IMR, the global commodities trader that owns mining and steel production facilities, has announced the acquisition of PPC Lime in South Africa for R515 million along with a consortium of investors.
Anirudh Misra, Chairman of the IMR, comments:
“After an extensive tendering process, we are pleased to have presented a sustainable and transparent structure to drive these operations forward.
“With our previous acquisition of the Sedibeng iron ore mine in the South African North Cape, we have shown that we are ready to invest in South African mineral assets and at the same time want to benefit everyone involved by investing in them and growing them.
“We are delighted to have the partners who have joined us in this latest acquisition, namely Billy Mawasha, who brings a wealth of experience in the South African mining industry, Johan Claassen, the former CEO of PPC Group.”
Billy Mawasha, founder of Kolobe Nala commented:
“South Africa is known for its rich, long-lived mineral deposits and this Lime Acres operation is no exception. It’s been in operation for nearly seven decades and has another five decades of extractable reserves.
“As new owners, it is our duty to ensure consistent and cost effective production to meet underlying demand and to develop new markets wherever possible. That is why IMR is a natural partner on board with a well-established trading business. “
“As the world moves into a greener future, I believe that lime products, with their unique properties, will play an important role in desulfurizing emissions from coal plants and other environmentally friendly applications.”
A spokesman for HEX2M Energy commented:
“We have already identified several ways to maintain the mine’s world-class status while using our global trading network to identify new sources of demand.
“It is not often an opportunity to source such a quality asset, and this consortium stands ready to ensure that not only will it be produced for many years to come, but that it will be revitalized by its new owners.”
Johan Claassen, former CEO of PPC Group and head of JJJL Mining, commented:
“This asset has always been a solid performance in the PPC portfolio and has been a reliable, steady profit maker. We are delighted that our offering has been recognized for what it was, the most sustainable and responsible future owner of this asset to ensure that it continues to benefit all parties for years to come. “
- PPC Lime is a headquartered wholly owned subsidiary of PPC Ltd, a South African cement and related products supplier.
- The company is one of the most technologically advanced lime producers in the world and the largest supplier of metallurgical lime in southern Africa.
- Its main asset is a limestone quarrying and processing facility which began operations in 1954 in Lime Acres, North Cape, with an extensive reserve of metallurgical grade limestone and dolomite.
- PPC Lime promotes, produces and sells reactive lime, hard burnt lime, hydrated lime, burnt dolomite lime and raw limestone in three modern preheating rotary kilns.
- The total calcination capacity at Lime Acres is 900,000 tons per year. This makes PPC Lime the leading supplier of these products for important local industries such as steel and alloys, gold, uranium and copper mining, non-ferrous metals, sugar refining, water treatment and flue gas desulphurisation;
- The world’s largest use of lime is in steel production, where it is used as a flux to remove impurities (silica, phosphorus and sulfur). and
- In the 2020 financial year, PPC Lime achieved sales of ZAR 816 million and an EBITDA of ZAR 110 million.
PPC Ltd initiated a formal sale process of PPC Lime in 2020 as part of an ongoing capital restructuring to defuse the company’s South African balance sheet.
Kgatelopele Lime was formed with this particular acquisition in mind to be the standout bidder in the process. This has meant ensuring a sustainable financial package and shareholder structure that not only complies with South African empowerment laws, but also includes passion, a knowledge transition, the workforce and the host communities, and an international trading company with a proven track record of investing in South African assets.
Upon completion of the transaction, PPC Lime is expected to be 39% black owned, with:
- 29% owned by strategic BEE investors;
- 5% owned by relevant PPC Lime employees; and
- 5% owned by the host communities of PPC Lime as required by the Mining Charter;
The name Kgatelopele is shared with the local parish where the mine is located. This name was deliberately chosen to symbolize the intention to partner with both the employees and the wider community as we breathe new life into the operation and the region and advance the mine.
With respect to the Agreement, the rights, benefits and benefits of the transfer of PPC Lime to Kgatelopele Lime will be transferred on April 1, 2021.
The transaction is expected to close by the end of this year under a number of precedents, including approval by the Department of Natural Resources and Energy and the South African Competition Commission.