Johannesburg - African Rainbow Minerals, the mining company controlled by billionaire Patrice Motsepe, said full-year profit rose 10 percent after a weaker rand countered lower iron-ore prices.
Earnings excluding one-time items were 4.1 billion rand, or 19 rand a share for the 12 months ended June 30 from 3.7 billion rand, or 17.35 rand a share, a year earlier, the Johannesburg-based company said in a statement today.
Profit from the ferrous unit, which includes iron ore, manganese and chrome, comprised 91 percent of total earnings and increased 17 percent to 3.7 billion rand.
Benchmark ore with 62 percent iron content delivered to the Chinese port of Tianjin traded at an average of about $122 (R1,304) a dry ton in the year through June, 4 percent lower than in 2013, according to the Steel Index.
African Rainbow receives payment in dollars for its exports of the steelmaking ingredient from South Africa.
The rand traded at an average 15 percent weaker in the year against the dollar, helping boost earnings.
“As the US and some European countries continue to show signs of improved economic health and China remains supportive of demand for the commodities that we produce, African Rainbow’s diversified portfolio positions it well to participate in both emerging and developed markets,” the company said.
African Rainbow and Assore’s Assmang unit produces manganese in the country, which has the world’s largest reserves of the steelmaking ingredient.
Transnet, the state-owned ports and rail operator, is spending about 16.9 billion rand on rail lines from the Kalahari Basin to a new, manganese terminal at the southern port of Ngqura to meet transport needs of miners.
African Rainbow “and Transnet continue to engage regarding future export capacity and growth for both iron ore and manganese ore,” the company said.
Assore and African Rainbow approved expansion of the Black Rock mine to raise manganese output to 4.6 million tons annually from 3.2 million tons.
About 900 million rand has been spent on the first phase of the project, with a further 1.7 billion rand planned.
Earnings at African Rainbow’s platinum unit increased 68 percent to 883 million rand.
The company has joint ventures with Anglo American Platinum and Impala Platinum.
African Rainbow impaired 510 million rand on its stake in Harmony Gold Mining after the company wrote off the value of its Phakisa mine in the Free State province by 1.4 billion rand after saying the expense of expanding the operation was too high.
The company plans to spend 3 billion rand over the next five years expanding its Beeshoek iron-ore mine, raising output to about 3 million tons for at least 12 years. - Bloomberg News