Modern Mining December 2022

IRON ORE

Afrimat’s diversification strategy underpins its success

Mid-tier miner Afrimat’s diversification strategy continues to unlock value and success with the company advancing its latest acquisition – the Glenover Phosphate operation, which consists of rare-earths, phosphate and vermiculite, and posts yet another successful set of results. By Nelendhre Moodley .

A frimat comprises four operating units – Construction Materials, Industrial Minerals, and Bulk Commodities and the group’s latest addi tion, Future Materials and Metals, which has expanded Afrimat’s product offering and national footprint. Financial success Delivering Afrimat’s interim results for the six months ended 31 August 2022, CEO Andries van Heerden says that strategic initiatives contributed positively to performance in the first six months of the financial year. These included the successful commissioning of the Jenkins iron ore mine, the turnaround of the Nkomati anthracite mine, and the Group’s continu ous improvement of existing operations. Group revenue increased by 7,2% fromR2,4-billion to R2,6-billion, while operating profit decreased by 12,1% from R582,8-million to R512,2-million, resulting in the operating profit margin settling at 19,7%. “Diversification, cost reduction and efficiency improvements remain the cornerstone of our strat egy and we used these to counter economic impacts, which are beyond our control,” says Van Heerden. Leveraging off Future Materials portfolio In December last year, the JSE-listed entity acquired Glenover Phosphate, located 90 km northwest

“Diversification, cost reduction and efficiency improvements remain the cornerstone of our strategy and we used these to counter economic impacts, which are beyond our control,” says Van Heerden.

Afrimat CEO, Andries van Heerden.

of Thabazimbi in the Limpopo Province, for R550-million. Speaking to Modern Mining on the sidelines of the interim results presentation, Van Heerden said that Glenover diversified Afrimat’s exposure wider than ferrous metals and aligned to global trends. “We have the Construction Materials business which is currently not in a great space and the Industrial Minerals business – a small business that’s ticking over nicely. However, the big driver of profits at the moment is the iron ore business, but it remains highly exposed to a single point risk with capacity constraints on the logistics systems. Our strategy is to enter new areas of opportunity where we can use the expertise in markets that don’t have a high risk concentration, which is what makes Glenover so exciting.” The Glenover acquisition offers Afrimat threefold exposure – fertiliser for agricultural applications, vermiculite in the construction of fire-retardant partitioning boards and in horticulture as a growth

Afrimat’s Demaneng Mine.

14  MODERN MINING  December 2022