African Rainbow Minerals (ARM), South Africa’s second-largest black-owned mining group, said first-half earnings rose 34% as it enjoyed booming commodity prices and achieved record output.
ARM said headline earnings per share climbed to 353 cents in the latter half of 2007, thanks to record sales in manganese ore, iron ore, chrome ore and thermal coal. That trend should continue, notwithstanding a domestic electricity shortage.
Headline EPS, which excludes capital, non-trading and certain extraordinary items, is the most widely watched profit figure in South Africa.
”The operational volume increases, together with ARM’s organic growth projects, are in line with the company’s strategy of growth to double production from 2005 levels by 2010 in key commodities with high margin operations,” ARM said in a statement.
”ARM has established a diversified commodity exposure, providing the company with varied pricing, volume and stage of mine development exposure.”
ARM said South Africa’s power crunch — which halted gold and platinum production for five days last month — had only affected its output marginally and the accompanying spike in commodity prices had made up for those losses.
It plans to bring in its own generators powered by diesel fuel in order to contain the impact of the electricity shortages. – Reuters