African Rainbow Minerals Ltd., a diversified South African mining company, said first-half profit jumped 27 percent as sales volumes of its products surged and it benefited from a weaker local currency.
Net income for the six months through December increased to 1.98 billion rand ($261 million), from 1.56 billion rand, the Johannesburg-based company said in a statement today. Iron-ore sales surged 68 percent as the Khumani expansion project, in partnership with Assore Ltd., was ahead of schedule.
A decline in the dollar price of manganese ore, manganese alloys, nickel and platinum group metals was balanced by a weaker rand, the company said. The average rand-dollar exchange rate slid 7 percent to 7.6227 rand in the six months compared with the same period in 2010, according to data compiled by Bloomberg.
“We are making substantial progress with our growth projects and are excited about government’s stated commitment to allocate huge resources to upgrade rail, port and electricity infrastructure,” Chairman Patrice Motsepe said in a separate e-mailed statement. “This will support and enhance our aggressive growth strategy.”
The ferrous unit, which includes iron ore, chrome and manganese assets, accounted for 2 billion rand of earnings excluding one-time items, from 1.26 billion rand a year earlier.
African Rainbow has approved capital of 885 million rand to develop a new pit at the Beeshoek Iron Ore mine, which will extend production to July 2014, it said.
Eighty-seven percent of the $399 million approved capital spending for the Konkola North copper project African Rainbow is developing with Vale SA in Zambia has been committed, the company said today. Commissioning of the concentrator plant is expected in December 2012, it said.
African Rainbow mines coal in partnership with Xstrata Plc, platinum group metals with Anglo American Platinum Ltd. and Impala Platinum Ltd., and nickel with MCC Norilsk Nickel OJSC. It holds a 14.8 percent stake in Harmony Gold Mining Co.