Tyre-/Plastics Processing South Africa Introduction and Overview of innovative, new technology Global Economist Forum, Bloemfontein 29 – 31st, October 2013

Tyre-/Plastics Processing South Africa Technology-Concept by: Martin Walzer / C4 Solution AG, Switzerland Presentation by: Douglas Lund / Benchmark Construction & Development, South Africa

Environmental problems

South Africa is taking action

What is REDISA REDISA is the initiative to organize and collect old tires Producers and importers are commited to pay R2,30/kg on new tires sold REDISA provides no technical solution for processing old tires waste into worth is the purpose – not the solution

REDISA plan for old tires

Our waste into worth business model consisting of 2 Units: UNIT 1 -Recycling of tires to rubber chips /steel -Recycling/cleaning of plastics to chips UNIT 2 -upgrading – refining mixture of rubber/plastics to fuels = worth

UNIT I - Recycling of tires in detail Car tires / truck tires / ML tires From old deposits or directly from market (REDISA) De-beading and cutting ML-tires and big truck tires Processing rubber chips <20mm (fibers included) with innovative technology separating steel from rubber completly Cleaning steel wire and pressing to briquets

Recycling of plastics For this business model we assume to purchase recycled plastics from market Plastics chips <20mm for use in refinery

UNIT II - Refining Innovative technology to refine rubber (60%) and plastics (40%) to clean fuels High conversion rate (~85%) to useable products Output of clean products according to industry specifications kerosene-optimized process due to good hydro-carbon-structure of rubber/plastics mixture (up to 60% kerosene potential)

UNIT I - tire recycling tpy

How it works - UNIT I tire recycling Sorting / Preperation debeading Steel (compacted to briquets) rubber chips <20mm fibers rubber chips <20mm fibers Storage ML tires Truck tires > 140cm cutting Sorting / Preperation ML tires Truck tires < 140cm Shredder stage 1 Shredder stage 1 Shredder stage 2 Shredder stage 2 Steel separating Steel separating Steel cleaning Steel cleaning Steel compacting Steel compacting

machinery tire recycling

Steel processing

4-5 to/h Unit

Tire recycling / balance sheet

Tire recycling / product yields

UNIT II - refinery ART = advanced refining technology tpy

UNIT II - ART = advanced refining technology This technology is designed to refine bio-feedstock and waste materials containing hydro-carbons like rubber and plastics. 90% is common refining technology you will find in crude- oil refineries in similar layout. The innovation in this process is an upstream plant component called reactor to convert and vaporize the raw materials. Feeding the reactor is required to be liquid product, depending on used raw materials the pre-processing has to be adjusted.

ART – layout The overall system, the layout and implementation of processes is made as kerosene-optimized the yield and kerosene potential of refining a mixture of rubber and plastic (mainly PE/PP) can be relatively high. Reasons are: Very positive relationship between carbon and hydrogen No or very little oxygen in the raw materials Favorable molecular structure of the raw materials, especially plastics PE/PP mixed with rubber Low aromatic content of plastics cheap places to break up the molecules

How it works - UNIT II refining Pre-processing Rubber chips plastics cleaning Carbon black silicats ZnO anorganics, dirt, etc. Gas gasoline Diesel fuel oil LCO Diesel fuel oil LCO kerosene fraction kerosene fraction HCO – therm. Gas – therm. polymerization olefin treatment Further treatment (merox, etc.) Jet Fuel A-1 ASTM D1655 Jet Fuel A-1 ASTM D1655 Petrol 95octane hydro treatment LCO Fuel Oil LCO Fuel Oil

balance sheet and volume of sales

Market data Imports and exports Kerosene (Jet A-1) and petrol are very valuable products with high and stable demand. SouthAfrica imports more JetFuel and petrol than it exports.

Market data JetFuel consumption Total JetFuel consumption in 2010 was millions of litres. The production capacity of this planned refinery is 82 millions of litres, which represents approx. 3,5% market share.

Market data Demand / refining capacity balance

Market data JetFuel price analysis and history

Market data JetFuel price analysis and history

Financial result Investment Overview and profit calculation

UNIT I tire recyclingplant tpy Investment overview The estimation of the total costs, running costs of the plant is based on the experience building and running existing plants in Europe. In this overview is included: the necessary planning (basic and detail engineering) permit application and engineering required by authorities whole machinery and plant control unit delivery, insurance, installation, commissioning tpy tire recycling unitEURZAR tire recycling plant R land, administration building, facilities R miscellanous (startup, product stock, etc.) R total investment tire recycling R

UNIT I tire recyclingplant tpy Financial result purchase of raw materials EUR / tonZAR / ton car tires- 25,85R -310,00 truck tires- 25,85R -310,00 ML tires 0,00R 0,00 product sales EUR/tonZAR / ton rubber chips 80,00R 959,39 steel 70,00R 839,47 0,00R 0,00 statement of incomefigures in thousands EURZARmargin sales revenue R operating expenses 7.015R raw material R operating income 5.701R ,8% - depriciation 1.572R amortization 1.132R operating income II (before interest+taxes) 2.997R ,3% - financial expense 993R earnings before company tax 2.004R ,6% - company tax 561R net income 1.443R ,1%

UNIT II ART refinery tpy Investment overview The estimation of the total costs of the plant is based on the experiences from refinery construction, supported by the recent work on another project with similar processing capacity. In this overview is included: the necessary planning (basic and detail engineering) permit application and engineering required by authorities plant control unit, MSR-T steel construction, pipline construction, etc tpy ART refineryEURZAR refinery R land, administration building, facilities R miscellanous (startup, product stock, etc.) R total investment refinery R

UNIT II ART refinery tpy Investment in detail sectionEURZAR pre-processing and cleaning R reactor and peripheral R distillation R olefin-reduction R LCO hydrogenation R polymerization plant R tank storage and loading R H2 section (external/own production) R energy infrastructure, building services R infrastructure general R site specific work R optimization and layout unit R estimated cost refinery R

UNIT II ART refinery tpy Financial result purchase of raw materials EUR / tonZAR / ton rubber 80,00R 959,39 plastics 150,00R 1.798,86 product sales USD / tonZAR / ton Kerosene (Jet A1)$890,00R ,24 Gasoline$850,00R ,54 HCO, LCO$420,00R 5.036,81 Gas$0,00R 0,00 Coke, Loss$0,00R 0,00 by-products carbon black$0,00R 0,00 zink-oxid ZnO 0,00R 0,00 sulphur (sulphur compounds)$0,00R 0,00

UNIT II ART refinery tpy Financial result statement of incomefigures in thousands EURZARmargin sales revenue R operating expenses R operating income R ,4% - depriciation 5.118R amortization 4.647R operating income II (before interest, taxes) R ,8% - financial expense 3.706R earnings before company tax R ,9% - company tax 4.172R net income R ,2%