South Africa’s biggest explosives-maker greenlights R900 million investment

South African mining and chemicals company AECI is preparing to invest between R700 million and R900 million to modernise its Modderfontein facility.

This investment is expected to take place over the next three to four years, with the aim of improving the facility’s efficiency and utilisation levels.

AECI is South Africa’s largest manufacturer of explosives for commercial mining and has operations across Europe, Asia, North and South America, and Australia.

The revitalisation of AECI’s Modderfontein plant has been touted by the company as critical for its continued competitiveness in its southern and central African markets.

In the company’s latest interim financial results for the first half of 2026, it listed optimisation of the Modderfontein facility as a key goal in its three-pillar corporate strategy.

In an interview with Engineering News, AECI CEO Alan Dickson said the company had already made some initial investments at the facility.

Dickson described these low-capital investments as the first phase in a larger optimisation plan for the Modderfontein facility.

“The second part of that is a larger-scale, more complex exercise, which focuses on a number of the core parts of the business,” Dickson said.

The investment is intended to support not only AECI’s position in its core African markets, but also the expansion of its core mining business into the Asia-Pacific region.

This comes after the Modderfontein plant faced numerous operational challenges last year, which at one point left the long-term future of the facility uncertain.

This included suffering 16 major power disruptions between January and April 2025, which resulted in roughly a month’s worth of output being lost.

Around the same time, AECI declared force majeure at the site due to supply shortages of lead azide, an important component in the non-electronic detonators manufactured by Denel.

In June 2025, former AECI CEO Holger Riemensperger told Engineering News that the company was assessing the future sustainability of the 126-year-old plant.

“There are many questions around that site and how to take that forward, which is something that we will deal with in the second half of this year,” Riemensperger said.

AECI resilient in uncertain global market

Despite increasing uncertainty in the global mining market, AECI’s latest results show that the company has remained resilient.

While revenue saw a 4% drop compared to the second half of 2025, from R15.7 billion down to R15.1 billion, the group reported a 20% increase in interim profit to R837 million,

Appearing on BusinessDayTV, Dickson said he was pleased with AECI’s overall performance during the first half of the year, despite the challenges it faced.

“It is a volatile world out there, particularly from a supply chain point of view where we have a great deal of uncertainty” Dickson said. “That has driven up the cost of raw materials.”

“But we set out in February with three very clear objectives. The first of those was to increase profitability, specifically in our core businesses of mining and chemicals.”

Dickson attributed the strong performance in AECI’s mining business to three key areas, those being an increase in volume, a maintaining of costs, and higher investment in its assets.

Specifically, Dickson said the company had invested heavily in its South African assets, such as the Modderfontein plant, which had seen improved utilisation in the first half of 2026 as a result.

While AECI has expanded into other global markets, such as the Asia-Pacific region, Dickson said the company’s South African base remained a core focus.

“Many of our people are employed here, and our largest asset base is here in terms of our manufacturing assets,” Dickson said. “South Africa remains absolutely core to us.”

“Irrespective of what we do, we recognise the South African base that we have, and we intend to focus intently there whilst growing in other parts of the global environment.”

While AECI’s mining business showed strong performance during the first half of 2026, its chemicals business remained under pressure.

Specifically, downtime caused by operational issues at its Schirm Germany division during January and February resulted in operating losses and an impairment charge of R320 million.

Despite this, Dickson said the company expects to maintain its solid overall performance into the second half of 2026, with further growth projected in its core mining and chemical businesses.