Afrimat’s planned R650 million acquisition of the Gravenhage manganese mine has fallen foul of a water-use licence and a dispute has been declared with the sellers.
The share price fell 3.64 percent to R50.30 on the JSE yesterday afternoon.
In an update of the acquisitions yesterday, Afrimat said the conditions for the Gravenhage acquisition had not been fulfilled, in that a water-use licence issued by the Department of Water and Sanitation deviated materially from the water-use licence application submitted by the sellers to the department.
The water-use licence thus did not constitute the grant of the water-use licence application as contemplated in the acquisition agreement.
Gravenhage is a long-life, near-development manganese resource in the northern part of the Kalahari manganese field some 120km from Afrimat’s Demaneng iron ore mine. The mine was being sold by Aquila Steel and Rakana Consolidated Mines.
“A formal dispute has been declared between the company and the sellers regarding whether the condition precedent relating to the water-use licence has been fulfilled, which the parties have to date been unable to resolve through negotiation. If the dispute remains unresolved, it might be referred to arbitration.”
More positively, the acquisition of Glenover phosphate mine for R550m was proceeding to plan – the group made cash payments of R215m and R35m for inventory deposits and the vermiculite mining right, respectively.
The Glenover acquisition includes phosphate stockpiles, rare earth elements and a vermiculite mining right, which the group said positioned it to enter new commodities aligned with global trends relating to food security and advanced technology, for example electric vehicles.
“The implementation of the initial phases of this acquisition has progressed well, with Afrimat selling high-grade phosphates. The feasibility studies of the follow-up phases of the project have yielded pleasing results thus far,” the group said.
The option to acquire the Glenover shares remained subject to the Afrimat board’s approval and Afrimat’s sole discretion to exercise the option to purchase Glenover shares from the Glenover shareholders, together with all claims that the shareholders might have against Glenover.
BUSINESS REPORT