MINE EXCURSION
H
ow do you transform a run-down, loss-making
iron ore mine into a profitable, fairy tale story in
less than two years? Ask Afrimat. Never scared of
a challenge, the junior miner, who cut its teeth into the
rough and tumble world of quarries and the South African
construction sector, has achieved the same remarkable
result at its Demaneng iron ore mine in the Northern
Cape province of South Africa as what it has consistently
achieved at its quarries around Southern Africa.
Afrimat’s success at Demaneng is built on pure operational
prowess, replicated into the DNA of a company often forced
to grind it out in the dust and grime of marginal quarries.
Operational excellence was exactly what the mine needed
when Afrimat bought Demaneng from Diro Iron Ore in
2016 and invested more than R450-million in the project.
On the doorstep of neighbouring Kumba’s Sishen mine,
Demaneng is located in a prime geological suburb of the
Kalahari Basin, and in close proximity to the major access
roads and Transnet’s rail infrastructure. Notwithstanding its
supreme geology and location, Diro couldn’t make it work,
Although Afrimat prefers to own all the mining equipment, they do hire
some yellow metal at Demaneng.
and eventually went into business rescue, which opened
the door for Afrimat. That said, the iron ore price didn’t
exactly assist Diro at the time, dropping to levels far below
the psychological level of USD50 per tonne late in 2015.
However, not long after Afrimat acquired the asset, iron
ore prices almost returned to boom time levels, peaking at
USD123 per tonne in July 2019. In the process, Demaneng
became Afrimat’s star performer. The company was now
well and truly on the way to becoming a diversified miner
and continued rewarding shareholders generously.
Rescuing a failed operation
According to Gerhard Odendaal, managing director of
Afrimat Bulk Commodities, transforming Demaneng into
an efficient open cast operation meant putting in the hard
yards. “The strong operational team was instrumental in
turning the business around and aligning the workforce with
the Afrimat value system,” says Odendaal. “When Afrimat
arrived on site, we basically found a failed mining operation.
The equipment and processing plant were in a bad state
of neglect and the pit construction and development was
totally flawed.”
When the company drafted an action plan in November
2016, they identified all the major challenges. Top of the list
was dealing with 216 extremely hostile workers who hadn’t
received a pay-cheque for more than eight months. Afrimat
had to engage all these people to restore order. To make
things worse, the mine was overstaffed, and the team had the
unenviable task of cutting the workforce by more than half.
“We terminated all the workers’ contracts in terms of a section
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African Mining February 2020
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