Modern Quarrying July-August 2016

MODERN

QUARRYING JULY - AUGUST 2016 www.crown.co.za

Afrimat celebrates a decade of success Global aggregates industry under the spotlight Aspasa focuses on industry stability into the future

IN THIS ISSUE

QUARRYING MODERN

CONTENTS

14

16 Global aggregates industry under the spotlight

23

Transformation beyond the equity scorecard – Part III

Aspasa focuses on industry sus- tainability into the future

In the final part of this paper, it is pointed out that although the industry has its lag- gards, the results from the study suggest that mining companies have bought in and committed to transformation. How- ever, the complexities associated with transforming the mining industry, requires a more effective collaboration between government and industry. 35 Maintenance short cuts are costly 36 Hydraulic excavators built for efficiency 37 Largest heavyweight hauler now in SA 38 BLT takes on MDS distributorship 39 Drilling just got smarter MARKET PLACE

GAIN (the Global Aggregates Informa- tion Network) is a coalition of the major international aggregates association across the world. Its fourth bi-annual meeting was held recently in Cape Town, attended by representatives from Austria, China, the United States, Latin America and Europe with input from Canada and New Zealand. The meeting was hosted by Aspasa.

It is estimated the Aspasa members repre- sent about 75% of the aggregates crushed in South Africa. The Association serves the aggregates industry with 35 member com- panies operating in over 100 quarries. The list of services rendered to the industry is an ever-expanding one, paving the way for an industry with world-class standards.

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A new level of cone crushing

AROUND THE INDUSTRY

4 Crushing and screening powerhouse 5 Tough economic times ahead 6 New national CSSA president 7 Call for Fulton Award nominations 9 FLSmidth management changes

In this regular Supplier Spotlight feature, we look at Weir Minerals’ ongoing success with its Trio® comminution equipment in the quarrying environment. The company recently received a contract for a 300 t/ hour plant in Zambia, followed by its latest comminution project in the Middle East – a 400 t/hour crushing and screening opera- tion in Saudi Arabia.

40 BLAST FROM THE PAST

ON THE COVER

MODERN

Published quarterly by: Crown Publications cc P O Box 140 Bedfordview, 2008 Tel: +27 11 622 4770 Fax: +27 11 615 6108 www.crown.co.za

Editor Dale Kelly

QUARRYING JULY -AUGUST2016 www.crown.co.za

Since its listing on the Main Board of the Johannesburg Stock Exchange in the Con- struction and Building Materials sector in 2006, leading open pit mining company Afrimat has grown by an average of more than 21% per year, only report- ing a negative growth in 2009. This year, the company is cele- brating a decade of success. The photo shows Kliprug Quar- ries Elvis Mkrola. See page 10 for the full story.

dalek@crown.co.za Mobile: 0834199162 Advertising Bennie Venter benniev@crown.co.za

Design & layout Adèl JvR Bothma

Average circulation 2 521 Printed by: Tandym Cape

Circulation Karen Smith Publisher Karen Grant

www.modernquarryingmagazine.co.za

Afrimatcelebratesadecadeofsuccess Globalaggregates industryunder thespotlight Aspasa focuseson industrystability into the future

The views expressed in this publication are not necessarily those of the editor or the publisher.

INTHIS ISSUE

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Advanced

Technology CRUSHING AND SCREENING

Powerscreen ® manufactures an extensive range of crushing and screening equipment for use in material processing industries. This equipment is capable of being used in a myriad of applications and industries. Applications include sludge and ash, as well as aggregates such as sand, gravel, hard rock, crushed rock, coal, limestone, mineral ores and many others. Together, Powerscreen ® and ELB Equipment are committed to delivering to you an unbeaten product and outstanding after-market support.

H/OFFICE: 14 Atlas Road, Anderbolt, Boksburg • Tel: (011) 306-0700 • Fax: (011) 918-7208 • e-mail: Elb@elbquip.co.za • Website: www.elbequipment.com BRANCHES & DEALERS – SOUTH AFRICA: BRITS: (012) 250-1565 • CAPE TOWN: (021) 933-2383 • DURBAN: (031) 464-6522 EAST LONDON: (043) 740-4530 • GEORGE: (044) 878-0874 • KIMBERLEY & KATHU : (053) 841-0040 • MIDDELBURG: (013) 246-2312 POLOKWANE: (082) 334-1564 SUBSIDIARY: ELB EAST AFRICA: NAIROBI, KENYA: (00254) (0) 20 807-0728 DEALERS – SOUTHERN AFRICA: BOTSWANA: (00267) 390-9972 • LESOTHO: (00266) 2831-3926 • MOZAMBIQUE: (00258) 219-00469 NAMIBIA: (00264) 61-234-052 SWAZILAND: (00268) 518-5348 • ZAMBIA: (00260) 212-210-642 • ZIMBABWE: (00263) (4) 448-990-3

AROUND THE INDUSTRY EDITOR’S COMMENT

The song is ended – but the melody lives on

T his month, I’d like to dedicate my column to Jenny Warwick, the founder of Crown Publications who passed away on 2 June, after a long battle with illness. She was a phenomenal human being and a phenomenal publisher who supported me in every way possible. When I joined Crown some 12 years back, she welcomed me with open arms and sup- ported and encouraged every move I made (some of which were new and strange to the Crown phi- losophy at the time). She encouraged me in start- ing up two quarterly magazines – one of which is Modern Quarrying – and she took the financial risk and jumped in guns blazing. For that, I can never thank her enough, and I wish that I had. I was always so proud of her; she was an incredible mentor, tough when she needed to be, but kind in every possible way. She loved life and she loved her Crown family so much. I always remember trying to dash past her office before she noticed (she really believed in an open door policy in every way). And inev- itably she’d call me back for a chat, or to replace my chewed off lipstick with a dash of her own! She always said that whenever one was sad or stressed, lipstick was the solution; I’ll never forget that particularly as she loved pink. which was not my colour. What an incredible life she led. Born in 1944 in Bedfordview, Jenny attended Jeppe Girls’ High School from which she matriculated at the age of 16. She then joined Anglo American, where she was personal secretary to one of the top execu- tives. She spent a number of years in the London office of the company. On returning to SA, she worked with her first husbandWilliam Smith at Star Schools, helping him run the business and looked after their two children David and Lee-Ann. After her divorce, Jenny spent some time at Braby’s before she joined Avonwold Publishing where she was a director from 1978-1986. She left there to form her own B2B publishing com- pany, Crown Publications, and once her business was successful, turned her attention to the indus- try as a whole. She served as a board member on the Specialist Press Association from 1998-2000, a board member of the Magazine Publisher’s Association from 2000-2003 and was chairman of the Pica Awards (for excellence in magazine pub- lishing) from 1998-2003.

Jenny was as active in her personal life as she was in business. She was a founder member of the Bedfordview Tudor Rose Ladies Club and an active member of the Housewives League. From 1997-1995 she served Bedfordview in the following roles: Town Councillor, Mayor, Deputy Mayor and Deputy Chairman of the Management Committee. She also held portfolios in Electrical Engineering, Library Services, Health, Investments, Environment, Parks and Recreation. From 1990- 1992 she was part of the negotiating team involved in the amalgamation of the City Council of Germiston and the town councils of Kathlehong, Palm Ridge and Bedfordview; and from 1992-1994, was a City Councillor on the Germiston Transitional Council. In 2001, Jenny was awarded the Paul Harris Award for her contribution to the community. Jenny really loved life. With her husband John, she loved laughing, entertaining, good food and socialising. She was a consummate cook and enter- tainer and was famous for her voluble dinners; her recipes and good cheer being legend. She enjoyed travelling around the world with family and friends, and particularly enjoyed long week- ends in the bush with close friends. She adored and was exceptionally proud of her children and three grandchildren. It is impossible to do her dauntless spirit jus- tice as she truly had energy enough to power a city. Some people touch our lives briefly, while others leave a lasting impression and are never forgotten. Jenny is one of those.

JennyWarwick 24 January 1944 – 2 June 2016

Founder and former publisher of Crown Publications, Jenny Warwick.

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AROUND THE INDUSTRY

Pilot Crushtec International has been appointed sole Southern Africa distributor for Metso’s Crushing and screening powerhouse deal Scherf, adding that a benefit which will appeal to Pilot Modular customers is that Metso static crushers and screens will be specified as original equipment for this semi-mobile range of products. “Yes, in legal terms it is a distributorship agreement but we see it as a partnership between two companies with the same core values.”

T he joint agreement which came into effect in early April this year, is recognised by both parties as the basis for an operational business model that will drive the marketing of Metso’s comprehensive range of rock processing equipment by a distributor with an indus- try reputation for service excellence and technical support. “Our strategy has always been to find a partner for our mobile business, and with the termination of our agreement with Barloworld a couple of months ago, it was the right time to think about develop- ing further and finding the right partner. At the same time, we wanted to expand the partnership,” Metso’s VP Southern Africa Eric Maricot explains. “Crushing and screening is a niche business and we needed an associate with the knowledge and experience that would provide us with an effective window into the market.” “We’ll be marketing all aggregate-pro- ducing products within the Metso range, including static, tracked and wheeled crushers, scalpers and screens,” says Pilot Crushtec International’s CEO Sandro aggregates products and services. MQ had the privilege of talking to the management team about this exciting partnership.

Jarkko Leppänen distribution man- ager (Southern Africa) for Metso says the installed base includes a very dynamic team. “There is experienced technical backup from the factory at Vereeniging with its repair workshop – a repair facility that knows what it is doing. It is part of the Metso group and not a sub-contractor, and technically no one knows more about crushing and screening than Metso.” Leppänen, who has vast experience of the market in both Europe and Southern Africa, will be residing in SA for a signifi- cant part of the year, bringing specialist support from Metso in Finland. In addi- tion, there is also the immediate benefit derived from Metso South Africa’s service hub which is also based in Jet Park. “It is exciting that there is experi- enced technical backup from the factory at Vereeniging, and this will make our lives a lot less complicated. There are also legends like Metso’s Johnny Carvallo and Alan Fletcher, who although not work- ing directly for us, are still part of that dynamic team. Metso is in our office!” Scherf says. “Our association with Metso offers a wealth of opportunities to both partners as well as improving its product offering to customers operating modular plants. We have the best product, best concept and best support.” “Like ourselves, Pilot Crushtec International has always kept its eye on the ball, remaining firmly committed to its core business. Now that we have the right partner, we have great business opportu- nities. A lot of boxes have been ticked off from day one and we believe our brand is in very good hands,”Maricot adds.

“Our lives will get easier, we believe. Not that we will get complacent, but it makes life much easier with the cus- tomer not having to think about different brands. It’s all from one supplier, and we are able to offer a complete package.” Inventory will be built up over time with Pilot Crushtec International having committed itself to a sizeable investment in terms of finished products and spare parts, and already addressing matters related to after-sales service. “One of the positive moves for us is that we have taken no fewer than 11 of Barloworld’s sales and support team, which means that from an after-sales care perspective, the opera- tion has been up and running from day one. They are just carrying on, people are talking to them, orders are being placed and serviced; nothing has changed.” Maricot agrees: “It is an easy inte- gration process and we have been able to keep the flow and the process going. The timing has been perfect. When we looked for a partner, we wanted one that does crushing and screening with brilliant market support, and we believe we have found the perfect match.” Scherf believes that a combination of shared experience combined with a tried and tested methodology together with an enhanced service platform, will stand the partnership in good stead.

www.pilotcrushtec.com www.metso.com

Report by Dale Kelly

From left: Eric Maricot, VP Southern Africa Metso; Adrian Wood, head of distribution AGG Business Line, Metso; Jarkko Leppänen, distribution business manager Southern Africa, Metso; Sandro Scherf, CEO Pilot Crushtec International; and Eric Bonin, GM AMET Distribution – Africa, Middle East & Turkey, Metso, at the signing of the joint agreement.

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AROUND THE INDUSTRY

Tough economic times ahead The Consulting Engineers South Africa (CESA) Bi-annual Economic and Capacity Survey for the period July to December 2015, just released, indicates that times are tough and getting tougher with industry confidence the lowest in 16 years. The report indicates that the consulting engineering industry will have to adapt to a low growth environment as the outlook for infrastructure spending is hampered by poor economic growth, lower than expected revenue by government, international economic instability and price volatility, and low private sector confidence. Three key factors continue to influence the global outlook: the gradual slowdown and rebalancing of the Chinese economy; lower prices for energy and other com- modities; and the gradual tightening of US monetary pol- icy. GDP growth in South Africa slowed to 0,6% q-q, from 0,7% q-q in the previous quarter. South African economic growth slowed from 1,5% y-y in 2014 to 1,3% in 2015. Growth was largely dragged down by a further contrac- tion in the agriculture sector while construction recorded marginal growth of 1,1% in the fourth quarter (from 0,5% in the previous quarter). According to CESA CEO Chris Campbell, “government needs a strong focus on the implementation of more of its strategic infrastructure projects as detailed in the National Development Plan in order to mitigate the decline in the economy and improve investor confidence.” He further reiterates that engineers in South Africa stand ready to partner with government in eradicating the leakage from the fiscus, “not only through water which does not reach domestic households, but also through poorly spent mon- ies or corrupt practices which have led to payment for poor quality and even non-existent services in the infrastructure space.” On industry challenges, Campbell says procurement is the biggest challenge. “A further challenge to industry is to find a way to standardise the procurement proce- dures applied by the different government departments. Procurement procedures should be standard for the coun- try, or at least for the specific tier of government,” he adds.

Visit www.cesa.co.za/node/21 for a copy of the CESA Bi-annual Economic and Capacity Survey.

CESA CEO Chris Campbell believes there are tough times ahead for the consulting engineering industry.

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AROUND THE INDUSTRY

Top prize for architectural student Vedhant Maharaj from the University of the Witwatersrand recently won first prize at the Corobrik Architectural Awards, which took place in Johannesburg recently. For nearly three decades, this prestigious award has been presented to a tal- ented young graduate who is on the brink of making a name for themself in the competitive architectural profession. Maharaj’s winning disser tation, entitled Yantra, Infrastructure of the Sacred and Profane, exhibited critical ele- ments selected by the judges – innovation and technical excel- lence expressed with a keen understanding of the combined social, economic and environmental context that is changing the approach to the built environment today. Maharaj’s dissertation is a water purification infrastructure for the hazardously-polluted River Ganges in India. www.corobrik.co.za

Vedhant Maharaj is the winner of the 2015 Architectural Student of the Year awards.

New national CSSA president Hanlie Turner has been inaugurated as the Concrete Society’s national president for 2016/2017. She is a technical information specialist with cement company PPC and has been a member of the Concrete Society for many years, holding several voluntary positions in the organisation including chairperson of the inland branch, and more recently as national VP. Past president Tseli Maliehe of Ibhayi Contracting in Port Elizabeth says he is confi- dent that the Society is being placed in good hands under Turner’s leadership, guidance and enthusiasm for all things concrete. www.concretesociety.co.za

Oil price uptick not enough

The oil price has increased to its high- est since the last six months recently, after sinking below US$30/barrel in February. Many analysts are express- ing relief, saying that the uptrend is likely to continue. Jenny Erskine, partner in oil and gas at Deloitte in the Western Cape, says that the slight uptick in the oil price is not enough to provide security for players in the industry. “Since the oil price’s downward spi- ral, upstream oil and gas companies have roughly faced a 70% drop in rev- enues. Companies operating in this sector should not get ahead of them- selves by focusing on the short term. There is still a lot of water that needs to flow under the bridge before oil will deliver the same returns to com- panies operating in this sector as in 2014, when the price peaked about ± $105/barrel,” she adds. www.deloitte.com

New Concrete Society president Hanlie Turner pictured with outgoing president Tseli Maliehe.

AROUND THE INDUSTRY

Call for Fulton Awards nominations The Concrete Society of Southern Africa NPC is calling for nom- inations for its prestigious biennial Fulton Awards, which recog- nise and honour excellence and innovation in the design and use of concrete. The awards continue to celebrate the legacy of scientific and technological advances in concrete within the built environment, and the late Dr Sandy Fulton’s life and achieve- ments in the industry. The 2017 awards take on a new look with brand new cate- gories and a new approach to judging, with PPC once again the anchor sponsor for the awards. “We had drifted away from identifying all that was excep- tional in the concrete,”explains CEO and director of the Concrete Society, John Sheath, “and in the opinion of the Fulton Awards Committee, we were focusing too much on the total project on hand, considering aspects that had little to do with the material.” The deadline for nominations is August 31, 2016, while the completed entry packs have to be submitted by the end of November 2016. The award winners will be announced at a spe- cial gala weekend in the Drakensburg from June 2-4, 2017. Visit www.concretesociety.co.za for full details of the 2017 awards.

A 2015 Fulton Award winner: Fairscape Precinct office tower, Botswana.

Roadmap for water use licence compliance As many mines grapple with the complexities of implementing and renewing their water use licences (WULs), global consultant engineers and scientists SRK Consulting, has prepared a manageable system to sim- plify this process – completewith a training programme to put all those responsible on the same page.

to make their operations more cost efficient. “While the WUL focuses on protecting all water resources – by limiting the quantity of what is abstracted from surface and groundwater sources and ensuring the quality of what is returned to the resource – there is also increasing attention paid to preventing pollution from diffuse sources and conserving water through reuse,” she says. This gives mines the opportunity to further enhance their water saving efforts and their water use efficiency plans. “SRK is frequently involved in auditing the imple- mentation of WULs for mining clients, so we see the recurring difficulties and have addressed these in our training and our tools,” Burke says. www.srk.co.za

SRK Africa principal scientist Jacky Burke says obtaining and implementing aWUL are onerous tasks which many mining operations find overwhelming. “Our approach is to get back to basics and to help clients implement a sustainable process with clear designation of roles, backed up by the necessary data collection and supporting technology.” She emphasises that the WUL is not just a com- pliance issue but needs to be embraced by mines as a valuable tool to help manage water resources and

SRK Consulting Africa’s principal scientist Jacky Burke.

Land rehab conference The Land Rehabilitation Society Southern Africa (LaRSSA) is holding its fourth annual conference in Kimberley, from 13-16 September this year. Under the banner of The Rehabilitation Business Case, it has invited submission of applied case studies and research initiatives on the following themes: • improving ecosystem function for long-term gain; • harnessing the intrinsic value of rehabilitation for communities; • improving the economic gains from rehabilitation;

• understanding the business indicators for successful rehabil- itation; and • identifying funding for rehabilitation. The conference will offer something for anyone with an interest in land rehabilitation – miners, farmers, land owners, conserva- tionists, practitioners, regulators and researchers. The conference again offers CPD opportunities in the form of a pre-conference workshop and post-conference site visits. www.larssa.co.za

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AROUND THE INDUSTRY

Royal Bafokeng partnership At a ceremony held at Phokeng, NorthWest Province, AfriSam and New Business Consulting, a 100% Broad-Based Black Economic Empowerment (B-BBEE) Bafokeng-owned company, signed a Memorandum of Understanding (MoU), cementing a partnership aimed at facilitating enterprise development and creating job opportunities for the Royal Bafokeng Nation. As the leading black-controlled construction materials group in southern Africa and the only established cement manufacturer with a Level 4 B-BBEE rating, AfriSam is committed to enabling economic development on the African continent. It believes in contributing in a sustainable and meaningful manner to com- munities surrounding its operations. New Business Consulting,

comprising a number of entities including local entrepreneurs, a women-owned company as well as the B-BBEE Makgotla Trust representing clans exceeding 2 000 members, strives to empower mining communities through its economic development model. As part of the MoU, a number of enterprise development opportunities within the Bafokeng area have been identified and are currently being investigated. Among these is the establish- ment of containers as cement sales outlets as well as a premix bagged product manufacturing facility. The goal is to establish sustainable local enterprise development businesses that will directly benefit the Bafokeng people. “All the projects we have identified strongly align with, and support, the strategic objectives and enterprise development goals of the Royal Bafokeng Group and should create shared value for all parties involved, including the local community,” says Roshni Lawrence, Strategic Growth Executive at AfriSam. www.afrisam.com Back left: Ian Venter (MD of Royal Bafokeng Enterprise Development); Moss Ramatja (New Business Consulting); Itu Diala (Women Group of New Business Consulting; and Damaria Masilo (Women Group of New Business Consulting. Front left: Gerhard Maree (AfriSam); Roshni Lawrence (Strategic Growth Executive, AfriSam); Ernest Mogopodi (Chairman of New Business Consulting); and Kgosana Phillimon Rabyae (Tau Bashiga Community Development Trust). Steve Mputle (New Business Consulting) is not in the photo. His vast expertise within the mining industry and specific experience in South Africa will be a great advantage when look- ing at the current challenges in the Sub-Saharan African market. Holding anMBA and aMechanical Engineering degree, De Kock will reside in South Africa, operationally reporting to the SVP Global Operations in the Minerals business and in his Country role, he will report to the Group Country Responsible (GCR) for South Africa. Drury, who has been both Country head and CFO South Africa, will stay on as Country CFO. www.flsmidth.com The National Regulator of Compulsory Specifications (NRCS) had confirmed to the FF Plus that the e-toll equipment had never been certified as required by law. The NRCS also confirmed that Sanral had never applied for certification either. “Until the Commission makes a finding in the complaint, Sanral is not allowed to issue accounts or take steps to collect fees, as it is possibly contravening the law and all accounts are therefore illegal,” he says. “According to the legal advisers of the FF Plus, any person who is being sued could use the fact that the issue is before the NCC as an argument to have the case post- poned. Sanral should take note of the fact that it is a crime to interfere with the activities of the Consumer Commission.” www.vfplus.org.za

FLSmidth management changes FLSmidth has announced changes within its South African organ- isation. Effective July 1, 2016, Deon de Kock has been appointed VP for Minerals, Sub-Sahara. In addition to assuming full regional responsibilities, he will assume the role of Country Head, South Africa, taking over from Charl Drury, who will remain as Country CEO. De Kock’s professional experience includes more than 20 years in mining and construction, working with growing busi- ness volumes, increasing profitability and large-scale operational improvement initiatives. Sanral e-toll saga continues Sanral is still trying to threaten road users in an illegal manner with summonses for e-toll accounts, according Adv. Anton Alberts, the FF Plus’ parliamentary spokesperson on Transport. Sanral’s latest threat was that motorists, who had not settled their overdue accounts by midnight May 3, 2016, would be civ- illy sued. Adv. Alberts says the threat is opportunistic and dis- honest, and once again shows Sanral’s contempt for the National Consumer Commission, as well as the Commission’s processes to adjudicate cases. He points out that FF Plus has already sub- mitted a complaint to the Consumer Commission on behalf of all account holders, in which it is argued that Sanral’s mea- suring instruments do not meet the requirements of the Legal Metrology Act, 9 of 2014.

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A view of the Glen Douglas primary crusher (centre) and intermediate stockpile from the stockpile area, with the wash plant on the left.

ON THE COVER

Since its listing on the Main Board of the JSE in the Construction and Building Materials sector in 2006, leading open pit mining company Afrimat has grown by an average of more than 21% per year since 2009. Dale Kelly l ooks at the reasons behind this year-on year achievement. Afrimat celebrates a decade of success

bricks in northern KwaZulu-Natal and the eastern Free State. Looking back, the black-empowered group successfully debuted on the JSE in November 2006, immediately indicating execution of its acquisition strategy when it placed the company under cautionary. The shares listed strongly at R8,05 to give Afrimat a market capitalisation on listing of R1-billion. New contracts worth some R50-million in line with forecast pro- jections set the group well on the way towards meeting its 2007 forecast reve- nue of R471,4-million. MQ recalls that with the prelisting placement almost 30 times oversub- scribed, disappointed applicants and the public were left to buy shares on listing. As a result, some two hours after listing, more than 2,6-million shares had changed hands in 767 separate transactions with an aggregate value of R21,4-mllion. An amount of R125-million was raised in the prelisting private place- ment of 25-million shares at R5,00/share. With R50-million going to founders of the group who had sold small stakehold- ings to facilitate the listing, new capital of R75-million went directly to eliminate gearing on the balance sheet – a financial strength that firmly positioned the group in its aggressive acquisition strategy. At that time, CEO Andries van Heerden told MQ that he was grateful that the list- ing was “an absolute blessing. I used to

A frimat supplies a broad range of construction materials and industrial minerals, ranging from mining and aggregates, metallurgical dolomites, agricultural lime, concrete products (bricks, blocks and pav- ers) to readymix. It has established a firm foothold in contracting services, which comprise drilling and blasting, mobile crushing and screening. Afrimat’s recent acquisition of Cape-based Cape Lime has further extended its diversification into additional mineral markets, pharmaceu- tical supply and the construction sector, through the burnt and milled lime and dolomite products. Backed by over 50 years’ experience, the group’s growing geographical foot- print covers vast sections of urban and rural Southern Africa, with its integrated product offering distributed across the Western Cape, Eastern Cape, KwaZulu- Natal, Free State, Gauteng, Limpopo, Mpumalanga (with its latest Mbombela branch launch taking place in early July), Northern Cape, and Mozambique. Its five

key divisions include: • Mining & Aggregates • Industrial Minerals • Contracting International • Concrete Products • Readymix

Afrimat is able to service projects of any scale from major infrastructure and con- struction projects for state-owned enter- prises and parastatals through to small private sector contracts. Its consistently low staff turnover has resulted in a deep skills pool, many of whom MQ has inter- viewed over the years. Genuine transformation, starting with staff and management and extending to community upliftment, is integral to the group’s philosophy and sustainability, and a genuine company this is and always has been. Afrimat brought together two indus- try specialists founded in 1963 and 1965 respectively – Prima, which mainly sup- plied aggregates to the Cape construc- tion and road building industries – and Lancaster, which was dominant in quarry- ing and the supply of concrete blocks and

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ON THE COVER

diligent in terms of the deals coming to its table, citing the Cape Lime acquisition as being one that took some four years to formulate. “This deal, which is our largest and most exciting acquisition undertaken to date, has a unique product offering, opening up additional markets in water purification, soil treatment, effluent treat- ment as well as the traditional building and construction sector.” Founded in 1946 in Robertson, Cape Lime is a producer of lime and associated products. Its resources include Langvlei (Robertson), dolomite; Vredendal, lime- stone and dolomite; and Maskam (Van Rhynsdorp), limestone – not yet mined. Hale says Cape Lime is a very well run operation and has therefore been an easy integration into the Afrimat Group. “This acquisition is an extension of our diversi- fication strategy aimed at leveraging off our core business, not only in new mar- kets but also by offering new products in existing markets.” Post year-end, Afrimat received regu- latory approval for the Cape Lime acqui- sition for which it paid R276-million. The acquisition was effective 31 March, 2016, complementing and boosting the compa- ny’s drive in the industrials sector. Glen Douglas was the company’s ini- tial diversification into industrial miner- als. “If you go back in history, it is amazing how cyclical this industry of ours is, and that’s why the Glen Douglas acquisition was so attractive to us. We went through tough times in 2008 when the share price nosed down, with a literal sell out on the stock exchange. The construction sector

to never give up. Together with my part- ners, it’s been a long and hard process, but we’re grateful for how things turned out,” he told MQ . Discussing the acquisi- tion of Lancaster, he said there were a lot of things at Lancaster that would become part of Afrimat’s culture, one of these being its strong business ethic. Bringing those ethics into the group was Pieter de Wet, and the rest is history. The Afrimat journey comprises: • 1973: Lancaster precast established • 2003: Empowerment transaction between Mega Oils and Prima; • Lancaster acquired by a consortium led by Andries van Heerden and Laurie Korsten; • 2006: Afrimat formed on merger of Lancaster and Prima; together with listing on Main Board of JSE in Construction and Building Materials sector; • 2007: Acquisition of Malans Group and Denver Quarries; • 2008: National footprint into Gauteng, Limpopo and Mpumalanga; • 2009: Afrimat BEE Trust acquired 15,8%; BEE shareholding increased to 26,1%; and acquisition of Blue Platinum Quarry; • 2011: Diversification into industrial minerals with the acquisition of Glen Douglas dolomite mine • 2012: Diversification into clinker mar- ket with acquisition of SA Block • 2013: Acquisition of 50,7% stake in Infrasors Holdings; and • 2015: Acquisition of Cape Lime. Chatting recently to group marketing manager Hylton Hale at the company’s head office in Cape Town, MQ asked him to explain the paradox between main- taining a strong balance sheet while also being adventurous and investing in new business ventures. “We are obviously less reliant on the construction industry than in the past, not forgetting that aggregates and con- crete products have been the basis for our success. And with this in mind, we have been very conservative in our approach in terms of new acquisitions, fiercely pro- tecting our market in terms of the con- struction industry. “ He says the company has been • 1963: Prima established; • 1965: Lancaster founded;

have all my hair before the listing, but lost it in one week!” Afrimat’s R125-million acquisition of Cape-based Malans Group and Denver Quarries that same year, further boosted the then Prima Quarries’ 45-year pres- ence in the region, marking the start of the group’s expansion plan. Malans com- prised several quarry operations and a number of sand mines in the Western Cape, Jeffrey’s Bay area and mobile crush- ing operations in Port Elizabeth. Commenting then on the Denver Quarries element, Van Heerden said the company had considered this operation as a standalone acquisition target even before it was acquired by Malans. “It will further enhance our presence in the Eastern Cape.” Interestingly, both Lancaster and Prima had similar cultures together with a histori- cal integration of management teams. Van Heerden was MD of Prima until January 2005 when he left and formed the consor- tium that eventually acquired Lancaster. Prima was established in 1963 as Prima Klipbrekers. It started as a small quarry and stone crushing business in Worcester. In 1979, Prima Quarries was formed as a holding company, diversi- fying and acquiring or forming entities within the same industry. Lancaster Quarries was founded in 1965 tomine and crush dolerite stone on a farm some five kilometres outside Vryheid in KwaZulu-Natal. Its precast division was established in 1972 with five production units in northern KZN and eastern Free State. In 2008, MQ joined Afrimat in cele- brating the opening of its state-of-the-art workshop in Vryheid. At that time it was robustly looking at further expansion and had signed a deal with a BEE partner. MQ recalls Van Heerden saying: “For me, the two most wonderful sounds in Africa are the call of the fish eagle and the roar of a big diesel engine, and not a lot of people can appreciate that. So when I joined Prima, I knew I could get to the fish eagle in the bush, and also play with big diesel engines; so it has worked out well for me.” Lancaster was acquired in 2005 with Van Heerden’s consortium taking over in September that year with a fully-lever- aged buy-out. “One of my core beliefs is

Lancaster Quarries was formed in 1965 to mine and crush dolerite stone on a farm situation five kilometres outside Vryheid in KwaZulu-Natal. Picture shows the Vryheid pit in early 2007.

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a mixture of conservatism and a bit of adventure comes. “Although we are not totally reliant on the construction industry as we were in the past, we have obviously taken note that aggregates and concrete products are the very foundation of our success as a company.” And as Van Heerden says, “our group has grown by an average of more than 21% per year since 2009. Our cashflow is good and the business is generally in a healthy state financially. We’re grateful for the blessings we have received in this company and we’re excited about what the future holds.”

services. It has established quarries in Pemba, Cuamba and Palma in the north- ern region, and considers Mozambique as a medium-sized investment which is being handled cautiously. “Our intention is a soft entry with a low capital invest- ment. If you are not there, you are not considered seriously,” Hale says. As its first step into Mozambique, the company identified the Tete-Ncala railway line as a viable opportunity followed by the Cabo Delgada Liquified Natural Gas (LNG) project, which is a first-of-its-kind LNG facility on the east coast of Africa. “We are already working on several con- tracts and believe we are in the right place at the right time.” For the financial year ended 29 February, 2016, Afrimat reported a positive growth rate against the previous period for nine of 10 reports (in February 2009, it reported a negative growth rate). Van Heerden attributes the solid performance to the company’s diversification strat- egy and its cost reduction and efficiency improvement initiatives.“We have, through our mantra Growth through Diversification, continued to successfully focus on our more valuable product lines, which has resulted in higher earnings.” “What is important,” Hale tells MQ ,” is that the core of our old business before the Glen Douglas acquisition has a very strong foundation. When one thinks about it, Lancaster and Malans was founded in 1963 and Prima in 1965, so one can image the wealth of experience just with those three companies. So that is the foundation of our success, where

suffered and that precipitated the danger of being too reliant on the construction industry, which can be very vulnerable.” In May 2010, Afrimat entered the industrial minerals market with the R35-million acquisition of Glen Douglas Dolomite. The quarry, which is situated in Henley-on-Klip, south of Johannesburg is undoubtedly the company’s flagship operation. It produces a broad spec- trum of aggregate products, followed by concrete products and the brickmak- ing industries. The mine has a strong brand due to its consistent quality and exceptionally low water demand of the products. It’s aglime for the agricultural indus- try is produced as a by-product from fines collected in the settling ponds at the washing and screening plant and fines from the metallurgical dolomite process. Opened in 1957, the mine is an open- pit operation producing from a single excavation, sub-divided by a 40 m wide dyke into two pits – B and C pits – which produce both the low-silica metallurgical dolomite for the steel industry and the high-silica content sold as an aggregate to a wide range of customers in Gauteng and the Free State. InMarch2013, Afrimat acquired a 50,7% stake in Infrasors Holdings, further expand- ing its geographic reach and footprint in industrial minerals. Infrasors produces met- allurgical dolomite, limestone and silica.The company has since incrementally increased its shareholding and currently owns 98%. The mining assets include: • Lyttleton Centurion Mine – opencast mining and beneficiation of dolomite; • Marble Hall Mine – opencast mining and beneficiation of limestone; • Delf Sand Mine – opencast mining and beneficiation of alluvial silica sand and silica quartz; and • Delf Silica Coastal – opencast mining and beneficiation of alluvial silica sand. Hale says Marble Hall has been a success story for the past year. “We secured a deal to supply Arcelor Mittal through Marble Hall, which is great for our guys up north.” Afrimat is also building strength beyond borders by extending its reach into Mozambique, supporting the rap- idly developing region with high quality aggregate products for civil and mining projects as well as drilling and blasting

Report and photographs by Dale Kelly unless otherwise credited.

Afrimat prioritises ongoing training to raise standard of performance and productivity. A focused training division is dedicated to providing employees with the opportunity of expanding their skills and qualifications. Mandisa Norubela is Kliprug quarry’s control room operator (photo courtesy Afrimat).

Afrimat group marketing manager Hylton Hale.

Afrimat’s Pemba operation is located south of the main LNG project in Northern Mozambique (photo courtesy Afrimat).

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GLOBAL AGGREGATES FOCUS

GAIN (the Global Aggregates Information Network) is a coalition of the major international aggregates associations across the world. Founded in 2010, the organisation held its first meeting in Brussels; the second took place in Charlotte, NC in 2012; the third in Brussels in 2014; with the last meeting hosted by Aspasa in Somerset West in April this year. Global aggregates industry under

some 7,0 t/capita, despite recent setbacks in the mining sector. CCAA sets out to dif- ferentiate itself from the mining sector, using extensive communication media emphasising the strong environmental stewardship of the aggregates industry. It is notable that in Australia, the aggregates sector now has a strong position in the marketplace due to growing off-shoring of the cement sector due to carbon taxes. China Jixian Han, secretary-general of the China Sand and Stone Association (CAA), says the ‘new normal’ of only 7,0% pa eco- nomic growth in China, the level of 2015 output of aggregates remaining at about 15-billion t, even though those of cement and concrete had declined about 5,0% and 12%, compared to 2014. Driven by the 13 th five-year economic develop- ment programme requiring major further investment in infrastructure, the outlook for the aggregates sector looks bright for the next 15-20 years. The Silk Road project, linking China to Europe, will link 4,4-billion people on its route. The continued growth of the aggre- gates industry has driven huge technical innovation in machinery suppliers and increases in the output of the 100 major national producers, who are now required to meet world-class operational standard. In parallel, older smaller operators were being closed down, despite the fact that they comprise 63% of the market. There is increased focus on high- er-quality aggregates for use in high- strength concretes, as well as in manufactured sand replacing natural sand. Recycling of demolition materials is also being strongly promoted with the objective of recycling 30% of those mate- rials in urban areas by 2020. The CCA is confident of a good future for aggregates in China. Latin America Jaume Puig i Canal, treasurer of FIPA (Federacion Iberoamericana de Produc- tores de Aridos) outlined the strong bonds that exist between Spain, Portugal, Mexico, Central and South America. There

A ttended by representa- tives from Austria, China, the United States, Latin America and Europe, with input from Canada and New Zealand, the aggregates industry was under the spotlight. Many issues common to various global regions were identified – with some regions having dif- ferent approaches and solutions – mak- ing the exchange of experience and best practices extremely valuable. Several areas were identified for follow-up, all of which will assist in strengthening the industry globally. In all countries represented, aggregate pro- duction tonnages are now either stable or increasing, which bodes well for the industry as a whole. The purpose of GAIN is to openly share experienced and industry best in the interests of promoting the greater good of the aggregates industry glob- ally. Interestingly, on a global scale, GAIN members represent 60% of the global aggregates production of 40-billion t, from around 400 000 quarries and pits worldwide, estimated to employ in the region of 3-million people. South Africa According to Aspasa director Nico Pienaar, post the decline after the Rugby World Cup in 2010, the SA aggregates sector is now growing with a production of some 130-million t, equivalent to 2,5 t/capita, driven by ongoing needs for housing, road, rail, electricity and water infrastruc- tural development. The quarrying industry falls under mining legislation and is heavily regu- lated. A large issue is illegal mining and quarrying, which negatively affects both industries. Other challenges include electricity, water and skills shortages,

the latter despite 30% unemployment. Despite these challenges, the future pros- pects for the economy and the aggregate industry in SA look bright, and Aspasa is optimistic for the future. United States Mike Johnson, president and CEO of the National Stone, Sand & Gravel Association (NSSGA), says his organisation represents 90% of crushed stone and 70% of sand and gravel produced in the US. The US market declined from3,1-billion t in2006 to1,96-bil- lion t in 2010, and in 2015 had risen again to 2,28-billion t, equivalent to 6,7 t/capita, drivenmainly by private construction. NSSGA is focused on advocacy through communications with all stake- holders, particularly the politicians. The recent success in promoting the FAST (Fixing America’s Surface Transportation) Act, should provide a further industry boost up to 2020. NSSGA’s top priorities are advocacy, both legislative and regulatory; commu- nications with all stakeholders; and mem- bership education and events. Its core message is to highlight what the industry does and its importance. Johnson says America’s future is tied directly to the suc- cess of the aggregates industry. Australia Ken Slattery, CE of Cement, Concrete & Aggregates Australia (CCAA), says the CCAA, which notably represents 90% of the combined cement, concrete and aggregates industries, aligns itself with the construction industry in Australia. CCAA’s strategic priorities include the industry licence to operate; market devel- opment; technical leadership; and mem- ber engagement. Uniquely, the country has enjoyed 23 years of continuous growth, now using

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GLOBAL AGGREGATES FOCUS

the spotlight are full member aggregates association in Argentina, Brazil, Colombia, Costa Rica, Guatemala, Panama and in the Dominion Republic, with other countries in the region represented by companies or observers. The total regional market is estimated

which represents the industry in Ontario. However, the aggregates industry con- tinues to prosper there as the greater Toronto areas continues to develop; though with increasing difficulties in get- ting access to resources in the surround- ing Greater Golden Horseshoe area. OSSGA actively participated in the recent Provincial Plan Review, the results of which recognised the importance of aggregates, yet gave little consolation in better facilitating permitting. The Association is campaigning for a more positive industry image, counteracting a recent negative social media campaign. There are also aggregates associations in the Alberta and British Colombia prov- inces, though there is as yet no national Canadian association. Average aggregates consumption in Canada is around 13 t/capita which, like Scandinavia, is typical for a developed, rugged, sparsely-populated country with a severe climate. Global aggregates estimate Presenting an overview of his best data for global aggregates production, honor- ary president UPEG and GAIN coordinator Jim O’Brien says best estimates indicate a global production of 40-billion t, of which 60% of covered by China, India and the rest of Asia. This represents about 5,3 t/ capita for a population of 7,5-billion. At a global level, the industry still remains fragmented. The top 20 global aggregates producers comprise only 5,0% of production, with the remaining 95% being produced by SMEs. Empirical data indicated that t/capita increases as GDP/ capita increases; in other words, more aggregates are needed as an economy develops. Anticipated growth in global population and GDP/capita would indi- cate that by 2030, global aggregates production will increase to 55-billion t, a very positive message for the industry. The next GAIN meeting in 2018 has been proposed to take place in Spain. www.uepg.eu Report by JimO’Brien and summarised by Dale Kelly. Please note that the papers presented will be summarised in the next issue of MQ .

production declining 30% from 2008 to 2,6-billion t in 2015, equivalent to 5,0 t/ capita, now with a slight recovery. UEPG actively lobbies and works with the European institutions as well as other representative bodies andNGOs. Its top pri- orities include better access to resources as part of the Raw Materials Strategy; green and blue growth in fostering biodiversity; the upcoming regulation of Respirable Crystalline Silica; and campaigning against illegal operators – more prevalent in some central and southern European countries. New Zealand Apologieswere received fromRoger Parton, executive director of AQA (Aggregates & Quarry Association of New Zealand). The output of the aggregates industry there suf- fered amajor decline from2006 to 2011 but now is in a very positive growth, driven by new housing around Auckland, the devel- opment of highways between the major cities and the post-earthquake rebuilding in Christchurch. Access to resources is a challenge around the major cities, though even NGOs now recognise the need for aggregates, and recycling is being pushed very actively. Due to a coal mine tragedy, health and safety is now being strongly regulated with the aggregates industry regarded as part of the mining sector. AQA is proactive in developing safety best practice guidelines for the aggre- gates industry. Canada Apologies were received from the Ontario Stone, Sand & Gravel Association (OSSGA),

at 1,9-billion t, equivalent to 2,9 t/capita, the biggest components being Brazil, Colombia, Chile and Mexico. Overall, the region has exciting growth prospects driven by a growing population par- ticularly in the major cities, with huge demand for better housing, better trans- port infrastructure and healthcare. The region has challenges in precari- ous political systems, which can have neg- ative impacts on stability and economic growth, together with poor regulation which leads to unfair competition in the aggregates industry. On the positive side, responsible operators can obtain permits within two years for durations up to 30 years. FIPA is a positive force in improving the industry in the region. Europe Describing the challenges face in Europe, secretary-general of UEPG (European Aggregates Association), Dirk Fincke, explains that UEPG represents the aggre- gates industry across 29 countries (most of the EU 28 plus EFTA) and has a high- ly-efficient small office with three staff in Brussels, where the key European institu- tions are located. Europe has 24 working languages with a wide variety of cultures, most now using Euro currency. Europe has suf- fered a long recession, with aggregates

International and local delegates photographed at the GAIN conference in Somerset West (photograph courtesy Aspasa).

Honorary president UPEG and GAIN coordinator Jim O’Brien (photograph Dale Kelly).

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