This document discusses a plan for a tire cutting project in South Africa between GC Tire, Redisa, and mining companies. Redisa is responsible for facilitating tire recycling and has approved the GC tire cutting machine project. The proposed business model would have Redisa sponsor a BBEE company to obtain a GC machine under license and handle tires. This would help Redisa meet recycling requirements while generating income and improving mining companies' sustainability scores. Next steps include finalizing the business plan and obtaining approvals from Redisa and mining companies like Anglo American.

1. GC Tire Cutting Project – South Africa
JOHANNESBURG, 28/11/2013

2. Facts:
1) South Africa has a National Environmental Management Waste Act (No.59 of
2008)
2) South Africa has a Waste Tyre Regulation (No.31901 of 2009)
3) Minister of Water and Environmental Affairs has approved on November 29,
2012 the Recycling and Economic Development Initiative of South Africa
(REDISA) plan that embraces the waste hierarchy principles,
4) REDISA is a non-profit organization and has a focus
1) to organize the collection of all used tires from distribution and historical waste
2) to create jobs for Previously Disadvantaged Individuals (PDI)
3) on BBEE and majority black ownership
4) on reporting to the Minister
1) National aggregated numbers and tons of tires put on market
2) National aggregated numbers and tons of waste tires collected, used for recycling, energy
etc.

3. Facts:
The Minister, by law, puts the responsibility of taking used tires out of the environment back
to the manufacturers  Redisa takes over that task!
REDISA has started in October 2012 to collect a fee of ZAR 2.30 / kg on locally produced and
imported tires following the tariff codes, including earth mover tires for mining, construction
and ports,
REDISA is responsible for facilitating tyres recycling, for tyres sold since 01st Oct 2012, within
a maximum of 5 years (including historical waste tyres); support & make sure as many tyres
as possible are recycled  REDISA = approver + facilitator + sponsor
Mining companies had to register their historical waste + provide a plan to get rid of them
 deadline is already passed = pressure
It is by law compulsory for Mining companies to deal with REDISA and be approved before
implementing any recycling solution

4. Action Plan:
1. Visit to South Africa in March 2013 by Arthur Chaumuzeau (GC/AIM Mkg), objective:
1. preparing meeting LPGC Mining with Redisa,
2. meeting Anglo American on recycling,
3. Informing local team on GC Tyre Cutting machine and project
2. Visit to South Africa in April 2013 by Marc Evangelista, Francois Vian and Karl de Quick
to:
1. Meet Redisa on GC Tyre Cutting project
2. Instructing local team on further Action Plan
3. Potential business model proposed to Redisa, based on conclusions GC/AIM Mkg,
conclusion #1: we should not sell machine but provide under licence; the licence would be
calculated to cover REDISA fee and cost machine.
conclusion #2: whatever the business case, we need to involve REDISA & cooperate

5. Action Plan:
conclusion #3: choice of partners will be KSF#1 and the most difficult part of the project
conclusion #4: AA is the best target even if we may face disagreement on business model
conclusion #5: location will be KSF#2  must be as close as possible of AA sites
conclusion #6: one machine won’t be enough, even only for 1 Mining Cie  need for more
production capacity
REDISA is under time pressure: they have 18 month to implement an operational solution
(since 01st Dec 2012  mid 2014)
Schedule of potential business model

6. benefit 2
= avoid CAPEX
benefit 1 = cover REDISA tax
POTENTIAL BUSINESS MODEL
REDISA
MICHELIN
• Provide machinery
under licence
• Know How & training
• Define commercial
policy
• Sponsor up to 50M ZAR
• Guarantee waste tyres capacity
• Guarantee downstream capacity
• Facilitate with BBEE fund
• Organize transport
• Provide Official Approval
CUTTING
ENTITY
• Run operations
• Apply MI commercial policy
• Mini 51% BBEE funded
PR
Joined national
& international
PR communication
AA
Improve MTCSA score card
CSR opportunities
AA RECYCLING
ENTITY
* LICENCE FEE CALCULATED TO BALANCE REDISA ECO TAX
** ENTRY FEE CALCULATED TO COVER PART OF MACHINE CAPEX / REST = LOAN FROM REDISA
benefit #3
= get a
competitive
advantage
benefit #4
benefit #5

7. Details “potential business model”
1. Redisa to advise on creation BBEE Company, no financial involvement Michelin,
2. Redisa to provide BBEE Company an interest free loan for up to 50 million ZAR (3.7 m
Euro),
3. BBEE Company to pay “entrée fee” to Michelin for 1 machine at 1.75 million Euro, we
don’t sell machine! No Capex Michelin!
4. BBEE Company to pay Michelin for each kg handled tire by GC tire cutting machine a
license fee of ZAR 2.30 / kg ,
5. BBEE Company will have income from Mining Company for each handled tire, Redisa has
access to historical waste,
6. BBEE Company will have income for selling end product, Lafarge or to recycle factory
(energy, Pyreco facility etc.)
7. As Michelin is providing unique “know how” and is training employees to operate, under
“statement 003” of new BBEE rules, MTCSA improves BBEE score card,
8. Potentially, MTCSA to host BBEE Company organization at office Clear Water Estate

8. Next steps:
1. Organize visit for Redisa to Brazil for pilot machine, (February 2014)
2. Adapt organization MTCSA to accommodate such project
3. Quantify scrap tyres quantity per site per company (AA/BHP/XSTRATA)
4. Map AA/BHP/XSTRATA mines and define best locations, priority AA,
5. Build business plan
1. Planning, installation, ramp-up
2. Risk assessment long term
3. Reporting, money streams, contracts
6. Present to REDISA and agree on financial support
7. Specific next steps for AA:
 Confirm commercial launch Redisa system
 Choice of priority on location (Mogolakwena, Sishen, Witbank or Venetia)