African Rainbow Minerals posts 24% rise in July-Dec earnings on higher sales.

By bne IntelliNews February 28, 2012
South African diversified mining group African Rainbow Minerals (ARM) posted a 24% growth in earnings for the six months to end-December 2011, on the back of higher sales volumes for all of its key commodities. Headline earnings per share, which exclude certain one-off items and are the major gauge of profitability in South Africa, rose to 912 cents in the first half of the fiscal year to end-June 2012 from 734 cents a year earlier. Sales grew 30% y/y at ZAR 8.72bn (EUR 851.3mn) in July-December 2011. The improvement in earnings was driven mainly by increased sales volumes in iron ore as the Khumani Iron Ore Expansion Project progressed well ahead of schedule, ARM said in a statement. Higher sales volumes were also achieved in manganese ore, manganese alloys, PGMs, nickel and Eskom thermal coal. The increased sales volumes were partly offset by a decline in U.S. dollar-denominated commodity prices, as uncertainty in global markets continued to put pressure on demand for commodities. But a 7.2% weakening of the exchange rate of the rand against the U.S. dollar during the period boosted results. ARM targets growth through the development of its four major projects in iron ore, nickel, coal and copper. The Khumani Iron Ore Expansion Project, which will increase annual production from 10 million tonnes to 16 million tonnes, is currently ahead of schedule and is well within budget, the company said. At the Nkomati Nickel Mine, both the 375,000 tonnes per month and the 250,000 tonnes per month concentrator plants were successfully commissioned. The Goedgevonden Coal Mine is moving towards 7 million tonnes per year. The Konkola North Copper Project in Zambia, which will produce 45,000 tonnes of copper per year, is progressing on schedule and commissioning of the concentrator plant is expected in December 2012.

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