3 December 2012

Zimbabwe: SA Cement Maker Invests in Zim

Photo: IRIN
Zimbabwe's capital, Harare

TEREA Africa, a South Africa based cement trading and mining company, is to invest about US$ 1 million into Tantalite mining in Zimbabwe and is looking for acquisitions of key mineral assets in Africa, chief executive officer (CEO), Ben de Wet, said this week.

The CEO said the company is also looking for partnerships in the sub-Saharan Africa to expand its cement trading business.

"In Zimbabwe, we are in the early stages of conducting a feasibility study on a tantalite mining operation in the Karoi area. We have geologists conducting tests to ascertain the potential in this area and should the outcome of this feasibility study be favourable, we will invest in the region of US$900 000 to get the project operational," De Wet told The Financial Gazette's Companies & Markets.

"Having said this, I see acquisition of key mineral assets as being the major factor contributing to the growth of Terea Africa in the next five years," he said.

According to Wikipedia, Tantalite is group name for minerals with the chemical formula (Fe,Mn) (Ta, Nb) 2O6 and it is a brown-black, almost completely black orthorhombic shape mineral. It is found mainly in granite pegmatites and it accumulates up in drifts and from there it is extracted as Ta ore.

Tantalum is a chemical element contained in tantalite and it is known for its hardness and resistance to corrosion. Tantalum itself is said to be very rare. It is used in surgical tools. Others use is in electronic parts, specifically tantalum capacitors. It has great significance in the computer industry and also automotive industry. Tantalum is used in many metal alloys, which have a high melting point and are solid.

De Wet said capital for the Karoi project was already available.

He said there was a wealth of potential in Africa for its cement business.

"The continent represents the final investment frontier. Africa is a massive market which requires large investment the construction and infrastructure sectors," he said.

De Wet said cement was a major requirement for Africa's infrastructural development but was too expensive and unavailable.

"For the growth of our cement business, we are looking to enter into partnerships with key organisations in each country to market our product, we already have partners in many countries but there are particular markets where we are still looking for suitable partners who share our values and vision," De Wet said.

Target countries are Gabon, Kenya and South Africa.

De Wet said capital for acquisition of mineral assets and expansion of the cement business would be raised through a mix of debt and equity from key partners, traditional financial institutions and ultimately, through an initial public offer.

Terea Africa's primary watch list for potential investment destinations on the African market are security of investment and stability of the country and positive investment policy.

"We need to recognise that there are now new cows and that the cows that are sacred should eventually be milked," he added.

Food shortages are being blamed on erratic rainfall and dry spells, limited access to seeds and fertilisers, a reduction in the planted area, poor farming practices and inadequate crop diversification. The worst-hit areas are the chronically dry regions of southern Zimbabwe.

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