Foskor is a proudly South African producer of phosphates and phosphoric acid with international exposure. Thanks to ageing plant and declining global commodity markets, the company has seen difficult times but with big planned investments on the horizon, the future is looking bright… Article published on Issue Nº 47 of Enterprise Africa Magazine | www.enterprise-africa.net

1. FOSKOR
Investments Into
New Plant Set to
Stabilise Foskor
Foskor is a proudly South African producer of phosphates and phosphoric acid with
international exposure. Thanks to ageing plant and declining global commodity markets,
the company has seen difficult times but with big planned investments on the horizon, the
future is looking bright…
PRODUCTION: Manelesi Dumasi
//
It’s well known that times in
mining and commodity markets
are difficult right now.The
situation in global markets has changed
dramatically in the past few years and this
is largely down to a confidence crisis in
Chinese financial sectors.The situation in
some areas is so bad that even the biggest
companies have not been safe.Take
Peabody Energy for example, the world’s
largest coal miner announced that it had
filed for bankruptcy after the commodities
price collapse.
In South Africa, a country built on
mining, falling prices are already causing
trouble, despite the favourable export
conditions with the recent depreciation of
the Rand. In February, the mining sector
recorded the worst figures in three years,
contracting by 8.7% year-on-year, a much
higher figure than even the pessimists
predicted.This contraction has paved the
way for new claims that the country could be
facing recession.
But even with all the negativity, there are
companies that have remained positive and
decided to be optimistic and enthusiastic
about the future, and not get caught up in
short term problems. A good example is
Foskor, the country’s producer of phosphates
and phosphoric acid and the only vertically
integrated phosphate producer.
Thefallingcommoditypricehashurt
Foskorbutinsteadofgettingstuckinarut,
thecompanyhasannouncedalarge-scale
investmentintoitsequipmentandplant
withtheaimofrevitalisingthebusinessand
improvingreliability,availabilityandefficiency.
The company holds a strong position
in the market, it has built fruitful and long-
standing relationships with companies all
over the world and with this new investment
it is looking to improve its business case from
within in the coming years.
One relationship which has been
fertile for Foskor over the past 16 years
has been with German company Loesche
who installed an innovative mill, theVRM
Type LM 50.4, back in 2000 at Foskor’s
Phalaborwa site.
Foskor’s Senior Manager Project and
Strategy, Shivaji Gadhave says that this type
of outlay is indicative of the company’s
strategy and bold approach to investment.
44 / Issue No.47 / www.enterprise-africa.net
“In 2000, we commissioned that
Extension 8 plant. Before that we were
using a ball mill or traditional mill. Our
team visited the site and tested material
before submitting the feasibility report. It
was a courageous decision at that time as
that type of mill had not been used in the
phosphate industry.
“Whenever you try new things there
are challenges and we worked hard with
Loesche on this.This mill was not designed
for the phosphate industry but we’ve seen
improvements in performance since using
the technology in this mill,”he says.
Foskor will hope that its future
investments are as successful as this.
The Loesche mill is suitable for hard rock
processing, can be fitted with wear resistant
products, uses low steel consumption
compared to conventional milling and
provides a better ore liberation compared to
conventional milling.
For the next three to five years, one
of the main focus areas for Foskor will be
upgrading ageing plant and Gadhave is
confident that this will be of huge benefit to
the company.
Continues on page 48 >>>

2. //LOESCHE
16 YEARS OF SUCCESSFUL OPERATION OF A LOESCHE VERTICAL-ROLLER-MILL
TYPE LM 50.4 IN A 25 KWH/T BWI HARD ROCK APPLICATION FOSKOR PTY (LTD) IN
PHALABORWA
In 1999, Foskor has decided to increase their production capacity to cater for the increase in phosphate
demand. During the project design phase, it was decided to install a Loesche Vertical Roller LM 50.4 mill
instead of the conventional rod and ball mill technology. Extensive research at the time of the projects has
revealed that the mill can be erected 30% cheaper than conventional milling process and a 25% smaller
footprint is required compared with a plant of similar capacity. Due to the inherent operating flexibility of
the VRM, better grand control can be applied by adjusting the feed rate, bed thickness, hydraulic pressure
on the bed, air flow and speed of the classifier.
Comparative grind analysis in pilot plant test between the VRM and the conventional mills were
conducted and it was concluded that the VRM provides much better differential milling and mineral
liberation resulting in better flotation recovery and concentrate grades.
The Loesche Mill grinds Pyroxenite Phosphate Rock from - 90mm to a flotation feed of 85 weight.-%
passing 425µm (P85=425µm). The annual production averages to 505 t/h of the hard-to-grind ore (Bond
Work Index: 25 kWh/t). Despite of the abrasive ore to be processed, the Foskor team achieves a plant
availability of 94% by executing appropriate preventative maintenance.
In 2010, additional wet milling capacity was added to the plant. The parallel operation of a dry
Vertical-Roller-Milling process and a conventional wet Rod and Ball Mill allows the first comparison of
these technologies in a hard rock application. A sampling campaign in July 2014 compared the actual
grinding and flotation performance between the two circuits and has revealed that the VRM provides:
• Better control over the process and hence consistently better product quality
• Higher process flexibility which allows to operate the mill in an on- and of-mode according to the
production targets which is not be possible with the wet milling circuit
• Faster adjustment of the process stability and product quality in case of mineralogical changes
• Better mineral liberation at reduced ultra-fines production resulting in higher recovery and
concentrate grades in flotation
A recent comparison between the VRM and the Rod / Ball mill revealed that the VRM consumes only
3% of the grinding media steel compared to the Rod / Ball Mill (4.32 g/ton vs 143 g/ton). Besides the
benefits in form of lesser iron contamination of the ground ore for the flotation this also leads to 35% cost
savings per ton of ore ground.
As part of continuous improvement Loesche and Foskor joined hands and are busy developing a new
generation modular air classifier with improved wear resistance and maintenance options which will be
installed 2017.
Loesche wants to thank the Foskor team for proving that the Loesche Milling technology is
successfully applicable for hard rock applications. Loesche is looking forward to continue the joint
improvement of the plant performance between Loesche GmbH and Foskor Ltd..
LOESCHE VRM TYPE LM 50.4
–16YEARSSUCCESSFULOPERATION
IN A HARD ROCK APPLICATION AT FOSKOR PTY (LTD)
BUSINESS PROFILE
46 / Issue No.47 / www.enterprise-africa.net

3. BUSINESS PROFILE
INVESTMENTS & UPGRADES
Foskor has a 65 years heritage in South
Africa and, as with any company that
utilised heavy industrial machinery, the
time has come for a significant upgrade
to allow Foskor to remain competitive.
“We have some plant that is around
40 years old so we now have the
requirement to replace a portion of the
plant in the Acid Division in Richards
Bay. We have had the funding approved
from our shareholder, the IDC, for the
acid equipment last year and we have
initiated the project.
“What the project is going to do
is improve the utilisation of plant, the
reliability of the plant and the efficiency
of the plant – currently because of the
age of the plant, we are struggling with
these parameters.
“This investment is between R3-4
billion,” explains Gadhave.
“It will definitely be positive for us
in the future and we are quite excited.
We are doing everything in house and
as we require we are going to source
contracts and consultants depending
on their expertise and contribution.
It’s completely funded by our major
shareholder, the IDC.
“There will not be a single partner.
Depending on the different part of
the plant there are different levels of
expertise available in the market, so
there will be several partners, several
construction consultants and partners
who will help us to implement this
project for the next three to five years,”
he adds.
The company has had success
recently following upgrades and
benefits from that investment are
already showing.
“In December 2014, we replaced
some of the major plant in our mining
division. This was a R550 million
investment and is currently running
successfully and has helped protect
our production capacity in the mining
division as the old plant was no longer
fit to run properly,” says Gadhave.
The R3-4 billion investment is
going to act as a catalyst for growth for
Foskor as it’s clear that the ageing plant
has been the source of many problems
for the business.
PRESSURE ON PRICE
“There is certainly downward pressure
in the market on pricing and currently
we are struggling with efficiency issues
and availability of plant so the situation
is difficult but there are opportunities
and soon the situation is going to
change and we will make profits,” says
Gadhave.
48 / Issue No.47 / www.enterprise-africa.net
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SHIVAJI GADHAVE
HEAD OF STRATEGY AND
PROJECTS
<<< Continues from page 44

4. FOSKORBUSINESS PROFILE
Economic phases are cyclical
and slumps are followed by peaks.
If we assume that the falling global
commodity prices will eventually
stabilise and rise, Foskor will be well
positioned to take advantage of new
opportunities.
“We have seen a reduction in our
market share but the major contributor
to that is our old plant as we cannot
produce at the level we were producing
before. Our quality is still the best in
the market, we have good customer
relationships so I think that the market
is not responsible for our reduction in
share, it’s to do with our internal issues
surrounding the age of our plant.
“The quality of our rock is among
the best in the world. It’s the same
with our phosphoric acid – it’s world
class. If there is a customer looking
for phosphoric acid and our acid is
available at the same price, customers
will go for our aid as there’s less
impurities and our acid is good for
niche markets. We have a quality
grow our business there while looking
for strategic alliances where possible so
that we can penetrate those markets,”
says Gadhave.
“We also have strategies to increase
our product basket. We want to add
value and move into downstream
products and we are planning to
diversify our business to reduce risk
and ensure everything is financially
sustainable.
“We are still focussing on our
South African market and there are
advantages here for us. We have long-term
relationships and established logistics
so we are well positioned in local and
international markets,”he adds.
The business is also focussed on
developing its most valuable asset –
its people. Foskor was awarded Top
Employer status in 2016, an award that
has been bestowed on the company
many times before, and this accreditation
demonstrates that Foskor offers
‘exceptional employee conditions, nurtures
and develops talent throughout all levels
advantage and excellent customer
relationships,” explains Gadhave.
Commodity pricing has also been
effected by unpredictable events that
cannot be planned for. Because of the
close link between phosphate and
farming, events such as droughts are
hugely damaging to the supply and
demand situation.
“Phosphate is a commodity but you
can’t generalise and group with other
commodities because it is mainly used
in fertiliser so it’s closely related to the
farming industry. There are others uses
in the food, pharmaceutical and animal
feed industries but the main use is in
farming. There is currently a drought
in South Africa, there’s a drought in
parts of India and India is the largest
consumer of phosphoric acid and
fertiliser so with the drought and with
changing government policies there is a
downward trend in price of phosphate,”
says Gadhave.
“It’s a temporary cycle and we’ve
seen it in the past. Things always go
of the organisation and has demonstrated
its leadership status in the HR environment,
always striving to optimise its employment
practices and to develop its employees’.
Gadhave, who joined the company
in 2010, is the perfect example of how
an employee has been nurtured.“I am
a mechanical engineer and a registered
and certified project management
professional in South Africa. I joined as a
project engineer in the mining division
and I climbed the ladder and I am now
heading up strategy and new business
development.
“Foskor offers fantastic career
development opportunities and shows
confidence in its staff,”he says.
Development of staff forms one of
the pillars of Foskor’s strategy – it’s not all
about profit. Part of the company’s mission
is to‘earn the respect of stakeholders’.
“We have a mechanism in place
where we engage with not only
employees but also the local community.
Foskor is a company that has the IDC as a
majority shareholder and that means that
down and then come back up. We are
geared up to survive in this is economic
cycle. Currently, there is no crisis for
us – we’re not going for a reduction in
production or retrenchments so we are
surviving and I’m sure the future will
be bright.
“Returning to profit is one aim
and the other is sustainability. The
current plant has completed its useful
life so we cannot expect much more
from this plant. New plant will mean
sustainability and improved efficiency
and that improves cost of production,”
he adds.
GROWTH & DEVELOPMENT
Following the installation of the
company’s new plant and the upgrades
of machinery, Foskor will be looking to
grow in terms of profits and markets
served.
“We always think about our
country and our continent so one
of the initiatives from our side is to
contribute to the SADC market and
FOSKOR
+27 11 347 0600
abbyl@foskor.co.za
www.foskor.co.za
50 / Issue No.47 / www.enterprise-africa.net www.enterprise-africa.net / Issue No.47 / 51
we are not only driven by profit making
but also by community development,
empowerment, small business
development and economic growth,”says
Gadhave.
“We have the internal problem with
our old plant as well as the downward
pressure from the market on prices and
so in the last couple of years, we haven’t
made huge profits so it’s difficult to
continually offer bonuses.
“We had a temporary problem but
now everyone is motivated and everyone
is giving their best effort to assist in the
turnaround of the company,”he explains.
In the long-term, the investment
into new plant is likely to be one of the
biggest decisions Foskor has ever made.
With the markets the way they are,
always unpredictable, the pressure is on
this sizeable business to perform well.
Fortunately, Foskor’s people are committed
and its partnerships and products are solid.
“To remain in the market you must
be a profitable business but we do
have other objectives and we want to
emphasise this as much as possible,”
says Gadhave.
This is going to be an interesting
few years, and Foskor is certainly worth
keeping an eye on
//R3-4 billion
investment