Bad news for one of billionaire Motsepe’s companies

African Rainbow Minerals (ARM), whose founder and Executive Chairman is Patrice Motsepe, has seen a significant drop in headline earnings.

Motsepe is one of South Africa’s richest men, with a net worth of $3 billion (roughly R54 billion), making him the fourth wealthiest man in the country.

On top of his shareholding in ARM, he also owns African Rainbow Capital, Mamelodi Sundowns, Ubuntu-Botho Investments and more.

Motsepe founded ARM in 2004 through the merger of ARMgold (created by Motsepe in the 1990s), Avmin, and Harmony Gold.

The group is a diversified mining company that mines several minerals, such as iron ore, platinum group metals (PGMs), manganese ore, copper and more.

It also has an investment in gold via its shares of Harmony Gold, where Motsepe also serves as chairman.

As chairman and founder, Motsepe owns roughly 40% of ARM, giving him a substantial say in how the company is run. His stake in ARM is worth roughly R13.2 billion.

However, the group saw its headline earnings for the six months ended 31 December 2024 decrease by 49% to R1.5 million or R7.75 per share.

ARM Ferrous headline earnings dropped by 33% to R1,881 million, driven by a decrease in the headline earnings of the iron ore division but slightly offset by the headline earnings from the manganese division.

The group said that iron ore headline earnings were lower due to a lower average realised US dollar export prices, a stronger rand/US dollar exchange rate and lower sales volumes.

Iron ore headline earnings were lower due to lower average realised US dollar export prices, a stronger rand/US dollar exchange rate and lower sales volumes.

Manganese headline earnings were also higher due to higher average realised US dollar manganese ore price, which was partially offset by lower export sales volumes and a stronger rand/US dollar exchange rate.

ARM Platinum reported a headline loss of R689 million (1H F2024: R282 million loss), mainly due to higher operational losses at Bokoni.

The group thus cut its interim dividend by 25% to R4.50 per share (1H F2024: R6.00 per share). The group’s net cash also dropped to R6 073 million. (30 June 2024: R7,197 million)

However, basic earnings per share were R1,394 million or R7.11 per share, marking an increase of 15%, as it included the following attributable impairments:

• An impairment of property, plant and equipment at Beeshoek of R96 million after tax
• An impairment of Assmang’s investment in Sakura Ferroalloys of R36 million with no tax effect
• An impairment of property, plant and equipment at Cato Ridge Works of R4 million after tax.