African Rainbow Gives 3-Year Deadline on Loss-Making OperationsBy
Full-year headline earnings plunge 40% to 1.05 billion rand
ARM wants to ‘maximize value’ at Lubambe copper mine
African Rainbow Minerals Ltd., a South African producer of iron ore, coal and platinum, said any of its assets that won’t make money within the next three years will be placed “under review” as the company’s earnings plunged due to low commodity prices.
ARM has cut costs and capital expenditure at its array of operations in a bid to remain profitable, the Johannesburg company said a statement Thursday. Headline earnings fell 40 percent to 1.05 billion rand ($75 million) in the year to June 30 from 12 months earlier.
One of its strategic goals for the coming year is “placing under review those operations which do not have the ability to operate profitably in the next three years,” ARM said.
The company is already considering options “to maximize value” at the loss-making Lubambe copper mine in Zambia, of which it owns 40 percent, it said. ARM recently sold its 50 percent stake in the Dwarsrivier chrome mine for 450 million rand.
ARM reduced its annual dividend 36 percent to 2.25 rand a share, it said. While the stock has more than doubled this year to 91.76 rand at Wednesday’s close, its still 46 percent lower than two years ago.