Quarry Southern Africa May 2017 - Page 36

“It’s a very interesting strategic question for a company like Afrimat, to decide when we actually want to get involved with a specific technology. Do you want to be on the bleeding edge, or do you want to be the second guy?” and move beyond being purely a quarrying company. We just recently added iron ore to our portfolio, and as soon as we are more settled in this area and we start seeing the results, I would like to look at expanding into more commodities. And then make sure that we maintain a consistent growth rate over the next few years. In terms of expanding into Africa, it’s a tough area and we are not the quickest mover into Africa because we have to fully examine potential opportunities before we move forward. So we will move as opportunities arise and we can see that we can make a good risk-adjusted return on any projects into Africa. We previously had operations in Tanzania and Namibia, but we have already exited both, and currently we only have one African operation outside South Africa, which is in Mozambique. RG: What would you say are the biggest challenges facing businesses looking to expand into Africa? AvH: I don’t think there’s one single thing that we can point to as being the Open pit mining company Afrimat recently added iron ore to its portfolio, and is planning to expand into more commodities in future. 34 _ QUARRY SA | MAY 2017 major challenge for companies looking to expand their business into Africa. You have to understand the local politics and the local economics, as well as the lack of infrastructure – including financial infrastructure. This is all very challenging in a new area, over and above the physical challenges. For instance, in most African countries you have health-related challenges such as malaria, or you have to deal with regional inaccessibility. It’s really, really tough out there, and it’s just something completely different to what we are used to in South Africa, which someone recently referred to as a little bit of Europe at the southern tip of Africa. I think, to a certain extent, Africa was a bit of a ‘flavour of the month’ a year or two ago, and that more and more companies are realising that in addition to large risks, it’s also extremely difficult to repatriate your profits once you’ve made them. And as a company, we’re about making good returns for our shareholders, so I will only go into an African project if I’m comfortable with the risk profile.