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African Rainbow Minerals to Put its JV Nkomati Mickel Mine

Mining News - Published on Tue, 03 Sep 2019

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African Rainbow Minerals, the diversified miner headed by well-known mining magnate Patrice Motsepe, has decided to put its joint venture Nkomati nickel mine on care and maintenance from September 2020, in preparation for closure. This follows a more buoyant outlook for the mine six months ago, when ARM CEO, Mr Mike Schmidt, said operational issues had been dealt with and the nickel price had recovered. However, he added at the time that there were discussions with JV partner Norilsk Nickel on the future of the mine.

In fact, the nickel price fell further in the 6 months to end-June, to USD 12,675 per tonne and the mine’s unit production costs rose. ARM has taken a ZAR 1.1 billion after-tax impairment on Nkomati, as well as a ZAR 507 million impairment on Sakura Ferroalloys, which is held through the Assmang joint venture with Assore.

Despite the impairments, ARM was able to boost its total dividend for the year to June to ZAR 13 a share from ZAR 10 a share in 2018 on the back of strong earnings from its iron ore and Two Rivers platinum operations. Headline earnings rose 9% to ZAR 5.2 billion or ZAR 27.18 a share.

However, high dollar prices for iron ore, palladium and chrome helped to offset weaker prices for coal, manganese, platinum and nickel. ARM’s iron ore division, which is the biggest business in the group, more than doubled headline earnings to ZAR 3.4 billion as its average realised iron ore price rose 34%.

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Posted By : Rabi Wangkhem on Tue, 03 Sep 2019
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