Afrimat has announced the acquisition of Coza Mining, which adds additional iron ore reserves to Afrimat’s commodity segment.
The acquisition includes three mines namely Jenkins, Driehoekspan and Doornpan, adding substantial potential to Afrimat’s iron ore and manganese operations in the Northern Cape.
Afrimat CEO, Andries van Heerden, indicated that, “This high-quality resource, which is located adjacent to our current Demaneng iron ore mine, affords Afrimat additional iron ore sources to extend the “life of mine”.
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He goes on to add that, most importantly and in-line with Afrimat’s dedication to diversification, iron ore will now also be sold into the inland market, with a supply agreement in place.
“This means that no additional pressure is placed on our current allocation on the Saldanha iron ore rail line, although any additional trains Afrimat is allocated on this line, we will continue to take and fill.”
The total purchase consideration is R300 million in cash tranches, dependent on approvals from authorities such as the Department of Mineral Resources and Energy and Water Use License confirmations.
Van Heerden goes on to say that given the proximity to the existing Demaneng operations, leverage opportunities exist. The asset includes a possible manganese resource for further exploration, which is similar to Demaneng and again, synergies through the combination of these resources are possible.
“Further expansion opportunities exist to increase the resource size at Driehoekspan and Doornpan, but this will likely only take place into the future, as it remains the Afrimat operating style, to take over and stabalise operations before attempting expansion,” van Heerden elaborated.
A mining contractor agreement is in place with Coza which allows Afrimat to initiate mining operations during the interim period until all conditions precedent are met, starting at the Jenkins mine.
“Afrimat conducted a thorough due diligence and are confident that these three mines will add to the commodities segment and the ability to supply the inland market further strengthens diversification within the segment.