On 27 May 2024, continuing its remarkable turnaround story, Mantengu Mining Limited, a leading resource investment company, reported that it had posted a group profit for the first time in more than 10 years. The group released its audited group results for the year ended 29 February 2024 marking a watershed moment for Mantengu as it posts significant increases in revenue and operating profits of R109.9-million (compared to FY23: R4.5-million) and R24.9-million (compared to FY23: R15.8-million loss), respectively.
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Magen Naidoo, CFO of Mantengu, comments, “Mantengu continues to defy its detractors by posting an impressive set of results. One of its strengths is to respond swiftly to changing market conditions even if those decisions are unpopular. We aim to maximise production during FY 2025 while operating at the lower end of the cost curve.”
The Langpan LG plant, despite operating at a steady state level from January 2024 and for only two months of the financial year, achieved outstanding results. During this period, approximately R60.1-million in revenue was generated. Sweeping changes implemented by the board in late 2023 significantly improved operational performance.
Naidoo adds, “These changes yielded the necessary step change in operational performance of the mine and the Langpan LG plant is well poised to continue delivering strong production performance into the 2025 financial year.”
However, the completion of the capex build for the Langpan MG plant posed challenges. Material price increases from suppliers, driven by negative market conditions, contributed to higher costs. Prolonged lead times for materials and parts further delayed the build process. Throughout the year, the board invested R57.3-million in capex at Langpan.
“The Langpan MG plant is expected to be commissioned later in calendar year 2024 and will add approximately 18 000 tonnes of monthly production capacity,” says Naidoo.
Mike Miller, CEO of Mantengu Mining Limited. Supplied by Mantengu Mining Limited
Sustained inflationary pressures stemming from high interest rates in the macroeconomic environment; and rising energy costs combined with lack of access to any power allocation from state energy producer, Eskom due to insufficient generation capacity in the region; have strained the company’s budget. Despite these headwinds, Mantengu continues to explore avenues for cost optimisation.
“Consequently, a top priority for the 2025 financial year is to reduce the overall cost of energy for the group. By addressing this challenge head-on, Mantengu aims to enhance operational efficiency and maintain its competitive edge in the mining industry,” says Naidoo.
Mike Miller, CEO of Mantengu, comments, “Mantengu has overcome extremely difficult operating and listing challenges in the past to get to this point in its journey. These challenges have galvanised Mantengu’s board, management teams and core service partners and these results are directly attributable to the notable people in these teams. The focus is now on operational stability, cost optimisation, profit maximisation and group growth.”
Magen Naidoo, CFO of Mantengu Mining Limited. Supplied by Mantengu Mining Limited
Mantengu on 10 May made a significant move by acquiring 100% of Birca Copper and Metals Proprietary Limited (BCM). The deal, valued at R29.9-million, positions Mantengu for strategic growth and operational efficiency. By acquiring BCM, Mantengu gains access to a strategic and valuable resource that perfectly complements its existing chrome ore operations, doubling its chrome ore supply and strengthening Mantengu’s position in this market. This expanded resource base ensures stability in production and enhances the company’s ability to meet market demand.
Although market conditions are extremely challenging, Mantengu is of the opinion that the tide has turned. The market is flooded with interesting opportunities for well financed, well governed, stable and optimised SMEs. Mantengu’s primary objective is to provide SMEs with an economic platform to boost growth by allowing them to compete in the financial and capital markets. The board is confident that Mantengu is well positioned to tackle these opportunities.
Source: Supplied by Mantengu Mining Limited