Johannesburg-based Sasol Ltd. and Chile’s Enaex SA separately announced that they have successfully completed negotiations to form a new joint venture company into which Sasol will transfer its explosives’ and rock fragmentation business as a going concern. An application will now be submitted to South Africa’s Competition Commission for approval of the proposed jv.
Once Competition Commission approval is received, Sasol and Enaex will form the new jv, said Sasol. The Santiago-headquartered Enaex, as the majority shareholder in the new company, will take over management and operational control of the new entity.
Sasol announced in July that it had selected the Santiago-based Enaex, which is Latin America’s largest producer of explosives-grade ammonium nitrate, as its preferred partner (GM July 26, p. 25). The South African company at the time said Sasol South Africa Ltd. would be the participating entity in the proposed jv, should it be formed.
The new company will include certain assets and associated activities within the current explosives value chain of Sasol South Africa’s Base Chemicals business, and will include associated business activities in both South Africa and the rest of the countries in Southern Africa. The Sasol Explosives division produces over 350,000 mt/y of explosives and has over 1,000 employees. It makes approximately US$250 million in annual revenue.
Sasol said in July the potential partner would be required to continue to ensure “reliable and sustainable” ammonia offtake for Sasol South Africa.
“Enaex brings almost a century’s experience to the global explosives market, with its core business being ammonium nitrate production, explosives production, and blasting services, making the company one of the few in the world that can produce and offer the entire spectrum of products and solutions to execute the blasting process,” said Sasol.
The South African company began a detailed asset review in 2017 to ensure that all assets in its global portfolio deliver against “stringent” financial metrics and are aligned with the company’s growth strategy.
In line with this review, Sasol’s explosives business was identified as having “substantial growth potential that could be unlocked through collaboration opportunities, including the possibility of partnering with a world-class brand,” Sasol said.
For Enaex, the tie-up with Sasol is seen as part of the Chilean company’s strategic plan to continue strengthening its international presence in the most important mining regions of the world.
Enaex CEO Juan Andrés Errázuriz also highlighted the significance of the African market for the Chilean company. “Because of its size, Africa is currently the third-largest explosives market in the world and has significant growth potential,” said Errázuriz.
Enaex SA, a subsidiary of the Sigdo Koppers Group, Santiago, owns three plants for the production capacity of ammonium nitrate, with a combined total capacity of 850,000 mt/y, according to its website.