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CAPITAL EQUIPMENT NEWS
NOVEMBER 2016
29
Benga contract in Mozambique in Decem-
ber 2015, Serfontein says the company will
be selling off most of the equipment, ahead
of its plan to standardise its equipment
moving forward. The excess assets will be
sold through an auction process. Reputa-
ble auction houses have been approached
and a list of units with each item’s floor
price have been provided. The auction
houses will sell the assets at best, but not
below the floor price. As of June 30, 2016,
the floor prices in aggregate equated to a
minimum price of R511 million.
In addition, about 18 months ago the
MCC Contract Mining division also reported
the termination of two major contract
mining projects in South Africa, on the
back of challenging operating conditions in
the sector. The company says the mining
environment has been in a decline in
South Africa and opportunities for contract
mining have become less frequent. Pricing
has also become more competitive. The
combination of these factors resulted in
equipment to the value of approximately
R700 million being in excess of the then
current operational requirements. This
resulted in an impairment of R97 million
being recorded in the South African
operations in June 2015 for some of these
BUSINESS
local excess assets, as a portion had then
been earmarked for future opportunities.
An additional impairment of R536 million
was raised for the local contract mining
excess assets this year.
Looking ahead
Under the new eXtract banner, the MCC
Contract Mining division will now focus on
improving the efficiencies of the mines on
which it operates, as well as seeking new
projects to diversify the geographic and
commodity exposures.
Serfontein says the company’s imme-
diate success will hinge on a number of
Eqstra’s MCC Contract Mining division
will now focus on improving the
efficiencies of the mines on which
it operates, as well as seeking new
projects to diversify the geographic and
commodity exposures.
• enX to purchase Eqstra’s Industrial Equipment and Fleet Management and Logistics
divisions for R7,8 billion
• Under the deal, the MCC Contract Mining division will be recapitalised with a cash
injection of R1,4 billion
• MCC Contract Mining division the only entity left in the Eqstra stable
• Eqstra to change its name to eXtract Group following conclusion of deal
• Deal comes into effect on 1 November 2016
QUICK TAKE
114
168
34
8
-55
-572
-530
-1 100
-900
-700
-500
-300
-100
100
R' Million
Impairment
Loss on Dis. Ops.
Net Pro t
LTM Dec 2015
Declining contract mining performance and idle assets