA PLC INTEGRATED ANNUAL REPORT 2019
57
Safety and health
Human resources
Social development
Human rights
Environment
4
Case study: Bee project
Tharisa Minerals has adopted an innovative approach to reducing its workforce’s interaction with bee populations around
the Tharisa Mine.
Recognising the critical importance of bees to the local ecosystem, the Tharisa Minerals safety team created a three-phase
solution which prevents the workforce from encountering potentially dangerous bees, and stops the bees being removed in
a manner which may impact the local ecology.
The Tharisa Minerals safety team first created “lure boxes” to attract local bee populations. The boxes are then removed by
trained Tharisa safety teams and relocated to local communities who have been trained in the responsible keeping and
farming of bees.
The community members benefit from the raw honey that the bees produce, and the bees are also used by local farmers to
promote pollination. This solution clearly demonstrates Tharisa’s philosophy of shared value and mutual benefit.
Environmental rehabilitation
Tharisa Minerals considers the impact of its operations on local landscapes at each stage of the mining cycle from initial exploration
to construction, operation and eventual decommissioning and closure. Operations rehabilitate concurrently with ongoing mining
activities wherever possible.
The cost of rehabilitation and closure is assessed annually by independent specialists in alignment with the requirements of relevant
legislation, EMPR closure commitments and applicable good practice. Financial provision is then made in the form of a financial
guarantee, which is submitted to the DMRE.
The total cumulative mine closure and environmental rehabilitation provision is US$13.1 million (2018: US$12.6 million), refer to
note 26 of consolidated annual financial statements, available on www.tharisa.com.
The regulations in terms of NEMA pertaining to financial provision for rehabilitation and closure for prospecting, exploration, mining
or production operations were published in November 2015. These regulations have significant financial implications for the mining
industry and the Mineral Council of South Africa is engaging with the DMRE around this impact and the industry’s concerns.
These regulations require mines to provide for ongoing expenses after mine closure and effectively freeze the existing provisions for
rehabilitation and closure, requiring further provisions to be made from operating expenses. Assessments aligned to these
regulations need to be completed and submitted to the DMRE by February 2020.
Case study: Bio remediation soil project
Many mining processes produce hydrocarbon waste which can have a negative impact on soil and natural vegetation.
In 2017, Tharisa Minerals launched a hydrocarbon waste clean-up programme to rehabilitate areas affected by hydrocarbon
waste as the first step in returning the soil to its intended state.
Tharisa Minerals then created a bio remediation bay, which facilitates a four-stage soil rehabilitation process: 1) all carbon
contaminated oil is brought to the bay; 2) an oxidiser is added to break down hydrocarbon chains in the oil; 3) microbials,
or good bacteria are added to “eat” hydrocarbon chains; and 4) a nutrient blend is added to return the soil to a usable
state.
This process allows soil which would have been treated as waste to be used as it was intended – to support natural
vegetation, to be used for crops by local communities or for remediation in Tharisa Mine’s open pit if needed.
Furthermore, secondary contamination and the mine’s carbon footprint are reduced, and local communities are able to
benefit from employment and skills training as they are trained to work on the bio remediation bay.
58 THARISA PLC INTEGRATED ANNUAL REPORT 2019
MINERAL RESOURCE
AND MINERAL RESERVE
STATEMENT
Introduction
The Mineral Resource and Mineral Reserve
of Tharisa Minerals was prepared under
the guidance of the Competent Person
(‘CP’) in accordance with the
requirements of the South African Code
for the Reporting of Exploration Results,
Mineral Resources and Mineral Reserves,
2016 (‘SAMREC Code’). The estimates are
as of 30 September 2019.
The previous declaration of the Mineral
Resource and Mineral Reserve was dated
September 2018. The current Mineral
Resource declaration relies on the
geological model and resource model of
April 2019 for the MG Chromitite Layers,
the June 2018 model for the UG1
chromitite layer and the end of FY2019
mining faces. The Mineral Reserve
declaration is based on the latest pit
design and LOM schedule.
Overview
Since the commencement of operations
at the Tharisa Mine, additional geological
information was obtained from
observation in the operating pits and
resource drilling. The Mineral Resource
and Mineral Reserve information in the
tables on the following pages are based
on information compiled by the CP.
Definitions
The declaration of the Mineral Resource
and Reserve was undertaken in terms of
the guidelines of SAMREC Code (2016
edition).
Location
The Tharisa Mine is located 35 km east of
Rustenburg and 120 km northwest of
Johannesburg in the North West Province
of South Africa.
Statement by Competent Person
Ken Lomberg of Pivot Mining Consultants
Proprietary Limited (previously Coffey
Mining South Africa Proprietary Limited),
is the CP for the Mineral Resource
declaration, registered with the South
African Council for Natural Scientific
Professions (Private Bag X540, Silverton,
0127, Gauteng province, South Africa),
registration number 400038/01. He holds
a BSc (Hons) Geology, BCom and MEng
(Mining engineering). Mr Lomberg is a
geologist with 34 years’ experience,
including the Mineral Resource estimation
in respect of PGM and chromitite in the
Bushveld Complex.
The Mineral Reserve declaration is by Jaco
Lotheringen of Ukwazi Mining Studies,
who is the CP for the Mineral Reserve
declaration. He holds a BEng (Mining). He
is registered with the Engineering Council
of South Africa (ECSA, Private Bag X691,
Bruma, South Africa), registration number
20030022. He is a principal mining
engineer with appropriate experience in
the estimation, assessment and evaluation
of relevant Mineral Reserves based on the
class of deposit and mining methodology.
The Company has written confirmation
from Ken Lomberg and Jaco Lotheringen
that the information disclosed is in
compliance with the SAMREC Code
(2016) and that they have consented to
the inclusion of this information in the
form and context in which it appears.
Mining rights summary
Tharisa Minerals holds a mining right,
granted by the Department of Mineral
Resources and Energy (‘DMRE’) (then the
Department of Minerals and Energy
(‘DME’) in terms of MPRDA on
19 September 2008, for a period of
30 years, to various portions of the farm
342 JQ and the whole of the farm
Rooikoppies 297 JQ. On 13 August 2009,
the mining right was registered in the
Mining and Petroleum Titles Registration
Office, under Reference No 49/2009(MR).
In July 2011, an application was granted
in terms of section 102 of the MPRDA, to
amend the existing mining right by the
addition of Portions 96, 183 and 286 of
the property 342 JQ to the mining right
49/2009(MR).
Mineral Resource
Geology and mineralisation
The Tharisa Mine is situated on the
southwestern limb of the Bushveld
Complex and is underlain by the Middle
Group (‘MG’) and Upper Group (‘UG’)
Chromitite Layers straddling the boundary
between the Marikana and Rustenburg
facies. The MG Chromitite Layers outcrop
is on the property, striking roughly east to
west with a gentle change in strike to
northwest-southeast in the far west. The
layers dip at between 9° and 15° to the
north. Towards the western extent of the
outcrop, the dip is steeper. The
stratigraphy typically narrows to the west
and the dip steepens. The dip typically
shallows out at depth across the extent of
the mine area.
The MG Chromitite Layer package
consists of five groups of Chromitite
Layers, being the MG0 Chromitite Layer
at the bottom, followed by the MG1
Chromitite Layer, the MG2 Chromitite
Layer (sub-divided into C, B and A
Chromitite Layers), the MG3 Chromitite
Layer and the MG4 Chromitite Layer
(sub-divided into 4(0), 4 and 4A
Chromitite Layers). The layers between
the Chromitite Layers frequently include
stringers or disseminations of chromite.
The MG Chromitite Layers at the Tharisa
Mine are a typical stack of tabular
deposits.
P I C T O B E
S U P P L I E D
Figure 1: Location of the Tharisa Mine
THARISA PLC INTEGRATED ANNUAL REPORT 2019
59
Mineral Resource and Mineral Reserve
statement
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-2848000 N
Figure 2: Image of the Tharisa Mine plan showing borehole locations and the extent of the open pits.
The structural interpretation of the Tharisa
Mine geology is based on the
aeromagnetic data, the available drilling
and observations in the operating open
pits. The only significant fault is a steeply
dipping northwest-southeast trending
normal fault with a downthrow of less
than 30 m to the east. This fault occurs
only on the far north-eastern corner of
the property and will have little effect on
mining of the MG Chromitite Layers on
the mine. A northwest-southeast
sub-vertical dyke of some 10 m thickness
was exposed in the east pit. The dyke is
not expected to have a major impact on
mining. The other major feature of
interest is the Spruitfontein upfold or
pothole which is located on the properties
immediately west of the mine. It affects
the UG2 Chromitite Layer and the rest of
the critical zone below. No new major
structural features were exposed by the
current mining operation.
The Mineral Resource estimate was
completed over the mining right of
Tharisa Minerals to a depth of 750 m for
the MG Chromitite Layers. The UG1
Chromitite Layer Mineral Resource
estimate was limited to the area within
the planned pit perimeter.
The previous declaration of the Mineral
Resource and Mineral Reserve was dated
September 2018. The current Mineral
Resource declaration relies on the
geological model and resource model of
April 2019 for the MG Chromitite Layers,
the geological and resource model of
June 2018 for the UG1 Chromitite Layer
and the end of FY2019 mining faces.
An additional 84 diamond drill boreholes,
since the 2016 estimation, were included
in the updated Mineral Resource and
Mineral Reserve statement. These
boreholes are located immediately ahead
of the current highwall, along the full
strike length of the mine.
The results from the samples confirmed
the geological assumptions and the
grades of the various Chromitite Layers,
providing additional confidence in the
mining operations. Observations on the
operation confirm the details observed
from the drilling. In-pit drilling continues
for the purposes of mining operations,
mine planning and grade control.
Additional resource drilling has been
planned for the next financial year.
Prior to the estimation, the data was
collated and verified with the quality
controls for logging, sampling and assays
being used. The Mineral Resource
estimate was undertaken on each
Chromitite Layer and interburden
independently. Each element was
estimated separately. Changes to the
Mineral Resource declaration are due to
the production during the previous
financial year, a revision of the UG1
Chromitite Layer declaration and a
revision of the Inferred Resource.
Tharisa Minerals Resource at
30 September 2019 is reported inclusive
of Mineral Reserve. The drilling which was
located ahead of the open pit mining
faces has allowed the CP to declare
additional Measured Mineral Resources.
As the drilling has not occurred beyond
the previously declared Indicated Mineral
Resource, the Indicated Mineral Resource
was reduced. Additional drilling further
downdip is expected to allow the
extension of the Indicated Mineral
Resource downdip.
60 THARISA PLC INTEGRATED ANNUAL REPORT 2019
MINERAL RESOURCE
AND MINERAL RESERVE
STATEMENT CONTINUED
As a result of the additional information, the boundary was moved northwards and downdip increasing the reported Measured
Mineral Resource. The Indicated Mineral Resource was decreased as no additional information was obtained ahead of this boundary.
Additional work was undertaken on the MG0 Chromitite Layer which resulted in a redefinition of the MG0 package into three
identified units. These were reclassified as Indicated Mineral Resource. Work on the area in the far west was largely responsible for
the increase in the reported tonnage of the Mineral Resource.
Sibanye-
Stillwater
Sibanye-
Stillwater
Figure 3: Map of the location of the Tharisa Mine
Mineral Resource estimate
2019
Tonnes
6PGE + Au grade
5PGE + Au grade
3PGE + Au grade
Cr2O3 grade
Contained 6PGE + Au
Contained 5PGE + Au
Contained 3PGE + Au
Contained Cr2O3
2018
Tonnes
6PGE + Au grade
5PGE + Au grade
3PGE + Au grade
Cr2O3 grade
Contained 6PGE + Au
Contained 5PGE + Au
Contained 3PGE + Au
Contained Cr2O3
Unit
Measured
Indicated
Inferred
Mt
g/t
g/t
g/t
%
Moz
Moz
Moz
Mt
111.51
1.73
1.67
1.29
22.40
6.18
5.99
4.61
24.98
87.99
1.48
1.37
1.06
21.72
4.18
3.87
3.00
19.11
691.20
1.52
1.47
1.12
19.79
33.86
32.67
24.92
136.79
Unit
Measured
Indicated
Inferred
Mt
g/t
g/t
g/t
%
Moz
Moz
Moz
Mt
62.82
1.78
1.73
1.32
23.69
3.61
3.49
2.67
14.88
112.35
1.70
1.65
1.25
22.57
6.16
5.94
4.52
25.36
685.49
1.55
1.50
1.14
20.11
34.26
33.05
25.17
137.84
Total
890.70
1.54
1.49
1.14
20.31
44.22
42.54
32.53
180.88
Total
860.66
1.59
1.54
1.17
20.11
43.02
42.48
32.35
173.06
THARISA PLC INTEGRATED ANNUAL REPORT 2019
61
Mineral Resource and Mineral Reserve
statement
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Mineral Reserve declaration
The Mineral Reserve estimate for
September 2019 was based on a revised,
updated LOM for the open pit and the
underground mining areas. This
re-estimation was underpinned by an
updated mining model and incorporates
the current economic conditions, current
on-mine mining methodology and survey
depletion. Appropriate technical aspects
were considered in the mine design and
schedule as basis for the Mineral Reserve
estimate, including economic pit limits,
underground target layers, geotechnical
parameters, mining methodology and
sequence, pit access, ramp placement,
equipment capability, production rates
and practical mining considerations. The
mining-related modifying factors applied
included geological losses, mining losses,
mining dilution and metallurgical
recovery. The variance between the 2018
and 2019 Mineral Reserve estimation is
due to:
(cid:3)• depletion
(cid:3)• updated LOM pit design
(cid:3)• geological structural updates
(cid:3)• revised underground design aligned
with the open pit limits
(cid:3)• updated geotechnical parameters.
The LOM plan was designed to extract
the MG Chromitite Layers, firstly from
open pit mining to a maximum depth of
220 m and subsequently from
underground extraction (MG2 and MG4
Chromitite Layers) by means of a bord
and pillar mining method.
The Mineral Reserve tonnage increased by
4.9% as a result of increasing the open
pit and underground mining areas,
geological structure changes, mining
depletion and treatment with a decrease
in PGM (3PGE + Au) and Cr2O3 grades by
2.8% and 1.6% respectively. All previous
Inferred Mineral Resources within the
open pit economic limit were upgraded
due to infill drilling. No Inferred Mineral
Resources are included in the open pit
LOM. The Inferred Mineral Resource was
included in the underground section of
the mine plan, but not included as part of
the Mineral Reserve estimate. If excluded
from the underground mine plan, the
underground project may not be feasible.
The 14-year LOM schedule targets an
average of 5.69 Mtpa before tapering
down in the last two years when the
open pit transitions to underground
mining. The final ore from the open pit is
produced in 2033. The open pit LOM
reduced by one year due to mining
depletion and an increased ore
production rate.
The Mineral Reserve declared for the
underground project was derived from
the Measured and Indicated Mineral
Resource portion that was included in the
underground LOM plan. The underground
section is planned to ramp up during the
final phase of the open pit operation. A
pre-feasibility study was completed in
2013 with an update of the study during
2019 for the underground mining of the
MG2 and MG4 Chromitite Layers from
the limit of the open pit highwall. The
Mineral Reserve for the underground
section extends to a maximum depth
of 270 m, constrained by the Mineral
Resource classification. However, the
underground LOM can be expected to
extend to a maximum depth of 700 m,
pending further fieldwork and study
work.
OPEN PIT 2019
Tonnes
5PGE + Au grade
3PGE + Au grade
Cr2O3 grade
Contained 3PGE + Au(1)
Contained Cr2O3 (2)
OPEN PIT 2018
Tonnes
5PGE + Au grade
3PGE + Au grade
Cr2O3 grade
Contained 3PGE + Au
Proved
Probable
Total
Unit
Mt
g/t
g/t
%
Moz
Mt
64.5
1.35
1.03
18.9
2.1
12.2
7.8
1.09
0.82
15.2
0.2
1.2
Unit
Proved
Probable
Mt
g/t
g/t
%
Moz
47.7
1.39
1.06
19.2
1.6
26.5
1.38
1.06
18.3
0.9
72.4
1.32
1.01
18.5
2.4
13.4
Total
74.2
1.39
1.06
18.9
2.5
62 THARISA PLC INTEGRATED ANNUAL REPORT 2019
MINERAL RESOURCE
AND MINERAL RESERVE
STATEMENT CONTINUED
Contained Cr2O3
UNDERGROUND 2019
Tonnes
5PGE + Au grade
3PGE + Au grade
Cr2O3 grade
Contained 3PGE + Au(1)
Contained Cr2O3 (2)
UNDERGROUND 2018
Tonnes
5PGE + Au grade
3PGE + Au grade
Cr2O3 grade
Contained 3PGE + Au
Contained Cr2O3
TOTAL OPEN PIT AND UNDERGROUND 2019
Tonnes
5PGE + Au grade
3PGE + Au grade
Cr2O3 grade
Contained 3PGE + Au(1)
Contained Cr2O3 (2)
TOTAL OPEN PIT AND UNDERGROUND 2018
Mt
Unit
Mt
g/t
g/t
%
Moz
Mt
Unit
Mt
g/t
g/t
%
Moz
Mt
Unit
Mt
g/t
g/t
%
Moz
Mt
Unit
9.2
4.8
Proved
Probable
8.1
1.57
1.23
19.3
0.3
1.6
17.1
1.62
1.24
20.6
0.7
3.5
14.0
Total
25.1
1.60
1.24
20.1
1.0
5.1
Proved
Probable
Total
–
–
–
–
–
–
18.7
1.52
1.17
19.3
0.7
3.6
18.7
1.52
1.17
19.3
0.7
3.6
Proved
Probable
Total
72.6
1.38
1.06
18.9
2.5
13.7
24.9
1.15
0.87
15.8
0.9
4.7
97.5
1.40
1.07
18.9
3.4
18.4
Proved
Probable
Total
Tonnes
5PGE + Au grade
3PGE + Au grade
Cr2O3 grade
Contained 3PGE + Au
Contained Cr2O3
(1) The contained metal is stated on a ROM basis. Plant recovery to convert to a saleable concentrate range from 81.3% to 85.7%
(2) The contained Cr2O3 is stated on a ROM basis. Plant yield to convert to a saleable product range from 37.3% to 40.9%
47.7
1.25
0.96
17.3
2.2
9.2
Mt
g/t
g/t
%
Moz
Mt
45.2
1.40
1.07
18.4
1.6
8.5
92.9
1.41
1.09
19.0
3.2
17.6
Material risks
Year-on-year deferral of waste stripping
could result in a substantial impact on the
open pit Mineral Reserve and sustained
delivery of chrome and PGM products.
An auditable reconciliation process could
add significant value to the appropriate
understanding of the systematic
contribution of process plant recoveries
and dilution and losses on the mining
operations related to plant feed grades,
mining methodology and equipment
allocation to sustain cost-effective
production performance.
Current long-term PGM and chrome
prices were adopted with a full
optimisation process completed for the
open pit area from which the economic
pit limit was selected. Sustained low
commodity prices over the long term
materially influence the overall value of
the operation and can have a material
impact on the size of the open pit portion
of the Mineral Reserve.
Due to the selection of an ultimate pit
with value and extended life strategy,
sustained low cost and efficient mining
with specific focus on waste backfill and
processing recoveries are critical to
creating sustained value from the open pit
operation.
Reporting codes and compliance
The Mineral Resource and Mineral Reserve
estimates for Tharisa Minerals is stated in
accordance with the principles and
guidelines of the SAMREC Code. All the
required regulatory permits have been
obtained or applied for. The directors are
unaware of any legal proceedings or
impediments to the continued operation
of Tharisa Mine.
THARISA PLC INTEGRATED ANNUAL REPORT 2019
63
Mineral Resource and Mineral Reserve
statement
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Environmental management and
funding
Tharisa Minerals has obtained all
environmental approvals and
authorisations required for the operation
of the Tharisa Mine. The estimated
long-term environmental provision,
comprising rehabilitation and mine
closure, was based on the Group’s
environmental policy, considering the
current technological, environmental and
regulatory requirements. Details of the
Group’s environmental liability and
funding can be found in note 26 of the
annual financial statements.
64 THARISA PLC INTEGRATED ANNUAL REPORT 2019
BOARD OF
DIRECTORS
Audit Committee
Risk Committee
Nomination Committee
Remuneration Committee
Safety, Health and Environment Committee
C = Chairman
I = By invitation
Social and Ethics Committee
New Business Committee
LOUCAS
POUROULIS – 81
PHOEVOS
POUROULIS – 45
MICHAEL
JONES – 57
DAVID
SALTER – 61
ANTONIOS
DJAKOURIS – 72
Chairman
Chief Executive Officer
(CEO)
Chief Finance Officer
(CFO)
Lead independent
non-executive director
Independent non-
executive director
Appointed:
27 October 2010
Appointed:
27 October 2010
Appointed:
30 January 2013
Appointed:
27 October 2010
Appointed:
11 October 2011
Mining and Metallurgical
Engineering (Hons)
(National Technical University,
Athens, Greece)
Bachelor of Science and
Business Administration
(Boston University, USA)
Bachelor of Accounting
(University of KwaZulu-
Natal, Pietermaritzburg,
South Africa), CA (SA);
Member of the South African
Institute of Chartered
Accountants
Bachelor of Science
Engineering (Hons); PhD in
Mineral Technology (Imperial
College, London);
Fellow of the South African
Institute of Mining and
Metallurgy (FSAIMM)
Chartered Accountant and
Fellow of the Institute of
Chartered Accountants in
England and Wales
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Phoevos Pouroulis is the Chief
Executive Officer of the Group,
with responsibility for overall
strategy and management.
Phoevos has held various
senior managerial and
operational positions in his
career spanning more than
17 years. He has extensive
experience in project
management, mining design,
commissioning and mining
operations, including coal,
chrome and PGM mines,
having been involved in South
Africa’s mining industry since
2003. He has served as
Commercial Director for
Chromex Mining and was a
founding member of Keaton
Energy. Phoevos is currently
the President of the
International Chromium
Development Association
(‘ICDA’).
Michael Jones is the Chief
Finance Officer of the Group
and is responsible for the
overall financial operation,
funding and the financial
reporting management of
the Group. Michael has more
than eleven years’ executive
financial management
experience in the mining
sector. In addition, he has
19 years’ experience in
investment banking, focusing
on mergers and acquisitions
and capital raisings of both
equity and debt.
David Salter has more than
30 years’ experience in the
development and
management of mining
companies, including both
open pit and underground
PGM mining operations.
David’s most recent public
company roles were Chairman
of Keaton Energy until its sale
to Wescoal in 2017 and
Managing Director of Eland
Platinum until its sale to
Xstrata in 2007. He is a
non-executive director of a
number of unlisted mining
companies.
Antonios Djakouris is a
qualified Chartered
Accountant and has over
30 years’ experience as a
manager and director, having
served in the accounting
profession and in a number of
posts with the Bank of Cyprus,
including internal audit, credit
review and retail banking, and
as Group General Manager in
charge of operations. From
2003 to 2009, he directed the
Bank of Cyprus group’s
overseas operations, including
banks in the United Kingdom,
Australia, Russia, Romania and
Ukraine. Antonios currently
serves in an honorary capacity
on the Board and Executive
Committee of the Cyprus Anti-
Cancer Society, one of the
largest charities in Cyprus.
Loucas Pouroulis is the
Executive Chairman of the
Group, with responsibility for
the development of strategy
and the identification of new
opportunities for the Group.
He began his career in Cyprus
in 1962, and his initial
post-graduate training took
place in Germany, Sweden
and Cyprus. Loucas is trained
as a mining and metallurgical
engineer and has more than
50 years’ experience in mining
exploration, project
management, financing and
production in open pit and
underground mining
operations, including PGM and
gold mines. He immigrated to
South Africa in 1964 and
joined Anglo American, where
he rose rapidly through the
management ranks and
received extensive training and
experience. In 1971, Loucas
began to pursue his own
mining interests, initially
focusing on gold mining
opportunities considered
uneconomical by the majors.
By the 1990s, he had
established Petra Diamonds
and, since 2000, has
established among others,
Eland Platinum, Tharisa,
Kameni, Keaton Energy,
Salene Chrome and the
Karo Mining Group.
THARISA PLC INTEGRATED ANNUAL REPORT 2019
65
Board of directors
Corporate governance
King IV™ application
Remuneration report
Directors’ report
Report of the Audit Committee
G
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OMAR
KAMAL – 48
CAROL
BELL – 61
ROGER
DAVEY – 74
JOANNA KA KI
CHENG – 51
ZHONG LIANG
HONG – 55
Independent non-
executive director
Independent non-
executive director
Independent non-
executive director
Non-executive director
Non-executive director
Appointed:
11 June 2014
Appointed:
22 March 2016
Appointed:
1 June 2017
Appointed:
1 February 2017
Appointed:
1 April 2018
Bachelor of Arts (Economics)
(York University, Ontario,
Canada)
Bachelor (Ferrous Metallurgy)
(Shanghai Metallurgy
Technology Academy)
Zhong Liang Hong is a Chinese
national with 33 years’
experience in commodity
trading. Representing Fujian
Wuhang Stainless Steel Co.
Limited and Huachuang
Singapore Pte Limited, Zhong
has a strong understanding
of analysis and forecasting
of commodity markets and
end-user demand. He started
his career in 1980 at the
Baosteel Group. In 2001 he
founded Shanghai Hongli
Metal Material Co. Limited,
and is still the Chairman of
this company. In 2002 he
expanded his business to
import manganese into
China and became the sole
manganese agent in China
acting for BHP Billiton.
Joanna Cheng, a Canadian
national, is a Chartered
Accountant and a member
of the Institute of Chartered
Accountants of Ontario,
Canada. She has more than
20 years’ experience in
business development,
investment and management
and is the Director
(Environment) of NWS
Infrastructure Management
Limited, a wholly owned
subsidiary of NWS Holdings
Limited (Hong Kong Stock:
659). Before joining the NWS
Holdings Limited group,
Joanna worked at audit firms
in Canada and Hong Kong.
Joanna will be retiring by
rotation at the conclusion of
the AGM and will not be
available for re-election. The
Board thanks Joanna for the
contribution she has made
to the Company since her
appointment as non-executive
director on 1 February 2017.
Bachelor in Economics and
Political Science (University of
Jordan); PhD in Management
(Finance and Banking)
(Coventry University in
collaboration with Harvard
Islamic Finance Programme at
Harvard University)
Master of Arts in Natural
Sciences (University of
Cambridge); PhD Archaeology
(University College, London)
Omar Kamal has more
than 25 years’ international
experience in banking,
investment management,
strategic advisory services and
high-growth entrepreneurship.
He has served at high-growth
companies and multibillion-
dollar corporates in various
executive capacities.
Until August 2015, he was the
co-Group CEO of a business
group owned by a prominent
family with global reach based
in Geneva, Switzerland. Prior
to that he was one of the
initial founders and acted as
the CIO of a regional bank in
the Middle East and, before
that, was a partner with Ernst
& Young on the advisory and
consulting side.
Omar continues to serve on
the boards of a number of
listed and unlisted companies,
among others, Cambridge
Scientific Innovation (CSI),
Cybsafe, Crowdemotion, and
Arab Bank Switzerland as
Chairman of the Fintech
Committee. In the same
context, Omar makes a
personal strategic contribution
towards digital innovation
and transformation.
Omar is a member of the
Young President Organisation
and a Board member of the
London Stars Chapter in
the UK.
Carol Bell has more than
35 years’ experience in the
energy and allied industries,
including a successful career
as a Managing Director of
Chase Manhattan Bank’s
Global Oil & Gas Group, Head
of European Equity Research
at JP Morgan and several years
as an equity research analyst in
the oil and gas sector at Credit
Suisse First Boston and UBS
Phillips & Drew. Carol began
her career in corporate
planning and business
development at Charterhouse
Petroleum and RTZ Oil and
Gas.
Carol has broad public
company experience and
currently serves on the boards
of TransGlobe Energy and
Bonheur. She is also a
non-executive director of
the BlackRock Energy and
Resources Income Trust and
serves on the Board of the
Development Bank of Wales
and The Football Association
of Wales. Carol is a trustee
of the Renewable Energy
Foundation (a UK think tank),
the National Museum of
Wales, the Wales Millennium
Centre, the British School at
Athens, and the Institute for
Archaeometallurgical Studies.
She is also a member of the
Council of Cardiff University.
Master of Science in Mineral
Production Management
(Royal School of Mines,
Imperial College, London);
Master of Science in Water
Resource Management and
Water Environment
(Bournemouth University);
Associate of the Camborne
School of Mines (‘ACSM’);
Chartered Engineer; European
Engineer; Member of the
Institute of Materials, Minerals
and Mining (‘IMMM’)
C
Roger Davey, a British national,
has more than 30 years’
operational experience at
senior management and
director level in the mining
industry in South America,
Africa and Europe. His
experience at senior
management level includes
financing, feasibility studies,
construction, development,
commissioning and
operational management
of both underground and
surface mining operations
in gold and base metals.
Previous positions include
being the Senior Mining
Engineer at NM Rothschild
(London) (1998 to 2010) in
the Mining and Metals project
finance team, where he
had responsibility for the
assessment of the technical
risk associated with current
and prospective project loans;
Director, Vice-President and
General Manager of Minorco
(AngloGold) subsidiaries in
Argentina (1994 to 1997),
where he was responsible for
the development of the
US$270 million Cerro
Vanguardia open pit
gold-silver mine in Patagonia;
Operations Director of
Greenwich Resources plc,
London (1984 to 1992), with
gold interests in Sudan, Egypt
and Australia; Production
Manager for Blue Circle
Industries in Chile (1979 to
1984); and various production
roles from graduate trainee
to mine manager, in Gold
Fields of South Africa (1971
to 1978).
66 THARISA PLC INTEGRATED ANNUAL REPORT 2019
CORPORATE
GOVERNANCE
Introduction
Tharisa is incorporated in Cyprus and is
therefore subject to Cyprus Companies Law.
With a primary listing on the JSE under the
general mining sector, Tharisa is subject to
the JSE Listings Requirements and the
requirements of the South African Code of
Corporate Practices and Conduct laid out in
King IV. Tharisa also has a secondary
standard listing of its depositary interests on
the London Stock Exchange (‘LSE’) and is
subject to the LSE Listing Rules and
Disclosure and Transparency Rules applicable
to a secondary standard listing. In addition,
Tharisa listed on the A2X exchange in South
Africa with effect from 6 February 2019.
Tharisa’s primary listing on the JSE and
secondary standard listing on the main
board of the LSE remain unaffected by the
secondary listing on A2X. The A2X is a
licensed stock exchange authorised to
provide a secondary listing venue for
companies and is regulated by the South
African Financial Sector Conduct Authority
in terms of the Financial Markets Act 19
of 2012. The listing on A2X provides an
opportunity to improve liquidity and attract
new investors through the lower trading
costs offered by this trading platform. There
are no additional regulatory requirements or
ongoing obligations to comply with.
The Company has its registered office in
Cyprus and is subject to Cyprus disclosure
and transparency legislation, Cyprus market
abuse legislation and the European
Commission Market Abuse Regulation
EU596/2014, and for such purposes
considers Cyprus as its home state, where
such term requires interpretation. The LSE
Listing Rules invoke the application of
certain provisions of the UK Disclosure and
Transparency Rules where similar provisions
do not exist under the national law of its
home state. The Company considers that
the requirements under the UK Disclosure
and Transparency Rules are met under
corresponding national law, but nonetheless
the Company aims to apply the relevant UK
Disclosure and Transparency Rules applicable
to the Company in circumstances where
there may be a deemed discrepancy. For the
purposes of the present corporate
governance report, a reference to Disclosure
and Transparency Rules shall be a joint
reference to applicable UK and Cyprus
transparency rules. While the UK Corporate
Governance Code published by the Financial
Reporting Council does not apply to the
Company, the Board recognises the
importance of good governance and
considers the principles and
recommendations contained therein.
The Board is fully committed to the fact that
accountability, integrity, fairness,
transparency and integrated thinking are
essential to the Group’s long-term
sustainability and to its ongoing ability
to create value for investors and other
stakeholders. It endorses and accepts
full responsibility for the application of the
principles necessary to ensure that effective
corporate governance is practised
consistently throughout the Group.
In discharging this responsibility, the Board
strives to comply with the requirements set
out in King IV. The Company’s disclosure on
its application of King IV principles is set out
on pages 76 to 85.
The Board is of the opinion that the
Company is compliant with the JSE Listings
Requirements and King IV in all material
respects, other than having an Executive
Chairman and not having an in-house
independent internal audit function.
The former has been mitigated by the
appointment of David Salter as the Lead
Independent Director and the latter by the
appointment of Deloitte as the internal
auditor of the Group.
Board composition
Executive directors
Loucas Pouroulis (Executive Chairman)
Phoevos Pouroulis (CEO)
Michael Jones (CFO)
Independent non-executive
directors
David Salter (Lead Independent
Director)
Antonios Djakouris
Omar Kamal
Carol Bell
Roger Davey
Non-executive directors
Joanna Cheng
Zhong Liang Hong
The Company has a unitary board, which
both leads and controls the Company. It
comprises three executive directors and
seven non-executive directors. Five of
the seven non-executive directors are
independent.
The Board is structured in such a way
that there is a clear balance of authority,
ensuring that no one director has unfettered
powers. The size of the Board is regulated
by the Company’s Articles of Association
and directors are appointed through a
formal process.
The Nomination Committee identifies
suitable candidates for appointment as
directors. Directors are required to be
individuals of calibre and credibility with the
necessary skills and experience to bring
judgement, independent of management,
on issues of strategy, performance,
resources, diversity, standards of conduct
and evaluation of performance. Merit,
commitment, integrity and diversity are the
core considerations in ensuring that the
Board and its committees have an
appropriate blend and balance of
perspectives, knowledge and experience to
discharge their duties effectively and
competently, having regard to the strategic
direction of the Group.
THARISA PLC INTEGRATED ANNUAL REPORT 2019
67
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Board of directors
Corporate governance
King IV™ application
Remuneration report
Directors’ report
Report of the Audit Committee
GENDER
Male
8
80%
20%
Female
2
AGE
(%)
TENURE
(%)
20
30
Average:
60 years
30
20
50
Average:
4.5 years
30
20
(cid:81) 41 to 50 years
(cid:81) 51 to 60 years
(cid:81) 61 to 70 years
(cid:81) 71 to 80 years
(cid:81) 0 to 3 years
(cid:81) 3 to 5 years
(cid:81) 5 to 8 years
EXPERIENCE
INDEPENDENCE
(%)
NATIONALITIES
(%)
10
50
30
30
30
10
20
10
10
(cid:81) Independent
(cid:81) Executive
(cid:81) Non-executive
directors
* Includes a lead independent non-executive director
non-executive
directors*
Board diversity
The Nomination Committee reviews
and assesses the size, structure and
composition of the Board on an ongoing
basis to ensure it is appropriately diversified.
In this assessment, it takes into account that
the perspective of Board members is
influenced by a combination of three
different sets of attributes, being experiential
attributes such as education, functional
experience, industry experience and
accomplishments, demographic attributes
such as gender, race, ethnicity, culture,
religion and generational cohort, and
personal attributes such as personality,
interests and values. The Board recognises
that having a blend of attributes across all
facets of diversity will lead to more thorough
and robust decision-making processes and
direction and therefore strives to ensure its
diverse composition.
Acknowledging the benefits that can be
achieved through diversity, and specifically
the meaningful participation of women who
possess the appropriate skills and
experience, as members of the Board,
the Board will continue to focus on the
long-term goal of improving gender
representation at Board level. At present, the
two female directors represent 20% of the
total number of directors and 29% of the
non-executive directors.
(cid:81) Cyprus
(cid:81) South Africa
(cid:81) Canada
(cid:81) Peoples Republic
of China
(cid:81) United Kingdom
(cid:81) Jordan
Similarly, recognising the value of ethnic and
cultural diversity at Board level, the Board
encourages the inclusion and consideration
of prospective candidates with diverse
backgrounds, a range of suitable skills,
based on merit and against objective criteria,
and with due regard for the benefits of
diversity on the Board.
In compliance with King IV, the JSE Listings
Requirements and international best
practice, the Nomination Committee and
Board have adopted a Board level diversity
policy, without introducing voluntary targets
with regard to gender and racial
diversification of the Board. The Nomination
Committee and the Board believe that fixed
targets will not necessarily result in the best
candidates being identified for appointment
to the Board, given that the achievement of
specific targets would be dependent on
a number of factors outside of the Board’s
control, including the frequency at which
Board positions become vacant, the need to
appoint additional Board members and the
availability of appropriately skilled
candidates. It is, however, the objective
to include diverse candidates in the process
of identifying suitably qualified candidates
for appointment as Board members. The
Board will also pursue opportunities
to increase the number of female and
5
1
5
6
3
1
Mining and metallurgy
Energy, oil and gas
Finance
Strategy and risk
Commodity markets
Information technology
Please note that some Board members have skills
and expertise in more than one area
racially and ethnically diverse Board
members over time, provided that it is
consistent with the skills and diversity
requirements of the Board. In identifying
suitable candidates, the Nomination
Committee considers diverse candidates
with a range of suitable skills against
objective criteria and with due regard for the
benefits of diversity on the Board. Whenever
practically and commercially possible, the
Board gives preference to those candidates
whose appointment will contribute to
the achievement of suitable diversity of the
Board.
During the assessment process, the
Nomination Committee also considers
the relationship between executive and
non-executive directors. The Board believes
that there is an appropriate balance
between executive and non-executive
directors. The Board is satisfied that the
current members of the Board collectively
possess the skills, knowledge and experience
required to effectively discharge the
responsibilities of the Board to achieve the
Group’s objectives, promote shareholder
interests and to create value for stakeholders
over the long term.
68 THARISA PLC INTEGRATED ANNUAL REPORT 2019
CORPORATE
GOVERNANCE CONTINUED
Role and responsibilities of the Board
The Board is the ultimate governing
authority, responsible for the Company’s
strategy, key policies, ethics and corporate
governance, as well as approving the
Company’s financial objectives and targets.
The Board recognises that strategy,
performance, risk and sustainability are
inseparable and that the execution of
strategy can have a material impact on the
Company’s creation of value and its various
stakeholders. The Board is fundamentally
important to the achievement of the
Company’s mission, financial objectives and
fulfilment of its corporate responsibilities in a
sustainable manner and provides effective
leadership on an ethical foundation.
The Board is the ultimate custodian of
the governance framework, which commits
the Company and its representatives to act
according to the highest standards
of fairness, accountability, responsibility,
transparency, ethics and sustainability.
The Company’s approach to corporate
governance strives to be stakeholder
inclusive and based on good
communication. This approach has
been integrated into every aspect of
the Company’s business.
The Board ensures that the Group is, and is
seen to be, a responsible corporate citizen,
by having regard not only to the financial
aspects of the business of the Group, but
also the impact that the business operations
have on the environment and the society in
which it operates.
The Board has adopted a Board Charter
setting out the role, functions, obligations,
rights, responsibilities and powers of the
Board and the policies and practices of the
Board in respect of its duties, functions and
responsibilities. The Board has also adopted
terms of reference for each of its
committees. The Board Charter and terms of
reference are available on the Company’s
website.
The directors who are also members of the
Executive Committee of the Company are
involved in the day-to-day business activities
of the Company and are responsible for
ensuring that the decisions of the Executive
Committee as approved by the Board, are
implemented in accordance with the
mandate given by the Board and Executive
Committee.
All non-executive directors have unrestricted
access to the Chairman, management, the
Company Secretary, the Assistant Company
Secretary and the external and internal
auditors. Directors are entitled to seek
independent professional advice on any
matter pertaining to the Company and the
Group, at the Company’s expense.
The Board considers and satisfies itself,
on an annual basis, of the qualifications,
experience and arm’s length relationship
between the Company Secretaries and the
Board.
Board meetings are held on a regular basis,
at least quarterly, and all directors participate
in the key areas of decision making.
Role of the Executive Chairman
There is a clear distinction between the roles
of the Executive Chairman and the CEO.
The Executive Chairman is responsible for
ensuring the integrity and effectiveness of
the Board and its committees, which
includes:
(cid:3)• providing overall leadership to the Board,
without limiting the principle of collective
responsibility for Board decisions
(cid:3)• presiding over meetings of the Board and
meetings of shareholders
(cid:3)• acting as facilitator at Board meetings to
ensure that no director, or group of
directors, dominate the discussion, that
sufficient debate takes place, that the
opinions of all directors relevant to the
subject under discussion are solicited and
expressed freely, that conflicts of interests
are managed and that Board discussions
lead to appropriate decisions
(cid:3)• actively participating in the selection
of Board members and overseeing a
formal succession plan for the Board and
certain senior management appointments
(cid:3)• encouraging collegiality among Board
members and management while at the
same time maintaining an arm’s length
relationship
(cid:3)• mentoring to enhance directors’
confidence, especially new or
inexperienced directors and encouraging
them to make an active contribution at
meetings.
The Chairman’s performance is appraised by
the non-executive directors on an annual or
such other basis as the Board may
determine.
Role of the CEO
The Board’s authority conferred on
management is delegated through the CEO
and the authority and accountability of
management is accordingly considered to be
the authority and accountability of the CEO.
The CEO provides executive leadership and
is accountable to the Board for the
implementation of strategies, objectives and
decisions within the framework of the
delegated authorities, values and policies of
the Company, which includes:
(cid:3)• recommending or appointing the
executive members and ensuring proper
succession planning and performance
appraisals
(cid:3)• developing the Company’s strategy
and vision for Board consideration
and approval
(cid:3)• developing and recommending annual
business plans and budgets that support
the Company’s long-term strategy to the
Board
(cid:3)• monitoring and reporting to the Board on
performance against and conforming
with strategic imperatives
(cid:3)• ensuring that the Company has
appropriate management structures and
a management team to effectively carry
out the Company’s objectives, strategy
and business plans
(cid:3)• ensuring that the assets of the Company
are properly maintained and safeguarded
and not unnecessarily placed at risk
(cid:3)• setting the tone from the top in providing
ethical leadership and creating an ethical
environment and not causing or
permitting any decision, internal or
external practice or activity by the
Company that may be contrary to
commonly accepted business practice,
good corporate governance
or professional ethics
(cid:3)• acting as the chief spokesperson of
the Company.
The non-executive directors monitor and
evaluate the CEO in achieving the approved
targets and objectives and the results of
such evaluation are considered by the
Remuneration Committee to guide it in its
appraisal of the performance and
remuneration of the CEO.
Role of the Lead Independent Director
The Lead Independent Director chairs the
Nomination Committee, Safety, Health and
Environment Committee and Social and
Ethics Committee, facilitates meetings of the
non-executive directors and is a member of
the Audit, Remuneration, Risk and New
Business Committees. He acts as a sounding
board to the Executive Chairman and the
CEO and leads the non-executive directors
in the appraisal of the Executive Chairman
and CEO. He provides leadership and advice
to the Board when the Executive Chairman
has a conflict of interest, without detracting
from the authority of the Executive
Chairman. He acts as an intermediary for
the other Board members and shareholders
with regard to concerns that have not been
resolved through the normal channels.
Role of the non-executive directors
The role of non-executive directors is to
bring independent judgement and to
challenge executive directors in a
constructive manner, without becoming
involved in the day-to-day running of
the business.
THARISA PLC INTEGRATED ANNUAL REPORT 2019
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Board of directors
Corporate governance
King IV™ application
Remuneration report
Directors’ report
Report of the Audit Committee
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The key responsibilities of non-executive
directors include oversight to the board on
issues relating to:
(cid:3)• strategic direction, by providing an
objective, informed and creative insight
based on own experience, to act as a
constructive critic in assessing the strategic
objectives devised by the CEO and to
ensure that the necessary financial and
human resources are in place for the
Company to meet its objectives
(cid:3)• monitoring performance of executive
management with regard to the progress
made towards achieving the Company’s
strategy and objectives and, in doing so,
playing an important role in key executive
appointments, removals where necessary,
and succession planning
(cid:3)• remuneration, through the work of
the Remuneration Committee, by
objectively and independently
determining appropriate levels of
remuneration of executive directors
(cid:3)• risk and strategic risk in particular,
through the work of the Risk Committee,
by reviewing the risk philosophy, strategy
and policies as recommended by
executive management, ensuring
compliance with such policies, and with
the overall risk profile of the Company
(cid:3)• integrity of financial information, through
the work of the Audit Committee, by
ensuring that the Company accounts
properly to its shareholders by presenting
a true and fair reflection of its actions and
financial performance and that the
necessary internal control systems are
implemented and monitored on a regular
basis
(cid:3)• standards of conduct.
Tharisa’s non-executive directors bring
diverse experience and expertise to the
Board. They are required to have a clear
understanding of the Group’s strategy and
must be sufficiently familiar with the Group’s
businesses to be effective contributors to the
development of the Group’s strategy and
identification and monitoring of risks faced
by the Group. Non-executive directors are
required to have sufficient time to perform
their duties as directors and to make a
meaningful contribution. They should
be prepared to question and challenge the
opinions of executive directors and provide
fresh insight into the Group’s strategic
direction. Non-executive directors assess the
performance of the Executive Chairman and
CEO and serve on various Board
committees. Non-executive directors meet
without the presence of the executive
directors at least twice a year.
Board appointments
Members of the Board are appointed by the
Company’s shareholders. The Board also has
the power to appoint directors, subject to
such appointments being approved by
shareholders at the next annual general
meeting (‘AGM’) following such
appointment. Pursuant to the terms of the
Board Charter, appointments to the Board
are made on recommendation of the
Nomination Committee. A formal policy
detailing the procedures for appointments
to the Board has been adopted by the
Company.
Non-executive directors are required to
be individuals of calibre and credibility, be
independent of management and possess
the necessary skills and expertise to bring
judgement to bear on issues of strategy,
performance, resources, diversity, standards
of conduct and evaluation of performance.
Directors are required to conduct
themselves, at all times, in a professional
manner, having due regard to their fiduciary
duties and responsibilities to the Company
and to ensure that sufficient time is made
available to devote to their duties as Board
members. Directors are further required to
be diligent in discharging their duties to the
Company, seek to acquire sufficient
knowledge of the business of the Company
and endeavour to keep abreast of changes
and trends in the business environment and
markets in which the Company operates, in
order to be able to provide meaningful
direction to the Company’s business
activities and operations.
Director induction
Upon appointment, all new directors are
provided with induction materials to
familiarise them with the Group’s
operations, business environment,
executive management and to induct
them in their fiduciary duties and
responsibilities. The induction programme
typically involves an information pack
comprising, inter alia, the Group
structure, a list of the top shareholders,
Board packs and minutes of previous
Board meetings, annual and interim
reports, Articles of Association, the Board
Charter, committee terms of reference,
information on directors’ and officers’
insurance, a guide to the JSE Listings
Requirements and a memorandum on
dealings in securities, market abuse and
insider trading. Periodic site visits are
arranged for existing and new non-
executive directors to improve their
understanding of the Group’s operations.
Retirement by rotation and re-election
of directors
In terms of the Company’s Articles of
Association, any directors appointed
by the Board during the course of the
financial year shall hold office only until
the next AGM of the Company following
their appointment and shall then retire
and be eligible for election. No new
directors had been appointed during the
financial year under review.
In accordance with the Company’s Articles
of Association, one-third of non-executive
directors must retire from office at each
AGM. Executive directors are not subject to
retirement by rotation. The non-executive
directors retiring at each AGM are those
directors who have been the longest serving
since their last election. Retiring directors are
eligible for re-election, and if so re-elected,
are deemed to not have vacated their office.
Omar Kamal, Carol Bell and Joanna Cheng
will be retiring by rotation at the upcoming
AGM. Both Omar and Carol will be available
for re-election. Joanna will not be available
for re-election. The Board thanks Joanna for
the contribution she has made to the
Company since her appointment as
non-executive director on 1 February 2017.
A brief curriculum vitae of each director
standing for election or re-election appears
on pages 64 and 65.
Board support for election or re-election is
not automatic. The Nomination Committee
assesses the composition of the Board and
performance of individual Board members
on an annual basis prior to recommending
any directors for election or re-election by
shareholders at the AGM. Upon
recommendation by the Nomination
Committee, the Board makes a
determination as to whether it will endorse
a director standing for election or re-
election. Having assessed the performance
of the directors standing for election, it is the
recommendation of the Board that Omar
Kamal and Carol Bell be re-elected.
Board meetings
The Board meets at least four times per year
and at such other times as may be required.
The Board met four times during the year
under review.
Board committees
Certain responsibilities are reserved for the
Board, while others are delegated to Board
committees, each with formal mandates
and terms of reference, without reducing
the individual and collective responsibilities
of Board members’ overall fiduciary duties
and responsibilities. The terms of reference
of each Board committee determines, inter
alia, the composition, purpose, scope of
mandate, and powers and duties of the
committee. Board committees provide
feedback to the Board through reports by
their respective chairmen and provide the
Board with copies of minutes of committee
meetings. All directors receive notice and
packs for committee meetings and are
welcome to join meetings of Board
committees of which they are not members.
Terms of reference of the various
committees are compliant with the
70 THARISA PLC INTEGRATED ANNUAL REPORT 2019
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provisions of the Company’s Articles of Association and the JSE Listings Requirements. The terms of reference are reviewed on a regular basis
and are available on the Company’s website. All committees have satisfied their responsibilities in compliance with their respective terms of
reference during the year under review.
The Company’s Board committees are constituted as follows:
Audit Committee
Antonios Djakouris
Chairman
Risk Committee
Antonios Djakouris
Nomination Committee
David Salter
Remuneration Committee
Antonios Djakouris
Safety, Health and Environment Committee David Salter
Social and Ethics Committee
David Salter
New Business Committee
Roger Davey
Members
David Salter
Omar Kamal
Carol Bell
Loucas Pouroulis
Phoevos Pouroulis
Michael Jones
David Salter
Omar Kamal
Carol Bell
Joanna Cheng
Roger Davey
Zhong Liang Hong
Loucas Pouroulis
Antonios Djakouris
David Salter
Carol Bell
Roger Davey
Antonios Djakouris
Carol Bell
Roger Davey
Antonios Djakouris
Omar Kamal
Carol Bell
Phoevos Pouroulis
David Salter
Carol Bell
Loucas Pouroulis
Phoevos Pouroulis
By standing invitation
CFO
CEO
COO
Group Executive: Legal
CEO
CFO
CEO
COO
CFO
COO
Audit Committee
The Audit Committee, which must
comprise at least three independent
non-executive directors, is chaired by
Antonios Djakouris, an independent
non-executive director. Other members
of the Audit Committee are David
Salter, Omar Kamal and Carol Bell, all
independent non-executive directors.
The Board is satisfied that the committee’s
members have the appropriate mix of
qualifications and experience in order to
fulfil their responsibilities appropriately.
The Group’s independent external auditor,
independent internal auditors, CFO and
CEO attend committee meetings by
invitation. The Audit Committee meets
with the internal and external auditor,
without any executive directors
being present.
Both the internal and external auditors have
unrestricted access to the Chairman of the
committee and to the Chairman of the
Board.
The Audit Committee provides the Board
with additional assurance regarding the
quality and reliability of financial information
used by the Board and the financial
statements of the Group. The committee
reviews the internal and financial control
systems, accounting systems and reporting
and internal audit functions. It liaises with
the Group’s external auditor and monitors
compliance with legal requirements.
Furthermore, the Audit Committee assesses
the performance of financial management,
approves external audit fees and budgets,
monitors non-audit services provided by the
external auditor against an approved policy
and ensures that management addresses
any identified internal control weakness. In
addition, the Audit Committee oversees the
integrated reporting process, risk
management systems, information
technology risks (as they relate to financial
reporting), the Group’s whistleblowing
arrangements and policies and procedures
for preventing corrupt behaviour and
detecting fraud and bribery.
The committee has unrestricted access to all
Company and Group information and may
seek information from any employee. The
committee may also consult external
professional advisers in executing its duties.
The Chairman of the Audit Committee is
required to report to the Board after each
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meeting of the Committee and the minutes
of meetings of the Audit Committee are
provided to the Board.
For more information on the activities of the
Committee during the year under review,
refer to the report of the Audit Committee
on page 96.
The Audit Committee is satisfied as to
the appropriateness of the expertise of
Michael Jones, the CFO. The
appropriateness of the expertise and
experience of the CFO is considered on
an annual basis.
The Audit Committee meets as often as is
deemed necessary, but is required to meet
at least twice a year. The committee met
four times during the year under review.
Risk Committee
Control of the complete process of risk
management, the evaluation of its
effectiveness and approval of recommended
risk management and internal control
strategies, systems and procedures are key
Board responsibilities. For this reason, the
Risk Committee comprises the entire Board.
The Risk Committee is chaired by Antonios
Djakouris.
The Risk Committee reviews
management reports on the adequacy and
effectiveness of the Group’s operational risk
management functions, ensures compliance
with the Group’s risk management policies
and reviews the adequacy of the Group’s
insurance coverage.
During the year under review, the
committee conducted a high-level review of
the residual risks identified by management
following a facilitated risk assessment
workshop and subsequent business risk
reviews undertaken at operating subsidiary
level. It continues to monitor progress made
by risk owners in identifying mitigating
factors, performing gap analyses and
implementing additional mitigating
measures where required. In addition, the
Risk Committee identifies reviews and
evaluates non-operational and strategic risks
impacting on the Company and the Group
on an ongoing basis. The Risk Committee
meets as often as is deemed necessary and
met twice during the year under review.
Nomination Committee
The Nomination Committee is chaired by
David Salter, the Lead Independent Director.
Other members of the Nomination
Committee are Antonios Djakouris, an
independent non-executive director, and
Loucas Pouroulis, the Executive Chairman.
Loucas Pouroulis is entitled to participate
and contribute to the Nomination
Committee, but is not entitled to vote on
any matter before the Nomination
Committee. In the event of a tied vote,
David Salter has a casting vote. The CEO
attends meetings by invitation, if required.
The Nomination Committee ensures that
the procedures for appointments to the
Board are formal and transparent by making
recommendations to the Board on all new
Board appointments in accordance with the
Company’s policy for Board appointments. It
does so by regularly evaluating the Board
performance, undertaking performance
appraisals of the Chairman and
directors, evaluating the effectiveness
of Board committees and making
recommendations to the Board. The
Nomination Committee also considers and
approves the Board succession plans.
The work of the Nomination Committee
during the year followed both its terms
of reference and established good practice
in corporate governance. The committee
conducted a review of the structure, size
and composition of the Board, with specific
emphasis on skills, knowledge,
independence and diversity of the Board
members.
The committee also considered the
independence of non-executive directors.
Consideration was given, among others, as
to whether the individual non-executive
directors are sufficiently independent of the
Company so as to effectively carry out their
responsibilities as directors, whether they are
independent in judgement and character
and that there are no conflicts of interest in
the form of contracts, relationships,
shareholding, remuneration, employment or
related-party disclosures that could affect
their independence.
The committee determined that David Salter,
Antonios Djakouris, Omar Kamal, Carol Bell
and Roger Davey are independent. Joanna
Cheng and Zhong Liang Hong are not
considered independent due to their
association with significant shareholders.
The Nomination Committee met once
during the year under review.
Remuneration Committee
All members of the Remuneration
Committee are independent non-executive
directors. The committee is chaired by
Antonios Djakouris and other members of
the committee are David Salter, Carol Bell
and Roger Davey. The CEO and CFO are
invited to attend meetings of the committee
to make presentations, except when their
own remuneration is under consideration.
The Remuneration Committee considers the
remuneration framework of the Executive
Chairman, CEO, CFO and other members of
the executive management of the Company
and its subsidiaries, with reference to local
and international benchmarks. As far as the
remuneration of the Executive Chairman
and the CEO is concerned, the committee
considers and if appropriate, recommends
the remuneration of the Executive Chairman
and the CEO to the Board for final approval.
The committee also considers bonuses,
which are discretionary and based upon
general economic variables, the
performance of the Company and each
individual’s performance against
personalised key performance indicators,
allocations in terms of the Group’s incentive
schemes and certain other employee
benefits and schemes.
During the year, the committee reviewed
various aspects of the Group’s remuneration
structure, including executive salaries,
performance-based remuneration schemes
and the Share Award Plan. The committee is
satisfied with the prevailing policies,
remuneration and structure.
The committee met three times during the
year under review.
The remuneration report may be found on
pages 86 to 93 of this Integrated Annual
Report.
Safety, Health and Environment
Committee
All members of the committee are
independent non-executive directors. The
committee is chaired by David Salter and
other members are Antonios Djakouris,
Carol Bell and Roger Davey. The CEO and
Chief Operating Officer attend the meeting
by invitation.
The Safety, Health and Environment
Committee develops and reviews the
Group’s framework, policies and guidelines
on safety, health and environmental
management, monitors key indicators on
accidents and incidents and considers
developments in relevant safety, health and
environmental practices and regulations.
The committee met four times during the
year under review.
Social and Ethics Committee
As required by the JSE Listings
Requirements, the Board established a Social
and Ethics Committee. The committee is
chaired by David Salter and other members
are Antonios Djakouris, Omar Kamal, Carol
Bell and Phoevos Pouroulis.
The committee’s objective is, inter alia,
to assist the Board in ensuring that the
Company and the other entities in the
Group are and remain committed, socially
72 THARISA PLC INTEGRATED ANNUAL REPORT 2019
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responsible corporate citizens by creating a
sustainable business and having regard to
the Company’s economic, social and
environmental impact on the communities
in which it operates which, among others,
includes public safety, HIV/Aids,
environmental management, corporate
social investment, consumer relationships,
labour and employment, the promotion of
equality and ethics management.
The committee has an independent role
with accountability to both the Board and
the Company’s shareholders. The committee
does not assume the functions of
management of the Company. These
functions remain the responsibility of the
Company’s executive directors, executive
management and senior managers.
It is the committee’s responsibility to monitor
the Group’s activities, having regard to any
relevant legislation, other legal requirements
or prevailing codes of best practice, with
regard to matters relating to, among others,
the following:
(i) Social and economic development,
focusing on the Company’s standing in
terms of the goals and purposes of the
10 United Nations Global Compact
Principles, among others:
(cid:3)• upholding and respecting human
rights
(cid:3)• fair labour practices, which include
the freedom of association, right
to collective bargaining and the
elimination of forced labour, child
labour and discrimination
(cid:3)• promotion of greater responsibility
toward the environment
(cid:3)• prevention of bribery and corruption
(cid:3)• the Organisation for Economic
Co-operation and Development’s
recommendations regarding
corruption
(cid:3)• the Equator Principles
(cid:3)• the Employment Equity Act and
the Broad-Based Black Economic
Empowerment Act, applicable
to South African subsidiaries.
(ii) Good corporate citizenship and the
impact of the Group’s activities and
of its products or services on the
environment, health and public safety
and the Company’s employment
relationships and its contribution toward
the educational development of its
employees. In order to ensure that
Tharisa is seen to be a responsible
corporate citizen, the committee
oversees and monitors, on an ongoing
basis, the consequences of the Group’s
activities and outputs on:
(cid:3)• the workplace, by ensuring
employment equity, fair
remuneration, safety, health, dignity
and development of employees and
the Group’s standing in relation to the
International Labour Organisation
Protocol on decent work and working
conditions
(cid:3)• the economy, by working towards
economic transformation
(cid:3)• the prevention, detection and
response to fraud and corruption
(cid:3)• society, by upholding public health
and safety, consumer protection,
community development and
protection of human rights
(cid:3)• the environment, by ensuring the
prevention of pollution, minimising
waste disposal and protecting
biodiversity.
of whistleblowing activities, reviewing
significant cases of employee conflicts
of interest, misconduct or fraud, or any
other unethical activity by employees or
the Company and ensuring that the
Company’s ethics performance is
assessed, monitored, reported and
disclosed.
The committee meets as often as it deems
necessary but, in any case, at least once a
year and at such other times as determined.
The committee met once during the year
under review.
New Business Committee
The New Business Committee is responsible
for the investigation and assessment of new
projects and business opportunities,
particularly from a strategic, technical and
operational point of view, and the
identification of project-related risks, and
safety, health and environmental risks. The
Committee is not authorised to approve
individual projects or investments or commit
the Company, but works with executive
management to review and evaluate new
business opportunities and initiatives and
make recommendations to the Board for
approval. The committee has the right of
access to management and/or external
consultants and the right to seek additional
information or explanations.
The committee is chaired by Roger Davey
and other members are David Salter, Carol
Bell, Loucas Pouroulis and Phoevos
Pouroulis. Michael Jones attends meetings
as a permanent invitee.
(iii) Ethical leadership and ethical behaviour,
by reviewing the Company’s Code of
Ethics and making recommendations to
the Board for approval, reviewing results
Meetings of the committee will be held as
often as necessary to undertake its role
effectively. The committee met five times
during the year under review.
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Attendance at meetings
Attendance at Board and committee meetings is set out below:
Board
Audit
Committee
Nomination
Committee
Remune-
ration
Committee
Risk
Committee
SHE
Committee
Social and
Ethics
Committee
New
Business
Committee
4
4
4
4
4
4
4
4
4
4
2
4
–
4#
4#
4
4
4
4
–
3#
–
1
1
–
–
1
1
1#
–
–
1#
–
3
–
3#
3#
3
3
–
3
–
3
–
2
2
2
2
2
2
2
1
2
2
1
4
–
4#
1#
4
4
2#
4
–
4
–
1
–
1
–
1
1
1
1
–
–
–
5
3
5
5#
5
2#
2#
5
1#
5
–
Director
Number of
meetings held
Loucas Pouroulis
Phoevos Pouroulis
Michael Jones
David Salter
Antonios Djakouris
Omar Kamal
Carol Bell
Joanna Cheng
Roger Davey
Zhong Liang Hong
# By invitation
Group Company Secretary
The role of the Group Company Secretary is,
inter alia, to provide guidance and advice to
the Board with respect to matters relating to
the JSE Listings Requirements, the LSE
Listings Rules, Disclosure and Transparency
Rules, Cyprus Companies Law, King IV,
market abuse laws and regulations and
other corporate governance-related matters.
In addition to her statutory duties, the
Company Secretary provides individual
directors, the Board as a whole, and the
various committees with guidance as to the
manner in which their responsibilities should
be discharged in the best interests of the
Group.
Sanet Findlay is a full-time employee within
the Group and based in South Africa. She
holds a Bachelor of Science and a Bachelor
of Law, a CIS professional post-graduate
qualification: Company Secretarial and
Governance Practice and is an Associate
member of the Chartered Secretaries
Southern Africa (2003). She has experience
as a Group Company Secretary of JSE and
LSE listed companies since 2009. She is not
a director of Tharisa or any of its subsidiaries
and maintains an arm’s length relationship
with the Board.
Lysandros Lysandrides acts as the Assistant
Company Secretary and holds a Bachelor of
Law and a post-graduate diploma in Legal
Practice (UK). He is an associate member of
the Institute of Chartered Secretaries and
Administrators (UK), a Fellow of the
Chartered Institute of Legal Executives (UK)
and a registered practising Cyprus attorney
at law. He has experience as a company
secretary and legal adviser to companies
listed on the LSE and Cyprus Stock
Exchange. Lysandros is appointed as an
external adviser to Tharisa and its Cyprus
subsidiaries and maintains an arm’s length
relationship with the Board.
The Board formally assessed and considered
the performance and qualifications of the
Company Secretaries and is satisfied that the
Company Secretaries are competent,
suitably qualified and experienced.
The appointment and removal of the
Company Secretaries are matters reserved
for the Board as a whole.
Board evaluation
The Nomination Committee, under
leadership of the Lead Independent Director,
conducts an evaluation of the performance
of the Board, its committees, the Executive
Chairman, CEO, CFO, the Company
Secretary and the performance and
contribution of the individual non-executive
directors. The Board committees conduct a
self-evaluation against their respective terms
of reference and each individual Board
member is evaluated by fellow Board
members using an evaluation questionnaire.
The results of the evaluation process are
considered by the Nomination Committee
prior to their presentation to the Board.
Results and any identified training
requirements are discussed with individual
directors if deemed necessary. Board
evaluations are performed on an annual or
bi-annual basis. An extensive evaluation was
conducted during October 2019.
Conflicts of interest
Disclosure of other directorships, personal
financial interests and any other conflicts of
interest, and those of related persons, in any
matter before the Board is a standing Board
agenda item and a register is kept of all such
disclosures. Directors recuse themselves from
discussion on any matters in which they may
have a conflict of interest. Non-executive
directors are required to inform the Board of
any proposed new directorships and the
Board reserves the right to review such
additional appointments to ensure that no
conflict of interest would arise and to ensure
that a director accepting a new appointment
would be able to continue to fulfil his or her
obligations as a member of the Board.
Share dealing and insider trading
All directors of the Company and its major
subsidiaries, senior executives, the Company
Secretaries and employees and advisers
who, by virtue of their positions have access
to financial and other price sensitive
information, are regarded as insiders and are
required, at all times, to obtain prior
authorisation to deal in the Company’s
shares.
Directors of the Company and its major
subsidiaries and senior executives are
reminded of their obligation to inform all
their associates, as defined by the JSE
Listings Requirements, and investment
managers of the fact that dealings by the
directors and their associates in Tharisa
shares have to be pre-approved and/or
disclosed to the Company within the
stipulated timeframe to facilitate release of
the required announcements in terms of the
JSE Listings Requirements. A similar
requirement exists under the European
Union’s Market Abuse Regulations for
persons discharging managerial
responsibilities and persons closely
associated with them.
74 THARISA PLC INTEGRATED ANNUAL REPORT 2019
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The Company’s directors, executives and
employees who are classified as insiders are
not permitted to deal in the Company’s
shares during closed periods or when they
are in possession of non-public information.
An appropriate communication is sent to all
such employees alerting them that the
Company is entering a closed period. Closed
periods are observed as required by the JSE
Listings Requirements, including the period
from the end of the interim and annual
financial reporting periods to the
announcement of the financial results for
the respective periods, and during periods
that the Company is under a cautionary
announcement. The EU Market Abuse
Regulation stipulates a closed period of 30
calendar days before announcement of the
interim and/or annual results. The Company
applies the longer duration in any given
financial reporting period.
Succession planning
The Board, assisted by the Nomination
Committee, is responsible for overseeing
succession planning and ensuring that
appropriate strategies are in place to ensure
the smooth continuation of roles and
responsibilities of members of the Board and
senior management.
Compliance
Compliance with financial reporting
requirements and accounting standards falls
within the ambit of the Audit Committee.
The Group’s statutory and regulatory
compliance resides with the Legal, Risk and
Compliance Officer and reports on
compliance are presented to the Audit and
Social and Ethics Committees. In addition to
the formal authorisation processes required
for dealings in the Company’s shares, the
Group has various policies and procedures in
place governing the declaration of interests,
accepting and granting of gifts and an
approved delegation of authorities matrix
which governs the delegation of authority
and value limits within the Group and
ensures that all transactions are approved
appropriately.
No incidents of non-compliance were
identified and no significant penalties or
regulatory censures were imposed on the
Company or any of its subsidiaries during
the year under review.
The Board is satisfied that the Company
complied with the requirements of the
JSE Listings Requirements pursuant to the
Company’s primary listing on the JSE during
the year under review. The Board also
acknowledges the role and responsibilities of
its JSE sponsor, Investec Bank Limited, and is
of the opinion that the sponsor has
discharged its responsibilities with due care
during the period.
Information technology governance
The Board Charter commits the Board to
assuming ultimate responsibility for ensuring
that effective information technology (‘IT’)
systems, internal control, auditing and
compliance policies, procedures and
processes are implemented in order to avoid
or mitigate key IT-related business risks. The
Board has delegated responsibility for the
governing of IT to the Audit Committee.
Assurance on the IT systems and processes is
provided by the Group’s internal auditors
and findings are reported to the Audit
Committee, which ensures that any and all
material findings are addressed
appropriately.
External audit
Ernst & Young Cyprus Limited acts as
external auditor to the Group and its
independence is reviewed by the Audit
Committee on an annual basis. The
appointment of the external auditor
was approved at the AGM on
10 January 2018. The external auditor has
unrestricted access to the Chairman of the
Audit Committee.
Internal audit
The Company does not have an in-house
independent internal audit function.
The Audit Committee reviews, on a regular
basis, whether there is a need for an
in-house internal audit function and makes
the necessary recommendation to the
Board. The Audit Committee is of the
opinion that given the size and stage of
development of the Company and the
Group, an in-house internal audit function is
not currently justified. The appointment of
Deloitte as internal auditor for the Group is
considered to sufficiently mitigate the risk of
not having an in-house internal audit
function.
Internal control systems
To meet the Company’s responsibility to
provide reliable financial information,
the Company maintains financial and
operational systems of internal control.
These controls are designed to provide
reasonable assurance that transactions
are concluded in accordance with
management’s authority, that the assets are
adequately protected against material losses,
unauthorised acquisition, use or disposal
and that transactions are properly authorised
and recorded.
The systems include a documented
organisational structure and division
of responsibility, established policies
and procedures, which are communicated
throughout the Group, and the careful
selection, training and development
of people.
The Audit Committee monitors the
operation of the internal control systems to
determine whether there are deficiencies.
Corrective actions are taken to address
control deficiencies as they are identified.
The Board, operating through the Audit
Committee, oversees the financial reporting
process and internal control systems.
There are inherent limitations to the
effectiveness of any system of internal
control, including the possibility of human
error and the circumvention or overriding of
controls.
Code of Business Ethics and Conduct
The Group’s Code of Business Ethics and
Conduct reaffirms the high standards of
business conduct required of all employees,
officers and directors of Tharisa. It forms
part of the Company’s continuing effort to
ensure that it complies with all applicable
laws, as an effective programme to prevent
and detect violations of law, and for the
education and training of employees,
officers and directors. In most circumstances,
the code sets standards that are higher than
the law requires and adherence to the code
aims to preserve the confidence and support
of the public and Tharisa’s shareholders.
Tharisa expects its employees, officers and
directors to:
(cid:3)• act with honesty, integrity and fairness in
all dealings, both internally and externally
(cid:3)• comply with all laws and regulations
applicable to the Group
(cid:3)• comply with Group policies and
procedures
(cid:3)• protect the health, safety and wellbeing
of co-workers, suppliers and the
communities in which the Group operates
(cid:3)• protect the environment by prudent use
of resources such as water and energy
and to limit waste disposal by recycling
(cid:3)• protect and not disclose Tharisa’s
confidential information
(cid:3)• avoid any potential conflicts of private
interests with the interests of the Group,
including, but not limited to, improper
communications with competitors or
suppliers regarding bids for contracts,
having close relationships with contractors
or suppliers, involvement with any other
businesses that have interests adverse to
Tharisa, interests in Tharisa or compete
with Tharisa
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Independent anonymous safety and
ethics hotline
The Group has a zero tolerance approach to
safety transgressions, theft, fraud,
corruption, violation of the law and
unethical business practices by employees or
suppliers.
A 24-hour independent anonymous safety
and ethics hotline monitored by
an independent external party is fully
operational and facilitates the reporting and
resolution of safety and ethical violations.
This confidential and anonymous hotline
provides an impartial facility for employees,
service providers, customers and other
stakeholders to report any safety or
ethics-related matter such as safety
concerns, unsafe behaviour and practices,
hazardous conditions, fraudulent activity,
corruption, statutory malpractice, financial
and accounting reporting irregularities and
other deviations from safe and ethical
behaviour. It is the duty of the Audit
Committee to ensure that arrangements are
in place for the independent investigation of
such matters and appropriate follow-up
action. No action will be taken against
anyone reporting legitimate concerns, even
if there is no proven unlawful conduct.
Investor relations
The CEO and CFO, supported by the
Investor Relations function, interact with
institutional investors on a regular basis on
the performance of the Group through
presentations and scheduled meetings. The
Company also participates in selected South
African and international conferences and
conducts roadshows in South Africa and
internationally.
A wide range of information and
documents, including copies of
presentations given to investors, annual
reports and notices of shareholder meetings,
are made available on the Company’s
website www.tharisa.com on an ongoing
basis.
Shareholders are encouraged to visit the
investors’ section of the website frequently
to be kept informed of the corporate
timetable, including dates for the AGMs,
forms of proxy and relevant shareholder
information relating thereto.
(cid:3)• not give or accept gifts, gratuities, or
hospitality from customers or suppliers of
inappropriate value, that could incur
obligations or that could influence
judgement
(cid:3)• avoid any situations or relationships that
could interfere with an individual’s ability
to make decisions in Tharisa’s best
interests
(cid:3)• to act in a courteous, dignified and
respectful manner when dealing with
co-workers and third parties and to refrain
from discriminatory, harassing or bullying
behaviour, whether expressed verbally, in
gesture or through behaviour.
Furthermore, it is Tharisa’s policy not to
discriminate against any employee on the
basis of race, religion, national origin,
language, gender, sexual orientation, HIV
status, age, political affiliation or physical or
other disability. Tharisa desires to create a
challenging and supportive environment
where individual contributions and
teamwork are highly valued. In order to
establish such an environment, all individuals
are expected to support this policy of
non-discrimination and Tharisa’s equal
employment opportunity policies.
Human Rights, modern slavery and
human trafficking
Tharisa acts ethically and with integrity in all
business dealings and has the necessary
systems and controls in place to safeguard
against any form of transgression of human
rights. Tharisa will continue to raise
awareness of human rights among its
employees, suppliers and the communities
in which it operates.
Modern slavery encapsulates slavery,
servitude and forced or compulsory labour.
Tharisa has a zero tolerance approach to any
form of modern slavery and is committed to
ensuring that there is no slavery or human
trafficking in its supply chain, or in any part
of its business.
Anti-bribery and corruption policy
Tharisa is committed to doing business
ethically. Tharisa does not tolerate
corruption, fraud and bribery and does not
allow donations to any political parties by
any of its operations. The Group’s anti-
corruption policy outlines potential risks,
steps to mitigate the risk of bribery and
corruption, together with a reporting
guideline. All employees, suppliers and other
associated persons are made aware of these
policies and procedures with regard to
ethical behaviour, business conduct and
transparency.
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Principle
Summary of how Tharisa applies the King IV Principles
Leadership, ethics and corporate citizenship
1. Leadership
The governing body should lead
ethically and effectively
Integrity
The Board is guided in all matters by the Board Charter, which sets out its role
and responsibilities. The Board subscribes to, and promotes the highest standards
of integrity and good corporate governance, itself acting ethically and setting the
tone for an ethical organisational culture. The Board’s ethical approach is further
strengthened by the diverse experience of its non-executive directors, the majority
of whom are independent.
Disclosure of other directorships, personal financial interests and any other conflicts
of interest, and those of related persons, in any matter before the Board is a
standing Board agenda item and a register is kept of all such disclosures. Directors
recuse themselves from discussion on any matters in which they may have a conflict
of interest.
The values and principles of Tharisa are defined in the Company’s Code of Business
Ethics and Conduct, which seeks to ensure compliance with relevant legislation and
regulations, in a manner that is beyond reproach.
The Social and Ethics Committee assists the Board by monitoring ethical leadership
and ethical behaviour, by reviewing the Company’s Code of Ethics and making
recommendations to the Board for approval, reviewing results of whistleblowing
activities, reviewing significant cases of employee conflicts of interest, misconduct
or fraud, or any other unethical activity by employees or the Company and
ensuring that the Company’s ethics performance is assessed, monitored, reported
and disclosed.
Competence
Upon appointment, all new directors are provided with induction materials to
familiarise them with the Group’s operations, business environment and members
of executive management. Periodic site visits are arranged for existing and new
non-executive directors to improve their understanding of the Group’s operations.
Directors are required to be diligent in discharging their duties to the Company,
seek to acquire sufficient knowledge of the business of the Company and
endeavour to keep abreast of changes and trends in the business environment
and markets in which the Company operates, in order to be able to provide
meaningful direction to the Company’s business activities and operations.
The Nomination Committee, under leadership of the Lead Independent Director,
conducts an evaluation of the effectiveness and performance of the Board, its
committees, and individual directors. Results and any identified training
requirements are discussed with individual directors if deemed necessary.
Responsibility
The Board is responsible for control of the Company and the strategic direction
of the Group. The Board exercises such control through the governance framework
of the Board and its committees. The Board Charter contains a list of matters
reserved for the Board.
The non-executive directors bring diverse experience and expertise to the Board.
They are required to have a clear understanding of the Group’s strategy and must
be sufficiently familiar with the Group’s businesses to be effective contributors to
the development of the Group’s strategy and identification and monitoring of risks
faced by the Group. Non-executive directors are required to have sufficient time
to perform their duties as directors and to make a meaningful contribution. They
should be prepared to question and challenge the opinions of executive directors
and provide fresh insight into the Group’s strategic direction.
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Summary of how Tharisa applies the King IV Principles
Leadership, ethics and corporate citizenship continued
1. Leadership continued
The governing body should lead
ethically and effectively
Accountability
Certain responsibilities are reserved for the Board, while others are delegated to
Board committees, each with formal mandates and terms of reference. This
delegation, however, does not reduce the individual and collective responsibilities
of Board members’ overall fiduciary duties and responsibilities.
Fairness and transparency
The Board is the ultimate custodian of the governance framework, which commits
the Company and its representatives to act according to the highest standards of
fairness, accountability, responsibility, transparency, ethics and sustainability. The
Board ensures that the Group is, and is seen to be, a responsible corporate citizen,
by having regard not only to the financial aspects of the business of the Group, but
also the impact that the business operations have on the environment and the
societies in which it operates.
2. Organisational ethics
The governing body should govern
the ethics of the organisation in a way
that supports the establishment of
an ethical culture
The Board Charter outlines the Board’s effective management of ethics. The
Group’s Code of Business Ethics and Conduct reaffirms the high standards of
business conduct required of all employees, officers and directors of Tharisa.
In most circumstances, the Code sets standards that are higher than the law
requires.
A 24-hour safety and ethics hotline, monitored by an independent external party,
facilitates the detection and resolution of safety and ethics violations. This
confidential and anonymous hotline provides an impartial facility for employees,
service providers, customers and other stakeholders to report any safety or
ethics-related matter such as safety concerns, unsafe behaviour and practices,
hazardous conditions, fraudulent activity, corruption, statutory malpractice,
financial and accounting reporting irregularities and other deviations from safe and
ethical behaviour. The Audit Committee ensures that arrangements are in place for
the independent investigation of such matters and appropriate follow-up action.
3. Responsible corporate citizenship
The governing body should ensure that
the organisation is, and is seen to be, a
responsible corporate citizen
The Board Charter outlines the Board’s responsibilities in this regard. Tharisa is
committed to the promotion of sound safety, health and environmental practices
in order to protect, enhance and invest in the wellbeing of the economy, society
and the environment.
The Board focuses on these matters through its Risk, Safety, Health and
Environment and Social and Ethics Committees.
The Social and Ethics Committee assists the Board by monitoring the Group’s
activities relating to good corporate citizenship and the impact of the Group’s
activities and its products or services on the environment, health and public safety,
the Company’s employment relationships and its contribution toward the
educational development of its employees. In order to ensure that Tharisa is seen
to be a responsible corporate citizen, the committee oversees and monitors, on
an ongoing basis, the consequences of the Group’s activities and outputs on:
(cid:3)• the workplace, by ensuring employment equity, fair remuneration, safety, health,
dignity and development of employees and the Group’s standing in relation to
the International Labour Organisation Protocol on decent work and working
conditions
(cid:3)• the economy, by working towards economic transformation
(cid:3)• the prevention, detection and response to fraud and corruption
(cid:3)• society, by upholding public health and safety, consumer protection, community
development and protection of human rights and
(cid:3)• the environment, by ensuring the prevention of pollution, minimising waste
disposal and protecting biodiversity.
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Principle
Summary of how Tharisa applies the King IV Principles
Strategy, performance and reporting
4. Strategy and performance
The governing body should appreciate
that the organisation’s core purpose,
its risks and opportunities, strategy,
business model, performance and
sustainable development are all
inseparable elements of the value
creation purpose
5. Reporting
The governing body should ensure that
reports issued by the organisation
enable stakeholders to make informed
assessments of the organisation’s
performance, and its short, medium
and long-term prospects
Governing structures and delegation
6. Primary role and responsibilities of
the governing body
The governing body should serve as the
focal point and custodian of corporate
governance in the organisation
The Board recognises that strategy, risk, performance and sustainability are
inseparable. The Board is responsible for aligning the strategic objectives, vision
and mission of the Group with performance and sustainability considerations.
The Board reviews and approves Group strategy, ensuring alignment with the
purpose of the Company, key value drivers, sustainability and legitimate interests
and expectations of stakeholders.
In terms of the Board Charter, approval of the strategy, business plans and
annual budgets and any subsequent material changes in strategic direction or
material deviations in business plans and/or annual budgets are matters reserved
for the Board.
The CEO provides executive leadership and is accountable to the Board for the
implementation of strategies, objectives and decisions within the framework of
the delegated authorities, values and policies of the Company, which include:
(cid:3)• developing the Company’s strategy and vision for Board consideration and
approval
(cid:3)• developing and recommending annual business plans and budgets that support
the Company’s long-term strategy to the Board
(cid:3)• monitoring and reporting to the Board on performance against and conformance
with strategic imperatives
(cid:3)• ensuring that the Company has appropriate management structures and a
management team to effectively carry out the Company’s objectives, strategy
and business plans.
The Company has controls to ensure the integrity of the Integrated Annual Report.
It is reviewed by the finance team, CFO, CEO, the Company Secretaries, senior
management, JSE sponsor, external auditor and the Audit Committee to ensure
that the information is a true reflection of the Group’s activities, prior to approval
by the Board.
The Board Charter sets out the Board’s responsibilities in relation to reporting and
the following are matters reserved for the Board:
(cid:3)• Adoption of any material change to or departure from the accounting policies
and practices of the Company and its subsidiaries.
(cid:3)• Approval of annual financial statements and interim reports and of any ancillary
documents related thereto.
The Board is committed to the highest standards of corporate governance and
believes that accountability, integrity, fairness, transparency and integrated thinking
are essential to the Group’s long-term sustainability and to its ongoing ability to
create value for investors and other stakeholders.
The Board is responsible for aligning the strategic objectives, vision and mission
of the Group with performance and sustainability considerations. In terms of the
Board Charter, approval of the strategy, business plans and annual budgets and any
subsequent material changes in strategic direction or material deviations in business
plans and/or annual budgets are matters reserved for the Board. The Board ensures
that risks impacting the business are adequately examined and mitigated by
management.
The Board, its committees and individual directors have unrestricted access to all
Company and Group information, the Company Secretaries, and may also consult
external professional advisers in executing their duties.
The number of meetings of the Board and its committees held and attendance
thereat is set out in the Integrated Annual Report.
The Board is satisfied that it has fulfilled its responsibilities in accordance with the
Board Charter during the financial year.
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Governing structures and delegation continued
7. Composition of the governing body
The governing body should comprise
an appropriate balance of knowledge,
skills, experience, diversity and
independence for it to discharge its
governance role and responsibilities
objectively and effectively
Composition
The unitary Board, which both leads and controls the Company, comprises three
executive directors, being the Executive Chairman, CEO and CFO, and seven
non-executive directors. Five of the seven non-executive directors are independent
of management. The Board is structured in such a way such that there is a clear
balance of authority, ensuring that no one director has unfettered powers.
Size and composition of the Board
The size of the Board is regulated by the Company’s Articles of Association and
directors are appointed through a formal process. The Nomination Committee
assists with the process by identifying suitable candidates for appointment as
directors. Directors are required to be individuals of high calibre and credibility
with the necessary skills and experience to bring judgement independent of
management, on issues of strategy, performance, resources, diversity, standards
of conduct and evaluation of performance.
The Nomination Committee also assesses the structure and composition of the
Board on an ongoing basis, taking into account the size of the Board and the
knowledge, skills, experience and demographics of the directors to ensure it is
appropriately diversified with regard to among others, gender, race, nationality,
skills, geographic and industry experience, age, personalities and other
characteristics of directors. Merit and diversity are the core considerations in
ensuring that the Board and its committees have an appropriate blend of
perspectives to effectively and competently discharge their duties having regard
to the strategic direction of the Group. The Nomination Committee has adopted
a Board level gender diversification policy without introducing a voluntary target.
At present, the two female directors represent 20% of the total number of
directors and 29% of the non-executive directors.
The Nomination Committee also reviews and assesses the composition of the
Board on an annual basis prior to recommending any individual director for election
or re-election by shareholders at the AGM.
Independence
As part of the assessment process, the Nomination Committee considers the
relationship between executive and non-executive directors and makes
recommendations to the Board. The Board believes that there is an appropriate
balance between executive and non-executive directors and is satisfied that the
current members of the Board collectively possess the skills, knowledge and
experience required to effectively discharge the responsibilities of the Board to
achieve the Group’s objectives, promote shareholder interests and to create value
for stakeholders over the long term.
Periodic rotation and nomination for re-election
In accordance with the Company’s Articles of Association, one-third of
non-executive directors must retire from office at each AGM. Retiring directors are
eligible for re-election. Executive directors are not subject to retirement by rotation.
Board support for re-election is not automatic and directors who are seeking
election or re-election are subject to a performance appraisal and the Board, upon
recommendation by the Nomination Committee, makes a determination as to
whether it will endorse a director standing for election or re-election.
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Principle
Summary of how Tharisa applies the King IV Principles
Governing structures and delegation continued
7. Composition of the governing body
continued
The governing body should comprise
an appropriate balance of knowledge,
skills, experience, diversity and
independence for it to discharge its
governance role and responsibilities
objectively and effectively
Succession planning
The Board, assisted by the Nomination Committee, is responsible for overseeing
succession planning and ensuring that appropriate strategies are in place to ensure
the smooth continuation of roles and responsibilities of members of the Board and
senior management.
Induction and mentorship
Upon appointment, all new directors are provided with the necessary information
to induct them in their fiduciary duties and responsibilities. In this respect, the
induction programme typically includes Articles of Association, the Board Charter,
committee terms of reference, information on directors’ and officers’ insurance,
a guide to the JSE Listings Requirements and a memorandum on dealings in
securities, market abuse and insider trading.
All directors, new and existing, have access to the Company Secretaries for
guidance as to the manner in which their responsibilities should be discharged in
the best interests of the Group.
It is the Executive Chairman’s role to enhance directors’ confidence, especially new
or inexperienced directors and to encourage them to make an active contribution
at meetings and to undergo training if required.
Conflicts of interests
Disclosure of other directorships, personal financial interests and any other conflicts
of interest, and those of related persons, in any matter before the Board is a
standing Board agenda item and a register is kept of all such disclosures. Directors
recuse themselves from discussion on any matters in which they may have a conflict
of interest. Non-executive directors are required to inform the Board of any
proposed new directorships and the Board reserves the right to review such
additional appointments to ensure that no conflict of interest would arise and to
ensure that a director accepting a new appointment would be able to continue
to fulfil his or her obligations as a member of the Board.
Independence
The Nomination Committee considers the independence of non-executive directors.
Consideration is given, among others, as to whether the individual non-executive
directors are sufficiently independent of the Company so as to effectively carry out
their responsibilities as directors, whether they are independent in judgement and
character and that there are no conflicts of interest in the form of contracts,
relationships, shareholding, remuneration, employment or related-party disclosures
that could affect their independence.
Lead independent non-executive director
The Lead independent non-executive director chairs the Nomination Committee,
Safety, Health and Environment Committee and Social and Ethics Committee,
facilitates meetings of the non-executive directors and is a member of the Audit,
Remuneration, Risk and Social and Ethics Committees. He acts as a sounding board
to the Executive Chairman and the CEO and leads the non-executive directors in
the appraisal of the Executive Chairman and CEO. He provides leadership and
advice to the Board when the Executive Chairman has a conflict of interest, without
detracting from the authority of the Executive Chairman. He acts as an intermediary
for the other Board members and shareholders with regard to concerns that have
not been resolved through the normal channels.
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Governing structures and delegation continued
8. Committees of the governing body
The governing body should ensure that
its arrangements for delegation within
its own structures promote
independent judgement, and assist
with balance of power and the effective
discharge of its duties
The Board is assisted in fulfilling its duties by well-structured committees, namely
the Audit Committee, Risk Committee, Remuneration Committee, Nomination
Committee, Safety, Health and Environment Committee, Social and Ethics
Committee and New Business Committee. These committees function according
to the Board-approved terms of reference in executing their mandates for which
the Board remains ultimately responsible. The terms of reference of all committees
are available on the Company’s website.
9. Evaluation of performance of the
governing body
The governing body should ensure that
the evaluation of its own performance
and that of its committees, its chair and
its individual members, support
continued improvement in its
performance and effectiveness
10. Appointment and delegation to
management
The governing body should ensure that
the appointment of, and delegation to,
management contribute to role clarity
and the effective exercise of authority
and responsibilities
The committees are appropriately constituted and all committees are empowered
to obtain such external independent advice as may be required to enable them to
discharge their duties. The majority of the directors on the committees are
non-executive and independent.
Details of the various Board committees, their composition, role and responsibilities
are set out in the Integrated Annual Report.
The Board and its committees conduct annual or bi-annual self-evaluation of the
performance of the Board, its committees, the Executive Chairman, CEO, CFO,
Company Secretary and individual directors. The results of the evaluations are
reviewed and considered by the Nomination Committee, the Board and the
respective committees. The Lead Independent Director, assisted by the Company
Secretary, coordinates the evaluation process.
CEO
The Board’s authority conferred on management is delegated through the CEO
and the authority and accountability of management is accordingly considered to
be the authority and accountability of the CEO. The CEO is the highest decision-
making officer in the Group and is accountable to the Board for the successful
implementation of the Group strategy and overall management of the Group.
In addition to the CEO’s responsibilities relating to the development and
implementation of the Group strategy, he is responsible for:
(cid:3)• recommending or appointing the executive members and ensuring proper
succession planning and performance appraisals
(cid:3)• ensuring that the assets of the Company are properly maintained and
safeguarded and not unnecessarily placed at risk
(cid:3)• setting the tone from the top in providing ethical leadership and creating an
ethical environment and not causing or permitting any decision, internal or
external practice or activity by the Company that may be contrary to commonly
accepted business practice, good corporate governance or professional ethics
(cid:3)• acting as the chief spokesperson of the Company.
The CEO is not a member of any Board committees other than the Risk Committee,
which comprises the whole Board, and the Social and Ethics Committee. He
attends the Audit, Remuneration, Nomination Committee and Safety, Health and
Environment Committee meetings as an invitee, if required.
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Principle
Summary of how Tharisa applies the King IV Principles
Governing structures and delegation continued
10. Appointment and delegation to
management continued
The governing body should ensure that
the appointment of, and delegation to,
management contribute to role clarity
and the effective exercise of authority
and responsibilities
The non-executive directors monitor and evaluate the CEO in achieving the
approved targets and objectives and the results of such evaluation are considered
by the Remuneration Committee to guide it in its appraisal of the performance
and remuneration of the CEO.
The Board and Nomination Committee oversee succession planning of the CEO
and other senior executives and officers.
The roles of the Executive Chairman and the CEO are not fulfilled by the same
person and there is a clear distinction between the roles and responsibilities of the
Chairman and the CEO, as set out in the Board Charter.
Subsidiary companies and delegation of authority
While boards of subsidiary companies function independently, the Company
requires decision-making involvement in a defined list of matters to ensure that
material decisions are in the interest of the Group.
The Group has approved delegation of authorities matrices in place, which govern
the delegation of authority and value limits within the Group and ensure that all
transactions are approved appropriately.
Company Secretaries
The role of the Company Secretaries is, inter alia, to provide guidance and advice
to the Board with respect to statutory, regulatory and corporate governance-related
matters. In addition to their statutory duties, the Company Secretaries provide
individual directors, the Board as a whole, and the various committees with
guidance as to the manner in which their responsibilities should be discharged in
the best interests of the Group.
The appointment and removal of the Company Secretaries are matters reserved
for the Board as a whole.
The Board formally assesses and considers the performance and qualifications of
the Company Secretaries and is satisfied that the Company Secretaries are
competent, suitably qualified and experienced, while maintaining an arm’s length
relationship with the Board.
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Governance functional areas
11. Risk governance
The governing body should govern risk
in a way that supports the organisation
in setting and achieving its strategic
objectives
12. Technology and information
governance
The governing body should govern
technology and information in a way
that supports the organisation setting
and achieving its strategic objectives
13. Compliance governance
The governing body should govern
compliance with applicable laws and
adopted, non-binding rules, codes and
standards in a way that supports the
organisation being ethical and a good
corporate citizen
The Board has delegated responsibility to monitor risk activities of the Company
to the Risk Committee while remaining ultimately accountable. The Risk Committee
comprises the full Board. The Board has delegated the responsibility to design,
implement and monitor Tharisa’s risk management plan to the senior management.
The Board, through the Risk Committee, sets limits for the levels of risk tolerance
and appetite and the implementation and management of the risk management
plan is monitored by the Risk Committee. Management performs risk assessments
on a continuous basis and provides regular feedback to the Risk Committee and
the Board.
A risk register is maintained by management and presented to the Risk Committee
and the Board to ensure continuous monitoring of the management of risk.
The Risk Committee and the Audit Committee provide assurance to the Board
regarding the efficacy of the risk management process, after consultation with
the internal and external auditors, where applicable.
The Board Charter commits the Board to assuming ultimate responsibility for
ensuring that effective IT systems, internal control, auditing and compliance
policies, procedures and processes are implemented in order to avoid or mitigate
key IT-related business risks. The Board has delegated responsibility for the
governing of IT to the Audit Committee. Assurance on the IT systems and processes
is provided by the Group’s internal auditors and findings are reported to the Audit
Committee, which ensures that any and all material findings are addressed
appropriately.
Compliance with financial reporting requirements and accounting standards falls
within the ambit of the Audit Committee.
The Group’s statutory and regulatory compliance resides with the Legal, Risk and
Compliance Officer and reports on compliance are presented to the Audit and
Social and Ethics Committees.
In addition to the formal authorisation processes required for dealing in the
Company’s shares, the Group has various policies and procedures in place
governing the declaration of interests, accepting and granting of gifts and
approved delegation of authorities matrices, governing the delegation of authority
and value limits within the Group.
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Summary of how Tharisa applies the King IV Principles
Governance functional areas continued
14. Remuneration governance
15. Assurance
The governing body should ensure that
assurance services and functions enable
an effective control environment, and
that these support the integrity of
information for internal decision
making and of the organisation’s
external reports
Remuneration policy
The Remuneration Committee ensures that the policies around the remuneration
of directors and executives are fair and effected responsibly. The remuneration
policy applies to all employees who are permanently employed and is not applicable
to employees of third-party contractors. The non-executive directors’ fees are
determined by the Board.
The Group’s remuneration policy reflects the dynamics of the market and the
context in which the Group operates. The policy plays a vital role in attracting,
motivating and retaining employees, management and directors with the necessary
skills to effectively manage operations and grow the business, creating a strong
performance-orientated environment and aligning employee and shareholders’
interests. The Group regularly seeks and uses remuneration survey services.
The Group aims to create and enforce a high-performance culture that motivates
employees to achieve more than just satisfactory levels of performance by
differentiating between excellent and mediocre performance. By ensuring that
employees are recognised and rewarded for their performance in a fair and
equitable manner, the Group strives to remunerate employees equitably according
to the value they contribute to the Group.
Basic remuneration packages and benefits are set at a competitive level by
benchmarking prevailing market rates in the mining industry and are reviewed
on an annual basis.
Guaranteed cost-to-company remuneration consists of a cash component plus
certain benefits.
Short-term and long-term incentives are geared to a number of performance
factors in the business and achievement of individual performance. The
remuneration philosophy establishes accountability by linking total reward to
business objectives in a fair and transparent manner in a bid to find a balance
between shareholder return requirements, affordability and incentivisation.
Remuneration policy and remuneration implementation report
The Company provides full disclosure of remuneration of executive and non-
executive directors as required by the JSE Listings Requirements and King IV.
The remuneration policy is published in the remuneration policy and remuneration
implementation report, which forms part of the Integrated Annual Report, and is
subject to non-binding advisory votes by shareholders at the AGM.
The Audit Committee oversees the combined assurance framework and receives
regular reports on assurance matters from the external auditor, internal auditors
and executive management.
The Audit Committee oversees the internal audit function, including reviewing
the effectiveness of internal controls, approving the annual internal audit plans
and fees, and recommending appointment of the internal auditors.
The Audit Committee approves the non-audit services provided by the external
auditors, recommends approval of the audit fees, considers the effectiveness and
independence of the external auditor, and recommends the appointment/
reappointment of the external auditor.
The Risk Committee and the Audit Committee provide assurance to the Board
regarding the efficacy of the risk management process, after consultation with
the internal and external auditors, where applicable.
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Stakeholder relationships
16. Stakeholder relationships
In the execution of its governance role
and responsibilities, the governing body
should adopt a stakeholder-inclusive
approach that balances the needs,
interests and expectations of material
stakeholders in the best interests of the
organisation over time
The Board has delegated authority to management to proactively deal with
stakeholder relationships.
Stakeholder perceptions are closely managed through engagement on multiple
levels, which allows management to manage and mitigate any potential issues,
reducing the likelihood of reputational risk.
The Board and management are striving to achieve the appropriate balance
between various stakeholder groupings, in the best interests of the Company.
The Cyprus Companies Law and the JSE Listings Requirements contain appropriate
protection of shareholders and the Articles of Association do not remove such
protection. Senior management and the investor relations team ensure that all
shareholders are treated equitably.
Senior management ensures that timely, relevant and accurate information is
provided to all stakeholders to maintain their trust and confidence in the Group.
The CEO and CFO, (supported by the investor relations function) interact with
institutional investors on a regular basis on the performance of the Group through
presentations and scheduled meetings. The Company also participates in selected
international conferences and conducts roadshows internationally.
A wide range of information and documents, including copies of presentations
given to investors, Integrated Annual Reports and notices of shareholder meetings,
are made available on the Company’s website www.tharisa.com on an ongoing
basis. Shareholders are encouraged to visit the investors’ section of the website
frequently to be kept informed of relevant shareholder information.
The Board encourages directors, shareholders and relevant stakeholders to attend
the AGM and other shareholders’ meetings. The AGM is also attended by the
chairmen of the Audit, Remuneration and Social and Ethics committees and the
designated partner responsible for the external audit.
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The Remuneration Committee
has engaged a global consulting
firm to assess the Group’s
existing executive remuneration
structure and long-term
incentive scheme and to assist
the Committee in designing
long-term incentive programmes
that adequately motivate and
retain key employees, while
strengthening the relationship
between rewards and employee
performance, in line with best
practice.
Background statement and
governance
Remuneration Committee
All members of the Remuneration
Committee are independent non-
executive directors. The committee is
chaired by Antonios Djakouris and other
members of the committee are David
Salter, Carol Bell and Roger Davey.
The responsibilities and duties of the
Remuneration Committee are governed
by the terms of reference that incorporate
best practice.
While the Group Remuneration
Committee establishes, maintains, reviews
and governs the Group’s remuneration
policy, it focuses mainly on the
remuneration of executive directors,
executives and senior management. The
Remuneration Committee considers the
remuneration framework of the Executive
Chairman, CEO, CFO and other members
of the executive management of the
Company and its subsidiaries, with
reference to international and local
benchmarks.
The committee also considers the rules
and performance requirements for the
Group-wide cash bonus scheme,
allocations in terms of the Group’s
long-term incentive schemes,
discretionary bonuses and certain other
employee benefits and schemes.
Both internal and external factors are
taken into account in determining the
remuneration framework, to ensure
ongoing relevance and appropriateness
in the context of the macroeconomic
climate and the Group’s business
objectives, among others:
(cid:3)• inflation
(cid:3)• commodity prices
(cid:3)• bargaining unit negotiations and
settlements in the industry
(cid:3)• production
(cid:3)• position on the cost curve
(cid:3)• profitability and cash flows
(cid:3)• skills availability and retention
(cid:3)• individual productivity and key
performance indicators.
The committee is satisfied with the
prevailing policies and structure and no
changes to the remuneration policy are
proposed.
During the year, the committee
(cid:3)• reviewed various aspects of the Group’s
remuneration policy, structure, and
performance-based remuneration
schemes
(cid:3)• considered the fixed total guaranteed
packages and variable short-term and
long-term incentives of executive
management against market data of
a comparator group comprising
companies with a similar profile to
Tharisa from an investor’s point of
view and approved annual increases
for all employment levels outside of
the bargaining unit
(cid:3)• reviewed and approved targets for
the cash bonus scheme
(cid:3)• reviewed and approved the vesting
conditions for the awards made in
terms of the Group’s long-term
incentive scheme
(cid:3)• approved new awards in terms of
the incentive scheme.
Members of the committee are entitled
to seek independent professional advice
on any matter pertaining to the Company
and the Group, at the Company’s
expense. At the AGM held on 23 January
2019, the resolutions to approve the
Group remuneration policy and the
remuneration implementation report were
passed, with both resolutions receiving
89.9% support. The Remuneration
Committee and the Board were grateful
for this strong level of support from
shareholders. During the financial year,
the committee considered the views
expressed by those shareholders who
voted against the resolutions, recognising
the varying expectations of investors
based in different markets. As part of
this process, independent advisory firm
Korn Ferry was engaged to review the
remuneration policy, with a particular
focus on the extent of compliance with
market practice for UK-listed companies,
taking into account the views of
institutional investors and proxy advisers.
The review included a detailed assessment
of the current long-term incentive scheme
and identified a number of areas where
amendments could be made to ensure
the scheme is fully aligned with good
practice in the markets in which Tharisa
operates and is listed.
Following consideration of the findings of
the review by the Remuneration
Committee and the Board, Korn Ferry has
been engaged to assist with the design of
a new long-term incentive arrangement
which supports Tharisa’s strategic
objectives while reflecting the
expectations of leading institutional
investors. This project is ongoing and we
expect to consult with major shareholders
on any resulting proposals during the
course of the financial year. Full details of
our final conclusions and any related
changes to the remuneration policy will
be included in next year’s annual report.
The terms of reference for the
Remuneration Committee, as approved
by the Board, are available on the
Company’s website.
The committee met three times during
the year under review.
Non-binding advisory vote
In terms of King IV recommendations,
and the JSE Listings Requirements, the
Company’s remuneration policy and the
remuneration implementation report, as
detailed in this report, must be tabled for
two separate non-binding advisory votes
at every AGM. The purpose of the
non-binding advisory votes is to enable
shareholders of the Company to express
their views on the Group’s remuneration
policy, and on its implementation.
The remuneration policy, as described in
the Company’s 2018 Integrated Annual
Report, received the support of 89.94%
of votes exercised at the AGM held on
23 January 2019. Shareholders are
thanked for their continued support of
the Group remuneration policy.
Shareholders’ contributions on the
remuneration policy, including high level
interactions on an individual basis with
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some of the major shareholders, have
been considered and will continue to be
assessed for incorporation into the
remuneration policy where these
contributions enhance and align with the
Group’s strategy.
Shareholders will again have the
opportunity to vote on the remuneration
policy and its implementation at the
next AGM, scheduled to be held on
29 January 2020. It is the
recommendation of the Remuneration
Committee and the Board that the
remuneration policy and implementation
report be approved.
Group remuneration policy
Objective and philosophy
The objective of the Group’s remuneration
policy is to establish responsible, fair
and equitable reward, which does not
discriminate on the basis of race, gender,
sex, pregnancy, marital status, family
responsibility, ethnic or social origin,
colour, sexual orientation, age, disability,
religion, HIV status, conscience, belief,
political opinion, culture, language, birth
or on any other arbitrary ground.
The Group’s remuneration policy reflects
the dynamics of the market and the
context in which the Group operates.
The policy plays a vital role in attracting,
motivating and retaining high-calibre
human resources with the necessary
skills to effectively manage operations
and grow the business, creating a strong
performance-orientated environment
and aligning employee interests with
those of the Group’s stakeholders in
order to achieve the Group’s strategic
objectives and to promote an ethical
culture and responsible citizenship among
all Group companies and employees.
Furthermore, it aims to encourage and
support a high performance and safety
conscious culture while remaining flexible
and adaptable to changes in the business
and the market in which the Group
operates. The Group regularly refers to
independent remuneration surveys and
benchmarks.
The remuneration policy applies to all
employees who are permanently
employed and is not applicable to
employees of third-party contractors.
The policy seeks to set out principles
and practices around the management
of employee remuneration.
Executive and employee remuneration
comprises fixed and variable components,
including:
(cid:3)• a fixed basic annual package, including
benefits
(cid:3)• variable performance bonuses
(cid:3)• ownership of shares through
participation in the long-term incentive
scheme.
The Group aims to create and enforce a
high-performance culture that motivates
employees to achieve more than just
satisfactory levels of performance by
differentiating between excellent and
mediocre performance. By ensuring that
employees are recognised and rewarded
for their performance in a fair and
equitable manner, the Group strives
to remunerate employees equitably
according to the value they contribute
to the Group.
Some 51% of Tharisa Minerals’ eligible
employees are members of the
Association of Mineworkers and
Construction Union of South Africa
(‘AMCU’). Tharisa Minerals has a
recognition agreement with AMCU,
which gives the union full organisational
rights. Accordingly, all unionised
employees’ salary levels, annual
increases and allowances are negotiated
on a collective basis.
Fixed remuneration
Guaranteed cost-to-company (fixed)
remuneration packages and benefits
(guaranteed pay) are determined per
job grade, set at a competitive level by
benchmarking prevailing market rates in
the mining industry and are reviewed on
an annual basis. The objective is to set
levels of fixed remuneration for South
African employees based on the 50th
percentile for mining companies in South
Africa and the 75th percentile for all
companies nationally in South Africa,
the purpose being to broaden the sample
size and to include mining areas situated
outside of the major mining economic
hubs. The mining industry is, however,
a very competitive market with a scarcity
of appropriate skills and top-end salary
scales are often paid to attract and retain
critical skills. The guaranteed cost-to-
company remuneration consists of a cash
component (basic salary) plus certain
benefits, which, depending on the
employing company, include compulsory
membership of the Group provident fund,
which includes risk benefits such as life,
disability, funeral and dread disease cover,
and the Group’s medical aid scheme.
Various other allowances are paid at
certain job levels or to certain job
categories.
Salaries are reviewed annually, taking into
consideration the economic environment,
country inflation, overall business and
financial performance of the Group,
affordability, market trends, individual
merit and scarcity of skills.
Variable remuneration
Short-term and long-term incentives are
geared to a number of performance
factors in the business and achievement
of individual performance, and do not
form part of guaranteed remuneration.
The remuneration philosophy establishes
accountability by linking total reward to
business objectives and execution thereof,
in a fair and transparent manner in a bid
to find a balance between shareholder
return requirements, affordability and
incentivisation. Actual participation in
both short-term and long-term incentive
schemes remains subject to approval by
the Remuneration Committee.
Short-term cash bonus scheme
The Group has implemented a short-term
cash bonus scheme for all bands of
employees. The primary purpose of the
cash bonus scheme is to create a culture
of zero tolerance concerning non-
compliance with safety requirements in
supporting injury free, sustainable
operations. A further objective of the
bonus scheme is to reward superior
performance, drive a culture of cost
efficiency, and enhance teamwork and
productivity.
Throughout all employee grades, the
cash bonus is calculated at 15% of the
individual employee’s guaranteed annual
remuneration package for on-target
performance, capped at a maximum of
25% of the employee’s guaranteed
remuneration package for ‘stretch’
performance. These bonuses are not
guaranteed, but are dependent on the
achievement of safety standards and
are payable only upon the achievement
of production targets and personal
performance standards. The quantum
of bonuses is calculated in terms of a
number of different bonus formulae,
specific to an individual’s area and band
88 THARISA PLC INTEGRATED ANNUAL REPORT 2019
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of employment. The bonus formulae
include a number of factors, with varying
weighting, among others:
(cid:3)• safety and fatality factors, which take
into account the number of lost-time
injuries (LTIs) and fatalities at the
Tharisa Mine during the bonus period
(cid:3)• the value-added factor applicable to
employees, which is a combined
calculation of the performances of a
number of measures relating to the
mining and processing plants at the
Tharisa Mine compared to budget, such
as reef tonnes delivered to ROM pad,
chrome feed grade and PGM feed
grade, tonnes milled, plant running
time, chrome recoveries, PGM
recoveries with a different percentage
being allocated to threshold, on-target
and exceptional performance, and
a zero percentage being applied for
unacceptable performance
(cid:3)• the key performance indicator (‘KPI’)
factor, which is dependent on the
individual’s performance assessment for
the applicable bonus period
(cid:3)• the profit factor, which is determined
with reference to the achievement of
a specified EBITDA for the applicable
bonus period as determined by the
Remuneration Committee
(cid:3)• the disciplinary factor, which is
determined with reference to the
aggregate number of written warnings
received by an individual as a result
of misconduct in terms of the Group’s
policies and procedures.
In addition to the fatality and safety
factors, the bonus formula for executive
management includes the performance
factor applicable to executive
management, which is dependent on:
(cid:3)• the executive’s KPI factor
(cid:3)• the value-added factor for executive
management, which is measured with
respect to the achievement of annual
Group consolidated EBITDA against
budget for the bonus period, with a
different percentage being allocated
to on-target and exceptional
performance, and zero percentage
being allocated for unacceptable
performance.
The bonuses are payable bi-annually
in arrears for executive management,
quarterly in arrears for senior
management, management and
employees graded Paterson band E2
and above, and monthly in arrears for
employees of bands E1 and below.
A new bonus scheme was implemented
at the Tharisa Mine during 2019,
applicable to employees working in
various mining disciplines (drilling,
blasting, loading and hauling, and
engineering). The main purpose for
establishing this new scheme was to pay
bonuses based on individualised targets
and performance, rather than on generic
principles. This has a positive impact on
individual performance. The bonuses are
paid weekly and bonus calculations are
based on individual performance per shift
or per day, ensuring that employees are
motivated to perform on a daily basis.
An employee will not be entitled to any
bonus in the event that prior to the
payment date, the employee had been
suspended pending a disciplinary enquiry
or had been given a final written warning
in terms of the employer company’s
policies and procedure in the quarter
applicable to the bonus. If an employee
ceases to be employed before the
payment date of the cash bonus, the
bonus will be forfeited.
However, if an employee’s employment
with any employer company terminates
before the end of the quarter applicable
to the bonus due to death, ill-health,
injury or disability as established to the
satisfaction of the Remuneration
Committee, retirement, retrenchment,
or such other reason provided for in the
rules of the cash bonus scheme, such
employee will qualify for a pro rata
bonus, based on the number of days
served in the relevant bonus period.
The Remuneration Committee reviews
and approves targets to ensure that they
are fair and transparent and that they
support the aim to achieve maximum
shareholder return.
Long-term incentives
The design and implementation of the
Tharisa Share Award Plan was approved
by shareholders on 13 March 2014.
The purpose of the Share Award Plan is:
(cid:3)• to act as a retention tool
(cid:3)• to incentivise selected employees within
the Group by rewarding the long-term
sustained performance required for
the ongoing performance and growth
of the Group
(cid:3)• to align management interests with
those of shareholders.
This is achieved by attaching a number
of performance conditions of different
weighting to the vesting of the
Conditional Awards and Appreciation
Rights awarded to various employees at
Paterson grade C5 and above, including:
(cid:3)• the achievement of certain minimum
safety standards to reinforce the Tharisa
Group’s emphasis on safety and the
strive for a zero harm work
environment, the vesting of all tranches
of the Conditional Awards and
Appreciation Rights awarded in terms
of the Share Award Plan being
conditional upon there being no fatality
at the Tharisa Mine during the vesting
period
(cid:3)• continued employment in good
standing
(cid:3)• the achievement of certain PGM and
chrome concentrate production metrics
(cid:3)• the achievement of the individual key
performance metrics set for the
individual participant
(cid:3)• the achievement of certain financial
metrics.
The number of awards and the
performance conditions attached thereto
are determined by the Remuneration
Committee at the date of grant and
included in the notice of the award.
Under the Share Award Plan, the
following awards may be made:
(cid:3)• Conditional Awards represent a
specified number of shares in the
Company, contingent on the
achievement of performance conditions
established by the Remuneration
Committee. The vesting dates for these
awards are also established by the
Remuneration Committee and vesting
takes place in three equal tranches.
(cid:3)• Appreciation Rights, which are rights
to receive such number of shares in the
Company equal to the increase in the
market price of such shares on the JSE,
between the date of grant and the date
of exercise of the award. The award
may be exercised between the vesting
date as set by the Remuneration
Committee and the fifth anniversary
of the date of grant. Vesting of
Appreciation Rights may also be
contingent upon the achievement of
performance conditions set by the
Remuneration Committee and vesting
takes place in two equal tranches.
The Share Award Plan makes provision
for the partial vesting of awards in the
event of a participant ceasing to be in
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the employ of the Group due to death,
injury, disability, ill-health, redundancy
or retirement and in the event of certain
corporate actions, including an offer
to acquire the entire share capital of the
Company, a scheme of arrangement,
restructuring and voluntary winding
up of the Company. Provided that the
performance and safety metrics are met,
the vesting is prorated based on the
number of days served during the relevant
vesting period under these circumstances.
The Share Award Plan does not currently
make provision for post-vesting forfeiture
of vested Conditional Awards or
Appreciation Rights.
The Share Award Plan also makes
provision for individual participant and
plan limits. On an individual basis, the
aggregate number of shares realisable by
any individual participant may not exceed
1 273 903 shares, being 0.5% of the
ordinary issued share capital at the date
of approval of the Share Award Plan.
Similarly, the aggregate number of shares
that can be issued to all participants, is
limited to 12 739 032 shares, being 5%
of the ordinary issued share capital at the
date of approval of the Share Award Plan.
Treasury shares
Vested awards may, at the election of the
Remuneration Committee, be either
share-settled or cash-settled as provided
in the rules of the Share Award Plan. To
date, the preferred approach has been
to issue treasury shares to settle vested
awards.
During the financial year, the Company
issued 5 000 000 new ordinary shares
into the treasury share account and
transferred 5 707 893 ordinary shares
from its treasury shares account to satisfy
the vesting of the Conditional Awards
and exercise of Appreciation Rights by
the participants of the Share Award Plan.
Following these transactions,
266 610 322 shares have voting rights
and 3 389 678 were held in treasury
at 30 September 2019.
Executive directors
Each director should be remunerated
fairly and the remuneration paid to each
director should take into account the
individual director’s level of responsibility,
skills and experience. All executive
directors have employment contracts,
are remunerated in accordance with their
function and position, and are not
remunerated for their roles as directors.
Executive directors are subject to the
Group’s standard terms and conditions
of employment with notice periods being
six months. In line with the remuneration
guidelines of King IV, no executives have
extended employment contracts or
special termination benefits. Should the
Group elect to invoke the non-compete
provisions of the employment contracts
on termination, payments linked to
the duration of the non-compete will
be made.
The executive directors are eligible to
participate in the short-term cash bonus
scheme and long-term incentives in terms
of the Share Award Plan.
Remuneration of key positions such as
CEO and CFO is determined by making
reference to remuneration surveys and
benchmarking to peer companies in the
mining sector for companies listed on
the JSE and the LSE.
While ensuring that the total
remuneration of executive management
remains fair and reasonable in the context
of the achievement of the Group’s
strategic objectives, the Remuneration
Committee is committed to reviewing and
monitoring the overall Group
remuneration and wage gap.
There is currently no minimum
shareholding requirement for executive
directors and executive management.
Non-executive directors
Appointment of non-executive directors
is governed by the Company’s Articles of
Association and the terms of appointment
are set out in a formal letter of
appointment. The initial term of
appointment is three years and
appointment can be extended thereafter.
Continuation of appointment is
conditional upon satisfactory
performance, retirement by rotation and
re-election at AGMs as required by the
Articles of Association.
Appointment as a non-executive director
may be terminated at any time by the
Company in accordance with the Articles
of Association and Cypriot Companies
Law, or upon resignation. Upon
termination of the appointment or
resignation as a director for any reason,
non-executive directors are not entitled to
any damages for loss of office and no fee
is payable in respect of any unexpired
portion of the term.
Non-executive directors are entitled to
receive fees for their time, responsibilities
and services as non-executive directors.
An annual fee is paid to all directors
and additional fees are paid based on
membership and chairmanship of Board
committees. Non-executive directors’ fees
are determined by the Board and are
payable quarterly in arrears. Non-
executive directors are not entitled to
bonuses or to participate in the Group’s
short-term and long-term incentives.
The office as a non-executive director is
not pensionable.
Following a benchmarking exercise comparing the Company’s non-executive directors’ fees with those of mid-cap resources
companies listed on the JSE, non-executive directors’ fees paid to directors of LSE listed companies and taking into account the rates
of inflation in the United Kingdom and Cyprus, the Board agreed to maintain the non-executive directors’ fees for the 2020 financial
year as follows:
US$
Annual fee
Committee chairman
Committee member
No changes to the remuneration policy are proposed.
FY2020
FY2019
42 500
25 000
18 000
42 500
25 000
18 000
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Long-term incentives
2014 award
The first awards under the Share Award
Plan were made on 9 April 2014,
comprising both Conditional Awards and
Appreciation Rights. These awards were
conditional on the listing of the Company
on the JSE and the participant remaining
employed by the Group at the time of
vesting. The Conditional Awards vested in
three tranches on 19 June 2015, 14 June
2016 and 30 June 2017 respectively and
the Appreciation Rights vested in two
tranches on 19 June 2015, and 14 June
2016 respectively. The Company issued
the requisite number of shares to satisfy
its obligations under the Share Award
Plan on 26 June 2015, 30 June 2016 and
13 July 2017 respectively. All the tranches
of the 2014 award have vested.
2015 award
The second awards under the Share
Award Plan were made on 30 June 2015,
comprising both Conditional Awards and
Appreciation Rights. The vesting of these
awards was subject to:
(cid:3)• There being no fatality at the Tharisa
Mine during the vesting period. In the
event of a fatality occurring during a
particular vesting period, the vesting for
that tranche is forfeited.
(cid:3)• Subject to there being no fatality
during a vesting period, the vesting of
each tranche is subject to the following
conditions, as determined on the date
of the awards:
– 33.34% of the vesting is conditional
upon the participant’s continued
employment in good standing
– 33.33% of the vesting is conditional
on the achievement of certain PGM
production metrics
– 33.33% of the vesting is conditional
on the achievement of certain
chrome concentrate production
metrics.
These performance conditions for the
performance period, being 1 July to
30 June for each vesting period, were
measured at each vesting date and
applied to the tranche which was eligible
for vesting at that date.
As a consequence of the fatality that
occurred on 28 September 2015, the
vesting of the first tranche of the 2015
awards granted on 30 June 2015 was
forfeited.
The second tranche of the Conditional
Awards vested on 30 June 2017 and
the second and final tranche of the
Appreciation Rights vested on the
same date. The final tranche of the
Conditional Awards vested on
30 June 2018. All the tranches of
the 2015 award have now vested.
2016 award
The third awards under the Share Award
Plan were made on 30 June 2016,
comprising both Conditional Awards and
Appreciation Rights. The vesting of these
awards for eligible and participating
employees other than executive directors
and members of the Group executive
management is subject to:
(cid:3)• There being no fatality at the Tharisa
Mine during the vesting period. In the
event of a fatality occurring during a
particular vesting period, the vesting
for that tranche is forfeited.
(cid:3)• Subject to there being no fatality
during a vesting period, the vesting of
each tranche is subject to the following
conditions, as determined on the date
of the awards:
– 33.34% of the vesting is conditional
upon the participant’s continued
employment in good standing
– 33.33% of the vesting is conditional
on the achievement of certain PGM
production metrics
– 33.33% of the vesting is conditional
on the achievement of certain
chrome concentrate production
metrics.
Vesting conditions for executive directors
and members of the Group executive
management are as follows:
(cid:3)• There being no fatality at the Tharisa
Mine during the vesting period. In the
event of a fatality occurring during a
particular vesting period, the vesting
for that tranche is forfeited.
(cid:3)• Subject to there being no fatality
during a vesting period, the vesting of
each tranche is subject to the following
conditions, as determined on the date
of the awards:
– 65.0% of the vesting is conditional
upon the achievement of the
individual key performance metrics
set for the participant
– 17.5% of the vesting is conditional
on the achievement of certain PGM
production metrics
– 17.5% of the vesting is conditional
on the achievement of certain
chrome concentrate production
metrics.
These performance conditions for the
performance period, being 1 July to
30 June for each vesting period, are
measured at each vesting date and
applied to the tranche which was eligible
for vesting at that date.
The first and second tranches of both the
Conditional Awards and Appreciation
Rights vested on 30 June 2017 and
30 June 2018 respectively, and the third
tranche of the Conditional Awards vested
on 30 June 2019. All the tranches of the
2016 award have now vested.
2017 award
The fourth awards under the Share Award
Plan were made on 30 June 2017,
comprising both Conditional Awards and
Appreciation Rights. The vesting of these
awards is subject to:
(cid:3)• There being no fatality at the Tharisa
Mine during the vesting period. In the
event of a fatality occurring during a
particular vesting period, the vesting
for that tranche is forfeited.
(cid:3)• Subject to there being no fatality
during a vesting period, the vesting of
each tranche is subject to the following
conditions, as determined on the date
of the awards:
– 33.34% of the vesting is conditional
upon the participant’s continued
employment in good standing
– 33.33% of the vesting is conditional
on the achievement of certain
PGM production metrics
– 33.33% of the vesting is conditional
on the achievement of certain
chrome concentrate production
metrics.
These performance conditions for the
performance period, being 1 July to
30 June for each vesting period, are
measured at each vesting date and
applied to the tranche which was eligible
for vesting at that date.
The first and second tranches of both the
Conditional Awards and Appreciation
Rights vested on 30 June 2018 and
30 June 2019 respectively.
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2018 award
The fifth awards under the Share Award Plan were made on 30 June 2018, comprising both Conditional Awards and Appreciation
Rights. The vesting of these awards is subject to:
(cid:3)• there being no fatality at the Tharisa Mine during the vesting period. In the event of a fatality occurring during a particular vesting
period, the vesting for that tranche is forfeited
(cid:3)• subject to there being no fatality during a vesting period, the vesting of each tranche is subject to the following conditions, as
determined on the date of the awards:
– 33.33% of the vesting is conditional upon the participant’s continued employment in good standing
– 16.67% of the vesting is conditional on the achievement of certain PGM production metrics
– 16.67% of the vesting is conditional on the achievement of certain chrome concentrate production metrics
– 33.33% of the vesting is conditional on the achievement of certain financial metrics (measured against budgeted EBITDA of
Tharisa Minerals for employees in Paterson band D and lower, and measured against budgeted EBITDA of the Tharisa Group for
executive directors, Group executive management and employees in Paterson band E and higher).
These performance conditions for the performance period, being 1 July to 30 June for each vesting period, are measured at each
vesting date and applied to the tranche which was eligible for vesting at that date.
The Remuneration Committee determined that only 50% of the first tranches of both the Conditional Awards and Appreciation
Rights vested on 30 June 2019. The remaining 50% was forfeited as a consequence of the production and EBITDA metrics not
having been met.
The Remuneration Committee will consider further awards on an annual basis in terms of the approved Share Award Plan.
Executive directors’ remuneration
US$’000
L Pouroulis
P Pouroulis
M Jones
Provident
fund
contributions
and risk
benefits
Basic
salary
Expense
allowance
Share-based
payments
Bonus
paid
717
476
397
–
8
–
–
41
35
472
395
311
89
73
57
Total
2019
1 278
993
800
Total
2018
1 278
1 135
976
Non-executive directors’ fees for the year under review
US$’000
Annual fee
Audit
Committee
Nomination
Committee
Remuneration
Committee
SHE
Committee
Other in
Group
companies
Total
2019
Total
2018
JD Salter
A Djakouris
OM Kamal
C Bell
J Ka Ki Cheng
RO Davey
ZL Hong
43
43
43
43
43
43
43
18
25
18
18
–
–
–
25
18
–
–
–
–
–
18
25
–
18
–
18
–
25
18
–
18
–
18
–
[48]
–
–
–
–
–
–
177
129
61
97
43
79
43
182
129
61
97
43
79
21
The Risk Committee comprises all members of the Board and does not carry a fee. The Social and Ethics and the New Business
Committees do not carry a fee.
Other disclosures
No payments were made in relation to loss of office during FY2019 nor were any payments made to any former directors.
92 THARISA PLC INTEGRATED ANNUAL REPORT 2019
REMUNERATION
REPORT CONTINUED
Executive directors’ interests in the Tharisa Share Award Plan
Conditional awards
As at 30 September 2019
Opening
balance of
unvested
awards
Market
value at
date of
award
ZAR Allocated
Value at
date of
award
ZAR
Director and offer date
L Pouroulis
30 June 2016
30 June 2017
30 June 2018
30 June 2019
Total
P Pouroulis
30 June 2016
30 June 2017
30 June 2018
30 June 2019
Total
M Jones
30 June 2016
30 June 2017
30 June 2018
30 June 2019
Total
134 102
214 392
264 138
–
612 632
111 751
188 588
239 592
–
539 931
100 576
158 808
193 476
–
452 860
10.14
17.53
17.96
–
10.14
17.53
17.96
–
10.14
17.53
17.96
–
325 530
325 530
20.08
359 568
359 568
20.08
196 164
196 164
20.08
Vesting
price
ZAR
Forfeited
Total
unvested
21.75
21.75
21.75
–
21.75
21.75
21.75
–
21.75
21.75
21.75
–
–
107 196
176 092
325 530
44 023
–
44 023
608 818
–
94 294
159 728
359 568
39 932
–
39 932
613 590
–
79 404
128 984
196 164
32 246
–
32 246
404 552
Vested
134 102
107 196
44 023
–
285 321
111 751
94 294
39 932
–
245 977
100 576
79 404
32 246
–
212 226
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Appreciation rights
Director and offer date
Unvested
balance
Market
value at
date of
award
ZAR Allocated
Value at
date of
award
As at 30 September 2019
Total
vested
but not
Vested Exercised
exercised Forfeited
Lapsed
Total
unvested
L Pouroulis
9 April 2014
30 June 2015
30 June 2016
30 June 2017
30 June 2018
30 June 2019
Total
P Pouroulis
9 April 2014
30 June 2015
30 June 2016
30 June 2017
30 June 2018
30 June 2019
Total
M Jones
9 April 2014
30 June 2015
30 June 2016
30 June 2017
30 June 2018
30 June 2019
Total
38.00
6.44
10.14
17.53
17.96
–
38.00
6.44
10.14
17.53
17.96
–
38.00
6.44
10.14
17.53
17.96
–
160 794
264 138
–
424 932
141 441
239 592
–
381 033
119 106
193 476
–
312 582
325 530
325 530
20.08
359 568
359 568
20.08
196 164
196 164
20.08
160 794
66 035
–
226 829
141 441
59 898
–
201 339
119 106
48 369
–
167 475
80 526
79 192
402 306
321 588
66 035
–
66 034
–
132 069
325 530
869 121
66 034
80 526
457 599
67 105
65 993
335 255
282 882
59 898
–
59 898
–
119 796
359 568
–
744 028
59 898
67 105
479 364
60 394
59 394
301 730
238 212
48 369
–
48 369
–
96 738
196 164
–
647 705
48 369
60 394
292 902
94 THARISA PLC INTEGRATED ANNUAL REPORT 2019
DIRECTORS’
REPORT
The Board of Directors of Tharisa plc (‘the
Company’) presents to the members its
report together with the condensed
consolidated financial statements of the
Company and its subsidiaries (together
with the Company, ‘the Group’) for the
year ended 30 September 2019.
The Company is a Cypriot incorporated
public company with a primary listing on
the main board of the Johannesburg
Stock Exchange and a secondary standard
listing on the main board of the London
Stock Exchange.
Principal activity
The principal activity of the Company is
that of an investment holding company.
Tharisa maintains a primary listing on the
Johannesburg Stock Exchange under the
general mining sector and a secondary,
standard listing of its depositary interests
on the London Stock Exchange. The
Company has controlling interests in
PGMs and chrome mining, processing
operations and associated sales and
logistics operations. The Group holds a
74% shareholding in Tharisa Minerals
Proprietary Limited (‘Tharisa Minerals’).
Tharisa Minerals owns and operates the
Tharisa Mine, an open pit PGM and
chrome mine located in the Bushveld
Complex of South Africa.
Financial results
The results of the Group are disclosed in
the condensed consolidated statement
of profit or loss and other comprehensive
income on page 98 of this report.
Dividends
It is the Group’s policy to pay a minimum
of 15% of its consolidated net profit after
tax as a dividend.
A dividend of US 2 cents per share was
proposed by the Board on 27 November
2018, approved by shareholders on
23 January 2019 and paid on
27 February 2019.
The following dividends were declared
in respect of the year ended
30 September 2019:
(cid:3)• An interim dividend of US 0.5 cent per
share was declared by the Board
on 14 May 2019 and paid on
19 June 2019.
(cid:3)• A final ordinary dividend of
US 0.25 cent per share was proposed
by the Board on 26 November 2019,
and is subject to shareholder approval
at the AGM.
The total dividend for FY2019 is therefore
US 0.75 cent per share, equating to
23.7% of its consolidated net profit after
tax (2018: US 4 cents per share).
Share capital and treasury shares
The authorised share capital of the
Company comprises 10 000 million
ordinary shares of US$0.001 each and
1 051 convertible redeemable preference
shares of US$1 each.
On 8 August 2019, the Company issued
5 000 000 shares in treasury shares.
Of the 270 000 000 shares in issue at
8 August 2019, 5 989 654 shares were
in treasury to satisfy the Company’s
obligations relating to the vesting of
the Conditional Awards of the Tharisa
Share Award Plan (‘TSAP’) on 30 June
2019 and to make provision for the
potential requirement to allot shares on
participants in the TSAP exercising vested
Appreciation Rights, and 264 010 346
had voting rights.
During the financial year, the Company
transferred 5 707 893 ordinary shares
from its treasury shares account to
satisfy the vesting of the Conditional
Awards and exercise of Appreciation
Rights by the participants of the
Share Award Plan. Following these
transactions, 266 610 322 shares had
voting rights and 3 389 678 were
held in treasury at 30 September 2019.
At 30 September 2019, the issued and
fully paid ordinary share comprised
270 000 000 ordinary shares.
Main risks
The main financial risks faced by the
Group are disclosed in notes 3 and 33 of
the consolidated annual financial
statements which are available on the
Company’s website, www.tharisa.com.
Future developments
During FY2018, the Group introduced its
Vision 2020 projects. These projects are
targeting an increase in Tharisa Minerals’
production to 200.0 kozpa of PGMs and
2.0 Mt of chrome concentrates by the
end of 2020 on an annualised basis.
Tharisa is on track to achieve its Vision
2020 targets of 2 Mt chrome concentrate
and 200 koz of PGMs on an annualised
basis by the end of calendar year 2020.
Tharisa’s FY2020 production guidance is
155 koz to 165 koz PGMs (6E basis) and
1.45 Mt to 1.55 Mt of chrome
concentrates.
Branches
The Group did not operate any
branches during the financial year ended
30 September 2019.
Members of the Board of Directors
The members of the Board as at
30 September 2019 and at the date
of this report are:
(cid:3)• Loucas Christos Pouroulis (Executive
Chairman)
(cid:3)• Phoevos Pouroulis (CEO)
(cid:3)• Michael Gifford Jones (CFO)
(cid:3)• John David Salter (Lead Independent
non-executive director)
(cid:3)• Antonios Djakouris (independent
non-executive director)
(cid:3)• Omar Marwan Kamal (independent
non-executive director)
(cid:3)• Carol Bell (independent non-executive
director)
(cid:3)• Joanna Ka Ki Cheng (non-executive
director)
(cid:3)• Roger Owen Davey (independent
non-executive director)
(cid:3)• Zhong Liang Hong (non-executive
director)
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Biographical details of the members
of the Board appear in the Board of
Directors section of the Integrated
Annual Report, which is available at
www.tharisa.com.
Events after the reporting period
Events after the reporting period are
disclosed in note 38 of the consolidated
financial statements, which are available
on the Company’s website.
There has been no change in the
allocation of responsibilities and the
composition of the Board between
30 September 2018 and 30 September
2019.
Group Company Secretary
Sanet Findlay serves as the Company
Secretary and Lysandros Lysandrides as
the Assistant Company Secretary.
Independent auditor
Ernst & Young Cyprus Limited, with
Stavros Pantzaris being the designated
registered auditor, was appointed as
the independent external auditor of
the Company and of the Group on
10 January 2018. Ernst & Young Cyprus
Limited has expressed its willingness to
continue in office and its reappointment
will be proposed at the AGM.
The Board formally assessed and
considered the performance and
qualifications of the Company Secretaries
and is satisfied that they are competent,
suitably qualified and experienced. They
are not directors of the Company, nor are
they related or connected to any of the
directors and the Board is satisfied that
they maintain an arm’s length relationship
with the Board. Their contact details are
as follows:
On behalf of the Board
Phoevos Pouroulis
Michael Jones
Cyprus
26 November 2019
Sanet Findlay
2nd Floor, The Crossing
372 Main Road
Bryanston, 2191
South Africa
Lysandros Lysandrides
26 Vyronos Avenue
1096, Nicosia
Cyprus
96 THARISA PLC INTEGRATED ANNUAL REPORT 2019
REPORT OF THE
AUDIT COMMITTEE
The Audit Committee is pleased to present its report for the 2019 financial year.
Composition
All members of the committee are
independent non-executive directors.
The committee is chaired by
Antonios Djakouris and other members
of the committee are David Salter,
Omar Kamal and Carol Bell. The Board
is satisfied that the members of the
committee have the appropriate mix of
qualifications and experience in order for
the committee to fulfil its responsibilities
appropriately.
The Group’s independent external auditor,
independent internal auditors, Chief
Finance Officer and Chief Executive
Officer attend committee meetings by
invitation. The committee also meets with
the internal and external auditors without
any executive directors being present.
The committee met six times during the
year under review and discharged its
responsibilities in terms of the approved
terms of reference, which is available on
the Company’s website.
Role
The committee is accountable to the
Board and to shareholders. It provides the
Board with additional assurance regarding
the quality and reliability of the financial
statements of the Group and financial
information used by the Board. It,
however, does not relieve members of
the Board of their fiduciary duties and
responsibilities and Board members must
exercise due care and judgement so as
to comply with their legal obligations.
The committee has unrestricted access
to all Company and Group information
and may seek information from any
employee. The committee may also
consult external professional advisers
in executing its duties.
The Chairman of the committee reports
to the Board after each meeting of the
committee and the minutes of
meetings of the committee are provided
to the Board.
Activities of the committee during
the year
Annual financial statements and
integrated annual report
The committee reviewed and monitored
the integrity of financial reports, including
the interim financial statements and
annual financial statements, and assessed
the financial reporting process and
controls, which it found to be effective.
It reviewed the accounting policies and
procedures adopted by the Group and
ensured that financial statements were
prepared based on appropriate
accounting policies and in accordance
with IFRS, the Cyprus Companies Law
and the JSE Listings Requirements.
The committee also assessed and
confirmed the appropriateness of the
going concern assumption used in the
annual financial statements, taking into
account management budgets and
forecasts.
The committee reviewed the integrated
annual report, reporting process and
governance and financial information
included in the integrated annual report
for accuracy and recommended to the
Board that the annual financial
statements and the financial information
included in the integrated annual report
be approved.
External audit
During the year under review, the
committee considered and approved
the terms of engagement, scope of
the external audit and audit fees.
It reviewed audit findings and
management’s response thereto and
monitored and encouraged cooperation
between external and internal auditors.
It considered the nature and extent of the
non-audit services that may be provided
by the external auditor. All non-audit
services provided by the external auditor
are preapproved on the basis that the
provision of these services does not affect
the independence of the external auditor.
The committee also discussed with the
external auditor their opinion of the level
of ethical conduct of the Group, its
executives and senior managers and held
separate meetings with management and
the external auditor. The external auditor’s
right to direct access to the Chairman of
the Audit Committee and the Chairman
of the Board was reiterated.
In addition, the committee evaluated the
independence, effectiveness, expertise
and performance of the external auditor.
As part of this process, the committee
considered and assessed the Partner
Accreditation Pack provided by EY Cyprus
in compliance with section 22 of the
JSE Listings Requirements, which
comprised the following documents:
(cid:3)• The most recent firm-wide control
procedures review report for EY Cyprus
as a firm (European Standards/ISQC1
inspection), issued by the Cyprus Public
Audit Oversight Board (‘CyPAOB’)
(cid:3)• The most recent Association of
Chartered Certified Accountants
(‘ACCA’) and Institute of Certified
Public Accountants of Cyprus (‘ICPAC’)
inspection report of EY Cyprus as a firm
(ISQC1 inspection) which also includes
the engagement review inspection
(cid:3)• A summary of the outcome of the
engagement partner’s latest internal
quality review
(cid:3)• A copy of the EY Cyprus 2018
Transparency Report which contains
the ISQC1 information as specified by
the JSE
(cid:3)• The results of the Audit Quality Review
Programme, together with the most
recent independent regulatory
inspection visits, combined with other
ongoing monitoring procedures which
provide EY Cyprus with a basis to
conclude that its internal quality control
systems are designed appropriately and
are operating effectively, and that no
systemic deficiencies have been
identified
(cid:3)• A summary of legal and disciplinary
proceedings against EY Cyprus,
which were concluded within the
past seven years.
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Based on the information provided in the
Partner Accreditation Pack, the committee
confirmed that EY Cyprus and the
designated individual audit partner,
Stavros Pantzaris, are accredited on the
JSE’s list of auditors and following an
assessment of their suitability for
appointment, it is the committee’s
recommendation that EY Cyprus, and
Stavros Pantzaris as the designated audit
partner, be reappointed as external
auditor at the Company’s AGM to be
held on 29 January 2020.
Internal control, risk management
and information technology
The committee is responsible for
reviewing the effectiveness and adequacy
of internal controls, including financial
controls, risk management systems and
information technology risks relating to
financial reporting. It is also responsible
for considering the major findings of any
internal investigations into control
weaknesses, fraud or misconduct, and
management’s response thereto.
The Board has delegated responsibility
for IT governance to the committee.
Assurance on the IT systems and
processes is provided by the Group’s
internal auditors and external consultants
for more specialised work, and findings
are reported to the committee. This
ensures that any and all material findings
are addressed appropriately. The
committee receives quarterly reports
prepared by the Group IT Manager
on and monitors the adequacy and
effectiveness of the Group’s information
technology controls and risks.
Having considered, analysed, reviewed
and debated information provided by
management, internal auditors and
external auditor, the committee
considered that the internal controls of
the Group were effective in all material
aspects throughout the year under review.
Budget
The committee reviewed and
recommended the FY2020 budget for
approval by the Board.
Dividend
The committee reviewed and
recommended the interim and final
dividend proposals for approval by
the Board.
facing the Group were being
appropriately addressed. To this end,
the Audit Committee examined and
encouraged the cooperation between
the internal and external auditors.
Internal audit
The independent internal audit function
is fulfilled by Deloitte.
During the year under review, the
committee reviewed the effectiveness
and adequacy of the internal control
systems and reviewed and considered
reports from the internal auditors. It
monitored the status of implementation
of recommendations on identified control
weaknesses by management and
discussed with the internal auditors their
opinion of the level of ethical conduct
of the Group, its executives and senior
managers.
The committee also considered and
approved the terms of engagement,
scope of the internal audit workstreams
and any deviations or changes thereto,
and the internal audit plan for FY2020. It
reviewed significant findings,
management comments thereon and
action plans. The committee discussed
with the internal auditors their
experiences and views on the level of
access to required information and
resources, and any difficulties
encountered relating to their internal
audit work, such as restrictions in the
identification of risk areas and/or the
scope of internal control workstreams
and reiterated their right to direct access
to the chairman of the Audit Committee
and the chairman of the Board.
Furthermore, the committee evaluated
the independence, effectiveness and
performance of the internal auditors
and recommended Deloitte’s continued
employment as internal auditors of the
Company and the Group.
Combined assurance
The committee considered the combined
assurance received from management
and the internal and external auditors,
and is satisfied that the significant risks
Chief Finance Officer and finance
function
The committee reviewed the
performance, qualifications and expertise
of Michael Jones, the Chief Finance
Officer, and is satisfied as to his suitability
to act as Chief Finance Officer of the
Company and the Group. It also
confirmed that the finance department
as a whole was adequately resourced
and experienced to execute the Group’s
finance function.
Other
During the year under review, the
committee confirmed the adequacy of
the Group’s whistleblowing arrangements
and policies and procedures for
preventing corrupt behaviour and
detecting fraud and bribery. It also
conducted a self-evaluation to establish
whether the committee operated
effectively and identified areas for
improvement.
The Chairman of the Audit Committee
reported to the Board after each meeting
of the Audit Committee.
On recommendation of the Audit
Committee, the Board approved:
(cid:3)• the annual financial statements for
the year ended 30 September 2019
(cid:3)• the integrated annual report for the
year ended 30 September 2019 and
(cid:3)• the notice of the annual general
meeting to be held on 29 January
2020.
For more information on the composition
and responsibilities of the Audit
Committee, please refer to page 70.
A Djakouris
Chairman of the Audit Committee
26 November 2019
98 THARISA PLC INTEGRATED ANNUAL REPORT 2019
FINANCIAL
REVIEW
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99
Condensed consolidated financial
statements
Notes to the annual financial statements
7
INTEGRATED CO-PRODUCER OF PGM
AND CHROME CONCENTRATES
7 FINANCIAL REVIEW
Condensed consolidated financial
statements
Notes to the annual financial statements
98 – 137
100
106
8 SHAREHOLDER INFORMATION
138 – 159
Investor relations report
Notice of annual general meeting
Glossary
Form of proxy
Corporate information
138
140
150
157
159
100 THARISA PLC INTEGRATED ANNUAL REPORT 2019
FINANCIAL
REVIEW CONTINUED
Preparation and approval of condensed consolidated financial statements
The condensed consolidated financial statements for the year ended 30 September 2019 have been extracted from the audited
financial statements of the Group, but have not been audited. The auditor’s report on the audited financial statements does not
report on all of the information contained herein. Shareholders are therefore advised that in order to obtain a full understanding of
the financial position and results of the Group, these condensed consolidated financial statements should be read together with the
full audited financial statements and full audit report.
These condensed consolidated financial statements and the audited financial statements, together with the audit report, are
available on the Company’s website, www.tharisa.com, and are available for inspection at the registered address of the Company.
The directors take full responsibility for the preparation of this report and the correct extraction of the financial information from the
underlying financial statements.
The directors of the Company are responsible for the maintenance of adequate accounting records and the preparation of the
financial statements and related information in a manner that fairly presents the state of affairs of the Company. These financial
statements are prepared in accordance with International Financial Reporting Standards and incorporate full and responsible
disclosure in line with the accounting policies of the Group, which are supported by prudent judgement.
The directors are also responsible for the maintenance of effective systems of internal control, which are based on established
organisational structure and procedures. These systems are designed to provide reasonable assurance as to the reliability of the
financial statements, and to prevent and detect material misstatement and loss.
The consolidated financial statements have been reported on without qualification by Ernst & Young Cyprus Limited.
The preparation of these condensed results was supervised by the Chief Finance Officer, Michael Jones, a Chartered Accountant (SA).
The condensed consolidated financial statements have been prepared on a going concern basis, as the directors believe that the
Company and Group will continue to be in operation in the foreseeable future.
The consolidated annual financial statements have been approved by the Board on 26 November 2019.
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101
Condensed consolidated financial
statements
Notes to the annual financial statements
7
Condensed consolidated statement of profit or loss and other
comprehensive income
for the year ended 30 September 2019
Revenue
Cost of sales
Gross profit
Other income
Net foreign exchange gain
Administrative expenses
Results from operating activities
Finance income
Finance costs
Changes in fair value of financial assets at fair value through profit or loss
Changes in fair value of financial liabilities at fair value through profit or loss
Share of loss of investment accounted for using the equity method
Profit before tax
Tax
Profit for the year
Other comprehensive income
Items that may be classified subsequently to profit or loss:
Foreign currency translation differences for foreign operations, net of tax
Other comprehensive income, net of tax
Total comprehensive income for the year
Profit for the year attributable to:
Owners of the Company
Non-controlling interest
Total comprehensive income for the year attributable to:
Owners of the Company
Non-controlling interest
Earnings per share
Basic earnings per share (US$ cents)
Diluted earnings per share (US$ cents)
The notes are an integral part of these condensed consolidated financial statements.
Notes
5
6
7
8
9
9
2019
US$’000
342 885
(282 461)
60 424
687
354
(37 252)
24 213
1 437
(8 812)
312
(4 343)
(1 652)
11 155
(2 779)
8 376
(13 985)
(13 985)
(5 609)
10 616
(2 240)
8 376
1 835
(7 444)
(5 609)
4
4
2018
US$’000
406 268
(297 782)
108 486
2 432
852
(39 232)
72 538
1 279
(10 189)
1 262
155
(62)
64 983
(14 011)
50 972
(10 663)
(10 663)
40 309
48 433
2 539
50 972
41 790
(1 481)
40 309
19
18
102 THARISA PLC INTEGRATED ANNUAL REPORT 2019
FINANCIAL
REVIEW CONTINUED
Condensed consolidated statement of financial position
as at 30 September 2019
Assets
Non-current assets
Property, plant and equipment
Goodwill
Investment accounted for using the equity method
Other financial assets
Deferred tax assets
Total non-current assets
Current assets
Inventories
Trade and other receivables
Contract assets
Other financial assets
Current taxation
Cash and cash equivalents
Total current assets
Total assets
Equity and liabilities
Share capital and premium
Other reserve
Foreign currency translation reserve
Retained earnings
Equity attributable to owners of the Company
Non-controlling interests
Total equity
Non-current liabilities
Provisions
Borrowings
Deferred tax liabilities
Total non-current liabilities
Current liabilities
Borrowings
Other financial liabilities
Current taxation
Trade and other payables
Contract liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
Notes
2019
US$’000
2018
US$’000
10
11
12
13
14
15
12
16
17
17
17
17
17
18
19
13
19
20
263 980
750
8 781
6 080
1 013
280 604
36 334
73 857
1 039
1 390
926
59 201
172 747
453 351
285 193
47 245
(88 985)
79 318
322 771
(33 982)
288 789
13 101
19 903
25 984
58 988
51 313
2 384
60
50 778
1 039
105 574
164 562
453 351
264 311
804
4 438
5 012
1 880
276 445
23 043
86 202
2 229
986
228
66 791
179 479
455 924
280 806
47 245
(80 204)
77 025
324 872
(26 538)
298 334
12 634
27 281
29 892
69 807
50 138
1 000
1 013
33 403
2 229
87 783
157 590
455 924
The consolidated financial statements were authorised for issue by the Board of Directors on 26 November 2019.
Phoevos Pouroulis
Director
Michael Jones
Director
The notes are an integral part of these condensed consolidated financial statements.
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103
Condensed consolidated financial
statements
Notes to the annual financial statements
7
Condensed consolidated statement of changes in equity
for the year ended 30 September 2019
Attributable to owners of the Company
Share
capital
US$’000
Share
premium
US$’000
Other
reserve
US$’000
Note
Foreign
currency
translation
reserve
US$’000
Retained
earnings
US$’000
Total
US$’000
Non-
controlling
interest
US$’000
Total
equity
US$’000
260
280 082
47 245
(73 561)
42 862
296 888
(25 057)
271 831
–
–
–
–
1
–
–
1
1
–
–
–
–
463
–
–
463
463
–
–
–
–
–
–
–
–
–
26
17
13
–
48 433
48 433
2 539
50 972
(6 643)
–
(6 643)
(4 020)
(10 663)
(6 643)
48 433
41 790
(1 481)
40 309
–
–
–
–
–
–
(18 214)
–
(18 214)
464
3 638
3 638
306
306
(14 270)
(13 806)
(14 270)
(13 806)
–
–
–
–
–
–
(18 214)
464
3 638
306
(13 806)
(13 806)
261
280 545
47 245
(80 204)
77 025
324 872
(26 538)
298 334
Balance at 1 October
2017
Total comprehensive
income for the year
Profit for the year
Other comprehensive income:
Foreign currency translation
differences
Total comprehensive
income for the year
Transactions with owners
of the Company
Contributions by and distributions
to owners
Dividends paid
Issue of ordinary shares
Equity-settled share- based
payments
Deferred tax on equity-settled
share-based payments
Contributions by owners of the
Company
Total transactions with owners of
the Company
Balance at 30 September
2018
The notes are an integral part of these condensed consolidated financial statements.
104 THARISA PLC INTEGRATED ANNUAL REPORT 2019
FINANCIAL
REVIEW CONTINUED
Condensed consolidated statement of changes in equity continued
for the year ended 30 September 2019
Attributable to owners of the Company
Share
capital
US$’000
Share
premium
US$’000
Other
reserve
US$’000
Note
Foreign
currency
translation
reserve
US$’000
Retained
earnings
US$’000
Total
US$’000
Non-
controlling
interest
US$’000
Total
equity
US$’000
261
280 545
47 245
(80 204)
77 025
324 872
(26 538)
298 334
–
–
–
–
6
–
–
6
6
–
–
–
–
4 381
–
–
4 381
4 381
–
–
–
–
–
–
–
–
–
26
17
13
–
10 616
10 616
(2 240)
8 376
(8 781)
–
(8 781)
(5 204)
(13 985)
(8 781)
10 616
1 835
(7 444)
(5 609)
–
–
–
–
–
–
(6 594)
–
(6 594)
4 387
(859)
(870)
(859)
(870)
(8 323)
(3 936)
(8 323)
(3 936)
–
–
–
–
–
–
(6 594)
4 387
(859)
(870)
(3 936)
(3 936)
267
284 926
47 245
(88 985)
79 318
322 771
(33 982)
288 789
Balance at 1 October
2018
Total comprehensive
income for the year
Profit for the year
Other comprehensive income:
Foreign currency translation
differences
Total comprehensive
income for the year
Transactions with owners
of the Company
Contributions by and distributions
to owners
Dividends paid
Issue of ordinary shares
Equity-settled share-based
payments
Deferred tax on equity-settled
share-based payments
Contributions by owners of the
Company
Total transactions with owners of
the Company
Balance at 30 September
2019
Companies which do not distribute 70% of their profits after tax, as defined by the Special Contribution for the Defence of the
Republic Law, during the two years after the end of the year of assessment to which the profits refer, will be deemed to have
distributed this amount as dividend. Special contribution for defence at 17% will be payable on such deemed dividend to the extent
that the ultimate shareholders at the end date of the period of two years from the end of the year of assessment to which the
profits refer are both Cypriot tax residents and Cypriot domiciled entities. The amount of this deemed dividend distribution is
reduced by any actual dividend paid out of the profits of the relevant year at any time. This special contribution for defence is paid
by the Company for the account of the shareholders. These provisions do not apply for ultimate beneficial owners that are
non-Cypriot tax resident individuals. Retained earnings is the only reserve that is available for distribution.
The notes are an integral part of these condensed consolidated financial statements.
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105
Condensed consolidated financial
statements
Notes to the annual financial statements
7
Notes
2019
US$’000
2018
US$’000
8 376
50 972
10
7
11
14
10
10
11
19
19
19
19
26
16
27 236
33
–
1 652
114
4 141
(312)
4 343
(354)
(1 437)
8 812
2 779
3 583
58 996
(15 207)
8 607
21 734
250
74 350
(4 408)
69 942
1 333
(43 881)
–
403
(7 995)
(2 277)
–
(52 417)
(14 347)
28 476
(19 024)
(6 647)
(6 594)
(4 665)
(22 801)
(5 276)
66 791
(2 314)
59 201
29 858
37
(1 884)
62
117
3 897
(1 262)
(155)
(852)
(1 279)
10 189
14 011
4 019
107 730
(2 456)
(18 639)
2 979
5 614
95 228
(5 457)
89 771
1 172
(40 454)
(21 840)
119
(2 500)
(4 008)
7 110
(60 401)
114
68 220
(48 503)
(6 463)
(18 214)
(6 619)
(11 465)
17 905
49 742
(856)
66 791
Condensed consolidated statement of cash flows
for the year ended 30 September 2019
Cash flows from operating activities
Profit for the year
Adjustments for:
Depreciation of property, plant and equipment
Loss on disposal of property, plant and equipment
Gain on bargain purchase
Share of loss of investment accounted for using the equity method
Impairment loss and net realisable value write down of inventory
Impairment and write off of property, plant and equipment
Changes in fair value of financial assets at fair value through profit or loss
Changes in fair value of financial liabilities at fair value through profit or loss
Net foreign exchange gain
Interest income
Interest expense
Tax
Equity-settled share based payments
Changes in:
Inventories
Trade and other receivables and contract assets
Trade and other payables and contract liabilities
Provisions
Cash from operations
Income tax paid
Net cash flows from operating activities
Cash flows from investing activities
Interest received
Additions to property, plant and equipment
Net cash outflow from business combination
Proceeds from disposal of property, plant and equipment
Additions to investments accounted for using the equity method
Additions to other financial assets
Refund of long-term deposits
Net cash flows used in investing activities
Cash flows from financing activities
Net (payment of)/proceeds from bank credit facilities
Advances received
Repayment of borrowings
Lease payments
Dividends
Interest paid
Net cash flows used in financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at the end of the year
The notes are an integral part of these condensed consolidated financial statements.
106 THARISA PLC INTEGRATED ANNUAL REPORT 2019
FINANCIAL
REVIEW CONTINUED
Notes to the condensed consolidated financial statements
for the year ended 30 September 2019
1.
2.
REPORTING ENTITY
Tharisa plc (‘the Company’) is a company domiciled in Cyprus. These condensed consolidated financial statements of the
Company for the year ended 30 September 2019 comprise the Company and its subsidiaries (together referred to as ‘the
Group’). The Group is primarily involved in platinum group metals (‘PGM’) and chrome mining, processing, trading and the
associated logistics. The Company is listed on the main board of the Johannesburg Stock Exchange and has a secondary
standard listing on the main board of the London Stock Exchange and a secondary listing on the A2X Exchange in
South Africa.
BASIS OF PREPARATION
Statement of compliance
These condensed consolidated financial statements have been prepared in accordance with the Listings Requirements of the
Johannesburg Stock Exchange and as a minimum, contain the information required by International Accounting Standards
34: Interim Financial Reporting. Selected explanatory notes are included to explain events and transactions that are
significant to obtain an understanding of the changes in the financial position and performance of the Group since the last
consolidated financial statements as at and for the year ended 30 September 2018. These condensed consolidated financial
statements do not include all the information required for full consolidated financial statements prepared in accordance with
International Financial Reporting Standards (‘IFRS’). The condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements for the year ended 30 September 2019, which have been prepared in
accordance with IFRS and the Cyprus Companies Law, Cap.113.
These condensed consolidated financial statements were approved by the Board of Directors on 26 November 2019.
Use of estimates and judgements
Preparing the condensed consolidated financial statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and
expenses. Actual results may differ from these estimates.
In preparing these condensed consolidated financial statements, significant judgements made by management in applying
the Group’s accounting policies and the key sources of estimation uncertainty were the same as those applied to the
consolidated financial statements at and for the year ended 30 September 2019.
Functional and presentation currency
The condensed consolidated financial statements are presented in United States Dollar (US$) which is the Company’s
functional and presentation currency. Amounts are rounded to the nearest thousand.
Going concern
After making enquiries which include reviews of current cash resources, forecasts and budgets, timing of cash flows,
borrowing facilities and sensitivity analyses and considering the associated uncertainties to the Group’s operations, the
directors have a reasonable expectation that the Group has adequate financial resources to continue in operational existence
for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the consolidated
financial statements and the condensed consolidated financial statements.
Standards and interpretations adopted in the current year
The Group early adopted IFRS 9 Financial Instruments, IFRS 15 Revenue from Contracts with Customers and IFRS 16 Leases
with effect from 1 October 2017 and the consolidated financial statements for the year ended 30 September 2018 were
prepared in accordance with these standards.
The Group has adopted the following new and/or revised standards and interpretations which became effective for the year
ended 30 September 2019:
IFRIC 22 Foreign Currency Transaction and Advance Consideration
IFRS 2 Classification and Measurement of Share-Based Payment Transactions (Amendment)
Standards and interpretations issued but not yet effective
A number of standards, amendments to standards and interpretations have been issued but are not yet effective for annual
periods beginning on 1 October 2018. Other than IFRS 16 Leases, the Group has elected not to early adopt any of these
standards, amendments to standards and interpretations. Those that are relevant to the Group are presented below.
IFRIC 23 Uncertainty over Income Tax Treatment (effective for reporting periods beginning on or after 1 January 2019)
IAS 23 Borrowing Costs (Amendment) (effective for reporting periods beginning on or after 1 January 2019
IFRS 3 Business Combinations (Amendment) (effective for reporting periods beginning on or after 1 January 2020
IAS 1 and IAS 8 Definition of material (Amendment) effective for reporting periods beginning on or after 1 January 2020)
The Group will adopt these standards and interpretations as they become effective.
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THARISA PLC INTEGRATED ANNUAL REPORT 2019
107
Condensed consolidated financial
statements
Notes to the annual financial statements
7
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
3.
4.
SIGNIFICANT ACCOUNTING POLICIES
The accounting policies adopted in the preparation of the condensed consolidated financial statements are consistent with
those applied in the preparation of the Group’s consolidated financial statements for the year ended 30 September 2019.
OPERATING SEGMENTS
For management purposes, the chief operating decision maker of the Group, being the executive directors of the Company
and the executive directors of the subsidiaries, reports its results per segment. The Group currently has the following three
segments:
(cid:3)• PGM segment.
(cid:3)• Chrome segment.
(cid:3)• Agency and trading segment.
The operating results of each segment are monitored separately by the chief decision maker in order to assist them in
making decisions regarding resource allocation as well as enabling them to evaluate performance. Segment performance is
evaluated on a PGM ounce production and sales basis and a chrome concentrate tonnes production and sales basis.
Third-party logistics, third-party trading and third-party chrome operations are evaluated individually but aggregated
together as the agency and trading segment.
The Group’s administrative costs, financing (including finance income and finance costs) and income taxes are managed on
a Group basis and are not allocated to a segment.
The accounting policies used by the Group in reporting segments internally are the same as those contained in the
consolidated financial statements.
Due to the intrinsic nature of the Group’s PGM and chrome concentrate production processes, assets are reported on a
consolidated basis and cannot necessarily be allocated to a specific segment. Consequently, assets are not disclosed per
segment in the following segmental information.
2019
Revenue
Cost of sales
Manufacturing costs
Selling costs
Freight services
Gross profit
2018
Revenue
Cost of sales
Manufacturing costs
Selling costs
Freight services
Gross profit
PGM
US$’000
Chrome
US$’000
Agency and
trading
US$’000
Total
US$’000
130 064
177 881
34 940
342 885
(100 735)
(899)
–
(101 634)
28 430
(88 861)
(41 302)
(17 910)
(148 073)
29 808
(17 061)
(10 012)
(5 681)
(32 754)
2 186
(206 657)
(52 213)
(23 591)
(282 461)
60 424
117 381
250 351
38 536
406 268
(87 745)
(399)
–
(88 144)
29 237
(106 485)
(48 343)
(19 836)
(174 664)
75 687
(21 695)
(9 711)
(3 568)
(34 974)
3 562
(215 925)
(58 453)
(23 404)
(297 782)
108 486
108 THARISA PLC INTEGRATED ANNUAL REPORT 2019
FINANCIAL
REVIEW CONTINUED
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
4.
OPERATING SEGMENTS continued
The shared costs relating to the manufacturing of PGM and chrome concentrates are allocated to the relevant operating
segments based on the relative sales value per product on an ex-works basis. During the year ended 30 September 2019,
the relative sales value of PGM concentrate increased compared to the relative sales value of chrome concentrates and
consequently the allocation basis of shared costs was amended to 55.0% for PGM concentrate and 45.0% for chrome
concentrates. Shared costs were allocated equally in the comparative year.
Cost of sales includes a charge for the write off/impairment of property, plant and equipment totalling US$4.1 million
(2018: US$3.6 million) which mainly relates to mining equipment. The write off/impairment has been allocated to the PGM
and chrome segments in accordance with the allocation basis of shared costs as described in the preceding paragraph.
Geographical information
The following table sets out information about the geographical location of:
(cid:3)• the Group’s revenue from external customers and
(cid:3)• the Group’s property, plant and equipment and goodwill (‘specified non-current assets’).
The geographical location analysis of revenue from external customers is based on the country of establishment of each
customer. The geographical location of the specified non-current assets is based on the physical location of the asset in the
case of property, plant and equipment and the location of the operation to which they are allocated in the case of goodwill.
Revenue from external customers
2019
South Africa
China
Singapore
Hong Kong
Other countries
2018
South Africa
China
Singapore
Hong Kong
Other countries
PGM
US$’000
Chrome
US$’000
Agency and
trading
US$’000
130 064
–
–
–
–
130 064
40 320
53 070
10 046
67 106
7 339
177 881
PGM
US$’000
Chrome
US$’000
695
3 558
30 182
–
505
34 940
Agency and
trading
US$’000
117 381
–
–
–
–
117 381
62 464
86 866
10 942
89 733
346
250 351
969
9 894
17 088
9 453
1 132
38 536
Total
US$’000
171 079
56 628
40 228
67 106
7 844
342 885
Total
US$’000
180 814
96 760
28 030
99 186
1 478
406 268
Revenue represents the sales value of goods supplied to customers, net of value-added tax. The following table summarises
sales to customers with whom transactions have individually exceeded 10.0% of the Group’s revenues.
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109
Condensed consolidated financial
statements
Notes to the annual financial statements
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
4.
OPERATING SEGMENTS continued
Revenue from external customers continued
2019
2018
Segment
US$’000
Segment
Customer 1
Customer 2
Customer 3
Customer 4
Specified non-current assets
South Africa
Zimbabwe
Cyprus
PGM
Chrome
Chrome
Chrome
110 209
42 582
41 858
39 769
PGM
Chrome
Chrome
Chrome
2019
US$’000
264 627
8 781
103
273 511
7
US$’000
101 560
62 583
46 186
24 372
2108
US$’000
264 933
4 438
73
269 444
Non-current assets includes property, plant and equipment, goodwill and the investment accounted for using the equity
method.
5.
REVENUE
2019
Revenue recognised at a point in time
Variable revenue based on initial results
Quantity adjustments
Revenue based on fixed selling prices
Revenue recognised over time
Freight services
Revenue from contracts with customers
Fair value adjustments
Total revenue
2018
Revenue recognised at a point in time
Variable revenue based on initial results
Quantity adjustments
Revenue based on fixed selling prices
Revenue recognised over time
Freight services
Revenue from contracts with customers
Fair value adjustments
Total revenue
PGM
US$’000
Chrome
US$’000
Agency and
trading
US$’000
Total
US$’000
118 188
1 788
–
–
119 976
10 088
130 064
110 619
254
–
–
110 873
6 508
117 381
118 604
1 048
40 319
17 910
177 881
–
177 881
169 092
(1 041)
62 464
19 836
250 351
–
250 351
28 891
64
304
5 681
34 940
–
34 940
33 957
42
915
3 622
38 536
–
38 536
265 683
2 900
40 623
23 591
332 797
10 088
342 885
313 668
(745)
63 379
23 458
399 760
6 508
406 268
During the year ended 30 September 2019, revenue from freight services of US$2.2 million was recognised which was
classified as a contract liability at 30 September 2018.
110 THARISA PLC INTEGRATED ANNUAL REPORT 2019
FINANCIAL
REVIEW CONTINUED
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
5.
REVENUE continued
Variable revenue recognised:
PGM revenue recognised in preceding year based on initial results
PGM revenue based on final results
PGM revenue adjustment recognised in current year
Chrome revenue recognised in preceding year based on initial results
Chrome revenue based on final results
Chrome revenue adjustment recognised in current year
2019
US$’000
2018
US$’000
(29 352)
28 957
(395)
(45 805)
45 618
(187)
(28 994)
30 823
1 829
(41 197)
41 177
(20)
The period ended 30 September 2019 includes PGM revenue of US$39.9 million and chrome revenue of US$37.7 million
that was based on provisional results as final prices and surveys were not yet available at the date of this report.
6.
COST OF SALES
Mining
Salaries and wages
Utilities
Diesel*
Materials and consumables
Re-agents
Steel balls
Overhead
State royalties
Depreciation – property, plant and equipment
Cost of commodities
Impairment and write off of property, plant and equipment
Change in inventories – finished products and ore stockpile
Total cost of sales excluding selling costs
Selling costs
Freight services
Cost of sales
* Not related to mining activities.
2019
US$’000
109 526
13 906
11 586
640
12 335
4 267
5 168
3 067
4 267
26 420
22 391
4 141
(11 057)
206 657
52 213
23 591
282 461
2018
US$’000
105 376
15 124
10 319
650
11 174
4 471
6 715
4 117
2 916
29 008
18 644
3 630
3 781
215 925
58 453
23 404
297 782
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111
Condensed consolidated financial
statements
Notes to the annual financial statements
7
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
7.
ADMINISTRATIVE EXPENSES
Directors and staff costs
Non-executive directors
Employees: salaries
bonuses
pension fund, medical aid and other contributions
Audit – external audit services
Audit – other services*
Consulting
Corporate and social investment
Depreciation
Discount facility and related fees
Equity-settled share-based payment expense
Internal audit
Listing fees and investor relations
Health and safety
Impairment and write off of property, plant and equipment
Insurance
Legal and professional
Loss on disposal of property, plant and equipment
Office administration, rent and utilities
Research and development
Security
Telecommunications and IT-related
Training
Travelling and accommodation
Sundry
Number of employees
2019
US$’000
2018
US$’000
629
15 234
1 518
1 836
19 217
353
6
2 678
198
816
759
3 583
60
180
1 132
–
743
600
33
985
351
1 443
2 331
505
702
577
37 252
2019
1 872
612
15 459
3 262
1 707
21 040
490
90
2 376
157
850
701
4 019
206
461
1 019
267
697
634
37
1 296
235
1 776
1 374
504
410
593
39 232
2018
1 758
* Other services paid to the former external auditor relates to tax and accounting services as approved by the Audit Committee.
112 THARISA PLC INTEGRATED ANNUAL REPORT 2019
FINANCIAL
REVIEW CONTINUED
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
8.
TAX
Corporate income tax for the year
Cyprus
South Africa
Special contribution for defence in Cyprus
Deferred tax
Originating and reversal of temporary differences (note 13)
Dividend withholding tax
Tax charge
Reconciliation between tax charge and accounting profit at applicable tax rates:
Profit before tax
Add share of loss of investment accounted for using the equity method
Tharisa plc and subsidiary companies’ profit before tax
Notional tax on profit before tax, calculated at the Cypriot income tax rate of 12.5%
(2018: 12.5%)
Tax effects of:
Different tax rates from the standard Cypriot income tax rate
Tax exempt income
Gain on bargain purchase
Interest received
Non-deductible expenses
Investment related
Interest paid
Capital expenses
Other
Recognition of deemed interest income for tax purposes
2019
US$’000
2018
US$’000
1 243
1 488
2 731
3
45
–
2 779
11 155
1 652
12 807
2 913
3 002
5 915
5
7 933
158
14 011
64 983
62
65 045
1 601
8 131
860
4 978
–
(2)
146
8
76
13
77
(230)
(12)
856
5
63
152
68
Tax charge
2 779
14 011
Tax is recognised on management’s best estimate of the weighted average annual income tax rate expected for the full
financial year applied to the pre-tax income of the year.
Under certain conditions interest income may be subject to defence contribution at the rate of 30.0% in Cyprus. Such
interest income is treated as non-taxable in the computation of corporation taxable income. In certain instances, dividends
received from abroad may be subject to defence contribution at the rate of 17.0%.
The Group’s consolidated effective tax rate for the year ended 30 September 2019 was 24.9% (2018: 21.6%).
At 30 September 2019, the Group’s unredeemed capital balance available for offset against future mining taxable income in
South Africa amounted to US$100.2 million (2018: US$111.1 million).
Special contribution for defence is provided in Cyprus on certain interest income at the rate of 30%. 100% of such interest
income is treated as non-taxable in the computation of chargeable income for corporation tax purposes.
Other than Cyprus and South Africa, no provision for tax in other jurisdictions was made as these entities either sustained
losses for taxation purposes or did not earn any assessable profits.
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THARISA PLC INTEGRATED ANNUAL REPORT 2019
113
Condensed consolidated financial
statements
Notes to the annual financial statements
7
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
9.
EARNINGS PER SHARE
Basic and diluted earnings per share
The calculation of basic and diluted earnings per share and headline and diluted headline per share have been based on the
profit attributable to the ordinary shareholders of the Company and the weighted average number of ordinary shares
outstanding. Treasury shares are excluded from the weighted average number of ordinary shares outstanding. Vested share
appreciation rights (‘SARs’) issued to employees at award prices lower than the current share price, results in a potential
dilutive impact on the weighted average number of issued ordinary shares and have been included in the calculation of
dilutive weighted average number of issued ordinary shares. The average market value of the Company’s shares for the
purposes of calculating the potential dilutive effect of SARs was based on quoted market prices for the year during which
the options were outstanding.
Profit for the year attributable to ordinary shareholders (US$’000)
Weighted average number of issued ordinary shares for basic earnings per share (’000)
Weighted average number of issued ordinary shares for diluted earnings per share (’000)
Earnings per share
Basic (US$ cents)
Diluted (US$ cents)
Headline and diluted headline earnings per share
Headline earnings for the year attributable to ordinary shareholders (US$’000)
Weighted average number of issued ordinary shares for basic headline earnings per share
(’000)
Weighted average number of issued ordinary shares for diluted headline earnings per
share (’000)
Headline earnings per share
Basic (US$ cents)
Diluted (US$ cents)
Reconciliation of profit to headline earnings
2019
2018
10 616
48 433
263 131
264 877
260 329
264 531
4
4
19
18
2019
2018
12 840
49 134
263 131
260 329
264 877
264 531
5
5
19
19
Profit attributable to ordinary
shareholders
Adjustments:
Gain on bargain purchase
Impairment of property, plant and
equipment
Loss on disposal of property, plant
and equipment
Headline earnings
Gross
US$’000
Tax
US$’000
Non-
controlling
interest
US$’000
2018
Net
US$’000
2018
Net
US$’000
–
–
–
–
–
–
10 616
48 433
–
(1 394)
4 140
(1 159)
(775)
2 206
2 076
33
(9)
(6)
18
19
12 840
49 134
114 THARISA PLC INTEGRATED ANNUAL REPORT 2019
FINANCIAL
REVIEW CONTINUED
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
10.
PROPERTY, PLANT AND EQUIPMENT
30 September 2019
Cost
Balance at 30 September 2018
Additions
Lease agreements entered into
Transfers
Disposals
Re–measurement
Impairment and write offs
Exchange differences on translation
Balance at 30 September 2019
Accumulated depreciation
Balance at 30 September 2018
Charge for the year
Transfers
Disposals
Impairment
Exchange differences on translation
Balance at 30 September 2019
Freehold
land and
buildings
US$’000
Mining
assets and
infrastructure
US$’000
Mining
fleet
US$’000
Right-of-use
asset: mining
fleet
US$’000
14 861
918
–
–
–
–
–
(1 048)
14 731
740
185
–
–
–
(60)
865
276 345
12 620
–
3 528
(86)
407
(26)
(19 442)
273 346
72 390
12 691
–
(39)
(16)
(5 543)
79 483
36 872
27 474
–
1 622
(1 278)
–
(2 781)
(3 824)
58 085
8 274
8 763
682
(889)
955
(1 066)
16 719
14 182
–
5 854
(1 622)
–
2
(733)
(1 140)
16 543
2 732
3 273
(682)
–
(346)
(303)
4 674
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THARISA PLC INTEGRATED ANNUAL REPORT 2019
115
Condensed consolidated financial
statements
Notes to the annual financial statements
7
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
Office
equipment and
furniture,
community
and
site office
improvements
US$’000
Computer
equipment
and
software
US$’000
Right-of-use
asset:
buildings
US$’000
7 223
2 061
–
(3 528)
(2)
–
(26)
(390)
5 338
3 340
1 732
1
(2)
(25)
(305)
4 741
771
93
–
–
(3)
–
(7)
(47)
807
541
86
–
(3)
(5)
(33)
586
2 296
–
70
–
–
–
(77)
(181)
2 108
532
421
–
–
(72)
(85)
796
Motor
vehicles
US$’000
651
715
–
–
–
–
–
(82)
1 284
341
85
(1)
–
–
(27)
398
Total
US$’000
353 201
43 881
5 924
–
(1 369)
409
(3 650)
(26 154)
372 242
88 890
27 236
–
(933)
491
(7 422)
108 262
116 THARISA PLC INTEGRATED ANNUAL REPORT 2019
FINANCIAL
REVIEW CONTINUED
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
10.
PROPERTY, PLANT AND EQUIPMENT continued
30 September 2018
Cost
Balance at 1 October 2017
Additions
Business combination
Transfers
Disposals
Impairment
Exchange differences on translation
Balance at 30 September 2018
Accumulated depreciation
Balance at 1 October 2017
Charge for the year
Transfers
Disposals
Impairment
Exchange differences on translation
Balance at 30 September 2018
Freehold
land and
buildings
US$’000
Mining
assets and
infrastructure
US$’000
Mining
fleet
US$’000
Right-of-use
asset: mining
fleet
US$’000
15 354
150
–
–
–
–
(643)
14 861
592
188
–
–
–
(40)
740
266 019
21 429
1 886
–
–
(266)
(12 723)
276 345
59 337
16 761
–
–
–
(3 708)
72 390
7 030
16 473
21 466
(2 203)
(145)
(2 539)
(3 210)
36 872
299
7 700
(80)
–
1 020
(665)
8 274
–
6 910
6 527
2 203
–
(159)
(1 299)
14 182
–
2 963
80
–
(88)
(223)
2 732
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THARISA PLC INTEGRATED ANNUAL REPORT 2019
117
Condensed consolidated financial
statements
Notes to the annual financial statements
7
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
Office
equipment and
furniture,
community
and
site office
improvements
US$’000
Computer
equipment
and
software
US$’000
Motor
vehicles
US$’000
Right-of-use
asset:
buildings
US$’000
Leasehold
improvements
US$’000
594
88
–
–
–
–
(31)
651
289
69
–
–
–
(17)
341
5 542
2 167
–
(15)
(97)
(1)
(373)
7 223
1 914
1 712
(6)
(87)
–
(193)
3 340
796
147
–
(114)
(29)
–
(29)
771
518
93
(23)
(28)
–
(19)
541
1 503
791
–
129
–
–
(127)
2 296
164
372
29
–
–
(33)
532
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
US$’000
296 838
48 155
29 879
–
(271)
(2 965)
(18 435)
353 201
63 113
29 858
–
(115)
932
(4 898)
88 890
118 THARISA PLC INTEGRATED ANNUAL REPORT 2019
FINANCIAL
REVIEW CONTINUED
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
10.
PROPERTY, PLANT AND EQUIPMENT continued
Net book value
Freehold land and buildings
Mining assets and infrastructure
Mining fleet
Right-of-use mining fleet
Motor vehicles
Computer equipment and software
Office equipment and furniture, community and site office improvements
Right-of-use buildings and premises
2019
US$’000
2018
US$’000
13 866
193 863
41 366
11 869
886
597
221
1 312
263 980
14 121
203 955
28 598
11 450
310
3 883
230
1 764
264 311
Included in additions to mining assets and infrastructure are additions to the deferred stripping asset of US$0.2 million
(2018: US$1.3 million).
The estimated economically recoverable proved and probable mineral reserve was reassessed at 1 October 2018 which gave
rise to a change in accounting estimate. The remaining reserve that management had previously assessed was 97.0 Mt
(at 1 October 2017) and at 1 October 2018 was assessed to be 92.9 Mt.
As a result, and taking into account depletion of the reserve during the year ended 30 September 2018 (4.9 Mt), the
expected useful life of the plant increased. The impact of the change on the actual depreciation expense, included in cost of
sales, is a reduced depreciation charge of US$0.1 million. The change in estimate was recognised prospectively.
Included in mining assets and infrastructure are projects under construction of US$14.8 million (2018: US$20.5 million).
Freehold land and buildings comprise various portions of the farms Elandsdrift 467 JQ, Buffelspoort 343 JQ and 342 JQ,
North West Province, South Africa. All land is freehold.
Property, plant and equipment, with the exception of motor vehicles, is insured at approximate cost of replacement. Motor
vehicles are insured at market value. Land is not insured.
Capital commitments
At 30 September 2019, the Group’s capital commitments for contracts to purchase property, plant and equipment
amounted to US$17.9 million (2018: US$6.0 million).
Securities
At 30 September 2019, the majority of the Group’s mining fleet was pledged as security against the equipment loan facility.
Impairment
During the year ended 30 September 2019, the Group impaired and scrapped individual assets totalling US$4.1 million
(2018: US$3.9 million). The impairment during year relates to yellow fleet equipment identified as no longer fit for use
and premature component failures.
The impairment during the previous year relates to costs that were capitalised to the construction of a plant and to yellow
fleet equipment identified as no longer fit for use. The Group decided not to proceed with the construction of the plant.
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THARISA PLC INTEGRATED ANNUAL REPORT 2019
119
Condensed consolidated financial
statements
Notes to the annual financial statements
7
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
11.
INVESTMENT ACCOUNTED FOR USING THE EQUITY METHOD
During the year ended 30 September 2018, the Group acquired 26.8% of the issued share capital of Karo Mining Holdings
Limited (‘Karo Holdings’), a company incorporated in Cyprus, for a total cash consideration of US$4.5 million from the Leto
Settlement, a related party.
Karo Holdings entered into an Investment Project Framework Agreement with the Republic of Zimbabwe in terms of which
Karo Holdings, through any of its subsidiaries, has undertaken to establish a platinum group metals mine, concentrators,
smelters, a base metal and precious metals refinery as well as power generation capacity for the operations with surplus
energy capacity made available to the Zimbabwe power grid (collectively referred to as ‘the Project’).
Karo Holdings’ principal place of business is in Cyprus. The functional and presentation currency of Karo Holdings and its
subsidiaries is the US dollar. The table below details Karo Holdings’ interest in subsidiaries as at 30 September 2019 and
30 September 2018.
Company name
Karo Zimbabwe Holdings (Private) Limited
Karo Platinum (Private) Limited*
Karo Coal Mines (Private) Limited**
Karo Power Generation (Private) Limited**
Karo Refinery (Private) Limited**
Effective
interest
100%
100%
100%
100%
100%
Country of
incorporation
and principal
place of business
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Principal
activity
Investment holding
Platinum mining
Coal
Power generation
PGM smelting and refining
* In terms of the Investment Project Framework Agreement, 50% of the shareholding in this company is required to be transferred to an investment
entity owned by the Republic of Zimbabwe, the communities and employees.
** In terms of the Investment Project Framework Agreement, 25% of the shareholding in this company is required to be transferred to an investment
entity owned by the Republic of Zimbabwe, the communities and employees.
The Group entered into a Shareholders’ Agreement with Leto Settlement whereby management of the Project will
exclusively vest in the Company or any of its subsidiaries. The Group has determined that a joint arrangement exists and
consequently has classified its investment in Karo Holdings as a joint venture. The Group accounts for joint ventures using
the equity method in the consolidated financial statements.
Investment in Karo Holdings
Opening balance
Shares acquired
Loan receivable
Share of total comprehensive loss
Total share of comprehensive loss from joint venture
2019
US$’000
2018
US$’000
4 438
–
5 995
(1 652)
8 781
(1 652)
–
4 500
–
(62)
4 438
(62)
120 THARISA PLC INTEGRATED ANNUAL REPORT 2019
FINANCIAL
REVIEW CONTINUED
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
11.
INVESTMENT ACCOUNTED FOR USING THE EQUITY METHOD continued
Summarised consolidated financial information of Karo Holdings
2019
US$’000
2018
US$’000
Summarised statement of financial position
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net deficit (100%)
Summarised statement of comprehensive income
Operating expenses
Tax
Total comprehensive loss
Carrying amount of investment in joint venture
Opening carrying amount
Group’s share of net deficit (26.8%)
Loan receivable
Purchase consideration
Carrying amount
574
27
(5 995)
(1 000)
(6 394)
(6 106)
(60)
(6 166)
4 438
(1 652)
5 995
–
8 781
122
3
(264)
(91)
(230)
(290)
60
(230)
–
(62)
–
4 500
4 438
Contingencies and commitments
The Group has undertaken to provide funding up to US$8.0 million to Karo Holdings as a repayable debt facility. This will
be utilised to undertake initial geological exploration and sampling work to determine a compliant mineral resource which
will enhance the value of the investment in Karo Holdings. At 30 September 2019, US$6.0 million had been advanced to
Karo Holdings. The loan is unsecured, subordinated in favour of other creditors and no fixed repayment terms exist.
12.
OTHER FINANCIAL ASSETS
Non-current assets:
Investments in money markets, current accounts, cash funds and income
funds
Current assets:
Investments in equity instruments
Forward exchange contracts
Prepaid investment in Salene Chrome Zimbabwe (Private) Limited
2019
US$’000
2018
US$’000
Fair value
hierarchy
Level 2
6 080
5 012
Level 1
Level 2
Amortised
cost
23
–
1 367
1 390
40
804
142
986
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THARISA PLC INTEGRATED ANNUAL REPORT 2019
121
Condensed consolidated financial
statements
Notes to the annual financial statements
7
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
12.
OTHER FINANCIAL ASSETS continued
Investments in money markets, current accounts, cash funds and income funds – fair value through profit
or loss
Investment in money market and current accounts totalling US$4.8 million (2018: US$3.8 million) is managed by Centriq
Insurance Company Limited (‘Centriq’). The investment serves as security for the guarantee issued by Centriq to the DMRE
for the rehabilitation provision. The guarantee issued by Centriq has a fixed cover period from 1 December 2014 to
30 November 2020.
Investment in cash funds and income funds of US$1.3 million (2018: US$1.2 million) managed by Stanlib Collective
Investments. The investment is ceded to Lombard Insurance Group (‘Lombard’) against a ZAR12.0 million
(2018: ZAR12.0 million) guarantee issued by Lombard on behalf of Arxo Logistics Proprietary Limited to Transnet
Freight Rail, a division of Transnet SOC Limited.
The investments in cash funds and income funds are held at fair value through profit or loss (designated). The underlying
investments are in money market and other funds and the fair value has been determined by reference to their quoted
prices.
Investments in equity instruments – fair value through profit or loss
Investments at fair value through profit or loss are valued based on quoted market prices at the end of the reporting period
without any deduction for transaction costs. The investment represents shares in the Bank of Cyprus Public Co Limited.
Forward exchange contracts – fair value through profit or loss
The Group entered into a number of forward exchange contracts to hedge certain aspects of the foreign exchange risk
associated to the conversion of the US$ to the ZAR. At 30 September 2018 the net exposure of these contracts was
US$28.6 million with various expiries no later than 20 December 2018.
Prepaid investment in Salene Chrome Zimbabwe (Private) Limited
The Company has been granted a call option to acquire a 90.0% shareholding in Salene Chrome Zimbabwe (Private) Limited
(‘Salene’) a company incorporated in Zimbabwe from the Leto Settlement, a related party (refer to note 22). Salene has been
awarded special grants under the Zimbabwe Mines and Minerals Act covering an area of approximately 9 500 hectares
(95 km²) on the eastern and western sides of the Great Dyke in Zimbabwe, which entitles it to mine the minerals thereon
including illuvial chrome, being at surface chrome fines generated from seams as a result of weathering. The call option is
exercisable upon completion of an initial exploration programme. In consideration of the call option, the Group will
undertake the initial exploration programme including the costs thereof up to an amount of US$3.2 million. The decision to
exercise the call option is at the Group’s election. At the date of this report, the call option has not yet been exercised.
At the date of this report, insufficient information was available to accurately determine the fair value of the call option,
more specifically the value of the net assets of the special grants or the profits attributable thereto. The group believes that
the fair value as at 30 September 2019 may only be possible to be determined once the initial exploration programme has
been completed. At 30 September 2019, the Group has invested US$1.4 million (2018: US$0.1 million) in Salene which
represents the costs of exploration activities. The exploration costs incurred will be capitalised to the cost of investment
upon the exercise of the call option.
122 THARISA PLC INTEGRATED ANNUAL REPORT 2019
FINANCIAL
REVIEW CONTINUED
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
13.
DEFERRED TAX
Deferred tax assets
Deferred tax liabilities
Net deferred tax liability
Deferred tax assets
Property, plant and equipment
Unrealised foreign currency exchange losses
Accrued leave
Share-based payments
Other
Deferred tax liabilities
Property, plant and equipment
Tax losses not utilised
Provisions
Share-based payments
Other
Reconciliation of deferred tax liability
Balance at the beginning of the year
Temporary differences recognised in profit or loss and equity in relation to:
Capital allowances on property, plant and equipment
Provisions
Tax losses utilised/available for future set off against profits
Currency losses
Share-based payments
Other
Exchange differences
Balance at the end of the year
Amounts recognised in:
Profit or loss (refer to note 8)
Equity
Share-based payments
Foreign currency translation reserve: tax impact of currency movements relating to
intergroup funding arrangements
2019
US$’000
1 013
(25 984)
(24 971)
(7)
–
188
741
91
1 013
(34 153)
3 144
4 567
393
65
(25 984)
2018
US$’000
1 880
(29 892)
(28 012)
(35)
610
165
1 040
100
1 880
(63 212)
28 755
3 573
782
210
(29 892)
(28 012)
(21 864)
(3 722)
472
2 062
2 722
(962)
744
1 316
1 725
(24 971)
(8 470)
440
(79)
–
–
482
(7 627)
1 479
(28 012)
(45)
(7 933)
(870)
2 231
1 316
306
–
(7 627)
Deferred tax assets and deferred tax liabilities are not offset unless the Group has a legally enforceable right to offset such
assets and liabilities.
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THARISA PLC INTEGRATED ANNUAL REPORT 2019
123
Condensed consolidated financial
statements
Notes to the annual financial statements
7
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
13.
DEFERRED TAX continued
All of the above amounts have used the currently enacted income taxation rates of the respective tax jurisdictions the Group
operates in. South African taxation losses normally expire within 12 months of the respective entities not trading. The
deductible temporary timing differences do not expire under current taxation legislation. Deferred tax assets have only been
recognised in terms of these items when it is probable that taxable profit will be available in the immediate future against
which the respective entities can utilise the benefits therefrom.
The estimates used to assess the recoverability of recognised deferred tax assets include a forecast of the future taxable
income and future cash flow projections based on a three-year period. The Group did not have tax losses and temporary
differences for which deferred tax was not recognised.
14.
INVENTORIES
Finished products
Ore stockpile
Consumables
Impairment of consumables
Total carrying amount
2019
US$’000
16 436
3 158
16 854
36 448
(114)
36 334
2018
US$’000
7 199
1 338
14 623
23 160
(117)
23 043
Inventories are stated at the lower of cost or net realisable value. The Group impaired certain consumables and spares as the
operational use became doubtful with no anticipated recoverable amount or value in use. The balance of the impaired
consumables is allocated 55.0% and 45.0% respectively to the PGM and chrome operating segments) (2018: allocated
equally to the PGM and chrome operating segments).
PGM finished products were written down to the net realisable value during the year ended 30 September 2019. The net
realisable write down amounted to US$0.2 million (2018: no net realisable value write down) and is allocated to the PGM
segment.
Inventories serve as collateral for the bank credit facilities, refer to note 19.
15.
TRADE AND OTHER RECEIVABLES
Trade receivables
PGM receivable
Total trade receivables
Other receivables – related parties (note 22)
Deposits, prepayments and other receivables
Accrued income
Value added tax receivable (VAT)
Provision for royalty tax
2019
US$’000
2018
US$’000
26 119
33 686
59 805
342
3 757
1 659
8 294
–
73 857
38 645
25 355
64 000
417
1 000
5 088
14 577
1 120
86 202
124 THARISA PLC INTEGRATED ANNUAL REPORT 2019
FINANCIAL
REVIEW CONTINUED
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
15.
TRADE AND OTHER RECEIVABLES continued
Trade and other receivables of the Group are expected to be recoverable within one year from each reporting date. Trade
receivables terms vary from 0 to 120 days (2018: 0 to 120 days). No impairment of trade receivables was recognised during
the year ended 30 September 2019 (2018: no impairment).
The Group applies a simplified approach to measure the loss allowance for trade receivables classified at amortised cost,
using the lifetime expected loss provision. The expected credit loss on trade receivables is estimated using a provision matrix
by reference to past default experience and credit rating if available, adjusted as appropriate for current observable data.
The following table details the risk profile of trade receivables based on the Group’s provision matrix.
Current
Less than 90 days past due but not impaired
Greater than 90 days past due but not impaired
2019
US$’000
58 714
164
927
59 805
2018
US$’000
61 674
2 143
183
64 000
Included in VAT is an amount of US$5.4 million (ZAR82.3 million) (2018: US$10.0 million (ZAR141.3 million)) that relates to
diesel rebates receivable from the South African Revenue Service (‘SARS’) in respect of the mining operations. SARS has
rejected the Group’s claim to the refund. The Group is strongly of the view that it fully complied with all the regulations to
be entitled to this refund. The Group’s recourse is to appeal to the High Court of South Africa before May 2020.
Based on current observable data, available credit quality information of clients and client’s past default experience,
management believes that no impairment allowance (2018: no impairment allowance) is required in respect of the trade and
other receivables as balances are still considered fully recoverable. The Group does not hold any collateral over these
balances.
16.
CASH AND CASH EQUIVALENTS
Bank balances
Short-term bank deposits
2019
US$’000
55 409
3 792
59 201
2018
US$’000
55 433
11 358
66 791
The amounts reflected above approximate fair value.
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are generally call
deposit accounts and earn interest at the respective short-term deposit rates.
At 30 September 2019, an amount of US$1.3 million (2018: US$1.6 million) was provided as security for a bank guarantee
issued in favour of a trade creditor of a subsidiary of the Group and US$0.3 million (2018: US$0.3 million) was provided as
security against certain credit facilities of the Group.
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125
Condensed consolidated financial
statements
Notes to the annual financial statements
7
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
17.
SHARE CAPITAL AND RESERVES
Share capital
2019
2018
Number of
Shares
US$’000
Number of
Shares
US$’000
Authorised – ordinary shares of US$0.001 each
As at 30 September
10 000 000 000
10 000 10 000 000 000
10 000
Authorised – convertible redeemable preference
shares of US$1 each
As at 30 September
Issued
Ordinary shares
Balance at the beginning of the year
Issued to treasury shares
Balance at the end of the year
Treasury shares
Balance at the beginning of the year
Issued
Transferred as part of management share award plans
Balance at the end of the year
1 051
1
1 051
1
265 000 000
5 000 000
270 000 000
4 097 571
5 000 000
(5 707 893)
3 389 678
265
261 000 000
5
4 000 000
270
265 000 000
4
5
(6)
3
987 274
4 000 000
(889 703)
4 097 571
261
4
265
1
4
(1)
4
Issued and fully paid
266 610 322
267
260 902 429
261
Share premium
2019
2018
Number of
Shares
US$’000
Number of
Shares
US$’000
Balance at the beginning of the year
260 902 429
280 545
260 012 726
280 082
Shares issued
Balance at the end of the year
Total share capital and premium
5 707 893
4 381
889 703
266 610 322
284 926
260 902 429
285 193
463
280 545
280 806
Share capital
Allotments during the year were in respect of 5 000 000 (2018: 4 000 000) ordinary shares issued as treasury shares to
satisfy the vesting of conditional awards and potential future settlement of appreciation rights of the participants’ of the
Tharisa Share Award Plan.
During the year ended 30 September 2019, 5 707 893 (2018: 889 703) ordinary shares were transferred from treasury
shares to satisfy the exercise of appreciation rights by the participants of the Tharisa Share Award Plan.
At 30 September 2019, 3 389 678 (2018: 4 097 571) ordinary shares were held in treasury.
Share premium
The share premium represents the excess of the issue price of ordinary shares over their nominal value, to the extent that it
is registered at the Registrar of Companies in Cyprus, less share issue costs. The share premium is not distributable for
dividend purposes.
During the years ended 30 September 2019 and 30 September 2018, the increases in the share premium account related to
the issue and allotment of ordinary shares granted in terms of the Share Award Plan.
126 THARISA PLC INTEGRATED ANNUAL REPORT 2019
FINANCIAL
REVIEW CONTINUED
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
17.
SHARE CAPITAL AND RESERVES continued
Other reserve
Other reserve represents the excess of the issue price of the Company’s ordinary shares over the sum of their nominal value
and share premium arising from such issuance, as registered with the Registrar of Companies in Cyprus.
Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign currency differences arising from the translation of the
financial statements of foreign operations with a functional currency other than US dollar and foreign currency differences
relating to translation of intergroup loans and funding arrangements which are considered to be part of the Company’s net
investment in a foreign operation.
Retained earnings
The retained earnings includes the accumulated retained profits and losses of the Group and the share-based payment
reserve. Retained earnings are distributable for dividend purposes.
18.
PROVISIONS
Provision for rehabilitation
Opening balance
Recognised in profit and loss
(Reversal of)/capitalised to
mining assets and
infrastructure
Business combination
Unwinding of discount
Exchange differences
Closing balance
2019
Decommis-
sioning
US$’000
Restoration
US$’000
Total
provision
US$’000
Restoration
US$’000
5 921
415
–
–
536
(448)
6 424
6 713
12 634
–
415
(166)
–
604
(474)
(166)
–
1 140
(922)
6 677
13 101
3 962
1 693
–
76
529
(339)
5 921
2018
Decommis-
sioning
US$’000
2 961
–
Total
provision
US$’000
6 923
1 693
3 922
3 922
57
212
(439)
133
741
(778)
6 713
12 634
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THARISA PLC INTEGRATED ANNUAL REPORT 2019
127
Condensed consolidated financial
statements
Notes to the annual financial statements
7
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
18.
PROVISIONS continued
The Group has a legal obligation to rehabilitate the mining area, once the mining operations cease. The provision has been
calculated based on total estimated rehabilitation costs, discounted back to their present values. The pre-tax discount rates
are adjusted annually and reflect current market assessments. These costs are expected to be utilised mostly towards the
end of the life of mine and associated infrastructure, which is currently estimated to be within 15 years. The provision is
determined using commercial closure cost assessments and not the inflation adjusted DMRE published rates.
The table below illustrates the movement in the provision as a result of mining operations and changes in variables. During
the year ended 30 September 2018, the Group adopted commercial rates in comparison to the previously used DMRE rates.
2019
Provision for restoration
Provision for decommissioning
2018
Provision for restoration
Provision for decommissioning
Opening
balance
US$’000
Mining
operations
US$’000
Changes in
variables
US$’000
Commercial
rates
US$’000
Exchange
differences
US$’000
5 921
6 713
12 634
3 962
2 961
6 923
3 057
162
3 219
1 839
(597)
1 242
(2 106)
276
(1 830)
882
368
1 250
–
–
–
(423)
4 420
3 997
(448)
(474)
(922)
(339)
(439)
(778)
Closing
balance
US$’000
6 424
6 677
13 101
5 921
6 713
12 634
19.
BORROWINGS
Non-current
Facilities
Equipment loan facility
Finance leases
Loan
Current
Facilities
Equipment loan facility
Finance leases
Loan
Bank credit facilities
2019
US$’000
2018
US$’000
4 279
7 901
5 873
1 850
19 903
25 000
3 698
5 707
2 008
14 900
51 313
13 711
1 931
7 505
4 134
27 281
9 104
5 564
4 299
1 928
29 243
50 138
128 THARISA PLC INTEGRATED ANNUAL REPORT 2019
FINANCIAL
REVIEW CONTINUED
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
19.
BORROWINGS continued
Facilities
Effective 28 March 2018, the Group concluded the US$52.8 million (ZAR800 million) facilities which comprise:
(cid:3)• a three-year senior secured amortising term loan of US$26.4 million (ZAR400 million) (‘term loan’),
(cid:3)• a three-year secured committed revolving facility of US$19.8 million (ZAR300 million) (‘revolving facility’); and
(cid:3)• an overdraft facility of US$6.6 million (ZAR100 million) (‘overdraft’).
The financing was obtained by Tharisa Minerals Proprietary Limited and guaranteed by the Company.
The Term loan bears interest at the three-month JIBAR plus 320 basis points nominal annual compounded quarterly and is
repayable in twelve equal consecutive quarterly instalments commencing on 30 June 2018. The revolving facility is available
for three years and bears interest at the one-month JIBAR plus 340 basis points nominal annual compounded quarterly and
is repayable in full at least once every twelve months. Interest is payable monthly in arrears. The overdraft facility is available
for one year and bears interest at the South African prime rate payable monthly in arrears.
The facilities contains the following financial covenants for Tharisa Minerals Proprietary Limited:
(cid:3)• Debt to equity ratio of less than 0.67 times;
(cid:3)• Net debt to EBITDA of less than 2.0 times; and
(cid:3)• EBITDA to interest of greater than 3.0 times.
During the year ended 30 September 2019, the EBITDA to interest financial covenant was reduced from greater than
4.0 times to greater than 3.0 times.
At 30 September 2019, Tharisa Minerals Proprietary Limited complied with all financial covenants.
The term loan was utilised, inter alia, to settle the secured bank borrowings at 29 March 2018 and in part to settle the
bridge loan at 31 March 2018. The unutilised facilities at 30 September 2019 amounted to US$9.9 million (ZAR150 million).
Equipment loan facility
During the year ended 30 September 2018, Tharisa Minerals Proprietary Limited entered into an equipment loan facility of
US$25 million with Caterpillar Financial Services Corporation for the funding of certain Caterpillar mining equipment. The
funding was partially utilised for the purchase of existing mining equipment acquired from MCC, as well as replacement
parts and new mining equipment. The loan is structured in three tranches and repayment of each tranche varies between
twenty-four and forty-eight equal monthly instalments, payable in arrears. Interest is calculated on the three-month US$
Libor plus between 350 and 400 basis points.
The equipment loan facility is secured by a first notarial bond over the equipment and is guaranteed by the Company.
The equipment loan facility contains the following Group financial covenants:
(cid:3)• Net debt to tangible net worth not higher than 1.4 times.
(cid:3)• Net debt to EBITDA lower than 2.0 times.
(cid:3)• EBITDA to interest greater than 4.0 times.
At 30 September 2019, the Group complied with all financial covenants.
Finance leases
The Group entered into a number of lease arrangements for the renting of office buildings, premises, computer equipment,
vehicles and mining fleet. The Group has elected not to recognise right-of-use assets and lease liabilities for short-term
leases of vehicles that have a lease term of 12 months or less and leases of low-value assets such as computer equipment.
Lease expenses of US$0.1 million (2018: US$0.2 million) and US$0.1 million (2018: US$0.1 million) were included in cost of
sales and administrative expenses respectively for the year ended 30 September 2019.
The duration of leases relating to buildings and premises are for a period of five years; payments are due at the beginning
of the month, escalating annually on average by 8.0%. At 30 September 2019, the remaining term of these leases varies
between four and four and a half years. These leases are secured by cash deposits varying from one to three times the
monthly lease payments.
The duration of leases relating to the mining fleet are for periods between fourteen and thirty-six months and bear interest
at interest rates between the South African prime interest rate and the South African prime interest rate plus 300 basis
points. The leases are secured by the mining fleet leased.
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THARISA PLC INTEGRATED ANNUAL REPORT 2019
129
Condensed consolidated financial
statements
Notes to the annual financial statements
7
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
19.
BORROWINGS continued
Minimum lease payments due:
Within one year
Two to five years
Less future finance charges
Present value of minimum lease payments due
Present value of minimum lease payments due:
Within one year
Two to five years
2019
US$’000
2018
US$’000
6 682
6 491
13 173
(1 593)
11 580
5 687
5 893
11 580
5 284
8 930
14 214
(2 410)
11 804
4 293
7 511
11 804
Loan
A subsidiary of the Company, Arxo Metals Proprietary Limited, entered into a loan agreement with Rand York Minerals Proprietary
Limited for the advance of ZAR90 million. The loan is repayable in thirty-six equal monthly instalments that commenced on
31 August 2018. The loan is unsecured and interest is calculated at the South African prime rate plus 100 basis points.
Bank credit facilities
The bank credit facilities relate to pre-shipment finance and discounting of the letters of credit by the Group’s banks
following performance of the letter of credit conditions by the Group, which results in funds being received in advance of
the normal payment date. Interest on these facilities at the reporting date varied between US Libor plus 1.6% pa and
US Libor plus 3.0% pa (2018: US Libor plus 1.6% pa).
Balance 30 September 2018
22 815
7 495
11 804
29 243
6 062
77 419
Facilities
US$’000
Equipment
loan facility
US$’000
Finance
leases
US$’000
Bank credit
facilities
US$’000
Loan
US$’000
Total
borrowings
US$’000
Changes from financing cash flows
Advances: bank credit facilities
Repayment: bank credit facilities
Net repayment of bank credit facilities
Advances received
Repayment of borrowings
Lease payments
Repayment of interest
Changes from financing cash flows
Foreign currency translation differences
Liability–related changes
Lease agreements entered into
Interest expense
Revaluation of foreign denominated loan
Total liability-related changes
Balance at 30 September 2019
Non-current borrowings
Current borrowings
Total borrowings
–
–
–
17 426
(9 294)
–
(2 549)
5 583
(1 986)
–
2 867
–
2 867
29 279
4 279
25 000
29 279
–
–
–
11 050
(7 831)
–
(602)
2 617
(764)
–
759
1 492
2 251
11 599
7 901
3 698
11 599
–
–
–
–
–
(6 647)
–
(6 647)
(821)
5 924
1 320
–
7 244
11 580
5 873
5 707
11 580
151 626
(165 973)
(14 347)
–
–
–
(524)
(14 871)
–
–
528
–
528
14 900
–
14 900
14 900
–
–
–
–
(1 899)
–
(570)
(2 469)
(305)
–
570
–
570
3 858
1 850
2 008
3 858
151 626
(165 973)
(14 347)
28 476
(19 024)
(6 647)
(4 245)
(15 787)
(3 876)
5 924
6 044
1 492
13 460
71 216
19 903
51 313
71 216
130 THARISA PLC INTEGRATED ANNUAL REPORT 2019
FINANCIAL
REVIEW CONTINUED
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
19.
BORROWINGS continued
Balance at 1 October 2017
Changes from financing cash flows
Advances: bank credit facilities
Repayment: bank credit facilities
Net repayment of bank credit facilities
Advances received
Repayment of borrowings
Lease payments
Repayment of interest
Changes from financing cash flows
Foreign currency translation differences
Liability-related changes
Lease agreements entered into
Business combination
Interest expense
Revaluation of foreign denominated loan
Total liability-related changes
Balance at 30 September 2018
Non-current borrowings
Current borrowings
Total borrowings
Facilities
US$’000
Equipment
loan facility
US$’000
–
–
–
–
29 523
(5 099)
–
(1 464)
22 960
(1 865)
–
–
1 720
–
1 720
22 815
13 711
9 104
22 815
–
–
–
–
12 694
(5 295)
–
(528)
6 871
(612)
–
–
708
528
1 236
7 495
1 931
5 564
7 495
Finance
leases
US$’000
Bank credit
facilities
US$’000
3 549
29 072
–
–
–
–
–
(6 463)
–
(6 463)
(982)
7 656
7 003
1 086
(45)
15 700
11 804
7 505
4 299
11 804
192 834
(192 720)
114
–
–
–
(395)
(281)
–
–
–
452
–
452
29 243
–
29 243
29 243
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THARISA PLC INTEGRATED ANNUAL REPORT 2019
131
Condensed consolidated financial
statements
Notes to the annual financial statements
7
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
Secured
bank
borrowings
US$’000
17 754
–
–
–
–
(18 424)
–
(1 088)
(19 512)
661
–
–
1 097
–
1 097
–
–
–
–
Loan
US$’000
–
–
–
–
6 883
(326)
–
(62)
6 495
(495)
–
–
62
–
62
6 062
4 134
1 928
6 062
Guardrisk
loan
US$’000
Bridge
loan
US$’000
231
–
–
–
–
(239)
–
(7)
(246)
8
–
–
7
–
7
–
–
–
–
–
–
–
–
19 120
(19 120)
–
(889)
(889)
–
–
–
889
–
889
–
–
–
–
Total
borrowings
US$’000
50 606
192 834
(192 720)
114
68 220
(48 503)
(6 463)
(4 433)
8 935
(3 285)
7 656
7 003
6 021
483
21 163
77 419
27 281
50 138
77 419
132 THARISA PLC INTEGRATED ANNUAL REPORT 2019
FINANCIAL
REVIEW CONTINUED
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
20.
TRADE AND OTHER PAYABLES
Trade payables
Accrued expenses
Leave pay accrual
Value added tax payable
Other payables – related parties (note 22)
Other payables
2019
US$’000
2018
US$’000
34 381
11 670
3 990
436
27
274
50 778
18 363
8 314
3 738
794
2 175
19
33 403
The amounts above are payable within one year from the reporting period. The amounts reflected above approximate fair
value.
21.
FINANCIAL RISK MANAGEMENT
30 September 2018
Financial assets measured at fair value
Investments in equity instruments
Investments in money markets, current accounts, cash funds and
income funds
Forward exchange contracts
Trade and other receivables measured at fair value
Fair value level
2019
US$’000
2018
US$’000
Level 1
Level 2
Level 2
23
6 080
–
40
5 012
804
PGM receivable
Level 2
33 686
25 355
Financial liabilities measured at fair value
Discount facility
Forward exchange contracts
Financial assets at amortised cost
Prepaid investment in Salene Chrome (Private) Limited
Trade and other receivables
Contract assets
Cash and cash equivalents
Financial liabilities at amortised cost
Borrowings
Contract liabilities
Trade and other payables
Level 2
Level 2
2 085
299
1 367
26 119
1 039
59 201
71 216
1 039
34 381
1 000
–
142
38 645
2 229
66 791
77 419
2 229
18 363
There were no transfers between Level 1 and Level 2 fair value measurements during the year.
The Group considers that the fair values of the financial assets and financial liabilities approximate their carrying values at
each reporting date.
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133
Condensed consolidated financial
statements
Notes to the annual financial statements
7
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
21.
FINANCIAL RISK MANAGEMENT continued
Fair value hierarchy
All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, based
on the lowest level input that is significant to the fair value measurement as a whole, as follows:
Level 1: fair values measured using quoted prices (unadjusted) in active markets for identical financial instruments (highest
level).
Level 2: fair values measured using quoted prices in active markets for similar financial instruments, or using valuation
methodologies in which all significant inputs are directly or indirectly based on observable market data.
Level 3: fair values measured using valuation methodologies in which any significant inputs are not based on observable
market data.
22.
RELATED PARTY TRANSACTIONS AND BALANCES
In the normal course of the business, the Group enters into various transactions with related parties. Related party
transactions exist between shareholders, joint ventures, directors, directors of subsidiaries and key management personnel.
Outstanding balances at the year end are unsecured and settlement occurs in cash. All intergroup transactions have been
eliminated on consolidation.
2019
US$’000
2018
US$’000
Trade and other receivables (note 15)
The Tharisa Community Trust
Rocasize Proprietary Limited
Karo Mining Holdings Limited
Karo Zimbabwe Holdings (Private) Limited
Karo Platinum (Private) Limited
Karo Power Generation (Private) Limited
Salene Chrome Zimbabwe (Private) Limited
Salene Technologies Proprietary Limited
Salene Mining Proprietary Limited
Trade and other payables (note 20)
The Leto Settlement
Karo Mining Holdings Limited
Karo Platinum (Private) Limited
Rocasize Proprietary Limited
Amounts due to directors
A Djakouris
JD Salter
OM Kamal
C Bell
R Davey
J Ka Ki Chen
ZL Hong
Total other payables
Acquisition of 26.8% of Karo Mining Holdings Limited from:
The Leto Settlement
4
13
–
26
18
2
264
–
15
342
–
5
21
1
27
–
–
–
–
–
–
–
–
27
–
1
71
20
254
40
–
12
4
15
417
2 000
–
–
31
2 031
22
31
16
25
20
11
19
144
2 175
4 500
134 THARISA PLC INTEGRATED ANNUAL REPORT 2019
FINANCIAL
REVIEW CONTINUED
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
22.
RELATED PARTY TRANSACTIONS AND BALANCES continued
Transactions and balances with related parties: (continued):
2019
US$’000
2018
US$’000
Loan receivable
Karo Mining Holdings Limited
Cost of sales
Rocasize Proprietary Limited
Other income
Karo Zimbabwe Holdings (Private) Limited
Karo Platinum (Private) Limited
Karo Power Generation (Private) Limited
Rocasize Proprietary Limited
Salene Chrome Proprietary Limited
Consulting fees received
Rocasize Proprietary Limited
Salene Chrome Proprietary Limited
Karo Platinum (Private) Limited
Karo Power Generation (Private) Limited
Karo Zimbabwe Holdings (Private) Limited
Consulting fees paid
Rocasize Proprietary Limited
Salene Mining Proprietary Limited
Donations paid
The Music for the Children Foundation
Interest expense
Arti Trust
Ditodi Trust
Makhaye Trust
The Phax Trust
The Rowad Trust
MJ Jacquet-Briner
5 995
393
42
37
3
9
2
15
43
189
59
213
–
–
12
–
–
–
–
–
–
–
–
234
–
–
–
–
–
32
–
–
–
128
234
17
4
514
47
47
93
47
47
795
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THARISA PLC INTEGRATED ANNUAL REPORT 2019
135
Condensed consolidated financial
statements
Notes to the annual financial statements
7
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
22.
RELATED PARTY TRANSACTIONS AND BALANCES continued
Compensation to key management:
2019
Non-executive directors
Executive directors
Other key management
2018
Non-executive directors
Executive directors
Other key management
Salary
and fees
US$’000
Expense
allowances
US$’000
Share-based
payments
US$’000
Provident
fund and
risk benefits
US$’000
629
1 590
1 196
3 415
Salary
and fees
US$’000
612
1 361
932
2 905
–
8
29
37
–
1 178
907
2 085
–
76
129
205
Expense
allowances
US$’000
–
9
31
40
Share-based
payments
US$’000
–
760
1 222
1 982
Provident
fund and
risk benefits
US$’000
–
83
107
190
Bonus
US$’000
Total
US$’000
–
219
190
409
629
3 071
2 451
6 151
Bonus
US$’000
–
700
420
1 120
Total
US$’000
612
2 913
2 712
6 237
Awards to key management in the period under review are as follows:
2019 Ordinary shares
LTIP – executive directors
LTIP – key management
2018 Ordinary shares
LTIP – executive directors
LTIP – key management
2019 Ordinary shares
SARS – executive directors
SARS – key management
2018 Ordinary shares
SARS – executive directors
SARS – key management
Opening
balance
1 605 423
1 099 439
1 808 316
1 202 153
Opening
balance
1 118 547
765 744
1 362 327
924 136
Inclusion of
additional
employee
–
286 656
Allocated
881 262
587 838
Vested
(743 524)
(619 289)
Forfeited
(116 201)
(108 398)
Total
1 626 960
1 246 246
–
–
697 206
483 348
(900 099)
(586 062)
–
–
1 605 423
1 099 439
Inclusion of
additional
employee
–
221 868
Allocated
881 262
587 838
Vested
(595 643)
(499 821)
Forfeited
(174 302)
(162 597)
Total
1 229 864
913 032
–
–
697 206
483 348
(940 986)
(641 740)
–
–
1 118 547
765 744
* At 30 September 2018 the vested shares have not yet been transferred to the respective employees.
Relationships between parties
The Tharisa Community Trust and Rocasize Proprietary Limited
The Tharisa Community Trust is a shareholder of Tharisa Minerals Proprietary Limited and owns 100% of the issued ordinary
share capital of Rocasize Proprietary Limited.
Arti Trust, Phax Trust and Rowad Trust
A director of the Company is a beneficiary of these trusts.
Ditodi Trust and Makhaye Trust
Certain of the non-controlling shareholders of Tharisa Minerals Proprietary Limited are beneficiaries of these trusts.
The Music for the Children Foundation
A director of the Company is a Trustee of the non-profit organisation.
136 THARISA PLC INTEGRATED ANNUAL REPORT 2019
FINANCIAL
REVIEW CONTINUED
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
22.
RELATED PARTY TRANSACTIONS AND BALANCES continued
MJ Jaquet-Briner
MJ Jaquet-Briner is a director of Tharisa Minerals Proprietary Limited and is a shareholder in the non-controlling interest of
Tharisa Minerals Proprietary Limited.
The Leto Settlement
The beneficial shareholder of Medway Developments Limited, a material shareholder in the Company.
Salene Chrome Zimbabwe (Private) Limited
This company is a wholly owned subsidiary of the Leto Settlement, the beneficial shareholder of Medway Developments
Limited, a material shareholder in the Company.
Salene Mining Proprietary Limited
A director of the Company is a director.
Karo Mining Holdings Limited, Karo Zimbabwe Holdings (Private) Limited, Karo Platinum (Private) Limited and
Karo Power Generation (Private) Limited
The Company owns 26.8% of the issued share capital of Karo Mining Holdings Limited. Karo Mining Holdings Limited owns
100% of the issued share capital of Karo Zimbabwe Holdings (Private) Limited, Karo Platinum (Private) Limited and Karo
Power Generation (Private) Limited.
23.
CONTINGENT LIABILITIES
As at 30 September 2019, there is no litigation (2018: no litigation), current or pending, which is considered likely to have a
material adverse effect on the Group. Refer to note 24 for guarantees.
24.
CAPITAL COMMITMENTS AND GUARANTEES
Capital commitments
Authorised and contracted
Authorised and not contracted
2019
US$’000
2018
US$’000
17 062
805
17 867
4 929
1 091
6 020
The above commitments are with respect to property, plant and equipment and are outstanding at the respective reporting
period. All contracted amounts will be funded through existing funding mechanisms within the Group and cash generated
from operations. Balances denominated in currencies other than the US dollar were converted at the closing rates of
exchange ruling at 30 September 2019.
The Company has made a commitment to Karo Mining Holdings Limited to fund the initial exploration programme,
feasibility study and development of the projects in Zimbabwe not exceeding US$8.0 million. Refer to note 16.
Guarantees
The Company issued a guarantee to Absa Bank Limited and Nedbank Limited amounting to US$52.8 million
(ZAR800 million) (2018: ZAR800 million) for the facilities entered into with Tharisa Minerals Proprietary Limited.
Tharisa Minerals Proprietary Limited entered into an equipment loan facility of US$25.0 million with Caterpillar Financial
Services Corporation. The equipment loan facility is secured by a first notarial bond over the equipment and is guaranteed
by the Company.
The Company issued a guarantee to Absa Bank Limited which guarantees the payment of certain liabilities of Arxo Logistics
Proprietary Limited to Transnet totalling US$1.3 million (ZAR19.4 million) (2018: ZAR19.4 million).
The Company guarantees performance of payment due from time to time between a third-party supplier and
Tharisa Minerals Proprietary Limited for the supply and sale of mining materials.
The Company issued guarantees limited to US$12.5 million (2018: US$12.5 million) and US$20.0 million
(2018: US$20.0 million) as securities for trade finance facilities provided by two banks to Arxo Resources Limited.
A guarantee was issued to Lombard Insurance Company Limited which guarantees the payment of certain liabilities of
Arxo Logistics Proprietary Limited to Transnet totalling US$0.8 million (ZAR12.0 million) (2018: ZAR12.0 million).
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THARISA PLC INTEGRATED ANNUAL REPORT 2019
137
Condensed consolidated financial
statements
Notes to the annual financial statements
7
Notes to the condensed consolidated financial statements continued
for the year ended 30 September 2019
24.
CAPITAL COMMITMENTS AND GUARANTEES continued
The Company and Arxo Metals Proprietary Limited jointly indemnify a third party for any claims which may result from
negligence or breach in terms of the plant operating agreement between Arxo Metals Proprietary Limited and the third party.
The Company holds an indirect 100% equity interest in Tharisa Fujian Industrial Co. Limited, the registered capital of which
is US$10.0 million. Up to 30 September 2019, US$6.0 million has been paid up. The remaining US$4.0 million needs to be
paid up by 14 February 2021.
25.
EVENTS AFTER THE REPORTING PERIOD
Effective 1 October 2019, the Company acquired 100.0% of the issued share capital of a company that manufactures
equipment used in the mining industry for a total purchase consideration of US$2.6 million (ZAR40.0 million). Of the
total purchase consideration, US$1.8 million (ZAR27.5 million) was settled in cash on the effective acquisition date
while US$0.8 million (ZAR12.5 million) will be settled in cash after one year from the acquisition date. Settlement of the
US$0.8 million is subject to the Company achieving certain profit targets which represents a contingent consideration.
The Company has recognised the total contingent consideration as a liability at 1 October 2019.
The following summarises the initial fair value of the Company’s assets and liabilities at the acquisition date:
Assets
Property, plant and equipment
Deferred tax
Inventories
Trade and other receivables
Cash and cash equivalents
Liabilities
Borrowings
Other financial liabilities
Trade and other payables
Total identifiable net assets at fair value
Goodwill arising on acquisition
Purchase consideration
Fair value
recognised on
acquisition
US$’000
1 420
39
580
332
116
2 487
(660)
(22)
(189)
(871)
1 616
1 022
2 638
The purchase consideration was funded by existing cash resources of the Group. The transaction cost is anticipated to be
US$0.1 million.
Management is currently in the process of finalising the fair value of the Company’s assets and liabilities. The goodwill
recognised is attributed to existing relationships with customers, industry knowledge and technical expertise relating to the
manufacture of the mining equipment.
On 26 November 2019, the Board proposed a final dividend of US 0.25 cent per share, subject to the necessary shareholder
approval at the annual general meeting.
The Board of Directors are not aware of any matter or circumstance arising since the end of the financial year that will
impact these financial results.
26.
DIVIDENDS
During the year ended 30 September 2019, the Company declared and paid a final dividend of US2 cents per share in
respect of the year ended 30 September 2018. In addition, an interim dividend of US0.5 cent per share was declared and
paid in respect of the financial year ended 30 September 2019.
During the year ended 30 September 2018, a final dividend of US5 cents per share was declared and paid in respect of the
financial year ended 30 September 2017. In addition, an interim dividend of US2 cents per share was declared and paid in
respect of the financial year ended 30 September 2018.
138 THARISA PLC INTEGRATED ANNUAL REPORT 2019
INVESTOR RELATIONS
REPORT
Share information
Tharisa plc is listed on the Johannesburg Stock Exchange and the London Stock Exchange
Company
JSE share code
LSE share code
A2X share code
Sector
Issued share capital as at 30 September 2019
Issued share capital (excluding treasury shares) as at 30 September 2019
Tharisa plc
THA
THS
THA
General mining
270 000 000
266 610 322
JSE
LSE
ZAR5.75 billion GBP313.2 million
116.00p
121.50p
94.00p
ZAR21.30
ZAR22.00
ZAR16.00
Number of
shareholders
Number
of shares
Percentage
of issued
share capital
Percentage
of voting
rights
846
89
43
8
9
1
–
996
886 305
2 981 444
13 136 191
19 862 150
120 117 226
109 627 006
3 389 678
0.33
1.10
4.86
7.36
44.49
40.60
1.26
270 000 000
100.00
0.33
1.12
4.93
7.45
45.05
41.12
–
100.0
Number
of shares
Percentage
of issued
share capital
Percentage
of voting
rights
109 627 006
40 548 241
19 419 920
11 587 917
40.60
15.02
7.19
4.29
41.12
15.21
7.28
4.35
Market capitalisation as at 30 September 2019
Closing share price as at 30 September 2019
12-month high
12-month low
Shareholder analysis
Analysis of shareholders as at 30 September 2019
Analysis of ordinary shareholders
Holding 1 to 10 000 shares
Holding 10 001 to 100 000 shares
Holding 100 001 to 1 000 000 shares
Holding 1 000 001 to 5 000 000 shares
Holding 5 000 001 to 100 000 000 shares
Holding > 100 000 000 shares
Treasury shares
Total
Major shareholders
Shareholders holding 10% or more
Medway Developments Limited
Rance Holdings Limited
Shareholders holding 5% or more
Fujian Wuhang Stainless Steel Co. Limited
Maaden Invest Limited
THARISA PLC INTEGRATED ANNUAL REPORT 2019
139
Investor relations report
Notice of annual general meeting
Glossary
Form of proxy
Corporate information
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Public and non-public shareholders
Public
Non-public
Directors and associates of the Company and its subsidiaries
Persons interested (other than directors), directly or indirectly,
in 10% or more
Total
Number of
shareholders
Number
of shares
Percentage
of issued
share capital
Percentage
of voting
rights
979
107 098 098
39.67
15
9 336 977
3.46
2
150 175 247
996
266 610 322
55.62
98.74
40.17
3.50
56.33
100.00
Disclosure of directors’ interests in the Company’s share capital
The aggregate direct and indirect interests of the directors in the issued share capital of the Company are as follows:
2019
2018
Beneficial
Non-beneficial
Beneficial
Non-beneficial
Director
Direct
Indirect
Direct
Indirect
Direct
Indirect
Direct
Indirect
Loucas Pouroulis
Phoevos Pouroulis
Michael Jones
David Salter
Antonios Djakouris
Omar Kamal
Carol Bell
Roger Davey
Joanna Cheng
Zhong Liang Hong
630 711
546 384
474 172
–
43 250
–
31 250
–
–
–
–
6 918 432
–
–
–
–
–
–
–
–
Total
1 725 767
6 918 432
–
–
–
–
–
–
–
–
–
–
–
10 000
–
–
–
–
–
–
–
–
–
272 952
240 871
207 397
–
43 250
–
31 250
–
–
–
–
6 918 132
–
–
–
–
–
–
–
–
10 000
795 720
6 918 432
–
–
–
–
–
–
–
–
–
–
–
10 000
–
–
–
–
–
–
–
–
–
10 000
There have been no changes in directors’ interests in the share capital between 30 September 2019 and the date of issue of this
Integrated Annual Report.
140 THARISA PLC INTEGRATED ANNUAL REPORT 2019
NOTICE OF ANNUAL
GENERAL MEETING
Tharisa plc
(Incorporated in the Republic of Cyprus with limited liability)
(Registration number: HE223412)
JSE share code: THA
LSE share code: THS
A2X share code: THA
ISIN: CY0103562118
LEI: 213800WW4YWMVVZIJM90
(‘Tharisa’ or the ‘Company’)
Notice is hereby given that the annual general meeting (‘AGM’) of shareholders of Tharisa will be held at 2nd Floor, The Crossing,
372 Main Road, Bryanston, South Africa on Wednesday, 29 January 2020 at 10:00 SA time (UTC +2) to consider and, if deemed fit,
pass, with or without modification, the ordinary and special resolutions as set out in this notice of AGM and to deal with such other
business as may be dealt with at the AGM.
This notice of AGM, the Integrated Annual Report containing the condensed, consolidated financial statements and the audited
annual financial statements together with all relevant reports, are available on the Company’s website www.tharisa.com and
available for inspection at the registered office of the Company.
Under the Companies Law, a member has the right to request an item to be included in the agenda for an AGM, as well as
to request that a specific resolution be tabled and resolved upon, provided that such request is accompanied by an adequate
explanation and justification for its inclusion which the Company deems to be reasonable and within the best interests of the
Company and its stakeholders as a whole and provided further that such member, or members acting collectively, hold in aggregate
5% of the ordinary share capital of the Company. Requests of this nature are to be received by the Company in writing or
electronically, at least 42 days before the scheduled date of the AGM.
IDENTIFICATION
Shareholders are advised that any person attending or participating in an AGM of shareholders must present reasonably satisfactory
identification before being entitled to participate in and vote at the AGM and the person presiding at the AGM must be reasonably
satisfied that the right of any person to participate in and vote (whether as shareholder or proxy for a shareholder) has been
reasonably verified.
Forms of identification that will be accepted include original and valid identity documents, driver’s licences or passports.
IMPORTANT DATES
Record date to receive notice of the AGM
Last day to trade to be eligible to vote
Record date to be eligible to vote at the AGM
Last day for lodging forms of instruction (by 08:00 UK time)
Last day for lodging forms of proxy (by 10:00 SA time)
Annual general meeting (10:00 SA time (UTC +2))
Friday, 6 December 2019
Tuesday, 21 January 2020
Friday, 24 January 2020
Friday, 24 January 2020
Monday, 27 January 2020
Wednesday, 29 January 2020
Accordingly, the date on which a person must be registered as a shareholder in the register of the Company to be entitled to attend
and vote at the AGM will be Friday, 24 January 2020.
THARISA PLC INTEGRATED ANNUAL REPORT 2019
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Investor relations report
Notice of annual general meeting
Glossary
Form of proxy
Corporate information
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RESOLUTIONS FOR CONSIDERATION AND ADOPTION
Ordinary business
1.
Ordinary resolution number 1
Adoption of the annual financial statements
To receive the audited annual financial statements for the year ended 30 September 2019, including the management
report and the report of the independent auditor, such annual financial statements having been approved by the Board
on 26 November 2019.
Additional information in respect of ordinary resolution number 1
The condensed consolidated financial statements for the year ended 30 September 2019 are included in the Integrated
Annual Report of which this notice of AGM forms part. The complete audited annual financial statements, together with the
relevant reports for the year ended 30 September 2019, are available on the Company’s website, www.tharisa.com. Copies
of the audited financial statements, management report and report of the auditor are also available for collection at the
registered office of the Company, and available for dispatch at the request of shareholders, free of charge and either in
printed copy or in electronic (email) format, by contacting the Company Secretary at secretarial@tharisa.com.
This resolution is non-binding, therefore no minimum voting threshold is required for ordinary resolution number 1.
2.
Ordinary resolution number 2
Reappointment of external auditor
“RESOLVED THAT Ernst & Young Cyprus Limited, with Stavros Pantzaris being the designated registered auditor, be
reappointed as the independent external auditor of the Company and of the Group for the financial year ending
30 September 2020, to hold office until conclusion of the next AGM of the Company, and that the remuneration for
the financial year ending 30 September 2020 be determined by the Audit Committee.”
Additional information in respect of ordinary resolution number 2
In accordance with clause 195 of the Company’s Articles of Association and sections 153 to 155 of the Companies Law,
Ernst & Young Cyprus Limited is proposed to be reappointed as the external auditor of the Company, until the conclusion
of the next AGM. The Audit Committee conducted an assessment of the performance and the independence of the external
auditor and compliance with the JSE Listings Requirements and recommends the reappointment as independent auditor
of the Company and the Group.
The percentage of voting rights required for ordinary resolution number 2 to be adopted is more than 50% in favour, of the
voting rights exercised on this resolution by all shareholders present or represented by proxy and entitled to vote at the AGM.
3.
Ordinary resolution number 3 (comprising ordinary resolutions numbers 3.1 and 3.2)
Re-election of directors retiring by rotation
3.1 “RESOLVED THAT Omar Kamal, who retires in accordance with the Company’s Articles of Association and who, being
eligible, offers himself for re-election, be re-elected as a director of the Company.”
3.2 “RESOLVED THAT Carol Bell, who retires in accordance with the Company’s Articles of Association and who, being
eligible, offers herself for re-election, be re-elected as a director of the Company.”
Additional information in respect of ordinary resolutions numbers 3.1 and 3.2
In terms of clause 110 of the Company’s Articles of Association, one-third of the non-executive directors of the Company for
the time being are required to retire from office at each AGM. The directors of the Company to retire in every year shall be
those who have been longest serving since their last election. A retiring director shall be eligible for re-election. Omar Kamal,
Carol Bell and Joanna Cheng are retiring by rotation. Joanna Cheng is not available for re-election.
A brief curriculum vitae in respect of the directors referred to in ordinary resolutions numbers 3.1 and 3.2 above appears
on pages 64 and 65 of the Integrated Annual Report of which this notice of AGM forms part and the Board recommends to
shareholders the re-election of the retiring directors as set out in ordinary resolutions numbers 3.1 and 3.2.
The percentage of voting rights required for ordinary resolutions numbers 3.1 and 3.2 to be adopted is more than 50%
in favour, of the voting rights exercised on such resolution by all shareholders present or represented by proxy and entitled
to vote at the AGM.
142 THARISA PLC INTEGRATED ANNUAL REPORT 2019
NOTICE OF ANNUAL
GENERAL MEETING CONTINUED
Special business
4.
Ordinary resolution number 4
General authority to directors to allot and issue ordinary shares
“RESOLVED THAT the authorised but unissued shares in the capital of the Company, limited to 27 000 000 (twenty seven
million) ordinary shares, being 10% of the number of listed equity securities in issue at the date of this notice, being
270 000 000 (two hundred and seventy million) ordinary shares (for which purposes any shares approved to be allotted and
issued by the Company in terms of the Share Award Plan for the benefit of employees shall be excluded), be and are hereby
placed under the control and authority of the directors and that they be and are hereby authorised to allot, issue and grant
options over and otherwise dispose of such shares to such persons on such terms and conditions and at such times as they
may from time to time and at their discretion deem fit. This is subject to the provisions of the Companies Law, as may be
amended from time to time, the Company’s Articles of Association, the JSE Listings Requirements and the LSE Listing Rules
and Disclosure and Transparency Rules which may apply to the Company. Such authority shall be valid until the conclusion
of the next AGM of the Company.”
Additional information in respect of ordinary resolution number 4
The Board may only allot and issue shares or grant rights over shares if authorised to do so by the shareholders. This
resolution seeks authority for the Board to allot, issue and deal in shares up to a maximum of 10% of the Company’s issued
share capital.
The percentage of votes required for ordinary resolution number 4 to be adopted is more than 50%, in favour, of the voting
rights exercised on such resolution by all shareholders present or represented by proxy and entitled to vote at the AGM.
5.
Ordinary resolution number 5
Dis-application of pre-emption rights
“RESOLVED THAT, subject to the JSE Listings Requirements, the Board be and is hereby authorised to dis-apply the pre-
emption rights, with respect to the authority conferred on the Board to issue and allot ordinary shares, up to a maximum
of 10% of the Company’s issued share capital. This authority will expire at the conclusion of the Company’s next AGM.”
Additional information in respect of ordinary resolution number 5
In terms of section 60B of the Companies Law, if the Board wishes to allot any unissued shares, grant rights over shares or
sell treasury shares for cash (other than pursuant to an employee share scheme) it must first offer them to existing
shareholders in proportion to their holdings. There may be circumstances, however, where the Board requires the flexibility to
finance business opportunities through the issue or sale of shares or related securities without a pre-emptive offer to existing
shareholders. This can only be done under the Companies Law if the shareholders have first waived their pre-emption rights.
This resolution seeks authority for the Board to dis-apply pre-emption rights for shares up to a maximum of 10% of the
Company’s issued share capital. If granted, this authority will expire at the conclusion of the Company’s next AGM.
The percentage of votes required for ordinary resolution number 5 to be adopted is more than 50%, in favour, of the voting
rights exercised on such resolution by all shareholders present or represented by proxy and entitled to vote at the AGM.
THARISA PLC INTEGRATED ANNUAL REPORT 2019
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Notice of annual general meeting
Glossary
Form of proxy
Corporate information
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6.
Ordinary resolution number 6
General authority to issue shares for cash
“RESOLVED THAT, subject to ordinary resolutions numbers 4 and 5 being passed, the Board be authorised, by way of a
general authority, to allot and issue shares (and/or any options or convertible securities) for cash to such persons on such
terms and conditions as the Board may from time to time in its discretion deem fit, subject to the provisions of the
Company’s Articles of Association, the Companies Law, as may be amended from time to time, the JSE Listings Requirements
and the LSE Listing Rules and Disclosure and Transparency Rules which may apply to the Company, and subject to the
following limitations, namely that:
i. The equity securities which are the subject of the issue for cash must be of a class already in issue, or where this is not
the case, must be limited to such securities or rights that are convertible into a class already in issue.
ii. Any such issue will only be made to “public shareholders” as defined in the JSE Listings Requirements and not to related
parties, unless the JSE otherwise agrees.
iii. In respect of securities which are the subject of the general issue of shares for cash, such issue may not exceed
27 000 000 (twenty seven million) ordinary shares, representing 10% of the number of listed equity securities in issue
as at the date of this notice, being 270 000 000 (two hundred and seventy million) ordinary shares, provided that:
(cid:3)• any equity securities issued under this authority during the period must be deducted from the number above
(cid:3)• in the event of a subdivision or consolidation of issued equity securities during the period contemplated above,
the existing authority must be adjusted accordingly to represent the same allocation ratio
(cid:3)• the calculation of the listed equity securities is a factual assessment of the listed equity securities as at the date
of the notice of AGM, excluding treasury shares.
iv. This authority shall be valid until the Company’s next AGM.
v. A SENS announcement giving full details of the issue will be published at the time of any issue representing, on a
cumulative basis within the period of this authority, 5% or more of the number of ordinary shares in issue prior to
the issue concerned.
vi. The maximum discount permitted at which equity securities may be issued is 10% of the weighted average traded price
on the JSE of those shares measured over the 30 business days prior to the date that the price of the issue is agreed
between the Company and the party subscribing for the securities. The JSE should be consulted for a ruling if the
Company’s securities have not traded in such 30 business day period.”
Additional information in respect of ordinary resolution number 6
In accordance with the Company’s Articles of Association, and the JSE Listings Requirements, the shareholders of the
Company have to approve a general issue of shares for cash. This authority will be subject to the Company’s Articles of
Association, the Companies Law and the JSE Listings Requirements. The Board considers it advantageous to renew this
authority to enable the Company to take advantage of any business opportunity that may arise in the future.
Any issue of shares for cash will be subject to approval by 90% of the Board members.
This ordinary resolution number 6 is required, under the JSE Listings Requirements, to be passed by achieving a 75%
majority of the voting rights exercised on this resolution by all shareholders present or represented by proxy and entitled
to vote at the AGM.
144 THARISA PLC INTEGRATED ANNUAL REPORT 2019
NOTICE OF ANNUAL
GENERAL MEETING CONTINUED
7.
Ordinary resolution number 7 (comprising ordinary resolutions numbers 7.1 and 7.2)
7.1 Approval of remuneration policy
“RESOLVED THAT the Group remuneration policy, as described in the remuneration report on pages 86 to 93 of
the Integrated Annual Report of which this notice of AGM forms part, be approved by way of a non-binding advisory
vote, as recommended in King IV.”
Additional information in respect of ordinary resolution number 7.1
In terms of King IV recommendations and the JSE Listings Requirements, the Company’s remuneration policy should be
tabled for a non-binding advisory vote at every AGM.
The purpose of the non-binding advisory vote is to enable shareholders of the Company to express their views on the
Group’s remuneration policies. Accordingly, the shareholders of the Company are requested to endorse the Company’s
remuneration policy as recommended by King IV.
This resolution is non-binding, therefore no minimum voting threshold is required for ordinary resolution number 7.1.
7.2 Approval of remuneration implementation report
“RESOLVED THAT the Group remuneration implementation report, as described in the remuneration report on
pages 86 to 93 of the Integrated Annual Report of which this notice of AGM forms part, be approved by way of
a non-binding advisory vote.”
Additional information in respect of ordinary resolution number 7.2
In terms of King IV recommendations and the JSE Listings Requirements, the Company’s remuneration implementation
report should be tabled for a non-binding advisory vote at every AGM.
The purpose of the non-binding advisory vote is to enable shareholders of the Company to express their views on the
Group’s implementation of the remuneration policy. Accordingly, the shareholders of the Company are requested to
endorse the Company’s remuneration implementation report.
This resolution is non-binding, therefore no minimum voting threshold is required for ordinary resolution number 7.2.
8.
Special resolution number 1
General authority to repurchase shares
“RESOLVED THAT the Company, and any of its subsidiaries, be authorised, by way of a general authority, in terms of the
provisions of the JSE Listings Requirements, the Companies Law and as permitted by the Company’s Articles of Association,
to acquire, as a general repurchase, the issued ordinary shares of the Company, upon such terms and conditions and in such
manner as the Board may from time to time determine, but subject to the applicable requirements of the Company’s Articles
of Association, the provisions of the Companies Law, the JSE Listings Requirements and the LSE Listing Rules and Disclosure
and Transparency Rules, where applicable, and provided that:
i. The maximum number of ordinary shares to be acquired shall not exceed 10% of the Company’s ordinary shares in issue
at the date on which this special resolution number 1 is passed.
ii. The repurchase of shares will be effected through the order books operated by the JSE and LSE trading system and done
without any prior understanding or arrangement between the Company and the counterparty (reported trades are
prohibited).
iii. The Company has been given authority to repurchase its shares by its Articles of Association.
iv. This general authority shall only be valid until the Company’s next AGM, provided that it shall not extend beyond
v.
12 months from the date of passing of this special resolution number 1.
In determining the price at which the Company’s ordinary shares are acquired by the Company in terms of this general
authority, the maximum premium and/or discount at which such ordinary shares may be acquired shall not exceed the
lesser of:
(cid:3)• 5% of the weighted average of the market price at which such ordinary shares are traded on the JSE, as determined
over the five business days immediately preceding the date of the repurchase of such ordinary shares by the Company
(cid:3)• the price quoted for the last independent trade of, or the highest current independent bid for any number of shares
on the JSE where the purchase is carried out.
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vi. At any point in time, the Company may only appoint one agent to effect any repurchases on the Company’s behalf.
vii. A resolution has been passed by the Board confirming that the Board has authorised the repurchase and that the
Company satisfied the net assets test contemplated under section 169A of the Companies Law.
viii. The Company may not repurchase ordinary shares during a prohibited period, as defined in the JSE Listings Requirements
or any applicable EU Market Abuse Regulations, unless the Company has a repurchase programme in place where the
dates and quantities of the ordinary shares to be traded during the relevant period are fixed and not subject to any
variation and full details of the programme have been disclosed to the JSE in writing prior to the commencement of the
prohibited period.
ix. A SENS announcement will be published giving such details as may be required in terms of the JSE Listings Requirements
as soon as the Company has cumulatively repurchased 3% of the number of shares in issue at the date of the passing
of this special resolution number 1 and for each 3% in aggregate of the initial number of shares acquired thereafter,
and in the media when required in terms of the Companies Law.
x. The Board undertakes that it will not implement the proposed authority to repurchase shares, unless the directors are
of the opinion that, for a period of 12 months after the date of the repurchase:
(cid:3)• the Company and the Group will be able, in the ordinary course of business, to pay its debts
(cid:3)• the assets of the Company and the Group, fairly valued in accordance with IFRS, will be in excess of the liabilities
of the Company and the Group
(cid:3)• the share capital and reserves of the Company and the Group will be adequate for ordinary business purposes and
(cid:3)• the working capital of the Company and the Group will be adequate for ordinary business purposes.”
Additional information in respect of special resolution number 1
Under section 57A of the Companies Law, the Board must obtain authorisation by special resolution from the shareholders
before they can effect the purchase by the Company of any of its own shares. In certain circumstances it may be
advantageous for the Company to purchase its own shares and this resolution seeks authority to do so. The Board will
exercise this power only in accordance with the requirements of the Companies Law and the JSE Listings Requirements,
and when, in view of market conditions prevailing at the time, it believes that the effect of such purchases will be to increase
earnings per share and is in the best interests of the shareholders generally. Save to the extent purchased pursuant to the
Companies Law, any shares purchased in this way will be cancelled and the number of shares in issue will be reduced
accordingly.
The Company may hold in treasury any of its own shares that it purchases pursuant to the Companies Law and the authority
conferred by this resolution. Repurchased shares may be held in treasury for a period not exceeding a maximum of two
calendar years from the repurchase date. This gives the Company the ability to reissue treasury shares quickly and cost-
effectively and provides the Company with greater flexibility in the management of its capital base. It also gives the Company
the opportunity to satisfy awards under the Share Award Plan using treasury shares. Once held in treasury, the Company is
not entitled to exercise any rights, including the right to attend and vote at meetings, in respect of the shares and no
dividend or other distribution of the Company’s assets may be made to the Company in respect of treasury shares.
In accordance with the Companies Law, this resolution specifies the maximum number of shares that may be acquired and
the maximum and minimum prices at which shares may be bought. If granted, this authority will expire at the conclusion
of the Company’s next AGM, provided that it shall not extend beyond 12 months from the date of passing of this special
resolution number 1.
Please refer to the additional disclosure of information contained in this notice of AGM, which disclosure is required in terms
of the JSE Listings Requirements.
146 THARISA PLC INTEGRATED ANNUAL REPORT 2019
NOTICE OF ANNUAL
GENERAL MEETING CONTINUED
The percentage of the voting rights required for special resolution number 1 to be adopted is 75%, in favour, of the voting
rights exercised on this resolution by all shareholders present or represented by proxy and entitled to vote at the AGM.
Additional disclosure requirements in terms of the JSE Listings Requirements
In compliance with the JSE Listings Requirements, the information listed below has been included in the Integrated Annual
Report of which this notice of AGM forms part:
(cid:3)• Major shareholders – refer to page 138 of the Integrated Annual Report
(cid:3)• Share capital of Tharisa – refer to pages 125 and 126 of the Integrated Annual Report.
Material changes
Other than the facts and developments reported on in the Annual Report, there have been no material changes in the affairs
or the financial position of the Company and its subsidiaries since the date of signature of the audit report and the date
of this notice of AGM.
Directors’ responsibility statement
The directors, whose names appear on page 64 of this Integrated Annual Report, collectively and individually accept full
responsibility for the accuracy of the information pertaining to this special resolution number 1 and certify that to the best
of their knowledge and belief there are no facts that have been omitted which would make any statement false or
misleading, that all reasonable enquiries to ascertain such facts have been made and that the proposed resolution contains
all such information required by law and the JSE Listings Requirements.
9.
Ordinary resolution number 8
Final dividend
“RESOLVED THAT a final cash dividend in the amount of US 0.25 cent per ordinary share is declared for the financial year
ending 30 September 2019, such dividend being payable to shareholders registered on the register of members of the
Company as of close of business on the record date, being Friday, 14 February 2020.”
Additional information in respect of ordinary resolution number 8
The Board has proposed a final cash dividend of US 0.25 cent per ordinary shares for the financial year ended
30 September 2019.
If approved by shareholders, the recommended final dividend will be paid on Wednesday, 26 February 2020. Shareholders
on the principal Cyprus register will be paid in US dollar, shareholders whose shares are held through Central Securities
Depositary Participants (‘CSDPs’) and brokers and are traded on the JSE will be paid in South African rand (‘ZAR’) and holders
of depositary interests traded on the LSE will be paid in sterling (‘GBP’). The currency equivalents of the dividend will be
based on the weighted average of the South African Reserve Bank’s daily rate at approximately 10:30 (UTC +2) on
26 November 2019, being the currency conversion date.
Tax implications of the dividend
Shareholders are advised that the dividend declared will be paid out of income reserves and may therefore be subject
to dividend withholding tax depending on the tax residency of the shareholder.
South African tax residents
South African shareholders are advised that the dividend constitutes a foreign dividend. For individual South African tax
resident shareholders, dividend withholding tax of 20% will be applied to the gross dividend of US 0.25 cent per share.
Shareholders who are South African tax resident companies are exempt from dividend tax and will receive the dividend of
US 0.25 cent per share. This does not constitute legal or tax advice and is based on taxation law and practice in South Africa.
Shareholders should consult their brokers, financial and/or tax advisers with regard to how they will be impacted by the
payment of the dividend.
UK tax residents
UK tax residents are advised that the dividend constitutes a foreign dividend and that they should consult their brokers,
financial and/or tax advisers with regard to how they will be impacted by the payment of the dividend.
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Cyprus tax residents
Individual Cyprus tax residents are advised that the dividend constitutes a local dividend and that they should consult their
brokers, financial and/or tax advisers with regard to how they will be impacted by the payment of the dividend.
Shareholders and depositary interest holders should note that information provided should not be regarded as tax advice.
The timetable for the dividend declaration is as follows:
Declaration and currency conversion date
Currency conversion rates announced
Last day to trade cum dividend rights on the JSE
Last day to trade cum dividend rights on the LSE
Shares will trade ex dividend rights on the JSE
Shares will trade ex dividend rights on the LSE
Record date for payment on both JSE and LSE
Dividend payment date
Tuesday, 26 November 2019
Thursday, 30 January 2020
Tuesday, 11 February 2020
Wednesday, 12 February 2020
Wednesday, 12 February 2020
Thursday, 13 February 2020
Friday, 14 February 2020
Wednesday, 26 February 2020
No dematerialisation or rematerialisation of shares within Strate will be permitted between Wednesday, 12 February 2020
and Friday, 14 February 2020, both days inclusive. No transfers between registers will be permitted between Thursday,
30 January 2020 and Friday, 14 February 2020, both days inclusive.
The percentage of the voting rights required for ordinary resolution number 8 to be adopted is 50%, in favour, of the voting
rights exercised on this resolution by all shareholders present or represented by proxy and entitled to vote at the AGM. By
virtue of Article 176 of the Articles of Association of the Company, shareholders are informed that they may vote to decrease
the dividend declaration proposed by the Board but shall not be entitled to increase it.
10.
Ordinary resolution number 9
Directors’ authority to implement ordinary and special resolutions
“RESOLVED THAT each and every director of the Company and/or the Company Secretary be and are hereby authorised to
do all such things and sign all such documents as may be necessary for or incidental to the ordinary and special resolutions
passed at the AGM.”
Additional information in respect of ordinary resolution number 9
The percentage of voting rights required for ordinary resolution number 9 to be adopted is more than 50% in favour, of the
voting rights exercised on this resolution by all shareholders present or represented by proxy and entitled to vote at the AGM.
PROXIES
An ordinary shareholder entitled to attend and vote at the AGM is entitled to appoint a proxy or proxies to attend and act in
his/her stead. A proxy need not be a member of the Company. For the convenience of registered members of the Company,
a form of proxy is attached hereto.
In terms of section 128C of the Companies Law, shareholders and their proxies shall have the right to ask questions on the
items to be discussed and resolutions proposed to be passed at the AGM. The Company shall endeavour to answer such
questions, provided that they are relevant to the matters at hand, do not disrupt or delay proceedings, have not already been
previously answered or contained in information readily available to shareholders elsewhere and the answers do not
constitute sensitive information that may harm the Company or its business operations if disclosed.
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NOTICE OF ANNUAL
GENERAL MEETING CONTINUED
Voting by shareholders whose shares are registered on the Cyprus principal register and the South African branch
register (‘JSE’)
The attached form of proxy is only to be completed by those ordinary shareholders who:
(cid:3)• hold ordinary shares in certificated form or
(cid:3)• are recorded on the sub-register in ‘own name’ dematerialised form.
Ordinary shareholders who have dematerialised their ordinary shares through a CSDP or broker other than with ‘own name‘
registration and who wish to attend the AGM, must instruct their CSDP or broker to provide them with the relevant letter
of representation to attend the AGM in person or by proxy and vote. If they do not wish to attend in person or by proxy, they
must provide the CSDP or broker with their voting instructions in terms of their custody agreement entered into between
them and the CSDP or broker.
Unless shareholders advise their CSDP or broker, in terms of their agreement, by the cut-off time stipulated therein, that
they wish to attend the AGM or send a proxy to represent them, their CSDP or broker will assume that they do not wish
to attend the AGM or send a proxy.
Shareholders who are unsure of their status or the action they should take, are advised to consult their CSDP, broker or
financial adviser.
The attached form of proxy must be executed in terms of the Company’s Articles of Association and in accordance with the
relevant instructions set out on the form, and must be lodged with the Company’s transfer secretaries not less than 48 hours
before the time set down for the AGM. If required, additional forms of proxy may be obtained from the transfer secretaries
or through the Company’s website.
Voting by depositary interest holders (‘LSE’)
Holders of depositary interests will be sent a form of instruction separately to this Notice of AGM by the depositary,
Computershare Investor Services PLC. On receipt, holders of depositary interests should complete the form of instruction in
accordance with the instructions printed thereon to direct Computershare Company Nominees Limited as the custodian of
their shares how to exercise their votes or (by following the instructions on the form of instruction) indicate that they intend
to attend the AGM in person or by proxy. If a holder of depositary interests indicates, in this manner, that they intend to
attend the AGM, Computershare Company Nominees Limited shall issue a letter of representation to the holder of
depositary interests giving them authorisation to attend the AGM and vote. If any holder of depositary interests attends the
AGM without a letter of representation, they will only be allowed to enter the AGM as a guest and will not be allowed to
vote. To be valid, the form of instruction must be completed in accordance with the instructions set out in the form and
returned as soon as possible to the offices of the depositary at Computershare Investor Services PLC, The Pavilions,
Bridgwater Road, Bristol, BS99 6ZY, England so as to be received no later than 08:00 UTC on Friday, 24 January 2020.
Depositary interest holders who are CREST members and who wish to issue an instruction through the CREST electronic
voting appointment service may do so by using the procedures described in the CREST manual (available from
www.euroclear.com/CREST). CREST personal members or other CREST sponsored members, and those CREST members
who have appointed a voting service provider(s), should refer to their CREST sponsor or voting services provider(s), who
will be able to take the appropriate action on their behalf.
In order for instructions made using the CREST service to be valid, the appropriate CREST message (a CREST voting
instruction) must be properly authenticated in accordance with the specifications of Euroclear UK & Ireland Limited (‘EUI’)
and must contain the information required for such instructions, as described in the CREST manual (available via
www.euroclear.com/CREST).
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The message, regardless of whether it relates to the voting instruction or to an amendment to the instruction given to the
depositary must, in order to be valid, be transmitted so as to be received by the issuer’s agent (ID 3RA50) no later than
08:00 UTC on Friday, 24 January 2020. For this purpose, the time of receipt will be taken to be the time (as determined by
the timestamp applied to the CREST voting instruction by the CREST applications host) from which the issuer’s agent is able
to retrieve the CREST voting instruction by enquiry to CREST in the manner prescribed by CREST.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not make
available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply
in relation to the transmission of CREST voting instructions. It is the responsibility of the CREST member concerned to take
(or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s),
to procure that the CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a
CREST voting instruction is transmitted by means of the CREST service by any particular time. In this connection, CREST
members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections
of the CREST manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST voting instruction in the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
VOTING
In accordance with the Company’s Articles of Association, all resolutions put to a vote at the AGM shall be decided on a poll. Every
shareholder of the Company shall have one vote for every share held in the Company by such shareholder. If you are in any doubt
as to what action you should take in respect of the resolutions provided for in this notice, please consult your CSDP, broker, banker,
attorney, accountant or other professional adviser. An abstention from voting is not a vote and will accordingly not be counted in
the calculation of votes for and against resolutions.
LODGEMENT OF FORMS OF PROXY AND LETTERS OF REPRESENTATION
Forms of proxy and letters of representation should be delivered or posted to the Company’s transfer secretaries, Computershare
Investor Services Proprietary Limited, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196, South Africa (PO Box 61051,
Marshalltown, 2107, South Africa), or can be emailed to Computershare at proxy@computershare.co.za or to the Company at
ir@tharisa.com, so as to be received by no later than 10:00 (SA time) on Monday, 27 January 2020, in accordance with clause 99 of
the Company’s Articles of Association. Any shareholder who completes and lodges a form of proxy will nevertheless be entitled to
attend and vote in person at the AGM, provided that he has obtained a letter of representation to attend and vote at the AGM
from his CSDP or broker.
By order of the Board
Sanet Findlay
Company Secretary
10 December 2019
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GLOSSARY
In this Integrated Annual Report, unless otherwise indicated, the words in the first column have the meanings stated opposite them
in the second column, words in the singular include the plural and vice versa, words denoting one gender include the other, and
words denoting natural persons include juristic persons and associations of persons and vice versa.
4PGE or 3PGE + Au
Platinum Group Metals comprising platinum, palladium, rhodium and gold
5PGE + Au
6PGE + Au
AET
AGM
AMCU
Appreciation right
Platinum Group Metals comprising platinum, palladium, rhodium, ruthenium, iridium and gold
5PGE plus osmium
adult education and training
the Annual General Meeting of the Company
the Association of Mineworkers and Construction Union of South Africa
the award which takes the form of a right to call for shares of an aggregate market value or receive
a cash amount equal to the increase (if any) between the date an award is granted and the exercise
date of the market value of such number of shares as is specified in the notice of award and has
vested
ART
antiretroviral treatment
Arxo Logistics
Arxo Metals
Arxo Resources
Arxo Logistics Proprietary Limited (Registration number 2009/006720/07), a private company duly
registered and incorporated in South Africa, a wholly owned subsidiary of the Company
Arxo Metals Proprietary Limited (Registration number 2011/143342/07), a private company duly
registered and incorporated in South Africa, an indirect wholly owned subsidiary of the Company
Arxo Resources Limited (Registration number HE221459), a public company duly registered and
incorporated in Cyprus, a wholly owned subsidiary of the Company
Award
Au
BAPS
BEE
BMI
Board
the award granted under the Share Award Plan in the form of a conditional award or an appreciation
right
gold
biodiversity action plans
Black Economic Empowerment, as defined in the MPRDA and “broad-based socioeconomic
empowerment” as defined in the Mining Charter
BMI Drilling Proprietary Limited (Registration number 2010/001913/07)
the Board of Directors of the Company
Bushveld Complex
a major intrusive igneous body in the northern part of South Africa, that has undergone remarkable
magmatic differentiation, and the leading source of PGMs and chromium
Calibre
CBT
Calibre Clinical Consultants Proprietary Limited (Registration number 2005/005494/07), a private
company duly registered and incorporated in South Africa
computer-based training
certificated shares
Shares which are held and represented by a share certificate or other tangible document of title,
which shares have not been dematerialised in terms of the requirements of Strate
Challenger or
Challenger Plant
Charter Scorecard
the integrated beneficiation plant adjacent to the Genesis Plant for the production of chemical and
foundry grade concentrate owned by Arxo Metals
the Scorecard for the Mining Charter published pursuant to section 100(2)(a) of the MPRDA under
Government Gazette No. 26661 of 13 August 2004, as amended by General Notice 1002 of
27 September 2018
chemical grade
concentrate
the main ingredient in the production of chrome chemicals. The critical specifications are a minimum
of 45% Cr2O3, and a maximum of 1.28% SiO2
chrome
used to reference any form of chromium, Cr or chrome concentrate
chrome concentrate
any combination of chemical, foundry and/or metallurgical grade concentrate with a predominance
of metallurgical grade concentrate
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chrome alloys
a chrome alloy produced directly through smelting using carbon as a reducing agent in the presence
of fluxes, which alloy is used as primary raw material in the production of stainless steel
chromite
chromitite
chromitite layers
chromium or Cr
CIF
cm
Coffey
a hard, black, refractory chromium-spinel mineral consisting of varying proportions of the oxides of
iron chromium, aluminium and magnesium
a rock composed essentially of chromite, that typically occurs as layers or irregular masses exclusively
associated with magmatic complexes. The bulk of the world’s exploitable chromitite occurs almost
exclusively in layered complexes
thick accumulations of chromite grains to form monomineralic bands or layers, which chromitite
layers are typically greater than 30 cm thick
the element chromium (Cr) is classified as a metal and is situated between other metals such as
vanadium (V), manganese (Mn) and molybdenum (Mo) in the periodic table of elements
cost, insurance and freight as defined in Incoterms 2010
centimetres
Coffey Mining (South Africa) Proprietary Limited (Registration number 2006/030152/07), a private
company duly registered and incorporated in South Africa
Company, Tharisa
Tharisa plc, a company incorporated under the laws of Cyprus with registration number HE223412
Competent Person’s
Report or CPR
a report compiled by an independent Competent Person (CP) relating to the technical aspects of a
mine that may include a techno-financial model
Conditional award
an award which takes the form of a contingent right to receive, at no or nominal cost, such number
of ordinary shares or receive a cash amount as is specified in the notice of award and has vested
CSE
CSI
Cr2O3
CREST
the Cyprus Stock Exchange
corporate social investment
chromium (III) oxide
the relevant system (as defined in the Uncertificated Securities Regulations) in respect of which
Euroclear UK & Ireland is the operator
CSDP Markets Act
a Central Securities Depository Participant as defined in section 1 of the Financial Markets Act
Cyprus
the Republic of Cyprus
Cyprus Companies Law Companies Law, Chapter 113 of the laws of Cyprus, as amended, supplemented or otherwise
modified from time to time
dematerialise,
dematerialised or
dematerialisation
dematerialised shares
the process by which physical share certificates are replaced with electronic records of ownership in
accordance with the rules of Strate
shares which are held in electronic form as uncertificated securities in accordance with the
requirements of Strate
Depositary
Computershare Investor Services PLC
Depositary interests or
DI
the dematerialised depositary interests issued by the Depositary in respect of the underlying ordinary
shares
Disclosure and
Transparency Rules or
DTR
the Disclosure and Transparency Rules made by the FCA under Part VI of the Financial Markets Act,
2000
DMRE
DWS
EIA
EMP
EMPR
the South African Department of Mineral Resources and Energy
Department of Water and Sanitation, South Africa
environmental impact assessment
the environmental management plan in terms of the MPRDA
environmental management programme report
152 THARISA PLC INTEGRATED ANNUAL REPORT 2019
GLOSSARY CONTINUED
Eskom
Eskom Holdings SOC Limited
Equator Principles
the set of voluntary guidelines adopted and interpreted in accordance with International Finance
Corporate Performance Standards and the World Bank’s EHS guidelines, adopted by Equator Principle
Financial Institutions, as updated from time to time
Euroclear UK & Ireland
Euroclear UK & Ireland Limited, the operator of CREST
the FCA
FCA
FEED
FIFR
the Financial Conduct Authority of the United Kingdom
Free carrier – a trade term requiring the seller to deliver goods to the carrier or another person
nominated by the buyer at the seller’s premises or another named place. Costs for transportation and
risk of loss transfer to the buyer after delivery to the carrier
front-end engineering and design
fatality injury frequency rate
foundry grade
concentrate saleable chromium-rich product typically more than 45% Cr2O3 less than 1% SiO2 and
a specific particle size distribution
g/t
GBP
grammes per tonne
British pound, the lawful currency of the United Kingdom
Genesis or Genesis
Plant
the 100 000 tpm nameplate capacity processing plant for the production of PGM and chrome
concentrate, owned by Tharisa Minerals
GHG
Group
HDSA
HRD
ICDA
IDP
IFRS
greenhouse gas
the Company including all its subsidiaries
historically disadvantaged South Africans as defined in the MPRDA and the Mining Charter
human resources development
the International Chromium Development Association
Individual development plans
International Financial Reporting Standards
illuvial chrome
at surface chrome fines generated from seams as a result of weathering
Impala Platinum
Incoterms 2010
Indicated Mineral
Resource
Inferred Mineral
Resource
Impala Platinum Limited, a subsidiary of Impala Platinum Holdings Limited (Registration number
1957/001979/06), a public company duly registered and incorporated in South Africa
the Incoterms rules are a series of predefined commercial terms published by the International
Chamber of Commerce that are widely used in international commercial transaction or procurement
processes
an Indicated Mineral Resource is that part of a Mineral Resource for which tonnage, densities, shape,
physical characteristics and mineral content can be estimated with a reasonable level of confidence.
Designating a resource as “Indicated” is based on information from exploration, sampling and testing
of material gathered from locations such as outcrops, trenches, pits, workings and drill holes. The
locations are too widely or inappropriately spaced to confirm geological or grade continuity but are
spaced close enough for continuity to be assumed
an Inferred Mineral Resource is that part of a Mineral Resource for which volume or tonnage, grade
and mineral content can be estimated with only a low level of confidence. It is inferred from
geological evidence and sample and assumed but not verified geologically or through analysis of
grade continuity. Designating a Mineral Resource “Inferred” is based on information gathered
through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill
holes that may be limited in scope or of uncertain quality and reliability
Investec Bank
Investec Bank Limited (Registration number 1969/004763/06), a public company duly registered and
incorporated in South Africa
Investment agreement
the Investment Project Framework Agreement entered into between Karo Holdings and the Republic
of Zimbabwe on 22 March 2018
Ir
Iridium
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IWUL
integrated water use licence
JSE or Johannesburg
Stock Exchange
JSE Limited (Registration number 2005/022939/06), a public company duly registered and
incorporated in South Africa and licensed in terms of the Financial Markets Act, No. 19 of 2012
JSE Listings
Requirements
the Listings Requirements of the JSE, as amended from time to time
K3 UG2 chrome plant
the chrome concentrate recovery plant associated with Sibanye-Stillwater’s K3 plant
Karo Holdings
Karo Platinum
Karo Mining Holdings Limited (Registration number HE380340), a public company duly registered and
incorporated in Cyprus
Karo Platinum Mines (Private) Limited (Registration number 7178/2013), a private company duly
registered and incorporated in Zimbabwe
King IV
the King IV Code on Corporate Governance 2016 (South Africa)
km
koz
kt
ktpm
Leto Settlement
Listing
thousand metres
thousand ounces
thousand tonnes
thousand tonnes per month
a discretionary trust established in accordance with the trusts (Guernsey) Law 1989 by Artemis
Trustees Limited, in its capacity as trustee of the Zeus Settlement, out of a portion of the trust assets
of the Zeus Settlement, for the benefit of Adonis Pouroulis, his wife and children
the primary listing of Tharisa, a foreign registered company, in the “General Mining” sector of the
Main Board of the JSE under the abbreviated name “Tharisa”, JSE code “THA” and ISIN
CY0103562118
Listing Rules
the Listing Rules made by the FCA under Part VI of the Financial Markets Act, 2000
LOM
life of mine, being the expected remaining years of production based on production rates and ore
Mineral Reserves
London Stock Exchange
or LSE
the London Stock Exchange plc
LTI
LTIFR
lost-time injury resulting in the injured being unable to attend/return to work to perform the full
duties of his/her regular work, as per advice of a suitably qualified medical professional, on the next
calendar day after the injury
lost-time injury frequency rate, the number of lost-time injuries per 200 000 hours worked
Main Market
the Main Market of the LSE
Measured Mineral
Resource
a Measured Mineral Resource is that part of a Mineral Resource for which the tonnage, densities,
physical characteristics, grade and mineral content can be estimated with a high level of confidence.
Describing a resource as “Measured” is based on detailed and reliable information from exploration,
sampling and testing of material from locations such as outcrops, trenches, pits, workings and drill
holes. The locations are spaced closely enough to confirm geological and grade continuity
metallurgical grade
concentrate
saleable chromium-rich product typically of 42% Cr2O3
MG0
MG1
MG2
chromitite layer that consists of chromitite dissemination with more chromitite layers and stringers,
that are developed in the footwall pyroxenite of the MG1 chromitite layer
chromitite layer that typically has a massive chromitite content with minor feldspathic pyroxenite
partings or layering. In some areas the MG1 chromitite layer has developed into two chromitite layers
separated by a feldspathic pyroxenite
chromitite layer that consists of three groupings of chromitite layers which from the base are the
MG2A chromitite layer, MG2B chromitite layer and the MG2C chromitite layer. The partings are
typically feldspathic pyroxenite. The parting between the MG2B chromitite layer and MG2C chromitite
layer includes a platiniferous chromitite stringer
154 THARISA PLC INTEGRATED ANNUAL REPORT 2019
GLOSSARY CONTINUED
MG3
MG4
chromitite layer that is occasionally a massive chromitite layer but more often a very irregular
assemblage of chromitite layers and stringers within a norite and/or anorthosite. The top of the
package typically consists of thin chromitite stringers and dissemination of chromite in norite which
develops into a massive layer at the base
the MG4 chromitite layer consists of a lower chromitite (MG4(0) chromitite layer) (approximately
0.6 m thick) immediately overlain by a norite (approximately 0.85 m thick) followed by the chromitite
layer of the MG4 chromitite layer (approximately 1.8 m thick), overlain by another parting, of
feldspathic pyroxenite composition, some 3.2 m thick and finally overlain by the chromitite of the
MG4A chromitite layer (approximately 1.5 m thick)
MG4A
the MG4A chromitite layer consists of a number of chromitite layers within a pyroxenite host rock
MG Chromitite Layers
group of five chromite layers that are known in the lower and upper critical zone of the
Bushveld Complex
MHSA
MHSC
Mineral Reserve
Mineral Resource
the Mine Health and Safety Act, 1996 of South Africa
the Mine Health and Safety Council of South Africa
the economically mineable material derived from a measured or indicated Mineral Resource or both,
which includes diluting and contaminating materials and allows for losses that are expected to occur
when the material is mined. Appropriate assessments to a minimum of a pre-feasibility study for a
project and a LOM plan for an operation must have been completed, including consideration of, and
modification by, realistically assumed mining, metallurgical, economic, marketing, legal,
environmental, social and governmental factors (the modifying factors)
a concentration or occurrence of material of economic interest in or on the earth’s crust in such form,
quality and quantity that there are reasonable and realistic prospects for eventual economic
extraction. The location, quantity, grade, continuity and other geological characteristics of a Mineral
Resource are known, or estimated from specific geological evidence, sampling and knowledge
interpreted from an appropriately constrained and portrayed geological model. Mineral Resources are
subdivided, and must be so reported, in order of increasing confidence in respect of geoscientific
evidence, into Inferred, Indicated or Measured categories
Mines and Minerals Act
the Mines and Minerals Act of Zimbabwe [Chapter 21:05]
Mining Charter
the Broad-based Socio-economic Empowerment Charter for the South African Mining Industry
(together with the Charter Scorecard), published pursuant to section 100(2)(a) of the MPRDA under
Government Gazette No. 26661 of 13 August 2004 and thereafter amended by General Notice 1002
of 27 September 2018
Mining Right
a new order Mining Right, granted by the DMRE in terms of the MPRDA, which provides the holder
thereof the required legal title to mine
MPRDA
the South African Mineral and Petroleum Resources Development Act, No. 28 of 2002, as amended
MQA
Mt
MTC
Mtpa
MW
MWh
NEMA
NEMWA
Noble
NQF
NUM
NWA
Mining Qualifications Authority of South Africa
million tonnes
medical treatment case
million tonnes per annum
megawatt
megawatt hour
National Environmental Management Act of 2008 of South Africa
National Environmental Management Waste Act of 2008 of South Africa
Noble Resources International PTE Limited, (Registration number 201115304N), a company duly
registered and incorporated in Singapore
National Qualifications Framework of South Africa
the National Union of Mineworkers of South Africa
National Water Act of 1998 of South Africa
THARISA PLC INTEGRATED ANNUAL REPORT 2019
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Investor relations report
Notice of annual general meeting
Glossary
Form of proxy
Corporate information
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OEM
original equipment manufacturer
Official List
the official list of the FCA
oz
ozpa
pa
Pd
Pivot
PGE
PGMs
a troy ounce which is exactly 31.1034768 grams
oz per annum
per annum
Palladium
Pivot Mining Consultants Proprietary Limited (Registration number 2006/030152/07), a private
company duly registered and incorporated in South Africa
Platinum group elements
Platinum group metals being platinum, palladium, rhodium, ruthenium, iridium, and osmium
PGM concentrate
the commercially acceptable flotation concentrate containing PGMs
PRC or China
the Peoples Republic of China
prill split
a breakdown by mass of the various PGM metals contained in PGM containing materials
Prospecting Right
a prospecting right granted by the DMRE in terms of the MPRDA
Pt
reef
Rh
RNS
ROM
Ru
Salene Chrome
SAMREC Code
SAMVAL Code
SENS
SETA
Platinum
in the context of this Integrated Annual Report, reef refers to any or all of the MG and UG chromitite
layers
Rhodium
the Regulatory News Service of the LSE
run of mine, being the ore tonnage extracted to be processed
Ruthenium
Salene Chrome Zimbabwe (Private) Limited (Registration number 920/2015), formerly Maroon Blue
Consultants (Private) Limited, a private company duly incorporated and registered in Zimbabwe
the South African Code for Reporting of Exploration Results, Mineral Resources and Reserves
(prepared by the South African Mineral Resource Committee (‘SAMREC’) Working Group) (2016)
the South African Code for the Reporting of Mineral Asset Valuation (2016) prepared by the South
African Mineral Asset Valuation Committee (‘SAMVAL’) Working Group
the Stock Exchange News Service of the JSE
Sector Education Training Authority, South Africa
Share Award Plan or
TSAP
the Tharisa Share Award Plan approved by the shareholders
Shares
SHE
SIB
all the issued ordinary shares of the Company of nominal value of US$0.001 each
safety, health and environment
stay in business capital expenditure
Sibanye-Stillwater
Sibanye Gold Limited (Registration number 2002/031431/06), a public company duly incorporated
and registered in South Africa
SiO2
SLP
SOP
silicon dioxide
Social and Labour Plan aimed at promoting employment and advancement of the social and
economic welfare of all South Africans while ensuring economic growth and socioeconomic
development as stipulated in the MPRDA
standard operating procedures
South Africa or SA
the Republic of South Africa
156 THARISA PLC INTEGRATED ANNUAL REPORT 2019
GLOSSARY CONTINUED
Standard listing
a listing on the standard segment of the official list
Strate
Strate Limited (Registration number 1998/022242/06), a limited liability public company duly
registered and incorporated in South Africa, which is a registered central securities depositary and
which is responsible for the electronic settlement system used by the JSE
stripping ratio
the ratio, measured in m3 to m3 at which waste and inter-burden are removed, relative to ore mined
STS
t
tCO2e
TB
Tharisa
Tharisa Mine
Tharisa Minerals
standard threshold shift
tonne
tonnes of carbon dioxide equivalent
tuberculosis
Tharisa plc (Registration number HE223412), a public company duly registered and incorporated in
Cyprus
Tharisa Minerals’ wholly owned PGM and chrome mining and processing operations located in the
magisterial district of Rustenburg (North West region), South Africa, situated in the Bushveld Complex
Tharisa Minerals Proprietary Limited (Registration number 2006/009544/07), a company duly
registered and incorporated in South Africa, held 74% by Tharisa
The Disclosure and
Transparency Law
Law 190(I)/2007, as amended (law providing for transparency requirements in relation to information
about issuers whose securities are admitted to trading on a regulated market), governed by the
Cyprus Securities and Exchange Commission
Tisco
tpa
tpm
Transnet
UG1
UG2
Taiyuan Iron and Steel’s Joint Venture Company Shanxi Taigang Wanbang Furnace Charge Co. Limited
tonnes per annum
tonnes per month
Transnet SOC Limited
the Upper Group 1 chromitite layer that is a well developed and consistent marker in the critical zone
of the Bushveld Complex that consists of a massive chromitite, chromitiferous pyroxenite, bands of
anorthosite, chromitite and norites and stringers of chromitites
the Upper Group 2 chromitite layer of the Bushveld Complex that is well known and typically contains
PGMs in a concentration that is sufficient for economic extraction
UG Chromitite Layers
the Upper Group chromitite layers of the Bushveld Complex
UK or United Kingdom the United Kingdom of Great Britain and Northern Ireland
UK Listing Authority or
UKLA
the Financial Conduct Authority acting in its capacity as the competent authority for the purposes of
Part VI of the FSMA and in the exercise of its functions in respect of admission to the official list
USA
US$
VCT
the United States of America
United States dollar, the lawful currency of the US
voluntary counselling and testing
Voyager or Voyager
Plant
a 300 000 tpm nameplate capacity processing plant for the production of PGM and chrome
concentrate, owned by Tharisa Minerals
WPIC
World Platinum Investment Council
ZAR or R or rand
South African rand, the lawful currency of South Africa
Zimbabwe
the Republic of Zimbabwe
FORM OF
PROXY
Tharisa plc
(Incorporated in the Republic of Cyprus with limited liability)
(Registration number: HE223412)
JSE share code: THA
LSE share code: THS
A2X share code: THA
ISIN: CY0103562118
LEI: 213800WW4YWMVVZIJM90
(‘Tharisa’ or the ‘Company’)
THARISA PLC INTEGRATED ANNUAL REPORT 2019
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Investor relations report
Notice of annual general meeting
Glossary
Form of proxy
Corporate information
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This form of proxy relates to the annual general meeting (‘AGM’) of shareholders of the Company to be held at 2nd Floor, The Crossing, 372 Main
Road, Bryanston, South Africa on Wednesday, 29 January 2020 at 10:00 SA time (UTC +2) and should be completed by registered certificated
shareholders and shareholders who have dematerialised their shares with “own name” registration.
All other dematerialised shareholders holding shares other than with ‘own name’ registration who wish to attend the AGM must inform their CSDP
or broker of their intention to attend the AGM and request their CSDP or broker to issue them with the relevant letter of representation to attend the
AGM in person or by proxy and vote. Shareholders who do not wish to attend the AGM in person or by proxy must provide their CSDP or broker with
their voting instructions in terms of the relevant custody agreement entered into between them and the CSDP or broker. These shareholders must not
complete this form of proxy.
This form of proxy should be read with the notice of AGM. Please print clearly and refer to the notes at the end of this form for an explanation on
the use of this form of proxy and the rights of the shareholder and the proxy.
I/We
of address
being the holder of
1.
2.
Tharisa shares, hereby appoint (see notes 1 and 3)
or failing him/her
or failing him/her
the Chairman of the AGM, as my/our proxy to act for me/us and on my/our behalf at the AGM which will be held for the purpose of considering and,
if deemed fit, passing, with or without modification, the resolutions to be proposed thereat and at any adjournment thereof; and to vote for and/or
against the resolutions and/or abstain from voting in respect of the Tharisa shares registered in my/our name(s), in accordance with the following
instructions (see note 3):
For
Against
Abstain
Ordinary business
Ordinary resolution number 1 is non-binding and does not require a minimum threshold
Ordinary resolutions numbers 2 and 3 require support of a simple majority (more than 50%) of the votes exercised in respect
of each resolution adopted
Ordinary resolution number 1: Adoption of annual financial statements
Ordinary resolution number 2: Reappointment of external auditor
Ordinary resolution number 3.1: Re-election of Omar Kamal as a director
Ordinary resolution number 3.2: Re-election of Carol Bell as a director
Special business
Ordinary resolutions numbers 4 and 5 require support of a simple majority (more than 50%) of the votes exercised in respect
of each resolution to be adopted
Ordinary resolution number 6 requires a 75% majority of the votes
Ordinary resolutions 7.1 and 7.2 are non-binding and do not require a minimum threshold
Special resolution number 1 requires support of at least 75% of the votes exercised to be adopted
Ordinary resolutions numbers 8 and 9 require support of a simple majority (more than 50%) of the votes exercised in respect
of each resolution to be adopted
Ordinary resolution number 4: Control of authorised but unissued shares
Ordinary resolution number 5: Dis-application of pre-emptive rights
Ordinary resolution number 6: General authority to issue shares for cash
Ordinary resolution number 7.1: Approval, through a non-binding advisory vote, of the Group remuneration policy
Ordinary resolution number 7.2: Approval, through a non-binding advisory vote, of the Group remuneration implementation
report
Special resolution number 1: General authority to repurchase shares
Ordinary resolution number 8: Final dividend
Ordinary resolution number 9: Directors’ authority to implement ordinary and special resolutions
Please indicate with an “X” in the space provided above how you wish your votes to be cast.
Signed at
Signature
Assisted by (if applicable) (see note 7)
on
2020
158 THARISA PLC INTEGRATED ANNUAL REPORT 2019
NOTES TO THE
FORM OF PROXY
1. A registered shareholder may appoint an individual as a proxy, including an individual who is not a shareholder of the
Company, to participate in, speak and vote at a shareholders’ meeting on his/her behalf. Should this space be left blank, the
proxy will be exercised by the Chairman of the meeting.
The person whose name appears first on the form of proxy and who is present at the AGM will be entitled to act as proxy to
the exclusion of those whose names follow.
2.
3. A proxy may delegate his/her authority to act on your behalf to another person, subject to any restriction set out in this form
of proxy.
4. A shareholder’s instructions to the proxy must be indicated by the insertion of an “X”, or the number of votes exercisable by
5.
6.
7.
that shareholder, in the appropriate box provided. The proxy is entitled to exercise, or abstain from exercising, any voting right
of the shareholder at the AGM, but only as directed on this form of proxy.
If there is no clear indication as to the voting instructions to the proxy, the form of proxy will be deemed to authorise the
proxy to vote or to abstain from voting at the AGM as he/she deems fit in respect of all the shareholder’s votes exercisable.
To be valid and counted, the completed form of proxy must be lodged with the transfer secretaries of the Company, namely
Computershare Investor Services Proprietary Limited, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196, South Africa
(PO Box 61051, Marshalltown, 2107, South Africa), so as to be received by them by no later than 10:00 SA time on Monday,
27 January 2020, being no later than 48 hours before the AGM to be held at 10:00 SA time on Wednesday, 29 January 2020,
provided that the Chairman of the AGM may, in his discretion, accept proxies that have been delivered after the expiry of the
aforementioned period up to and until the time of commencement of the AGM, at his sole discretion. Letters of instruction
must be lodged with Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS13 8AE, United Kingdom,
so as to be received by them by no later than 08:00 on Friday, 24 January 2020.
This form of proxy must be dated and signed by the shareholder appointing the proxy. The completion of blank spaces does
not have to be initialled, but any alteration or correction made to this form of proxy must be initialled by the signatory/ies.
A minor must be assisted by his/her parent or guardian unless the relevant documents establishing his/her legal capacity are
produced or have been registered by the Company.
8. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity must be
attached to this form of proxy unless previously recorded by the Company or waived by the Chairman of the AGM. CSDPs or
brokers registered in the Company’s sub-register voting on instructions from beneficial owners of shares registered in the
Company’s sub-register, are requested to identify the beneficial owner in the sub-register on whose behalf they are voting
and return a copy of the instruction from such owner to the Company’s transfer secretaries, together with this form of proxy.
The Chairman of the meeting shall be entitled to decline or accept the authority of a person signing the form under a power
of attorney or on behalf of a company, unless the power of attorney is deposited at the Company’s transfer secretaries not later
than 48 hours before the meeting.
9.
10. The appointment of the proxy or proxies will be suspended at any time to the extent that the shareholder chooses to act
directly and in person in the exercise of any of his/her rights as a shareholder at the AGM.
11. The appointment of the proxy is revocable unless expressly stated otherwise in this form of proxy. The proxy appointment may
be revoked by cancelling it in writing, or making a later inconsistent appointment of a proxy and delivering a copy of the
revocation instrument to the proxy and to the Company’s transfer secretaries. Please note the revocation of a proxy
appointment constitutes a complete and final cancellation of the proxy’s authority to act on behalf of the shareholder, as of
the date stated in the revocation instrument, if any, or the date on which the revocation instrument was delivered to the
Company’s transfer secretaries and the proxy, as aforesaid.
12. The appointment of the proxy remains valid only until the end of the AGM or any adjournment or postponement thereof,
unless it is revoked by the shareholder before then on the basis set out above.
13. Holders of depositary interests on the LSE must not complete this form of proxy. Holders of depositary interests will be sent a
separate form of instruction by the depositary, Computershare Investor Services PLC. On receipt, holders of depositary interests
should complete the form of instruction in accordance with the instructions printed thereon to direct Computershare Company
Nominees Limited as the custodian of their shares how to exercise their votes.
CORPORATE
INFORMATION
Tharisa plc
Incorporated in the Republic of Cyprus with limited liability
Registration number: HE223412
JSE share code: THA
LSE share code: THS
A2X share code: THA
ISIN: CY0103562118
LEI: 213800WW4YWMVVZIJM90
Registered address
Office 108 – 110
S. Pittokopitis Business Centre
17 Neophytou Nicolaides and Kilkis Streets
8011 Paphos
Cyprus
Postal address
PO Box 62425
8064 Paphos
Cyprus
Website
www.tharisa.com
Directors of Tharisa
Loucas Christos Pouroulis (Executive Chairman)
Phoevos Pouroulis (Chief Executive Officer)
Michael Gifford Jones (Chief Finance Officer)
John David Salter (Lead independent non-executive director)
Antonios Djakouris (Independent non-executive director)
Omar Marwan Kamal (Independent non-executive director)
Carol Bell (Independent non-executive director)
Roger Davey (Independent non-executive director)
Joanna Ka Ki Cheng (Non-executive director)
Zhong Liang Hong (Non-executive director)
Group Company Secretary
Sanet Findlay
The Crossing, 372 Main Road
Bryanston, Johannesburg 2021
South Africa
Email: secretarial@tharisa.com
Assistant Company Secretary
Lysandros Lysandrides
26 Vyronos Avenue
1096 Nicosia
Cyprus
Investor relations
Ilja Graulich
The Crossing, 372 Main Road
Bryanston, Johannesburg 2021
South Africa
Email: ir@tharisa.com
Financial public relations
Buchanan
107 Cheapside, London EC2V 6DN
England, United Kingdom
Contact: Bobby Morse/James Husband
+44 020 7466 5000
Transfer Secretaries
Cymain Registrars Limited
Registration number: HE174490
26 Vyronos Avenue
1096 Nicosia
Cyprus
Computershare Investor Services Proprietary Limited
Registration number: 2004/003647/07
Rosebank Towers
15 Biermann Avenue
Rosebank 2196
South Africa
Computershare Investor Services PLC
Registration number: 3498808
The Pavilions, Bridgwater Road, Bristol BS13 8AE
England, United Kingdom
JSE sponsor
Investec Bank Limited
Registration number: 1969/004763/06
100 Grayston Drive
Sandown, Sandton 2196
South Africa
Auditors
Ernst & Young Cyprus Limited
Registration number: HE222520
Jean Nouvel Tower, 6 Stasinos Avenue
1060 Nicosia
Cyprus
Brokers
Peel Hunt LLP (UK joint broker)
Moore House 120, London Wall EC 2Y 5ET
England, United Kingdom
Contact: Ross Allister/David McKeown
+44 207 7418 8900
BMO Capital Markets Limited (UK joint broker)
95 Queen Victoria Street, London EC4V 4HG
England, United Kingdom
Contact: Thomas Rider/Neil Elliot/Michael Rechsteiner
+44 020 7236 1010
Joh. Berenberg, Gossler & Co. KG (UK joint broker)
60 Threadneedle Street, London EC2R 8HP
England, United Kingdom
Contact: Matthew Armitt/Detlir Elezi
+44 20 3207 7800
Nedbank Limited (acting through its Corporate and Investment
Banking division) (RSA broker)
135 Rivonia Road
Sandown, Sandton 2196
South Africa
Contact: Shabbir Norath
+27 11 295 6575
www.tharisa.com