ARM signals funding risk as profit drops
Johannesburg - African Rainbow Minerals, the diversified mining company controlled by South African billionaire Patrice Motsepe, said it may ask shareholders for money after all its units except its steelmaking-commodities division suffered half-year losses.
Earnings excluding one-time items for the six months ended December 31 fell 51 percent to R507 million ($33 million) from a year before, aided by a R599 million profit from its ferrous unit that includes iron ore, manganese and chrome, the Johannesburg-based company said in a statement on Friday.
All of African Rainbow’s other divisions including platinum, coal and copper reported losses for the period, the company said.
“African Rainbow is critically reviewing non-performing operations and assessing whether these have potential to achieve improved results in the future,” it said in the statement. The company will cut costs, improve mines and seek to ensure “that where shareholder funding is required, this is minimised.”
Mining companies globally have seen their margins eroded by a slump in commodity prices, caused by supply gluts and a slowdown in economic growth in China, the largest consumer.