Resource investment company Mantengu has posted a loss of R315-million for the financial year ended February 28 owing to a combination of factors; however, the board views these as one-off items that are not expected to reoccur.

Having posted a profit of R303-million in the prior year, this year’s profit swung the other way owing to R168-million of losses related to the closure of Sublime Technologies since May 2025, R115-million of losses in the chrome operations and R26-million relating to expenses for Blue Ridge Platinum.

Sublime, which produces silicon carbide, shut down in May last year for routine maintenance, following which the board decided not to resume production in July after completion of this maintenance. The rationale for this was that the business would have incurred an additional energy charge of R7-million a month because its tariff agreement with Eskom expired on March 31, 2025.

Sublime submitted its application for extension of its tariff agreement with Eskom in June 2024 and, to this day, continues to negotiate with Eskom for approval. Sublime consumes a significantly large amount of energy to produce silicon carbide as it uses open arc furnaces.

Similar to other smelting operations in the country, Mantengu says it is not viable to continue operations at current Eskom tariffs and energy costs.

Sublime started a retrenchment consultation process with employees and trade unions in May this year, which is expected to be completed in early August.

Particularly, the R168-million loss in the reporting year relates to operational costs while not generating income, an inventory write-down and impairment of intangible and deferred tax assets.

Once the Section 189 process is completed, Sublime’s monthly costs are expected to decrease by about 80%, which will stem further losses.

The board nonetheless continues to negotiate with Eskom and will evaluate Sublime’s options on successful conclusion of an agreement.

Meanwhile, Mantengu’s chrome business incurred a loss of R115-million for the year owing to significant flooding early in the 2025 calendar year and the Langpan operation’s offtaker at the time exercising an option to buy chrome concentrate at a lower price compared to that of the market during the May to July quarter, in 2025.

Mantengu explains that Langpan experienced further challenges in the reporting year owing to sabotage, with implicated employees no longer employed by the company. “Legal actions are in the process of determining what occurred,” Mantengu confirms.

Langpan subsequently entered into new offtake and funding agreements with HMS Bergbau Africa to replace the prior offtaker. Mantengu says this offtaker is more commercially aligned with Langpan’s long-term development and sales strategy and eliminates the RWE legacy concept of unilateral price determinations below prevailing market prices.

Further, Mantengu assumed control of Blue Ridge on August 1, 2025, with the losses related to this business relating to monthly expenditure without any income generation – as Blue Ridge was not yet being operationalised. Mantengu has since advanced negotiations to dispose of Blue Ridge for R50-million.

Another R6-million of corporate losses relate to increased security costs owing to threats on the lives of executive directors and increased legal costs to respond to various nefarious actions, the company explains.

Mantengu posted a loss a share of R1.01 for the year, compared with earnings of R1.48 apiece in the prior year. The headline loss a share amounted to 90c in the reporting year, compared with a headline loss of 23c in the prior year.

The group’s net asset value per share also decreased from R1.78 in the prior year to R0.71 in the reporting year.

Gross profit reduced from R106-million in the prior year to R23.6-million in the reporting year, while operating profit reduced from R3.9-million in the prior year to an operating loss of R258-million in the year under review.

OUTLOOK

Mantengu announced on May 20 that it entered into advanced negotiations with Averi Finance to acquire assets of Averi in exchange for the issue of new Mantengu shares. Management is currently busy in the due diligence phase, and this transaction is expected to be completed in the 2027 financial year.

The board also announced on June 12 that, pursuant to receiving an offer from Afresources Mining, it has entered into advanced negotiations to dispose of Blue Ridge.

Mantengu also took the decision to streamline its investment portfolio in anticipation of completing the Averi Finance transaction.

Once completed, the transaction will have an expected positive impact on net profit of the group of R24-million a year, as it will no longer have to fund operational expenses at Blue Ridge without any income.

The Section 189 process at Sublime is expected to be completed in early August 2026. The completion will have an expected positive impact of R38-million a year as it will no longer have to fund operational expenses at Sublime without any income.

The group's chrome operations continue to ramp up production after a difficult 2026 financial year. Mantengu aims to monetise the production of platinum group metals at Langpan in the 2027 financial year, as well as increase production at the Meerust operation by processing tailings into chrome concentrate.