JSE-listed mining and materials group Afrimat has warned that losses in its cement segment and a weaker-than-expected performance from its anthracite segment will mean that its results for the 2025 financial year will be lower than those of the previous period.

In a preclose briefing on February 17, the company noted that changes in the iron-ore market, given the rand value received on iron-ore exports and the volume reduction from ArcelorMittal South Africa (AMSA) in the first half of the 2025 financial year, severely impacted on Afrimat’s financial performance.

Afrimat noted that international iron-ore prices have remained lower than last year's comparative period, although they have been increasing slightly over the past six weeks.

Local iron-ore volumes suffered a 70% drop in the first quarter of the current financial year owing to significantly reduced volumes taken up by AMSA.

However, for part of the second quarter and in the second half of the financial year, volumes recovered well, Afrimat said.

“Afrimat remains in active and constant discussions with AMSA to understand their requirements fully and to support them with innovative raw material solutions, irrespective of the Longs business' operational status,” the company said.

Nonetheless, the company was optimistic, noting that its construction materials segment was benefiting from a strong aggregates performance while steadily reducing cement losses, noting that margin recovery was encouraging.

“Management thus remains confident that the majority of the company’s metrics have turned and bode well for a better financial result in the coming year,” Afrimat said.

The company said the successful integration of the recently acquired Lafarge South Africa has strengthened Afrimat's foundation.

Strong performance from the traditional aggregate quarries and ash business will ensure the construction materials (aggregates) segment achieves a better result than last year, the company added.

Afrimat said the cement operations had been successfully revitalised and were now functioning at acceptable levels, resulting in the company regaining market share.

“The trend remains positive,” Afrimat said.

The company said the cement kilns had benefited from extensive maintenance and were now operating both efficiently and dependably, ensuring the company could operate with backup capacity.

Afrimat also highlighted the progress at the Nkomati anthracite mine in Mpumalanga, noting that part of the environmental-impact assessment (EIA) for the full life-of-mine plan had now been received.

Aside from the EIA allowing for more optimal openpit mining to take place, Nkomati has made progress on several fronts, including the introduction of a more efficient mining fleet; the reorganisation of the mining team, including a new management structure; an Eskom powerline being moved to allow for more fluid openpit mining; the relocation of 91 graves and 38 houses; and increased marketing activity on the export bouquet.

Underground mining operations were relocated to a safer area and, together with gains from the adjustments, in January, Nkomati returned to profitability, with February expected to yield a similarly positive outcome.

No secondary products were exported in the latter half of the 2025 financial year owing to the closure of the border with Mozambique, which restricted access to the Maputo port. This led to a delay in export shipments.

Fortunately, the border had reopened, and Afrimat pointed out that it had since secured commitments for up to 80% of the 2026 financial year's export volume.

Afrimat, however, pointed out that poor rail performance continued to impact export iron-ore volumes.

“Volumes align with the previous financial year, which is good news to an extent because volumes have not deteriorated, and a good relationship remains in place between Afrimat and its subsidiaries’ marketing partner.

"However, overall volumes remain 20% below Afrimat's rail allocation,” the company said.

In terms of Afrimat’s industrial minerals business, a significant recovery meant things were back to previous performance levels. The ongoing suspension of loadshedding, along with optimistic signs of economic growth, boded well for this business and its clients, the company said.

Meanwhile, the testwork on the rare earths component was nearing completion and showing positive results, Afrimat said. The company added that it was pursuing the final design of the process to ensure it capitalised on the inherent competitive advantage of the Glenover resource.

On the phosphate side, the plant was now operational, with ramp-up progressing well, although slower than projected, Afrimat said.

Afrimat is expected to publish its 2025 financial year results in May.