Investor Site Visit

Western Cape
25 March 2011
www.ppc.co.za 1

Today’s program
 07h45 Welcome at PPC’s Montague Gardens depot  08h00 Overview of PPC’s Western Cape operations  08h45 By bus to PPC’s De Hoek factory, Piketberg (±2 hours)  10h45 Presentation and site tour at De Hoek factory  12h45 By bus to PPC’s Riebeeck Factory, Riebeeck West (±1 hour)  13h45 Presentation and site tour at Riebeeck factory  15h00 Lunch and final Q&A in Riebeeck West  16h30 Depart by bus for return journey (±1.5 hour)  18h00 Arrive at Cape Town airport or Montague Gardens depot

Enjoy the day!
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Today’s objectives
 Investors
    An overview of PPC’s operations in the Western Cape province (WC) First-hand knowledge of cement manufacturing processes and equipment A better understanding of PPC’s modernisation plans in the WC Meeting a wider group of PPC management

 PPC
 Interaction with important stakeholders  Showcase our operations in the WC  Clearly articulate our modernisation and expansion plans for the WC

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PPC in southern Africa
Botswana Namibia
Gaborone (Mill) Slurry

Zimbabwe
Bulawayo (Mill)

Dwaalboom Hercules
Johannesburg

Jupiter ’

Lime Acres

Saldanha (Mill) De Hoek Montague Gardens (Depot)
Cape Town

Riebeeck

Port Elizabeth George (Depot)

PPC Cement PPC Aggregates PPC Lime
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Mozambique

Colleen Bawn

PPC in the Western Cape Western Cape Province Vanryhnsdorp 7 Northern Cape 1 De Hoek Saldanha (Mill) ±60km ±140km ±100km Riebeeck Western Cape Montague Gardens (Depot) George (Depot) Cape Town 5 .

PPC’s Western Cape integrated network Orientation Northern Cape Vanryhnsdorp 7 Significant WC limestone reserves Indicates rail interconnectivity 1 Saldanha (Mill) De Hoek Western Cape Riebeeck George (Depot) Montague Gardens (Depot) Cape Town 6 .

40 employees.PPC’s Western Cape integrated network  Exploiting the closest. capacity ~1. capacity ~ 600ktpa cement  Saldanha factory. capacity ~ 500k tons of slag per annum  Currently limited to ~240k tons per annum due to slag availability  Montague Gardens and George depots. 220 employees. significant limestone reserves to the Cape Town market  Vanryhnsdorp and Saldanha limestone reserves not owned by PPC  All WC sites connected by both rail and road  All WC sites can distribute bulk or bag to customers  De Hoek factory. 180 employees.2mtpa cement  Riebeeck factory. (20 operations employees)  Exports possible through Cape Town harbour 7 .

brick and roof tile manufacturers  Surebuild (general purpose cement)  A premium multipurpose cement  All products are available in bag and bulk 8 . concrete product manufacturers and readymix concrete producers  RHC (rapid hardening cement)  Specialised applications where high early strength concrete is required – e.g.Products  OPC (ordinary portland cement)  Construction industry.

Customer segments and projects in the WC  Retailers are the largest customer segment followed by readymix concrete producers and concrete product manufacturers  Planned infrastructure projects ~R13bn      New N1/N2 toll road BRT (bus rapid transit) project Retail/shopping centres Distribution depots for retailers Mitchells Plein Hospital Includes only the major projects for the next 3 to 5 years All values listed above are estimated project costs R4.6bn (phase 1A) >R1.6bn ~R1.8bn R4.3bn R400m Note: 9 .

PPC estimate 10 . Western Cape 2010 .WC demand analysis Annual cement demand 1616 000 000 14 14 000 000 1212 000 000 3 500 000 5 000 000 4 500 000 4 000 000 1010 000 000 000 tons 3 000 000 2 500 000 2 000 000 1 500 000 1 000 000 500 000 SA domestic 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Western Cape 2008 2009 2010 8 000 8 000 2 000 6 000 1 500 4 000 1 000 500 2 000 00  WC market is between 10 -15% of SA domestic market through a cycle Source: CNCI data.

WC demand analysis (continued) An n u a l c e m e n t d e m a n d in d e x 1996 = 100 180 160 140 120 100 80 S A Do m e stic 60 2004 2001 2002 2003 1996 1997 1998 1999 2000 2005 2006 2007 2008 2009 2010 W e ste rn Ca p e  SA domestic demand back to 2004/2005 levels and WC demand back to 2002 levels WC demand has been more volatile than the overall SA domestic market Source: CNCI data. Western Cape 2010 a PPC estimate 11 . PPC calculations.

WC replacement and expansion plan  Why?  Kilns are old (average 40 years) but well-maintained and still produce good quality cement however much less energy efficient  Impact of new environmental legislation (from 2015) will require significant capex investment  To align WC capacity with future market demand  “Brown fields” preferred to “green fields” approach:  Deliver the same capacity and energy efficiency  Lower capital cost spread over a longer period  Reduced environmental impact  Capacity (increase of ±50%)  De Hoek: replacement (phase 1) and expansion (phase 3)  Riebeeck: replacement with some expansion (phase 2) 12 .

coal firing system and bag filter for De Hoek kiln 6  Capex R 280m .WC replacement and expansion plan (continued)  3 phases.Currently in progress to be completed early 2012  Phase 2 – New kiln 3 and upgrading of kiln feed and cement milling capacity at Riebeeck  Capex R 1.300m – Commencing 2012 to be completed 2016  Phase 3 – Further increased capacity and energy efficiency of De Hoek kiln 6 by installing a pre-calciner  Capex R 1.400m – Commencing 2016 to be completed 2018 Other advantages of this plan?  Can expedite or delay phase 3 to match market demand  Optimal utilisation of limestone resources Each phase will be discussed in more detail at the respective factories 13 . including Riebeeck and De Hoek  Phase 1 – A new clinker cooler.

za 14 .Montague Gardens depot Cape Town www.co.ppc.

marketing and administration offices  35 sales and marketing employees  Bulk handling and packaging facility  Receives bulk cement from De Hoek and Riebeeck factories by rail  Bulk cement storage capacity 18 000t (OPC and Surebuild)  Ability to dispatch both bagged and bulk cement by road  Key advantage  Ability to optimise rail/road logistics between plants and Cape Town market  Ability to service customers with short lead times 15 .Montague Gardens depot  Bulk handling and packaging facility completed in 1980  Includes WC sales.

za 16 .co.ppc.Questions? www.

ppc.co.za 17 .Investor Site Visit De Hoek factory .Piketberg www.

Introduction to De Hoek factory  History  Limestone discovered in 1919 by the Hermon Piquetberg Lime Company  Cape Portland Cement started production of cement in 1923  In 1983 name changed to PPC  Integrated cement factory  Products – Surebuild and Rapo in bag/bulk dispatched by road and rail  Capacity to produce 1.2mtpa of cement using  2 kilns – DHK5 (1974) and DHK6 (1980)  2 cement mills  2 rotary packers each capable of 2900 bags per hour  2 automated cement bag palletisers  On-site limestone reserves for more than 30 years  Coal from Saldanha (230km) and Limpopo province (1800km) by rail  All other raw materials locally sourced 18 .

Cement manufacturing process crushing plant Kiln feed preparation and blending coal stockpile Limestone mining coal mill raw mill pre-heater. kiln line & cooler clinker storage cement milling & dispatch 19 .

Cement manufacturing process (continued) mining limestone crushing plant limestone blending coal stockpile coal mill raw mill pre-heater. kiln line & cooler clinker storage cement milling & dispatch 20 .

Cement manufacturing process (continued) mining limestone crushing plant limestone blending coal stockpile coal mill raw mill pre-heater. kiln line & cooler clinker storage cement milling & dispatch Most thermal energy intensive Most thermal energy intensive stage of the process stage of the process Flame to produce 1400 C o Clinker Cooler Coal Mill 21 .

5 tons + 1400oC heat =» 1 ton clinker + 500kg CO2*  Approximately half of CO2 produced in the clinker process is derived from the dissociation limestone. sand. iron) Flame to produce 1400 C o  ~1.5 ton raw meal =» 1 ton clinker Clinker Cooler Coal Mill  Calcination process  Calcium carbonate + heat =» calcium oxide + carbon dioxide  CaCO3 + 1400oC heat =» CaO + CO2  ~1.Cement manufacturing process (continued)  Raw meal feed to the kiln:  ~90% limestone  Source of calcium carbonate  ~10% other (shale. not from burning coal * Excludes CO 2 from coal and electricity used in the process 22 .

Cement manufacturing process (continued) mining limestone crushing plant limestone blending coal stockpile coal mill raw mill pre-heater. such as limestone. fly ash or slag 23 . kiln line & cooler clinker storage cement milling & dispatch  Clinker is finely ground with gypsum (to control the setting time of cement)  CEM I (‘pure’ cement) consists predominantly of clinker and gypsum  Extended cements contain extender materials.

De Hoek upgrade and expansion plan  Phase 1 (De Hoek kiln 6)             Currently in progress and due for completion in early 2012 Kiln shell and inlet seal replacement New grate type clinker cooler Indirect coal firing conversion and installation of a modern kiln burner New bag filter for kiln exhaust gas  Advantages New shell = improved kiln uniformity and refractory life Rapid cooling of clinker improves grindability and handling Multi-channel burner = burning of alternative/waste fuels Improved kiln thermal efficiency = lower fuel consumption and higher output Increased coal mill capacity = use of lower grade coal Reduced kiln dust emissions Enables future capacity expansion (Phase 3) 24 .

De Hoek upgrade and expansion plan (continued) Indirect firing system Kiln shell replacement Planetary coolers replaced with grate cooler 25 .

8mtpa  De Hoek Kiln6 will be upgraded to world-class technology  Together with new Riebeeck kiln 3 will produce the base requirement for WC  De Hoek kiln 5 will become the “swing unit” for the WC *Current estimate and may vary according to final design and equipment specifications 26 . coal milling and other ancillary equipment to cater for the increased kiln6 capacity  Advantages  Will result in a significant thermal efficiency (coal) improvement  Will increase De Hoek kiln 6 output by 100%  Resulting in ~1.De Hoek upgrade and expansion plan (continued)  Phase 3 (De Hoek kiln6)  Timing of this phase is flexible and will be aligned with market demand as it develops  Main features will include the installation of a kiln pre-calciner and the upgrade of kiln feed.3mtpa* modernised cement capacity  Overall De Hoek factory capacity will increase to ±1.

co.Questions? www.za 27 .ppc.

Site tour 28 .

Site tour plan  Visit mine to view:  Extent of limestone reserves  Mining of Zoutkloof and Vondeling pits  Central control room for overview of plant operation Group splits to visit  Laboratory/packaging plant Group rotates  Return to training centre 29 .

vehicle maintenance. infrastructure and housing  Construction and upgrading of classrooms and facilities at local schools  Portable skills training in the community (welding.De Hoek’s social development initiatives  A number of projects focussing on education. agriculture and woodwork)  Water infrastructure supplied to the Wittewater and Goedverwacht communities  Construction of entrance road for Wittewater  Construction of business hub for SMMEs at Porterville Grade R classrooms at Steynville Primary School (Local contractor used 20 local workers) 30 .

Investor Site Visit Riebeeck Factory – Riebeeck West www.co.za 31 .ppc.

1950) a national monument maintained by PPC  The factory was founded in 1959  An integrated cement factory  Current products – OPC and Rapo in bag/bulk.Introduction to Riebeeck factory  History  The factory site includes the birth place of General Jan Smuts (1870 . dispatched by road and rail  Capacity to produce 600 000 tpa of cement using  2 kilns – RK1 (1959) and RK2 (1968)  Both kilns run sustainably at 20% over original design capacity  2 cement mills  1 rotary packer capable of 2000 bags per hour  On-site limestone reserves for more than 100 years  Coal from Limpopo province by rail – 1700km distance  All other raw materials sourced locally and Saldanha (237km) 32 .

Aerial view of factory and mine Riebeeck West village Smuts cottage Cement factory Limestone mine Rehabilitated overburden dumps 33 .

Mine rehabilitation 34 .

product storage and general site infrastructure can be used  Advantages      Two old cement kilns replaced with one modern cement kiln Significantly improved thermal and electrical efficiency 40% increase in overall factory capacity Brown-fields project with lower capital expenditure New equipment will exceed new environmental requirements  Result: ~850ktpa* cement capacity at world-class efficiency and environmental standards 35 *Current estimate and may vary according to final design and equipment specifications .Riebeeck upgrade and expansion plan  EIA process based on revised expansion plan commenced late during 2010  Construction expected to commence during 2012     New kiln (RK3) to replace both existing kilns Kiln feed & coal milling circuits to be upgraded to support larger capacity Cement milling will be upgraded for larger capacity and future product changes Existing mining. raw materials handling.

scope crushing plant Kiln feed preparation and blending coal stockpile mining limestone coal mill raw mill kiln line & cooler clinker storage cement milling & dispatch 36 .Riebeeck upgrade and expansion plan .

Riebeeck upgrade and expansion plan (continued)  Schematic of current plant layout (RK1 & 2 in yellow) 37 .

Riebeeck upgrade and expansion plan (continued)  Schematic of kiln 3 construction (green) 38 .

Riebeeck upgrade and expansion plan (continued)  Schematic of upgraded layout (RK1 &2 dismantled) 39 .

co.ppc.za 40 .Questions? www.

Site tour 41 .

Site tour plan  Mine visit to view:     Extent of limestone reserves Current mining operation Future mine layout Rehabilitated overburden dumps  Factory visit to view:  Existing kilns and material flow  Location of proposed kiln 42 .

PPC Riebeeck’s social development initiatives  Our vision is the development of our youth as the building blocks for our future in this country  Strategy is to prioritise investment in educating the youth in the area  Projects completed or in progress:  Investment in two crèches (completed)  Construction of three grade R classes (completed)  Construction of a youth centre in conjunction with Goedgedacht trust which specialises in youth development programs (in progress) Youth centre under construction 43 .

co.za 44 .ppc.Thank you for spending time with us today www.

those statements concerning the demand outlook. special or incidental. and unless otherwise stated. based on claims arising out of misrepresentation or negligence arising in connection with a forward-looking statement. changes in economic and market conditions. among other factors. While PPC takes reasonable care to ensure the accuracy of the information presented.4(B)(VIII)(1)(BB).Disclaimer Whilst not intended to contain any profit forecasts or profit estimates. changes in the regulatory environment. PPC’s expansion projects and its capital resources and expenditure. this document including. may contain certain forward-looking views. This document is not intended to contain any profit forecasts or profit estimates. 45 . Accordingly.4(B)(VIII)(1)(AA) OR 3. other government action and business and operational risk management. no assurance can be given that such expectations will prove to have been correct. forward-looking statements involve risk and uncertainty and although PPC believes that the expectations reflected in such forward-looking statements are reasonable. By their nature. PPC accepts no responsibility for any damages be it consequential. results could differ materially from those set out in the forward-looking statements as a result of. indirect. success of business and operating initiatives. without limitation. has not been reviewed and reported on by PPC’s auditor either in accordance with 3. whether foreseeable or unforeseeable.