JOHANNESBURG (miningweekly.com) – Mining explosives and chemicals company AECI, which turned 100 this week, will be unveiling a digital strategy for the mining market during the course of this year.

It is also looking to become greener as it keeps innovation closest to its rapidly internationalising heart.

“We have a legacy of innovation. Even peers refer to us as the ‘university of the industry’,” AECI CEO Holger Riemensperger outlined Mining Weekly in an interview at the Johannesburg Stock Exchange (JSE), where the company reiterated its intention to divest from selected non-core assets, keep AECI Mining as its cornerstone, accelerate internationalisation and optimise organic growth. (Also watch attached Creamer Media video).

Deep thought is being given to innovating along environmentally friendlier paths. “I would say we’re all eyeing the move to the next explosives, away from ammonium nitrate. That's a big move. There's still a lot of work to be done,” Riemensperger disclosed.

With regard to a next-generation explosive technology replacement building block, he said: "At the moment, many would say that hydrogen peroxide will be next”, as demand grows for the development of explosives with fewer NOx and CO₂ consequences.

“Also, the way that we apply our explosives can contribute to an optimisation in the downstream of mining, which will also reduce the CO₂ footprint of the mine,” Riemensperger pointed out.

The use of hydrogen peroxide emulsion to reduce emissions associated with blasting has been coming under the spotlight owing to several mining companies committing to net zero well ahead of the 2050 deadline.

In this regard, the need to use green ammonia is also being highlighted. “Green ammonia definitely has a future, but at the moment it is only a few markets that would be willing to pay a premium.”  

Those are the European and North American markets and probably Australia to some degree.

“In the other markets, there is no ask for green ammonia and nobody is willing to pay the premium at the moment, but I think, in the long run, we will move there,” Riemensperger forecast.

AECI currently has a 22-country presence on six continents, served by a workforce of more than 7 500 people

Mining Weekly: Going forward, how do you plan to accelerate the further internationalisation?

Riemensperger: We have built a very nice growth momentum outside of South Africa, but also outside of Africa, specifically in Australia, and in Indonesia. Practically every year, we have doubled the revenues. We see this momentum continuing, but we’re also targeting other geographies, so it's all about internationalisation in specific geographies.

What growth opportunities do critical minerals and metals present and where?

They do present a very nice opportunity for us and we are eyeing specific markets where you find critical minerals, which is Australia and also Peru, Chile, Brazil, US and Canada. Geographically, those are our target markets, but we’re not looking only for specific commodities. In general, we believe we can add value to the mining of all commodities.

Can you expand on the use of hydrogen peroxide?

There are still a lot of questions that need answering. It's highly explosive unstable chemical, so the difficulty of using hydrogen peroxide is in transport. So, how can we stabilise the product from production to application?

What would you estimate is the timeframe on the introduction of hydrogen peroxide?

Personally, I believe it is about ten years out.

Doubling earnings before interest tax depreciation and amortisation (Ebitda) of core mining and chemicals units by 2026 is ambitious. How do you intend realising that aspiration?

It is indeed ambitious, but we like ambitions. There are two ways to it. There are basically two goals we are seeking here. Doubling for us means roughly about R3.2-billion on Ebitda, of which about R2-billion is in revenue from organic growth. The track record of Ebitda growth that we have now would basically get us there, and then we have created a transformation programme with more than 500 initiatives to unlock the other R1.2 -billion Ebitda over the next three years.

Tell us about the planned disposal of non-core assets and what that will do to AECI’s debt and gearing?

We have decided to go into a corporate structure with two divisions, a mining division, and a chemicals division. Mining is the core of AECI. The divestment of the other businesses is not because they are bad businesses, it’s really a strategic decision on the basis that these are not the businesses we should be in. If we divest all those businesses within the timeframe that we have set, that's 18 months from November last year, that will put us in a net cash position, together with the organic growth that we expect. That will also be the time to reinvest into mining and really accelerate growth, also inorganically. We want to bring AECI back to where it should be. The world will see us becoming the number three in our selected industry. I'm really 100% certain of that.

Are detonators, explosives, and chemicals your core?

It’s pretty much that but we will not rule out that we extend our portfolio, adding other services going forward. There is a big digital piece coming up. We are working on that. During the course of this year, we will unveil our digital strategy in the market segment of mining and what we can offer, and that may add another segment in the long term.