| Tue 26 Feb 2013, 7:05 | | AFRICAN RAINBOW MINERALS LIMITED - Interim results for the six months ended 31 December 2012 |
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ARI 201302260004A
Interim results for the six months ended 31 December 2012
African Rainbow Minerals Limited
Incorporated in the Republic of South Africa
Registration number 1933/004580/06
JSE share code: ARI
ADR ticker symbol: AFRBY
ISIN code: ZAE000054045
("ARM" or the "Company")
Interim results
for the six months ended
31 December 2012
Salient features
- Headline earnings reduced by 30% to R1.41 billion (1H F2012 restated: R2.00 billion)
primarily as a result of the fall in iron ore prices, coupled with above inflation unit
cost increases at some operations. This reduction was partially offset by improved
performances at Nkomati Nickel and ARM Coal. Headline earnings per share were
654 cents per share (1H F2012 restated: 937 cents per share).
- Sales revenue maintained at R8.8 billion (1H F2012: R8.7 billion).
- Increased sales volumes for iron ore, PGMs, nickel, Dwarsrivier chrome and thermal coal.
- Cash generated from operations decreased by 38% to R1.67 billion
(1H F2012: R2.67 billion).
- Positive financial position with net cash (excluding partner loans) of R630 million
(1H F2012: R1.7 billion) after capital expenditure of R2.02 billion and an increase
in working capital of R1.5 billion.
- Growth projects deliver:
The Nkomati Nickel Mine improved its mining and metallurgical recoveries and has
increased production of nickel by 87% and reduced unit costs by 50% to US$5.13/lb.
Contribution to headline earnings of R147 million (1H F2012 restated: R75 million loss).
The concentrator plant at the Lubambe Copper Project was commissioned in
October 2012, two months ahead of schedule.
Khumani mine ramping up ahead of schedule.
- South African government's continued commitment to investment in infrastructure.
* 1H F2012 and 2H F2012 have been restated to take into account the early adoption of IFRIC 20.
ARM operational review
The ARM Board of Directors (the Board) announces reduced earnings for the six months ended 31 December 2012
(1H F2013). Headline earnings for the period decreased by 30% to R1.41 billion when compared to the restated
earnings for the corresponding six months ended 31 December 2011 (1H F2012: R2.00 billion). Headline earnings
per share were 654 cents per share (1H F2012 restated: 937 cents per share). The results achieved are in line with
those for the immediately preceding period (2H F2012) of R1.45 billion.
The reduction in ARM's earnings results mainly from the 46% decline in the contribution by the ARM Ferrous division.
This is largely due to iron ore prices received being 28% lower in dollar terms, partly offset by an 11% weakening of
the Rand/US Dollar exchange rate. The manganese earnings reduced by 51% due to lower production volumes and
higher costs.
A good turnaround in earnings contribution was achieved at Nkomati Nickel Mine and at ARM Coal.
Higher sales volumes were achieved in iron ore, PGMs, nickel, Dwarsrivier chrome ore and thermal coal. The positive
effect of improved sales volumes was, however, reduced by a decline in US Dollar commodity prices as uncertainty in
global markets continued to put pressure on demand for commodities.
The following increases in sales volumes were achieved:
- 129% increase in Dwarsrivier chrome ore from 211 thousand tonnes to 483 thousand tonnes;
- 92% increase in nickel sales from 5.1 thousand tonnes to 9.9 thousand tonnes;
- 21% increase in Eskom coal sales at GGV from 1.88 million tonnes to 2.28 million tonnes;
- 12% increase in export coal sales from 6.29 million tonnes to 7.03 million tonnes;
- 10% increase in iron ore sales from 6.8 million tonnes to 7.4 million tonnes; and
- 7% increase in PGMs (including Nkomati) sales from 384 thousand ounces to 409 thousand ounces.
The interim results for the six months ended 31 December 2012 have been prepared in accordance with International
Financial Reporting Standards (IFRS) and the disclosures are in accordance with IAS 34: Interim Financial Reporting.
Rounding of figures may result in minor computational discrepancies on the tabulations.
Contribution to headline earnings
Unaudited
Commodity group six months ended 31 December
R million 2012 2011 % change
Platinum Group Metals 152 162 (6)
Nkomati nickel and chrome* 147 (75)
Ferrous metals 1 061 1 974 (46)
Coal 105 (12)
Copper (21) (30) 30
Exploration (36) (54) 33
Gold 32 38 (16)
Corporate and other (34) (6) >(100)
ARM headline earnings 1 406 1 997 (30)
* The 1H F2012 headline earnings have been restated to take into account the adoption of IFRIC 20.
These results reflect ARM's share of the earnings achieved in conjunction with ARM's partners at the various
operations, Anglo American Platinum Limited ("Anglo Platinum"), Assore Limited ("Assore"), Impala Platinum Holdings
Limited ("Implats"), Norilsk Nickel Africa Proprietary Limited ("Norilsk"), Xstrata South Africa Proprietary Limited
("Xstrata"), Vale S.A. ("Vale") and Zambian Consolidated Copper Mines Investment Holdings ("ZCCM-IH").
ARM's quality growth continues
ARM continues to focus on growth through the ramping up of production in iron ore, nickel, coal and copper.
The Lubambe Copper Project in Zambia commenced commissioning of ore in October 2012, two months ahead
of schedule. During the reporting period 3 214 tonnes of copper in concentrate were produced and toll smelted in
Zambia. The project is on schedule to ramp up to 45 000 tonnes of copper per annum in the 2015 financial year.
The second phase of this project which is expected to lead to the exploitation of the Lubambe Extension Area is also
progressing well with six exploration drill rigs deployed and a total of 10 535 metres drilled during the reporting period.
The Khumani iron ore mine is ramping up production and stripping overburden to allow more flexibility for improved
optimisation of mining. The iron ore production volume of 7.7 million tonnes is 14% up on last year and the plant is
at steady state production.
The Nkomati nickel mine tonnes milled improved by 19% to 3.74 million tonnes, associated with substantial
head grade and concentrator recovery improvements yielding 11 258 tonnes of nickel in concentrate produced, up
87% from 1H F2012.
The Goedgevonden coal mine produced 4.41 million tonnes saleable product in 1H F2013, which is 58% better than
1H F2012 and higher than the average steady state capacity of 6.7 mtpa.
Projects in pipeline
The Board approved the early works for the expansion at Black Rock Mine from 3 to 4 mtpa manganese ore which is
a R5.8 billion project over the next four years.
ARM has a number of projects in the pipeline for which feasibility studies are well advanced. These include expansion
of the iron ore operations, further increasing manganese ore production and expansion of the Modikwa Mine.
The expansions under consideration require additional infrastructure capacity in the form of rail, port, water and
electricity. Reconfirmation of the government's commitment to investment in infrastructure bodes very well for
development of these projects. ARM is confident about developing these projects and continues to work with Transnet
and Eskom to evaluate different alternatives for increased logistics and electricity capacity.
Focus on operational efficiencies
ARM's target is to have all operations positioned below the 50th percentile of each commodity's respective global cost
curve. Despite inflationary pressure on the South African mining industry resulting from above inflation increases in
the cost of diesel, electricity and labour, ARM has to date managed to achieve this target for all its operations except
the Nkomati Nickel Mine and the ferrochrome operations. Nkomati is expected to reach this target in 2013 while the
ferrochrome operations are in the process of being converted from ferrochrome to ferromanganese. Two furnaces at
Machadodorp Works have been successfully converted and another furnace has been converted in January 2013.
Lubambe Copper is expected to produce copper below the median world production cost by 2015.
Silicosis
ARM and 29 other respondents have been served with an application for the certification of two classes of claimants:
(i) Class 1: current and former mineworkers who have silicosis (whether or not accompanied by any other disease)
and who work or have worked on certain gold mines; and
(ii) Class 2: the dependants of mineworkers who died as a result of silicosis (whether or not accompanied by any
other disease) and who have worked on certain gold mines.
The applicants in the matter seek certification of the two classes in order to represent them in class actions for
damages against the respondents. ARM is following the normal legal process and will defend the matter on the merits.
Changes to the board
In terms of paragraph 3.59 of the JSE Limited Listings Requirements, notification is hereby given of Mr Thando
Mkatshana's appointment as Chief Executive: ARM Coal with effect from 3 September 2012. Thando Mkatshana was
previously Executive: Coal Operations. The responsibilities of Chief Executive: ARM Coal were previously part of the
broader responsibilities of Mr Mangisi Gule.
Mangisi Gule remains an Executive Director: Corporate Affairs.
Changes to resources and reserves
There were no material changes in the six months to ARM's mineral resources and reserves as disclosed in the
Integrated Annual Report for the financial year ended 30 June 2012, other than depletion due to continued mining
activities at the operations and increased resources at the Lubambe Copper Extension Area.
The Lubambe Copper Project Extension Area has increased ore resources to 105 million tonnes at an in-situ grade
of 3.66% total copper based upon a report released by AMEC E&C Services Inc. on 14 February 2013. The drilling
of this area is continuing.
Financial commentary
Headline earnings for the six-month period to 31 December 2012 were R1 406 million or 30% lower than the
corresponding period's restated headline earnings (1H F2012: R1 997 million).
ARM's earnings for 1H F2013 are also the reported headline earnings as there are no exceptional items for the six-
month period.
The 31 December 2011 results have been restated owing to the early adoption by ARM of the International Financial
Reporting Interpretations Committee (IFRIC) IFRIC 20: Stripping Costs in the Production Phase of a Surface Mine,
as fully reported upon in the 30 June 2012 Integrated Annual Report. The net adjusted increase to earnings and
headline earnings for 1H F2012 amounts to R53 million. The previously published results for ARM's headline earnings
for the six months to 31 December 2011 of R1 944 million have been restated to R1 997 million. The impact of the
application of IFRIC 20 on the 1H 2013 headline earnings was a decrease of R23 million. Note 2 to the financial
statements provides a detailed analysis of these changes.
Sales for the reporting period were in line with the corresponding period last year at R8.85 billion (1H F2012:
R8.72 billion).
The average gross profit margin of 28.6% (1H F2012: 38.5%) is lower than the corresponding period largely due to
decreased US Dollar commodity prices for iron ore, PGMs, ferromanganese alloys and nickel coupled with above
inflation unit cost increases at some operations. Nkomati, which remains in ramp-up, achieved a turnaround for the
period and operated at a gross profit of R264 million for the period (1H 2012 restated: R8 million); the improvement is
largely due to the much higher sales volumes. The margins achieved at each operation may be ascertained from the
detailed segment reports provided in note 11 to the financial statements as well as in the write-ups for each operation.
The 1H F2013 average Rand/US Dollar of R8.46/US$ is 11% weaker than the corresponding period average of
R7.61/US$. The weaker exchange rate had a positive impact on the Rand prices achieved for commodities.
For reporting purposes the closing exchange rate was R8.45/US$ (1H 2012: R8.07/US$).
ARM's earnings before interest, tax, depreciation and amortisation (EBITDA) excluding exceptional items and income
from associates were R2.88 billion, which represents a decrease of 23% or R856 million less than the restated
amount for 1H F2012.
The detailed segmental contribution analyses are provided in note 11 to the financial statements. Key features from
the segmental contribution analyses are:
- The ARM Ferrous contribution to ARM's headline earnings amounted to R1 061 million (1H F2012: R1 974 million).
This represents a 46% decrease over the corresponding period last year.
- The ARM Platinum segment contribution, which includes the results of Nkomati, was R299 million which is
R212 million higher than the corresponding period and represents a 244% increase. The increase in contribution
is due to the significantly increased contribution from Nkomati.
- The ARM Coal segment result was an improved contribution of R105 million (1H F2012: R12 million loss).
Goedgevonden contributed an increased headline earnings of R63 million (1H F2012: R31 million) while the
PCB operations improved significantly and contributed R42 million (1H F2012: R43 million loss).
- ARM Copper which comprises the Vale/ARM joint venture and related costs amounted to a loss of R21 million for
the period (1H F2012: R30 million loss). Operating costs at the Lubambe copper project were capitalised for the
full reporting period. Costs will be expensed with effect from 1 January 2013.
- The costs for the newly formed ARM Exploration segment were R36 million and mainly comprises the cost of
exploration on the Rovuma project as well as staff and administration costs.
- The ARM Corporate, other companies and consolidation segment reflects a cost of R34 million as compared to a
cost of R6 million for the previous corresponding period.
- ARM received a dividend of R32 million in October 2012 from its investment in Harmony relating to their F2012
results (1H F2011: R38 million).
At 31 December 2012 cash and cash equivalents amounted to R2 971 million (F2012: R3 564 million) with gross debt
being R4 381 million (F2012: R3 237 million). The increase in gross debt largely results from increased borrowings to
fund the completion of the Lubambe copper project. The net debt position at 31 December 2012 therefore amounts
to R1 410 million (F2012: R327 million net cash), a change of R1 737 million relative to the position at 30 June 2012.
- Cash generated from operations decreased by R1 008 million from R2 673 million to R1 665 million after an
increased working capital requirement of R1 527 million. The increase in working capital comprises: (i) outstanding
trade debtors at the end of December 2012 being larger due to increased sales occurring in the last two trading
months; there has also been an increase to normal trade debtor levels at Modikwa following the March/April strike
at the mine; (ii) inventories increased at Khumani and Nkomati as they ramped up production and (iii) provisions
impacted working capital largely as a result of the payment during the reporting period of short-term provisions
raised at 30 June 2012.
- Capital expenditure amounted to R2 019 million for the period (1H F2012: R1 987 million) and was mainly
expended on the growth projects of Khumani iron ore and Lubambe copper.
- Net cash at 31 December 2012 excluding partner loans (Implats: R48 million, Anglo Platinum: R114 million,
Xstrata: R1 575 million and ZCCM-IH: R303 million) amounted to R630 million as compared to R2 303 million at
30 June 2012.
ARM's consolidated total assets of R37.1 billion (F2012: R35.3 billion) include the marked-to-market valuation of
ARM's investment in Harmony of R4.7 billion at a share price of R74.00 per share (F2012: R76.50 per share).
The effective tax rate of 30% was in line with that of the corresponding period last year. The expense for mineral royalty
tax is included in Other Operating Expenses and amounts to R171 million for the period (1H F2011: R222 million).
Safety
- ARM is proud to declare no fatalities during the six months and will continue striving towards zero fatalities.
- 80 Lost Time Injuries (LTIs) occurred during the six months, resulting in a Lost Time Injury Frequency Rate (LTIFR)
of 0.41 per 200 000 man-hours (1H F2012: 0.41).
- 45 of the Lost Time Injuries (reported above) were also classified as Reportable Injuries in terms of the definitions
of the Mine Health and Safety Act and Occupational Health and Safety Act.
Achievements
- Beeshoek Mine completed 16 consecutive operating months without incurring a lost time injury. The mine has
also been fatality-free since March 2003.
- Nkomati Mine has achieved in excess of 2.8 million fatality free shifts.
- Khumani Mine has achieved 2.9 million fatality free shifts.
- Black Rock Mine completed two million fatality free shifts.
Safety figures and statistics in this report are presented on a 100% basis and exclude the ARM Coal operations.
ARM Ferrous
For the six months ended 31 December 2012, Assmang Limited's (Assmang) headline earnings declined by 46% to
R2.12 billion (F2011: R3.95 billion) driven by lower iron ore prices partly mitigated by increased iron ore sales volumes
and an 11% weaker exchange rate. Sales tonnages increased across all commodities except manganese ore.
Assmang headline earnings
100% basis six months ended 31 December
R million 2012 2011 % change
Iron ore division 1 731 3 126 (45)
Manganese division 411 833 (51)
Chrome division (20) (10) (100)
Total 2 122 3 949 (46)
Headline earnings attributable to ARM (50%) 1 061 1 974 (46)
Sales volumes compared to the same period last year were as follows:
- Iron ore increased by 10% to 7.4 million tonnes;
- Manganese ore (excluding intragroup sales) decreased by 5% to 1.5 million tonnes;
- Chrome ore (excluding intragroup sales) increased by 129% to 0.5 million tonnes;
- Manganese alloys volumes were virtually unchanged at 0.1 million tonnes;
- Chrome alloys decreased by 44% due to the conversion of furnaces to ferromanganese.
Assmang sales volumes
100% basis six months ended 31 December
Thousand tonnes 2012 2011 % change
Iron ore 7 433 6 781 10
Manganese ore* 1 513 1 590 (5)
Manganese alloys* 107 104 3
Charge chrome 48 86 (44)
Chrome ore* 483 211 129
Assmang production volumes
100% basis six months ended 31 December
Thousand tonnes 2012 2011 % change
Iron ore 7 730 6 413 21
Manganese ore 1 483 1 692 (12)
Manganese alloys 138 153 (10)
Charge chrome 113 (100)
Chrome ore* 496 498
* Excluding intragroup sales.
On-mine unit production cost changes were:
- In the previous reporting period when Khumani was still in the ramp-up stage 59% of the waste stripping was
capitalised. For this reporting period, the mine developed into a steady state mine and the total waste tonnage
which had to be mined increased by 41%. On top of this increase, the volume of waste mined on working costs
increased by 79%. This allowed the creation of the required pit footprint and space to generate in-pit ore stockpiles
to ready the mine for a steady state of production. This additional waste stripping accounted for 18% of the
overall 25% unit cost increase while above inflationary increases in fuel, power and labour accounted for the
other 7%. During this year mining will reach steady-state and the production cost should stabilise at the current
level. The EBITDA margin for iron ore was 48% and reduced from the 64% reported for the comparative period.
The reduction is largely due to the fall in iron ore prices received.
- The manganese production volume was 12% lower than the corresponding period last year mainly due to
increases in underground haulage distances, three section 54 stoppages and the establishment of a new mining
area to maintain ore quality following the intersection of water-bearing fissures and faulting. This shortfall in
production accounted for 11% of the overall 26% increase in unit cost and a further 7% was due to annual labour
cost increases, 120 person complement increase and the conversion of 296 labour hire employees to permanent
employees. The remaining 8% of the overall increase was due to inflationary increases for water and electricity
and consumables.
- Chrome ore unit costs increased by 7% as a result of inflation and higher labour cost increases.
- Manganese alloys' unit costs increased by 7%.
Assmang unit cost produced on mine and EBITDA margin performance
1H F2013 1H F2012
Rand per tonne EBITDA EBITDA
Commodity group cost change margin margin
% % %
Iron ore 25 48 64
Manganese ore 26 26 37
Manganese alloys 7 12 41
Charge Chrome 5
Chrome ore 7 6 38
Total capital expenditure was R2.32 billion (1H F2012: R2.04 billion). The main expenditure items included ongoing
development of the Khumani Mine including the Wet High Intensity Magnetic Separation plant (WHIMS) (R1.16 billion),
the Beeshoek East pit and road deviation (R256.2 million), the Black Rock expansion of 3 to 4 million tonnes
(R228 million) and the final conversion at Machadodorp Works of ferrochrome furnaces to ferromanganese furnaces
(R216 million). The balance of the capital expenditure was for the replacement of vehicles and equipment, housing,
and ensuring compliance to legislative changes.
Assmang capital expenditure
100% basis six months ended 31 December
R million 2012 2011
Iron ore 1 610 1 644
Manganese 651 265
Chrome 61 128
Total 2 322 2 037
Projects
Khumani Iron Ore Expansion Project
The Khumani Expansion project is complete and the mine is now fully operational at steady state. The WHIMS project
to extract more value from the ore by recovering high grade fines from the discard stream is ahead of schedule and
will be commissioned during May 2013.
Beeshoek Iron Ore Mine
The capital waste stripping in Beeshoek's east pit is progressing well and the feasibility study for the future village pit
is expected to be completed by March 2013. These projects will extend Beeshoek's life by approximately 20 years.
Conversion of Ferrochrome Furnaces to Manganese Alloy Furnaces
This project has now been largely completed. Furnaces No 2 and No 5 at Machadodorp Works have been
commissioned and furnace No 3 was commissioned at the end of January 2013. This project was completed on
schedule and within budget.
Manganese Ore Expansion
The early works to expand the Black Rock mining operations from 3 mtpa to 4 mtpa was approved and has
commenced. The project involves the possible upgrade of the existing Nchwaning 2 shaft as well as a new shaft
complex. The feasibility study to expand the mine further from 4 mtpa to 5 mtpa is progressing and will be reviewed
by the board during the next six months.
Logistics
Assmang signed the Iron Ore Export 14 mtpa Agreement with Transnet. Assmang's Iron ore export volume is on target
for the financial year. Additional ore can be moved from Beeshoek to Khumani due to the second load-out station at
Khumani being commissioned ahead of time.
Assmang and Transnet will start to engage regarding a new Manganese Ore Export contract through the port of
Port Elizabeth and future export allocation for the period 1 April 2013 until 31 March 2018. Assmang also exports
manganese ore through the ports of Durban and Richards Bay.
Assmang managed to reduce its road transport volume of chrome ore by successfully securing rail capacity through
the port of Richards Bay.
The Industry and Transnet completed a feasibility study to expand the Iron Ore Export capacity from the current
60 mtpa capacity to 82 mtpa through the port of Saldanha. This study was handed over to Transnet to complete to a
higher level of accuracy.
Transnet is concluding a feasibility study to expand its Manganese Ore Export capacity to about 12 mtpa through the
port of Ngqura from April 2018.
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
Despite challenging market conditions, ARM Platinum generated encouraging results with Nkomati and Two Rivers
showing substantial improvements in operating profits.
Attributable headline earnings increased 244% to R299 million from R87 million driven mainly by improved performance
at Nkomati and an increased output at Two Rivers.
PGM production (on 100% basis including Nkomati) increased 7% to 409 014 6E ounces (1H F2012: 383 809
6E ounces) while Nkomati's nickel produced increased by 87% to 11 258 tonnes (1H F2012: 6 014 tonnes) due to an
improved head grade and plant recoveries.
Nkomati's unit cost improved by 9% to R297 per tonne milled (1H F2012: R328 per tonne milled) while the C1 unit
cash cost, net of by-products, reduced by 50% to US$5.13/lb (1H F2012: US$10.24/lb) of nickel produced.
Despite the increase in unit production cost it is anticipated that Two Rivers and Modikwa will continue to be positioned
below the 50th percentile of the global PGM cost curve with respective unit costs of R5 121/6E PGM oz (1H F2012:
R4 734/6E PGM oz) and R5 829/6E PGM ounce (1H F2012: R4 891/6E PGM oz).
Dollar prices were lower than the corresponding period but the weakening of the Rand against the US Dollar
compensated for the lower PGM prices, resulting in the basket prices for Modikwa and Two Rivers remaining fairly
constant at R271 808/kg (1H F2012: R272 154) and R282 478/kg (1H F2012: R285 315), respectively. The nickel price
was lower by 17% in US Dollar terms.
The table below sets out the relevant price comparison:
Average metal prices
Average for six months ended 31 December
2012 2011 % change
Platinum $/oz 1 550 1 652 (6)
Palladium $/oz 633 691 (8)
Rhodium $/oz 1 081 1 667 (35)
Nickel $/t 16 376 19 763 (17)
Copper $/t 7 729 8 067 (4)
Chrome concentrate (CIF) $/t 142 177 (20)
Capital expenditure at ARM Platinum was R536 million (R401 million attributable). Modikwa's major capital items
include the deepening of North shaft, the sinking of South 2 shaft, phase 2 development on South 1 shaft and
the replacement of mining equipment. Of the capital spent at Two Rivers, 26% is associated with the replacement
of the underground mining fleet and 16% on the PGM scavenger plant. The balance was incurred in the deepening of
the Main and North declines. Nkomati's capital expenditure was mainly to sustain operations.
ARM Platinum capital expenditure
100% basis six months ended 31 December
R million 2012 2011 % change
Modikwa 172 246 (30)
Two Rivers 266 164 62
Nkomati 98 112 (13)
Total 536 522 3
Modikwa
With production similar to the previous reporting period, an increase in costs resulted in a 25% reduction in cash
operating profit. PGMs produced for the six months are similar at 176 701 6E ounces (1H 2012: 176 490 6E ounces).
Unit costs increased 15% to R812 per tonne milled (1H F2012: R706 per tonne milled) while Rand unit cost per
6E PGM ounce increased 19% to R5 829 (1H F2012: R4 891).
Modikwa experienced excessive cost increases on labour (18%), contractors (26%) and power (17%). Extra equipping
of panels to increase the immediately stopeable reserves for mining flexibility and open cast mining were the two
main drivers for the increase in contractors cost. In order for Modikwa to be aligned with the industry, above inflation
wage increases, additional housing allowances as well as provisions for an employee participation fund increased
labour cost.
During the period under review, Modikwa milled 134 000 tonnes (11% of total plant feed) of open pit material, which
negatively affected plant recovery, mill feed grade and unit cost per PGM ounce.
Modikwa operational statistics
100% basis six months ended 31 December
2012 2011 % change
Cash operating profit R million 250 335 (25)
Tonnes milled Mt 1.27 1.22 4
Head grade g/t, 6E 5.44 5.57 (2)
PGMs in concentrate Ounces, 6E 176 701 176 490
Average basket price R/kg, 6E 271 808 272 154
Average basket price $/oz 999 1 112 (10)
Cash operating margin % 20 28
Cash cost R/kg, 6E 187 418 157 246 19
Cash cost R/tonne 812 706 15
Cash cost R/Pt oz 14 672 12 310 19
Cash cost R/oz, 6E 5 829 4 891 19
Cash cost $/oz, 6E 689 643 7
Headline earnings attributable
to ARM (41.5%) R million 54 74 (27)
Two Rivers
A 10% increase in PGM ounces, driven by an increase in tonnes milled (2%) and an improved head grade (7%),
resulted in a 15% increase in cash operating profit. Head grades were negatively affected in the previous period by
the processing of Merensky material. Unit costs increased by 8% to R5 121 per 6E PGM oz (1H F2012: R4 734 per
6E PGM oz). Cash cost increased due to above inflation increases on labour, consumables and power, as well as the
appointment of contractor staff as own employees.
The previous period's cost was also positively impacted by 110 000 tonnes milled which were part of a capital
development programme.
Two Rivers has taken over 1 660 contractor employees previously employed by Grinaker LTA. The appointment
of these employees was completed by 31 December 2012 and resulted in a total unit cost increase of
approximately 1.5%.
Two Rivers operational statistics
100% basis six months ended 31 December
2012 2011 % change
Cash operating profit R million 479 418 15
Tonnes milled Mt 1.59 1.56 2
Head grade g/t, 6E 4.07 3.81 7
PGMs in concentrate Ounces, 6E 179 513 163 177 10
Average basket price R/kg, 6E 282 478 285 315 (1)
Average basket price $/oz, 6E 1 039 1 166 (11)
Cash operating margin % 34 35
Cash cost R/kg, 6E 164 629 152 200 8
Cash cost R/tonne 578 495 17
Cash cost R/Pt oz 11 050 10 088 10
Cash cost R/oz, 6E 5 121 4 734 8
Cash cost $/oz, 6E 605 622 (3)
Headline earnings attributable to ARM (55%) R million 98 88 11
Nkomati
A 19% increase in total tonnes milled, 40% improvement in head grade and a substantial enhancement in concentrator
recoveries, delivered an 87% growth in nickel produced.
The depressed chrome market resulted in chrome concentrate sales declining to 75 849 tonnes (1H F2012:
250 687 tonnes).
Notwithstanding an 8% decrease in the rand nickel price achieved, Nkomati generated a cash operating profit of
R694 million, a substantial increase from the R201 million loss in the corresponding period. The turnaround in results
can be attributed to cost control, enhanced efficiencies, grades and recoveries. The mine achieved their initial target of
more than 70% recovery in the concentrator, albeit at a higher head grade of 0.42% nickel. Management are confident
that these recoveries are sustainable.
Despite lower than expected by-product credits, especially for chrome, the operation still managed to achieve a C1 unit
cost of US$5.13/lb net of by-products (1H F2012: US$10.24/lb). The unit costs for Nkomati are currently positioned
at approximately 45% of the global cost curve.
Nkomati operational statistics
100% basis six months ended 31 December
2012 2011 % change
Cash operating profit/(loss) R million 694 (201)
Cash operating profit/(loss)
Nickel Mine R million 644 (228)
Cash operating profit
Chrome Mine R million 50 27 85
Cash operating margin % 33 (15)
Tonnes milled Million 3.74 3.14 19
Head grade % nickel 0.42 0.30 40
Nickel on-mine cash cost per tonne milled R/tonne 297 328 (9)
Cash cost net of by-products* $/lb 5.13 10.24 (50)
Contained metal
Nickel Tonnes 11 258 6 014 87
PGMs Ounces 52 800 44 142 20
Copper Tonnes 4 988 3 108 60
Cobalt Tonnes 535 281 90
Chrome ore sold Tonnes 64 144 (100)
Chrome concentrate sold Tonnes 75 849 250 687 (70)
Headline earnings/(loss) attributable to ARM
(50%) ** R million 147 (75)
* This reflects US Dollar cash costs net of by-products (PGMs and Chrome) per pound of nickel produced.
** The 1H F2012 headline earnings have been restated to take into account the early adoption of IFRIC 20.
Projects
Modikwa Expansion
The UG2 Phase 2 project to increase production to 240 000 tonnes per month is in progress. Construction work
on 7 level at North Shaft is progressing well. Development at the South 2 Decline system is ahead of schedule.
Two Rivers Additional Ore Sources
Construction of the Tertiary Milling plant commenced and completion is expected during July 2013. A feasibility study
was completed on the extraction of UG2 ore from the deeper southern strike extent of the Main Decline.
Nkomati Nickel
The Large Scale Expansion Project has been completed and Nkomati is now producing at design capacity.
The upgrade of the 132kV overhead distribution lines was delayed as a result of Eskom processes and completion is
now expected by March 2013. This has no material impact on Nkomati in the short to medium term.
Kalplats PGM Exploration Project
ARM Platinum completed its review of the Definitive Feasibility Study (DFS) submitted by Platinum Australia (PLA)
and recommended some modifications. These are being undertaken by PLA and a revised DFS is expected early
in 2013. The viability of a possible mining operation is adversely affected by the lack of Eskom infrastructure and
the uncertainty regarding the timing of its delivery. An application for a Retention Permit was submitted in July 2012.
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 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
ARM Coal's change in strategy from predominantly underground to opencast mining, is starting to deliver
positive results.
Attributable cash operating profit of R443 million is 49% higher when compared to 1H F2012. Attributable headline
earnings are R105 million compared to a loss of R12 million in the previous period. Export sales volumes increased
and the unit cost per saleable tonne declined year-on-year for both the participative coal business (PCB) and
Goedgevonden (GGV).
Total saleable coal production for 1H F2013 is 20% higher than 1H F2012. The GGV coal handling and processing
plant (CHPP) achieved consistent design capacity levels of production during the period under review, which resulted
in an increase of 58% in saleable production. Although some challenges are still being experienced at the iMpunzi
East CHPP total saleable production for PCB reflected an increase of 4% compared to the previous period.
Consolidated export sales volumes were 12% higher than 1H F2012 which, together with the weaker Rand Dollar
exchange rate, resulted in an increase of 19% in export revenue, which was slightly offset by a 4% reduction in export
coal prices.
Goedgevonden Coal Mine (GGV)
Run of Mine (ROM) production and saleable production at GGV were, respectively, 47% and 58% higher than in
1H F2012 as a result of an overall improvement in performance and efficiencies at the mine which is now consistently
achieving design production levels.
Export and Eskom sales volumes increased by 7% and 21%, respectively, compared to the previous period, supported
by an improved performance by Transnet Freight Rail (TFR). GGV achieved 7.9 million total saleable tonnes in the
2012 calendar year, which is 18% above the design capacity of 6.7 mtpa.
Improved sales volumes and lower unit cost caused attributable cash operating profit to increase from R144 million
to R183 million, which resulted in headline earnings to increase by 100% to R62 million (1H F2012: R31 million).
Attributable revenue was R66 million higher than in 1H F2012 mainly due to an increase in sales volumes (R38 million)
and a weaker Rand Dollar exchange rate (R38 million). On mine costs per saleable tonne decreased by 24% to
R158 compared to R209 in 1H F2012. This improvement can be attributed to the increase in saleable production
volumes and utilisation of the in-pit inventories.
Goedgevonden operational statistics
six months ended 31 December
2012 2011 % change
Total production sales (100%)
Saleable production Mt 4.41 2.80 58
Export thermal coal sales Mt 1.74 1.62 7
Eskom thermal coal sales Mt 2.28 1.88 21
Attributable production and sales (26%)
Saleable production Mt 1.15 0.73 58
Export thermal coal sales Mt 0.45 0.42 7
Eskom thermal coal sales Mt 0.59 0.49 20
Average received coal price
Export (FOB) $/tonne 93.20 100.37 (7)
Eskom (FOT) R/tonne 183.73 155.85 18
On mine saleable cost R/tonne 157.98 208.80 (24)
Cash operating profit
Total R million 702 555 26
Attributable (26%) R million 183 144 27
Headline earnings attributable to ARM R million 63 31 103
Attributable profit analysis
six months ended 31 December
2012 2011 % change
Cash operating profit 183 144 27
Less: Interest paid (43) (48) 10
Amortisation (47) (47)
Fair value adjustments (6) (5) (20)
Profit before tax 87 44 98
Less: Tax (24) (13) (85)
Headline earnings attributable to ARM 63 31 103
Participating Coal Business (PCB)
Saleable production was 4% higher than 1H F2012 largely due to an improvement in production performance and
efficiencies at the iMpunzi East CHPP.
Attributable revenue was R153 million higher than 1H F2012 due to higher export volumes (R94 million) and a
weaker Rand/Dollar exchange rate (R88 million). This was slightly offset by lower export prices and lower Eskom and
domestic sales volumes.
Total on mine cash costs were R7 million lower than 1H F2012 which together with the increase in saleable production
volumes resulted in a unit cost decrease of R27 per tonne equivalent to 8%.
Attributable cash operating profit increased from R152 million to R260 million and headline earnings of R42 million
reflected an increase of 195% from a loss of R43 million reflected in 1H F2012.
Participating Coal Business (PCB) operational statistics
six months ended 31 December
2012 2011 % change
Total production sales (100%)
Saleable production Mt 6.65 6.38 4
Export thermal coal sales Mt 5.29 4.67 13
Eskom thermal coal sales Mt 0.84 2.05 (59)
Local thermal coal sales Mt 0.22 0.47 (53)
Attributable production and sales (20.2%)
Saleable production Mt 1.34 1.29 4
Export thermal coal sales Mt 1.07 0.94 14
Eskom thermal coal sales Mt 0.17 0.41 (59)
Local thermal coal sales Mt 0.04 0.09 (56)
Average received coal price
Export (FOB) $/tonne 96.30 97.65 (1)
Eskom (FOT) R/tonne 179.13 93.51 92
Local (FOR) R/tonne 264.86 223.07 19
On mine saleable cost R/tonne 302.06 329.30 (8)
Cash operating profit
Total R million 1 286 750 71
Attributable (20.2%) R million 260 152 71
Headline earnings/(loss) attributable to ARM R million 42 (43)
Attributable profit analysis
six months ended 31 December
2012 2011 % change
Cash operating profit 260 152 71
Less: interest paid (60) (58) (3)
amortisation (115) (144) 20
fair value adjustments (28) (10) (180)
Profit/(loss) before tax 57 (60) 195
Less: Tax (15) 17 (188)
Headline earnings/(loss) attributable to ARM 42 (43)
ARM's economic interest in XCSA (PCB) as at 31 December 2012 remains at 20.2%. PCB consists of two mine
complexes 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
Lubambe
Project progress at Lubambe Copper Mine (previously Konkola North Project) is well advanced with most of the
major milestones having been met. Total project completion was determined as 90% at the end of December 2012.
In September 2012 the mine achieved one million fatality free shifts with well-established safety systems in place.
The 27-month construction plan for the concentrator plant was completed in 25 months and thus started two months
earlier than the base line plan. The plant started treating ore from the underground operations in October 2012 and
3 214 tonnes of copper in concentrate were produced by the end of December 2012. The first concentrate has been
toll smelted in terms of the off-take agreements and the first revenue from the sale of concentrate has been received
by the mine.
Mechanised development is progressing very well with ore drive development being ahead of schedule. Longitudinal
Room and Pillar (LRP) Stoping commenced in August 2012 and by the end of December 2012 four stopes had been
established. A lot of valuable practical experience regarding the mining of the ore body has been gained during a
very short period. Poor ground conditions are being experienced in places resulting in higher costs and lower advance
rates due to additional support requirements. Refurbishing of the No. 2 Vertical shaft is still scheduled for completion
by April 2013. All other outstanding project capital regarding outstanding underground and surface infrastructure are
on schedule for completion by the end of F2013. Project close out is to be finalised before the end of June 2013.
Production ramp-up to full production of 45 000 tonnes of contained copper is still expected to be reached by the end
of F2015.
Project expenditure is forecasted in nominal terms to be US$454 million (US$410 million in July 2010 terms) and in ZAR
terms is below budget due to the weaker exchange rate, as a large proportion of the capital equipment is purchased
in South Africa. All these costs will be capitalised and includes the cost of relocating about 205 informal settlement
houses built on potential mining subsidence areas as defined by Zambian Mining Legislation. Commencement of the
relocation infrastructure and house construction commenced in October 2012.
The mine's throughput design from both the South and East Limb ore bodies remains at 2.5 mtpa of ore at an average
mill head grade of 2.3% copper, resulting in the production of 45 000 tonnes of contained copper in concentrate per
annum for 28 years. All copper concentrate produced will be toll smelted and refined in Zambia.
AMEC E & C Services Inc (AMEC) signed an initial Mineral Resources Statement for Lubambe Copper Mine Extension
Area. The effective date being 14 February 2013 for a total ore resource of 105 million tonnes at 3.66% total copper
grade in-situ. This is comprised of 73 million tonnes at total copper grade in-situ of 3.60% in indicated category and
32 million tonnes at 3.79% total copper grade in-situ as inferred. ARM is busy with a feasibility study of this area and
expect completion by March 2014. Additional surface drilling is continuing in the Lubambe Extension Area and during
the first six months of the F2013 year six exploration drill rigs were deployed and a total of 10 535 metres were drilled
to enhance the confidence levels and provide the required study information regarding the resource. Further to the
drilling programme the analysis of the Aero Magnetic and Aero Electric surveys were done across the whole Mining
Lease area with the intention to identify further exploration target areas.
Kalumines
ARM and Vale have agreed to exit the Kalumines project and are in the process of negotiating an exit strategy with
Gecamines.
ARM Copper headline loss decreased to R21 million (1H F2012: R30 million loss).
ARM Exploration and New Business
ARM has undertaken a thorough review of the growth opportunities of its current joint venture assets. This undertaking
culminated in a Growth Strategy with two parts, ie (i) strong continued growth of the existing assets, pursued by the
existing joint venture operations and (ii) a new minerals business growth strategy to develop an expanded, diversified
portfolio of new mine development opportunities.
In order to manage and execute ARM's strategy, the Exploration and New Business Division was created and
mandated to identify, evaluate new early-stage, mineral business opportunities.
ARM's minimum requirement is that potential partners have successfully completed methodological target generation
and concept-driven exploration and have recorded discovery success. ARM will consider investing in such projects
or companies and would undertake further exploration, studies, evaluation and investments further down the mining
value chain.
Exploration and New Business is also tasked to identify merger and acquisition opportunities. Each project will be
assessed in terms of its sustainability and value and hence the potential contribution that it can make to the company's
overall growth strategy.
The agreement with Rovuma Resources Limited, a British Virgin Island registered Mozambican exploration company,
was signed in July 2011. Rovuma has been exploring in Mozambique since 2007 and numerous occurrences of
copper/zinc, nickel/copper/PGE, chromite/nickel and graphite mineralisation have been identified.
ARM agreed to continue with the option for the second year (commencing April 2012) and to fund exploration at a cost
of US$7 million per year. ARM will have exclusive rights to exercise options to purchase prospecting and/or mining
rights to the resources.
The prospective geological units have a strike extend of approximately 100 km and four target cluster areas have been
defined, each comprising numerous identified areas of base metal mineralisation. Three of the four clusters have
been drill tested during the 2012 field season. The complete suite of assay results are awaited from laboratories in
South Africa but initial results show further substantiation and have intersected and identified new occurrences, of
nickel, copper and zinc mineralisation.
In Zambia, ARM has undertaken reconnaissance exploration work on prospective areas for high grade manganese
mineralisation. Numerous targets have been identified and discussions with the rights holders have continued for a
possible joint venture and/or partnership.
The headline loss attributable to ARM for 1H 2013 is R36 million (1H F2012: R54 million loss).
Harmony Gold Mining Company Limited
Harmony reported a 16% increase in operating profits to R1.6 billion and a 28% rise in headline earnings per share to
158 cents per share for the quarter ended 31 December 2012 in comparison to the preceding quarter. The net profit
for the December 2012 quarter was R731 million; a 40% increase quarter on quarter.
The Harmony EBITDA for the quarter exceeded R1.4 billion and is their fourth consecutive quarter of increasing
EBITDA. Their improved results have been largely achieved by:
(i) improving underground grades;
(ii) a Rand gold price which at R479 801/kg was 9% higher quarter on quarter; and
(iii) decreased total cash operating costs impacted favourably by reduced Eskom summer power tariffs.
Harmony reported good progress in resolving the labour issues of its Kusasalethu mine but indicated that the mine
would remain closed until agreements were in place. Harmony has signed agreements on 14 February 2013 with
various trade unions representing the majority of all employees at the mine. This will allow for the mine to re-open in
a phased approach.
The completion of the R1.5 billion sale of the Evander Gold mine remains subject to the consent of the Minister of
Mineral Resources.
The Harmony board declared an interim dividend of 50 cents per share (1H F2012: 40 cents per share) payable on
11 March 2013. ARM will account for this dividend in its 2H F2013 results.
The ARM statement of financial position at 31 December 2012 reflects a marked-to-market investment in Harmony of
R4.7 billion which is based on a Harmony share price of R74.00 per share. Changes in the value of the investment
in Harmony are accounted for by ARM through the statement of comprehensive income, net of deferred capital
gains tax. Dividends are recognised in the ARM income statement on the last day of the registration following
dividend declaration.
Harmony's results for the quarter and six months ended 31 December 2012 can be viewed on Harmony's website at:
www.harmony.co.za
ARM owns 14.6% of Harmony's issued share capital.
Outlook
Global commodity markets and related sentiment are expected to continue to be volatile as sovereign risks particularly
in Europe and the USA are addressed. In this business environment ARM will enhance its key focus on areas which lie
within its ability to control, viz. unit operating costs, optimisation of capital allocation, efficient mining at its operations
and delivering on its growth projects. In addition, ARM will maintain its strong relationships with all stakeholders,
including labour.
While any recovery in Europe is expected to remain subdued at best, the economic outlook for eastern economies
remains positive.
A positive development since the end of the reporting period has been the recovery in iron ore, PGM and manganese
ore prices.
Review by independent auditors
The financial results for the six months ended 31 December 2012 have not been reviewed or audited by the Company's
registered auditors, Ernst & Young Inc.
Signed on behalf of the board
P T Motsepe M P Schmidt
Executive Chairman Chief Executive Officer
Johannesburg
26 February 2013
Group statement of financial position
as at 31 December 2012
Unaudited Audited
Six months ended Year ended
31 December 30 June
Restated*
2012 2011 2012
Note Rm Rm Rm
ASSETS
Non-current assets
Property, plant and equipment 19 936 17 133 18 707
Investment property 12 12 12
Intangible assets 185 198 191
Deferred tax asset 4 1 3
Loans and long-term receivables 266 195 221
Financial assets 134 67 74
Inventories 147 157 141
Investment in associate 1 449 1 306 1 354
Other investments 4 813 6 129 4 959
26 946 25 198 25 662
Current assets
Inventories 2 837 2 483 2 458
Trade and other receivables 4 323 3 898 3 606
Taxation 32 37 26
Cash and cash equivalents 3 2 971 2 825 3 564
10 163 9 243 9 654
Total assets 37 109 34 441 35 316
EQUITY AND LIABILITIES
Capital and reserves
Ordinary share capital 11 11 11
Share premium 3 990 3 896 3 937
Other reserves 519 1 562 571
Retained earnings 19 066 17 272 18 681
Equity attributable to equity holders of ARM 23 586 22 741 23 200
Non-controlling interest 1 315 1 155 1 205
Total equity 24 901 23 896 24 405
Non-current liabilities
Long-term borrowings 4 3 370 1 835 2 216
Deferred tax liabilities 4 029 3 885 3 777
Long-term provisions 928 652 892
8 327 6 372 6 885
Current liabilities
Trade and other payables 2 331 2 377 2 318
Short-term provisions 308 201 463
Taxation 231 368 224
Overdrafts and short-term borrowings 4 1 011 1 227 1 021
3 881 4 173 4 026
Total equity and liabilities 37 109 34 441 35 316
* Restated after early adoption of IFRIC 20: Accounting for stripping costs in the production phase of a surface mine.
(Refer note 2)
Group income statement
for the six months ended 31 December 2012
Unaudited Audited
Six months ended Year ended
31 December 30 June
Restated**
2012 2011 2012
Note Rm Rm Rm
Revenue 9 145 9 093 18 142
Sales 8 845 8 721 17 530
Cost of sales (6 317) (5 365) (11 463)
Gross profit 2 528 3 356 6 067
Other operating income 398 545 859
Other operating expenses (865) (743) (1 710)
Profit from operations before exceptional items 2 061 3 158 5 216
Income from investments 123 141 279
Finance costs (108) (93) (232)
Income/(Loss) from associate* 42 (6) 11
Profit before taxation and exceptional items 2 118 3 200 5 274
Exceptional items 5 2 (70)
Profit before taxation 2 118 3 202 5 204
Taxation 7 (628) (1 081) (1 633)
Profit for the period 1 490 2 121 3 571
Attributable to:
Non-controlling interest 84 85 133
Equity holders of ARM 1 406 2 036 3 438
1 490 2 121 3 571
Additional information
Headline earnings (R million) 6 1 406 1 997 3 451
Headline earnings per share (cents) 654 937 1 615
Basic earnings per share (cents) 654 955 1 609
Fully diluted headline earnings per share (cents) 650 931 1 604
Fully diluted basic earnings per share (cents) 650 949 1 598
Number of shares in issue at end of period
(thousands) 215 532 213 751 214 852
Weighted average number of shares in issue
(thousands) 215 122 213 233 213 689
Weighted average number of shares used
in calculating fully diluted earnings
per share (thousands) 216 424 214 579 215 118
Net asset value per share (cents) 10 943 10 639 10 798
EBITDA (R million) 2 875 3 731 6 531
* Exceptional gain included in income/(loss)
from associate (R million) 37 38
Dividend declared after year end (cents) 475
** Restated after early adoption of IFRIC 20: Accounting for stripping costs in the production phase of a surface mine.
(Refer note 2)
Group statement of comprehensive income
for the six months ended 31 December 2012
Total
Available- share- Non-
for-sale Retained holders controlling
reserve Other earnings of ARM interest Total
Rm Rm Rm Rm Rm Rm
Six months ended
31 December 2012 (Unaudited)
Profit for the period 1 406 1 406 84 1 490
Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss:
Net impact of revaluation of listed investment (129) (129) (129)
Revaluation of listed investment (159) (159) (159)
Deferred tax on revaluation of
listed investment 30 30 30
Foreign exchange movements on loans
to a foreign Group entity 20 20 20
Deferred tax on foreign exchange
movements on loans to a foreign
Group entity (5) (5) (5)
Cash flow hedge reserve 1 1 1
Foreign currency translation 29 29 29
Total other comprehensive income (129) 45 (84) (84)
Total comprehensive income
for the period (129) 45 1 406 1 322 84 1 406
Six months ended
31 December 2011 restated* (Unaudited)
Profit for the period 2 036 2 036 85 2 121
Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss:
Net impact of revaluation of listed investment 276 276 276
Revaluation of listed investment 321 321 321
Deferred tax on revaluation of
listed investment (45) (45) (45)
Foreign exchange movements on loans
to a foreign Group entity 110 110 110
Deferred tax on foreign exchange
movements on loans to a foreign
Group entity (18) (18) (18)
Cash flow hedge reserve (35) (35) (35)
Foreign currency translation 20 20 20
Other 2 (2)
Total other comprehensive income 276 79 (2) 353 353
Total comprehensive income
for the period 276 79 2 034 2 389 85 2 474
Total
Available- share- Non-
for-sale Retained holders controlling
reserve Other earnings of ARM interest Total
Rm Rm Rm Rm Rm Rm
Year ended 30 June 2012 (Audited)
Profit for the year 3 438 3 438 133 3 571
Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss:
Net impact of revaluation of listed investment (775) (775) (775)
Revaluation of listed investment (856) (856) (856)
Deferred tax on revaluation of
listed investment 81 81 81
Foreign exchange movements on loans
to a foreign Group entity 117 117 117
Deferred tax on foreign exchange
movements on loans to a foreign
Group entity (20) (20) (20)
Cash flow hedge reserve (11) (11) (11)
Foreign currency translation 16 16 16
Total other comprehensive income (775) 102 (673) (673)
Total comprehensive income
for the year (775) 102 3 438 2 765 133 2 898
* Restated after early adoption of IFRIC 20: Accounting for stripping costs in the production phase of a surface mine.
(Refer note 2)
Group statement of changes in equity
for the six months ended 31 December 2012
Share Total
capital Available- share- Non-
and for-sale Retained holders controlling
premium reserve Other* earnings of ARM interest Total
Rm Rm Rm Rm Rm Rm Rm
Six months ended
31 December 2012 (Unaudited)
Balance at 30 June 2012 3 948 139 432 18 681 23 200 1 205 24 405
Profit for the period 1 406 1 406 84 1 490
Other comprehensive income (129) 45 (84) (84)
Total comprehensive income
for the period (129) 45 1 406 1 322 84 1 406
Share-based payments 63 63 63
Share options exercised 22 22 22
Bonus and performance shares
issued to employees 31 (31)
Dividend paid (1 021) (1 021) (1 021)
Subscription by minority
shareholder in Lubambe 26 26
Balance at 31 December 2012 4 001 10 509 19 066 23 586 1 315 24 901
Six months ended
31 December 2011 restated*
(Unaudited)
Balance at 30 June 2011 3 851 914 287 16 160 21 212 958 22 170
Profit for the period 2 036 2 036 85 2 121
Other comprehensive income 276 79 (2) 353 353
Total comprehensive income
for the period 276 79 2 034 2 389 85 2 474
Share-based payments 52 52 52
Share options exercised 10 10 10
Bonus and performance shares
issued to employees 46 (46)
Dividends paid (959) (959) (959)
Part disposal of interest in Lubambe 37 37 112 149
Balance at 31 December 2011 3 907 1 190 372 17 272 22 741 1 155 23 896
Year ended
30 June 2012 (Audited)
Balance at
30 June 2011 (restated) 3 851 914 287 16 160 21 212 958 22 170
Profit for the year 3 438 3 438 133 3 571
Other comprehensive income (775) 102 (673) (673)
Total comprehensive income
for the year (775) 102 3 438 2 765 133 2 898
Share-based payments 94 94 94
Share options exercised 50 50 50
Bonus and performance shares
issued to employees 47 (47)
Dividends paid (959) (959) (959)
Part disposal of interest in Lubambe 38 38 114 152
Other (4) 4
Balance at 30 June 2012 3 948 139 432 18 681 23 200 1 205 24 405
* Restated after early adoption of IFRIC 20: Accounting for stripping costs in the production phase of a surface mine.
(Refer note 2)
Group statement of cash flows
for the six months ended 31 December 2012
Unaudited Audited
Six months ended Year ended
31 December 30 June
Restated*
2012 2011 2012
Note Rm Rm Rm
CASH FLOW FROM OPERATING ACTIVITIES
Cash receipts from customers 8 540 8 487 17 883
Cash paid to suppliers and employees (6 875) (5 814) (11 914)
Cash generated from operations 9 1 665 2 673 5 969
Interest received 89 95 214
Interest paid (54) (36) (106)
Dividends received 32 38 64
Dividend paid (1 021) (959) (959)
Taxation paid (350) (631) (1 294)
Net cash inflow from operating activities 361 1 180 3 888
CASH FLOW FROM INVESTING ACTIVITIES
Additions to property, plant and equipment
to maintain operations (778) (419) (1 180)
Additions to property, plant and equipment
to expand operations (1 272) (1 561) (2 866)
Proceeds on disposal of property,
plant and equipment 19 1 1
Investment in associate (53) (16) (23)
Investments in Richards Bay Coal Terminal (13) (9) (17)
Decrease/(Increase) in loans and
long-term receivables 7 (10) 8
Net cash outflow from investing activities (2 090) (2 014) (4 077)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds on exercise of share options 22 10 50
Proceeds on subscription by minority shareholder
in Lubambe 26 86
Long-term borrowings raised 901 165 501
Long-term borrowings repaid (110) (98) (294)
Increase/(Decrease) in short-term borrowings 143 (110) (78)
Net cash inflow from financing activities 982 53 179
Net decrease in cash and cash equivalents (747) (781) (10)
Cash and cash equivalents at beginning of period 3 227 3 227 3 227
Foreign currency translation on cash balances 6 19 10
Cash and cash equivalents at end of period 3 2 486 2 465 3 227
Cash generated from operations
per share (cents) 774 1 254 2 794
* Restated after early adoption of IFRIC 20: Accounting for stripping costs in the production phase of a surface mine.
(Refer note 2)
Notes to the financial statements
for the six months ended 31 December 2012
1 STATEMENT OF COMPLIANCE
The consolidated Group financial statements for the half-year ended 31 December 2012 have been prepared in
accordance with International Financial Reporting Standards (IFRS) of the International Accounting Standards Board
(IASB), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting
Pronouncements as issued by the Financial Reporting Standards Council, requirements of the South African Companies
Act, 2008 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 2012 have been prepared on the
historical cost basis, except for certain financial instruments, which includes listed investments, 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 financial statements for the period have been prepared under the supervision of the Financial Director,
Mr M Arnold CA(SA).
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 2012.
Standard Subject
IAS 1 Presentation of other comprehensive income (Amendment)
IAS 12 Deferred tax Recovery of an underlying asset (Amendment)
The adoption of these amendments only had a disclosure effect on the Group Statement of Comprehensive Income.
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
IFRS 1 First-time Adoption of International Financial Reporting Standards (Amendment) 1 January 2013
IFRS 9 Financial instruments: Classification and measurement 1 January 2015
IFRS 10 Consolidated financial statements 1 January 2013
IFRS 11 Joint Arrangements 1 January 2013
IFRS 12 Disclosure of interest in other entities 1 January 2013
IFRS 13 Fair value measurement 1 January 2013
IAS 1 Presentation of Financial statements (Amendment) 1 January 2013
IAS 12 Income taxes Recovery of underlying assets (Amendment) 1 January 2012
IAS 16 Property, Plant and Equipment (Amendment) 1 January 2013
IAS 19 Employee benefits (Amendment) 1 January 2013
IAS 27 Separate financial statements (as revised in 2011) 1 January 2013
IAS 28 Investment in associate and Joint Ventures (as revised in 2011) 1 January 2013
IAS 32 Financial Instruments: Presentation (Amendment) 1 January 2014
IAS 34 Interim Financial Reporting (Amendment) 1 January 2013
The Group does not intend early adopting any of the above amendments, standards or interpretations.
The Group has early adopted IAS 1 Presentation of Financial statements, which was amended as a result of the
IASB's Annual improvement project in May 2012. The amendment clarified the requirements for certain disclosures and
comparative information and as a result of this no notes are presented with regards to the third statement of financial
position.
The Group has early adopted IFRIC 20 Accounting for stripping costs in the production phase of a surface mine.
This interpretation is effective for annual periods commencing on or after 1 January 2013, which would ordinarily mean
it would apply to the Group from the year ending 30 June 2013, however the Group has elected to early adopt this
interpretation and apply it for the year ended 30 June 2012. In accordance with the transitional provision of the interpretation,
the requirements were applied retrospectively to production stripping costs incurred on or after 1 July 2010 (commencement
of the comparative financial period). The interpretation now clarifies that an entity can recognise production stripping
costs of a surface mining operation as part of a stripping activity asset if certain requirements as per the IFRIC 20 are met.
Refer to note 2 for details of the financial effect of early adoption of this interpretation.
2 FINANCIAL EFFECT OF EARLY ADOPTION OF IFRIC 20
ACCOUNTING FOR STRIPPING COSTS IN THE PRODUCTION PHASE OF A SURFACE MINE
As stated in the 30 June 2012 financial results, ARM previously expensed all production phase stripping costs as
incurred and did not capitalise any as deferred stripping assets. Accordingly, the adoption of IFRIC 20 did not have any
impact on the opening balances in respect of the financial year ended 30 June 2011. The effect on the financial year ended
30 June 2011 was disclosed in the 30 June 2012 Integrated Annual report.
Adopting IFRIC 20 had the following impact on the Group's profit before income taxes, net profit after income taxes, and
the statement of financial position as at and for the period ended 31 December 2011:
Income statement for the six months ended Pre-tax Tax effect Post-tax
31 December 2011 Rm Rm Rm
Increase due to the reversal of certain production
phase stripping costs previously expensed 112 (31) 81
Change in inventory valuation as a result of capitalised
stripping costs changing the value of cost per tonne (16) 4 (12)
Decrease due to depreciation of the stripping activity asset (22) 6 (16)
Net increase in profit 74 (21) 53
Statement of financial position Effect
as at 31 December 2011 of adoption
of IFRIC 20
full year to
June 2011 as Six months to Restated
As previously reported in December after adoption
reported June 2012 2011 of IFRIC 20
Rm Rm Rm Rm
Property, plant and equipment 16 959 84 90 17 133
Inventories 2 506 (7) (16) 2 483
Deferred taxation 3 842 22 21 3 885
Retained earnings (17 164) (55) (53) (17 272)
Impact on the 31 December 2012 financial information
Adopting IFRIC 20 had the following impact on the Group's profit before income taxes, net profit after income taxes, and
the statement of financial position as at and for the current period ended 31 December 2012:
Income statement for the six months ended Pre-tax Tax effect Post-tax
31 December 2012 Rm Rm Rm
Increase due to the reversal of certain production phase
stripping costs previously expensed 25 (7) 18
Change in inventory valuation as a result of capitalised
stripping costs changing the value of cost per tonne (11) 3 (8)
Decrease due to depreciation of the stripping activity asset (46) 13 (33)
Net decrease in profit (32) 9 (23)
Statement of financial position Effect
as at 31 December 2012 of adoption
of IFRIC 20
Rm
Property, plant and equipment (21)
Inventories (11)
Deferred taxation 9
Retained earnings (23)
Effect on per share information.
The effect of adopting IFRIC 20 on earnings per share and headline earnings per share for the six months ending
31 December 2011 and 2012 was as follows:
2012 2011
cents cents
Basic earnings per share (decrease)/increase (11) 25
Headline earnings per share (decrease)/increase (11) 25
Diluted basic earnings per share (decrease)/increase (11) 25
Diluted headline earnings per share (decrease)/increase (11) 25
Unaudited Audited
Six months ended Year ended
Restated
2012 2011 2012
Rm Rm Rm
3 CASH AND CASH EQUIVALENTS
African Rainbow Minerals Limited 73 174 161
ARM Coal Proprietary Limited 64
ARM Finance Company SA 106 107
Assmang Limited 1 332 1 357 2 160
ARM Platinum Proprietary Limited 188 291 152
Kingfisher Insurance Co Limited 150 138 146
Nkomati 60 46 43
Two Rivers Platinum Proprietary Limited 9 9 2
Vale/ARM joint venture 191 86 60
Venture Building Trust Proprietary Limited 4 6 4
Restricted cash 794 718 729
Total as per statement of financial position 2 971 2 825 3 564
Less: Overdrafts (refer note 4) 485 360 337
Total as per statement of cash flows 2 486 2 465 3 227
4 BORROWINGS
Long-term borrowings are held as follows:
African Rainbow Minerals Limited 814
ARM Finance Company SA 608 277
ARM Coal Proprietary Limited 1 513 1 676 1 604
ARM Platinum Proprietary Limited 1
Two Rivers Platinum Proprietary Limited 132 142 140
Vale/ARM joint venture 303 16 195
3 370 1 835 2 216
Short-term borrowings are held as follows:
African Rainbow Minerals Limited 203 561 415
Anglo Platinum Limited (partner loan) 114 114 114
ARM Coal Proprietary Limited 62 51 14
Two Rivers Platinum Proprietary Limited
Bank loans and overdraft 99 93 93
Two Rivers Platinum Proprietary Limited
Impala Platinum Limited 48 48 48
526 867 684
Overdrafts are held as follows:
ARM Platinum Proprietary Limited 72 5 57
Two Rivers Platinum Proprietary Limited
Bank loans and overdraft 376 316 245
Other 37 39 35
485 360 337
Overdrafts and short-term borrowings 1 011 1 227 1 021
Total borrowings 4 381 3 062 3 237
Interest of R8 million was capitalised
for the six months ended 31 December 2012
(Six months to 31 December 2011: R3 million,
Full year to 30 June 2012: R3 million)
Unaudited Audited
Six months ended Year ended
31 December 30 June
Restated
2012 2011 2012
Rm Rm Rm
5 EXCEPTIONAL ITEMS
Profit/(Loss) on sale of property, plant and equipment 1 (2)
Reversal/(Impairments) of property, plant and equipment 1 (68)
Exceptional items per income statement 2 (70)
Profit on sale of property, plant and equipment
in Associate ARM Coal 52 52
Total exceptional items 54 (18)
Taxation accounted for in associate (15) (14)
Taxation 19
Total amount adjusted for headline earnings 39 (13)
6 HEADLINE EARNINGS
Basic earnings per income statement 1 406 2 036 3 438
(Reversal)/Impairment of property, plant and equipment (1) 68
(Profit)/Loss on sale of property, plant and equipment (1) 2
Profit on sale of property, plant and equipment
in Associate ARM Coal (52) (52)
1 406 1 982 3 456
Taxation 15 (5)
Headline earnings 1 406 1 997 3 451
7 TAXATION
South African normal tax current year 355 718 1 184
mining 290 649 1 043
non-mining 65 69 141
prior year 69
Deferred tax current year 273 313 329
Foreign taxes 1
Secondary Tax on Companies 50 50
628 1 081 1 633
Unaudited Audited
Six months ended Year ended
31 December 30 June
Restated
2012 2011 2012
Rm Rm Rm
8 MINERAL ROYALTY TAXATION
Included in other operating expenses are amounts
relating to ARM's attributable portion of mineral royalty
taxes paid.
Assmang Limited 119 187 438
ARM Mining Consortium Limited 3 3 3
ARM Coal Proprietary Limited 1 1 1
Nkomati 4 4 7
Two Rivers Platinum Proprietary Limited 44 27 43
Total 171 222 492
9 CASH GENERATED FROM OPERATIONS
Cash generated from operations before
working capital movement 3 192 3 805 7 158
Working capital changes (1 527) (1 132) (1 189)
Movement in receivables (790) (784) (528)
Movement in payables and provisions (358) (34) (286)
Movement in inventories (379) (314) (375)
Cash generated from operations (per statement
of cash flows) 1 665 2 673 5 969
10 COMMITMENTS AND CONTINGENT LIABILITIES
Commitments in respect of future capital expenditure
which will be funded from operating cash flows and
by utilising debt facilities at entity and corporate levels,
are summarised below:
Approved by Directors
contracted for 2 869 4 143 3 580
not contracted for 342 536 419
Total commitments 3 211 4 679 3 999
Contingent liabilities
Shareholders are advised that there have been no significant changes to the contingent liabilities of the Group as disclosed
in the 30 June 2012 annual report.
PRIMARY SEGMENTAL INFORMATION
ARM Corporate
ARM ARM ARM ARM Explora- and
Platinum Ferrous Coal Copper tion other* Gold Total
Rm Rm Rm Rm Rm Rm Rm Rm
11 Six months ended
31 December 2012
(Unaudited)
Sales 3 107 5 273 465 8 845
Cost of sales (2 428) (3 548) (361) 20 (6 317)
Other operating income 24 105 23 2 244 398
Other operating expenses (141) (396) (1) (29) (36) (262) (865)
Segment result 562 1 434 126 (27) (36) 2 2 061
Income from investments 8 57 26 32 123
Finance cost (20) (9) (39) (36) (104)
Finance cost Impala
Platinum Limited:
Shareholders loan
Two Rivers (2) (2)
Finance cost ARM:
Shareholders loan
Two Rivers (2) (2)
Income from associate 42 42
Taxation (154) (421) (24) (29) (628)
Non-controlling interest (93) 6 3 (84)
Contribution to earnings s 299 1 061 105 (21) (36) (34) 32 1 406
Contribution to headline
earnings 299 1 061 105 (21) (36) (34) 32 1 406
Other information:
Segment assets,
including investment
in associate 9 516 15 139 3 757 2 775 1 213 4 709 37 109
Investment in associate 1 449 1 449
Segment liabilities 1 795 1 443 1 791 554 2 365 7 948
Unallocated deferred
taxation and taxation 4 260
Consolidated total
liabilities 12 208
Cash generated
from operations 265 1 281 162 (54) (36) 47 1 665
Cash in/(out) flow from
operating activities 203 1 129 163 (55) (36) (1 075) 32 361
Cash outflow from
investing activities (334) (1 200) (72) (479) (5) (2 090)
Cash (out)/in flow from
financing activities (54) (23) 121 938 982
Capital expenditure 401 1 115 13 486 4 2 019
Amortisation and
depreciation 328 430 52 2 2 814
EBITDA 890 1 864 178 (25) (36) 4 2 875
* Corporate, other companies and consolidation adjustments.
ARM Corporate
ARM ARM ARM ARM Explora- and
Platinum Ferrous Coal Copper** tion other* Gold Total
Rm Rm Rm Rm Rm Rm Rm Rm
Six months ended
31 December 2011
(Unaudited) Restated
Sales 2 491 5 830 400 8 721
Cost of sales (2 059) (3 018) (310) 22 (5 365)
Other operating income 37 325 6 177 545
Other operating expenses (198) (354) (1) (18) (54) (118) (743)
Segment result 271 2 783 95 (18) (54) 81 3 158
Income from investments 14 46 43 38 141
Finance cost (22) (6) (51) 8 (71)
Finance cost Impala
Platinum Limited:
Shareholders loan
Two Rivers (2) (2)
Finance cost ARM:
Shareholders loan
Two Rivers (3) (3)
Finance cost:
Shareholders loan ARM (17) (17)
Loss from associate*** (6) (6)
Exceptional items 1 1 2
Taxation (84) (849) (13) (3) (132) (1 081)
Non-controlling interest (87) 8 (6) (85)
Contribution to earnings 88 1 975 25 (30) (54) (6) 38 2 036
Contribution to headline
earnings 87 1 974 (12) (30) (54) (6) 38 1 997
Other information:
Segment assets, including
investment in associate 8 780 13 505 3 531 1 364 1 216 6 045 34 441
Investment in associate 1 306 1 306
Segment liabilities 1 849 1 236 1 880 166 1 161 6 292
Unallocated deferred
taxation and taxation 4 253
Consolidated total
liabilities 10 545
Cash generated
from operations 552 1 948 177 (52) (54) 102 2 673
Cash in/(out) flow from
operating activities 526 1 436 182 (49) (54) (899) 38 1 180
Cash outflow from
investing activities (444) (1 035) (60) (473) (2) (2 014)
Cash (out)/in flow from
financing activities (85) (13) (125) 102 174 53
Capital expenditure 455 977 74 479 2 1 987
Amortisation and
depreciation 257 259 52 2 3 573
EBITDA 528 3 042 147 (16) (54) 84 3 731
* Corporate, other companies and consolidation adjustments.
** With effect from 1 July 2011 ARM Copper comprises the development of the Lubambe Copper Mine and copper
exploration cost in Zambia and the DRC.
*** Exceptional gain included in loss from associate R37 million
ARM Corporate
ARM ARM ARM ARM Explora- and
Platinum Ferrous Coal Copper tion other* Gold Total
Rm Rm Rm Rm Rm Rm Rm Rm
Year ended
30 June 2012
(Audited)
Sales 4 914 11 844 772 17 530
Cost of sales (4 261) (6 690) (557) 45 (11 463)
Other operating income 33 435 23 368 859
Other operating expenses (355) (893) (1) (33) (113) (315) (1 710)
Segment result 331 4 696 214 (10) (113) 98 5 216
Income from investments 33 124 58 64 279
Finance cost (47) (14) (103) (34) (26) (224)
Finance cost Impala
Platinum Limited:
Shareholders loan
Two Rivers (4) (4)
Finance cost ARM:
Shareholders loan
Two Rivers (4) (4)
Income from associate 11 11
Exceptional items 1 (71) (70)
Taxation (110) (1 292) (32) (5) (194) (1 633)
Non-controlling interest (139) 18 (12) (133)
Contribution to earnings 61 3 443 90 (31) (113) (76) 64 3 438
Contribution to headline
earnings 60 3 495 52 (31) (113) (76) 64 3 451
Other information:
Segment assets,
including investment
in associate 8 821 14 751 3 628 2 000 1 248 4 868 35 316
Investment in associate 1 354 1 354
Segment liabilities 1 828 1 548 1 855 427 1 252 6 910
Unallocated deferred
taxation and taxation 4 001
Consolidated total
liabilities 10 911
Cash generated
from operations 742 4 877 367 (48) (113) 144 5 969
Cash in/(out) flow from
operating activities 651 3 879 368 (51) (113) (910) 64 3 888
Cash outflow from
investing activities (828) (2 179) (108) (959) (3) (4 077)
Cash (out)/in flow from
financing activities (78) (2) (269) 191 337 179
Capital expenditure 928 2 171 151 1 065 6 4 321
Amortisation and
depreciation 521 677 109 4 4 1 315
Impairment (1) 69 68
EBITDA 852 5 373 323 (6) (113) 102 6 531
* Corporate, other companies and consolidation adjustments.
Additional information
The ARM platinum segment is analysed further into Nkomati, Two Rivers Platinum Proprietary Limited and ARM Mining
Consortium Limited which includes 50% of the Modikwa Platinum Mine.
ARM
Two Rivers Modikwa Nkomati Platinum
Platinum Rm Rm Rm Rm
Six months ended
31 December 2012 (Unaudited)
Sales 1 407 640 1 060 3 107
Cost of sales (1 098) (534) (796) (2 428)
Other operating income 15 6 3 24
Other operating expenses (53) (25) (63) (141)
Segment result 271 87 204 562
Income from investments 2 3 3 8
Finance cost (18) (2) (20)
Finance cost Impala Platinum Limited:
Shareholders loan Two Rivers (2) (2)
Finance cost ARM:
Shareholders loan Two Rivers (2) (2)
Taxation (71) (25) (58) (154)
Non-controlling interest (82) (11) (93)
Contribution to basic earnings 98 54 147 299
Contribution to headline earnings 98 54 147 299
Other information:
Segment assets 3 721 2 942 2 853 9 516
Segment liabilities 1 023 556 216 1 795
Cash inflow from operating activities 129 4 70 203
Cash outflow from investing activities (200) (85) (49) (334)
Cash outflow from financing activities (54) (54)
Capital expenditure 266 86 49 401
Amortisation and depreciation 165 38 125 328
EBITDA 436 125 329 890
ARM
Two Rivers Modikwa Nkomati Platinum
Platinum Rm Rm Rm Rm
Six months ended
31 December 2011 (Unaudited)
Sales 1 200 599 692 2 491
Cost of sales (915) (460) (684) (2 059)
Other operating income 9 28 37
Other operating expenses (36) (25) (137) (198)
Segment result 258 114 (101) 271
Income from investments 2 8 4 14
Finance cost (20) (1) (1) (22)
Finance cost Impala Platinum Limited:
Shareholders loan Two Rivers (2) (2)
Finance cost ARM:
Shareholders loan Two Rivers (3) (3)
Exceptional items 1 1
Taxation (75) (32) 23 (84)
Non-controlling interest (72) (15) (87)
Contribution to basic earnings 88 74 (74) 88
Contribution to headline earnings 88 74 (75) 87
Other information:
Segment assets 3 207 2 997 2 576 8 780
Segment liabilities 893 736 220 1 849
Cash inflow from operating activities 291 150 85 526
Cash outflow from investing activities (110) (122) (212) (444)
Cash outflow from financing activities (72) (10) (3) (85)
Capital expenditure 164 123 168 455
Amortisation and depreciation 127 45 85 257
EBITDA 385 159 (16) 528
Additional information
Attribut-
Pro forma analysis Iron ore Manganese Chrome Ferrous able to
of the Ferrous segment division division division total ARM
on a 100% basis Rm Rm Rm Rm Rm
11 Six months ended
31 December 2012 (Unaudited)
Sales 6 111 3 449 985 10 545 5 273
Other operating income 266 104 68 438 105
Other operating expenses (587) (216) (217) (1 020) (396)
Operating profit/(loss) 2 361 543 (38) 2 866 1 434
Contribution to earnings 1 731 412 (21) 2 122 1 061
Contribution to headline earnings 1 731 411 (20) 2 122 1 061
Other information:
Segment assets 20 033 9 708 1 314 31 055 15 139
Segment liabilities 5 118 2 320 604 8 042 1 443
Cash in/(out) flow from
operating activities 391* 559 (191) 759 1 129
Cash outflow from investing activities (1 693) (409) (298) (2 400) (1 200)
Cash (out)/in flow from
financing activities (414) (62) 476
Capital expenditure 1 610 651 61 2 322 1 115
Amortisation and depreciation 553 247 77 877 430
EBITDA 2 914 790 39 3 743 1 864
Six months ended
31 December 2011 (Unaudited)
Sales 7 517 3 181 962 11 660 5 830
Other operating income 468 330 53 851 325
Other operating expenses (645) (165) (99) (909) (354)
Operating profit/(loss) 4 499 1 068 (1) 5 566 2 783
Contribution to earnings 3 126 834 (10) 3 950 1 975
Contribution to headline earnings 3 126 833 (10) 3 949 1 974
Other information:
Segment assets 17 514 8 699 1 430 27 643 13 505
Segment liabilities 4 540 2 028 616 7 184 1 236
Cash in/(out) flow from
operating activities 1 510* 571 (210) 1 871 1 436
Cash outflow from investing activities (1 684) (218) (167) (2 069) (1 035)
Cash outflow from financing activities (26) (26) (13)
Capital expenditure 1 644 265 128 2 037 977
Amortisation and depreciation 337 126 71 534 259
EBITDA 4 836 1 194 70 6 100 3 042
* Dividend paid amounting to R1.5 billion (2011: R1 billion) included in cash flows from operating activities
Shareholder information
Issued share capital at 31 December 2012 215 532 020 shares
Market capitalisation at 31 December 2012 ZAR40.9 billion
Market capitalisation at 31 December 2012 US$4.84 billion
Closing share price at 31 December 2012 R189.90
Six-month high (1 July 2012 31 December 2012) R192.69
Six-month low (1 July 2012 31 December 2012) R139.02
Average daily volume traded for the six months 421 707 shares
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
Email: jongisa.klaas@arm.co.za
Corne Dippenaar
Corporate Development
Telephone: +27 11 779 1478
Fax: +27 11 779 1312
Email: corne.dippenaar@arm.co.za
Company secretary
Alyson D'Oyley, BCom., LLB., LLM.
Telephone: +27 11 779 1300
Fax: +27 11 779 1318
Email: alyson.doyley@arm.co.za
Contact details and administration
African Rainbow Minerals Limited
Incorporated in the Republic of South Africa
Registration number 1933/004580/06
JSE share code: ARI
ADR ticker symbol: AFRBY
ISIN code: ZAE 000054045
("ARM" or the "Company")
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
Email: 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
Email: web.queries@computershare.co.za
Website: http://www.computershare.co.za
Sponsor
Deutsche Securities (SA) (Pty) Limited
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
HIV & 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.
Directors
PT Motsepe (Executive Chairman) WM Gule
MP Schmidt (Chief Executive Officer) MW King*
F Abbott* AK Maditsi*
M Arnold Dr RV Simelane*
Dr MMM Bakane-Tuoane* ZB Swanepoel*
TA Boardman* AJ Wilkens
AD Botha*
JA Chissano (Mozambican)*
* Independent Non-executive
www.arm.co.za
Date: 26/02/2013 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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