Industrial minerals and construction materials provider Afrimat has acquired mining and fertiliser company Glenover Phosphate for R550-million, comprising R250-million for the assets and an option, at Afrimat’s sole discretion, to buy 100% of Glenover’s shares for R300-million.
Glenover is located 90 km northwest of Thabazimbi in the Limpopo province.
“Current reserves of phosphate, vermiculite and rare earth elements provide for a resource life of more than 20 years. Afrimat will obtain the inventory deposits of historically mined resources and extend the life of the project by acquiring the remaining in situ resource,” says Afrimat CEO Andries van Heerden.
He adds that the acquisition will further expand the group’s offering in line with its diversification strategy.
“The application of these minerals is vast. Phosphates are used in fertilisers and rare earth elements are used in many applications, one of which is for magnets in electric motors. The international trend towards electric vehicles is expected to be a big demand driver for this application in future.
“Vermiculite is used in the construction of fire retardant partitioning boards, and in horticulture as a growth medium, as well as in animal feed and other industrial applications,” he points out.
Van Heerden says Glenover will also expand Afrimat’s product portfolio beyond the ferrous metals value chain by providing a multi-commodity product that addresses fundamental needs and trends, including those in the agriculture and food industry, as well as in new technology applications.
“This transaction provides the group with a new platform for growth while, at the same time, reducing cyclicality. Phosphate, vermiculite and rare earth minerals will also widen our international geographic market footprint,” he says.
The acquisition further bolsters Afrimat’s commitment to the South African economy, enabling job creation, skills transfer and training, food security, social upliftment in surrounding communities and ensuring South Africa is a player on the world stage for minerals used in future technology applications, the company notes.
In terms of the timing of the transaction, Van Heerden says Afrimat is currently debt-free and is experiencing strong operational cash flow, adding that the Coza Mining and Nkomati Anthracite projects have been successfully implemented and are providing good additional contributions.
“This, combined with the group’s strong execution capacity creates the opportunity for accelerated growth,” he says.
Further to this acquisition, Afrimat is busy with the optimisation and implementation planning of the recently acquired Gravenhage manganese mine.
“This dedicated project team is planning to commence mining operations as soon as all the statutory approvals have been received and the business plan is approved,” Van Heerden says.
On November 12, Afrimat also acquired the shares in feedlime producer Agri Lime and associated assets for R63-million. Van Heerden says that, through that transaction, Afrimat’s footprint in the agricultural lime market has been strengthened as part of the growth strategy for the industrial minerals segment of the business.