Fertiliser, explosives and chemicals group Omnia is solidifying itself as a serious contender in global mine-blasting markets after establishing a joint venture with Indonesia’s second-largest explosives group.
The move is in tandem with the group’s strategy to deploy capital outside SA, where CEO Seelan Gobalsamy says headwinds including electricity shortages and port challenges continue to weigh on a high inflationary operating environment.
Through its subsidiary BME, Omnia announced this week it had signed a conditional sale and purchase of shares agreement with Indonesia’s MNK to expand its mining footprint into the Asia Pacific region.
The resulting joint venture will see BME’s technology and innovative systems and products coupled with MNK’s local networks, giving experience and resources to create an integrated offering with an expanded suite of products and services for both surface and underground mines.
“We’ve been in Indonesia for five years, doing blasts and securing business there,” Gobalsamy told Business Day. “What we’ve decided is to combine our two explosives businesses into one.”
Indonesia, in the Pacific “ring of fire”, is a big player in the global mining industry that extracts minerals such as coal, copper, gold, oil, tin, nickel and natural gas for export and domestic markets.
“It will give us exposure to all the minerals in that area and it is a nice mining market for us where we believe we can add value,” said Gobalsamy.
International expansion
Omnia has been pursuing further expansion of its international mining and agriculture portfolio in Canada, Indonesia and Australia where demand for greener inputs and mining solutions is climbing.
This comes as electricity shortages and port and rail challenges create a tough operating environment in SA.
“What we’ve been focusing on locally is to ensure that we protect and enhance our supply chain and manufacturing capabilities,” Gobalsamy said.
BME Mining operates in Indonesia and Australia, Canada and both North and South America and 17 African countries.
In Canada, Omnia has a partnership with Consbec, the largest drill and blast company there, and is also building a second emulsion plant in that territory.
Similarly, in Australia, where it expanded production capacity through investment in new plants and technology, Omnia sees opportunities in the development and manufacture of speciality fertilisers as well as kelp products as the demand for sustainable agricultural inputs rises.
“We will continue to grow and deploy cash globally to enhance the value we generate,” said Gobalsamy.
“We’ve got certain areas where we want to expand, so you’ll probably see more acquisitions and partnerships in those areas which include mining and agriculture.”
Omnia’s half-year profit published in November nearly doubled as it managed to ensure the security of supply to customers amid global fertiliser shortages and heightened demand.
The mining segment’s operating profit rose 44% to R359m as the group secured multiple contract extensions and new business in surface and underground mines.
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