1. DWA - ORWRDP - Technical Workshop Mogalakwena Regional Raw Water Scheme (MRRWS) 21 Feb 2013 Ossie Rossouw Victor Couto Bertus Bierman

2. Flag Boshielo Dam Witbank Dam Loskop Dam 140 De Hoop Dam 165 Steelpoort 27 165 138 133 Mooihoek 12 31 78 Mogalakwena Polokwane Phase 2C Mines Existing LWUA South Sekhukhune 5 Demand Available Water 2 LWUA 2A 2C 12 38 59 LWUA Mines (new) Social (new) LWUA Mines (new) Social (new) LWUA Mines (new) LWUA Mines (new) 39 90 Note: Already allocated in Flag Boshielo 49 77 Note: Already allocated in Flag Boshielo 10 2B 2D ORWRDP PH2 – SCHEME BALANCE DWA Data Yield Analysis Feb. 2011 coincide with DWA Recon Study, March 2012 13 Ml/d currently available in the existing Lebalelo system from Havercroft for Mooihoek purification plant

3. Flag Boshielo Dam Witbank Dam Loskop Dam 140 De Hoop Dam 165 Steelpoort 27 165 138 133 Mooihoek 12 31 78 Mogalakwena Polokwane Phase 2C Mines Existing LWUA South Sekhukhune 5 Demand Available Water COST EFFECTIVE SOLUTION - PHASE 2B 3 LWUA 2A 2C 12 38 59 LWUA Mines (new) Social (new) LWUA Mines (new) Social (new) LWUA Mines (new) LWUA Mines (new) 39 90 Note: Already allocated in Flag Boshielo 49 77 Note: Already allocated in Flag Boshielo 10 2B 2D MOGALAKWENA PIPELINE LWUA application for extension of area of jurisdiction Phase 2B extended beyond Pruissen to Sekhuruwe LWUA can construct as one contract with significant savings LWUA mine members are willing to provide significant portion of capacity for Mogalakwena Municipality free of charge MOGALAKWENA PIPELINE LWUA application for extension of area of jurisdiction Phase 2B extended beyond Pruissen to Sekhuruwe LWUA can construct as one contract with significant savings LWUA mine members are willing to provide significant portion of capacity for Mogalakwena Municipality free of charge Sekuruwe Note: Already allocated in Flag Boshielo

4. Flag Boshielo Dam Witbank Dam Loskop Dam 140 De Hoop Dam 165 Steelpoort 27 165 138 133 Mooihoek 12 31 78 Mogalakwena Polokwane Phase 2C Mines Existing LWUA South Sekhukhune 5 Demand Available Water COST EFFECTIVE SOLUTION - OPTIMIZATION & UPGRADING OF LWUA INFRASTRUCTURE 4 LWUA 2A 2C 12 38 59 LWUA Mines (new) Social (new) LWUA Mines (new) Social (new) LWUA Mines (new) LWUA Mines (new) 39 Note: 60 – 100 Ml/d AMD already included in river balance Note: Fig 9.7 Upper Olifants River surplus – 110 Ml/d (40x10 6 mᵌ) Note: Fig 9.13 Surplus high growth – 82 Ml/d (30x10 6 mᵌ) 90 Note: Already allocated in Flag Boshielo 49 77 Note: Already allocated in Flag Boshielo 10 2B 2D Sekuruwe OPTIMIZATION OF LWUA EXISTING INFRASTRUCTURE The existing LWUA pipeline from Havercroft can support all the social and mining demands in the Phases 2E and 2D areas up until 2021 2021 - 2025 augment 12 Ml/d (4x10 6 m 3 /a) from the De Hoop Dam side by reverse pumping through the existing LWUA pipeline up until 2025 2030 Demand: 28.4 Ml/d (10x10 6 m 3 /a) will need to be augmented from De Hoop Dam by 2024 with the Phase 2D pipeline or 12.5 km upgrade of the existing LWUA pipeline (35 Ml/d (13x10 6 m 3 /a)) OPTIMIZATION OF LWUA EXISTING INFRASTRUCTURE The existing LWUA pipeline from Havercroft can support all the social and mining demands in the Phases 2E and 2D areas up until 2021 2021 - 2025 augment 12 Ml/d (4x10 6 m 3 /a) from the De Hoop Dam side by reverse pumping through the existing LWUA pipeline up until 2025 2030 Demand: 28.4 Ml/d (10x10 6 m 3 /a) will need to be augmented from De Hoop Dam by 2024 with the Phase 2D pipeline or 12.5 km upgrade of the existing LWUA pipeline (35 Ml/d (13x10 6 m 3 /a)) Havercroft Weir

5. ORWRDP PH2 – PoE AGREEMENTS 5 Accept recon study – resource/yield 2C – by TCTA - review line size for revised yield 2D – not required now. 13 Ml/d of social water available now –LWUA can implement appropriate upgrade of existing LWUA infrastructure when required (2025) –Aligned to current LWUA infrastructure and associated changes/upgrades –No risk or contribution from DWA (member agreement) 2B – to proceed

6. MRRWS (2B+) 6 120Ml/d R2.4bn (2B+ 2011 scope - excl contingency) Old 2B Scope 2B+ Proposed Scope

7. EXPECTED MEMBERSHIP 7 “Industrial members” - possibly 5 to 8 new members: –Anglo American Platinum Limited –Akanani Mining (Proprietary) Limited –Tameng Mining and Exploration (Pty) Limited –Lesego Platinum Mining Limited –Platreef Resources (Pty) Limited –Polokwane Iron Ore Company (Proprietary) Limited –Messina Platinum Mines Limited –Ironveld (Pty) Limited –Minmetals First Chrome Mine (Pty) Limit ed “Ordinary members” - possibly 2 members: –Respective Municipalities

8. MRRWS - SCOPE 8 MRRWS Scope –Historical - TCTA 2B based on ~77km pipeline delivering 60Ml/d between Flag Boshielo and Pruissen –Historical - 2011 LWUA concept assessment based on ~118km pipelines delivering 120Ml/d between Flag Boshielo, Pruissen and Sekuruwe (R2.4bn in 2011 terms indicative estimate) –Current – forecast to include ~195km of pipelines delivering 140Ml/d scheme between Flag Boshielo, Pruissen, Sekuruwe to Akanani and associated mining tee offs –Layout (map) Bulk Potable Water –Not currently included above scope. LWUA willing to discuss the implementation as separate project funded by government –LWUA willing to support the appointed water services authority in operational readiness set up

9. WATER REQUIREMENTS IN THE MRRWS AREA 9 Requirement between 120Ml/d and 150Ml/d – Propose 140Ml/d Mining: ~78Ml/d Social: ~62Ml/d (39Ml/d Mog Municipality, 11Ml/d Bakenberg and 12Ml/d Agenang)

10. MRRWS – SCOPE OPTIONS ASSESSMENT 10 Require life cycle cost trade offs - Capex and Opex: –Member take off points –Potable water take off points –Storage capacity and points –Power supply trade offs – pump points, member power supply points and alternate power supply points –Pipeline geotechnical data –Land negotiations –140Ml/d design - allows for future growth requirements (20 years)

11. MRRWS – FUNDING 11 Mining members can facilitate implementation of cost efficient projects. Using LWUA, risk of alternative funding cost impacts and capacity issues mitigated Capped the governments capital contribution on raw water for potable/social - minimizes financial risk to government LWUA overhead very low Funding options: –Capital contribution: Members contribute their full capital component upfront (internally or externally funded) or Members provide guarantee to LWUA for their full capital component and fund on a 3 or 6 month basis LWUA borrow on open market (IDC, IFC, WB, other) using member take off and capital guarantees –Take off agreement

12. MRRWS – CAPEX ASSESSMENT 12 Capex and cash flow assessment requires scope to be better defined and assessed: –Finalize scheme membership –Finalize scheme capacity –Scope and do trade offs incl cost (capex/opex) and fund modelling –Select preferred option –Do design and final costing –Obtain final member approval –Run funding options in parallel

13. MRRWS – PROPOSED CAPEX MODEL 13 Capital cost Aligned to the current LWUA Constitution and Membership Agreement (incl member voting rights) The parties will need to agree to an equitable capital contribution based on capacity and point of supply and the associated scope/deliverables Members accepted that a social component of raw water intended for potable water, be funded as follows: –Mining members: 58% (35/60 l/c/d) and –Government: 42% (25/60 l/c/d) –Applies to the capital cost for the section between Flag Boshielo Dam to Pruissen. Opex to be covered by the domestic users Beyond Pruissen no allocation agreements have been reached

14. MRRWS – COST MODEL 14 Operating Cost Aligned to the current LWUA Constitution and Agreement Opex (O&M) constitutes fixed and variable costs: –Fixed costs: Working capital Personnel cost Consultant fees –Variable costs: Raw water cost Electricity costs according to demand Maintenance costs and Personnel costs associated with overtime The Olifants River regional tariff principals are to be defined by DWA in conjunction with LWUA/JWF and other stakeholders asap – risk mitigation

15. PROPOSED PROGRAMME / DELIVERY STRUCTURE 15 LWUA PM and Procurement processes - adapted to suit member requirements

16. CURRENT SCHEDULE 16 Proposed compressed (Optimistic) schedule with a parallel PFS/FS considered - key milestone dates: –Complete the CS in Q3 2013 and review/approval/funding Q4 2013 –Conduct a PFS/FS for completion in Q1 2015 and review, approval and funding in Q3 2015 –Run legislative requirements (EIA, etc.) between Q3 2014 and Q3 2015 and –24 month construction period allowing first water to be available in Q4 2017 Currently 3 months late due to delayed approval of area of operation Optimistic Schedule – Q4 2017

17. KEY PROGRAMME CONCERNS 17 Approval by DWA of the implementing agency – time Alignment (members) – scope, time and cost Reviews and approvals (members) - time Funding (members) – time and cost Legislative requirements (EIA, servitudes, etc) - time

18. POSSIBLE SCHEDULE RISK MITIGATIONS AND FURTHER OPPORTUNITIES 18 Approve implementing agent immediately - risk Agree on demand/scope - risk Sharing of existing survey, design and environmental information - opportunity Improved authority (government) turn around times – EIA, borrow pit, servitudes, etc - opportunity Improved member review, approval and funding turn around times: –Industrial and Ordinary members - opportunity Option to proceed with study using government funding (part R500m – apportioned contribution to scheme) - opportunity Run funding model assessment in parallel with upfront study work - opportunity Option to skip concept study and move into PFS (opportunity) however first need: –Defined scope (140Ml/d and possible growth) –Define trade off options to be assessed –Get member commitment

19. 19 Project Lifecycle Time Influence FEL 1 – Business Case Overall Each Programme Study Work Plan/Project Execution Plan and Charter for Options FEL 3 – Single option detailed assessment Each Programme & Project PEP and Charter for Selected Option BEST PRACTICE PROJECT MANAGEMENT FEL 2 – Option assessment Each Programme & Project SWP/PEP and Charter for Selected Option

20. CASH FLOW 20 Based on current Optimistic schedule and 6 month member rolling funding

21. MRRWS RISKS 21

22. DWA CAPACITY BUILDING 22 LWUA willing to assist DWA with capacity building Need to better understand DWA requirements for skills development Propose that DWA second staff to the programme and LWUA provide training as agreed between the parties DWA cover cost of DWA secondees Opt for an EPC model with LWUA conducting the Management LWUA (members) determine the selection process for EPC and suppliers

23. MRRWS – WAY FORWARD 23 Obtain approval on extension to area of operation Obtain historical data/information not previously shared Commitment and funding for front end loading (studies) Set up project steering committee Recruit owners team members Define DWA capacity building needs and process Secure support consulting services Update the Concept study Review and approve the updated Concept study Define and agree funding models Proceed with Pre-feasibility Study/Feasibility Study Review and approve the Pre-feasibility Study/Feasibility Study (incl funding vehicles) Approval and funding for execution Design, procure, fabricate, construct and commission

24. QUESTIONS 24