Open-pit mining company Afrimat has further strengthened its portfolio with the acquisition of Coza Mining’s three iron ore operations in the Northern Cape Province of South Africa.
Afrimat’s Demaneng iron ore mine in the Northern Cape Province of South Africa. The company’s new iron ore acquisitions are located next to the Demaneng mine. Image credit: Afrimat
The acquisition adds significant iron ore reserves to Afrimat’s commodity segment, and includes the Jenkins, Driehoekspan and Doornpan mines, adding substantial potential to Afrimat’s iron ore and manganese operations in the Northern Cape.
According to Afrimat CEO, Andries van Heerden, this high-quality resource, which is located adjacent to Afrimat’s Demaneng iron ore mine, affords the company additional iron ore sources to extend the life of mine at Demaneng. “Most importantly, we are now able to sell iron ore 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,” says van Heerden.
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 stabilise 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’ precedents 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,” says Van Heerden.