Modern Mining June 2020

as very attractive,” says Van Heerden. “Demaneng, for example, was regarded as too small for the big mining houses, and that’s the type of assets we find lucrative to us.” Further growth To further grow its Bulk Commodities segment, Afrimat has identified more opportunities in the iron ore sector. “We are looking at an opportunity to acquire additional iron ore assets in Northern Cape. This will significantly increase our reserves.”

Staying true to its diversification culture, Afrimat is also in the process of expand- ing its bulk commodities footprint into the anthracite sector, which Van Heerden regards as “a very interesting business space”. The company recently announced that it had approached Unicorn Capital Partners Limited (Unicorn) to acquire, subject to outstanding condi- tions and a formal offer being made, the remaining shares in Unicorn. Afrimat currently holds 27,27% of the issued share capital in Unicorn. It is envisaged that the remain- ing shareholding will be acquired in exchange for new listed Afrimat ordinary shares at a ratio of 1 new Afrimat share for every 280 Unicorn shares held. Afrimat has obtained irrevocable undertakings from 57% of Unicorn shareholders who have indi- cated that they will vote in favour of the scheme of arrangement. Unicorn’s primary asset, Nkomati Anthracite Proprietary Limited (Nkomati), mines high-grade anthracite, which positions it as a key supplier to the local market. The existing operations are both open pit and underground, with the current Life of Mine (LoM) for the open pit section estimated to be

demand for anthracite in South Africa. “Nkomati’s anthracite has the lowest sulphur impurities of all anthracite producers in South Africa, while its phos- phorus levels are on par with the best producing mines,” he says. “As an effective reductant, anthracite remains one of the cleaner fossil fuels used for smelting, particu- larly compared to thermal coal, which makes it more attractive to users.” Van Heerden reiterates that this acquisition will afford Afrimat another product with unique proper- ties, pricing structures and a fit into Afrimat’s core competencies. Opportunity abounds Van Heerden believes that opportunity tends to come at the most unforeseen times, and has always maintained that “it’s always the best time to acquire a business at the bottom of the business cycle”, some- thing Afrimat has done well over the years. He believes that a period of volatility like this one, given the current downturn in the mining sector as a

Afrimat has identified an opportunity to acquire additional iron ore assets in the Northern Cape province of South Africa.

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Despite the effects of the lockdown, Demaneng is once again producing at 100%.

nine years, with the underground portion’s LoM being in excess of 20 years. There is currently a total managed coal resource of 41-million tonnes and a total managed run of mine (ROM) coal reserve of 5,9-million tonnes. The transaction, says Van Heerden, accords well with the group’s diversifica- tion strategy and will open up an additional product line to Afrimat’s customers as well as add to the composition of the compa- ny’s Bulk Commodities segment. “We are of course very familiar with open-pit mining operations, and while we understand that underground mining of anthracite comes with its challenges, we have completed numerous assessments to ensure the safe mining of the anthracite using precise, technical methods.” Van Heerden adds that there is good

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