JOHANNESBURG (miningweekly.com) – Dr Patrice Motsepe, the executive chairperson of the diversified mining company African Rainbow Minerals, on Friday expressed confidence that platinum group metal (PGM) prices will increase in the medium to long term.

“We’re confident that, in the medium to long term, the pricing of our PGM metals will increase and it's a business that we have confidence in. PGMs are part of our portfolio of assets that we run and operate that we think will do well,"  Motsepe outlined. (Also watch attached Creamer Media video.)

To preserve cash in the current PGM price environment, major expansion plans at the Bokoni PGMs mine have been deferred and a Section 189 process to right-size the mine has commenced. Construction of the chrome recovery plant at Bokoni is underway, with plant commissioning expected in June. Chrome is a co-product of the PGM-bearing upper group two reef that is mined at Bokoni.

“I often get asked questions by our shareholders about Bokoni and what we’ve said over the years is that Bokoni is a world-class orebody and we’re confident that with the plans that we have and some of the strategies that we have in the medium to long term, it will create value for shareholders,” Motsepe explained during the presentation of half-year results covered by Mining Weekly.

In the six months to the end of December, ARM Platinum’s headline earnings fell 144% to record a R680-million loss compared with the corresponding period of financial year (FY) 2024.

Overall headline earnings for the six months decreased by 49% to R1 520-million and the Johannesburg Stock Exchange-listed company, which has net cash of R6 073-million, declared an interim dividend of R4.50 a share amounting to R1 011-million for the first half of its FY 2025.

“The declaration of dividends goes hand-in-hand with an important investment in the future. We invest in the minerals that we have, including others that we are pursuing, and you have to take a long-term perspective, particularly the context of PGMs, but also in all minerals,” Motsepe said.

ARM mines and beneficiates iron-ore, manganese ore, chrome ore, PGMs, nickel and coal and also has a strategic investment in gold through Harmony Gold Mining Company, which Motsepe also chairs.

“The pricing can be very cyclical. We've been in this business for more than 30 years, and we understand it.

“During the good times, we invest in the future, and during the difficult times, that's when there are opportunities, but also that's the time when companies with a strong balance sheet and world-class management will always perform well.”

The lower average realised export iron-ore prices and stronger rand:dollar exchange rate were partially offset by higher manganese ore and alloy prices.

Construction of ARM Platinum’s 100 MW solar photovoltaic facility is progressing on schedule, with the first power delivery expected in August.

With the definitive feasibility study for renewable energy at ARM Ferrous completed in December, various funding models and energy mix options are being reviewed.

TOUGH OPERATING ENVIRONMENT

ARM CEO Phillip Tobias reported that during the past six months, ARM faced a very tough operating environment, including low commodity prices across the basket, logistics issues and water challenges, combined with above-inflation cost increases.

Cost reduction and cost containment remain a key focus area. “We remain focused on enhancing quality through mining grade optimisation, reusing waste, dilutions and increasing volumes,” Tobias said.

The headline earnings of ARM Ferrous were lower on 22% lower iron-ore prices, a strong exchange rate and lower sales volume for the iron-ore division.

Higher average realised US dollar manganese ore prices and a better cost performance contributed positively to headline earnings, partially offset by a stronger exchange rate and lower export sales.

Regarding coal, reduced trucking because of lower coal prices and strong exchange rate lowered export volumes. A decision was made to stop trucking because the prices were lower than the laid-down limit price.

Regarding iron-ore, domestic sales volume was 9% down owing to reduced offtake from steelmaking company ArcelorMittal South Africa presenting risk for the continued operations at the Beeshoek iron-ore mine.

CHALLENGING CAPITAL ALLOCATION TIMES

ARM FD Tsundzukani Mhlanga emphasised the importance of disciplined capital allocation “in these challenging times”, when the company is prioritising capital expenditure (capex) investment in its existing businesses.

“It's the business that we know. These are orebodies we know. We know the landscape very well, so that's your lowest risk in terms of where you can deploy capital.

“When we speak about our existing business, we refer to the sustaining capex, and that's where, in the period under review, we've deployed most of our capital.

“However, we don't stop there. We also look at growing our existing business, as well as pursuing any acquisitions that make commercial sense,” Mhlanga explained.