JOHANNESBURG (miningweekly.com) – The founder and chairperson of diversified mining company African Rainbow Minerals (ARM) on Friday, September emphasised the importance of companies behaving in a manner that reflects integrity, honesty, governance and respect for legality and due process.

“It's important for us to create value for shareholders. It's equally, if not more, important that we do so in a legal manner, in an ethical manner, and that’s what has always been the culture of ARM,” Dr Patrice Motsepe pointed out during the Johannesburg Stock Exchange-listed company’s presentation of 19% higher headline earnings of R3.2-billion. (Also watch attached Creamer Media video.)

Net cash improved 54% to R10.2-billion, and a final dividend of R7 a share was declared.

“We've always had a commitment to all stakeholders. We're a company that, being South African, has a duty to reflect meritocracy, the best of our people from all backgrounds and cultures – black people, white people, coloured people, and Indian people.

“Everybody must feel that this is their company, not in terms of what we say, but in terms of our track record and how our employees and management feel that we behave, and also a duty to the country to provide jobs and uplift,” said Motsepe, ahead of ARM CEO Phillip Tobias stating that he is “very pleased” that the ARM board has approved a R15.2-billion capital outlay on what he described as the host of South Africa’s second-largest platinum group metals (PGM) resource, the Bokoni PGM project, which has a 6.3-year payback.

Restart of the Nkomati nickel mine has also won the board's thumbs up. “The restart is a low-risk, immediately executable opportunity that leverages existing infrastructure and re-establishes South Africa's only primary nickel producer,” Tobias reported.

Existing infrastructure is supporting execution involving capital of approximately R1.9-billion over two years.

Regarding safety, Tobias expressed pride at achieving a fatality-free year and “we remain committed to achieving zero harm”.

ARM FD Tsundzukani Mhlanga pointed to the significant increase in cash generation to R4.2-billion: “Last year, same time, we generated cash of R45-million versus R4.2-billion – quite a marked increase.”

ARM Platinum headline earnings increased by more than 200% as did those of Two Rivers PGM mine and Modikwa PGM mine.

Nkomati mine, which sold 28 111 t of chrome concentrate, reported headline earnings of R39-million.

“Our outlook on earnings remains positive... We continue to focus on factors that are within our control – the cost discipline, mining flexibility, and quality mining,” Tobias explained.

ARM FERROUS

ARM Ferrous headline earnings decreased by 42% to R2 028-million on lower contributions from the iron-ore and manganese divisions.

The iron-ore division’s headline earnings decreased by 41% and the manganese division’s by 68%. The cessation of production at Beeshoek mine resulted in local sales volumes falling to 0.5-million tonnes.

The reduction in sales volumes, retrenchment costs of R124-million, an increase in the rehabilitation provision of R191-million and care-and-maintenance costs of R92-million collectively had a significant negative impact on headline earnings.

Headline earnings at Khumani mine decreased significantly on mainly the average realised rand strengthening by 7%, partially offset by 180 000-t-higher export sales volumes.

Manganese headline earnings declined on mainly the rand strengthening and lower manganese ore and alloy export prices.

Continued collaboration with State-owned Transnet through the Ore Users Forum and Manganese Producers Consortium advanced rail and port reforms on the Saldanha and Ngqura corridors, delivering a 1% improvement in export rail performance and enhancing the long-term competitiveness of South African producers, ARM reported in a media release to Mining Weekly.

ARM COAL

ARM Coal reported a headline loss of R428-million driven mainly by the lower realised coal price and rand strengthening.

The Goedgevonden coal mine recorded a headline loss of R73-million and PCB a headline loss of R355-million.

COPPER

ARM stated that its investment in Surge Copper supported the continued advancement of the Berg project, which the completed prefeasibility study (PFS) confirms as a large-scale copper/molybdenum development with a maiden mineral reserve supporting a 28-year mine life.

Following completion of the PFS, the project is now progressing into feasibility-level technical and environmental studies, alongside the environmental assessment and permitting process and continued engagement with First Nations.

The feasibility study report is planned for 2028, with the environmental assessment decision targeted for 2029 to 2030 and a final investment decision for 2031.