Modern Mining July 2021

BULK COMMODITIES

but this will likely only take place in the future, as it remains the Afrimat operating style to take over and stabilise operations before attempting expansion,” Van Heerden elaborates. “With Nkomati and Coza coming on line, we expect to see a strong performance from the Bulk Commodities segment in this financial year. This will be further buoyed by the projected strong recov‑ ery from the Construction Materials and Industrial Minerals divisions,” says De Wit. Biggest deal to date More notably, Afrimat recently committed further to its diversification strategy by announcing its big‑ gest deal to date, the R650-million acquisition of the Gravenhage manganese mining right and associ‑ ated assets in the Northern Cape. In a statement at the time of the announcement, Van Heerden said that there were many positives to the acquisition, the first being that the group will be adding another commodity, manganese, to its diversification strategy within the Bulk Commodities segment, and the second being that this acquisition would propel Afrimat into the mid-tier mining space. The resource, adds Van Heerden, is well posi‑ tioned within Afrimat operationally as it is not dissimilar to its existing operations given the pro‑ cess, and is considered attractive in both size and quality of the resource. Gravenhage is a long-life, near-development manganese resource situated in the northern part of the Kalahari Manganese field approximately 120 km from Afrimat’s existing Demaneng iron ore mine. Current studies show an extensive life of mine in excess of 20 years. A Definitive Feasibility Study was finalised, confirming the technical and economic fea‑ sibility of the Gravenhage Manganese Project based on an initial open cut operation with the potential for subsequent underground mining. The resource and its significant potential have been well defined by continued exploration drilling. Van Heerden adds that Afrimat has ensured sustainability through diversification. “The success‑ ful development of Gravenhage will increase our scale in the ferrous-metal value chain and provide further exposure to foreign currency denominated earnings.” Afrimat has been able to successfully invest in commodities that generate a strong cash flow – cash that the group has in turn spent on making further strategic acquisitions to grow cash incrementally. “This approach has proved successful for us and will be applied to this acquisition. In turn, I am confident we can achieve growth of the group by ensuring focused execution of Gravenhage.” Operational synergies with the Demaneng iron ore mine are expected to be realised, and a plan is in place to accommodate logistics to extract man‑ ganese product from Hotazel to ports for outbound

Elsewhere, Afrimat is in the final stages of getting the Jenkins iron ore mine, part of the Coza acquisi‑ tion, up and running, with the mining licence having recently been approved. It is also expected that Jenkins will contribute to the group in the second half of the coming financial year. Product from this iron ore mine will initially be for the inland market. The acquisition of Coza included three mines, namely Jenkins, Driehoekspan and Doornpan, add‑ ing substantial potential to Afrimat’s iron ore and manganese operations in the Northern Cape. The high-quality resource, which is located adjacent to the company’s current Demaneng iron ore mine, affords Afrimat additional iron ore sources to extend the life of mine. Given the proximity to the existing Demaneng operations, leverage opportunities exist. The asset includes a possible manganese resource for fur‑ ther exploration, which is similar to Demaneng and again, synergies through the combination of these resources are possible. “Further expansion opportunities exist to increase the resource size at Driehoekspan and Doornpan,

Afrimat saw large profits from its iron ore business in the past financial year on the back of favourable iron ore prices.

20  MODERN MINING  July 2021