African Rainbow Minerals (JSE: ARI) on Friday posted a 19% increase in annual profit, as strong platinum group metal prices offset the impact of lower income from its coal, iron ore and manganese divisions.
The diversified South African miner’s headline earnings came in at 3.201 billion rand ($200.3 million) in the year ended June 30, compared with 2.695 billion rand previously.
ARM said it will pay a final dividend of 7 rand per share, up from 6 rand per share last year.
The company’s PGM operations swung back to profit with 1.345 billion rand in headline earnings against last year’s 1.288 billion rand loss, after metal prices rose by more than 50% compared to the previous year.
Its ferrous division, which consists of iron ore and manganese, reported a 42% decline in headline earnings to 2.028 billion rand.
Iron ore earnings hit by mothballing of mine
Income from the iron ore division was impacted by a 75% collapse in sales volumes at the Beeshoek Mine, which was mothballed last November.
Headline earnings at ARM’s other iron ore mine, Khumani, also decreased significantly due to a stronger rand, despite higher export volumes. Manganese income was also hurt by lower mineral prices and the stronger rand.
The coal unit made a 428 million rand loss, against last year’s 47 million rand profit, mainly due to lower prices.
ARM said in July it was undertaking a phased 15.2 billion rand upgrade of its Bokoni platinum operations, as well as a resumption of nickel mining at Nkomati.
The Bokoni project is expected to reach its peak in 2032, producing between 350,000 and 400,000 ounces of PGMs annually, doubling ARM’s current output.
ARM is restarting open-pit mining operations and nickel concentrate production at Nkomati, which was idled in 2021. Nkomati will produce 56,065 tons annually after agreeing an off-take deal with Sweden’s Boliden BOL.ST .
($1 = 15.9803 rand)
(Reporting by Nelson Banya; Editing by Muralikumar Anantharaman and Jan Harvey)
