Kropz Group, a major player in the African phosphate domain, recently posted a revenue of $14.1 million for the first half of 2021, ending June 30. This period also marked the company’s initial sales from its trial production phase.
Despite its promising revenue figures, Kropz Group navigated through several challenges in the past six months. The Western Cape region experienced heavy rainfall, which the company noted as “unprecedented.” Such conditions severely impacted mining activities, leading to waterlogged sites.
To counter these adverse conditions, Kropz Group has introduced several measures. Primarily, the company has enhanced in-pit drainage systems, ensuring the mining zones remain relatively dry. They’ve also initiated ore stockpiling and blending strategies to ensure smooth operations.
Another challenge faced by Kropz was the presence of ultra-fines in the ore, which restricted production throughput. Elandsfontein, Kropz’s prime mining entity, is investing in advanced equipment to address these complications. The new tools will enable efficient handling and processing of such slimes material. Ambitiously, the company plans to ramp up its production throughput by a staggering 40% in the foreseeable future.
According to a report by Mining Weekly, Kropz highlighted their continuous efforts to deal with the hard bank material found in the ore. This material is rich in phosphate. Currently, they are analyzing this to determine optimal mining and processing techniques to extract its phosphate content.
Although the Elandsfontein mine continues its trial production phase, Kropz remains optimistic. However, they also anticipate potential hurdles as they gear towards maximizing production. Given that the company is still establishing its market footing and operates below its full production capacity, a gross loss for the period has been recorded. This stems from discounted sales prices and production costs that are anticipated to decrease once full production is achieved.
Financial highlights for the company include a $64.2 million value for property, plant, equipment, and exploration assets as of June 30. They also reported cash holdings of $2.1 million during this period. Other financial metrics include shareholder loans and derivatives amounting to $66.2 million and trade payables at $5.4 million as of June 30.
In a strategic financial move earlier this year, Kropz Elandsfontein secured a R285 million bridge loan facility with the ARC Fund. This was to address immediate cash flow needs. By the end of June, the company had drawn R225 million from this facility. The loan, which remains unsecured, doesn’t have fixed repayment terms. However, Kropz can repay it on short notice of two business days.
To sum it up, Kropz Group continues its operations amidst several challenges, leveraging strategic decisions and investments to ensure its growth and sustainability in the phosphate industry.
