Modern Mining June 2020

BULK COMMODITIES

Afrimat sets its eyes on bulk commodities In the recent announcement of its record set of results, Afrimat noted the growing importance of its Bulk Commodities division to the company’s overall business. CEO Andries van Heerden tells Munesu Shoko that Afrimat sees the mid-tier mining space, especially in bulk commodities, as highly attractive, and the company is cash positive to make further investments in new assets to grow the division. The move has been set in motion with the intended acquisition of new iron ore assets and a company that owns a high-grade anthracite operation.

L eading open-pit mining com- pany providing industrial minerals, commodities and construction materials, Afrimat, recently released full-year results for the year ended 29 February 2020, reporting a record set of results for the second-year running, with group revenue up 11,4% to R3,3-billion and an operating profit margin of 18%. CEO Andries van Heerden says the

principally due to an improvement across all three business segments, including an excellent perfor- mance by the Bulk Commodities segment. Growing significance Talking of the Bulk Commodities segment, Van Heerden says its establishment following the 2016 acquisition of the Demaneng iron ore mine, previ- ously known as Diro Manganese Proprietary Limited and Diro Iron Ore Proprietary Limited, the segment is continuously becoming a significant part of the business. The Bulk Commodities segment delivered an exceptional contribution to the results, producing 31,4% of the revenue, compared with 28,9% the previous year. The operating profit of this seg- ment increased by 59,8% from R201,3-million to R321,7-million as a result of an increase in volumes and favourable pricing across the year. This trans- lated into an increase in the operating margin from 29,5% to 31%. “We grew our volumes at Demaneg by 34% year-

record results are a result of a healthy entre- preneurial culture, supported by the company’s diversification strategy and consistent efficiency improvement initiatives. This resulted in improved earnings generated by all the company’s three operating segments – Bulk Commodities, Industrial Minerals and Construction Materials – contributing to record results in the face of a difficult economy. External revenue improved by 11,4% fromR3-billion to R3,3-billion. Operating profit increased by an impressive 27,5% from R471,2-million to R601-million,

Andries van Heerden, CEO of Afrimat.

The Bulk Commodities segment, consisting of the Demaneng iron ore mine, delivered an exceptional contribution to Afrimat’s results, at 31,4% of revenue.

on-year. This was complemented by favourable iron ore prices, which grew by almost 14% year-on-year,” he says. Speaking to Modern Mining , Van Heerden says while the company remains diversified, with a strong footprint in its traditional Construction Materials and Industrial Minerals busi- nesses – which saw an increase in operating profit of 22,5% to R95,6- million and 1,2% to R192,4-million respectively – Afrimat finds the mid-tier mining, especially in bulk commodities, highly-attractive. The company sees a lot of potential in those assets deemed unattractive, mainly because of their size, to the big mining houses. “We see the mid-tier mining space

14  MODERN MINING  June 2020