creating value mining

8/12/2019 Creating Value Mining

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Creating value in mining .



Optimising your strategy, operations and growth initiativesDevelopment of Strategic Options .........................................3

Capital Efciency ....................................................................4Radical Business Improvement ...............................................5Building the Growth Engine ...................................................6Technical Mining Advisory Services ........................................7Corporate Finance Solutions...................................................9

Saving cost, improving service through outsourcingMining Shared Services ........................................................12Outsourced Recruitment Solutions .......................................13

Dealing with sustainability Sustainable Mining ...............................................................17Safety Analytics ....................................................................18Tip-offs Anonymous .............................................................20Corporate Social Investment ................................................22

Getting the most from your technology Pre-congured SAP Solutions ...............................................24

Application Integrity ............................................................25 Application Management Services .......................................26IT Governance ......................................................................28Exploring risk, extracting value ............................................30

Optimising your tax and legal positionTax Management Consulting ................................................32

Tax Efcient Supply Chain ....................................................34Transfer Pricing ....................................................................36Legal Advisory Solutions ......................................................38Contract Optimisation ..........................................................40Records Management Solution ............................................41

Addressing talent challengesTalent Development and Assessment Solutions ....................43Remuneration and Incentive Design Services .......................45

e-Learning Solutions ............................................................47

Contents



COUNTRIES SERVICED

MOROCCO

ALGERIA

T U N I S I A

EGYPTLIBYA

NIGERIA

W E S T E R N S A H A R A

MAURITANIACAPEVERDEISLANDS

MALI

SENEGALGAMBIA

GUINEA-BISSAU GUINEA

SIERRA LEONE

LIBERIA

BURKINAFASO

NIGER

CHAD

SUDAN

CENTRALAFRICANREPUBLIC

ETHIOPIA

ERITREA

DJIBOUTI

SOMALIA

COMORES

SEYCHELLES

MAURITIUS

REUNION

CAMEROON

GHANA

IVORYCOAST T

O G O B E N

I N

EQUATORIAL GUINEA

CABINDA

GABON

DEMOCRATICREPUBLIC OF

CONGO

ANGOLA

NAMIBIA

SOUTHAFRICA

BOTSWANA

ZAMBIA

ZIMBABWE

KENYA

TANZANIA

UGANDA

RWANDA

BURUNDI

M O Z

A M B I Q U E

M A L A W I

LESOTHO

SWAZILAND

M A D A G A S C A R

C O N G O

B R A Z A V I L L E

COUNTRIES NOT SERVICED

Deloitte footprint in Africa

DELOITTE OFFICES

SOUTHERNSUDAN



1

Deloitte has tapped into its vast resource pool to bring youmining specic strategic and business solutions to increaseproductivity, protability and minimise loss. Our subjectmatter experts have focused on providing solutions tothe issues experienced specically in the mining industry.Our relevant experience in the mining industry allows usto help your organisation gain the coveted competitiveadvantage it needs to be successful in the mining industry.With our extensive footprint in Africa, Deloitte can addresskey challenges of our mining clients.

By being a global multi-disciplinary organisation, we haveaccess to leading experts in the various elds of auditing,tax, consulting, nancial advisory and corporate nance.As part of this pooled resource, all members are availablefor global deployment, supplying rapid and relevantresponses to our clients’ needs. But even more re-assuringthan this is the fact that the world’s top mining expertsare to be found right here on home soil, to immediately

help you with your company’s challenges.

Many of the world’s most successful mining venturesdepend on Deloitte’s mining experts to advise them oncomplex business and industry issues.

Take a deeper look at whatDeloitte offers by reading

through this brochure.

Deloitte Mining Solutions



Optimising yourstrategy, operationsand growthinitiatives



3

Development of Strategic OptionsChallenges mining companies faceMining companies emerged from the nancial crisis leaner,meaner and frequently cash-rich. To deploy available capitaleffectively, some companies forge ahead with projectspreviously considered marginal; others are debatingreturning excess capital to shareholders, and still othershave launched a spate of M&A transactions.

There’s a renewed interest in beyond-borders expansion,particularly into Africa, with all the opportunities, threatsand uncertainties associated with mining on the continent.

Executives should now take a good, hard look at theirportfolios, processes, plans and value drivers and articulatea long-term strategy to make informed investmentdecisions.

How does the Deloitte solution address the businessissue?Our approach encapsulates a rigorous analysis ofthe prospective acquisition targets, along a range ofparameters, coupled with identication and quanticationof risks facing potential investments, including political risk,prevalent particularly in Africa.

At Deloitte we have found that our on-the-ground presencein most African countries plays a considerable role in ourability to understand local investment opportunities andrisks. We use hypothesis formulation and testing as wellas a real options approach as some of the useful tools inweighting investment options.

Benets to your organisationDeloitte works with our strategy, actuarial and corporatenance specialists to deliver this unique solution.Our analysis provides a comprehensive “as –is” picture and

reveals potential opportunities for commercial exploitationswhile identifying any latent aws or fundamentally negativeaspects, which may impact your investments.The high-level nancial models help to select the optimumentry option and the risk models aid the development ofmitigation strategies.

Scenario planning assists in the understanding of thecountry-specic risks, particularly in identifying the leadingindicators or triggers, thus helping to ascertain early whichof a range of identied scenarios could unfold.

Jacek Guzek

Tel: +27 (0)11 517 4163

Email: [email protected]



4

Challenges mining companies faceOur experience has shown that every large capital projectshould include a detailed value improvement processcoupled with a rigorous capital business case review. Theneed for a robust process has been highlighted by thecurrent worldwide economic conditions where capitalfunding is constrained and it is crucial that projects deliveron the promised projected returns.

How does the Deloitte solution address the

business issue?Our approach encapsulates a detailed value improvementprocess coupled with a rigorous capital business caserobustness review. Value enhancement is achieved byworking closely with the project team, targeting areas ofpotential value through various techniques focusing onefciencies, waste and new sources of value. The positionof the project in the overall project lifecycle will determinethe focus of the review and the warranted analysis. During

the business case robustness review, the business case isevaluated, assumptions tested and validated, while risksare framed and key drivers are modelled stochasticallyproviding a view on the uncertainty associated with thereported project return.

Benets to your organisationBig capital projects takes a considerable amount of time todevelop. During this time many congurations are testedand assumptions made on which decisions are based,while the business case is continuously updated andchanged. Since the world can change signicantly overthe project study period a structured value improvementand business case robustness review could add value byproviding decision makers with the peace of mind thatthe optimal value has been identied and that the project

return numbers are sound.

Capital Efciency

Louis Kruger

Tel: +27 (0)11 209 6444Email: [email protected]



5

Challenges mining companies faceOur experience has shown that clients understand thebusiness improvement imperative, but often lack thecapacity and approach to make improvement a reality.

How does the Deloitte solution address thebusiness issue?The Radical Business Improvement (RBI) approach aimsto inuence the thinking and behaviour of operationalteams to make business improvement a ‘way of life’.

This is achieved through the embedment of a businessimprovement platform that not only fast tracks businessimprovement, but also ensures sustainable continuousimprovement practices.

Benets to your organisationOur RBI Team will provide your business with a platformthat drives business improvement in a sustainable manner.The platform consists of specialised people,streamlined processes and supporting systems. Once thisis established, your company will have gone through aculture shift where everybody understands, supports andparticipates in business improvement.

Radical Business Improvement

Abrie Olivier




6

Challenges mining companies faceCEOs are often surprised by the size of their companies’“Growth Gap”—the difference between the revenuegrowth they can deliver through the current businessversus the revenue growth they need to deliver (or havecommitted to delivering).

How does the Deloitte solution address thebusiness issue?The Growth Engine is not about the “what,” but the

“how.” Deloitte member rms are in an ideal position tobuild, maintain, and run your Engine more so than anyother service provider.

Due to our organisation’s vast, global reach and theresulting deep industry and market insights enables us to:• Assess opportunities• Set targets and criteria• Design, develop, and deploy

• Provide support services and tools

Benets to your organisationThe Growth Engine can provide you with:• A market intelligence network to proactively scan for

emerging opportunities;• A mechanism for ltering through many ideas to

highlight the most valuable and viable ones;• A means for measuring an idea’s potential for impacting

revenue growth, protability, and shareholder value;• The capability to repeatedly plan, commercialise, and

manage a portfolio of new businesses.

Building the Growth Engine

Thomas Jankovich

Tel: +27 (0)11 209 8839




7

Challenges mining companies faceMining companies face many technical and strategicchallenges. Whether you are still exploring for minerals,developing your projects or in production, we have aunique combination of strategic and assurance servicesbased on technically sound principles that can assistyou to optimally develop your mineral project or moreeffectively manage your mining operations.

How does the Deloitte solution address the

business issue?The Deloitte solution ensures that appropriatelyexperienced and skilled people develop a solution toany technical or assurance challenge, including: miningtechnical due diligence; the compilation or review oftechnical feasibility studies; the valuation of mineraldeposits; mineral resource and reserve complianceassessments; technical risk assessments; competentpersons’ reporting; project pipeline analysis; and general

technical assurance services.Deloitte will work with the relevant counterparts at thecompany or project under review to assess the level

and standard of information available followed by thegeneration of a time line and budget based on the scopeof work.

Benets to your organisationThe following factors uniquely position Deloitte to providethe required services:• Intrinsic strengths of Deloitte, the Global Firm;• Relevant experience in the elds in which Deloitte will

be required to exercise its judgement; and

• Availability of appropriate skills among the staff andassociates.

Technical Mining Advisory Services

The Mining Advisory Services businessunit is uniquely positioned to provide arange of Technical Services across themineral asset value chain.

Ebrahim Takolia

Tel: +27 (0)11 209 6493




8

Exploration/ Assessment

Evaluation/ Analyses Design / Construction Production Depletion/Closure

P R O J E C T

V A L U E 1

• Preliminary economicassessments

• Valuation• Prospecting rights

application/s•Compliance - mineral

resources and reserves• Assessment of project

pipeline• Environmental

assessments

• Pre-feasibility andfeasibility studies

• Mining rightsapplication/s

• Compliance - mineralresources and reserves

• Environmentalassessments

• Risk assessments• Competent persons’

reporting• Valuation

• Due diligence

• Capital ef ciency andoperational readiness

• Assessment of risks inproject execution planand schedule

• Corporate governanceframework

• Project to operationstrategy

• Competent persons’reporting

• Valuation

• Due diligence

• Radical businessimprovement plan /strategy

• Annual reporting -mineral resources andreserves, environmental

• Mine closure /rehabilitationassessments

•Mining shared services• Competent persons’

reporting

• Valuation• Due diligence

•Mine and processoptimisation studies

• Mineral resources andreserves replacementstrategy

• Mine closure /rehabilitation planning

•Optimal disposal ofsaleable assets

• Business Rescue

CONFIDENCE

Mining Advisory Services – across the value chain

Project Value



9

Corporate Finance SolutionsChallenges mining companies faceAccessing Cash: With mining projects invariably requiringsignicant investment to bring them into operation,having access to sufcient cash resources is key to thesuccess of any mining company. While some miners arecash rich, others have to look to capital markets andbanks for cash, both of which are jittery after sufferinglosses in the global recession of 2008/09 and the loomingeconomic troubles in Europe.

Growing through acquisition: Mining Due Diligences arepredominantly focused on the geological, metallurgical,environmental and other technical aspects of a project,and rightly so as these aspects are paramount to thepotential investor. However, the nancial soundnessand management of a project, mine or mining companyis often overlooked as part of the acquisition process.Furthermore, inadequate M&A deal management canerode the value of a transaction.

How does the Deloitte solution address thebusiness issues?Deloitte has a track record of working closely withinvestments banks as part of multi-disciplinary IPO teamsto ensure that mining companies extract the maximumvalue from initial and subsequent capital raisings. As wellas traditional reporting accountant and sponsor roles,Deloitte also offers services such as IPO readiness reviews,capital structure assessments, drafting and coordination oflisting documents and road show support.

The Deloitte Debt Advisory team enables clients to takecontrol of the vital debt raising process in order to accessa much wider spectrum of funders, to pitch competitivelyand to execute the most effective deal that is RoEenhancing with the least amount of business constraints.Deloitte’s transaction services and M&A advisory teamscan assist you through every step of an acquisition processto ensure that you gain the maximum benet from the

transaction with the least disruption to your own business.Furthermore, nancial and tax due diligence should beprioritised as part of the due diligence process to ensurethat the investor gets a holistic view of the asset it isconsidering investing in or sponsoring.



10

Karin Hodson


Benets to your organisationHaving worked on some of the largest mining IPOs in keymining capital markets such as Johannesburg, London,Toronto and Sydney, and advised mining companies onlarge project nance deals particularly in Africa, Deloitte’steam of corporate nance advisors are best placed toassist you in accessing the cash that is so crucial to thesuccess of your project.

At Deloitte Corporate Finance, we have a wealth of

experience in delivering focused and value-addednancial and tax due diligence services and M&A advisoryservices in the mining industry. Working in conjunctionwith your choice of technical mining experts (or indeedDeloitte’s own Mining Advisory Services), we consider theimplications of key due diligence ndings on the nancialposition and prospects of the business and recommendpractical solutions to make the deal work.



11

Saving cost,improvingservice throughoutsourcing



12

Mining Shared ServicesChallenges mining companies faceThe mining sector is no stranger to boom and bust

cycles. The global nancial crisis has hit harder than mostmining companies anticipated. Many companies now ndthemselves in a position of increasing production costsand high capital commitments, with lower commodityprices. As a result, cost management has been set as a toppriority – not only as a way to offset softening commodityprices, but also in response to the ongoing high costs fordevelopment, materials and labour.

How does the Deloitte solution address thebusiness issue?The concept of shared services rests on three principles:• Standardisation• Consolidation• Re-engineering

In most mining companies, transaction processingactivities such as accounts payable and other supportservices are carried out from a number of different

locations, performing the work in a variety of ways andusing a range of systems.

Shared services allows companies to strip out the lowervalue transaction processing common to disparate

locations and bring it together in one site. Processes arestandardised, the people and technology are relocated toa single site and the work is re-engineered to bring it toworld-class standards.

Benets to your organisationThere are multiple benets for mining companies and theirback ofce staff in partnering with Deloitte:• Take advantage of economies of scale and thereby

reduce and control operating costs• Reduce time spent on non-core functions• Improve process ef ciencies• Improve business focus• Transfer risks to Deloitte and the SSC.• Free valuable management resources for

other purposes• Provide increased opportunities for existing staff• Gain access to best-in-class global practices.

Johan Theron

Tel: +27 (0)11 806 6436




13

Outsourced Recruitment SolutionsChallenges mining companies faceMining companies, similar to those in other industries faceever increasing challenges in the strategic talent attractionand retention arena. The very recent economic downturnunderscored the importance of strong, skilled leadershipand a resilient, energetic management team. Having theright talent on board and holding onto your most valuedand scarce skilled people, not only to maintain currentbusiness operations, but also to turn the tide, managechallenges and capitalise on opportunities, is paramount.

Finding and retaining the right people with the rightattitude, skills and experience is more critical than ever.

How does the Deloitte solution address thebusiness issue?RecruiTalent, the recruitment division in Deloitte offerssearch and selection services by a team of industryspecialists with both local and international experience.Recruiting the best is a key success factor in any

organisation. We partner with clients in understandingand fullling their exact recruitment needs, withdue consideration of appropriate experience, skills,qualications, and importantly, culture t.

RecruiTalent specialise in sourcing people with top talentin professional services from junior entry level to seniorexecutive leadership. We have successfully recruitedquality mining professionals for our clients in the miningindustry.

Our focus areas include sourcing of nancial staff andmanagement including:• Financial Managers and Executives• Chartered and Management Accountants

• Internal Auditors• Taxation• Accounts payable and receivable staff• Book keepers



14

We also source staff and management in:• General Management• Information Technology• Management Consultancy• Human Resources• Engineering• Project Management• Procurement Specialist• Change Management Specialist• Legal• Marketing• Personal Assistants• Data Capturers• Administration.

The Deloitte brand is a magnet for top talent. We havestrong strategic relationships and leverage our extensivenetworks for continuous access to top candidates includingpreviously disadvantaged individuals. We foster strong longterm client relationships with an in-depth understanding ofeach client and its unique requirements which assist us tocontinually provide potential “right-t” candidates.

Our ability to search for top executives is furtherstrengthened by our extensive networks and alumni (exDeloitte employees), database of qualied CharteredAccountants and other specialist skilled candidates. Wecommit ourselves to providing you with the best talentas well as support from our solid, knowledgeable andcapable service delivery team.



15

Benets to your organisation• Using the philosophy of “One Deloitte” we optimise the

multi-disciplinary capability of our rm to add value toour clients. We are in a unique position to leverage a farwider team of professionals and their networks, whererequired, in sourcing top candidates

• Sound track record of recruiting for a variety of clientsnationally in both the public and private sector

• A standardised and consistent recruitment process that isfully supported by our state of the art recruitment system

• An experienced and diverse team, which has specialistexperience in recruitment and selection

• Our processes are fair and non-discriminatory and complywith company policies and current labour legislation

• Our global and national footprint strengthens ourposition, as we are able to synergise with our local andinternational ofces, to draw on the best talent andnetworks in order to full your recruitment needs

• Ef cient service and turnaround times

• Highly competitive fees.

Anneke Andrews




16

Dealing withsustainability



17

Sustainable MiningChallenges mining companies faceAs an energy-intensive sector, mining companies will be oneof the hardest hit by increasing fuel tariffs, rising electricityprices, depleting fossil fuel reserves and forthcoming climatechange legislation. In order to be sustainable, miningcompanies need to start addressing these risks and preparingfor an emerging carbon and energy constrained economy.

How does the Deloitte solution address thebusiness issue?The Deloitte Sustainability and Climate Change Team canassist your organisation in mitigating sustainability andclimate change risks. Tools, methodologies and models havebeen developed to identify, manage and implement specicinitiative’s to create sustainable mines.

With every risk there is always an opportunity. At Deloitte,the opportunities will always be investigated so as to bestservice each client individually. Options such as carbon

emission reduction projects to generate revenue throughcarbon credits is one of the mechanisms considered.

Sustainability, apart from enhancing protability, can alsogenerate revenue for your organisation. Our team seeks tomaximise these opportunities in order to ensure that your

organisation is sustainable in the emerging carbon andenergy constrained economy.

Benets to your organisation• Identifying strategic imperatives to enable the business

to remain sustainable• Identifying sustainability initiatives that add value to

the business such as obtaining positive returns oninvestment to enhance operational efciency or revenuegrowth

• Improved investor and stakeholder perceptions• Market differentiation• Identifying speci c risks to the sustainability of your

organisation• Creating the roadmap to integrate sustainability into the

business going forward• Consideration of trends in the market place in which a

business operates• Benchmarking against key competitors

• Analysis of potential carbon market opportunities.

Peter Oldacre

Tel: +27 (0)11 209 6803


Duane Newman

Tel: +27 (0)11 806 5362




18

Safety AnalyticsTo say that safety in the South African mining industry is animportant issue, is an understatement.

It cuts a highly charged, politically sensitive swathe throughevery mining industry stakeholder group including, amongothers, the families of miners killed while at work, thegovernment, trade unions, human resources and labourrelations professionals, Boards, and shareholders.

Challenges mining companies faceSafety issues in South Africa are particularly complexgiven increasing cost constraints, the increasing depthat which mining operations take place, ageing facilitiesand a legacy of unsafe behaviour. Conventional miningmethods often take place alongside heavily mechanisedactivities, further increasing the risk of health and safetyincidents.

While signicant improvements in mine safety have been

made, the quest for zero-harm continues.

One thing is certain: A great deal more needs to be doneto improve mining safety, if tougher mining laws are tobe avoided. South Africa’s Mineral Resources Minister,went on record recently saying that government was

“very concerned about the continued carnage” on SouthAfrica’s mines, adding that South Africa may strengthenmining laws because companies are compromisingworker safety as they accelerate production, amid risingcommodity prices.

Ramping up production might be one businessimperative for mines right now, but there are also otherpressing business reasons to improve safety.

How does the Deloitte solution address thebusiness issue?Traditionally, the focus on improving safety in mines hasbeen on:• Training• Awareness Campaigns / Competitions• Safety orientated process optimisation• Implementing monitoring systems that gather and

report on basic safety information.



19

There is much more that can be learned from existingdata, however, by studying the underlying causes of andcontributing factors to workplace accidents - the how,where, when, and why they occur - and then applyingthat information to further reduce fatalities.

Deloitte does this by using advanced analytics, i.e. byapplying two statistical techniques; Predictive Modellingand Data Mining to produce a mathematical modelthat effectively segments and predicts the likelihood ofworkplace accidents as well as indicating the likely severityof those events. Through the Advanced analytics process,we are also able to identify contributing factors. Thismethodology can assist in addressing mining safety froma different angle. By making use of data and techniquesnot previously applied in this industry, Advanced Analyticshelps identify jobs, locations and processes that may carrya greater risk of injury or accident.

Derek Schraader

Tel: +27 (0)79 499 9046


Benets to your organisationAdvanced analytics puts company data to work bycombining traditional data sources of risk informationwith non-traditional data sources. The disciplinesupports enterprise cost containment, protability,and wellness strategies, along with efforts to lowerthe frequency and severity of workplace accidents.It also builds enterprise sustainability by increasingsafety, improving legal and regulatory compliance andpromoting corporate responsibility.

Additional benets include:• Increased productivity• Reduced nes as a result of improved compliance• Competitive advantage in recruiting and employee

retention• Healthier employees and reduced absenteeism• Improved employee satisfaction and morale.

In summary, our view is that there is an opportunityto leverage safety related data (traditional andnon-traditional data) more aggressively in order togenerate insights and models that can positivelycontribute to the quest for zero-harm.



20

Challenges mining companies faceRecent statistics by the Association of Certi ed Fraud

Examiners (ACFE) revealed that on average 6% - 10% ofturnover was being lost to fraud within large organisationstoday. The ACFE further highlighted that entities that failto protect themselves should expect to become victims offraud as more than 70% of fraud goes undetected.Effective prevention and detection processes is thereforeneeded to increase condence and morale of allstakeholders. One of the key mechanisms of frauddetection is the implementation of an outsourcedindependent fraud hotline, such as Tip-offs Anonymousfraud and ethics hotline service.

How does the Deloitte solution address thebusiness issue?We currently enable an organisation’s stakeholders(employees, management, suppliers and customers)to report fraud, dishonesty and unethical behaviour inan anonymous and condential manner without fearof recrimination. There are currently six mediums ofcommunication that include a unique Freecall 0800number, unique email address, post, website, facsimileand sms.

Tip-offs Anonymous



21

Benets to your organisationOur Deloitte Tip-offs Anonymous service:

• Acts as a powerful practical deterrent to dishonesty andinappropriate behaviour in the work place;

• Is designed to protect the assets, bottom line andreputation of organisations, both in the private orpublic sector;

• Is a simple, low cost but strong practical deterrent toworkplace dishonesty, inappropriate behaviour andunethical business practices;

• Protects an organisation from negative publicity andadverse disclosure to the media;

• Demonstrates an organisation’s commitment topromoting a culture of honesty, and integrity;

• Is a tangible corporate governance initiative that allstakeholders can embrace to promote openness andtransparency throughout your organisation;

• Effectively highlights risk areas and weak internalcontrol environments;

• Promotes an organisation’s risk management strategyand prole as well as that of the internal audit functionand audit committee.;

• Can be used as a barometer to measure unethicalbehaviour;

• Exposes undetected or unreported fraud, crime,non-compliance issues and collusion through

anonymous calls;• Embraces a recommendation of the King Reports on

Corporate Governance to “make available safe easilyaccessible channels to stakeholders”;

• Enables an organisation to comply substantially withthe provisions of the Protected Disclosures Act No 26of 2000.

Navin Sing

Tel: +27 (0)31 560 7307




22

Corporate Social InvestmentChallenges mining companies faceSocial Responsibility has evolved from being a business

afterthought to being a key consideration to any sustainablebusiness strategy.

In an already complex business environment, companiesoperating in South Africa are increasingly underpressure from government, investors, customers andsociety to consider the wider socio-economic impactof their operations and to credibly report on their socialperformance.

How does the Deloitte solution address thebusiness issue?A number of forces are shaping South Africa’s SocialDevelopment Landscape:• B-BBEE Codes of Good Practice, requires companies

to contribute 1% of net pro t af ter tax to socio-economic development, and 3% of NPAT to Enterprise

Development.• The JSE Social Responsibility Index (SRI) sets socialperformance criteria for companies seeking listing or SRIstatus on the index.

• Legislation – Government establishes ‘license tooperate’ conditions related to social contribution,particularly in certain sectors.

• Reputation drives companies to focus on socialresponsibility to inuence perceptions.

• The Global Reporting Initiative’s (GRI) and The KingIII vision is that disclosure on corporate governance,environmental, and social performance is ascommonplace and comparable as nancial reporting’simportance to organisational success.

Benets to your organisation• Reduced project implementation failure• Projects that support one or more business objectives• Information for SLP or SED Projects & Veri cation

Services is readily available• Improved project communication, coordination &

integration• Reduced project risks.

Mareza van Staden

Tel: +27 (0)82 375 0106


Mark Roux

Tel: +27 (0)12 482 0325




23

Getting the mostfrom yourtechnology



24

Challenges mining companies faceAre you facing tighter margins with information systems that lack theability to access your business information?

Does your business need a best practice mining specic solutionwhich can be managed effectively on your own at a low cost?

Deloitte can deliver a dramatically reduced total cost of ownershipsystem without any signicant disruption to business with the Miningin a Box solution which has been developed based on Deloitte’s many

years of experience in the mining industry.

How does the Deloitte solution address the business issue?Working in conjunction with SAP AG, our SAP Mining Practice hasdeveloped a pre-congured solution for the mining industry. Thisproven solution includes a fully pre-documented and pre-conguredSAP solution that can be rapidly implemented and adjusted to meetclients’ speci c needs. Notably, the solution incorporates SAP’s BestPractices for Mining, which was developed with extensive input fromDeloitte. By speaking the industry’s language, the solution providesmining companies of any size with a means to implement SAPfaster and smarter, using fewer resources and causing less business

disruptions.

Benets to your organisationDeloitte’s pre-con gured SAP Mining Solution can help your companyquickly establish a platform for growth. You’re up and running50% faster than conventional systems, plus, the software packagehelps you simultaneously address the operational challenges andcapacity constraints that your company could be facing during thesechallenging times and at all times provide you with the exibility you

require with an ERP system.

Pre-congured SAP Solutions

Frank van Niekerk

Tel: +27 (0)11 209 8028




25

Challenges mining companies faceIn addition to organisation wide risks there are the

practical software-related risks and concerns to bemitigated. Compliance with changing regulatory and legalrequirements is a constant and growing pressure.

Competitive use of newtechnologies and the speed

with which they can bedeployed is critical inattaining early moveradvantages.

How does the Deloitte solution address thebusiness issue?

Every application system (new or existing) has its ownunique parameters and requirements. That’s why ourapproach is practical, risk-based and modular – enablingus to tailor our approach to meet your specic needs.Our Application Integrity services include:• Application security• Business process controls• Interface and data migration controls• Compliance tools

Benets to your organisationWhether you are starting from scratch, building on anexisting software application or have sophisticated globalsoftware engineering capabilities, we can help take yourorganisation to the next level.

We bring specialised skills and experience to your business

applications environment.

Application Integrity

Cathy Gibson

Tel: +27 (0)11 806 5386




26

Challenges mining companies faceThe evolution of AMS is approaching an inection

point with cost no longer the sole focus. Forwardlooking IT organisations are starting to view applicationsmanagement as a platform for driving business innovationand value.

Organisations face mounting pressure to reduce cost anddrive greater ROI and a renewed focus is being placed oninnovation and rapid delivery. There is also heightenedattention to risk and regulatory environment andincreased expectations for quality. Services that are nottightly aligned with business objectives diminish the returnon application investments and innovation and continuousimprovement becomes disconnected from the IT supportdepartment.

Support issues are large,growing more complex, andtouch the entire business meaning that IT expense bases

are soaring but capital budgets for technology enabledbusiness innovations are constrained. Nearly two out ofthree IT dollars are now sunk into operational services.


Our Deloitte Application Management Services (AMS)practice delivers functional and technical capabilitiesacross a global platform to continuously deliver on clientspecic business objectives. We are relentlessly focusedon driving down costs, improving quality, and acceleratingvalue in every aspect of our services.

Our Application Management Services span the entirecontinuum from up-front advisory services throughapplication optimisation and innovation.

• Globally Delivery Network- A Global footprint serving our clients where they

work. Over 600 practitioners focused on AMS in theUS alone, combined with over 7 000 practitionersperforming AMS services worldwide.

• Services

- A full suit of application management servicesofferings - advisory through maintenance,optimisation and innovation.

Application Management Services



27

Benets to your organisationWe leverage deep expertise from our industry, technical

and functional competency centres to deliver differentiatedapplication management service results:• Industry: leveraging industry specic insights and

intellectual capital across 27 industry segments, allowingus to make better, faster, more informed applicationmanagement decisions

• Technical/functional: bringing to our clients marketrecognised expertise and deep partnerships with SAPand Oracle, allowing us to face off against our clientsmost complex, multi-dimensional application challenges.

• Technologies- A comprehensive coverage of outsourced

applications - information management, customapplications and ERP application, tools, techniquesand related disciplines

• Delivery Structure- An ability to provide the right resources at the right

price in the delivery modes and business modelsthat best meet our clients objectives

• People- A broad and deep bench of resources, spanning

technical, functional and industry domain expertisedifferentiated by a strong business acumen

• Methods and tools- A globally standardised methodology and

integrated out-of-the-box toolkit to accelerate thebuild, conguration, execution and realisation ofvalue from AMS

• Value Level Management- Tying the performance and accountability of the

AMS organisation to the objectives and businessoutcomes of our clients.

Mike du Toit

Tel: +27 (0)11 806 5449


Glen Krynauw

Tel: +27 (0)11 517 4688




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Challenges mining companies faceCXO’s want to and should know the return on

investment (ROI) of IT in their business. This informsfuture IT investment decisions as well as currentactions that may need to be taken in IT. It is alsoimportant to understand what the critical systems areto the business and whether sufcient focus, time andresources are being applied to these systems. It is alsoimportant to assess how these may be impacted by costrationalisation efforts. Other areas such as IT governance(which is receiving increased attention from shareholdersand the board as a result of recent legislation) andlicensing are also key to the CXO. How well aligned arethe business objectives with our IT strategy?


Our approach is a good component of an approachto IT governance. Our approach recognises that costoptimisation is a journey and our tool output providesthe rst step in that direction. The tool is alignedwith COBIT® (Control Objectives for Information andrelated Technology) and is facilitated through a half-dayworkshop. The tool has been developed in conjunctionwith Gary Hardy, an advisor to Deloitte and the ITGI(IT Governance Institute), a recognised leader in ITgovernance thinking and a key contributor to COBIT®.

Benets to your organisationThe tool output is designed to assist managementin achieving:• Cost effective management of IT assets• Well managed IT processes• Optimised use of human capital

IT Governance

Claude Martin

Tel: +27 (0)11 806 5496




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Exploring risk,extracting value



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Exploring risk, extracting valueRisk Advisory provides a range of services to help clientswith their risk management issues. This includes the

identication and prioritisation of enterprise-wide risks.Deloitte Risk Advisory offers clients an end-to-end solutionfor all their risk management needs.

Challenges mining companies faceNormally, Internal Audit practitioners follow a sample-based approach whereby a sample of a data population isselected and tested, as well as basic auditing conductedon information technology (IT) systems. Typically, theresults of these tests would form the basis for theInternal Audit report and opinion on the adequacy andeffectiveness of the internal control environment.

How does the Deloitte solution address thebusiness issue?Our approach draws on our global experience in themining and resources sector to ensure Managementand the Board have a clear view of how risks impactshareholder value and how data ‘paints a picture’ that youcan leverage towards your business growth objectives.Risk Intelligence allows us to jointly develop a sharedunderstanding of the links between shareholder value, riskand assurance, which means you get an Internal Auditthat delivers assurance that really matters to you. We call

this Internal Assurance.

The Risk Advisory suite of services that canassist you with your internal assuranceinclude:• Internal Audit• Governance and Risk Management• Data Analytics• Technology Risk Advisory• IT Audit• Forensics• Security and Privacy Services• License Compliance and Asset Management Solutions• Tipp Offs Anonymous

Benets to your organisationGood internal assurance gets you one step closer to acomplete combined assurance framework. We knowthat organisations make a considerable effort in the riskmanagement arena and we propose building on this aspart of our internal assurance programme, rather thanstarting anew. We build on and incorporate frameworksthat you may already have designed and implementedinto our approach and make the necessary amendmentsto avoid rework for all parties.

Sidesh Maharaj

Tel: +27 (0)11 806 5247


Paulo Nunes

Tel: +27 (0)11 209 8174




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Optimisingyour taxand legalposition



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Challenges faced by mining companies:The mining industry has been thrown into a realm of

uncertainty with the introduction of various mineral andresources royalty and resource taxes.

In addition to the legislative uncertainty in calculating themining royalty payable, mining houses are forced to keepabreast of the many changes in tax legislation regardingthe mining industry as well as staying focused on therunning of day to day business operations.

Compliance with the mining tax and the mining royaltylegislation, in general, has inevitably become a potentialtax mineeld.


Deloitte mining tax specialists apply their specic expertiseto corporate tax issues in the mining industry. Our mainexpertise lies in tax planning and the ability to assistwith preparing or reviewing tax returns and year-end taxaccruals.

In addition to the above, due to the complexities andmurkiness surrounding the calculation of the miningtax royalty payable by mining houses, our mining taxspecialists have:

• Developed a highly skilled knowledge base regardingthe interpretation of the controversial legislation aroundthe mining royalty; and

• formulated a means to assist with the calculation of theactual royalty payable.

Tax Management Consulting



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Suren Dharamlall

Tel: +27 (0)11 209 8569


Service Offerings:• Consulting;

• Compliance;• Mining Royalty Calculations;• Restructuring, including advice on implementation and

drafting of legal agreements;• Indirect Tax Advice;• International Tax Advice;• Tax strategy;• Tax technology and systems integration; and• Government Growth Initiatives.

Benets to your organisation:You will enjoy the distinct advantage of obtaining the verybest advice from leading professionals in each area of taxwho can all be found under one roof- from legal advisersto thought leaders who will strive to assist you to identifythe optimal nancial, practical and most tax effectivemechanisms that will see your company not only prosperbut ourish!



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Tax Efcient Supply ChainChallenges mining companies faceOne of the greatest opportunities to unlock value in the

mining industry is to plan across the entire supply chain.Since the major markets for African commodities includeAsia, the US and Europe, companies need to identifyefciencies beyond their own borders. This includes thecareful management of risks across different jurisdictions.

How does the Deloitte solution address thebusiness issue?Business Model Optimisation (“BMO”) enables companies

to obtain operating and tax efciencies. This includes foursteps:

Realign for business transformationOperational changes are usually required to move thebusiness model and the tax plan into harmony. Dening anew operating model to improve operating margins andgrow revenues in a tax compliant manner can generateincreased after-tax earnings and enhanced cash ows.Shifting components of the physical value chain to moretax-efcient jurisdictions is part of the solution, as is thestrategic relocation of intellectual property.

Recongure Information Technology (IT) systemsAs governance structures, supply chains, and other

parts of an enterprise realign to capture more value,the information systems that support those functionsmust evolve as well. As a result, the IT systems shouldbe recongured to support the new operating model. Inaddition, the IT function is itself a source of potential newefciency through centralization, shared service centers,and economies of scale.



35

Readying human resourcesBMO initiatives have human capital implications across

the organization. After all, moving functions and risksmeans moving people, and that can trigger leadershipchallenges, potential disruption to the business, andloss of talent. These challenges, which can also createopportunities, need to be managed carefully with acommand and control project management structure,strong communication plans, and dynamic changemanagement.

Re-organise legal, nance, and tax structureBMO goes beyond narrowly dened tax questions – butthose questions remain at the heart of any worthwhilesolution. A new legal structure and transaction owsoften result from a BMO transformation as a means ofmanaging tax and trade risks in the local countries as thelegal entity structure aligns with the new operating model.Finance aspects, cash ows, and customs duties andother indirect tax implications of the new business modelneed to be considered within the new management andreporting structure.

Benets to your organisationThe risks inherent in the mining industry present unique

opportunities for companies to reduce their effective taxrate. This can be done by aligning the supply chain in atax ef cient manner. Furthermore, careful considerationof the business model can overcome additional economicand regulatory challenges, such as liquidity shortages andwithholding taxes.

Louise Vosloo

Tel: +27 (0)11 806 5360


f



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Transfer PricingChallenges Mining companies faceThe mining industry poses some very specic challenges

from a transfer pricing point of view. South African mininggroups are often involved at more than one level in thesupply chain. For example, the group may both mine andbeneciate the commodity in South Africa. This can makeit very difcult to evaluate the protability of the SouthAfrican entity or entities.

In this scenario it is also necessary to determine the valueon which the Mining Royalty will be paid. Companies

would wish, as far as possible, to pay on the value of thecommodity before any beneciation.The global footprint of many multinationals in themining industry also presents challenges. It is necessaryto consider the pricing of sales to group companies inmultiple parts of the world. This is likely to mean that thepricing policies are very complex.

Meeting documentation requirements in multiple jurisdictions is also onerous.

A specic problem for ventures into Africa is the widerange of withholding taxes imposed by many Africangovernments.


The Deloitte transfer pricing team is part of a globalteam which has consistently had the highest numberof individuals (including individuals from SA) rated inthe Euromoney Guide to the World’s Leading TransferPricing Advisers. The SA team has extensive experience inpreparing OECD compliant documentation which satisesthe requirements of SARS and is readily adaptable to therequirements of other countries.

We have extensive experience in the mining industry.Apart from substantial documentation projects, ourassignments have included the following:• Benchmarking the sale to Europe of a valuable

by-product from mining operations• Working together with colleagues in the UK and Canada

to secure an advance pricing agreement (APA) betweenthe authorities of those two countries

• Advising on the SA transfer pricing implications ofa signicant restructuring of the supply chain of acommodity mined in SA.



37

Billy Joubert

Tel: +27 (0)11 806 5352


Benets to your organisationThe bene ts of using the SA TP team are as follows:

• A cutting edge SA practice with access to a world-widerange of specialists in the mining industry

• A proven record of successful and constructivenegotiations with SARS and with revenue authorities inother African countries (most recently, Botswana andMalawi)

• Extensive experience in the mining industry

L l Ad i S l i



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Legal Advisory SolutionsChallenges mining companies facePolitical and regulatory changes have long had a bearing

on mining companies. Regulatory compliance is notnegotiable and holds serious consequences if not fullled.Mining companies therefore need to continuouslyensure that new legislation is considered for impact oninvestment decisions and to ensure operations complywith the law.

Following the recent global nancial crisis, governmentinterventions and new legislation have reached new

heights across the globe, including Africa. Examplesinclude imminent data privacy law, new royalty andother resource tax legislation, tightening of permitting,beneciation, changes in labour laws and competition lawto mention a few.

How does the Deloitte solution address thebusiness issue?Through our Deloitte network of ofces in Africa and ourGlobal Legal Network, we provide advice to clients oncross-border M&A and regulatory requirements including:• Country reviews including political, economic, social,

technological, legal and environmental reviews andspecic environment of business assessments

• Market reviews focussing speci cally on competitionand regulatory assessments

• Regulatory reviews including sector speci c regulatoryenvironment assessments and general corporate law

• Due diligence assessments on potential acquisition and/ or joint venture targets

• Country speci c compliance offerings addressingtopics such as competition law, records management,electronic communication and transactions, labour law,royalty and social license requirements.

• Legal agreements including cross-border M&A,

expatriate employment contracts and generalcommercial agreements.



39

Dean Chivers

Tel: +27 (0)11 806 5159


Benets to your organisationDeloitte Legal is represented in 47 cities in 30 countries

throughout Africa. We therefore have on-the-groundknowledge of new legislative requirements ensuring that:

• Sound knowledge exists of the legislative requirementsand that the ease and cost of doing business is assessedbefore entering a country

• The impact of new legislation is assessed and addressedin terms of nancial performance or investment

• Companies keep abreast of the latest developments and

legislative requirements• Compliance with legislation and regulations• Proactive action is taken to reduce cost of compliance• Ethical risks to the company are understood and

managed appropriately.

C t t O ti i ti



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Challenges mining companies faceContractual provisions around pricing, rebates and

penalty rights are not always effectively enforcedmeaning that full value is not always extracted duringthe course of the enforcement of a contract.

How does the Deloitte solution address thebusiness issue?Contractual Value Extraction is an acceleratedprocess aimed at quickly identifying contractual clausessuch as price regulation, penalty implementation

or volume rebates with a view to establishing theextent to which costs can be reduced through betterenforcement of such provisions. The process includesdrawing nancial data and analysing this in light of agreedcontractual provisions.

Benets to your organisationOur Contractual Value Extraction Process will add value

to your business through cash improvement and skillstransfer, while simultaneously improving governance fromboth an administrative and negotiation perspective.

Contract Optimisation

Dean Chivers

Tel: +27 (0)11 806 5159


Records Management Solution



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Challenges mining companies faceA number of laws of general application require

businesses to retain certain records for certain periods inspecic formats.

Generally businesses retain records for the followingreasons:• In order to ensure legal compliance (prescribed retention

periods range from 3 months to 30 years)• Retain evidence (the use of email and evidence in

disciplinary hearings and litigation have increased

dramatically over the last few years)• For operational reasons

Failure to retain records subject to retention requirementsmay expose businesses to criminal nes, civil liability andreputational harm.


The Deloitte Email and Records Management Solutionincludes the following modules:• GAP Analysis Report• Training• Records Management Policy• Retention Schedule (a document detailing all retention

legislation applicable to a business, records subjectto retention requirements, retention periods andprescribed formats)

• Email Archiving Policy• Electronic Evidence Policy• Public Information Disclosure Policy• Policy maintenance and updates• Technology advice on compliance solutions

Benets to your organisationThe records management solution allows businesses tocomply with legislation and common law provisions whichindirectly require businesses to archive all outgoing emailfor at least three years.

Records Management Solution

Dean Chivers

Tel: +27 (0)11 806 5159




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Addressingtalentchallenges

Talent Development and Assessment Solutions



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Talent Development and Assessment SolutionsChallenges mining companies faceAs the mining industry ramps back up in response to

growing demand, talent shortages will become morepronounced. In Africa this is an even greater challengegiven the younger demographic prole, and limitedaccess to tertiary education compared to other parts ofthe world.

The already skilled workforce on the other hand, ismobile and has great bargaining power which mandatescompanies to think more creatively about talent.

How does the Deloitte solution address thebusiness issue?Deloitte has a far ranging set of human capital solutionsto address talent challenges.

One of these sets include our assessment and developmentsolutions which systematically and creatively close the gapbetween where a business needs to go and the talent theymust have to take them there by providing:• Competency-based recruitment and selection systems that

enable organisations to hire better people faster.• Training and development that helps improve leadership

and employee performance at all levels within the business.

Deloitte Consulting South Africa is the sole Africarepresentative of Development Dimensions International,

Inc. (DDI). We bring the deepest, broadest and freshestexperience, learning programmes and technology to thetable to help organisations develop their talent capabilityand the people they will need to successfully executetomorrow’s business strategy.

The DDI solution suite offers the following:• Selection solutions• Leadership development solutions

• Workforce development solutions• Customer service solutions• Performance management solutions• Succession management solutions• Assessment centre solutions.



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Benets to your organisationDeloitte works with you to connect your talent

development strategy with your business strategy to:• Pinpoint current and future business drivers• De ne how success will be measured• Identify gaps in the quality and quantity of talent

required to execute your business drivers• Pinpoint strengths and weaknesses in your current talent

management systems and capabilities• Deliver a solution aimed at closing your talent gaps.

David Conradie

Tel: +27 (0)11 517 4207


Remuneration and Incentive Design Services



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Challenges mining companies faceThe mining industry operates in a volatile, commodity

price driven environment in which experienced and skilledexecutives and management and operational talentare at a premium, are absolutely necessary for success,and yet are extremely mobile and susceptible to offersfrom competitors. Attracting, retaining and rewardingemployees for performance is a key strategic requirementin such an environment, particularly as company nancialand/or operational performance must prevail over, but canbe dwarfed by, the inuence of external factors. Balancing

and designing reward delivery mechanisms (guaranteedpay, annual incentive pay, and long term (share based)incentives becomes a challenge which requires balanced,experienced and authoritative support. The price of failureor sub-optimality is high.

How does the Deloitte solution address thebusiness issue?Deloitte brings its long and extensive, internationalexperiential base to bear in devising reward strategiesthat are best international practice and yet tuned to theoperational and strategic requirements of its clients. In theeld of incentives design it brings to bear the combinedservices of reward, tax, accounting, legal and regulatory

oriented experts and unashamedly looks for the optimalsolution for the client, that will survive the passage of time

and the vagaries of an uncertain future. Its knowledge ofthe mining industry is extensive and includes operationalas well as consulting experience.

Deloitte’s offerings extend into such elds as:• Reward philosophy and strategy & compliance with King

III, including;• Executive compensation design;• Assistance in drafting Remuneration Charters &

Remuneration Reports for inclusion in annual reports;• Performance Management & annual incentives design &

implementation;• New age share plan and long term incentive design and

implementation (including tax and legal implementation);• Employee share ownership plans;• Non-executive pay quantum and structuring;• Strategic advice and assistance to Remuneration

Committees.

Remuneration and Incentive Design Services



Creating value in mining .



Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited byguarantee, and its network of member rms, each of which is a legally separate and independent entity.Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte ToucheTohmatsu Limited and its member rms.

“Deloitte” is the brand under which tens of thousands of dedicated professionals in independent rmsthroughout the world collaborate to provide audit, consulting, nancial advisory, risk management, andtax services to selected clients. These rms are members of Deloitte Touche Tohmatsu Limited (DTTL), a UKprivate company limited by guarantee. Each member rm provides services in a particular geographic areaand is subject to the laws and professional regulations of the particular country or countries in which itoperates. DTTL does not itself provide services to clients. DTTL and each DTTL member rm are separate and

distinct legal entities, which cannot obligate each other. DTTL and each DTTL member rm are liable onlyfor their own acts or omissions and not those of each other. Each DTTL member rm is structured differentlyin accordance with national laws, regulations, customary practice, and other factors, and may secure theprovision of professional services in its territory through subsidiaries, afliates, and/or other entities.

© 2012 Deloitte & Touche. All rights reserved. Member of Deloitte Touche Tohmatsu

Designed and produced by Creative Solutions at Deloitte, Johannesburg. (803120/mar)

e-Learning Solutions



47

Challenges mining companies faceIn the mining industry the cost of training and thenumber of shifts lost due to training attendance are twoof the biggest concerns for leaders. On the other hand,bigger awareness of safety also highlights the need forhigh quality training. Leaderships challenge is to nd theright balance. In addition, employers and employeesneeds are often not met due to insufcient training anddevelopment programmes, which do not integrate withother forms of learning to accommodate the needs ofhighly diverse and busy employees.

How does the Deloitte solution address thebusiness issue?The value of training starts with people. Wepartner with organisations to help them achievetheir strategic objectives through their people bydeveloping and implementing world class learningand development strategies and optimising learningdelivery and management through proven adult learning

methodologies and approaches using innovativetechnologies, systems and processes. We have proventhat our methods not only save time, but are also the bestway to meet and prove compliance with Mine, Health andSafety Authority (MHSA).

Benets to your organisationWe assist in creating a new culture where knowledgeis treated as an asset by people and the organisationbecomes a lifelong learning organisation. This happenswhen the whole learning path is provided for with theoryand practical learning opportunities.

Learning with Deloitte becomes a driver of the businessstrategy, rather than a service, due to the alignment of thebusiness strategies.

e Learning Solutions

Leana du Plessis

Tel: +27 (0)12 482 0364




Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited byguarantee, and its network of member rms, each of which is a legally separate and independent entity.Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte ToucheTohmatsu Limited and its member rms.

“Deloitte” is the brand under which tens of thousands of dedicated professionals in independent rmsthroughout the world collaborate to provide audit, consulting, nancial advisory, risk management, andtax services to selected clients. These rms are members of Deloitte Touche Tohmatsu Limited (DTTL), a UKprivate company limited by guarantee. Each member rm provides services in a particular geographic areaand is subject to the laws and professional regulations of the particular country or countries in which itoperates. DTTL does not itself provide services to clients. DTTL and each DTTL member rm are separate and

distinct legal entities, which cannot obligate each other. DTTL and each DTTL member rm are liable onlyfor their own acts or omissions and not those of each other. Each DTTL member rm is structured differentlyin accordance with national laws, regulations, customary practice, and other factors, and may secure theprovision of professional services in its territory through subsidiaries, afliates, and/or other entities.

© 2012 Deloitte & Touche. All rights reserved. Member of Deloitte Touche Tohmatsu

Designed and produced by Creative Solutions at Deloitte, Johannesburg. (803120/mar)

creating value mining

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