AECI, a South African company that provides mining and chemical solutions, has announced its plans to sell six of its noncore businesses in the next 18 months. The company expects to raise about R2.5 billion ($170 million) from the disposals, which will be used to reduce its debt and invest in its core operations.
The six businesses that AECI intends to sell are Much Asphalt, Animal Health, Schirm, Sans Fibers, Beverages, and Public Water. These businesses accounted for 22% of AECI’s revenue and 12% of its operating profit in 2023, but they are not aligned with the company’s strategic focus on critical minerals.
Critical minerals are essential for the development of clean energy technologies, such as wind turbines, electric vehicles, and batteries. They include rare earth elements, lithium, cobalt, nickel, and copper, among others. The demand for these minerals is expected to grow rapidly in the coming years, as countries and companies seek to reduce their greenhouse gas emissions and achieve net-zero targets.
AECI’s CEO, Holger Riemensperger, said that the company has a strong position in the critical minerals market, especially in Africa, Australia, and South America. He said that AECI’s mining and chemicals businesses offer innovative and sustainable solutions for the extraction, processing, and refining of critical minerals, as well as the management of their environmental and social impacts.
Riemensperger also said that AECI is aligning its internationalization strategy to regions that have high potential for critical minerals growth, such as Europe, North America, and Southeast Asia. He said that the company is exploring opportunities to partner with local players, acquire strategic assets, and leverage its existing capabilities and networks.
AECI’s restructuring plan comes amid a challenging business environment, due to the COVID-19 pandemic, geopolitical tensions, and supply chain disruptions. The company reported a 9% decline in revenue and a 25% drop in operating profit in 2023, compared to 2022. However, Riemensperger said that the company is confident of its resilience and recovery, as it adapts to the changing market dynamics and customer needs.
He said that AECI Is committed to creating value for its stakeholders, while contributing to the global transition to a low-carbon economy. He said that the company’s vision is to be a leader in the critical minerals sector, and to support the development of a greener and more sustainable future.
Source: Mining Weekly
