Necsa group corporate plan 2012

1. Necsa group corporate plan (2012/13-2014/15)

2. Introduction Mr. Don Robertson Acting CEO 2

3. Index Necsa�s Legislative and Policy Mandate Necsa�s Achievements in 2011/12 Key objectives of the Necsa Group Key Risks for the Necsa Group Budget Assumptions Government Grant Budget 2013 Government Grant Reduction 3

4. Index Necsa DoE Grant and Personnel Cost trends Necsa Corporation Budget Risks Group Revenue Graph 2012/13 Group Expenditure Graph 2012/13 Necsa Group Capital Expenditure Plan Necsa Corporation Revenue Graph 2012/13 Necsa Corporation Expenditure Graph 2012/13 4

5. Necsa�s Legislative and Policy Mandate

6. Necsa�s Main Functions (in terms of the Nuclear Energy Act, 1999) To undertake and promote research and development in the field of nuclear energy and radiation sciences and technology and .� to make these generally available. To process source material, special nuclear material and restricted material and to reprocess and enrich source material and nuclear material. To co-operate with any person or institution in matters falling within these functions. Also: Execute institutional responsibilities on behalf of government, e.g. operation and utilisation of SAFARI-1, decommissioning and waste management, international obligations. 6

7. Necsa in the Nuclear Energy Policy (2008) Necsa shall serve as the anchor for nuclear energy research, development and innovation in South Africa. Necsa shall be encouraged to participate in the uranium value chain. Government, through Necsa, shall undertake/investigate... the development of uranium conversion capabilities, the viability of developing its own uranium enrichment capabilities and simultaneously seek to obtain access to established uranium enrichment programmes, a strategy to develop nuclear fuel fabrication capabilities. Government�s intention is to�establish a modern nuclear technology industry including manufacturing and construction capabilities as well as services. 7

8. Necsa�s Achievements

9. Achievements Necsa Group revenue in the 2010/11 financial year amounted to R1.11 billion (including grants and investment income R1.66 billion). The group revenue for the 2011/12 financial year is forecast to be R1.66 billion. NTP Radioisotopes (Pty) Ltd, the SAFARI-1 Reactor and the Necsa MTR Fuel Department managed to maintain the Necsa Group in a strong position in the radioisotope market. During the 2010/11 financial year the NTP Group achieved sales of R869 million. The successful conversion of the SAFARI-1 reactor to low enriched uranium (LEU) fuel, together with the irradiation of LEU target plates for Molybdenum-99 production, saw NTP becoming the only company in the world with the proven ability to produce Mo-99 on a commercial scale using a fully LEU process. 9

10. Achievements Comprehensive feasibility studies relating to the re-establishment of nuclear fuel cycle programmes in South Africa was completed during 2011. Excellent relationships with most major international suppliers of fuel cycle technologies and products were developed. Significant capital investment is required if the vision of a future local fuel supply to the power reactor fleet is to be achieved. The Nuclear Skills Development Centre received accreditation from various SETAs and recognition as a Decentralised Trade Test Centre for the final trade testing of apprentices and is currently in strong demand. Necsa contributed to a range of policy making and public participation processes relating to the energy planning, nuclear energy R&D and related topics, and maintained participation in national and international collaborative programmes in the field of nuclear R&D and Generation IV nuclear energy systems. 10

11. Achievements The Necsa Visitor Centre was opened to the public in February 2011 and has been a big success in improving public understanding of nuclear science and technology (10 000 visitors are projected as at end-March 2012). The Necsa Group continued to demonstrate compliance to good corporate governance by receiving unqualified audit reports from the Auditor General. 11

12. Necsa Group Corporate Plan 2013-2015

13. Key Objectives of the Necsa Group Nuclear Power Cluster To progress with preparations for the development or demonstration of required nuclear fuel cycle processes and technologies. To achieve the necessary project targets for establishment of PWR fuel fabrication capabilities. To implement Pelchem�s strategy for growth and sustainability, including an increase of sales from R194m (2011/12 forecast) to R333m by 2014/15. 13

14. Key Objectives of the Necsa Group Radiation Science and Applications Cluster To maintain full operational capability of SAFARI-1 and implement the reactor�s ageing management programme. To perform a feasibility study on a multipurpose research reactor to replace SAFARI-1 at the end of its operational lifetime. To achieve the project targets for the establishment of an LEU fuel and Mo-99 target plate manufacturing plant. 14

15. Key Objectives of the Necsa Group Radiation Science and Applications Cluster cont. To grow NTP Group sales from R851m (2011/12 forecast) to R1068m by 2014/15. Necsa as Host of Nuclear Programmes Cluster To increase Necsa�s research, development and innovation outputs. To constantly improve SHEQ management performance. To achieve a sustainable salary bill within existing funding constraints. To maintain infrastructure at a suitable level. 15

16. Key Risks for the Necsa Group Misalignment between available funding and the role Necsa has to play in terms of its mandate; The unavailability of an appropriate skills mix to execute and expand Necsa�s core technical programmes; Ageing equipment and infrastructure as well as production plant availability; and Business sustainability and challenging global market conditions. It should be noted that the reducing trend of the Government grant allocated to Necsa over the past three MTEF budget processes, together with more challenging market conditions for its commercial subsidiaries, has increased the risk that Necsa will not be able to fully meet its core legislative and policy mandate. 16

17. Budget Assumptions � Exchange Rates 17

18. Budget Assumptions � Other 18

19. Government Grant Budget 2013 (Excl. VAT) 19

20. Government Grant Reduction Budget 2011 to Budget 2013 20

21. Necsa DoE Grant and Personnel Related Cost 21

22. Necsa Corporation Budget Risks 22

23. Necsa Group Revenue 2012/13 23

24. Necsa Group Revenue Analysis 24

25. Necsa Group Expenditure 2012/13 25

26. Necsa Group Capital Expenditure Plan 26

27. Necsa Corporate Revenue 2012/13 27

28. Necsa Corporate Revenue analysis 28

29. Necsa Corporate Expenditure 2012/13 29

30. Necsa Corporate Expenditure Analysis 30

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