Patrice Motsepe

IF you’re a mining investor looking for a broadly diversified portfolio, Motsepe is an executive after your own heart. Over the past 28 years, African Rainbow Minerals (ARM), the company he founded on gold, has spread its interests to platinum group metals, manganese, coal and iron ore. Now the target is critical minerals, specifically copper. Clearly, given commodities cycles, not all these cylinders are going to fire at once but together they should be able to generate fairly regular cash flow for shareholders. Problem is, Harmony Gold Mining, the longest-held asset in which ARM’s stake is currently 11.8%, doesn’t pay much in the way of dividends, so what’s the point of holding on to it? 

Thanks to gold’s appreciation in the past year, the value of Harmony on ARM’s books has doubled. A good time to start selling down and deploying the cash elsewhere? But Motsepe is adamant that ARM is going to retain Harmony, justifying the decision on the basis of its copper assets in Papua New Guinea and (more recently) Australia. ARM’s other critical mineral interest so far is graphite, which has already caused some trouble. 

In November it emerged that ARM and its sister company ARC were facing a $195m claim from Pula Graphite Partners of Tanzania for breaching a non-disclosure and non-compete agreement after ARC invested in a rival project nearby. Expect further developments on this and other issues around critical minerals this year.