In October 2025, the board of mining chemicals and explosives group AECI announced that CEO Holger Riemensperger would step down for personal reasons after just 2½ years in the role.
He is widely credited with driving the group’s turnaround — simplifying the portfolio, improving operational efficiency, cutting costs and debt and lifting profitability. In the first half of 2025, AECI reported a 132% surge in headline earnings and reinstated its interim dividend under his leadership. His interim successor, Dean Murray, previously executive vice-president of AECI Chemicals, now has the task of sustaining that momentum while a permanent CEO is sought.
The full-year 2025 results underline that management has built a solid foundation for the future. Revenue was slightly down year on year, but ebitda climbed 12% to R3.41bn, driven by stronger margins and cost discipline. Crucially, AECI used the year to clean up its balance sheet, raising roughly R2.2bn from selling noncore assets and ploughing all proceeds into debt reduction. The effect was a drop in net debt from R3.74bn at end-2024 to about R500m at end-2025, lifting gearing back into single digits.
All this repositioning reflects AECI’s refocus on core industrial markets. As management emphasises, AECI is fundamentally a mining and chemicals business. Its flagship division, AECI Mining, produces and supplies explosives, detonators and initiating systems, along with mining reagents and nitrates to the gold, platinum, coal and base-metal industries in Africa and beyond. The AECI Chemicals arm covers a portfolio of industrial and speciality chemicals, including water-treatment and plant-health products. Both segments serve heavy industries — mines, agribusiness and water utilities — which are cyclical but also offer high barriers to entry.
The big job for the new management team is keeping costs in check, fixing Modderfontein’s problems and investing where returns are highest
In 2026, management has clear priorities to build on the 2025 gains. The biggest near-term focus is the Modderfontein explosives plant in Gauteng, which is critical to supplying bulk emulsions to many African mining customers. In 2025 Modderfontein suffered power outages and raw material glitches that dented volumes. The company reports that these issues have largely been addressed in the second half, but the work continues. Indeed, one of the business priorities flagged for 2026 is the optimisation of the Modderfontein facility. This includes investing in reliability, replacing ageing low-margin production lines with higher-margin technologies and deploying new sensors and process control systems.
Outside South Africa, AECI will keep pushing selective international expansion — including the Democratic Republic of Congo and other African markets and parts of Asia Pacific — but always under a strict return-on-capital discipline. AECI says it will allocate free cash to the highest-return options: replacement capex at Modderfontein and other core plants, moderate bolt-on growth capex, and a steady, covered dividend.
AECI’s current valuation is modest by historic standards. At R110 per share, the stock trades on roughly 10 times trailing earnings, implying investors are not paying much of a premium. Yet management has laid out ambitious medium-term targets, including average ebitda growth of 15% per year. If achieved, the current earnings multiple would look fairly cheap.
However, there are risks, many tied to external factors. AECI’s mining customers rely on access to inputs such as sulphuric acid to run their operations. The conflict in the Middle East has thrown a major spanner into global sulphur and acid markets as the Strait of Hormuz, which carries roughly half of global sulphur exports, has been disrupted. Southern African miners normally import more than 90% of their sulphur from the Gulf, so cancelled shipments and plant shutdowns have caused sudden supply shortages and price spikes. A severe, prolonged acid shortage could force mine operators to cut back ore-leaching campaigns, which would reduce demand for explosives and mining chemicals from AECI.
Ammonia supplies are similarly under threat. Ammonia, another Middle East export chemical, has seen sharp disruptions as regional plants are offline. Analysts note that Middle Eastern ammonia plants being “trapped” has taken out about 20% of global capacity almost overnight. AECI imports a portion of its ammonia feedstock (roughly 10% of its needs in 2025) via sea routes that transit the affected region. The company is taking steps to secure alternative volumes. But if the global ammonia shortage deepens, AECI would face higher input costs and perhaps production delays on its mining chemicals side; again, its mining customers would feel the pinch in their operating costs.
AECI comes into 2026 leaner and more focused than it was two years ago. The big job for the new management team is keeping costs in check, fixing Modderfontein’s problems and investing where returns are highest. Given the stock’s low valuation and growing dividend, this niche explosives group could reward shareholders if the turnaround story continues as planned.
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