| Mon 28 Feb 2011, 7:05 | | ARI - African Rainbow Minerals Limited - Unaudited Interim Results for the six |
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ARI
ARIM
ARI - African Rainbow Minerals Limited - Unaudited Interim Results for the six
months ended 31 December 2010
African Rainbow Minerals Limited
Incorporated in the Republic of South Africa
Registration number 1933/004580/06
ISIN code: ZAE000054045
JSE share code: ARI
("ARM" or "the Company")
Unaudited Interim Results for the six months ended 31 December 2010
Shareholder information
Issued share capital at 31 December 2010 212 931 905
Market capitalisation at 31 December 2010 ZAR44.7 billion
Market capitalisation at 31 December 2010 US$6.8 billion
Closing share price at 31 December 2010 R210.10
Six month high (1 July 2010 - 31 December R217.26
2010)
Six month low (1 July 2010 - 31 December R146.25
2010)
Average volume traded for the six months 447 622 shares per day
Primary listing JSE Limited
Ticker symbol ARI
Investor relations
Jongisa Klaas
Head of Investor Relations and Corporate Development
Telephone: +27 11 779 1507
Fax: +27 11 779 1312
E-mail: jongisa.klaas@arm.co.za
Corne Dippenaar
Corporate Development
Telephone: +27 11 779 1478
Fax: +27 11 779 1312
E-mail: corne.dippenaar@arm.co.za
Company secretary
Alyson D`Oyley
Telephone: +27 11 779 1480
Fax: +27 11 779 1318
E-mail: alyson.doyley@arm.co.za
Salient features
- Headline earnings increased 244% to R1 562 million from R454 million for the
corresponding six months ended 31 December 2009, driven mainly by significantly
improved dollar commodity prices. The headline earnings per share were 734 cents
per share compared to 214 cents per share for the corresponding period last
year.
- Significant increases in sales volumes achieved in nickel, copper and cobalt
(from Nkomati Nickel Mine) as well as platinum group metals, chrome ore and
ferrochrome.
- Continued focus on unit cost reduction and increased sales volumes resulted in
a decrease in unit costs at Nkomati Nickel Mine, Goedgevonden Coal Mine and at
the ferrochrome operations.
- Robust financial position maintained with cash and cash equivalents at R2.3
billion and net debt to equity of 6%.
- Aggressive growth continues with production ramp-up at the Goedgevonden Coal
Mine, the Nkomati Nickel Large Scale Expansion Project and the Khumani Iron Ore
Expansion.
- Commissioning of the new 250 thousand tonnes ore per month nickel concentrator
two months ahead of schedule and within budget.
- Development of the Konkola North Copper Project commenced with US$236 million
of the capital expenditure already contracted for as at 31 December 2010.
ARM operational review
ARM`s Board of Directors (`the Board`) is pleased to announce significantly
improved results for the six months ended 31 December 2010 (1H F2011). Headline
earnings of R1 562 million were achieved during the period representing an
increase of 244% when compared to the corresponding six months ended 31 December
2009 (1H F2010). This significant increase in earnings was driven mainly by a
notable improvement in conditions in the commodity markets. The positive impact
of increased dollar commodity prices was however negatively impacted by the
strengthening of the Rand against the US Dollar from an average of R7.65/US$ (1H
F2010) to R7.10/US$ (1H F2011).
Sales volume growth
Key operational contributors to the improvement in ARM`s earnings include:
- 367% increase in export thermal coal sales volumes from the Goedgevonden Coal
Mine to 1.4 million tonnes
116% increase in chrome ore sales volumes (Assmang only) to 214 thousand tonnes
56% increase in copper sales volumes from Nkomati Nickel Mine to 2 885 tonnes
- 41% increase in contained nickel sales volumes to 5 321 tonnes
- 38% increase in cobalt sales volumes from Nkomati Nickel Mine to 321 tonnes
- 21% increase in ferrochrome sales volumes to 91 thousand tonnes
- 2% increase in Platinum Group Metals (PGM) sales volumes to 384 657 ounces
Although sales volumes for iron ore, manganese ore and ferromanganese were
lower, production of these commodities increased during the period under review.
Iron ore production increased by 10%, while sales were lower as a result of
derailments on the Saldanha rail line. Manganese ore production increased 43% to
meet sales volumes whilst production of ferromanganese increased with the
successful conversion of the ferrochrome furnace to ferromanganese production.
Sales and production volumes from the PCB coal operations decreased.
To meet increasing demand for commodities, ARM continues with the aggressive
development of its projects with the ramp-up of the Khumani Iron Ore Expansion,
the Nkomati Large Scale Expansion, the Goedgevonden Coal Mine, and the
commencement of the Konkola North Copper Project.
Contribution to headline earnings
Commodity group six months ended 31 December
R million 2010 2009 % change
Platinum Group Metals 161 131 23
Nkomati nickel and chrome 134 36 272
Ferrous metal 1 256 302 316
Coal (54) 36
Exploration (64) (85) 25
Corporate and other 129 34 279
ARM headline earnings 1 562 454 244
The interim results for the six months ended 31 December 2010 have been prepared
in accordance with International Financial Reporting Standards (IFRS) and the
disclosures are in accordance with IAS 34: Interim Financial Reporting.
ARM Ferrous was the largest contributor to the improved earnings with headline
earnings increasing 316% to R1 256 million. The contribution of iron ore
increased 357% whilst manganese`s contribution was 139% higher than the
corresponding period last year.
The ramp-up of the expanded Nkomati Nickel Mine made a significant impact on the
results of ARM Platinum with headline earnings for the nickel mine increasing
272% as a result of increased sales volumes of nickel and by-products as well as
increased prices realised for those commodities. A higher realised basket price
at Two Rivers and Modikwa platinum mines contributed to the increase in ARM
Platinum headline earnings.
ARM Coal experienced a challenging six months impacted by lower export and
domestic coal sales volumes at the Participating Coal Business (PCB). The PCB
operations are currently undergoing a transition converting from predominantly
underground mining to lower cost opencast mines. The changes being implemented
to achieve this transition impacted the PCB operations in the period under
review as the transition is taking longer than anticipated. The transition once
completed is expected to have a positive effect on the PCB operations as they
move down the cost curve. The ramp-up of the Goedgevonden Coal Mine had a
positive impact on the ARM Coal results as export sales volumes increased from
0.3 million to 1.4 million tonnes and Eskom sales volumes from 0.1 million to
1.2 million tonnes.
Aggressive growth continues
Ramp-up of ARM`s key growth projects continues to progress well.
Production ramp-up targets were achieved at the Goedgevonden Coal Mine with all
modules of the coal processing and handling plant now operational. Saleable
production at Goedgevonden thus increased 314% in the six months.
At the Nkomati Nickel Mine production ramp-up of the 375 thousand tonnes per
month (ktpm) Main Mineralised Zone (MMZ) plant was completed successfully with
design capacity (on a monthly basis) achieved in October 2010. The upgrade of
the 100 ktpm Chromotitic Peridotite Mineralised Zone (PCMZ) plant to 250 ktpm
commenced in July 2010 and hot commissioning was achieved two months ahead of
schedule at the end of October 2010.
The expansion of the Khumani Iron Ore Mine to 16 million tonnes per annum (mtpa)
iron ore (of which 14 mtpa is for export) continues to progress well ahead of
schedule and within budget. Full production is expected in the 2013 financial
year and has been planned to coincide with the expansion of the Saldanha Export
Channel from 47 mtpa to 60 mtpa.
The Konkola North Copper project was released for approval by ARM and Vale S.A.
in August 2010 and the official ground-breaking ceremony was held on 14 October
2010. The release and development of this project represents a significant
milestone for ARM as it will add a major copper producer to the ARM portfolio
(Nkomati Nickel Mine produced 2 885 tonnes of copper during 1H F2011) and is
ARM`s first operation outside South Africa. Work on the project continues on
schedule with US$236 million of the projected US$380 million (in July 2010
terms) capital expenditure already contracted for as at 31 December 2010.
ARM`s consolidated net debt to equity percentage remained low at 6% thereby
reflecting significant capacity to continue with its growth strategy.
There has been no material change to the ARM mineral resources and reserves, as
disclosed in the Integrated Annual Report for the financial year ended 30 June
2010, other than depletion due to continued mining activities at the operations.
These results have been achieved in conjunction with ARM`s partners at the
various operations, Anglo Platinum Limited ("Anglo Platinum"), Assore Limited
("Assore"), Impala Platinum Holdings Limited ("Implats"), Norilsk Nickel Africa
(Pty) Limited ("Norilsk"), Xstrata Coal ("Xstrata") and Companhia Vale do Rio
Doce ("Vale").
Financial commentary
Headline earnings for the six-month period to 31 December 2010 of R1 562 million
were R1 108 million higher than the corresponding period`s headline earnings (1H
F2010: R454 million).
Sales for the reporting period were R6.7 billion (1H F2010: R4.2 billion). The
average gross profit margin of 41% is substantially higher than the
corresponding period last year (1H F2010: 26.5%), largely due to increased
realised US Dollar commodity prices, especially for iron ore.
The 1H F2011 average Rand/US Dollar of R7.10/US$ is 7.2% stronger than the
corresponding period average of R7.65/US$. The closing exchange rate of
R6.60/US$ impacted negatively on mark-to-market adjustments at the period end.
ARM`s earnings before interest, tax, depreciation and amortisation (EBITDA)
excluding exceptional items and loss from associate were R3 103 million, which
represents an increase of 157% or R1 894 million over that achieved for 1H
F2010.
The detailed segmental contribution analysis is provided in note 10 to the
financial statements.
- The ARM Ferrous contribution to ARM`s headline earnings amounted to R1 256
million (1H F2010: R302 million), a 316% increase over the corresponding period
last year.
- The ARM Platinum segment contribution, which includes the results of Nkomati,
was R295 million which is R128 million more than the corresponding period and
represents a 77% increase.
- The ARM Coal segment result was a loss of R54 million (1H F2010: R36 million
profit). Goedgevonden Coal Mine contributed a profit of R6 million while the PCB
operations contributed a loss of R60 million.
- ARM Exploration`s costs have decreased relative to the corresponding period at
R64 million (1H F2010: R85 million). All costs on the Konkola North Copper
Project are being capitalised.
- The ARM Corporate, other companies and consolidation segment shows a positive
contribution of R129 million for the period to December 2010 as compared to R34m
for the previous corresponding period. This increase is largely a result of
consolidation accounting adjustments to reverse self-insurance premiums expensed
by individual operations.
- Included in the ARM Corporate, other companies and consolidation segment is a
dividend of R32 million received by ARM in October 2010 from its investment in
Harmony, relating to their F2010 results (1H F2010: R32 million).
ARM`s earnings for 1H F2011 are marginally less than headline earnings, as
exceptional items amounted to only R4 million for the period.
At 31 December 2010 cash and cash equivalents were R2 301 million (F2010: R3 039
million) with gross debt being R3 397 million (F2010: R3 346 million). Therefore
the net debt position at 31 December 2010 amounts to R1 096 million and is an
increase of R789 million relative to the position at 30 June 2010 mainly as a
result of increased capital expenditure for the Khumani and Nkomati expansion
projects. The net debt to equity remained low at 6%.
- Cash generated from operations increased by R1.2 billion from R895 million to
R2.0 billion despite an increased working capital requirement of R634 million,
resulting from the increased activity levels at operations.
- Capital expenditure amounted to R1 552 million for the period (1H F2010: R1
227 million) and was mainly expended at the Khumani and Nkomati expansion
projects.
- Net cash after debt at 31 December 2010 excluding partner loans (Implats: R232
million, Anglo Platinum: R115 million and Xstrata: R1 847 million) amounted to
R1 098 million as compared to R1 811 million at 30 June 2010.
ARM`s consolidated total assets of R29.5 billion (F2010: R28.2 billion) include
the marked-to-market valuation of ARM`s investment in Harmony of R5.3 billion at
a share price of R83.00 per share (F2010: R81.40 per share), while equity
attributable to ARM`s equity holders was R19.0 billion (F2010: R 17.8 billion).
Included in Other Expenses is an amount of R38 million for mineral royalty tax
of which R29 million is for ARM Ferrous. ARM Ferrous continues to pay the state
share of profits on its manganese ore operations while the related new order
mining right, which has been granted, is executed.
The effective tax rate including STC remained constant at 34% for the period.
Safety
A safe and healthy work place is a key imperative for ARM and an integral part
of the way we operate our businesses. Safety awareness, risk assessment and
supervision resulted in all ARM operations achieving zero fatalities for the six
months to 31 December 2010.
The Lost Time Injury Frequency Rate (LTIFR) for the six months improved to 0.42
per 200 000 man hours from 0.84. This represents a LTIFR improvement of 49%.
Achievements
- Modikwa Platinum Mine achieved 7 000 000 consecutive fatality-free man shifts
worked on 21 September 2010, an exceptional achievement in the industry. Modikwa
also operated fatality-free for four calendar years at the end of December 2010.
- The Two Rivers Platinum Mine reached a milestone of 2 000 000 fatality-free
man shifts on 11 November 2010.
- Khumani Iron Ore Mine achieved its first 1 000 000 fatality-free man shifts at
the end of November 2010.
- Beeshoek Iron Ore Mine achieved 8 000 fatality-free production shifts in the
Northern Cape Department of Minerals and Resources ("DMR") safety competition,
as well as 1.8 million fatality-free shifts in ARM`s internal St Barbara
competition.
- Nkomati achieved 1.4 million fatality-free shifts in ARM`s internal St Barbara
competition.
- Khumani Iron Ore was the winner of the ARM "Excellence in Safety" internal
competition for the 2010 financial year, with Cato Ridge the runner-up.
Safety figures and statistics in this report are presented on a 100% basis and
currently exclude the ARM Coal operations.
ARM Ferrous
Assmang reported a 76% increase in turnover to R8.1 billion (1H F2010: R4.6
billion) and a 317% increase in headline earnings to R2.5 billion (1H F2010:
R0.6 billion). This improvement was mainly due to higher dollar commodity
prices, relative to 1H 2010, iron ore prices having increased by 159%, while
manganese ore, manganese alloy and chrome alloy prices increased by 75%, 46% and
33% respectively. Lower sales volumes in iron ore and manganese as well as a
strengthening in the R/US$ exchange rate diminished these gains.
Production at the Khumani Iron Ore Mine increased by 4.4% whilst unit operating
costs increased by 19.9% as a result of increased labour costs in preparation
for the new King pit that will become operational during the second half of
F2011. Unit operating costs at the manganese ore operations increased by less
than inflation, as a result of a 43% increase in production volumes. Manganese
alloy production increased by 14.3% mainly due to the ramp-up of the converted
furnace at Machadodorp which was successfully converted from ferrochrome to
ferromanganese last year. The overall ferromanganese unit cost however increased
above inflation due to the rebuild of two furnaces at Cato Ridge. Ferrochrome
production increased by 70% whilst the unit cost decreased by 14.6%.
Assmang`s capital expenditure for the period was R2 073 million (1H 2010: R1 288
million), of which the major portion, R1 549 million, was spent on
infrastructure development for the expansion to 16 mtpa of the Khumani Iron Ore
Mine. R60 million was spent to build the new and more efficient beneficiation
plant at Black Rock Mine, and replacement capital amounted to R16 million. R20
million was spent on information technology developments and R216 million on
furnace upgrades at both the Machadodorp and Cato Ridge smelters.
Assmang headline earnings
100% basis six months ended 31 December
R million 2010 2009 % change
Iron ore division 1 750 383 357
Manganese division 849 355 139
Chrome division (87) (136) 36
Total 2 512 602 317
Headline earnings attributable to 1 256 302 317
ARM (50%)
Assmang production
100% basis six months ended 31 December
Thousand tonnes 2010 2009 % change
Iron ore 4 646 4 234 10
Manganese ore 1 305 914 43
Manganese alloys 103 90 14
Charge chrome 122 72 69
Chrome ore 442 249 78
Assmang sales volumes
100% basis six months ended 31 December
Thousand tonnes 2010 2009 % change
Iron ore 4 039 4 452 (9)
Manganese ore* 1 456 1 463 -
Manganese alloys 87 120 (28)
Charge chrome 91 75 21
Chrome ore* 214 99 116
*Excluding intra-group sales
Assmang cost and EBITDA margin performance
Commodity group Rand per tonne EBITDA
cost change margin
% %
Iron ore 19.9 68.2
Manganese ore 1.8 60.8
Manganese alloys 14.8 23.7
Charge chrome (14.6) (2.8)
Assmang capital expenditure
100% basis six months ended 31 December
R million 2010 2009
Iron ore 1 601 777
Manganese 380 376
Chrome 92 135
Total 2 073 1 288
Khumani Iron Ore Mine Expansion Project
The Khumani Iron Ore Mine expansion to 16 mtpa, of which 14 mtpa will be for
export and 2 mtpa earmarked for the local market, continues ahead of schedule
and is expected to be completed well within the budgeted R6.7 billion. Ramp-up
of the expansion is planned to coincide with the Transnet expansion of the
Saldanha Export Channel from 47 mtpa to 60 mtpa in the 2012 calendar year. With
the expansion ahead of schedule, the expanded Khumani Iron Ore Mine is well
positioned to expedite further ramp-up should capacity on the export channel
become available. The 14 mtpa export contract has been concluded between Assmang
and Transnet subject to final board approvals.
Logistics
Export volumes of iron ore were negatively affected by derailments on the
Saldanha export rail line in July and August 2010. Transnet`s performance has
since improved significantly and it is envisaged that a large proportion of the
tonnage lost in the derailments will be made up during 2H F2011.
Manganese ore exports through the ports of Port Elizabeth, Richards Bay and
Durban were within planned volumes but not within the planned rail throughput.
This resulted in increased road transport usage with resultant higher costs.
South African iron ore and manganese ore producers have embarked on a joint
project with Transnet to investigate the further expansion of the Saldanha
Export Channel to beyond 60 mtpa. Good progress has been made and the first
phase (FEL1) has been concluded and the second phase (FEL2) has commenced and is
expected to be completed by September 2011.
The ARM Ferrous operations, held through its 50% investment in Assmang, consist
of three divisions: iron ore, manganese and chrome. Assore Limited, ARM`s
partner in Assmang, owns the remaining 50%.
ARM Platinum
ARM Platinum achieved good results for 1H F2011, increasing headline earnings
attributable to ARM by 77% to R295 million. This was mainly as a result of
higher metal prices and increased production volumes at Nkomati. Attributable
PGM production (including Nkomati) increased by 2% to 188 239 ounces (1H F2010:
183 986 ounces) while total nickel produced increased 41% to 5 321 tonnes (1H
F2010: 3 785 tonnes).
Despite the strengthening of the Rand against the US Dollar from an average of
R7.65/US$ to R7.10/US$, the increase in dollar commodity prices resulted in the
basket prices for both Modikwa and Two Rivers increasing by more than 20% to
R249 803/kg 6E and R264 917/kg 6E respectively.
The table below sets out the relevant price comparison:
Average metal prices
Average for six months ended 31 December
R million 2010 2009 % change
Platinum $/oz 1 625 1 323 23
Palladium $/oz 585 321 82
Rhodium $/oz 2 191 1 800 22
Nickel $/t 21 863 17 566 24
The capital expenditure at ARM Platinum was R835 million (R444 million
attributable) of which 75% was spent on the Nkomati Large Scale Expansion
Project. The bulk of the capital spent at Modikwa was for backup generators, the
deepening of South 2 Shaft as well as fleet replacement. Expenditure at Two
Rivers was largely to sustain operations.
ARM Platinum capital expenditure
100% basis six months ended 31 December
R million 2010 2009 % change
Modikwa 154 68 126
Two Rivers 53 55 (4)
Nkomati 628 588 7
Total 835 711 17
Modikwa
As a result of improved metal prices, specifically for palladium, Modikwa
realised a 22% increase in cash operating profit when compared with the
corresponding period in F2010. Modikwa`s milled tonnes and head grade remained
constant. 117 000 Tonnes of open pit material was treated during the period. Due
to lower recoveries on the open pit ore, PGM ounces decreased slightly to 179
224 ounces (1H F2010: 183 449 ounces). Cost saving initiatives paid off,
resulting in a mere 2% increase in the unit cost to R640 per tonne milled (1H
F2010: R625 per tonne milled). Rand unit cost per 6E PGM ounce increased by 6%
to R4 416 per ounce. Modikwa achieved 7 000 000 fatality free shifts on 21
September 2010.
Modikwa operational statistics
100% basis six months ended 31 December
2010 2009 % change
Cash operating profit R million 369 303 22
Tonnes milled Mt 1.24 1.22 2
Head grade g/t, 6E 5.65 5.56 2
PGMs in concentrate Ounces, 6E 179 224 183 449 (2)
Average basket price R/kg, 6E 249 803 198 167 26
Average basket price $/oz, 6E 1 096 810 35
Cash operating margin % 32 29
Cash cost R/kg, 6E 141 964 133 551 6
Cash cost R/tonne 640 625 2
Cash cost R/Pt oz 11 150 10 753 4
Cash cost R/oz, 6E 4 416 4 154 6
Cash cost $/oz, 6E 623 546 14
Headline earnings R million 85 59 44
attributable to ARM
(41.5%)
Two Rivers
Tonnes milled at Two Rivers remained constant and a slight decrease in head
grade was offset by an increase in concentrator recoveries, yielding 152 859 PGM
ounces (1H F2010: 150 721 ounces). A cash operating profit of R368 million (1H
F2010: R364 million) was realised for the six months under review. Unit cash
costs increased by 13% to R469 per tonne milled (1H F2010: R416) due to
accelerated developments in geologically disturbed areas and merensky trial
mining. On 12 November 2010, Two Rivers surpassed the milestone of 2 000 000
fatality free shifts.
As in the previous period, the earnings of Two Rivers were negatively affected
by interest charged on the shareholders` loans from ARM and Implats. Interest
was charged at a rate of 7% per annum to December 2010 (1H F2010: 8%).
Two Rivers operational statistics
100% basis six months ended 31 December
2010 2009 % change
Cash operating profit R million 368 364 1
Tonnes milled Mt 1.48 1.48 -
Head grade g/t, 6E 3.94 4.05 (3)
PGMs in concentrate Ounces, 6E 152 859 150 721 1
Average basket price R/kg, 6E 264 917 219 138 21
Average basket price $/oz, 6E 1 162 896 30
Cash operating margin % 34 37
Cash cost R/kg, 6E 146 527 131 146 12
Cash cost R/tonne 469 416 13
Cash cost R/Pt oz 9 536 8 503 12
Cash cost R/oz, 6E 4 557 4 079 12
Cash cost $/oz, 6E 643 536 20
Headline earnings/(loss) R million 76 72 6
attributable to ARM (55%)
Nkomati
Production ramp-up at the Nkomati 375 ktpm MMZ plant was completed with design
throughput achieved during October 2010. Good progress has been made with the
crusher and overland conveyor, improving availabilities significantly. Close
monitoring and evaluation of the primary crusher performance will continue
during the next six months to ensure that best practices are adhered to
regarding ore feed quality and maintenance.
The 100 ktpm plant was stopped on 30 June 2010 as planned, to be upgraded to a
250 ktpm PCMZ plant. Hot commissioning of the PCMZ plant commenced 2 months
ahead of schedule at the end of October 2010. Production ramp-up is above target
and all critical construction issues were completed during December 2010.
Capital cost for the plant is within budget.
Total tonnes milled increased by 74% resulting in a 41% increase in nickel
produced to 5 321 tonnes (1H F2010: 3 785 tonnes). Copper production increased
by 56% to 2 885 tonnes. Chrome ore sales decreased to 223 279 tonnes (1H F2010:
295 147 tonnes) while chrome concentrate sales remained largely constant at 142
138 tonnes (1H F2010: 143 193 tonnes).
Unit cost was reduced by 11% to R226 per tonne milled while cash cost net of by-
products (C1 cash cost) decreased by 26% to $2.15/lb. The capitalisation of pre-
production working costs is expected to terminate in the last quarter of F2011.
Nkomati operational statistics
100% basis six months ended 31 December
2010 2009 % change
Cash operating profit R million 715 267 168
- Nickel Mine R million 498 151 230
- Chrome Mine R million 217 116 87
Cash operating margin % 47 40
Tonnes milled Mt 2.12 1.22 74
Head grade % nickel 0.39 0.50 (23)
Nickel on-mine cash cost R/tonne 226 253 (11)
per tonne milled
Cash cost net of by- $/lb. 2.15 2.91 (26)
products per nickel pound
produced*
Contained metal
Nickel Tonnes 5 321 3 785 41
PGMs Ounces 29 110 18 730 55
Copper Tonnes 2 885 1 846 56
Cobalt Tonnes 321 232 38
Chrome ore sold Tonnes 223 279 295 147 (24)
Chrome concentrate sold Tonnes 142 138 143 193 (1)
Headline earnings R million 134 36 272
attributable to ARM (50%)
*This reflects US Dollar cash costs net of by-products (PGMs, copper, cobalt and
chrome) per pound of nickel produced
Projects and prospects
Modikwa
The feasibility study for the Phase 2 UG2 replacement and expansion project that
was completed in 2008 has been revised and is ready to be presented to Modikwa`s
shareholders for approval.
Preparatory work on the South 2 decline system and access road has commenced. To
date, both the chairlift and the material decline pre-sink have been completed.
The primary development from South 1 to South 2, which will be used for ore
handling, is progressing on schedule, as is the deepening of North 1 Shaft.
Two Rivers
As part of a feasibility study, Two Rivers is currently conducting Merensky reef
trial mining and will assess the results from the test work by June 2011.
Environmental authorisation for the North open pit was received on 14 December
2010 and a business case is currently being prepared.
Nkomati Nickel Large Scale Expansion Project
Total funds committed at 31 December 2010 amount to R3.4 billion of the total
R3.7 billion approved for the capital project.
The Eskom power supply project for the 375 ktpm MMZ plant is complete and all
three new 40MVA transformers have been installed and energised. The next phase
of the Eskom power supply project is the upgrade of the 132kV overhead
distribution lines and we anticipate this to be completed by December 2011.
Nkomati`s Eskom Electricity Supply Agreement was concluded in December 2010.
Kalplats PGM Exploration Project
By virtue of the completion of the pre-feasibility study in January 2010 and the
decision by both parties to proceed to a Bankable Feasibility Study, Platinum
Australia (PLA) earned a 12% interest in the Kalplats Platinum Project. PLA has
now submitted a Bankable Feasibility Study which is currently under review by
ARM Platinum.
The ARM Platinum division comprises three operating mines, Modikwa, Two Rivers
and Nkomati. It has an effective 41.5% interest in Modikwa where local
communities hold an 8.5% effective interest. The remaining 50% is held by Anglo
Platinum. Two Rivers is an incorporated joint venture with Implats, with ARM
holding 55% and Impala (Implats) 45%. Nkomati is a 50:50 partnership with
Norilsk Nickel Africa. ARM Platinum also has an interest in two joint ventures
with PLA. The first is the "Kalplats Platinum Project" in which ARM Platinum
owns 90% and PLA can earn-in up to 49% by completing a bankable feasibility
study. The second joint venture, "Kalplats Extended Area Project" is a 50:50
partnership between ARM Platinum and PLA.
ARM Coal
Production at the Goedgevonden Coal Mine (GGV) reached design capacity levels
during 1H F2011 while the PCB operations experienced a very challenging six
months, resulting in consolidated saleable production being 18% lower than in 1H
F2010. The decline in production was due to a delay in the commissioning of the
iMpunzi East project, rationalisation of opencast and underground production at
Tweefontein and the unplanned closure of the No. 5 seam operation.
ARM Coal acquired a shareholding in Richards Bay Coal Terminal Phase V during
October 2010, securing an entitlement of 3.2 mtpa.
Attributable cash operating profit of R208 million is 5% lower when compared to
1H 2010 while headline earnings decreased from R36 million profit to a headline
loss of R54 million. The deterioration in headline earnings can be ascribed to
increased amortisation and interest charges. The rise in interest charges
resulted from an increase in borrowing levels on existing loan facilities
provided by Xstrata as well as a new R343 million facility entered into with
Xstrata for the funding of ARM Coal`s shareholding in Richards Bay Coal Terminal
Phase V.
Export coal prices increased marginally during the period, but ARM Coal did not
benefit significantly from this as only 17% of sales were concluded at spot
prices. The balance of the coal was sold at previously negotiated long-term
contract prices for which the average realised price for the period was $70.07
per tonne.
Goedgevonden Coal Mine (GGV)
Production ramp-up targets were achieved during 1H 2011, resulting in Run of
Mine (ROM) production increasing by 77%. With all the modules of the coal
processing plant now operational, saleable production increased from 0.7 Mt to
2.9 Mt in this period.
Sales volumes increased significantly, but the continued underperformance of
Transnet Freight Rail (TFR) had a negative impact on export and Eskom sales
volumes.
An increase in sales volumes resulted in revenue being R392 million higher.
Total on mine operating costs increased by R169 million in line with the
increase in production volumes. The capitalisation of working costs was
terminated as the mine reached steady state production during the review period.
Operating costs per saleable tonne decreased by 8% to R154 per tonne (1H 2010
R167 per tonne). Attributable cash operating profit increased from R45 million
to R96 million.
Attributable headline earnings decreased from R21 million to R6 million as a
result of an increase in depreciation and the cessation of capitalising finance
costs. Depreciation increased in line with the increase in ROM production and
sales volumes which form the basis for calculating the depreciation charge.
Goedgevonden operational statistics
100% basis six months ended 31 December
2010 2009 % change
Total production sales
Saleable production Mt 2.90 0.70 314
Export thermal coal sales Mt 1.40 0.30 367
Eskom thermal coal sales Mt 1.14 0.01 >500
Attributable production and
sales
Saleable production Mt 0.80 0.20 300
Export thermal coal sales Mt 0.40 0.10 300
Eskom thermal coal sales Mt 0.30 0.00
Average received coal price
Export (FOB) $/tonne 70.50 67.80 4
Eskom (FOT) R/tonne 192.06 169.15 14
Local (FOR) R/tonne 242.43 520.30 (53)
Exchange Rate R/US$ 7.10 7.60 (7)
On mine saleable cost R/tonne 153.80 166.70 (8)
Cash operating profit
Total R million 369 172 115
Attributable (26%) R million 96 45 113
Headline earnings R million 6 21 (71)
attributable to ARM
Attributable Profit Analysis
six months ended 31 December
R million 2010 2009 % change
Operating profit 96 45 113
Less: interest paid 42 (5)
amortisation 41 20 105
fair value adjustments 6 1 500
Profit before tax 8 28 (70)
Tax (2) (8) 75
Headline earnings attributable to ARM 6 21 (71)
Participating Coal Business (PCB)
The PCB operational results for the period were unsatisfactory as the transition
from predominantly high cost underground mining to low cost opencast mining is
taking longer than anticipated. The results are in addition impacted by lower
production. Run of Mine (ROM) and saleable production were respectively 6% and
35% lower than in H1 2010. All operations in the PCB produced less saleable
coal. The late commissioning of the mine infrastructure and coal processing
plant at iMpunzi East, the planned rationalisation of underground and opencast
mining at the Tweefontein division and the unplanned closure of the No. 5 seam
operation accounted for 57%, 30% and 12% of the underproduction respectively.
Construction of the coal processing plant at ATCOM East continued and it is
anticipated that the 1 700 tonnes/hour capacity plant will be commissioned by
the end of June 2011. Excessive rain during December 2010 hampered production at
most opencast operations.
Export sales volumes were 19% lower due to underperformance of TFR. Domestic
demand continued to decline which negatively impacted sales volumes.
Lower volumes and a stronger exchange rate caused attributable cash operating
profit to decrease 36% to R112 million (1H 2010: R173 million).
Total on mine cash costs per tonne increased by 48% to R327 per tonne (1H 2010:
R221 per tonne), due to lower saleable volumes, lower yields and the re-
organisation of work at ATCOM East and South Stock. We are progressing the sale
process of the high-cost Mpumalanga assets.
Attributable headline earnings declined from R15 million profit to a loss of R60
million.
PCB`s focus on the transition away from high cost operations to opencast mining
remains critical to the future success of its operations.
Participating Coal Business (PCB) operational statistics
100% basis six months ended 31 December
2010 2009 % change
Total production sales
Saleable production Mt 7.20 11.00 (35)
Export thermal coal sales Mt 5.40 6.60 (19)
Eskom thermal coal sales Mt 1.51 3.38 (55)
Local thermal coal sales Mt 0.69 0.99 (30)
Attributable production and
sales
Saleable production Mt 1.50 2.20 (32)
Export thermal coal sales Mt 1.10 1.30 (15)
Eskom thermal coal sales Mt 0.31 0.68 (55)
Local thermal coal sales Mt 0.14 0.20 (30)
Average received coal price
Export (FOB) $/tonne 72.90 64.70 13
Eskom (FOT) R/tonne 98.67 53.50 84
Local (FOR) R/tonne 289.02 228.19 27
Exchange rate R/US$ 7.10 7.60 (7)
On mine saleable cost R/tonne 326.60 220.50 48
Cash operating profit
Total R 553 857 (36)
million
Attributable (20.2%) R 111 173 (36)
million
(Loss)/Income from associate R (60) 15
attributable to ARM million
Attributable profit analysis
six months ended 31 December
R million 2010 2009 % change
Operating profit 111 173 (36)
Less: interest paid 51 24 113
Less: amortisation 128 102 25
Less: fair value adjustments 16 25 (36)
(Loss)/profit before tax (83) 21
Tax PCB 23 (6) 483
Headline (loss)/earnings attributable (60) 15
to ARM
ARM`s economic interest in XCSA (PCB) as at 31 December 2011 remains at 20.2%.
PCB consists of 12 mines all situated in Mpumalanga. ARM has a 26% effective
interest in the GGV Thermal Coal Mine situated near Ogies in Mpumalanga.
Attributable refers to 20.2% of Xstrata Coal South Africa (XCSA) Operations and
whilst total refers to 100%.
ARM Copper
In August 2010 the Vale/ARM joint venture approved the development of the
Konkola North Copper Project in Zambia. His Excellency, the President of the
Republic of Zambia, Rupiah B. Banda, officially opened the ground-breaking
ceremony for the development of the Konkola North Copper Mine on 14 October
2010.
The mine`s throughput design from both the South and East Limb ore bodies is 2.5
mtpa of ore at an average mill head grade of 2.3% copper, which will result in
the production of 45 000 tonnes of contained copper in concentrate per annum for
28 years. The copper concentrate produced will be toll smelted and refined in
Zambia. Commissioning of the concentrator plant is expected at the end of
November 2012, and full production will be reached in 2015. The project capital
expenditure in July 2010 terms is estimated at $380 million, of which $236
million was contracted for at 31 December 2010.
Development of the project has commenced and progress on site is in accordance
with the approved construction program and budget. A large portion of the
construction and mining contracts have been placed and site establishment for
the mining and shaft rehabilitation is underway. Mechanised development from the
completed box cut for the East Decline will commence in March 2011.
This project is the first phase of the exploitation of the total resource
presently known on mining license LML 20. The second phase, which provides for
the exploitation of Area A South, 6km to the south of the present mine
development, may provide for another shaft and the expansion of the Konkola
North Copper Mine processing plant to potentially increase the total production
to 100 000 tonnes of copper from 5 million tonnes of ore per annum. Exploration
drilling is continuing in Area A South and adjacent areas to further define the
resources available.
After a geological evaluation of the extent of the existing Konkola North Mining
licence and adjacent exploration licences held by the joint venture, the
Vale/ARM joint venture applied to the Government of the Republic of Zambia to
convert, and include, the adjacent prospecting licenses into the existing
Konkola North Mining License. Following the approval of this application, the
total area of the Konkola North Mining License increased from 44 Km2 to 96 Km2.
A further 150 Km2 of exploration licence area to the east and north east of the
existing mining license is under consideration for inclusion into the Konkola
North Mining License. The Vale/ARM joint venture has relinquished the mining
license for the Mwambashi Copper Project and the adjacent prospecting license
(Area 4).
ARM Exploration
To facilitate the strategy to further expand into Sub-Saharan Africa, the
Vale/ARM joint venture continues to undertake exploration and feasibility
studies in the Democratic Republic of Congo (DRC) and in Zambia on exploration
licenses outside the Konkola North Copper Project mining license.
ARM Exploration`s main objective is to identify and assess exploration and
mineral business opportunities for base metals, ferrous metals; PGM`s and coal
in sub-Saharan Africa. A key focus area for ARM Exploration is the development
of the Vale/ARM joint venture copper and cobalt assets.
On the Kalumines mining license property in the DRC, in close proximity to
Lubumbashi, the Vale/ARM joint venture has defined five ore bodies, comprising
an initial resource of 68.25 million tonnes of copper and cobalt through an
extensive drilling campaign. An accelerated drilling programme of a further 18
582 metres infill and delineation drilling was completed during the last six
months. The results of this drilling will further enhance the confidence level
of the resources discovered on the Kalumines mining license property.
Exploration work has been developed to such a level that a feasibility study is
now in progress. Metallurgical test work commenced and results are expected soon
as part of the process to evaluate the possible development of these
copper/cobalt resources.
The headline loss attributable to ARM for 1H 2011 is R64 million (1H F2010: R 85
million), comprising mainly costs associated with exploration drilling,
feasibility studies, finance and administration.
ARM owns 100% of ARM Exploration. ARM Exploration owns 50% of the Vale/ARM joint
venture. Previously, ARM owned 65% of TEAL which was listed on the Toronto Stock
Exchange.
Harmony Gold Mining Company Limited
Harmony reported headline earnings of R356 million for the six months under
review, representing a 125% increase relative to the R158 million headline
earnings achieved in the six months to December 2009.
The improvement in earnings was as a result of numerous management initiatives
undertaken in the preceding three years aimed at optimising the asset portfolio
and increasing operational efficiency for Harmony. These initiatives have since
lead to an increase in production and lower costs evident in Harmony`s growth
projects, Doornkop, Phakisa and Hidden Valley.
Harmony`s realised Rand gold prices increased by 17% to R295 069/kg (1H F2010:
R251 968/kg) however due to lower production Harmony`s unit cash costs increased
by 17% to R222 787/kg (1H F2010: R190 172/kg). Gold production decreased 12%
relative to the corresponding period owing to safety stoppages at two of
Harmony`s mines during the second quarter.
There has been good progress in the Papua New Guinean operations with positive
developments at Wafi-Golpu. The Golpu resource continues to be expanded to the
north as drilling continues to define further mineralisation.
Harmony continues to focus on increasing its production to two million ounces by
the 2013 financial year, with costs per tonne milled in the lowest quartile of
South African producers. With the closure of some shafts and unplanned
production setbacks during the first six months of financial year 2011,
production for the financial year 2011 is expected to be between 1.45Moz and
1.5Moz.
ARM received a dividend from Harmony of R32 million during the period under
review.
The ARM balance sheet as at 31 December 2010 reflects a mark-to market
investment in Harmony of R5 282 million which is based on a Harmony share price
of R83.00. Changes to the value of the investment in Harmony are accounted for
by ARM through the statement of comprehensive income net of deferred capital
gains tax. The investment reflected at market value reflects approximately 12%
of the ARM market capitalisation of R44.7 billion as at 31 December 2010.
Harmony`s results for the quarter and six months ended 31 December 2010 can be
viewed on Harmony`s website at www.harmony.co.za
ARM owns 14.8% of Harmony`s issued share capital.
Outlook
Conditions in the commodity markets continued to improve significantly in the
latter half of the 2010 calendar year driven mainly by strong demand from China.
China`s appetite for commodities consumed in the steel making process was
especially strong. This was evidenced by the strong performance of dollar prices
for iron ore, manganese and metallurgical coal.
Despite concerns of `cooling` in the Chinese economy, growth in China is
expected to remain strong at around 8 - 10% for the 2011 calendar year. This
together with supply side constraints for almost all commodities in the ARM
portfolio is expected to continue to support dollar commodity prices going
forward.
Concerns remain about the relative strength of the Rand although it has weakened
from R6.60/$ at the end of December 2010 to around R7.05/$. With recovery in
developed markets, especially Europe and to a lesser extent the United States,
still subdued and interest rates in these economies still low, Rand strength
could temper the positive impact of higher dollar commodity prices for ARM.
ARM maintains a positive outlook on commodity markets and with the ramp up of
the Khumani Iron Ore Expansion, the Goedgevonden Coal Mine and the Nkomati
Nickel Expansion coinciding with significant improvement in the commodity
markets, the Company is well positioned to take advantage of the upswing in
commodity demand.
ARM is delivering into improved commodity markets product from long life, low
cost mines (all below the 50th percentile) with the majority of the capital
expenditure already spent, indicating low capital risk. The Konkola North Copper
Project is also expected to deliver into strong copper markets from 2013
onwards.
ARM continues to pursue aggressive growth and is supported by a robust financial
position with a strong cash position and low gearing, permitting opportunity to
pursue further growth currently under consideration.
Signed on behalf of the board:
PT Motsepe A J Wilkens
Executive Chairman Chief Executive Officer
Johannesburg
25 February 2011
Financial statements
Group statement of financial position
as at 31 December 2010
Unaudited
Six months Audited
ended Year ended
31 December 30 June
2010 2009 2010
Note Rm Rm Rm
ASSETS
Non-current assets
Property, plant and equipment 14 219 12 254 13 256
Investment property 53 14 12
Intangible assets 206 212 212
Deferred tax assets 44 37 44
Loans and long-term 192 20 51
receivables
Financial assets 87 82 84
Inventories 127 160 148
Investment in associate 1 375 1 389 1 292
Other investments 2 5 346 4 833 5 191
21 649 19 001 20 290
Current assets
Inventories 2 170 2 048 1 834
Trade and other receivables 3 355 1 901 3 026
Taxation 38 45 44
Cash and cash equivalents 3 2 301 2 271 3 039
7 864 6 265 7 943
Total assets 29 513 25 266 28 233
EQUITY AND LIABILITIES
Capital and reserves
Ordinary share capital 11 11 11
Share premium 3 822 3 772 3 803
Other reserves 804 424 728
Retained earnings 14 367 11 862 13 223
Equity attributable to equity 19 004 16 069 17 765
holders of ARM
Non-controlling interest 834 676 764
Total equity 19 838 16 745 18 529
Non-current liabilities
Long-term borrowings 4 2 627 2 743 2 582
Deferred tax liabilities 3 360 2 496 2 961
Long-term provisions 520 437 500
6 507 5 676 6 043
Current liabilities
Trade and other payables 1 926 1 534 2 315
Short-term provisions 181 163 268
Taxation 291 219 314
Overdrafts and short-term 4 770 929 764
borrowings
3 168 2 845 3 661
Total equity and liabilities 29 513 25 266 28 233
Group income statement
for the six months ended 31 December 2010
Unaudited
Six months Audited
ended Year ended
31 December 30 June
2010 2009 2010
Note Rm Rm Rm
Revenue 6 924 4 386 11 425
Sales 6 714 4 202 11 022
Cost of sales (3 940) (3 088) (7 480)
Gross profit 2 774 1 114 3 542
Other operating income 174 438 408
Other operating expenses (414) (808) (1 030)
Profit from operations before 2 534 744 2 920
exceptional items
Income from investments 108 136 209
Finance costs (99) (93) (192)
(Loss)/income from associate (60) 15 (51)
Profit before taxation and 2 483 802 2 886
exceptional items
Exceptional items 5 (4) - 97
Profit before taxation 2 479 802 2 983
Taxation 7 (851) (276) (1 009)
Profit for the period 1 628 526 1 974
Attributable to:
Non-controlling interest 70 74 162
Equity holders of ARM 1 558 452 1 812
1 628 526 1 974
Additional information
Headline earnings (R million) 6 1 562 454 1 714
Headline earnings per share 734 214 807
(cents)
Basic earnings per share 732 213 854
(cents)
Fully diluted headline 727 212 798
earnings per share (cents)
Fully diluted basic earnings 725 211 844
per share (cents)
Number of shares in issue at 212 932 212 260 212 692
end of period (thousands)
Weighted average number of 212 768 212 135 212 289
shares in issue (thousands)
Weighted average number of 214 827 214 083 214 763
shares used in calculating
fully diluted earnings per
share (thousands)
Net asset value per share 8 925 7 570 8 352
(cents)
EBITDA (R million) 3 103 1 209 3 907
Dividend declared after year - - 200
end (cents)
Group statement of comprehensive income
for the six months ended 31 December 2010
Revaluation
of listed Retained
investments Other earnings
Rm Rm Rm
Six months ended 31 December
2010 (Unaudited)
Profit for the period - - 1 558
Other comprehensive income:
Net impact of revaluation of 88 - -
listed investment
Revaluation of listed 102 - -
investment
Deferred tax on revaluation of (14) - -
listed investment
Realignment of currency - 55 -
Foreign exchange on loans to - (95) -
foreign Group entity
Cash flow hedge reserve - 12 -
Other - (11) 11
Total other comprehensive 88 (39) 11
income
Total comprehensive income for 88 (39) 1 569
the period
Six months ended31 December
2009 (Unaudited)
Profit for the period - - 452
Other comprehensive income:
Net impact of revaluation of (230) - -
listed investment
Revaluation of listed (268) - -
investment
Deferred tax on revaluation of 38 - -
listed investment
Cash flow hedge reserve - 45 -
Realignment of currency - (13) -
Other - (2) 2
Total other comprehensive (230) 30 2
income
Total comprehensive income for (230) 30 454
the period
Year ended 30 June 2010
(Audited)
Profit for the year - - 1 812
Other comprehensive income:
Net impact of revaluation of 76 - -
listed investment
Revaluation of listed 89 - -
investment
Deferred tax on revaluation of (13) - -
listed investment
Foreign exchange on loans to - (6) -
foreign Group entity
Cash flow hedge reserve - 16 -
Realignment of currency - (2) -
Total other comprehensive 76 8 -
income
Total comprehensive income for 76 8 1 812
the year
Total Non-
share- controll-
holders ing
of ARM interest Total
Rm Rm Rm
Six months ended 31 December
2010 (Unaudited)
Profit for the period 1 558 70 1 628
Other comprehensive income:
Net impact of revaluation of 88 - 88
listed investment
Revaluation of listed 102 - 102
investment
Deferred tax on revaluation of (14) - (14)
listed investment
Realignment of currency 55 - 55
Foreign exchange on loans to (95) - (95)
foreign Group entity
Cash flow hedge reserve 12 - 12
Other - - -
Total other comprehensive 60 - 60
income
Total comprehensive income for 1 618 70 1 688
the period
Six months ended31 December
2009 (Unaudited)
Profit for the period 452 74 526
Other comprehensive income:
Net impact of revaluation of (230) - (230)
listed investment
Revaluation of listed (268) - (268)
investment
Deferred tax on revaluation of 38 - 38
listed investment
Cash flow hedge reserve 45 - 45
Realignment of currency (13) - (13)
Other - - -
Total other comprehensive (198) - (198)
income
Total comprehensive income for 254 74 328
the period
Year ended 30 June 2010
(Audited)
Profit for the year 1 812 162 1 974
Other comprehensive income:
Net impact of revaluation of 76 - 76
listed investment
Revaluation of listed 89 - 89
investment
Deferred tax on revaluation of (13) - (13)
listed investment
Foreign exchange on loans to (6) - (6)
foreign Group entity
Cash flow hedge reserve 16 - 16
Realignment of currency (2) - (2)
Total other comprehensive 84 - 84
income
Total comprehensive income for 1 896 162 2 058
the year
Group statement of changes in equity
for the six months ended 31 December 2010
Share
capital Revaluation
and of listed Retained
premium investments Other earnings
Rm Rm Rm Rm
Six months ended31
December 2010
(Unaudited)
Balance at 30 June 2010 3 814 446 282 13 223
Profit for the period - - - 1 558
Other comprehensive - 88 (39) 11
income
Total comprehensive - 88 (39) 1 569
income for the period
Share-based payments - - 27 -
Share options exercised 19 - - -
Dividend paid - - - (425)
Balance at 31 December 3 833 534 270 14 367
2010
Six months ended31
December 2009
(Unaudited)
Balance at 30 June 2009 3 770 370 230 11 779
Profit for the period - - - 452
Other comprehensive - (230) 30 2
income
Total comprehensive - (230) 30 454
income for the period
Share based payments - - 24 -
Share options exercised 13 - - -
Dividends paid - - - (371)
Balance at 31 December 3 783 140 284 11 862
2009
Year ended 30 June 2010
(Audited)
Balance at 30 June 2009 3 770 370 230 11 779
Profit for the year - - - 1 812
Other comprehensive - 76 8 -
income
Total comprehensive - 76 8 1 812
incomefor the year
Share based payments - - 47 -
Share options exercised 44 - - -
Dividends paid - - - (371)
Other - - (3) 3
Balance at 30 June 2010 3 814 446 282 13 223
Total Non-
share- controll-
holders ing
of ARM interest Total
Rm Rm Rm
Six months ended31
December 2010
(Unaudited)
Balance at 30 June 2010 17 765 764 18 529
Profit for the period 1 558 70 1 628
Other comprehensive 60 - 60
income
Total comprehensive 1 618 70 1 688
income for the period
Share-based payments 27 - 27
Share options exercised 19 - 19
Dividend paid (425) - (425)
Balance at 31 December 19 004 834 19 838
2010
Six months ended 31
December 2009
(Unaudited)
Balance at 30 June 2009 16 149 602 16 751
Profit for the period 452 74 526
Other comprehensive (198) - (198)
income
Total comprehensive 254 74 328
income for the period
Share based payments 24 - 24
Share options exercised 13 - 13
Dividends paid (371) - (371)
Balance at 31 December 16 069 676 16 745
2009
Year ended 30 June 2010
(Audited)
Balance at 30 June 2009 16 149 602 16 751
Profit for the year 1 812 162 1 974
Other comprehensive 84 - 84
income
Total comprehensive 1 896 162 2 058
income for the year
Share based payments 47 - 47
Share options exercised 44 - 44
Dividends paid (371) - (371)
Other - - -
Balance at 30 June 2010 17 765 764 18 529
Group statement of cash flows
for the six months ended 31 December 2010
Unaudited
Six months Audited
ended Year ended
31 December 30 June
2010 2009 2010
Note Rm Rm Rm
CASH FLOW FROM OPERATING
ACTIVITIES
Cash receipts from customers 6 660 4 318 9 992
Cash paid to suppliers and (4 611) (3 423) (6 562)
employees
Cash generated from operations 8 2 049 895 3 430
Interest received 83 96 176
Interest paid (52) (81) (135)
Dividends received 32 32 33
Dividends paid (425) (371) (371)
Taxation paid (486) (377) (612)
Net cash inflow from operating 1 201 194 2 521
activities
CASH FLOW FROM INVESTING
ACTIVITIES
Additions to property, plant (430) (237) (519)
and equipment to maintain
operations
Additions to property, plant (1 202) (976) (1 981)
and equipment to expand
operations
Proceeds on disposal of 1 2 13
property, plant and equipment
Proceeds on disposal of - - 107
Otjikoto
Investment in associate - Coal (131) - -
- loan
Investments in Richards Bay (176) - -
Coal Terminal
Decrease in investment loans 1 - 56
and receivables
Net cash outflow from (1 937) (1 211) (2 324)
investing activities
CASH FLOW FROM FINANCING
ACTIVITIES
Proceeds on exercise of share 19 13 44
options
Long-term borrowings raised 363 803 848
Long-term borrowings repaid (300) (491) (834)
Decrease in short-term (150) (546) (787)
borrowings
Net cash outflow from (68) (221) (729)
financing activities
Net decrease in cash and cash (804) (1 238) (532)
equivalents
Cash and cash equivalents at 2 791 3 325 3 325
beginning of period
Foreign currency translation (19) (5) (2)
on cash balances
Cash and cash equivalents at 1 968 2 082 2 791
end of period
Cash generated from operations 963 422 1 616
per share (cents)
Notes to the financial statements
for the six months ended 31 December 2010
1. STATEMENT OF COMPLIANCE
The consolidated Group financial statements for the half-year ended 31 December
2010 have been prepared in accordance with International Financial Reporting
Standards (IFRS) of the International Accounting Standards Board (IASB), the AC
500 standards as issued by the Accounting Practices Board or its successor,
requirements of Schedule 4 of the Companies Act, 1973 as amended, and the
Listings Requirements of the JSE Limited.
BASIS OF PREPARATION
The consolidated Group financial statements for the half-year ended 31 December
2010 have been prepared on the historical cost basis, except for certain
financial instruments that are fairly valued by marking to market. The
accounting policies used are consistent with those in the most recent annual
financial statements except for those listed below and comply with IFRS and are
in terms of the disclosure requirements of IAS 34 - Interim Financial Reporting.
The Group has adopted the following new and revised standards and
interpretations issued by the International Financial Reporting Interpretation
Committee (IFRIC) of the IASB that became effective before and on 1 July 2010.
Standard Subject
IFRS 1 First-time adoption of International Financial Reporting
Standards - Additional exceptions for first time adoption
(Amendment)
IFRS 2 Share-based payments - Group cash settled share-based payment
arrangement (Amendment)
IFRS 3 Transition requirements for contingent consideration from a
business combination that occurred before the effective date
of the revised IFRS (Amendment)
Measurement of non-controlling interest (Amendment)
Un-replaced and voluntarily replaced share-based payment
awards (Amendment)
IFRS 5 Disclosures of non-current assets (or disposal groups) held
for sale and discontinued operations (Amendment)
IFRS 8 Disclosure of information about segment assets (Amendment)
IAS 1 Current/non-current classification of convertible instruments
(Amendment)
IAS 7 Classification of expenditures on unrecognised assets
(Amendment)
IAS 17 Classification of leases of land and buildings (Amendment)
IAS 27 Transition requirements for amendments made as a result of
IAS 27 consolidated and separate financial statements
(Amendment)
IAS 32 Financial instruments presentation - Classification of rights
issued (Amendment)
IAS 36 Unit of accounting for goodwill impairment test (Amendment)
IAS 39 Assessment of loan repayment penalties as embedded
derivatives (Amendment)
Scope exception for business combinations contract
(Amendment)
Cash flow hedge accounting (Amendment)
IFRIC 19 Extinguishing financial liabilities with equity instruments
The adoption of these amendments, standards and interpretations had no effect on
these financial statements.
In addition the following amendments, standards or interpretations have been
issued but are not yet effective. The effective date refers to periods beginning
on or after, unless otherwise indicated.
Standard Subject Effective date Date issued
IFRS 1 Amendments to IFRS 1 - 1 July 2011 December 2010
Severe hyperinflation and
removal of fixed dates for
first time adopters
Accounting policy changes 1 January 2011 May 2010
in the year of adoption
(Amendment)
Revaluation basis as deemed 1 January 2011 May 2010
cost (Amendment)
Use of deemed cost for 1 January 2011 May 2010
operations subject to rate
regulations (Amendment)
IFRS 7 Financial instruments 1 July 2011 October 2010
disclosures - Amendments
enhancing disclosures about
transfers of financial
assets
Clarifications of 1 January 2011 May 2010
disclosures (Amendment)
IFRS 9 Financial instruments 1 January 2013 November 2009
(Phase 1 - Financial
assets)
Financial instruments 1 January 2013 October 2010
(Phase 1 - Financial
liabilities)
IAS 1 Clarification of statement 1 January 2011 May 2010
of changes in equity
(Amendment)
IAS 12 Income taxes - Recovery of 1 January 2012 December 2010
underlying assets
(Amendment)
IAS 24 Related party disclosures 1 January 2011 November 2009
IAS 34 Significant events and 1 January 2011 May 2010
transactions (Amendment)
IFRIC 13 Fair value of award credit 1 January 2011 May 2010
(Amendment)
IFRIC 14 Prepayments of minimum 1 January 2011 November 2009
funding requirement
(Amendment)
The Group does not intend early adopting any of the above amendments, standards
or interpretations.
Unaudited
Six months Audited
ended Year ended
31 December 30 June
2010 2009 2010
Note Rm Rm Rm
2. INVESTMENTS
Listed and unlisted
Opening balance 5 180 5 091 5 091
Unrealised revaluation 102 (268) 89
gain/(loss) for the period
5 282 4 823 5 180
Richards Bay Coal Terminal 53 - -
Other 11 10 11
Total carrying amount of 5 346 4 833 5 191
investments
3. CASH AND CASH EQUIVALENTS
- African Rainbow Minerals 678 599 903
Limited
- Assmang Limited 498 814 897
- ARM Platinum (Pty) Limited 276 260 248
- Kingfisher Insurance Co 134 134 126
Limited
- Mannequin Insurance PPC 79 91 58
Limited
- Nkomati 93 63 82
- Two Rivers Platinum (Pty) 57 6 7
Limited
- Vale/ARM joint venture 26 12 115
- Restricted cash 460 292 603
Total as per statement of 2 301 2 271 3 039
financial position
Less overdrafts 333 189 248
Total as per statement of cash 1 968 2 082 2 791
flows
4. BORROWINGS
Long-term borrowings are held
as follows
- African Rainbow Minerals 683 979 784
Limited
- Assmang Limited 2 5 3
- ARM Coal (Pty) Limited 1 808 1 609 1 657
- ARM Platinum (Pty) Limited - 2 1
- Two Rivers Platinum (Pty) 134 148 137
Limited
2 627 2 743 2 582
Overdrafts and short-term
borrowings are held as
follows:
- Assmang Limited - 5 4
- ARM Platinum (Pty) Limited 121 144 123
- ARM Coal (Pty) Limited 39 - 4
- Vale/ARM joint venture - 8 -
- Two Rivers Platinum (Pty) 340 196 252
Limited
- Two Rivers Platinum (Pty) 232 539 343
Limited - Implats
- Other 38 37 38
770 929 764
Total borrowings 3 397 3 672 3 346
Interest of R12 million was
capitalised for the half year
ended 31 December 2010
(Half year to 31 December
2009: R31 million, Full year
to 30 June 2010: R80 million).
5. EXCEPTIONAL ITEMS
Profit on sale of Otjikoto - - 103
Profit on sale of property, 1 1 3
plant and equipment
Loss on sale of property, (1) (1) -
plant and equipment
Impairments of property, plant (4) - (10)
and equipment
Capital portion of insurance - - 1
claim at Nkomati
Exceptional items per income (4) - 97
statement
Impairment of assets - (2) -
Taxation - - 1
Total amount adjusted for (4) (2) 98
headline earnings
6. HEADLINE EARNINGS
Basic earnings per income 1 558 452 1 812
statement
Impairment of property, plant 4 2 10
and equipment
Profit on sale of property, - - (3)
plant and equipment
Profit on sale of Otjikoto - - (103)
Capital portion of insurance - - (1)
claim at Nkomati
1 562 454 1 715
Taxation - - (1)
Headline earnings 1 562 454 1 714
7. TAXATION
South African normal tax
- current year 355 40 271
- mining 308 25 213
- non - mining 47 15 58
- prior year - (51) (52)
State`s share of profits 60 10 80
Deferred tax - current year 386 252 659
Secondary Tax on Companies 50 25 51
851 276 1 009
8. CASH GENERATED FROM
OPERATIONS BEFORE WORKING
CAPITAL MOVEMENTS
Cash generated from operations 3 031 1 243 4 028
before working capital
movement
Working capital changes (982) (348) (598)
Movement in receivables (253) (315) (1 393)
Movement in payables (360) 156 756
Movement in inventories (369) (189) 39
Cash generated from operations 2 049 895 3 430
(per statement of cash flows)
9. COMMITMENTS AND CONTINGENT LIABILITIES
Commitments in respect of
future capital expenditure
which will be funded from
operating cash flows and
byutilising debt facilities at
entity and corporate
levels,are summarised below:
Approved by directors
- contracted for 3 066 4 163 2 921
- not contracted for 2 032 876 505
Total commitments 5 098 5 039 3 426
Contingent liabilities
Shareholders are advised that there have been no significant changes to the
contingent liabilities of the Group as disclosed in the June 2010 annual report.
The Company is in discussion with the South African Revenue Services on
progressing the 1998 tax dispute concerning the claim of a loan stock redemption
premium.
ARM Platinum Ferrous
Platinum Nickel Metals Coal
Rm Rm Rm Rm
10. SEGMENTAL INFORMATION
Primary segmental information
Six months ended 31 December
2010 (Unaudited)
Total sales 1 651 768 4 056 244
Inter-group sales to ARM - 5 - -
Ferrous
External sales 1 651 763 4 056 244
Cost of sales (1 259) (544) (1 962) (191)
Other operating income 6 10 24 -
Other operating expenses (30) (46) (255) (1)
Segment result 368 183 1 863 52
Income from investments 11 3 26 -
Finance cost (12) (1) (2) (44)
Finance cost Implats: (14) - - -
Shareholders loan Two Rivers
Finance cost ARM: Shareholders (11) - - -
loan Two Rivers
Finance cost: Shareholders - - - -
loan ARM
Income from associate - - - (60)
Exceptional items - (4) - -
Taxation (101) (51) (631) (2)
Non-controlling interest (80) - - -
Contribution to earnings 161 130 1 256 (54)
Contribution to headline 161 134 1 256 (54)
earnings
Other information
Segment assets including 5 812 2 614 10 300 3 507
investment in associate
Investment in associate 1 375
Segment liabilities 1 522 209 924 1 937
Unallocated - Deferred
taxation and taxation
Consolidated total liabilities
Cash generated from operations 409 266 1 570 91
Cash in/(out) flow from 390 269 1 148 89
operating activities
Cash outflow from investing (111) (325) (1 043) (228)
activities
Cash (out)/in flow from (131) - (4) 143
financing activities
Capital expenditure 130 314 995 48
Amortisation and depreciation 156 125 236 46
EBITDA 524 308 2 099 98
Corporate*
Explora- and
tion other Gold Total
Rm Rm Rm Rm
10. SEGMENTAL INFORMATION
Primary segmental information
Six months ended 31 December
2010 (Unaudited)
Total sales - - - 6 719
Inter-group sales to ARM - - - 5
Ferrous
External sales - - - 6 714
Cost of sales - 16 - (3 940)
Other operating income - 134 - 174
Other operating expenses (72) (10) - (414)
Segment result (72) 140 - 2 534
Income from investments - 36 32 108
Finance cost (1) (10) - (70)
Finance cost Implats: - - - (14)
Shareholders loan Two Rivers
Finance cost ARM: Shareholders - - - (11)
loan Two Rivers
Finance cost: Shareholders (4) - - (4)
loan ARM
Income from associate - - - (60)
Exceptional items - - - (4)
Taxation - (66) - (851)
Non-controlling interest 13 (3) - (70)
Contribution to earnings (64) 97 32 1 558
Contribution to headline (64) 97 32 1 562
earnings
Other information
Segment assets including 280 1 718 5 282 29 513
investment in associate
Investment in associate 1 375
Segment liabilities 36 1 396 - 6 024
Unallocated - Deferred 3 651
taxation and taxation
Consolidated total liabilities 9 675
Cash generated from operations (108) (179) - 2 049
Cash in/(out) flow from (108) (587) - 1 201
operating activities
Cash outflow from investing (57) (173) - (1 937)
activities
Cash (out)/in flow from - (76) - (68)
financing activities
Capital expenditure 24 41 - 1 552
Amortisation and depreciation 3 3 - 569
EBITDA (69) 143 - 3 103
*Corporate, other companies and consolidation adjustments
ARM Platinum Ferrous
Platinum Nickel Metals Coal
Rm Rm Rm Rm
10. SEGMENTAL INFORMATION
(continued)
Six months ended 31 December
2009 (Unaudited)
Sales
External sales 1 523 334 2 301 44
Cost of sales (1 155) (255) (1 673) (20)
Other operating income 9 22 39 -
Other operating expenses (42) (53) (232) -
Segment result 335 48 435 24
Income from investments 9 3 49 -
Finance cost (18) (1) (1) 5
Finance cost Implats: (21) - - -
Shareholders loan Two Rivers
Finance cost ARM: Shareholders (26) - - -
loan Two Rivers
Finance cost: Shareholders - - - -
loan ARM
Income from associate - - - 15
Exceptional items (1) - 1 -
Taxation (78) (14) (181) (8)
Non-controlling interest (70) - - -
Contribution to earnings 130 36 303 36
Contribution to headline 131 36 302 36
earnings
Other information
Segment assets including 5 578 2 052 8 112 3 284
investment in associate
Investment in associate 1 389
Segment liabilities 1 546 190 760 1 680
Unallocated - Deferred
taxation and taxation
Consolidated total liabilities
Cash generated from operations 260 91 384 (28)
Cash in/(out) flow from 211 90 92 (28)
operating activities
Cash outflow from investing (82) (289) (644) (191)
activities
Cash (out)/in flow from (40) (150) (1) 222
financing activities
Capital expenditure 89 294 619 220
Amortisation and depreciation 163 52 223 21
EBITDA 498 100 658 45
Corporate*
Explora- and
tion other Gold Total
Rm Rm Rm Rm
10. SEGMENTAL INFORMATION
(continued)
Six months ended 31 December
2009 (Unaudited)
Sales
External sales - - - 4 202
Cost of sales - 15 - (3 088)
Other operating income - 368** - 438
Other operating expenses (64) (417)** - (808)
Segment result (64) (34) - 744
Income from investments 7 36 32 136
Finance cost (6) (1) - (22)
Finance cost Implats: (3) - - (24)
Shareholders loan Two Rivers
Finance cost ARM: Shareholders - - - (26)
loan Two Rivers
Finance cost: Shareholders (21) - - (21)
loan ARM
Income from associate - - - 15
Exceptional items - - - -
Taxation - 5 - (276)
Non-controlling interest - (4) - (74)
Contribution to earnings (87) 2 32 452
Contribution to headline (85) 2 32 454
earnings
Other information
Segment assets including 299 1 118 4 823 25 266
investment in associate
Investment in associate 1 389
Segment liabilities 49 1 581 - 5 806
Unallocated - Deferred 2 715
taxation and taxation
Consolidated total liabilities 8 521
Cash generated from operations (105) 293 - 895
Cash in/(out) flow from (106) (65) - 194
operating activities
Cash outflow from investing (1) (4) - (1 211)
activities
Cash (out)/in flow from 71 (323) - (221)
financing activities
Capital expenditure 1 4 - 1 227
Amortisation and depreciation 4 2 - 465
EBITDA (60) (32) - 1 209
* Corporate, other companies and consolidation adjustments
** Other operating income and other operating expenses have both been increased
by R273 million due to the grossing up of the insurance amounts paid and
received by ARM`s two wholly owned insurance entities.
ARM Platinum Ferrous
Platinum Nickel Metals Coal
Rm Rm Rm Rm
10. SEGMENTAL INFORMATION Year
ended 30 June 2010 (Audited)
Total sales 3 156 1 224 6 435 212
Inter-group sales to ARM - 6 - -
Ferrous
Sales 3 156 1 218 6 435 212
Cost of sales (2 294) (896) (4 160) (157)
Other operating income 11 37 148 -
Other operating expenses (79) (72) (423) (1)
Segment result 794 287 2 000 54
Income from investments 23 7 86 -
Finance cost (38) (2) (7) (7)
Finance cost Implats: (41) - - -
Shareholders loan Two Rivers
Finance cost ARM: Shareholders (50) - - -
loan Two Rivers
Loss from associate - - - (51)
Exceptional items - (2) 3 -
Taxation (199) (85) (715) (13)
Non-controlling interest (174) - - -
Contribution to earnings 315 205 1 367 (17)
Contribution to headline 315 206 1 364 (17)
earnings
Other information
Segment assets including 5 717 2 385 9 572 3 270
investment in associate
Investment in associate 1 292
Segment liabilities 1 540 213 1 171 1 746
Unallocated - Deferred
taxation and taxation
Consolidated total liabilities
Cash in/(out) flow from 760 365 1 322 23
operating activities
Cash (out)/in flow from (116) (557) (1 534) (259)
investing activities
Cash (out)/in flow from (295) (150) 1 239
financing activities
Capital expenditure 148 601 1 601 339
Amortisation and depreciation 316 144 459 60
Impairment - 3 - -
EBITDA 1 110 431 2 459 114
Corporate*
Explora- and
tion other Gold Total
Rm Rm Rm Rm
10. SEGMENTAL INFORMATION Year
ended 30 June 2010 (Audited)
Total sales 1 - - 11 028
Inter-group sales to ARM - - - 6
Ferrous
Sales 1 - - 11 022
Cost of sales - 27 - (7 480)
Other operating income - 212 - 408
Other operating expenses (120) (335) - (1 030)
Segment result (119) (96) - 2 920
Income from investments - 61 32 209
Finance cost (46) (1) - (101)
Finance cost Implats: - - - (41)
Shareholders loan Two Rivers
Finance cost ARM: Shareholders - - - (50)
loan Two Rivers
Loss from associate - - - (51)
Exceptional items 96 - - 97
Taxation 1 2 - (1 009)
Non-controlling interest 21 (9) - (162)
Contribution to earnings (47) (43) 32 1 812
Contribution to headline (143) (43) 32 1 714
earnings
Other information
Segment assets including 348 1 761 5 180 28 233
investment in associate
Investment in associate 1 292
Segment liabilities 59 1 700 - 6 429
Unallocated - Deferred 3 275
taxation and taxation
Consolidated total liabilities 9 704
Cash in/(out) flow from (137) 188 - 2 521
operating activities
Cash (out)/in flow from 149 (7) - (2 324)
investing activities
Cash (out)/in flow from (8) (516) - (729)
financing activities
Capital expenditure 44 5 - 2 738
Amortisation and depreciation 6 2 - 987
Impairment 7 - - 10
EBITDA (113) (94) - 3 907
*Corporate, other companies and consolidation adjustments
Additional information
for the six months ended 31 December 2010
The ARM platinum segment is analysed further into Two Rivers Platinum Mine and
ARM Mining Consortium (which includes Modikwa).
Two Rivers Modikwa Platinum
Rm Rm Rm
SEGMENTAL INFORMATION
Six months ended 31 December 2010
(Unaudited)
Sales
External sales 1 071 580 1 651
Cost of sales (819) (440) (1 259)
Other operating income 6 - 6
Other operating expenses (16) (14) (30)
Segment result 242 126 368
Income from investments 2 9 11
Finance cost (16) 4 (12)
Finance cost Implats: (14) - (14)
Shareholders loan Two Rivers
Finance cost ARM: Shareholders (11) - (11)
loan Two Rivers
Taxation (65) (36) (101)
Non-controlling interest (62) (18) (80)
Contribution to earnings 76 85 161
Contribution to headline earnings 76 85 161
Other information
Segment assets 3 052 2 760 5 812
Segment liabilities 979 543 1 522
Cash inflow from operating 236 154 390
activities
Cash outflow from investing (39) (72) (111)
activities
Cash outflow from financing (130) (1) (131)
activities
Capital expenditure 53 77 130
Amortisation and depreciation 116 40 156
EBITDA 358 166 524
Six months ended 31 December 2009
(Unaudited)
Sales
External sales 995 528 1 523
Cost of sales (749) (406) (1 155)
Other operating expenses 9 - 9
Other operating expenses (15) (27) (42)
Segment result 240 95 335
Income from investments 1 8 9
Finance cost (17) (1) (18)
Finance cost Implats: (21) - (21)
Shareholders loan Two Rivers
Finance cost ARM: Shareholders (26) - (26)
loan Two Rivers
Exceptional items - (1) (1)
Taxation (47) (31) (78)
Non-controlling interest (58) (12) (70)
Contribution to earnings 72 58 130
Contribution to headline earnings 72 59 131
Other information
Segment assets 3 040 2 538 5 578
Segment liabilities 1 074 472 1 546
Cash inflow from operating 73 138 211
activities
Cash outflow from investing (50) (32) (82)
activities
Cash outflow from financing (40) - (40)
activities
Capital expenditure 55 34 89
Amortisation and depreciation 120 43 163
EBITDA 360 138 498
Additional information
for the six months ended 31 December 2010
Iron ore Manganese Chrome
Proforma analysis of the Ferrous division division division
segment on a 100% basis Rm Rm Rm
Segmental Information
Six months ended 31 December
2010 (Unaudited)
Sales
External sales 3 987 3 204 921
Other operating income 6 54 3
Other operating expenses (202) (227) (96)
Operating profit/(loss) 2 436 1 402 (112)
Contribution to earnings 1 750 849 (87)
Contribution to headline 1 750 849 (87)
earnings
Other information
Segment assets 10 561 8 869 1 657
Segment liabilities 2 615 2 573 667
Cash in/(out) flow from 1 546 (30) (220)
operating activities
Cash outflow from investing (1 600) (350) (136)
activities
Cash outflow from financing - - (8)
activities
Capital expenditure 1 601 380 92
Amortisation and depreciation 284 143 71
EBITDA 2 720 1 545 (41)
Six months ended 31 December
2009 (Unaudited)
Sales
External sales 1 795 2 302 504
Other operating income 27 103 9
Other operating expenses (106) (276) (144)
Operating profit/(loss) 536 515 (183)
Contribution to earnings 383 355 (136)
Contribution to headline 383 355 (136)
earnings
Other information
Segment assets 6 970 7 751 1 852
Segment liabilities 1 826 2 050 605
Taxation 363 581 (686)
Cash in/(out) flow from 628 (827) (128)
operating activities
Cash outflow from operating (782) (376) (130)
activities
Cash in/(out) flow from 106 - (109)
operating activities
Capital expenditure 777 376 135
Amortisation and depreciation 262 131 68
EBITDA 798 646 (115)
Ferrous Attributable
Proforma analysis of the Ferrous Total to ARM
segment on a 100% basis Rm Rm
Segmental Information
Six months ended 31 December
2010 (Unaudited)
Sales
External sales 8 112 4 056
Other operating income 63 24
Other operating expenses (525) (255)
Operating profit/(loss) 3 726 1 863
Contribution to earnings 2 512 1 256
Contribution to headline 2 512 1 256
earnings
Other information
Segment assets 21 087 10 300
Segment liabilities 5 855 924
Cash in/(out) flow from 1 296 1 148
operating activities
Cash outflow from investing (2 086) (1 043)
activities
Cash outflow from financing (8) (4)
activities
Capital expenditure 2 073 995
Amortisation and depreciation 498 236
EBITDA 4 224 2 099
Six months ended 31 December
2009 (Unaudited)
Sales
External sales 4 601 2 301
Other operating income 139 39
Other operating expenses (526) (232)
Operating profit/(loss) 868 435
Contribution to earnings 602 303
Contribution to headline 602 302
earnings
Other information
Segment assets 16 573 8 112
Segment liabilities 4 481 760
Taxation 258 -
Cash in/(out) flow from (327) 92
operating activities
Cash outflow from operating (1 288) (644)
activities
Cash in/(out) flow from (3) (1)
operating activities
Capital expenditure 1 288 619
Amortisation and depreciation 461 223
EBITDA 1 329 658
Forward-looking statements
Certain statements in this report constitute forward looking statements that are
neither reported financial results nor other historical information. They
include but are not limited to statements that are predictions of or indicate
future earnings, savings, synergies, events, trends, plans or objectives. Such
forward looking statements may or may not take into account and may or may not
be affected by known and unknown risks, uncertainties and other important
factors that could cause the actual results, performance or achievements of the
Company to be materially different from the future results, performance or
achievements expressed or implied by such forward looking statements. Such
risks, uncertainties and other important factors include among others: economic,
business and political conditions in South Africa; decreases in the market price
of commodities; hazards associated with underground and surface mining; labour
disruptions; changes in government regulations, particularly environmental
regulations; changes in exchange rates; currency devaluations; inflation and
other macro-economic factors; and the impact of the AIDS crisis in South Africa.
These forward looking statements speak only as of the date of publication of
these pages. The Company undertakes no obligation to update publicly or release
any revisions to these forward looking statements to reflect events or
circumstances after the date of publication of these pages or to reflect the
occurrence of unanticipated events.
Contact details and administration
Registered office
ARM House
29 Impala Road
Chislehurston, Sandton, 2196
South Africa
PO Box 786136, Sandton, 2146
South Africa
Telephone: +27 11 779 1300
Fax: +27 11 779 1312
E-mail: ir.admin@arm.co.za
Website: http://www.arm.co.za
Transfer secretaries
Computershare Investor Services (Pty) Limited
Ground Floor, 70 Marshall Street
Johannesburg 2001
PO Box 61051 Marshalltown, 2107
Telephone: +27 11 370 5000
Telefax: +27 11 688 5222
E-mail: web.queries@computershare.co.za
Website: http://www.computershare.co.za
Directors
PT Motsepe (Executive Chairman)
AJ Wilkens (Chief Executive Officer)
F Abbott*
M Arnold
Dr MMM Bakane-Tuoane**
TA Boardman**
AD Botha**
JA Chissano (Mozambican)**
WM Gule
MW King**
AK Maditsi**
KS Mashalane
JR McAlpine**
LA Shiels
Dr RV Simelane**
JC Steenkamp
ZB Swanepoel*
*Non-executive**Independent non-executive
www.arm.co.za
Johannesburg
28 February 2011
Sponsor
Deutsche Securities (SA) (Proprietary) Limited
Date: 28/02/2011 07:05:08 Produced by the JSE SENS Department.
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