The JSE-listed group’s export volumes were however in line with the previous year, which was good news to the extent that the volumes did not decline. Picture: Supplied
Afrimat export iron volumes continue to be impacted by poor rail performance and full-year results are likely to be weaker than a year before, the mid-tier mining and industrial minerals group said.
The main culprits behind the annual loss are changes in the iron ore market given the rand value received on iron ore exports, and the volume reduction from ailing steel-maker ArcelorMittal South Africa (AMSA) in the first half, which had severely impacted Afrimat, the group said in a business update Monday.
The government is working closely with businesses to revive failing transport and energy infrastructure. This includes providing clarity on funding and supporting agreements between private companies and Transnet, which operates the main bulk mineral railway routes to the export terminals. Some coal and iron or producers are negotiating agreements with Transnet to repair rail infrastructure.
Afrimat said another reason for the weaker annual results was losses from cement and weaker-than-expected performance from anthracite.
The JSE-listed group’s export volumes were however in line with the previous year, which was good news to the extent that the volumes did not decline.
However, overall volumes were 20% below Afrimat's rail allocation. International iron ore prices remained lower than last year's, although they have increased slightly over the past six weeks.
The group’s local iron ore volumes suffered a 70% retraction in the first quarter due to significantly reduced volumes taken up by the ailing AMSA, but volumes recovered well in the second half.
The group also remains in discussions with AMSA to understand their requirements and to support them with “innovative raw material solutions” irrespective of AMSA’s Longs business' operational status, which is facing possible closure.
Afrimat produces and supplies construction materials, cement, iron ore, anthracite, phosphate, and high-quality industrial minerals. It is well known among JSE investors for acquiring distressed assets and turning them to profit.
The directors said that 2025 had brought its share of challenges, but these were successfully navigated towards the end of the year to ensure sustainability and returned performance for the next financial year.
Lafarge South Africa, the most recent acquisition, was successfully integrated. The Construction Materials (Aggregates) segment saw a better result due to strong performance from the aggregate quarries and ash businesses.
The cement operations were revitalised and functioning at acceptable levels. The cement kilns benefited from maintenance and were operating efficiently and dependably.
The Industrial Minerals business made a significant recovery back to previous performance levels. The suspension of load-shedding, along with signs of economic growth, boded well for this business.
The Environmental Impact Assessment for the Life of Mine Plan for the Nkomati anthracite mine would allow for more optimal open-pit mining to take place.
The mine had also progressed on introducing a more efficient mining fleet; reorganisation of the mining team, including a new management structure; moving an Eskom powerline to allow for more fluid open-pit mining; relocating 91 graves and 38 houses, and increased marketing activity.
In January 202, Nkomati returned to profitability, and February was expected to yield a similar outcome.
The test work on rare earths extraction was nearing completion and showing positive results.
“Afrimat is pursuing the final design of the process to ensure it capitalises on the competitive advantage of the Glenover resource. On the phosphate side, the plant is now operational, with ramp-up progressing well, although slower than projected.”
“Management (is) confident the majority of the company's metrics have turned and bode well for a better financial result in the coming year,” the group directors said.
The share price traded 0.4% weaker to R62.78 on Monday morning, little changed from R60.10 a year ago.
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