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CAPITAL EQUIPMENT NEWS
NOVEMBER 2016
30
BUSINESS
factors, but it’s important to branch out
into new geographic and commodity ex-
posures. He tells
Capital Equipment
News
that previously 90% of the Contract
Mining division’s work was in the platinum
sector and that exposed it to a lot of risk
considering the historical pricing turmoil
in this particular mineral sector. As a re-
sult, Serfontein says the company focused
its efforts during the last couple of years
on expanding into other soft rock mining
sectors. “Our skills set stretches across
hard rock and soft rock operations, and we
are looking at spreading the risk between
commodities rather than having too much
exposure in a single commodity,” says Ser-
fontein.
He also believes future growth will be
realised through expanding into other
territories to increase hard currency
earning potential. “We are diversifying
into new territories, not only in Africa, but
across the globe,” says Serfontein. “There
are certain jurisdictions that are easier
to enter and we will prioritise them first.
These range from Indonesia to Guinea and
everything in between. Of importance to us
is where projects sit on the cost curve and
how sustainable a project is.”
Meanwhile, as part of the new
strategy adopted in June 2015 to become
a services-focussed group, the MCC
Contract Mining division will increase its
services offered to mines. “We currently
offer a total suite of services, from pre-
feasibility studies, through to mining
execution and rehabilitation. Previously
our offering included bringing a sizeable
portion of our balance sheet to projects,”
says Serfontein, adding that in the future,
the company’s offering will be much more
service-oriented, with value creation
the main focus, while using some of the
company’s and others’ balance sheets.
In the long term, Serfontein says the
company will look to grow through stra-
tegic acquisitions. “We will be looking
at acquisitions in the mining services and
supply space, that add value across and
up/down the mining value chain,” he says.
Speaking of turning around the fortunes
of the company, Serfontein says, while
there are factors which remain external,
such as commodity pricing, he believes
a large part of the future success of the
eXtract Group lies with efficiencies which
are within the company’s control. Some
of the immediate plans following the
recapitalisation of the Contract Mining
division entail monetising standing equip-
ment to pay down some of the company’s
remaining debt. He believes that the cash
from the disposal of excess assets would
greatly alleviate the current constraints.
All proceeds from the sales of local excess
assets will be used to repay South African
bank debt, while proceeds from the sales
of Benga excess assets will go towards
repaying rest of world funding.
b
Net asset values for the Excess Assets that were identified as held for sale, as at 31 December 2015:
Assets held for sale value
Disposal Consideration
Entity
Rm
Rm
MCC Plant Hire
84.0
58.8
MCC Contracts
281.0
196.7
EML
782.0
547.4
Total Excess Assets
1 147.0
802.9
“We currently offer a
total suite of services,
from pre-feasibility
studies, through to
mining execution
and rehabilitation.
Previously our offering
included bringing a
sizeable portion of
our balance sheet to
projects.”
Eqstra’s MCC Contract Mining division’s skills
set stretches across hard rock and soft rock
operations, and will look at spreading the risk
between commodities rather than having too
much exposure in a single commodity.