INTERCEM CONFERENCECape Town: 20 Sept 2007

Batsweledi Expansion Project

‘Growing into the Future’

Dr. Orrie Fenn

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Presentation Outline

Industry overviewPPC background Project considerations

OptionsTimelineTender allocation

Project overview & technologyHighlights to date

Preheater towerCommunity involvement Other projects in pipelineSummary

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Industry Overview

Four producers (including PPC)AfriSam/Holcim (85% owned by BEE investor Afrisam)Lafarge acquired Blue Circle (South Africa) 1998Cimpor acquired NPC in 2002

PPC leading player with 34-39% market shareAfriSam (30-33%), Lafarge (20-24%), Cimpor (8-10%)

AfriSam & Lafarge have interests in fly ash & slag extendersPPC & Cimpor have alternative slag sources

Producers involved in readymix & aggregates Average age of plant around 30 years (some upgrades)

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24 - 34

21 - 34

21 - 47

Age (Years)

0.6

0.8 - 1.2

0.8 - 1.3

0.2 - 0.9

Capacity (Mt/yr)**

FLSmidth

Polysius; KHD

Polysius; FLSmidth (2)

Polysius; FLSmidth (12)

Supplier

11NPC

21Lafarge

32AfriSam

137PPC

KilnsPlants*Producer

*South Africa: **Clinker (PPC estimate)

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PPC Background

Founded 1892; listed on Johannesburg Stock Exchange 1910Largest cement company in southern Africa (6.9Mt capacity)Market leader in South Africa, Botswana & ZimbabweFirst to introduce branded cement (Surebuild) 1996Aggregates business (largest SA quarry)Largest lime producer in southern AfricaMaterials handling & slag facility at Mittal Steel operationBuilder of last cement line in South Africa (Dwaalboom 1985)

39.7%Operating Margin

3025 (including Zimbabwe)Number of Employees

€ 2.55 billion Market Capitalisation (JSE)

€473 million (excluding Zimbabwe)Revenue

PPC Results 2006 (SA & Botswana)

Note: Figures based on 13 Sept 2007 ZAR/€ exchange rate & share price

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Riebeeck

De Hoek

Port Elizabeth

SlurryLichtenburg

Dudfield HerculesJupiter

Ulco

Dwaalboom

’

Simuma

Cement Capacity SA (Mt/yr)PPC 6.1AfriSam 3.8Lafarge 2.7NPC (Cimpor) 1.0

Zimbabwe

Botswana

Colleen Bawn

Bulawayo

Factory Location

Total: 14.8*

Namibia

Moz

ambi

que

* PPC estimate

3rd party extenders 1.2

Plant

Commissioning

Scope Fix

Achieved

Construction

Commenced

Contracts

Awarded

Board

Approval

Batsweledi Project: Considerations & Timeline

Feasibility

Commenced

May 04 Aug 05 Nov 05 March 06 Aug 06 April 08

Project Duration 48 months

Tim

elin

e

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Project Feasibility Commenced May 2004

Increasing cement demand drove investment decision50% increase in cement demand during 2002-2006Forecast >15.5Mt in 2007 (demand to remain strong post 2010)

Extensive investigation & analysis conductedSeveral key decisions had to be made

Greenfield or brownfield expansion?Cost & timing implicationsLimestone reserves & availability

Best location Dwaalboom or Slurry?Dwaalboom in Limpopo ProvinceLogistics (road/rail infrastructure)

New kiln line or existing line upgrade?Avoid protracted kiln shutdown during peak sales cycleOff-the-shelf proven designMore manufacturing flexibility (not reliant on one production unit)

Minimise capital cost & maximise cement production Use existing storage, milling & despatch facilities Use extenders available near to market

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Project Approved in August 2005

After 15 months feasibility study Batsweledi Project approved1Mt/yr clinker manufacturing line (DK2)Upgrade of existing cement milling infrastructure (Jupiter)

Total capital cost €139mIncluding escalation, currency, project management, contingency

Project cost split between two sitesDwaalboom ~€128m: Jupiter~€11m

Commissioning of DK2 scheduled for April 2008Jupiter milling upgrade commissioned March 2006Ramped-up project management capabilities

Limited in-house skills at start of projectBatsweledi first stage of PPC’s 20 year modernisation plan

Caters for retirement of 3 old kilns (capacity ~600kt/yr)

Batsweledi Project PPC’s first new kiln line in nearly 25 yearsBatsweledi Project PPC’s first new kiln line in nearly 25 years

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Dwaalboom Preferred Location

Most financially attractive optionIndependently verified during planning stage

PPC’s most modern plant (excluding PPC Zimbabwe)Most advanced control systems (neural network-based)

One of South Africa’s lowest cost-producing plants Original plant design ‘space planned’ for future expansion

Plant layout ideally suited for additional capacityExisting equipment sized to accommodate higher volumes

Raw meal silo & clinker transfer system can serve two kiln linesQuarry crushing train adequate capacity Existing quarry fleet to operate another shift

Sufficient limestone reservesGood quality limestoneTwo component mix design (includes lava)Not a complex mining operation

Dedicated rail line & ring-fenced wagon fleet

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Dwaalboom Planned in Early 1980’s

Commissioned in 1985FLSmidth equipment supplierImmediately mothballed

Re-commissioned in 1996 as a clinker grinding plant

Supplied JupiterControl & operating systems upgradedCement mill/despatch facilities 1998Cement capacity increased to ~900kt/yrServes Limpopo Province & exports

Supplies clinker to Hercules factory CEM 1 (42.5 & 52.5) & CEM 2 (32.5)

70% bagsEmploys 163 peopleISO 9002, ISO 14001 & ISO 18000 Plant altitude 1100 metres

Dwaalboom compares very favourably against global benchmarksDwaalboom compares very favourably against global benchmarks

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Located Miles from Anywhere

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Existing Layout Facilitates Expansion

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Unique Stacker Reclaimer Setup

FLS stacker & disc re-claimer

Two 68 000 ton stockpiles

Coal & gypsum re-claimer

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15

Lava SP L/SLava

Coal HG Coal LG Coal HGCoal LG

SP L/S

LEGEND

Raw Materials Handling

Main Plant

Clinker Handling

Electrical

Limestone

Gypsum

Limestone

Gypsum

DWAALBOOM SITE LAYOUT

Plant Split Into Sections For Tendering

Allowed PPC to utilise ‘best-of-breed’ in each discipline/area of plantAllowed PPC to utilise ‘best-of-breed’ in each discipline/area of plant

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Major Contracts Awarded in November 2005

FLSmidth main equipment supplier (~€23m)Atox raw & coal mills, Rotax 3300t/d kiln Upgrade of disc reclaimer to 500t/h

Standby apron feeder (fed by front-end loader) installed as back-upInstallation of kiln line FFE Minerals-Vecor (FLSmidth Minerals)

Subcontracted to DMCEBateman Africa supply & installation of raw material handlingequipment, & clinker transport/handling & load-out station (~€10m)

New 250t/hr & 200t/hr scraper-reclaimers for coal & additivesIron ore offloading & storage facility (3 component mix)Proportioning station equipped with 2 x 330t/hr apron feedersTwo 400t/hr conveyors to feed new raw mill

Concor Civils major civils contractor (>85%)Electrical installations managed by Kentz Automation & Drives

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Factors Affecting Choice of Technology

Future increasing trends in energy costs consideredCoal costs approaching export parity pricesHighest kiln system thermal efficiency required

Dwaalboom water availability & consumption a concernParticularly in summer months (>15kl/hr required for DK2)

Lack of water ruled out conditioning tower Technical option requiring lowest water consumption a prerequisite

Water & emission levels dictated use of bag filter technologyExhaust gas temperature <270°C to prevent damage to bag filters

Six-stage cyclone preheater with in-line calciner preferred solutionOperating temperature at bag house inlet of ~2000C ~10kcal/kg clinker less energy (compared to 5 stage system)

Improved heat efficiency & water saving >€100k/yrOffsets increased capital cost ~€2m

Energy efficient vertical roller mill technology used for raw & coal millingEnergy efficient vertical roller mill technology used for raw & coal milling

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DK2 Based on Latest Design & Technology

Six-stage cyclone pre-heater with in-line calciner

115m high preheater tower (DK1 at 80m)South African first

Lowest thermal energy consumption>10% better than next best PPC plant

Kiln dimensions 4.55m x 54mCapacity 3300tpd FLS Rotax kiln

Electric drive via two support stationsNo girth gear to maintain

Latest generation grate coolerFLS Multiple-Moving Cross-Bar cooler (MMC)Clinker on clinker (wear minimised)

Kiln feed controlled by x-ray spectrometerIncreases kiln stability & efficiency

Burn secondary fuels & lower grade coal Operating staff trained on kiln simulator

Focus on minimising energy consumption & maximising environmental benefitsFocus on minimising energy consumption & maximising environmental benefits

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Clinker transferred to Hercules & Jupiter plants for milling Constructing facility designed to load block trains

50 rail trucks totaling 3 200 tons clinkerLoaded out within one eight hour shift

In-house designNo existing rail load plants to use as guidance

Peak loading rate 1 000 tons per hour (ship loaders ~300tph)Dust free loading operation

1 160 m³/minute dust collection capacitySpecial 80 ton radio controlled ‘train mover’ to be used

Rapid Clinker Load-Out Facility

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Dwaalboom Upgrade Statistics

Clinker capacity increased to 1.75MtLimestone requirement 2.5MtCoal usage 250ktInstalled power 34 MegawattsPower usage 230 million kWh Diesel consumption 1.7 million litres1Mt clinker transported by rail to Gauteng

Milled at Jupiter & Hercules facilitiesAdditional 28 people employed Construction workforce peaks at >1000

Including overseas complementPlant erection technical skills

Note: All figures quoted are on an annual basis

Highlights to Date

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Site Before Construction Commenced

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Project Started by Removing Large Trees

Sept 2005

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Trees Painstakingly Relocated

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Civils Followed Site Clearance

Sept 2006

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PPC Aggregates Division Provided Stone

27Dec 2006

28Feb 2007

29Feb 2007

Airstrip

30April 2007

Trees

Aggregate Stockpiles

31May 2007

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Clinker Silo Piling Proved Problematic

July 2006

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34Clinker Silos 5 & 6

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Clinker Silo 5 Slide Finished in 14 Days

June 2007

37Sept 2007