Cape Town – Patrice Motsepe-backed phosphate producer Kropz is restructuring its Elandsfontein operation in the Western Cape, with up to 238 contractor jobs at risk as the company halts production of phosphate rock and shifts its focus to an alternative product.
According to BusinessTech, Kropz will not renew its operating and maintenance agreement with contractors when it expires in November. The Elandsfontein mine, about 110km northwest of Cape Town, employs around 540 people, including contractors.
Mining contractor Trollope Mining Group has separately warned employees that its contract could be “drastically reduced if not completely terminated at the end of November”, potentially affecting 238 jobs.
The restructuring follows a $160 million (about R2.6 billion) investment in the Elandsfontein operation, which has struggled to achieve profitability and production targets.
Kropz announced on 7 September that it had begun an urgent operational review, citing pressure from the Middle East conflict, weaker phosphate-rock demand and higher fuel, chemical and freight costs. The company said Elandsfontein had continued to operate without reaching profitability.
“The restructuring and operational downsizing process will be challenging and we understand the impact it will have on employees and their families and other stakeholders and are deeply saddened,” Kropz CEO Louis Loubser said.
He added that the decision was necessary to establish “a more sustainable operating model”.
Phosphate production to stop
Kropz said it would sell down its existing phosphate-rock stockpiles rather than continue producing the conventional product. It plans instead to develop its Nanophos business, a soft-rock phosphate product designed to release nutrients more gradually.
The company said it had produced 150,246 tonnes of phosphate rock during the first five months of its 2026/27 financial year, selling 149,907 tonnes. However, it does not currently plan further phosphate-rock production, according to Investegate.
A report by Moneyweb said that Kropz will maintain most of the unused plant in a care-and-maintenance state, allowing for a possible return to phosphate-rock production if market conditions improve.
Kropz Chief Operating Officer Mark Maynard said: “Kropz will continue maintaining the majority of the unused plant in a care and maintenance state that will ensure a quick return to phosrock production when market conditions become more favourable.”
The company’s troubles have also hit its market value. BusinessTech/Bloomberg reported that Kropz shares fell 39% following the restructuring announcement, reducing its market capitalisation to about £9.1 million, compared with a peak of £120 million in 2022.
Motsepe first invested in Kropz in 2018 through African Rainbow Capital (ARC), which subsequently built up an approximately 90% stake in the company.
Kropz said the restructuring was aimed at lowering its cost base and creating a more sustainable business, while retaining the option of restarting phosphate-rock operations once market conditions normalise.
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Compiled by Betha Madhomu
