On the cover:
Last year’s acquisition of Demaneng, previously known as Diro Manganese Proprietary Limited and Diro Iron Ore Proprietary Limited, gave Afrimat a foot into the commodities market, further allowing the company to expand its already massively diversified product offering. Following the transaction, Afrimat created a new Commodities Segment, adding to its traditional industrial minerals and construction materials portfolio.
Grant Dreyer, Head of Business Development and Group Strategy at Afrimat, says iron ore was a logical next step for the open-pit mining giant, given the operational aspects are so similar. There are fundamental aspects of the new business that remain the same as with the traditional portfolios – opencast operation, conventional drill and blast, load and haul, primary and secondary crushing and screening.
“Essentially it was about leveraging our competencies in a new sector, but more importantly diluting our exposure to the cyclical nature of the construction sector locally,” explains Dreyer. “In addition, it allowed us to earn USD-based revenue, providing significant hedge against local currency weakness.”
Dreyer adds that as part of the company’s diversification strategy, Afrimat has always maintained that it will acquire operations it believes – based on fundamentals – will provide solid returns, and have inherent competitive advantages such as unique metallurgy, cost structure or location. This is exactly what Demaneng offers; the mine’s product is of high quality with low contaminates and good physical properties, in addition to low stripping ratios and good access to infrastructure.
Initially, Afrimat acquired 60% of the mine for R276-million, before purchasing the remaining 40% stake from minorities for a further R44-million, giving the group a 100% stake in the operation. At the time, the mine had halted operation due to financial distress the previous owners found themselves in, which subsequently led to the placement of the mine into formal business rescue in June 2016. Having acquired the full value of the operation by July 31 last year, the operation formally exited business rescue by August 2016. Barely a year later, Afrimat is ramping up production to 1-million tonnes per year.
At the forefront of innovative quarrying
In the face of tough market conditions, several initiatives at AfriSam Peninsula quarry – including relentless pursuit for operational excellence, a range of in-house and group-wide innovations and the identification of niche, high value products – are key success drivers. The quarry boasts the highest sales volumes within the AfriSam group, and is one of the largest operations of its nature in South Africa in size and production capacity.
AfriSam’s Peninsula quarry is one of the largest quarries, not only in the Western Cape, but across South Africa. Ideally located some 25 km north of Cape Town, it supplies aggregate material, mainly to asphalt, readymix, building and civil construction markets across the greater Cape Town area. Unquestionably one of the best-looking aggregate quarries in the country, Peninsula started mining around 1962, and a new 30-year mining right was granted in August 2009 to August 2039.
When Modern Quarrying recently paid a visit to Peninsula quarry, it was encouraging to see that the management team, led by works manager, Chris Kruger, is pushing boundaries, maintaining high sales volumes during such a difficult economic spell.
According to Bradley Thomas, territory manager, West Region, Western Cape at AfriSam, the quarry is the highest volume producer among AfriSam’s 15 other operations across the country. It is also one of the very few quarries in South Africa that has an annual production capacity in excess of 1-million tonnes per year.
At the pinnacle of limestone production
In just two years of operation, Rossmin, a Port Shepstone-based limestone operation, has already wrestled a larger share of the market against some established players in its vicinity. Its recipe for immediate success is its product quality and reliability of supply. To get to the pinnacle of limestone production, a fleet of “Africa tough” gear is helping keep the wheels of production turning, offering 98% availability even in the face of some major operational challenges such as the taxing 10% hauling grade.
From the onset, mine management at Rossmin understood that wrestling a larger share of the market was going to be a tough battle. There are several other operations in the area supplying the same product to the same customers. For example, one of the fierce competitors is just located less than 2 km away on the other side of the river, and has been operational for more than 40 years.
Despite the fierce competition, Rossmin has already established itself as a force to be reckoned with in the area, and testimony to its early success is that when we visited the site, an expansion programme was already underway, barely two years into operation. Product quality and reliability have been the major cornerstones of early success. Form a quality perspective, the quarry is blessed with a high-grade, niche limestone rock.
Speaking of reliability of its limestone supplies, uptime has been the major rewarding factor, necessitated by a well-supported and reliable range of equipment on site. Local original equipment manufacturer, Desmond Equipment, better known as Dezzi, with a factory located some 20 km away from the site, has been the quarry’s yellow metal equipment supplier of choice since the development phase.