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IMR, the global commodities trader with ownership of mining assets and steel production facilities, has announced the R515 million acquisition of PPC Lime in South Africa along with a consortium of investors.

Anirudh Misra, Chairman of IMR, comments: 

“After an extensive tender process, we are pleased to have presented a sustainable and transparent structure to carry these operations forward.

“Through our previous acquisition of the Sedibeng Iron Ore mine in the Northern Cape, South Africa, we have shown ourselves to be willing investors in South African mineral assets while also aiming to benefit all stakeholders by investing in them and growing them.

“We are excited by the partners that have joined us in this latest acquisition, namely, Billy Mawasha, who brings a wealth of South African mining experience to the table, Johan Claassen the former CEO of PPC Group.”

Billy Mawasha, founder of Kolobe Nala, commented:

“South Africa is known for its rich, long-life mineral deposits, and this operation near Lime Acres is no exception – having already been operational for almost seven decades, it has another five decades of extractable reserves.

“It is our duty as the new owners to ensure consistent, low-cost production to match underlying demand and to develop new markets wherever possible. That is why IMR, with a well-established trading business, is a natural partner to have on board.”

“As the world transitions to a greener future, I believe lime products, with their unique characteristics, will have a real part to play in terms of desulphurisation of emissions from coal fired operations along with other environmentally beneficial applications.”

A spokesperson for HEX2M Energy, commented:

“We have already identified several opportunities to maintain the world class status of the mine and at the same time identify new sources of demand, using our worldwide trading network.

“It is not often an opportunity presents itself to procure such a quality asset, and this consortium is ready to ensure it not only produces for many more years to come but is also reinvigorated by its new owners.”

Johan Claassen, former CEO of PPC Group and head of JJJL Mining, commented:

“This asset was always a solid performer in the PPC portfolio and a reliable, steady generator of profits. We are excited that our bid was recognised for what it was, the most sustainable and responsible future owner of this asset to ensure it continues to benefit all parties for years ahead.”

Highlights:

  • PPC Lime is a wholly owned subsidiary of PPC Ltd, a South African headquartered supplier of cement and related products;
  • The company is one of the most technologically advanced lime producers in the world and is the largest supplier of metallurgical-grade lime in Southern Africa;
  • The primary asset is a limestone quarry and processing facilities, which commenced operations in 1954 in Lime Acres, Northern Cape on an extensive reserve of metallurgical quality limestone and dolomite;
  • PPC Lime mines, manufactures and distributes reactive lime, hard burnt lime, hydrated lime, burnt dolomitic lime and raw limestone in three modern pre-heater rotary kilns;
  • The total calcination capacity at Lime Acres is 900,000 tonnes per annum, making PPC Lime the leading supplier of these products for key local industries such as steel and alloys, gold, uranium and copper mining, non-ferrous metals, sugar refining, water treatment and flue gas desulphurisation;
  • The largest use of lime globally is in steel manufacturing, where it serves as a flux to remove impurities (silica, phosphorus, and sulphur); and
  • In FY2020, PPC Lime generated revenues of ZAR816 million and EBITDA of ZAR110 million.

PPC Ltd initiated a formal sales process of PPC Lime in 2020 as part an ongoing capital restructuring to de-gear the company’s South African balance sheet.

Kgatelopele Lime was formed with this specific acquisition in mind and to be the standout bidder in the process.  This meant ensuring a sustainable finance package and a shareholder structure that is not just compliant with South Africa’s empowerment laws but incorporates passion, a transition of knowledge, the employees and host communities, and an international trading firm with a proven track record of investing in South African assets.

Post completion of the transaction, PPC Lime is expected to be 39% black-owned, with:

  • 29% owned by strategic BEE investors;
  • 5% owned by relevant PPC Lime employees; and
  • 5% owned by host communities of PPC Lime, in accordance with the requirements of the Mining Charter;

The name Kgatelopele is shared with the local municipality in which the mine is located. This name was deliberately chosen to symbolise an intention to embrace the employees as well as the broader community as partners, as we breathe new life into the operation and the region and progress the mine forward.

In terms of the agreement, the rights, benefits and advantages of PPC Lime transfer to Kgatelopele Lime on 1 April 2021.

The transaction is expected to close by the end of this year subject to a number of conditions precedent, including approval by the Department of Mineral Resources and Energy and the South African Competition Commission.