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Overview of the South African Nuclear Energy Corporation

1

Who we areThe South African Nuclear Energy Corporation (Necsa) is a state-

owned public company, registered in terms of the Companies Act,

(Act No. 61 of 1973), registration number 2000/003735/06.

Necsa has enjoyed a fascinating and at times controversial

history, starting out as the Atomic Energy Board (AEB). The AEB

was established in 1948 in terms of an Act of Parliament, with the

immediate objective of regulating the uranium industry in South

Africa. Provision was also made for supporting research and

development after consultation with the CSIR which was engaged

in research into radioactivity at the time. By the mid 1950s, the

CSIR had made progress with the monitoring of radioactivity and

radon gas in the gold mines, the importation of radioisotopes

and the application of radioisotopes in research and medical

practice. At the same time the enormous potential of the peaceful

application of nuclear energy, and its value in the future, was

becoming clear. The AEB was already looking into the building of

an experimental reactor and the construction of a nuclear power

station in Cape Town. Inevitably then, in 1959, it was decided

that the country’s nuclear research and development programme

would be undertaken by the AEB.

Extensive investigations ensued to locate a site for the programme

that met the stringent requirements specified by and adopted in

the United Kingdom code. Pelindaba, situated some 30 km to the

west of Pretoria, proved to be more than satisfactory in all respects

and remains today the home of South Africa’s nuclear research

and development programme.

The South African Fundamental Atomic Research Installation

(SAFARI-1) went into operation on 18 March 1965 and the

Uranium Enrichment Corporation (UCOR) was established

alongside the AEB in 1970 to co-ordinate the development of an

enrichment programme. By 1977 South Africa was among several

countries in the world with the capacity to enrich uranium and

plans for the building of the first nuclear power plant had been

finalised.

In 1986 the AEB and UCOR were consolidated to form the Atomic

Energy Corporation (AEC) and the Vaalputs Waste Disposal Site

for low and intermediate-level waste was opened in Namaqualand

in the Northern Cape Province. This placed the AEC in the unique

position where it was involved in all aspects of the fuel cycle from

feedstock production through to waste disposal management.

Amidst intense international pressure and against the background

of changing national strategic imperatives, the production of highly

enriched uranium ceased in November 1989. On 10 July 1991,

South Africa acceded to the Nuclear Non-Proliferation Treaty

and went on to sign the International Atomic Energy Agency’s

Safeguards Agreement in September 1991.

By 1995, South Africa had become the only known country to have

produced weapons grade enriched uranium and then verifiably

dismantle its programme. In the ensuing years, the organisation’s

focus moved to the industrialisation of some of its core and spin-

off technologies.

In 1999, the AEC restructured under the banner of the South

African Nuclear Energy Corporation (Necsa). Today, Necsa’s focus

is true to its mandate, namely research and development into the

peaceful application of nuclear technologies, with its industrialised

operations functioning as wholly owned subsidiaries.

What we doIn terms of the Nuclear Energy Act, (Act No. 46 of 1999), Article

13, the South African Nuclear Energy Corporation (Necsa) is

mandated:

• Toundertakeandpromoteresearchanddevelopment

in the field of nuclear energy and radiation sciences and

technology and, subject to the Safeguards Agreement, to

make these generally available;

• Toprocesssourcematerial,specialnuclearmaterialand

restricted material and to reprocess and enrich source

material and nuclear material; and

Overview of the South African Nuclear Energy Corporation

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2

• Toco-operatewithanypersonorinstitutioninmattersfalling

within these functions subject to the approval of the Minister.

Necsa is also responsible for managing certain institutional

obligations of the Republic, as delegated by the Minister, in terms

of international agreements, or in the national or public interest,

concerning matters arising from or otherwise involving the use of

nuclear energy. These include:

• Decommissioninganddecontaminationofpaststrategic

nuclear facilities;

• Managementofnuclearwastedisposalonanationalbasis;

• Applicationofradiationtechnologyformedicalorscientific

purposes;

• OperationoftheSAFARI-1nuclearresearchreactor;

• OperationofNecsa’ssiteatPelindabaandaccompanying

services; and

• ImplementationandexecutionoftheNuclearNon-

proliferation Treaty, the Safeguards Agreement, the African

Co-operative Agreement, the Treaty of Pelindaba and any

other treaty, agreement or protocol.

Necsa’s subsidiaries, in turn, are mandated by Necsa Corporate

to operate in a self-sustainable manner and to remain competitive

in the industries within which they operate.

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Office of the Chief Executive Officer

Necsa is governed by a Board of Directors and managed by a

Chief Executive Officer (CEO), appointed by the Minister of

Minerals and Energy for a three year, renewable tenure. Necsa’s

CEO is supported by an Executive Management Committee (EMC)

comprising Heads of Divisions.

Towards efficient management and ‘hands-on’ access to key

information, the following departments report directly to the CEO:

Corporate Planning Implementation Department The CPI role is to ensure corporate compliance with the planning

and reporting requirements as stipulated for Schedule 2 public

entities in the Public Finance Management Act (Act No. 1 of

1999) (Section 52). This responsibility requires execution of the

following functions:

• Co-ordinationofthecompilationoftheannualNecsaGroup

Corporate Plan which include the following:

- Strategic objectives;

- Strategic and business initiatives;

- Key performance indicators;

- Risk management plan;

- Fraud prevention plan;

- Materiality/significance framework;

- Budget for three years; and

- Shareholder’s compact;

• ContributiontoNecsa’sMTEFbudgetsubmissionstothe

shareholder;

• CompilationoftheNecsaquarterlyreportandperformance

review; and

• Adhocprojectsrelatedtotheaboveresponsibilities.

Internal Audit DepartmentThe Internal Audit Department was instituted not only to comply

with statutory requirements, but as an additional management

control for the Necsa Board of Directors and the Chief Executive

Officer. Its primary functions concern the on-going evaluation

of the activities, risks, controls and governance processes of

the Corporation and its Subsidiaries, in order to support the

achievement of objectives and the improvement of performance.

This is accomplished through a systematic, disciplined approach

to:

• Continuousinvestigationoftheeffectivenessandevaluation

of risks associated with the internal controls of Necsa and its

Subsidiaries to ensure:

- Reliability and integrity of financial and operational

information;

- Resources are applied effectively, efficiently and

economically;

- Assets are properly safeguarded; and

- Legal and statutory requirements are complied with.

• ProvisionofadviceandconsultationservicestoManagement

to continuously improve the performance of Necsa and

its Subsidiaries in achieving strategic and operational

objectives, focusing attention on:

- The necessity of, opportunities for, and possible ways to

improve performance; and

- Aligning corporate governance with best practice in

accordance with statutory and regulatory requirements.

The following audit and consulting services are rendered to the

Corporation and its Subsidiaries to achieve the above-mentioned:

• Systemsandcomplianceauditsofpredominantlyfinancial-

and human resources-related systems;

• Performanceauditsregardingtheeconomy,effectiveness

and efficiency of programmes, Divisions, Departments and

Subsidiaries;

• InformationTechnology(IT)-relatedaudits;

• Corporategovernanceandethics-relatedaudits;

• ValueforMoney(VFM)auditsandspecialinvestigations

according to requirements of the Audit Committee and the

CEO; and

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4 Office of the Chief Executive Officer

• ConsultingservicesbasedonrequestsbytheAudit

Committee,theCEOandGeneralManagersregarding

improvement in areas of risk management, internal controls,

corporate governance and performance.

The Internal Audit function, in its operations, is responsible for

compliance in terms of the Public Finance Management Act

(PFMA), Treasury Regulations and International Standards for the

Professional Practice of Internal Auditing.

Risk and Knowledge Management OfficeThe responsibility of the Office for Risk and Knowledge

Management is as follows:

• EstablishmentandimplementationofEnterprisewideRisk

Management Framework for Necsa;

• Co-ordinationandmonitoringofriskmanagementactivities

through the Internal Risk Management Committee;

• ProvisionofassistancetoInternalAuditdepartment

concerning review of effectiveness of risk management;

• ReportingonNecsacorporaterisks;

• Establishmentofaframeworkforimplementationof

Knowledge Management;

• IntegrationofKnowledgeManagementwithotherbusiness

processes; and

• Provisionofcorporate-widesupportforimplementationof

Knowledge Management.

Legal Services and Company SecretariatLegal Services is responsible for:

• Custodianofgrouplegalcompliance;

• Theprovisionofallcommerciallegalservices,including

contracts and litigation, to Necsa Corporate and its

Subsidiaries;

• Adhocprojectsfallingwithinthecompetencyofthe

department;andGroupCompanySecretariat;and

• GroupCompanySecretariat(i.e.NecsaCorporate,allNecsa

Subsidiaries, and the EMC.

Group Communication and Stakeholder RelationsThe department is responsible for the following:

• Internalandexternalcommunication;

• Corporateimageandidentity;

• Stakeholderrelations;

• Mediarelations;

• Eventsmanagement;

• Corporatesocialinvestment;

• Governmentrelations;

• Publicrelations;

• Advertisingandpromotion;and

• Internationalrelations.

The strategic goal of the department is to provide a range of

services that adhere to a uniform corporate identity and to

establish a positive perspective of Necsa to all stakeholders.

Engineering and Technology Integration (ETI)ETI is responsible for:

• Preparing,developmentandmaintenanceofNecsa’s

Safety, Health, Environmental and Quality System (including

information security and security);

• Corporatecross-divisionalprojectse.g.securityupgrading,

infrastructure upgrading, etc.;

• LineresponsibilityfortheUraniumandEffluentProcessing

department to ensure conversion to LEU of the current

HEU processes e.g. including projects to ensure enriched

uranium recovery from uranium containing materials and

uranium inventory optimisation; and

• LineresponsibilityfortheCorporateLicensingDepartment

to ensure sufficient competency, capability and capacity for

this mission-critical function.

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People and Organisational Development

1. Purpose The purpose of P & OD is the development and

implementation of human resource and organisational

development programmes and strategies that will be

supportive of Necsa’s strategic imperatives. This is

enshrined in our vision and mission as detailed below.

2. Vision of P & OD “To become a strategic partner of our customers through the

sustainable provision of excellent people solutions”.

3. Mission of P & OD “To provide leadership in people related issues that will add

value to Necsa’s strategic imperatives through the:

• Contributiontothedevelopmentofskillsinscience,

engineering and technology;

• DevelopmentandempowermentofNecsa’shumanresource

base;

• Developmentandexecutionofemployeewellnessprograms;

and

• Provisionofcustomerfocusedpeopleandorganisational

development solutions”.

4. Strategic Objectives of P & OD In line with our commitment to support Necsa’s strategic

objectives, the following are our strategic goals:

a) Recruitment and exchange of technical skills to achieve

strategic objectives of Necsa through increasing the ratio

of technical to non-technical staff throughout Necsa; the

development of relevant educational qualifications and

skills; on-time delivery of related services; and increasing

the numbers of historically disadvantaged scientists and

engineers;

b) Development and implementation of HR systems,

processes, and policies to support Necsa divisions through

the various systems, namely, knowledge management ;

induction; coaching and mentoring; succession planning;

and performance management outputs;

c) Contribution to the South African System of Innovation

through various education training and development (ETD)

initiatives such as collaboration with educational institutions;

the South African National Human Asset Research

Programme (SANHARP); and internships and leanerships;

d) Development and implementation of organisational

development interventions to support divisions through

processes such as performance and knowledge

management; and

e) The attainment of Necsa’s strategic goals by ensuring

healthy relationships between Necsa, its employees and

labour. The formulating, maintaining and revision of

appropriate collective bargaining processes, relevant to the

changing Necsa by ensuring healthy employer-employee

relations.

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6 People and Organisational Development

Figure 1 below is the P & OD structure to implement the strategy.

Figure 1: People and Organisational Development

General Manager:People and Organisational Development

Personal AssistantEmployee Relations

Snr Manager:Learning and People

Development

Snr Manager: HR Services

Snr Manager: Organisational Development

Snr Manager: Employment Equity and Recruitment

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Nuclear Services

… maintaining an optimally functional and safe working environment for the

benefit of employees, the community and generations to come.

BackgroundOperating from newly upgraded premises the Consulting

Business Unit is fully geared to providing a world class service in

engineering, design, project management and specialist nuclear

consulting.

The Nuclear Services Division of Necsa provides a wide range of

services in six major focus areas:

1 Radioactive Waste management

2. Irradiation services

3. Manufacturing

4. Consulting

5. Analytical Services

6. Training.

There are several highly skilled and qualified staff in these areas

that are able to provide solutions to common, and not so common,

problems across industries ranging from Nuclear, Aerospace,

Medical devices to Automotive and Transportation to name but

a few.

Training & Skills Development

Manufacturing ServicesAnalytical ServicesWaste Management

ServicesIrradiation ServicesConsulting Services

Design & Drafting Irradiation of Material Seminars, short courses

Decommissioning & Decontamination

(D&D)Radio Analysis Small mechanical

components

Engineering Activation of Material Artisan & TechniciansRadiological Surveys Chemical Analysis Pressure vessels and Distillation columns

Calibration

ProjectsIrradiation of

materials for e.g. Medial Isotopes

Engineers In Training (EIT)

Conditioning, disposal & interim storage of radioactive waste

Fabrication, Assembly & Testing

Environmental Monitoring

Industrial Isotope Tracing Direct medical use SHEQLiability assessment

& management

Environmental sitingIrradiation &

Post Irradiation Examination (I/PIE)

Supervisory & Introductory management

General Manager Nuclear ServicesPersonal AssistantFunctions

Finance

Human Resources

Marketing

SHEQ Specialist

Divisional Structure

Preparation & PrintingWaste Management Radiographic analysis Practical ExperienceRadiation containers

& source recovery GasAnalysis

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Specific areas of engagement in the immediate past are:

Waste Management and related areas• Developmentofsitingplansfornuclearwasterepositoriesfor

various governments in Asia, Africa and South America;

• Providingsolutionsformanagingradioactivesourcesin

countries as diverse as Sudan, Argentina, South Africa,

China and Tanzania;

• Decontaminationoffacilities,conditioningofwaste(solid

and liquid) and predisposal activities associated with final

disposal; and

• DevelopmentofaregulatoryFrameworkformanaging

nuclear waste for three African and two Asian countries.

Manufacturing services• DevelopmentofspecializedvalvesforHeliumTestFacility;

• Manufacturingofevaporatorforliquidnuclearwasteplant;

• Manufactureofgloveboxesandequipmentforhandling

radioactive materials;

• Productionofspecializedwinchesforship-boarduse;

• Developmentofpressurevesselsforspecializedapplications

including diving operations;

• Manufactureoflargetanksforpowerindustryuse;

• ManufactureofsmallpressurevesselsusingInconeland

stainless steel for various industries, including Petroleum,

nuclear and general manufacturing; and

• Non-destructiveevaluationofproducts,manufacturedand

developed items.

Training servicesWide range of both theoretical and practical training in our own

workshops is provided. Specifically focused on the trades are:

• Welding,electrical,fitting,turningandmillwrightartisan

training; and

• MechanicalInspection.

Other courses with much wider applicability are:

• NuclearReactorOperatorTheory;

• RadioactiveWastemanagement(decontamination,pre-

conditioning, disposal);

• Quality-Basic,Totalqualitymanagement(TQM),“20Keys”;

• ProjectManagement;

• LaboratoryManagement;

• NuclearPhysics;and

• RadiationProtection.

There are also short courses and seminars which are presented

in conjunction with other institutions of learning aimed at specific

audiences, specifically those mid level managers who are unable

to spend much time away from their office, but who need to have

refreshers in some areas of their activities.

Irradiation services• Design,developmentoftest,jigsandfixturesforthe

irradiation of reactor fuel;

• Irradiationoftargetplatesfortheproductionofmedical

isotopes, including radio-pharmaceuticals;

• TestingofnewfuelforpurposesofsupplyingGenerationIV

power reactors;

• Activationofsamplesforradio-analysisanddeterminationof

trace impurities; and

• Samplecharacterisation.

Analytical services• EnvironmentalTesting(water,soilandairsamplingand

analysis);

• Analysisofradioactivematerials(wehavelicensed

laboratories for this specialized area of operations);

• Analysisofmetalsandnon-metalsfortraceelements;and

• Radio-analysisofactivatedsamples.

Consulting servicesWith the specialized skills set available within Nuclear service a

broad scope of work is possible.

• Adviceonmanaginglicensingofnuclearfacilities;

• Developmentandimplementationofprojectplansforsiting

of radioactive waste facilities;

• Developmentofmechanical,civilandelectricalprojects;

• Designservices,draftingservicesinNuclear,Aerospace,

automotive and other industries; and

• Calibrationofradiationdetectors.

Nuclear Services

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Research and Development

The hub for research, development and innovation, generating new knowledge

and technologies that will deliver tangible benefits for the Corporation, the country

and the African continent.

BackgroundThe Research and Development (R&D) division was established

on 1 April 2007 to consolidate and expand Necsa’s research and

technology development activities and outputs. Its role is to take

the lead in delivering on a key component of the Corporation’s

mandate under the Nuclear Energy Act, namely to undertake and

promote research and development in the field of nuclear energy

and radiation sciences and technology. In addition to this, the

R&D division is investigating the re-establishment of components

of the nuclear fuel cycle in South Africa, as foreseen in the Nuclear

Energy Policy.

Mission The mission of the division is to:

• Implementafocussedandbalancedportfolioof

programmes relating to the nuclear fuel cycle as well

as applications of nuclear and radiation science and

technology;

• Expandthehumancapitalbaseandresearchinfrastructure

required to generate and exploit new intellectual property by

means of research, development and innovation;

• Participateincollaborativeresearchandspecialisedskills

development programmes with local and international higher

education and research institutions; and

• Leverage,inthenationalinterest,thetechnicalco-operation

and skills exchange programmes of the International Atomic

Energy Agency (IAEA) and the AFRA co-operative agreement

on nuclear science and technology in Africa.

Divisional StructureThe Research and Development division consists of four

departments, i.e. Applied Chemistry, Radiation Science, Nuclear

Fuel Cycle, and Nuclear Technology Co-operation and Resource

Mobilisation. It also operates an intellectual property management

officeonbehalfoftheNecsaGroup.

Research and Development

SHEQ Intellectual Property

Nuclear Technology Co-op & Resource

MobilisationRadiation Science Applied Chemistry Nuclear Fuel Cycle

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Functional Overview

Applied Chemistry department

This department undertakes research and technology

demonstration activities in the areas of radiochemistry, nuclear

waste, plasma technology, uranium chemistry and fluorine

chemistry.

The first of these is aimed at the development of radioisotopes,

radiopharmaceuticals and radiolabelled compounds for use in

human health, industry and research, much of which is channelled

through the Necsa subsidiary NTP Radioisotopes (Pty) Ltd.

Expertise and processes in the field of radioactive waste treatment

are developed in support of the existing nuclear industry and in

view of the planned expanded use of nuclear energy in South

Africa. The Applied Chemistry Department also houses most of

Necsa’s expertise in uranium chemistry, a critical component for

success in the nuclear fuel cycle.

Fluorine chemical R&D programmes are focussed on both

the front end of the nuclear fuel cycle and the Fluorochemical

Expansion Initiative, a government-supported programme linked

to thebeneficiationof localmineral resources (fluorspar in this

case). High temperature plasma processes are used for the

preparation of a variety of ceramic and metallic compounds

for the nuclear industry as well as non-nuclear applications. A

nuclear materials development and characterisation programme

has been initiated.

R&D is performed in laboratories that are specially equipped for

the handling of radioactive materials.

Radiation Science department

The Radiation and Reactor Theory section performs R&D in the

field of reactor physics and renders specialised calculational

services. The latter are required for the licensing and safe operation

of nuclear facilities at Necsa and in support of SAFARI-1 operation

and utilisation. The section houses high level expertise in nuclear

criticality, neutronics, shielding and source term calculations, as

well as the development of computer code systems based on this,

for example, the widely used OSCAR system.

Other sections within the department are responsible for the

establishment and operation of neutron beam-line and accelerator

facilities for collaborative research with South African and

international universities and research institutions. These include

a unique combination of neutron and X-ray radiography and

tomography, neutron and X-ray diffraction, small angle neutron

scattering, small linear accelerators and other complementary

instrumentation. Applications of these experimental capabilities

include the following: geophysical studies of porous rocks,

non-destructive characterisation of unique archaeological

artefacts, magnetic studies on metallic systems, chemical

phase determination in powder samples, and characterisation of

nanostructured materials.

The RS and AC departments are involved in numerous

collaborative programmes with research institutes and universities,

and many post-graduate students make use of Necsa facilities in

their research projects.

Nuclear Fuel Cycle department

Tasked with the consolidation and expansion of Necsa’s skills

base relating to the fuel cycle, the department performs feasibility

studies and technology demonstration programmes relating to the

re-establishment of viable nuclear fuel cycle activities in South

Africa. The focus is on building a thorough understanding of

scenarios and options regarding the various components of the fuel

cycle, with specific reference to advice towards decision-making

on re-entering the fuel cycle on an industrial scale. This will be

followed by the establishment of selected fuel cycle operations

in collaboration with appropriate local and international partners.

In addition to this, skills transfer and technology development

initiatives are undertaken in order to build the future human

capital base and capacity for research and development and the

establishment of components of the nuclear fuel cycle in South

Africa on an industrial scale.

Nuclear Technology Co-operation and Resource Mobilisation

The department acts as the national co-ordinator and facilitator

of technical co-operation between South African institutions, the

IAEA and member states of the AFRA agreement on the use of

nuclear science and technology in Africa. It also facilitates the

establishment of collaborative research and development activities

and access to South African and international research funding

instruments in support of Necsa’s R&D programmes.

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Finance and Information Management

… ensuring the efficient and effective allocation and application of financial and

information resources.

Strategic Overview

The division:

Is accountable for the efficient financial performance and

allocation of financial resources of Necsa, ensuring the effective,

balanced and consistent application of these resources to facilitate

excellent service both internally and externally.

Aligns itself to Necsa’s vision, mission and embraces its values to

fulfil Necsa’s strategy.

Implements sound budgetary controls and procedures through

comprehensive, accurate and transparent budgets that establish

the basis for financial control and provide timely financial

information.

Adopts and implements accounting policies within a strong control

environment to ensure sound risk management as well as good

corporate governance and compliance with the requirements of

the Public Finance Management Act, South African Statements

ofGenerallyAcceptedAccountingPractice,CompaniesActand

other relevant legislation and provides support and an oversight

roletotheNecsaGroup.

Continuously strives for excellence in financial reporting and

management information on a timely basis to the Board of

Directors, Executive Management Committee, divisions and

otherrelevantstakeholders,e.g.Governmentbodies,customers,

suppliers and employees.

Is responsible for ensuring that Necsa’s IT systems provide relevant

and reliable information, in real time, to assist management in the

decision making process.

Provides a professional and distinguished procurement and

provisioning service in terms of quality, value for money, in optimal

time resulting in total optimal cost of ownership and embracing the

spirit of Broad Based Black Economic Empowerment (BBBEE).

Functional Overview

What we do?

• Advisoryandassistanceonanannualbasisthepreparation

of the budget in accordance with the Medium Term

Expenditure Framework as well as other funding requests;

• Productionofannualfinancialstatementsandmanagement

reporting;

• Riskmanagement,developmentandmaintenanceof

financial policies & procedures and financial advisory

services to the Necsa group;

• Providesfinancialsupporttobusinessunitsandsupport

units in terms of management reporting, compliance to the

regulatory environment and governance;

• Providesaneffectiveandefficientcreditmanagement

service;

• Provideinfrastructure,systemsandsupportservicesinthe

following areas of specialisation: Information Technology

(IT), Electronic communications, Enterprise Resource

Planning (ERP) system and Office Automation to Necsa and

subsidiaries; and

• Providesacost-effectiveandefficientprocurementand

provisioning service.

Who we do it for?

Stakeholders such as:

• DepartmentofEnergyandNationalTreasury;

• BoardofDirectorsandExecutiveManagementCommittee;

• Customers,suppliersandemployees;

• Grouprelatedentities;and

• Divisions.

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How do we do it? (special techniques, technologies, equipment etc)

• Strictadherencetoallapplicablelegislationaswellas

the implementation and monitoring of effective, efficient,

relevant and reliable internal controls.

• ImplementationofaccountingpoliciesintermsofSouth

AfricanStatementsofGenerallyAcceptedAccounting

Practice;

• Ensuringavailabilityoffacilities,informationnetworks,ERP

system, communication networks and other infrastructure

and equipment;

• SystemsandInformationManagementsstructureis

optimised to deliver services in line with the Information

Technology Infrastructure Library (ITIL) set of best practice

processes;

• Implementationandmonitoringpoliciesandprocedures;

and

• Procurementandprovisioningdepartmentprovidesservices

and innovative methods that integrate quality solutions

to meet customers’ needs. Through reducing transaction

costs, improving efficiency, increasing contract compliance,

reducing cycle times thereby creating strategic value.

What value do we add to Necsa?

• Ensuringcompliancetothefinancialregulatoryenvironment

within which the Necsa group operates, applicable policies

and procedures as well as excellence in financial reporting;

• InformationandCommunicationTechnologyaswellas

Office Automation is a pervasive aspect of any organization

and therefore a key enabler of business processes and

strategy;

• Weensurethatthesoftwarequalityanddataintegrityofthe

ERP system are relevant and reliable to users;

• Ensuringthatoptimalresourcesareavailableattheright

time and place by maximizing the sources of revenues; and

• Procuringgoodsandservicesatgoodqualityandpriceand

embracing the spirit of BBBEE.

Personal Assistant

Business and Support Units

GroupStructuresandGovernance

Management Information

System and Information

Management

Procurement and Provisioning

Corporate Accounting Services Financial Systems Management

Reporting Customer Services Central Procurement

Business Units Subsidiaries Costing Infrastructure Services

CentralProvisioning

Support Units Software Development

Project Manufacturing and Plant Support

Electronic Communication and

office Automation

Finance and Information Management

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Risk and Infrastructure Management

Provision of nuclear safeguards for South Africa and security for the site,

protection of employees and entrenching of Safety and Health as prescribed in

the Occupational Health and Safety Act. Maintaining the operation of the site and providing adequate resources for Necsa,

its subsidiaries and tenants.

Background The functions of the Risk and Infrastructure Management division

are directly mandated under Sections 1 (13, 14, 33 and 34) of the

Nuclear Energy Act, (Act No. 46 of 1999) and include:

Implementation of the Safeguards Agreement on behalf of •

government;

Implementation of the SHEQ system, including provision of •

Medical and Emergency services for Necsa , its subsidiaries

and contractors;

Security Services for Necsa, its subsidiaries and tenants;•

Provision of maintenance services for all Necsa divisions and •

subsidiaries;

Management of Necsa property and support for all •

occupants; and

Provision of utilities such as steam and compressed air.•

Nuclear Safeguards Management The department is responsible for the efficient implementation

of the Comprehensive Safeguards Agreement (INFCIRC/394)

between the Republic of South Africa and the International

Atomic Energy Agency (IAEA) as well as the Additional Protocol

to the Agreement.

The department is also responsible for matters related to nuclear

material and equipment safeguards including:

Monitoring of compliance with regard to non-proliferation in •

the country’s nuclear facilities;

Ensuring the continued capability to attend to the country’s •

nuclear responsibility as required by law and other

international non-proliferation obligations;

Implementing and maintaining a State System of Accounting •

and Control of nuclear material;

Carrying out inspections to quantify and qualify accuracy of •

declarations made by the South Africa to the IAEA; and

Monitoring against the diversion of significant quantities of •

fissile nuclear material from monitored peaceful nuclear

activities.

Divisional Structure

Personal Assistant

SHEQ Snr Manager Maintenance Snr Manager

Security ServicesSnr Manager

Nuclear SafeguardsActing Manager

Property ServicesManager

Utility Services Manager

Human Resources

GM:RiskandInfrastructure

Finance

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Safety, Health, Environment and Quality Department (SHEQ)The Safety, Health, Environment and Quality department (SHEQ)

is responsible for the following services to Necsa (including

subsidiaries) and to external companies on contract:

Development and review of relevant SHEQ policies, •

procedures, guidelines, instructions, processes and systems

requiring specialist expertise e.g. radiation and chemical

protection; medical surveillance; workplace monitoring;

emergency planning; corporate environmental management;

waste management; and Behaviour Based Safety Process, to

ensure regulatory compliance;

Development and implementation of quality management •

systems for products and services in compliance with ISO

9001 or other standards;

Emergency Control Centre (including national emergency •

team and IAEA contact point for ENA conventions);

Liaison with Compensation Commissioner and •

Compensation Commissioner assessments;

Personnel monitoring (e.g. whole body counter, TLDs);•

Evaluation, registration and records of occupationally •

exposed persons (DOME system);

Primary Health Care, Clinics and Wellness Programme;•

HIRA, OREP, and WASPs and liaison with AIAs;•

Event investigations and injury reporting to government •

departments;

Certification of electrical installations; and•

SHEQ support to line management, with implementation of •

the SHEQ systems.

Emergency and Medical Services are also rendered to the

community in the Hartbeespoort area.

Security ServicesSecurity Services is responsible for security of the entire Necsa

site, including the premises of subsidiaries and tenants as well as

houses which are outside the main fences:

Physical Security and manning of Necsa site, access control •

of personnel e.g. searching, issuing of permits;

Monitoring of all security systems within the Necsa Control •

Centre;

Communication with all relevant security stakeholders in the •

event of an incident; and

Information classification control and electronic information •

security management.

Maintenance ServicesThis division renders the following cost effective maintenance

services to clients within Necsa and, where possible, to other

clients:

Measuring of electrical power and recovery of cost;•

Special maintenance and specialised instrumentation and •

electronic equipment;

Managing electrical utility substations;•

Access control systems , radio communication systems and •

telephone network system;

Maintenance and services on all mobile equipment e.g. •

trucks, tractors, forklifts, busses, motor cycles;

SmallmaintenancetasksonAVISfleetvehicles;and•

Recruitment of civil engineering services and hiring of earth •

moving equipment.

Property and Support ServicesLetting out of space to Necsa departments and private •

companies thereby increasing income;

Maintaining Necsa’s assets to retain the value thereof; •

Keeping maintenance costs as low as possible to decrease •

Necsa’s nett fund requirements;

Utilisation of external contractors for all painting, building, •

excavations, carpentry, locksmith and other civil related

matters; and

Maintenance of infrastructure and updates of infrastructure •

documentation of all Necsa property in South Africa; and

Management of all contractors providing service to Necsa.•

Utilities Services

The division is responsible for the production, distribution and

cost recovery of the following utilities at Necsa

Processing water received from Rand Water supply and •

distributing it to the Necsa site via pipelines;

Processing and purifying water from the Crocodile River and •

distributing it for use;

Distributing compressed air, produced in compressor-plants •

and at Beva, and distributing it to relevant sites via pipelines;

Distributing nitrogen, sourced in bulk from Afrox, and •

providing it to relevant plants via bulk storage tanks;

Distribute demineralised water produced via pipelines on the •

relevant sites;

Distribute Chiller water produced at Beva H4 plant from •

Chiller plants and distributed on Beva site via lagged

pipelines;

Distribute Soft water via pipelines;•

Operation of two Sewage plants, Pelindaba East & Pelindaba •

West;

Electricity is sourced from Eskom in bulk via two Eskom •

substations (Lomond substation in Pelindaba East and Safari

substation in Pelindaba West);

Electricity distributed on Necsa site via an 11 000 Volt cable •

network and stepped down to typical 400 volts at building

substations;

Electricity consumption is measure and recovered from •

identified users on Necsa site;

Managing electrical utility substations, and ensure •

maintenance is done; and

Doing Energy management to ensure efficient utilisation of •

electrical energy and to ensure compliance to Eskom energy

saving requirements.

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NTP Radioisotopes (Pty) Ltd

OriginsNTP Radioisotopes, based at the Pelindaba nuclear facility,

originated from within the strategically realigned Necsa

organisation in the early 1990s and operated as a financially ring-

fenced commercial division until incorporation as a limited liability

company, NTP Radioisotopes (Pty) Ltd, in October 2003. NTP

has shown consistent growth in revenue, profitability, product

portfolio, personnel strength and markets since its inception as

a commercial division of Necsa. Originally supplying only the

domestic market with its range of radioisotope and related products

and continuing to meet the vast majority of domestic needs for

isotope related medical and industrial products, NTP now is a

global player, being amongst the world’s top three radiochemical

producers and enjoying a reputation built on consistent, reliable

service and product quality excellence.

NTP has a 100% shareholding in subsidiary companies AEC

Amersham (Pty) Ltd and Cyclotope (Pty) Ltd. AEC Amersham is

the exclusive distributor in Africa of NTP’s radiopharmaceutical

products as well as a range of life science research and other

products, whilst Cyclotope markets the radiopharmaceuticals,

suchasFDGforPET,producedbyNTP’scyclotronoperations.AEC

Amersham in turn holds the entire shareholding in Pharmatopes

(Pty) Ltd, a radiopharmacy that dispenses compounded unit doses

of PET and SPECT radiopharmaceuticals produced by NTP.

During 2008 NTP established, with a BEE partner, a joint venture

logistics and freight forwarding company, NTP Logistics (Pty)

Ltd, in which NTP Radioisotopes has a 51% shareholding. Other

acquisitions and joint venture opportunities are actively being

pursued as part of NTP’s ambitious growth plans.

StatusThe NTP group employs about 250 personnel, has annual revenues

in excess of R420 million (2008-09), exports its products to nearly

60 countries on five continents and maintains world-class quality

(ISO 9001:2000), safety and regulatory compliance systems and

performance. NTP is a world leader in the production and supply of

radiochemicals, in particular I-131 and Molybdenum-99 the latter

being the most important isotope for devices used in the practice

of diagnostic nuclear medicine. With a world radiochemical

market share approaching 25%, the products supplied by NTP

allow for the performance of an estimated 8 to 10 million nuclear

medical diagnostic scans every year. NTP’s products are used

also in numerous therapeutic modalities including those for the

treatment of thyroid disease and radioimmunotherapy agents

used to treat recalcitrant lymphoma.

The elevated status that NTP now enjoys amongst the world’s

foremost users and suppliers of isotopes is reflected in the

stature of its principal customers and of its strategic partners and

associates, who rank amongst the world’s leading pharmaceutical

producers and their suppliers.

NTP is also a leading provider of neutron irradiation services

using the SAFARI-1 reactor. Important irradiations performed

for globally distributed customers include silicon ingots (neutron

transmutation doping to create semiconducting material), TeO2

targets for activation I–131 production, samarium, iridium and

others according to customer requirements and specifications.

Radiopharmaceuticals produced by NTP and marketed by

AECAmersham include theNovaTec-PTc-99mgenerator,FDG

(fluorodeoxyglucose) for PET (positron emission tomography)

studies, a range of labelling (cold) kits, and I-131 capsules for

diagnostic and therapeutic applications.

The industrial market is served, directly by NTP in South Africa

andinternationallyviadistributorGammatecNDTSupplies(Pty)

Ltd, by the provision of NTP’s sealed radioactive sources (mainly

Ir-192, Co-60 and Cs-137 and associated containers) and tritium

light sources for emergency lighting signage.

Competitive EdgeNTP has a strategically-important relationship with its parent

organisation, Necsa, through the provision by the latter of

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irradiation services (using the SAFARI-1 reactor), research and

development support, waste management resources, irradiation

targets, security, utilities and facilities, all of which are critical

to NTP’s business operations and for which NTP pays market-

related prices.

Aside from its support for production operations from Necsa, NTP

has control over the mission-critical logistics component of its

business. NTP has designed, produced and licensed a range of

transport containers and has links and relationships with carriers

that allow it to export products to anywhere on the globe with a

consistency and reliability that is unmatched. NTP’s control over all

aspects and inputs of its production and distribution, together with

dependable and extensive back-up supply agreements with other

suppliers of critical isotopes, in particular IRE of Belgium, make it

unique amongst global isotope and radiochemical producers and

provide an important competitive edge to the company.

Product Portfolio NTP produces a range of radiochemicals, radiopharmaceuticals

and industrial products that fall into the following five broad

categories and that service needs in the domestic and international

healthcare, life sciences and industrial markets. These are:

Radiopharmaceuticals:

NovaTec-P Tecnetium-99m Generator, Labelling (cold) Kits,

Iodine-131 Capsules and Solutions, Fluorodeoxyglucose (FDG).

Irradiation Services:

Neutron Transmutation Doping of Silicon, Neutron Irradiation

Services per customer requirements.

Radiochemicals:

Molybdenum-99, Iodine-131, Phosphorous-32, Phosphorous-33,

Sulphur-35.

Radioactive Sealed Sources:

Iridium-192, Caesium-137, Cobalt-60 and others.

Radiation Technology Products and Services:

Radioluminescent light sources and finished products,

Radioisotope source containers and Isotope transport logistics.

The largest contribution to NTP sales is attributable to

radiochemicals that are sold in bulk to large users throughout the

globe but especially in the US and Europe. These strategic raw

materials are essential for the manufacture of a host of medical

diagnostic and therapeutic products (radiopharmaceuticals), as

well as for various applications in pharmaceutical development and

biotechnology. Radioactive sources manufactured by NTP include

Iridium-192, which is used extensively for the non-destructive

testing (NDT) of welds, process vessel walls and piping. Other

sources are Cobalt-60 and Caesium-137 for use in process control

applications. NTP also manufactures a range of radioluminescent

light sources and associated finished products, such as signage,

and markets these products via distributors in South Africa and

international markets. Amongst the irradiation services performed

by NTP are neutron transmutation doping (NTD) of large, single

crystal silicon ingots destined for use in the semiconductor industry

and the production (using neutron irradiation) of speciality, high

value isotopes for various international clients. NTP manufactures

a comprehensive range of radiopharmaceuticals comprising the

NovaTec-P generator, labelling kits, Iodine-131 diagnostic and

therapeuticproductsandFDGforPETimaging.

NTP Radioisotopes (Pty) Ltd

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Pelchem (Pty) Ltd

Pelchem (Pty) Ltd is a fluorochemicals business and a 100% subsidiary of the

South African Nuclear Energy Corporation Ltd (Necsa).

Strategic OverviewPelchem’s purpose is to operate, maintain and grow the portfolio

offluorochemicalbusinessesofNecsa,andtoplayaleadingrole

in the South African Fluorochemical Expansion Initiative (FEI).

Acids & Salts Plant

NF3 Contract

F2 Plant

XeF2 Plant

Kabelo & Sibiza Plant

Linde Electronics South Africa (Pty) Ltd(49.9% Shareholding)

Subsidiary Companies

Fluoro Pack (Pty) Ltd(90% Shareholding)

Fluorochem (Pty) Ltd(Dormant)

Fluuoropharm (Pty) Ltd

(Dormant)

Affiliate CompaniesPelchem Operating Activites

Pelchem (Pty) LtdBoard of Directors

Group Structure

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BusinessSouth Africa holds the second largest fluorspar reserves in the

world outside China, and is an important international supplier of

fluorspartohydrogenfluorideproducers.

Pelchem is the only company in South Africa that beneficiates

a small percentage of locally mined fluorspar into higher value

fluorochemical products and is expected to play a leading role

in the South African Fluorochemical Expansion Initiative (FEI), a

priority project of the Department of Trade and Industry’s chemical

sector development strategy to increase beneficiation of South

African minerals and to counter the trade deficit in chemical

products.

Pelchem manufactures and markets hydrogen fluoride,

hydrofluoricacid,fluoridesalts, fluorinegas, specialityfluoride-

containing gases and fluoro organic monomer to the local

South African industry and to selected international customers.

Pelchem products are used in the Petroleum, Pharmaceutical,

Glass, Electricity, Metallurgical, Mining, Polymer, Agrochemical,

Electronics, Construction, Aluminium and Detergent industries.

Pelchem has attracted over two hundred million rand in foreign

direct investment into the country since 2001 for the building of

specialtyfluorochemicalplantsatitsPelindabapremises.These

includethefluoroorganicmonomerplant,builtinassociationwith

itsGermanpartner,and thenitrogen trifluorideplantownedby

BOC/Linde.

Pelchem’s subsidiary (Fluouro Pack) modifies the surface

propertiesandcharacteristicsofpolyolefinsbysurfacefluorination.

This allows a wide application of these plastics where paint

adhesion and contents permeation is normally a problem.

Pelchemiscommittedtofluorochemicalexcellencebymaintaining

its high standard of safe delivery of products, and through the

provision of technical and safety support to its customers.

Credibility• MemberoftheChemicalandAlliedIndustriesAssociationof

South Africa;

• SignatorytotheResponsibleCareinitiative;

• SignatorytoUSAandEuropeanTechnicalCommitteeson

hydrofluoricacidstorage,safetyandtransportstudygroups;

• MemberoftheSouthAfricanCompressedGasAssociation;and

• AssociatememberoftheInternationalCompressedGas

Association.

Consumer Products Inspired by the Fluorine MoleculeAs consumers our daily lives are affected by products which

are manufactured from fluoride chemicals. The vast array

includes high octane fuel, anaesthetics, metered dose inhalers,

electrical insulators, foam insulation materials and packaging

materials, special alloys, cell phones, diamonds, domestic and

industrial refrigeration, non-stick cookware, plastic components

in automotive applications, electrical cable insulation, beverage

cans, pesticides and herbicides in agriculture, microchips

for domestic appliances and computers, memory chips in

computers,i-pods,flashmemorysticks,liquidcrystaldisplayson

electronic components, cement, designer stainless steel kitchen

ware, stainless steel automotive components, soaps and washing

powders,fluoridedentaltreatment.