African Rainbow Minerals HY HEPS up 40%
African Rainbow Minerals half-year profit is up 40 per cent. Earnings from coal rose by 300 per cent, driven by higher thermal coal prices, manganese was up 54 per cent on firmer prices, while the iron ore division reported a 12 per cent decline in headline earnings owing to lower prices and a 15 per cent drop in export sales resulting from rail logistics challenges. Mike Schmidt, CEO, African Rainbow Minerals spoke to CNBC Africa for more.
Mon, 06 Mar 2023 16:35:21 GMT
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AI Generated Summary
- African Rainbow Minerals achieved a 40% increase in half-year profit, boosted by a significant rise in coal earnings and firm prices in manganese.
- Despite facing a decline in iron ore earnings and logistical challenges, the company remains optimistic about its performance.
- Strategic investments in capital expenditure and operational efficiency are expected to drive growth in ARM's mining operations over the coming years.
African Rainbow Minerals (ARM) has reported a significant increase in its half-year profit, up by 40%. The impressive performance was primarily driven by soaring earnings from coal, which rose by an astonishing 300% due to higher thermal coal prices. Additionally, manganese profits surged by 54% on the back of firmer prices. However, the iron ore division saw a decline in earnings by 12% as a result of lower prices and a 15% drop in export sales due to challenges in rail logistics.
In an interview with CNBC Africa, Mike Schmidt, CEO of ARM, expressed his satisfaction with the results, particularly highlighting the stellar performance in coal prices. Despite facing obstacles in logistics and power supply, Schmidt emphasized the value of having a diversified portfolio to navigate through fluctuations in commodity prices.
Schmidt addressed concerns about the impact of logistics and power constraints on the company's performance. While he acknowledged the challenges posed by these factors, he also mentioned that ARM strategically manages its operations in response to such constraints. With operational efficiencies in focus, Schmidt provided insights into the delivery performance of ARM's key products, stating that the iron ore and manganese operations were achieving delivery rates of over 85% and 87%, respectively.
In terms of capital expenditure, ARM is proactively investing in projects to enhance its mining operations. The company plans to allocate R1 billion towards initiatives aimed at accelerating production and early output at its mines. Schmidt elaborated on ARM's capital expenditure on its manganese and Bokoni operations, outlining the strategic considerations and financial outlook for these projects.
Looking ahead, ARM is poised for growth in the iron ore and manganese sectors, with a focus on optimizing production capacity and seizing market opportunities. The company's strategic investments in expanding its mining operations, particularly in the Marensky and Medeco projects, are expected to drive substantial growth over the next 12 to 18 months.
With a strong commitment to operational efficiency and strategic growth initiatives, ARM remains optimistic about its future prospects and aims to capitalize on emerging opportunities in the mining sector.
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