African contract miner Moolmans continues turnaround despite COVID-19

In a trading statement for FY2020 ending June 30, 2020, South Africa’s Aveng says its Moolmans contract mining business “showed continued progress on the journey to re-establish the business as a leader in open-cut contract mining operating in Africa.” The full financials for FY2020 are due for release November 30.

The March to June 2020 quarter was positively impacted by good operational performance on most of the contracts with one loss-making contract due to section 54 stoppages. The business entered FY21 with 81% of budgeted revenue secured and continues to actively pursue a number of opportunities for extensions to existing contracts and new work.

The Moolmans performance for the year was driven by COVID-19 related closures on all operations for the period from March to June 2020, contract renegotiations and extensions and substantial turnaround in underperforming projects. Despite the impact of the COVID-19 related shutdown in South Africa, Moolmans will report a small operating profit for the year to June 2020, representing a significant turnaround from FY2019.

In line with the level 5 lockdown regulations announced at the start of South Africa’s initial lockdown period, all the mining contracts in the country ceased and were placed on care and maintenance. Moolmans care and maintenance practices undertaken during this time were designed to ensure the protection of its assets and to allow for a rapid recommencement of operations. Since the move to level 4 in South Africa, Moolmans recommenced full operations at the majority of its open cut mining contracts. As part of the remobilisation process, Moolmans has implemented COVID-19 specific health and safety precautions, in line with recommended best practice, to ensure that staff are protected against possible infection.

Moolmans now has a diverse contract base across a range of mine types and commodities. It includes open cut contract mining operations in the Northern Cape and Mpumalanga provinces in South Africa and in Guinea together with a deep level shafting sinking operation in the Limpopo province of South Africa.

It includes in South African surface mines the mining of ore and waste at Vedanta’s Gamsberg zinc mine (both North and South pits); loading and hauling of coal overburden and mid-burden materials at South 32’s Klipspruit colliery; iron ore load and haul at Anglo American’s Klipbankfontein pit at Kolomela plus waste removal at Sishen; and a full mining service at Tshipi Borwa manganese mine. Elsewhere it carries out loading and hauling over 600,000 in-situ cubic metres a month at Nordgold’s Lefa gold mine in Guinea.

It also made a big resurgence in its large scale underground operations success when it recently completed shaft sinking of the 996 m Shaft 1 at Ivanhoe’s Platreef platinum group metals project in South Africa. The project had remained ‘Fall-of-Ground’ incident free since shaft sinking operations began in July 2016.