PRESENTATION TO THE PORTFOLIO COMMITTEE ON

MINERALS AND ENERGY

24 OCTOBER 2007

CEF (Pty) Ltd incorp. EDC and NEEA

Chairperson – B MabuzaCEO - M Damane

100%SFF

ASSOCIATIONChairperson – B Mabuza

CEO – M Damane

100%Petroleum Agency SA

Chairperson – L MakatiniCEO – M Xiphu

100%iGAS

Chairperson – M DamaneCOO – M de Pontes

100%PETROSA

Chairperson – P MolefeCEO – S Mkhize

100% OPCSA

Chairperson – M DamaneCEO – P Coetzee

Central EnergyCentral EnergyFundFund

CEF GROUP CEF GROUP STRUCTURESTRUCTURE

49%Bannietor Mining

100%SANERI

Chairperson – M DamaneCEO – K Nassiep

PERFORMANCE MEASURES 2006/2007

Weight Target Achieved

7 7.0 7.0

Finalise participation agreements for 5MW landfill gas projects 7 7.0 7.0

- Obtain project approval for landfill gas

- Prepare project evaluation documents for internal approvals

41 41.0 41.0

Make Investment decision in respect to LSF project 15 15.0 15.0

- Apply for Mining licence

- Prepare a detailed market strategy document

- Finalise feasibility study

- Negotiate and finalise joint venture relationships

- Produce an implementation plan with financial indicators

Investigate utilising EyeSiswe's torbanite reserves 3 3.0 3.0

Make investment decision regarding biodiesel projects 8 8.0 8.0

- Sasol project

- PetroSA project

Obtain at least R3m from donor agencies for developmental projects 5 5.0 5.0

- Establish working relationships with at least two other agencies.

- Obtain R3m in grant funding for development activities and awareness

Build internal CDM expertise with a view to start trading in 2007/8 5 5.0 5.0

- Attend training/conferences

Contribute 5 MW towards South Africa's Renewable Energy target of 10,000GWH by 2013

Ensure long-term profitability of CEF (Pty) Ltd

PERFORMANCE MEASURES 2006/2007

17.0 17.0 17.0

Finalise at least 2 other developmental projects 5 5.0 5.0

- Continue feasibility studies

- Finalise plan for Basa njenjo magogo project

- Board approval

Finalise and accept at least 1 other project from "Commercial Projects under review" 5 5.0 5.0

- Progress feasibility studies for 1 commercial renewable energy project

Investigate the viability of Bio Fuels industry 5 5.0 5.0

- Perform desktop study together with IDC

- Participate in National Biofuels Task Team .

- Employ consultant to prepare biofuels task team report

- Finalise feasibility studies for ethanol

Partner with GTZ to identify feasible projects 2 2.0 2.0

- Agree terms of participation

- Identify at least one commercial biofuel opportunity

Invest in alternative and cleaner energy technologies that will improve the quality of life for low income households through more affordable and safer energy sources

Weight Target Achieved

PERFORMANCE MEASURES 2006/2007

17.0 17.0 17.0

Monitor performance of subsidiaries against board approved objectives 5 5.0 5.0

- Quarterly subsidiary board meetings

Review and approve long term plans and strategies 0.5 0.5 0.5

- Signed shareholders compacts

Communication Strategy within CEF, Group and External Stakeholders 0.5 0.5 0.5

- Appoint Public Relations Officer

- Develop and implement communication strategy

Provision of services by support functions to internal departments and subsidiaries 11 11.0 11.0

Manage investment in subsidiaries to ensure good governance and sustainabilityWeight Target Achieved

PERFORMANCE MEASURES 2006/2007

18.0 18.0 18.0

Oversee final implementation of Bethlehem Hydro 4 4.0 4.0

- Finalise power purchase agreement

- Finalise engineering and construction plan

- Board and management participation

- Ensure transfer of skills

Oversee Darling Windfarm Demonstration Project 4 4.0 4.0

- Finalise Power Purchase Agreement

- Finalise engineering and construction plans

- Board and management participation

Implement the Solar Water Heating Project in collaboration with UNDP/GEF as per Ministerial Directive 2 2.0 2.0

- Implement pilot phase

- Receive and house test rig at SABS

- Implement monitoring mechanisms for energy savings

- Report to Minister on project results

Project Implementation

Weight Target Achieved

PERFORMANCE MEASURES 2006/2007

Weight Target Achieved

Johanna Solar 2 2.0 2.0

- Obtain reserve bank approval and make investment

- Board participation

- Begin discussions with licence authority PTIP snd South African consortium

- PV road map for SA

Jathropha pilot project 3 3.0 3.0

- Negotiate NDA

- Appoint consultant

- Assess landowners readiness for the project

- Project steering committee participation

Biotherm 3 3.0 3.0

- Finalise discussions with PetroSA

- Investigate potential to increase equity stake

- Make investment decision

TOTAL 100 100.0 100.0

CEF GROUP RESULTS 2006/7 (R’m)CEF PETROSA PASA OPCSA IGAS SANERI SFF TOTAL 2005/6

-

-

-

2.7

-

63.5

(64.5)

1.7-

1.7-

1.7

(2.5)

9,162.3

(0.8)

(6,118.1)

7,689.7

(4,437.4)

3,252.3

866.5

(471.5)

263.5

(992.3

2,918.4(9.6)

2,908.8(92.9)

2,815.9

11.9

3,044.2

1,196.3

(464.5)

726.4

(1,156.8)

3,345.724.0

3,369.7(343.7)

3,026

11.0

2,827.83,015

Gross revenue - 8,951.8 70.1 17.5 - 123.7

Cost of sales - (6,118.5) - (0.4) - -

Gross Profit - 2,833.3 70.1 17.2 - 123.7

Interest received 231.0 869.2 12.5 - - 80.9

Finance costs (136.9) (297.8) - - (29.8) -

Other income 9.0 641.7 1.3 - - 10.9

Operating expenses (39.9) (993.8) (47.5) (11.8) (0.6) 1.3

Operating ProfitAssociate incomeProfit before taxTax

63.2-

63.2(8.2)

3,052.6(5.5)

3,047.1(317.9)

36.4-

36.4-

5.3-

5.3-

(30.4)29.5(0.9)

-

216.8-

216.8(17.6)

Profit/(loss) after tax

55 2,729.2 36.4 5.3 (0.9) 199.2

Consolidation entries

26.4 0.2 (75) 0.6 47.3 (7.9)

Total 81.4 2,729.4 38.6 5.9 46.4 191.3

CEF GROUP – 2006/7 RESULTS(contd)

CEF projectsTorbaniteSignificant progress on feasibility studyProject approach will lead to both oil extraction and electricity generationBasa Njengo Magogo program adopted to enhance clean coal use

Bio fuelsBiodiesel : 20million litre biodiesel project using canolaEthanol : CEF/IDC partnership ( Eastern Cape and Hoedspruit project atbankable feasibility stage)

Johanna SolarRSA investment decision made

Methane Gas projectsPetroSA refinery 4.1 MW project switched on;Developing a number of Municipal land fill gas projects

CEF GROUP – 2006/7 RESULTS(contd)

Energy EfficiencyCFL investment in assembling and burning lines

Darling Demonstration Wind FarmConstruction at advanced stage – switch on expected in January 2008

Nelson Mandela Bay MetroContractual agreements for landfill gas management, efficient street lighting, hydro, SWH and wind development

UNDP/CEF SWH ProjectPilot 500 stage completed – testing for energy savings in progress

Carbon trading business launchedNo risk approach that ensure full carbon value captured for RSA

PETROSA

Positive impact on revenues due to high crude pricesContinued focus on cost containmentAnnual Maintenance shutdownBrass exploration (R856 million)Capex focus on South Coast Gas Project (R1 135 million) and Brass Exploration (R87 million) R690m Dividend

IGAS

Significant progress on Coega LNG Power PlantRompco Dividends (R29,5 million)

PASA

Continued focus on role as Designated AgencyLicensing RoundRelinquishment of OP26Processing applicationsContinental Shelf Claim Project

SFF

Significant increase in demand for storage at SaldanhaProspecting Permits to AEMFCAEMFC subsidiary of CEF

OPCSA

Increased activity in Saldanha Bay due to increased demand for storageMarketing operational activities to Government Agencies

DORMANT COMPANIES

Liquidated:- Mosshold- Soekor E & PDeregistered- Enerkom- Enerkom ProductsOther entities required for business

CEF – THE FUTURETorbenite Project (Oil and electricity)BiofuelsDarling Wind FarmJohanna SolarBiomass/Landfill GasGellification/ Safer use of Paraffin ( Pilot in progress)Solar Water HeatersCDMEnergy EfficiencyCEF Sustainability (NMB Metro)SASDAAEMFC

PETROSA – THE FUTURE

South Coast GasGTL and COD Commercialisation using LTFTExploration for feedstock and non-feedstockRefining facilities New Fuel SpecificationsDownstream Opportunities

iGAS – THE FUTURE

Rompco Expansion Project StartedCoega LNG Regasification Plant to supply GAS to a Power Generation Plant for continuous electricity to the Eastern CapeGas Distribution Network within the Coega-IDZ Feasibility study of at least two gas transmission pipe lines

SFF – THE FUTURE

Obtain finality on strategic stock policy and implementManagement of crude oilEnvironmental liability at Ogies

OPCSA - THE FUTURETo be the recognised Oil Spill Response Company in South AfricaTo expand the market share to 60% in short term and 80% in medium termDepartment of Transport and SAMSAManage SFF environmental liabilities at OgiesEstablish a presence in Sub Sahara AfricaTo enter into agreements with Middle East oil producing countries whereby OPCSA will perform all pollution prevention and control services on their behalf in the long-termForm international alliances with other players in the field

SANERI – THE FUTUREEnsure long term health of energy research capacity in the country and assist in stimulating a culture of innovation in the energy research environmentEnergy Efficiency and demand side management- Assist to achieve national strategy of – 12% reduction in final

energy demand by 2015- Demand side management include load management The impact of energy use on the environment The role of energy in stimulating socio-economic developmentCleaner fossil fuel development, including clean coal technologiesRenewable energyAlternative energyEnergy planning and modelingEnergy policy research

SANERI – THE FUTURE (contd)Energy R&D Agenda

Develop a comprehensive energy R&D agenda for SA– Baseline study of existing research capacity– Flagship project development – Knowledge, Data and Project management system

development

Human Capital Development and TransformationEstablish Chairs of Energy Researche.g. Energy Efficiency, Energy Policy Research, Fuel cells & Hydrogen economy

Establish Renewable Energy & Sustainable Energy HubEstablished at University of Stellenbosch

Cooperative Energy R&D ActivitiesStrategic alliances with established research institutes

AEMFC▪ Confirm geological reserves

- Perform drilling and coal analysis- Retrieve/find or buy old borehole information

▪ Build resource-reserve database system- Develop a database of all boreholes (JSE listing

requirement)

▪ Apply for mining licence- Conclude BEE transaction - Complete a mining work programme- Complete a social and labour development plan- Complete environmental management programme report

(EMRP)

AEMFC (contd)Conclude BEE Equity Participation- Develop a policy/procedure to identify prospective BEE partners- Conclude shareholders agreement

Negotiate off-take agreements- Identify coal markets- Negotiate supply agreements

Resolve Xstrata Royal Payment Dispute- Submit application for a Declaratory Order or;- Attack the validity of Xstrata validity of mining permit and breach of

contract

Identify strategic equity investment (RBCT, coal, base metals, drilling cbm etc)- Develop a diversification strategy- Identify possible takeovers/JV- Perform Due Diligence