Mining and blasting solutions leader BME contributed significantly to the positive results announced in June by its parent company Omnia, which is listed on the JSE.
Omnia CEO Seelan Gobalsamy reported that the group’s results reflected “an exceptional operating performance enhanced by diligent strategic execution, a higher commodity price environment and favourable conditions for both the agriculture and mining divisions.”
The group’s mining division – where BME is the main player – delivered a 29% increase in net revenue to R6.7 billion. The results benefitted from higher ammonia prices and increased sales volumes through the mobilisation of large customer contracts. BME continues its profitability drive through deliberate management actions, including optimising efficiencies, costs and process integration.
BME Managing Director Ralf Hennecke highlighted that this robust performance was achieved despite a highly competitive environment, as well as lower mining production due to inclement weather in the second half of the year.
“Our performance in South Africa was strengthened by operational efficiencies, market expansion in the surface and underground segments, and gains from large customer contracts,” said Hennecke. “We expanded in gold, copper and platinum sectors – in both surface and underground mines – with large customer contracts supporting throughput in the group’s plants.”
BME’s strong presence in other African markets continued, as did its global operations in countries including Indonesia, Canada and Australia.
“We renewed a large customer contract in Zambia, which contributed to our increased volumes, while we put in place sustainable localised business partnership models in the rest of SADC,” he said. A three-year contract extension was also secured with BME’s largest West African customer, and the company was investing in new infrastructure to support further expansion in the region.
“Growth in Indonesia remains a focus and our Canadian team is working hard to secure longer-term customer contracts,” he said. “In Canada, we have successfully completed trials of technology and explosives systems in the underground market, and we have begun transitioning for a major surface contract.”
He noted that the new AXXIS Titanium and Silver products have been well received by the Australian market, where new opportunities were being evaluated. The growth of BME’s global business was strongly supported by its world-class electronic detonators and emulsions, and it continued to develop technology that contributed to customers’ sustainability and ESG targets.
“The launch of AXXIS Titanium and AXXIS Silver, one of the world’s most advanced electronic blast detonation systems, is a major step for our ever-evolving technology offering,” he said. “This latest generation secures our position among the global leaders in electronic delay detonator design.”
BME’s advances in mining software, technology and product developments are creating widespread interest across both international and local markets. Hennecke emphasised, however, that security of supply is where customers are focused today – especially given their experience of the Covid-19 disruptions.
“Our robust supply chain was fundamental to achieving these financial results,” he said. “We continued to deliver on-time and in-full to customers throughout the pandemic. This has reinforced our standing in the market and bodes well for our chances when bidding for future work.”
Looking ahead, he said the macro-economic environment has seen increased metal commodity prices, which benefitted mining production globally.
“All the global mining indices are moving in the right direction, from capital expenditure to exploration,” he said. “This buoyant picture is good for us in terms of both brownfield and greenfield projects.”
In Canada, the potential includes the large underground mining sector, which is receptive to BME’s blasting systems and technologies. This market also has considerable synergy with existing BME customers in Africa. A potential and significant partnership in Indonesia has underpinned its successful business there, as well as the future strategic expansion plans from the coal segment into metal mining. In Australia, BME’s technology is a good differentiator for its business, and the focus is on growth.
The southern African mining sector, with promising mineralisation, continues to face headwinds through constrained infrastructure and unreliable provision of utilities.
“Some SADC countries, however, have seen a revitalisation of their mining activities resulting in stronger demand compared to the last few years,” he said. “The region certainly has more to give on the mining front.”
Importantly, BME was well positioned to take advantage of the anticipated growth in its primary markets. He noted that BME is expanding its R&D and technology capacities to ensure market relevance while leading the new mining mechanisation trends.