Modern Mining November 2020

sector, which Van Heerden regards as “a very interesting business space”. The possible acquisition of Nkomati mine, says Van Heerden, gives Afrimat access to a new min- eral with a different profile and cycle, thus further diversifying the Bulk Commodities segment. “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. Operationally, however, Nkomati is a business we will need to turn around. We have previously turned around loss-making businesses into strong cash cows, and leveraging this expe- rience, we are well aware that there is need to be careful and precise in execution,” he says. Commenting on the state of the

Key takeaways  Afrimat’s Bulk Commodities segment made a solid contribution to the group’s interim results for the six months ended 31 August 2020, delivering growth of 135,8% in operating profit to R325,8-million  The excellent performance was largely due to favourable iron ore pricing and the weaker rand during the reporting period  Afrimat went into the COVID-19 influenced downturn with a strong balance sheet, which has enabled further acquisitions in the bulk commodities sector  To further grow its Bulk Commodities segment, Afrimat has added Coza Mining to its iron ore portfolio. The acquisition includes three mines, namely Jenkins, Driehoekspan and Doornpan  Afrimat is in the process of expanding its bulk commodities foot- print into the anthracite sector with the possible acquisition of Nkomati mine In conclusion, Van Heerden says while the company has enough fund- ing to take advantage of several opportunities, there is need for the right skills to execute these projects. “You need three things to be success- ful in business: a good opportunity, the right people and the necessary funding. The most difficult part is finding the right people. I believe we have sufficient funds on our balance sheet and many opportunities, but the challenge is now making sure that we have the right ‘jockeys for our horses’,” concludes Van Heerden.  Nkomati transaction, Van Heerden says as a large creditor, Afrimat had applied for business rescue proceedings, which have been granted by the court, and had received shareholder approval to proceed with the scheme of arrangement that had been proposed. “We believe that the competi- tive advantages of geographic location and unique metallurgy – some of the critical criteria we use when evaluating any potential – are in place at Nkomati,” he says. “This, coupled with the high market demand for high quality, clean burning anthracite, will add tremendous value to our Bulk Commodity diversification strategy. High-quality anthracite remains a sought-after product by large smelters in South Africa for metals smelting, fabrication and furnaces,” he adds.

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