Louis Loubser

LOUIS Loubser has faced an intimidating list of challenges since taking on the role of CEO at Kropz in January 2023. On the face of it, Kropz’s main and only operating asset, the Elandsfontein phosphate mine on South Africa’s West Coast, has a very desirable, high-grade deposit. But bringing it into full profitable production is proving elusive.

The list of problems that have bedevilled the mine since 2017 include opposition from environmentalists to the granting of a water-use licence, logistics obstacles, delays due to Covid-19 (of course), and the discovery of sections of hard material in the deposit. Altogether, these issues have pushed out first production by five years, sucked up way more capital than originally budgeted for, and delayed ramp-up and commissioning. The mine, which is still in its trial mining phase, has encountered more production hitches from extremely wet weather in the Western Cape.

As a new entrant to the market, Kropz is selling its initial output at below-market prices. It has survived for all these years thanks to support from its long-suffering major shareholder, African Rainbow Capital (ARC), but as a result of many years of little or no revenue, it is now labouring under a heavy debt obligation. It has been in negotiations with BNP Paribas, which it owes $18.75m, about refinancing the loan, and to date the obligation to ARC has spiralled to about $66m, some of which is debt and some of which is convertible into equity. Kropz’s second asset is the Hinda phosphate project in the Republic of the Congo, where Loubser is proceeding cautiously, starting with a low-capex project to prove the viability of producing and exporting phosphate in the country.