Mineral Development StudiesMineral Development StudiesMineral Development StudiesMineral Development Studies

• NEPAD: Africa-wide mineral-based SDI assessment: To NEPAD: Africa-wide mineral-based SDI assessment: To identify potential Spatial Development Initiatives (SDIs) identify potential Spatial Development Initiatives (SDIs) across Africa (most are mineral-based as only minerals across Africa (most are mineral-based as only minerals can fund the requisite infrastructure)can fund the requisite infrastructure)

• SDI mineral-based RSDIP projectsSDI mineral-based RSDIP projects

• Concept study on the development of an Al industry Concept study on the development of an Al industry based on nepheline syenites in the Zambezi corridorbased on nepheline syenites in the Zambezi corridor

• Conceptualisation of the Maputo Metallurgical Complex Conceptualisation of the Maputo Metallurgical Complex (MMC) and identification of potential investors(MMC) and identification of potential investors

• Concept study on the Heavy Minerals downstream Concept study on the Heavy Minerals downstream opportunities in the Chibuto area (Corridor Sands)opportunities in the Chibuto area (Corridor Sands)

• Cluster study of selected projects in the Zambezi SDICluster study of selected projects in the Zambezi SDI

• Lobito and Malange SDIs. Phase I of Angolan studyLobito and Malange SDIs. Phase I of Angolan study

• AG report for Mintek’s financials for the financial year 2004/05 reflected non-compliance or non-conformance to Generally Accepted Accounting Practice (GAAP)

• Primary reasons for GAAP non-compliance:Change from cash accounting to accrual accountingCurrent SAP system was designed/developed for cash accounting.Accounting as a government entity rather than a commercial entity.

• Secondary reasons for GAAP non-compliance:SAP crash - influenced the preparation and levels of support that was offered to the external audit.Focus and relevance of the work conducted by the internal audit.

Reasons for Audit ReportReasons for Audit ReportReasons for Audit ReportReasons for Audit Report

Reasons for delay:

• SAP crash delayed financials presentation by about three months.

• Audit changed - substantive instead of control-based. Significantly more samples tested than previously, which resulted in an extension of the audit.

• Mintek had to review many of its accounting policies, particularly relating to depreciation, post-retirement medical aid liability and accounting for prior year adjustments.

• Resource constraints - at the AG and at Mintek.

• Correction and adjustments of prior year errors - audit processes significantly reviewed.

Sign-off of FinancialsSign-off of FinancialsSign-off of FinancialsSign-off of Financials

Problems:

• Hardware failure of primary server• Human error in doing primary backups• Hardware failure in recovering secondary backup• Problematic and time consuming recovery procedure• Staffing shortage in regard to SAP expertise

Way forward:

• Better backup process and checking in place• More appropriate form of SAP - implementation April

2006• SAP to be hosted offsite - more secure & less

complex• Migrating to new MySAP All In One

HR Systems went live on 01/03/2006Business Systems to go live on 01/04/2006

SAP SystemSAP SystemSAP SystemSAP System

Plans for 2006-2007Plans for 2006-2007Plans for 2006-2007Plans for 2006-2007

• Optimise balance between commercial and R&D activities

• Re-emphasise research as a core competency, but broaden to encompass SMMEs

• Maintain an appropriate contribution to wealth creation, poverty alleviation and human capacity building, particularly in bridging the 1st & 2nd economy divide.

• Retain the Mintek brand with respect to research and products

Plans for 2006-2007 (cont.)Plans for 2006-2007 (cont.)Plans for 2006-2007 (cont.)Plans for 2006-2007 (cont.)

• Progressively extend core competencies to include– the refining stages of the mineral/metal value chain

– environmental protection and sustainability

– Assess expanding ferrous competency in the light of Iscor’s R&D exit

• Begin a comprehensive evaluation of the southern and African mining scene that will provide a basis for setting national long-term research priorities and feed into Mintek’s own research strategies.

Basic Strategic Application Design Production/ Sales Research Development Manufacturing PRODUCT LIFE CYCLE

Act

ivity

Le

vel S

cale

LocalResearch

Local Industry & Industrial Products

OVERSEAS TECHNOLOGY SOURCESResearch Development Production

Technology

Transfer

$

Innovation “Chasm”

Technology dependency or knowledge economy?

Future R&D capacity

Technical progress(Improvement and

Innovation)SET Human Capital

Business performance

Current R&D Capacity

Wealth Creation

Imported know-how

Quality of life

Framework for the new plan

National R&D Strategy 2002

R&D Failure due to lack of funds for demo-scale

(~R100-R200m)Movement of

R&D overseas (relistings, take-overs)

Analytical

Engineering

Laboratories

Pilot-plants

Corporate

THANK YOUTHANK YOU

The Mintek CampusThe Mintek Campus