Prominent South African miner feels the pain 

Major South African miner Afrimat has had a challenging 2025 financial year, with a significant decline in profit and earnings.

Afrimat is a multi-commodity, mid-tier mining company that produces and supplies construction materials, cement, iron ore, anthracite, phosphate, and high-quality industrial minerals. 

The company released its results for the year ended 28 February 2025 on Thursday, 15 May 2025, which revealed a poor performance for the miner.

While Afrimat’s revenue increased by 36.7% from R6.1 billion to R8.3 billion, this includes the Lafarge business, a recent acquisition the company made.

Lafarge South Africa, Afrimat’s most recent and largest acquisition to date, was successfully integrated into the company during this reporting period. 

Therefore, its inclusion in these results benefited the company’s revenue during the period.

However, Afrimat also reported that its operating profit decreased by 58.5% from R1.15 billion in 2024 to R477.7 million in 20205. 

The company’s profit for the year dropped from R788.72 million in 2024 to R113.51 million, an 85.61% decrease. Afrimat’s earnings per ordinary share also slumped, declining by 87.89% from 520.3 cents per share to 63 cents.

The miner’s cash flows also suffered, with cash generated from operations equating to R571.6 million by the end of the reporting period compared to R1.55 billion in the comparative period. 

“This decrease was impacted by lower profits and the working capital requirements of the group,” it explained.

The miner largely attributed its weaker performance to a declining iron ore price, a strengthening rand, and ongoing limitations on the export rail line. 

It explained that a large industrial customer reduced the off-take of iron ore products during the first half of the year but increased it in the second half.

“Additionally, there were no anthracite product exports from Nkomati through Mozambique due to border closures, and the cement business faced losses,” it said.

“Furthermore, additional debt to fund the acquisition of Lafarge resulted in significant additional finance costs.” 

Afrimat said this culminated in headline earnings per share reducing from 567.3 cents to 72.3 cents.

South African mining under pressure

While many of Afrimat’s divisions performed weaker than expected during the 2025 financial year, it said this was due to many factors outside its control.

For example, it said changes in the iron ore market, influenced by the rand value received on iron ore exports, and a weaker-than-expected performance from anthracite hindered its performance. 

“While many impacts were not entirely within management’s control, the group remained highly resourceful,” it said.

Positively, the miner said its traditional aggregate quarries and ash business delivered a solid performance during FY2025. 

However, its cement business continued to incur losses throughout the period. “Pleasingly, these losses from the cement business are steadily reducing as the cement operations were successfully restored and are now functioning at acceptable levels,” it said.

“Substantial work was done to ensure a strong foundation for sustainability and improved performance in the next financial year, FY2026.”

One of the external factors Afrimat highlighted as weighing on its operations was the poor and deteriorating performance of national rail carrier Transnet.

The miner said Transnet’s deterioration is impacting not only Afrimat but also all mining operations across South Africa. 

“Exports continue to be impacted by the challenges on the rail line, and overall volumes remain under 16.5% below Afrimat’s rail allocation,” it said. 

To counter this impact, particularly on the export of iron ore, Afrimat said its executives dedicate time in the Ore User Forum to assist as part of a public/private collaborative effort.