African Phosphate Miner Kropz Plans for IPO

As South African phosphate explorer Kropz prepares for its first round of production due in 2019, the company has set its sights on listing on London’s AIM Stock Exchange by year’s end.

The plan to go public is part of an effort for the phosphate miner to raise cash to pay down debt and fund the development of its Elandsfontein phosphate mine, Kropz CEO told Reuters on Tuesday (September 25).

The company’s flagship project Elandsfontein, located in the Northern part of South Africa, is expected to begin production in the second half of 2019. Kropz expects the phosphate mine to reach 900,000 tonnes of output per year by the end of 2020.

While the company reports it is making progress towards its goal of listing on the AIM by the end of 2018, Kropz first announced its intentions to float on the exchange in July.

“Kropz is seeking an IPO on the back of a 10-year low price environment in the phosphate rock market, driven by a limited period of oversupply and weaker demand,” Ian Harebottle, Kropz CEO, said in July.

“We believe the bottom of the market is now behind us, and the recovery in other commodity prices is beginning to be evidenced in the fertilizer market as well, with phosphate rock prices already reaching above US$100 per tonne from their recent lows of US$90 per tonne, but they are still significantly down on historical prices achieved.”

Global phosphate demand is steadily increasing, last year alone international demand grew by 3 percent to 68.3 million tonnes, making it an advantageous time to bring a phosphate project online.

Kropz has already lined up three buyers and distributors for the phosphate it will produce at Elandsfontein, including South African company Foskor and trading partners Keytrade and Kalyaan.

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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.