Modern Mining November 2020

footprint in its traditional Construction Materials and Industrial Minerals businesses, Afrimat is increas- ingly finding the mid-tier mining segment, especially in bulk commodities, highly-attractive. The company sees a lot of potential in those assets deemed unat- tractive, mainly because of their size, to the big mining houses. To further grow its Bulk Commodities seg- ment, Afrimat has added Coza Mining to its iron ore portfolio. The acquisition includes 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’. Most importantly and in line with Afrimat’s dedi- cation to diversification, iron ore from Coza will now also be sold into the inland market, with an off-take agreement with Arcelormital already in place. “This means that no additional pressure is placed on our current export allocation on the Saldanha iron ore rail line, although we will welcome any additional capacity allocated to us on this line.” The total purchase consideration is R300‑million in cash tranches, dependent on approvals from authorities such as the Department of Mineral

favour” has allowed Afrimat to thrive in the face of the current challenges. “Three things worked in our favour. Firstly, the diversification strategy is proving to be the cornerstone of the business, more so dur- ing the pandemic where our traditional Construction Materials and Industrial Minerals businesses endured a difficult time, with the Bulk Commodities segment offsetting the slow growth in the two other segments,” he says. Secondly, the company’s values-based entre- preneurial culture is paying dividends. Thirdly, a very strong balance sheet is enabling growth. Using the cash generated by successful operations, the company has reduced its debt, while deploying the surplus cash to making further acquisitions, which in turn leads to further diversification, thus driving fur- ther growth. Afrimat has gone into the downturn with a strong balance sheet, which has enabled further acquisi- tions in the bulk commodities sector. The company recently concluded a deal to acquire Coza Mining (iron ore) and is pursuing the acquisition of Nkomati mine (anthracite), which will further reinforce its diversification strategy. Coza Mining deal Speaking to Modern Mining , Van Heerden says while the company remains diversified, with a strong

The upside of Nkomati is that it is one of those high-quality reserves that the market demands and is willing to pay a premium for.

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