Afrimat and Gemfields have ample lost ground to regain

Afrimat could have a better chance to turn around its fortunes, but Gemfields may have taken too many risks in a business whose very nature is uncertain

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If you decided at the start of 2025 that this was the year to buy Afrimat and Gemfields as your choices in the mining and resources sector, you would be down 29%.

As underperformance goes, that's awful. But could things change and allow Afrimat and Gemfields to regain some lost ground? Both released updates last week, so it's an opportunity to consider their performance and whether the bottom might be in.

We begin with Afrimat, where momentum does seem to be swinging.

Is dawn breaking at Afrimat?

Afrimat has an incredible track record of dealmaking. Over many years, it has built a resilient and diversified resources business through a combination of organic growth, bolt-on acquisitions and entries into new commodities.

At some point, though, something had to go wrong. As is usually the case, it's a combination of factors that has led to the situation that Afrimat now finds itself in.

The Lafarge acquisition is bold, to say the least, as Afrimat has willingly signed up for a difficult asset that was always going to make losses for a while. Those losses can be absorbed if the rest of the business performs well, but that's a big if.

While the group has been trying to bed down arguably the riskiest acquisition in its history, it has had to deal with a cocktail of problems, ranging from disastrous circumstances in the local ferrochrome smelters (key customers for the anthracite mining operations) to serious questions about the sustainability of ArcelorMittal as an iron ore customer.