9 December 2021 – Afrimat, a leading open-pit mining company providing industrial minerals, bulk commodities, and construction materials, today announced another acquisition, this time in the phosphate and rare earth minerals space, through the acquisition of Glenover Phosphate (Pty) Ltd (“Glenover”) for a total purchase consideration of R550 million, consisting of R250 million for the assets and an option, at Afrimat’s sole discretion, to purchase 100% of Glenover’s shares for R300 million.
According to Afrimat’s CEO, Andries van Heerden, Glenover is located 90km 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 project by acquiring the remaining in situ resource.”
Van Heerden 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 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 went on to say that Glenover would 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.”
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.
Commenting on the timing of the transaction, van Heerden said that Afrimat is currently debt-free and is experiencing strong operational cash flow, adding that the Coza Mining (Pty) Ltd (“Jenkins”) and Nkomati Anthracite (Pty) Ltd (“Nkomati”) 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.”
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 commence mining operations as soon as all the statutory approvals have been received and the business plan is approved.”
On 12 November 2021, Afrimat also acquired the shares in Agri Lime (Pty) Ltd and associated assets for a purchase consideration of R63 million. Van Heerden said that through acquiring Agri Lime, a feedlime producer, Afrimat’s footprint in the agricultural lime market has been strengthened as part of the growth strategy of the Industrial Minerals segment of the business.
He concluded that these exciting 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.”
Issued for: Afrimat Limited