PHOSPHATE development firm, Kropz, is to list in London in the second half of the year, the company said in an announcement today.
The conditions for a listing were perfect as the phosphate price was at its cyclical low whilst global urbanisation meant that pressure on land for food would increase and, therefore, result in higher demand for fertilisers, said Ian Harebottle, CEO of Kropz. Phosphate is used in the production of fertiliser.
The firm, which is to make its debut on the Alternative Investment Market, will also raise capital, although the amount targeted was not specified. Funds from the listing would be allocated to debt reduction as well as the commissioning of Elandsfontein, Kropz’s phosphate project located in the Western Cape province.
Harebottle also wants Kropz to capitalise on new projects.
“Subject to successful recommissioning and financing, Kropz will be in production next year, at our Elandsfontein project in South Africa,” said Harebottle. “Kropz intends to become a significant, low cost, phosphate player on the global stage with a London listing creating awareness for the business and access to further capital to realise our goal of becoming the African champion of the sector.”
The intention to list may also provide an indication as to whether African Rainbow Capital, the company’s black economic empowerment partner, wants to invest further in the Elandsfontein project. It said in May it was considering whether it would follow its rights as the project required “… significant additional capital”. ARC has a 26% stake in the mine which is controlled by Mike Nunn, a well down mining and metals entrepreneur most famed for developing tanzanite as a semi-precious jewellery item.
“We haven’t decided yet,” said Harebottle when asked by Miningmx in February whether a listing was on the cards. “It’s just one of the options, or we could go the route of private equity. But we definitely have ambition to build Kropz beyond Elandsfontein,” he said.
Commenting on the proposed listing, Harebottle said that the “… bottom of the market is now behind us, and the recovery in other commodity prices is beginning to be evidenced in the fertiliser market as well”. Phosphate prices, which have recently moved above $100 per tonne from recent lows of $90/t, were “… significantly down on historical prices achieved”, said Harebottle.
Kropz also announced it had submitted an application for exploration in Ghana on a prospect that lay on the extension of a quality, historically exploited phosphate resource in neighbouring Togo. There was also potential to extend the life of Elandsfontein whilst the firm ” … was looking at further acquisitions of assets to increase production”.
