S.Africa: Strong rand twists ARM

Diversified miner African Rainbow Minerals yesterday reported an 80% fall in first-half headline earnings, hit by lower commodity prices and a strong rand against the US dollar.

ARM, which has interests in nickel, coal, iron ore, platinum, chrome and manganese, said headline earnings per share for the six months to end-December fell to 214 cents from 1055 cents a year ago.

South Africa’s second-biggest black-owned mining group said its ferrous unit was the main contributor to its earnings during the six months, but these were eroded due to the strong rand, which ARM expects to pressure profits this year too.

The company sells most of its metals in dollars and pays its costs in rand. Prices for its commodities dropped between 16% for thermal coal to 75% for manganese ore during the period.

The company said its sales rose across its platinum group metals, nickel, iron ore, manganese, chrome and alloys units.

ARM said unit costs at its platinum, nickel and iron ore operations dropped due to increased operational efficiencies on the platinum and nickel businesses and higher production volumes in iron ore and nickel

Source: www.timeslive.co.za 20100222

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