African Rainbow Minerals (ARM) has suspended operations at its loss-making Bokoni platinum mine while it works on a revised mining plan for the asset, it said on Friday as it reported a sharp fall in basic annual earnings.
ARM said on Friday its full-year profit fell 47%. It posted headline earnings of R2.69bn in the year ended June 30, compared with R5.08bn the year before, and declared a final dividend of R6 per share, lower than the R9 a share payout last year.
The diversified miner said lower thermal coal and iron ore prices as well as a stronger rand against the US dollar offset the effect of marginal increases in manganese ore and alloy prices.
ARM booked a R2.2bn impairment at Bokoni, citing a delay in ramping up mining operations and a change in mining method.
This pushed ARM's basic earnings down to R330m in the year ended June 30, from R3.1bn previously.
ARM acquired Bokoni, which is in Limpopo, from Anglo American and Atlatsa Resources Corporation for R3.5bn in 2022. The platinum mine had been put under care and maintenance in 2017 after a string of losses.
ARM has been operating Bokoni using an existing 60,000 tonne per month concentrator under an “early ounces” initial plan aimed at expanding operations. However, the collapse of platinum group metal prices in 2023 forced ARM to defer the planned 240,000 tonne per month mine development project.
“Without this larger scale, the lower production volumes obtained from the early ounces project could not achieve the required economies of scale,” ARM said in a results statement.
The current mining and milling capacity was insufficient to offset fixed costs and sustain profitability, leading to the suspension of operations at the end of June, the company said.
Bokoni's platinum group metal concentrate production rose 62% to 45,579 ounces in the year, but the mine's cash costs surged 48% to $2,051 (R36,264) per ounce.
ARM would now focus on ore reserve development at Bokoni while a feasibility study for a smaller 120,000 tonne per month mine is under way, it said. The study is expected to be completed in early 2026.
Reuters
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