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Afrimat’s future in Africa looks bright as it diversifies further

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Afrimat’s Demaneng iron ore mine in the Northern Cape. Afrimat has been one of the most successful junior mining companies in Africa in recent time. Image credit: Afrimat

South African miner Afrimat will diversify its portfolio further with the proposed acquisition of Nkomati Anthracite mine in Mpumalanga. Afrimat’s future looks bright in Africa as it hunts for more assets.   

Afrimat, one of South Africa’s most successful junior mining companies, continues its acquisition path. The company started out as a quarry and aggregate business focusing on South Africa, but then diversified its portfolio into coal and iron ore. In addition to its operations in South Africa, Afrimat operates several quarries across southern Africa. It has become a favorite for investors and business analyst as the company continues seeking good business opportunities in Africa.

Its latest move involves the acquisition of Capital Partners Limited, whose primary asset is the Nkomati Anthracite mine in Mpumalanga. Afrimat currently holds 27.27% of the issued share capital. The company’s offer is to acquire the remaining shares in Unicorn, through an exchange for new listed Afrimat ordinary shares at a ratio of 1 new Afrimat share for every 280 Unicorn shares held.

According to the company, Afrimat has obtained irrevocable undertakings from 57% of Unicorn shareholders who have indicated that they will vote in favour of the scheme of arrangement.

Nkomati Anthracite mines high-grade anthracite, which positions it as a key supplier to the local market. The existing operations are both open pit and underground, with the current Life of Mine (LoM) for the open pit section estimated to be nine years, with the underground portion LoM being more than 20 years. There is currently a total managed coal resource of 41 million tonnes and a total managed run of mine (ROM) coal reserve of 5.9 million tonnes.

According to Afrimat CEO, Andries van Heerden, this transaction accords well with the group’s diversification strategy and will open up an additional product line to its customers as well as add to the composition of the bulk commodities segment in Afrimat.

“We are of course very familiar with open-pit mining operations, and while we understand that underground mining of anthracite comes with its challenges, we have completed numerous assessments to ensure the safe mining of the anthracite using precise, technical methods,” says van Heerden.

Van Heerden added that there is good demand for anthracite in South Africa. “Nkomati’s anthracite has the lowest sulphur impurities of all anthracite producers in South Africa, while its phosphorus levels are on par with the best producing mines.

As an effective reductant, anthracite remains one of the cleaner fossil fuels used for smelting, particularly compared to coking coal and thermal coal, which makes it more attractive to users.

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