Afrimat (AFT) – Nkomati Anthracite Mine – Site visit notes

On 25 January 2023, Afrimat hosted a site visit to its Nkomati mine in the Nkomazi municipality of Mpumalanga. We were shown the new underground mine as well as three open cast mining pits on the property, including the first pit mined (previously flooded and at the end of its life) and two new pits opened in 2022.
The Nkomati mine has made good progress despite facing many setbacks, ranging from community unrest to the underground mine roof collapsing. Despite the perseverance and progress made by the Nkomati team, FY23 volumes are expected to be lower.
FY24 promises to be a much more productive year for the mine and revenue and profits could increase considerably. Production is to be ramped up to 70ktpm initially, with a further 30ktpm increase expected once the underground mine and Block L pit are fully operational.
Nkomati will, however, remain constrained by the poor infrastructure around the mines, which may slow sales volumes in the short to medium term, as well as communities opposing the mining of the area and the relocation of homes and graves.
This asset has great growth potential and, once the plant upgrade is completed, should yield c. 45ktpm and easily reach its 540ktpa target over a twelve-month period. The increased volumes, along with expected higher contract prices, bodes well for Nkomati. However, if it is not able to remove the bottlenecks it is facing, production could remain low and the mine may not be able to reach its full potential.