African Rainbow Minerals (ARM) said on Friday it had delayed plans to ramp up production at its Bokoni mine due to low platinum group metals (PGM) prices, Reuters reported. Earlier, the company reported a 43% drop in half-year profit.
Overall earnings at African Rainbow Minerals fell to 2.96 billion rand ($158.5 million) in the six months to December 2023 from 5.17 billion rand previously, as lower thermal coal and PGM prices hit revenue.
African Rainbow Minerals has cut its interim dividend to 6 rand per share from 14 rand previously.
As part of its plan to expand PGM production, African Rainbow Minerals acquired the Bokoni mine in South Africa from Anglo American Platinum and Atlatsa Resources in 2022.
The Bokoni mine, which was maintained and maintained by the previous owner in 2017, resumed production in November 2023, with plans to expand production further.
However, PGM prices have fallen sharply over the past year due to weak Chinese demand and an uncertain global economic outlook, forcing South African miners to suspend projects and cut costs. South African miners account for more than 70 percent of global production.
African Rainbow Minerals said the feasibility study for the phased development of Bokoni had been delayed "due to low commodity prices and uncertain near-term prospects".
African Rainbow Minerals said palladium and rhodium prices fell 42 per cent and 70 per cent, respectively, during the period under review, resulting in a 40 per cent decline in the average realised rand price of its platinum group metals.
African Rainbow Minerals said its immediate priority was to save cash while using existing infrastructure to ramp up production in phases from its current capacity of 60,000 tonnes of ore per month.
