Afrimat has flagged deteriorating local infrastructure and a lack of state-backed protection as greater threats to its outlook than global trade tension or tariffs.
In its latest business update, the diversified miner said structural constraints continued to weigh on its customer base. However, it remains focused on eliminating losses in its cement division and unlocking value through targeted expansion.
“Demand for our cement products remains strong, with July marking the highest monthly sales since acquisition. Growth is only limited by kiln reliability, which we’re actively addressing,” it said.
Afrimat’s acquisition of Lafarge’s local quarry operations is also beginning to bear fruit. After years of neglect, the group invested heavily to restore the assets, integrating management and IT systems to boost operational efficiency in the second quarter.
The successful integration of Holcim’s systems — gained through the Lafarge SA takeover — has begun yielding meaningful cost savings across cement and aggregates, it said.
It reported stronger domestic iron ore sales, and a recovery in aggregate volumes.
“In our 19-year history, Afrimat has never experienced a significant permanent capital loss. While earlier acquisitions were smaller and easier to turn around, recent deals have been larger and more complex, requiring more time to stabilise,” the group said, alluding to the weaker returns in the 2025 financial year it is still working through, though momentum is returning.
According to the group it invested substantial amounts in the Lichtenburg cement plant to fix years of underinvestment. Major upgrades have been completed, but minor issues still cause downtime. Five engineers have been deployed to improve plant reliability and cut disruptions.
Its fly ash business continued to gain momentum, recording its strongest monthly volumes yet in July, driven by the delivery of key projects since acquisition, it said.
Afrimat expects volumes to stay steady despite shutdown risks at ArcelorMittal’s Newcastle business.
“We anticipate domestic iron ore sales to be slightly lower across the second half of the financial year if Newcastle closes. International iron ore sales are expected to remain similar to the previous year,” it said.
The group expects export volumes to rise compared with the same period last year (349,084 tonnes by August 31 2024), but full-year volumes are likely to remain 16% below its 870,000 tonnes a year allocation.
Afrimat said it had acquired the nearby Salene deposit, securing long-term supply and supporting quality product blending to boost returns.
Operational gains at Nkomati include securing the full environmental impact assessment and steadying output, while the underground section has been mothballed in favour of safer, cheaper options.
“An additional viable open pit has been discovered, taking the total to three — enough to meet demand despite a 10%-15% dip in volumes (155,686 tonnes as of August 31 2024) on weaker ferrochrome smelter demand,” it said.
Since the Mozambique border has reopened, the group is expecting export activity to rise, with two shipments already dispatched.
Looking forward, the group said: “We will continue differentiating the cement business through the expansion of the cement extender and innovative cement products. A detailed strategic review of the kiln performance is taking place.”
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