Aerial photograph of construction site and sand mountains. Picture: Supplied
Mantengu Mining has officially entered into an agreement with the joint liquidators of Masorini Iron Beneficiation (MIB) to acquire an iron plant in Phalaborwa, Limpopo, for R18.97 million.
The acquisition forms part of Mantengu’s initiative to expand its operations and modernise iron production techniques in South Africa.
The iron plant in question boasts a cutting-edge design that converts superfine iron ore into high-quality metallic products, utilising low-cost thermal coal in its operations. This state-of-the-art facility is intended to be modular, allowing for deployment at strategic locations, thereby significantly reducing production costs related to feedstock logistics and energy consumption.
According to Mantengu, the production process employed by the plant is notably energy efficient, with significantly lower emissions than traditional iron-making methods. This emphasis on sustainability aligns with global trends, as the industry continues to face scrutiny over its environmental footprint.
In July 2024, MIB was placed into final liquidation, prompting the appointment of joint liquidators, including Ntandazo Aviwe Ndyamara, Mohammed Yaseen Khammissa, and Ebrahim Mehnaaz, who undertook the responsibility to auction MIB's assets.
Following this, in September, a public invitation for offers on the iron ore beneficiation plant came, including other essential assets like a 50 000 tonnes per year SupaScrap briquetting plant and various operational equipment.
Mantengu’s acquisition of the iron plant was confirmed through the successful auction process, which is anticipated to generate significant value for its shareholders and address environmental concerns associated with superfine iron ore production.
Mantengu will put down a deposit of 20% of the purchase price, equating to R3.78m (including VAT), with the remaining R15.2m scheduled for payment on or before 28 February 2025.
Additionally, a commission of 10% on the acquisition, amounting to R1.9m, will be paid simultaneously.
Despite the challenges facing MIB, which reported a negative equity of R203m and a R10m loss according to its last audited financial statements for the year up to 31 December 2020, Mantengu’s board remains optimistic about the plant and machinery acquired.
They believe that the intrinsic value of these assets exceeds the balance sheet valuation of R210m as of that date.
This acquisition marks a crucial step for Mantengu in an industry that continues to evolve, positioning itself as a leader in efficient and sustainable iron production in South Africa.
BUSINESS REPORT