Diversified mining company African Rainbow Minerals (ARM) last week reported a narrowed basic earnings loss of R254-million in the six months to December 31.
The loss resulted mainly from attributable impairments of the Nkomati nickel and Modikwa platinum mines totalling R1.4-billion after tax, compared with the half-year loss R996-million in the corresponding period of 2015.
However, ARM, headed by executive chairperson Patrice Motsepe, increased headline earnings by 234% to R1 693-million, or 893c a share, compared with R507-million in the corresponding period of 2015.
Cost containment was achieved at all mines bar the Goedgevonden coal mine and the Nkomati nickel mine, where unit costs increased on lower production.
ARM’s net debt to equity ratio of 15.4% at year-end was boosted by a R1.5-billion post-year-end dividend from Assmang.
The jump in headline earnings stems largely from the strong performances of the ferrous division and the Two Rivers platinum mine and earnings improvements in coal and nickel, both of which incurred losses in the corresponding previous period.
Copper’s headline loss narrowed from R275-million to R178-million, but Modikwa’s widened to R54-million from R47-million in the corresponding period.
The results were achieved in conjunction with ARM’s partners at the various operations of Anglo American Platinum, Assore, Impala Platinum, Norilsk, Glencore South Africa, Vale and Zambian Consolidated Copper Mines Investment Holdings.
At Modikwa, unit costs for every platinum group metal ounce increased by 7% and at Two Rivers by 9%.
Nkomati reduced on-mine unit costs by 19% to R254/t milled, excluding capitalised waste stripping.
Goedgevonden production costs jumped 34% as a result of mining high-cost areas and producing lower saleable tonnes.
Capital expenditure fell 15% to R209-million, or 15%, much of which was spent on the Black Rock Project.