[miningmx.com] –AFRICAN Rainbow Minerals (ARM) continued the string of good financial news from diversified mining groups by more than trebling headline earnings for the six months to end-December to R1.6bn (previous comparable period – R454m).
This was achieved on the back of improved profits across the board from ARM’s various divisions, with the exception of coal which lost R54m because of lower production as some of its mines switched from underground to open cast operations.
The major contribution came from ARM’s ferrous metal division, where headline earnings quadrupled to R1.3bn (R302m).
The group’s cash and cash equivalent on hand remained virtually unchanged, amounting to R2.3bn at end-December.
There’s more to come in the second half of the current financial year to end-June, according to CEO Andre Wilkens who said: “Aggressive growth continues with production ramp-up at the Goedgevonden Coal Mines, the Nkomati large-scale expansion project and the Khumani iron ore expansion.’
Wilkens added that “conditions in the commodity markets continued to improve significantly in the latter half of the 2010 calendar year, driven mainly by strong demand from China.
“Despite concerns of “cooling’ in the Chinese economy, growth in China is expected to remain strong at around 8% to 10% for the 2011 calendar year.
“This, together with the supply side constraints for almost all commodities in the ARM portfolio, is expected to continue to support dollar commodity prices going forward.’
Wilkens said ARM remained concerned about the relative strength of the rand against the US dollar, although the SA currency had weakened somewhat since the end of December.
He said ARM was delivering resources from long-life, low-cost mines into improving commodity markets. Also, the majority of capital expenditure has already been made, indicating low capital risk.
“The Konkola North copper project is also expected to deliver into strong copper markets from 2013 onwards,” said Wilkens.
“ARM continues to pursue aggressive growth and is supported by a robust financial position with a strong cash position and low gearing – permitting opportunity to pursue further growth currently under consideration.’
