Afrimat on acquisition trail buying Glenover for R550 million
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AFRIMAT continued down the acquisition trail and turning-around loss-making mines yesterday with the announcement to acquire Glenover Phosphate and its vermiculite and phosphate rock deposits at Glenover Mine for R550 million.
The acquisition expands Afrimat’s product offering to include a new mineral segment that supports its diversification strategy – the group mines construction materials and bulk commodities such as iron ore, anthracite and manganese.
The acquisition would be funded by a robust balance sheet and future cash flow generation, the group said.
Last month, Afrimat acquired Agri Lime and Stony Lime for R63m, an opencast mine near Northam in Limpopo, to strengthen its footprint in the agricultural lime market, and in line with the growth strategy at its Industrial Minerals segment.
The group also said yesterday that its Coza Mining (Jenkins) and Nkomati Anthracite projects had been successfully implemented, allowing the business development team to focus on the new Gravenhage mining right, and Glenover projects.
“Recent results regarding the quality and quantity of resources coming from the Nkomati and Jenkins projects were exceeding expectations, with good cash flow as a result,” Afrimat said.
The group said Glenhover would reduce its exposure to the ferrous metals value chain by providing a multi-commodity product, which addresses fundamental needs and trends, including the agriculture and food industry, as well as new technology applications.
Glenover was currently not operational and all income received in the year to June 30 was from a limited sale of phosphate rock inventories. The net asset value of Glenover at that date was R38.01m, when it had reported an attributable loss of R642 929.
Afrimat said Glenover also had the ability to provide minerals into various sectors, such as fertilisers and magnets for electric motors, providing it with a new platform for growth while at the same time reducing cyclicality.
Glenover is located 90km north-west of Thabazimbi in the Lephalale Municipality in Limpopo province. It owns prospecting rights over the property to mine high-grade phosphate, vermiculite and rare earth elements. Afrimat said current reserve statements provided for a resource life of more than 20 years, with an option to extend the resource.
BUSINESS REPORT ONLINE