Photo by: Bloomberg
JOHANNESBURG (miningweekly.com) – Construction company Afrimat expects to start production at its Diro iron-ore operations, in the Northern Cape, by mid-year.
Afrimat CEO Andries van Heerden said during a media briefing on Thursday that the company was now in the process of refurbishing the business. “We have started commissioning the plant slowly,” he noted.
The company last year acquired a majority stake in Diro Iron Ore and Diro Manganese’s distressed assets for R276-million, after it was placed under business rescue.
With the operation’s one-million-tonne-a-year capacity, Van Heerden said the mine held “excellent potential” for growth, as it diversified the company’s portfolio and provided a wider currency exposure and rand hedge.
“The margin that we expect to make on 1 t of iron-ore is more than the total sales price of 1 t of aggregate,” he said, alluding to the company’s main stream of income.
Van Heerden said the company was now eyeing both the export and domestic market to sell its iron-ore, but heeded that the domestic market was still “not very” robust. “However, it is much better than a year ago. Given our low-cost operating model, we believe we can actually make significant margin,” he noted.
With the iron-ore price currently trading at $59.75/t, it left the company in good stead. “Any price north of $45/t, we can survive on, and at over $50/t, we will make good returns,” said Van Heerden.
“We are also working on expanding our resource base and expanding our capacity to start producing higher volumes,” he pointed out. The mine has a proven iron-ore reserve of 5.6-million tonnes, along with 1.3-million tonnes of saleable fine ore stockpiles.