Leading openpit mining company Afrimat – a producer of industrial minerals, bulk commodities and construction materials – in December, made an acquisition in the phosphate and rare earth minerals space.
Afrimat acquired mining and fertiliser company Glenover Phosphate for a total purchase consideration of R550-million, comprising R250-million for the assets and an option, at Afrimat’s sole discretion, to purchase 100% of Glenover’s shares for R300-million.
Glenover is located 90 km north-west 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 project by acquiring the remaining in situ resource,” Afrimat CEO Andries van Heerden said at the time.
He added that this acquisition would further expand the group’s offerings in line with its diversification strategy.
“The application of these minerals is vast. Phosphates are used in fertilisers and rare-earths elements are used in many applications, one of which is for magnets in electric motors. The international trend towards electric vehicles (EVs) 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 added that Glenover would also expand Afrimat’s product portfolio beyond the ferrous metals value chain by providing a multicommodity 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 earths minerals will also widen our international geographic market footprint.”
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.
Van Heerden commented on the timing of the transaction saying that Afrimat was debt-free and was experiencing strong operational cash flow.
Additionally, mining company Coza Mining’s Jenkins project, located in the Northern Cape, and mining company Nkomati Anthracite’s Nkomati project, located in Mpumalanga, 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,” said Van Heerden.
In addition to Glenover, Afrimat is busy with the optimisation and implementation planning of the recently acquired Gravenhage manganese mine.
“This dedicated project team is planning to [start] mining operations as soon as all the statutory approvals have been received and the business plan is approved.”
Further, on November 12, 2021, Afrimat also acquired the shares in feed lime producer Agri Lime and associated assets for a purchase consideration of R63-million. Van Heerden said that through acquiring Agri Lime, Afrimat’s footprint in the agricultural lime market had been strengthened as part of the growth strategy of the industrial minerals segment of the business.
These developments and new acquisitions were planned in accordance with the group’s significant cash generation.
“Afrimat will, as always, ensure that execution on these projects is undertaken with the precision and the cautiousness for which we are known,” concluded Van Heerden.