Specialist chemical services company Omnia is extending its continental footprint through its new venture in the Democratic Republic of Congo (DRC), where it is currently supplying its first fill-up of chemicals to US diversified miner Freeport-McMoran Copper & Gold’s Tenke Fungurume copper mine.

The Tenke Fungurume mining project is a partnership led by Freeport, Lundin Mining, a diversified base-metals-mining company, and the government of the DRC, through the State-owned Gecamines.

While one needed to be careful while doing business in the DRC, the potential in this country was great, MD Rod Humphris told Mining Weekly at the company’s results presentation, in Johannesburg, last week.

Humphris says that Freeport was one of the major American mining groups, and based on the success of the project, Omnia could benefit from a $100-million-a-year contact for the supply of chemicals to the mine.

Despite the subprime crisis in the world’s banking sector, and the challenges faced in mining as a result of South Africa’s power crisis, Omnia reported continued growth in mining chemicals, explosives and related products and services.

Omnia attributed the growth of the explosives and the chemicals market to the demand for commodities, particularly coal, copper and uranium, and increasing international prices, particularly of nitrate products.

Revenue growth for the mining division for the six months ended September 30 was up 73% to R1 006-million, compared with R581-million for the corresponding period last year. Operating profit rose by 125%, to R126-million.

“Although metal prices started to decrease in the period under review, demand for coal, copper, uranium and iron-ore remained robust, and, in consequence, mining activity during the period was healthy. This benefited demand for explosives and related pro-ducts and services, as well as the group’s range of mining chemicals,” said Humphris.

Previous communications to Omnia shareholders indicated that the explosives market had become intensely competitive, with rapidly rising raw material costs pressurising margins.

“Following the unacceptable 14% decline in operating profit in the period to September 2007, the division opted to withdraw from unprofitable contracts and renegotiate pricing for others. “This decisive action resulted in a recovery in the operating margin to 12,5%, although it still remains below historic levels,” said Humphris.

He also pointed out that costs were also being impacted on negatively by the shortage of competent skills in the industry, with the division also having to face significant additional costs to retain such skills.

Omnia forecasts continued growth in the mining chemicals market, with margins remaining at reasonable levels.

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