Hilton Tarrant: Petmin's executive chairman Ian Cockerill is with us in the studio. Ian, results for the year to the end of July 2010 out today. The comparison of your numbers, though, distorted by that sale of Springlake. On a normalised basis, how does revenue compare?
Ian Cockerill: Well, on a normalised basis earnings are up 5% year-on-year - so if you exclude Springlake. Many people have asked me today why we decided to sell Springlake, and simply because, Hilton, Springlake is a mature asset. We saw limited upside potential, it was an underground operation, high volume, low margin, and that really doesn't fit the Petmin franchise. We are looking to be positioned into better quality, long-life assets with good margin, low positioning on the cost curve, as well as with upside potential. And really the sale of Springlake has enabled us to improve our gross margin from 27% in previous years to 37% this year. So yes, it shows nominally that our earnings were down year on year, but we've got a much higher quality asset base from which to work. We are able to take that money from the sale, invest it as you can see in the expansion of Somkhele, and that will enable us to double the size of Somkhele over the next 12 to 18 months.
Hilton Tarrant: That anthracite business, Somkhele - are you pretty much at peak production at the moment?
Ian Cockerill: Well, we're at peak production with the existing structure, hence the need for the R120m expansion. What that will enable us to do is to process just over 2m tons of one ... material a year, which will then produce a million tons of saleable product, which is double where we are now.
Hilton Tarrant: Beyond the capex expansion on both that project and your silica side of the business, where are you looking for growth?
Ian Cockerill: Well, certainly growth is a very important part of the Petmin business. We have decided that we want to focus our attention on what we refer to as infrastructure-related commodities. Specifically for us that would be in the metallurgical coal space, ferrous, copper specifically. We are looking both domestically, regionally and we've also looked at one or two opportunities further afield.
Hilton Tarrant: In terms of operating in South Africa, are you feeling any constraints within the country? There's been a lot of murmuring around the certainty around mining rights, for example. Is that top of mind at the moment?
Ian Cockerill: Well, look, we've converted our mining rights. On our current mining operations we have new-order mining rights, we've got all our prospecting rights in place. But I can understand that in some quarters there is some concern, and I think certainly the moratorium that has been imposed by the minister - if that moratorium is used sensibly and can bring some order, as there appears to be a the moment huge levels of uncertainty, then it has to be a good thing.
Hilton Tarrant: Petmin's executive chairman, Ian Cockerill. A maiden dividend declared today - 6c/share, 4c out of earnings and 2c I guess special dividend from the sale of Springlake.
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