South Africa’s African Rainbow Minerals (ARM) is seeking lithium and copper acquisitions but is concerned about “crazy money” being paid for metal assets considered vital to the clean energy transition.
ARM has walked away from three potential deals because the prices “did not make sense”, executive chairman Patrice Motsepe said on Monday.
“The big danger is sometimes people are ridiculously excited and pay excessively higher for lithium deposits than should be the case,” Motsepe said during a results presentation.
“We are not desperate, we don’t have to conclude transactions for the sake of it.”
Diversified miner ARM, which has iron ore, manganese, coal and platinum group metals (PGM) assets, suffered a 21% decline in annual profit to 8.98 billion rand ($475.37 million), the company said on Monday, citing rail logistics problems, lower production and weaker commodity prices.
The company’s iron ore, manganese ore and thermal coal volumes were hit by logistics challenges blamed on South Africa’s state-owned freight rail operator Transnet, which is struggling with locomotive shortages, cable theft and vandalism.
ARM’s iron ore business was affected by lower export sales and weaker prices while lower output and softer prices also hit earnings from its PGM division.
Unit production costs remained under pressure from lower
production volumes and above-inflation increases in the cost of explosives, diesel, electricity and maintenance.
The company declared a dividend of 12 rand per share, down from 20 rand per share last year.
($1 = 18.8904 rand)
(By Nelson Banya; Editing by Jacqueline Wong, Louise Heavens and David Goodman)
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