Motsepe: Mining assets are a good buyComment on this story
Johannesburg - African Rainbow Minerals Ltd. is considering buying mining assets that will boost long-term profit, said Patrice Motsepe, the South African company’s billionaire chairman.
“We continue to look at opportunities, this is a good time to buy,” Motsepe, who is the richest black South African and has expressed interest in platinum assets for the last year, said at a presentation in Johannesburg today.
“You can not be affected by short-term desolations and short-term periods of volatility as well as uncertainty.”
Shares in South African platinum producers have dropped since violence and illegal strikes broke out at operations in the second half of 2012, shutting production.
That’s cut the costs of assets and lowered the nation’s gross domestic product by about 0.5 percentage point last year, according to the National Treasury.
The miner of minerals including iron ore, nickel, copper, and manganese will next week meet investors in Europe and the US, Motsepe said.
“We have no intentions of overpaying” for assets, he said.
The company has looked at copper assets in Papua New Guinea in its search for exploration opportunities outside of Africa and has the goal of being a global competitor, Motsepe said.
African Rainbow said earnings excluding one-time items fell 30 percent to 1.41 billion rand ($160 million) in the first half through December as iron-ore prices dropped and costs rose at a rate above inflation.
Motsepe said he was “very excited” about prospects for the company’s coal business, which increased sales to Eskom, the utility generating more than 90 percent of South Africa’s power, by 21 percent to 2.28 million metric tons during the period.
Africa’s biggest economy is expanding its electricity- generation base to avoid a repeat of power shortages that halted mines for at least five days in January 2008.
The company, which uses coal for more than 80 percent of generation, is building what will be the world’s third- and fourth-biggest plants that use the fuel to make electricity.
Motsepe, who is also chairman of Harmony Gold Mining, pledged some of his wealth to charity last month, joining Warren Buffett’s initiative to boost philanthropy.
The stock declined for a second day, losing 2.3 percent to 188.58 rand by 2:35 p.m. in Johannesburg. More than 288,000 shares, or 63 percent of the daily average over the past three months, changed hands. - Bloomberg News