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African Rainbow Minerals has suspended all mining activity at its unprofitable Bokoni platinum mine while it refines a scaled-down development proposal. The decision comes amid sharply declining earnings and a substantial impairment charge, underscoring the mine's failure to deliver expected returns.

ARM announced a 2.2-billion-rand impairment for Bokoni, attributing the write-down to delays in ramping up operations and a shift in mining methodology. This loss dragged the company's basic earnings for the year ending 30 June to just 330 million rand, down drastically from 3.1 billion rand the previous year. Headline earnings, which exclude one-off items such as impairments, slumped to 2.695 billion rand from 5.08 billion rand. These declines were further compounded by subdued iron ore and coal prices, which weighed on ARM's diversified mining portfolio.

ARM acquired Bokoni for 3.5 billion rand in 2022 from Anglo American and Atlatsa Resources Corporation. The mine had been under care and maintenance since 2017 due to persistent losses when the acquisition took place. Initially, ARM pursued an“early ounces” strategy, operating through a 60,000-tonne-per-month concentrator. Plans for a large-scale expansion to 240,000 tonnes per month were deferred in response to a collapse in platinum group metal prices in 2023, preventing the operation from achieving necessary economies of scale.

While production rose 62 per cent to 45,579 ounces of platinum group metal concentrate, cash costs escalated 48 per cent to US$2,051 per ounce-eroding profitability and compelling ARM to halt operations by the end of June.

ARM has pivoted to focus on further ore reserve development and is conducting a feasibility study for a reduced-scale operation aiming at 120,000 tonnes per month. This study is expected to conclude in early 2026.

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Reflecting on this shift, ARM's management said it will now“advance capital development of the larger mine in a way that ensures its long-term sustainability,” expressing confidence in unlocking value from Bokoni's resource base while exercising financial discipline amid ongoing platinum price uncertainty.

Given the headline slump, which amounted to a 47 per cent year-on-year decline, the company's share price fell by roughly 7 per cent on the day of the results announcement. Nonetheless, ARM ended the financial year with a healthy cash balance of 6.61 billion rand, down modestly from 7.2 billion the year before. The company also declared a final dividend of R6 per share, compared with R9 in the prior year.

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