Fraser Alexander CEO Velile Nhlapo
JOHANNESBURG (miningweekly.com) – Mining Services and construction company Fraser Alexander has, as part of repositioning its business value proposition, introduced a structured funding offering to its Integrated Mining Service (IMS) for its clients.
CEO Velile Nhlapo believes this value proposition will “revolutionise the mining industry”. Moreover, the 100%-black-owned company “is geared to take [its] new structured funding IMS offering to market tomorrow”, he highlighted to Mining Weekly Online during an exclusive interview on Monday.
“Clients now have the benefit of selecting from the company’s range of value-adding, outsourced services, either as an individual service, a combination of selected services or the whole range of services,” he added.
The 104-year-old company is also able to offer the full value proposition, under its “One Fraser Alexander” strategy, across the complete mining value chain, where the company will oversee the funding, construction, mining, processing and delivery of a product for the client to take to market.
Despite the mining community facing “harsh economic times”, several small- to medium-sized miners have mining project assets, Nhlapo said. However, while these miners are starting prefeasibility or definitive feasibility studies, they require “last mile funding” to start construction of and ultimately production at their mines, Nhlapo underscored.
“Typically such “last mile funding” would be about R80-million to R150-million. Most institutions do not want to fund these projects, as they are either too small, or too high risk,” he noted.
However, Fraser Alexander is willing to share in this risk and aims to provide the required funding to assist mining companies.
In turn, this will provide Fraser Alexander with the option to guarantee security of tenure with the client, as well as provide “the best possible service, instead of only competing with other competition on a rand per tonne basis”, while also ”sharing in the risk of starting up and operating the mine”, Nhlapo said.
The models available in the structured funding offering include a build-own-operate-maintain model or a build-own–operate-transfer model, where the plant or equipment could be transferred to the client.
The company is focused on coal-to-power projects and is considering supporting projects in Tanzania, Mozambique, Botswana and South Africa.
It will also consider projects in other commodity sectors, such as gold, chrome and copper.
“Fraser Alexander’s growth initiative is focused on growing outside South Africa. Despite a slump in the economy, there are a multitude of new mining projects in Africa that require funding. Consequently, we aim to partner with those companies in developing the mines with them,” Nhlapo said.
He further highlighted that Fraser Alexander has developed the new value proposition through addressing several strategic imperatives to ensure the long-term sustainability of the company.
While Fraser Alexander’s vision remains being “the preferred outsourcing mining services partner in Africa”, the company also announced a programme to reposition, restructure and right-size the business.
Part of the company’s repositioning phase is an acquisition of existing plants and potentially new projects for new and organic growth.
Further complementing the company’s restructuring phase is the executive committee’s implementation of a new operating model to improve effectiveness and efficiencies and to save costs for clients.
“With that, Fraser Alexander is able to offer monetary savings and value for the client, as [it] fully understands the current market conditions,” Nhlapo said.
He added that mining contractors are expected to consolidate over the next two years and that “Fraser Alexander has plans to be the catalyst of consolidating the mining contract companies through growth by acquisition and partnerships”.
“As a company, we still maintain a strong balance sheet and our operations and contracts on more than 200 mining sites are sound. Fraser Alexander aims to be a larger, more global player in the mining services sector,” he concluded.