Related Articles
Top Stories
Feb 13 2012 07:58
Greek lawmakers have approved a new round of drastic austerity measures after a long day of street battles between police and protesters left dozens injured.
Feb 13 2012 07:41
A reader gets advice on quick returns on a lump sum.
Feb 12 2012 15:59
Moral hazard, financial weapons of mass destruction, a huge mess - these were the words used by a founder member to sum up the collapse of the Pinnacle Point Group.
Johannesburg - Construction group Basil Read said prospects for its mining operations have improved as commodities demand has picked up, presenting opportunities for the group's open cast mining operations.
"At the moment there is an improvement in the number of tenders on the mining side," Basil Read CEO Marius Heyns told Fin24.com.
He admitted that increased commodities demand was not the result of a global economic recovery, but rather because of factors related to China. "If you speak to the mining guys, they'll say it's mostly because China is stocking up."
Earlier in August construction firm Group Five said some cancelled mining projects were now being renegotiated, confirming a pickup in the sector.
Analysts also believed this was the reason for Basil Read's move to consider a merger with TWP Holdings, a heavy construction firm specialising in mining. The union could be worth about R2bn.
"Basil Read has indicated in the past that it wanted to make acquisitions in line with its strategy. It's a good time to go into mining if you think the sector is going to pick up and they're both probably preparing for the upturn," Imara SP Reid's Stephen Meintjes told Fin24.com at the time of the announcement.
"On the face of it, it looks like a good thing," said Meintjes.
Heyns said opportunities were opening up in Africa as miners looked at new operations in Nigeria, Ghana and Tanzania, which could see Basil Read's projects moving to those areas.
Basil Read already has open cast mining operations in Namibia, working on a three-year contract with Rössing Uranium for owner Rio Tinto.
In addition, it is working on the Venetia diamond mine, near Musina in Limpopo, operated by diamond producer De Beers. It is also operating in Botswana on a magnetite mine contract valued at R180m.
Elsewhere, Basil Read has earmarked Zimbabwe and Australia for further opportunities.
The group's mining division revenue grew to R339.7m for the six months to end-June 2009, down from the June 2008 figure of R355.7m. Its operating profit of R51m was higher than last year's comparable figure of R35.9m.
Its mining order book stood at R1bn. Heyns said should shareholders give the TWP construction mining merger the thumbs up on September 8, Basil Read's order book would increase by over R1bn.
- Fin24.com