JOHANNESBURG (miningweekly.com) – The major challenge of the mining industry is the imperative of growth, African Rainbow Minerals (ARM) executive chairperson Dr Patrice Motsepe said on Wednesday, when the 25 000-employee ARM reported record financial results.

“You’ve got to replace the orebody that you’re mining with an equally world-class and an equally competitive orebody,” said Motsepe at ARM’s presentation of cash-rich interim results, which include a 100%-higher interim dividend of R10 a share. (Also watch attached Creamer Media video.)

Headline earnings for the six months to December 31 were up 134% to R5-billion, boosted by iron-ore and platinum group metals. Net cash on hand was up by 29% to $4.8-billion.

“It excites me that ARM and many of the companies in the mining industry can deliver good results and maintain the global confidence in the mining industry,” Motsepe said at the virtual results presentation covered by Mining Weekly.

“We’ve learnt over the years that in times when things are fine, we’ve got to invest and then also look after our shareholders, as well as all our other stakeholders, the communities that live near our operations, the workers as well as the obligations we have to inclusivity, and to make sure that the mining industry contributes to a globally competitive industry.

“The commitment for the mining industry to be globally competitive is critically important and for ARM to be a competitive dividend payer with an increased share price,” Motsepe said.

“For the mining industry in South Africa to continue to be globally competitive is critically, critically important and also to ensure that we work with all stakeholders, with government, to continue to create an environment that is globally competitive,” said Motsepe.

“We have to focus to ensure that the commitment to zero fatalities becomes a reality,” said Motsepe.

ARM suffered two fatalities in the six months. On September 13, Dennis Hlengani Mdaka, a rock drill operator at Modikwa, was fatally injured when he entered an unventilated development end at South 2 shaft, and on October 7, Johannes Mahlalela, a team leader at Modikwa, sustained an injury to his right arm during a shift. Although he was stable after an operation, Mahlalela passed away in hospital on October 11 following medical complications. Five ARM employees also succumbed to the Covid-19 pandemic in the period.

“Our operations navigated these turbulent times well, responding in an agile and responsible manner,” the JSE-listed company stated in a release.

ARM Ferrous headline earnings were 60% higher at R2 955-million, driven by a 99% increase in headline earnings in the iron-ore division. This was partially offset by a 69% decrease in headline earnings in the manganese division.

ARM Platinum attributable headline earnings increased by R1 532-million to R2 021-million, with the Two Rivers and Modikwa mines benefitting from a 35% average increase in the palladium price and a 162% average increase in the rhodium price.

Rhodium comprised 47% of the Two Rivers basket price and 45% of the Modikwa basket price.

Production is expected to cease at Nkomati nickel mine this month when the opencast mine will be placed on care and maintenance in preparation for closure.

ARM Coal reported an attributable headline loss of R222-million, mainly as a result of the sharp decline in export thermal coal prices, lower sales volumes on reduced Eskom offtake and logistics and mining challenges.