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01 Sep 2008 08:29
South African diversified mining group African Rainbow Minerals (ARM) full-year earnings jumped due to strong metal prices and the group gave bright outlook on Monday.
Despite electricity shortages in South Africa, ARM, the country’s second-biggest and black-owned mining group, said it had put in place contingency plans at all its operations.
ARM posted a 232% jump in full-year headline earnings per share to R19,06 in the year to end-June from R5,80.
Headline earnings, the main profit measure in South Africa, strips out non-trading, capital and some extraordinary items.
ARM’s higher output, cost controls and operational efficiencies had outweighed unit cost increases, the group said.
ARM said the jump in earnings was as a result of increased output and record prices of platinum group metals, manganese ore, chrome ore and export thermal coal.
The group said it would expand its Khumani iron ore mine in South Africa to produce an extra six million tonnes and added that it was “well positioned” to face the global economic slowdown based on its wide range of products.
Annual sales doubled to R12,6-billion. ARM declared a dividend of R4, up 167% on last year’s maiden dividend.
ARM has a stake in three platinum mines, which it owns in separate partnerships with Anglo Platinum, Impala Platinum, the world’s top two producers of the metal, and Norilsk Nickel.
ARM’s coal operations are run jointly with Xstrata under Xstrata Coal South Africa, and its copper exploration in Zambia and the Democratic Republic of Congo is conducted by its majority-owned affiliate Teal.
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