Modern Quarrying Q3 2018

In 2017, Afrimat expanded its product footprint into iron ore with the acquisition of Demaneng.

The mine’s product is of high quality with low contaminates and good physical properties, in addition to low stripping ratios.

Andries van Heerden, CEO of Afrimat.

Grant Dreyer, Head of Business Development and Group Strategy at Afrimat.

metallurgy, cost structure or location. This is exactly what Demaneng offers; the mine’s product is of high quality with low contaminates and good physical properties, in addition to low stripping ratios and good access to infrastructure. On a growth path Afrimat has over the years demon- strated its prowess in corporate revitalisation, exhibited by its approach of acquiring existing businesses in distress and in need of a turnaround, successfully making them strong solid performers within a short space of time. The same approach has been well executed at Demaneng – an operation it acquired for about R300-million – where a combination of inter- ventions have notably resulted in

increased production. Initially, Afrimat acquired 60% of the mine for R276-million, before purchasing the remaining 40% stake from minorities for a further R44-million, giving the group a 100% stake in the operation. At the time, the mine had halted operation due to financial distress the previous owners found themselves in, which subsequently led to the placement of the mine into formal business rescue in June 2016. Having acquired the full value of the operation by July 31 last year, the operation formally exited business rescue by August 2016. Barely a year later, Afrimat has already ramped up production to

aspects of the new business that remain the same with the traditional portfolios – opencast operation, conventional drill and blast, load and haul, primary and secondary crushing and screening. “Essentially it was about lever- aging our competencies in a new sector, but more importantly diluting our exposure to the cyclical nature of the construction sector locally,” explains Dreyer. “In addition, it allowed us to earn USD-based revenue, providing significant hedge against local currency weakness.” Dreyer adds that as part of the company’s diversification strategy, Afrimat has always maintained that it will acquire operations it believes – based on fundamentals – will provide solid returns, and have inherent com- petitive advantages such as unique

1-million tonnes per year. “Key to the turnaround at Demaneng was to realign the operations to ‘become fit for

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QUARTER 3 - 2018 MODERN QUARRYING