Patrice Motsepe's African Rainbow Minerals Reports Lowest Profit In Seven Years

African Rainbow Minerals ARM, the diversified South African mining group led by Patrice Motsepe, Africas first Black billionaire, reported its lowest profit in seven years. The companys 2024 fiscal year results showed a 75 percent drop in profit, driven by higher costs and a tough operating environment.

ARM reported a profit of R2.29 billion 128.5 million for the year ended June 30, 2024 , a stark contrast to the R9.32 billion 521.5 million achieved in 2023. This decline represents the lowest profit since 2017 when the group posted earnings of R1.43 billion 80 million. The drop in profits was attributed to several factors, including lower revenue and rising operational costs.

Revenue fell to R12.92 billion 722.9 million from R16.1 billion 900.8 million in the prior year. This decline was largely driven by a drop in the average US dollar price for 6E platinum group metals PGMs and a decrease in thermal coal prices. Additionally, higher unit costs due to reduced production volumes, above-inflation increases in electricity expenses, and higher waste-stripping costs at ARMs iron ore operations further squeezed earnings.

Despite these headwinds, ARM continued its tradition of rewarding shareholders. The board approved a final dividend of R9 0.50 per share, down from the R12 0.67 per share paid in the prior year. Including an interim dividend of R6 0.34 per share, the total dividend for the 2024 fiscal year stands at R15 0.84 per share, compared to R26 1.45 per share in 2023.

ARM, a significant player in South Africas mining industry, has interests across a broad spectrum of commodities, including iron ore, coal, copper, gold, platinum, and other precious metals. Motsepe, who owns 45.9 percent of ARM, remains one of Africas richest individuals, with a significant portion of his wealth tied to the company.