Wrap Text
Provisional Results for the year ended 30 June 2013
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")
PROVISIONAL RESULTS
FOR THE YEAR
ENDED 30 JUNE 2013
Shareholder information
Issued share capital at 30 June 2013 215 624 972 shares
Market capitalisation at 30 June 2013 ZAR32.3 billion
Market capitalisation at 30 June 2013 US$3.3 billion
Closing share price at 30 June 2013 R149.76
12 month high (1 July 2012 - 30 June 2013) R208.84
12 month low (1 July 2012 - 30 June 2013) R139.02
Average daily volume traded for the 12 months 453 829 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
E-mail: jongisa.klaas@arm.co.za
Corné 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, LL.B., LL.M.
Telephone: +27 11 779 1480
Fax: +27 11 779 1318
E-mail: alyson.doyley@arm.co.za
Salient features
- Headline earnings increased 8% to R3.74 billion (F2012: R3.45 billion). The headline
earnings per share were 1 735 cents compared to 1 615 cents in F2012.
- ARM declared an increased dividend of 510 cents per share, compared to the F2012
dividend of 475 cents per share.
- ARM Platinum contribution to headline earnings increased significantly from R60 million
in F2012 to R572 million and ARM Coal increased its contribution from R52 million to
R148 million, while ARM Ferrous contributed R3.2 billion (F2012: R3.5 billion).
- Basic earnings of R1.6 billion were negatively impacted by an exceptional net R2.0 billion
after tax unrealised mark-to-market impairment of the Harmony investment in terms of
ARM's accounting policy.
- Increased sales volumes were achieved in nickel, Platinum Group Metals (PGM), iron ore,
chrome ore, export coal and Eskom coal, from Goedgevonden Mine.
- Costs were well contained with the Dwarsrivier, Nkomati and Goedgevonden mines
achieving reductions in unit costs.
- Growth projects deliver:
- The iron ore mines have ramped up to steady state production.
- The Nkomati Nickel Mine achieved a significant turnaround increasing production
by 66% to 23 220 tonnes of nickel and reducing costs by 42% to US$4.98/lb.
- The Lubambe Copper Mine commissioned its concentrator plant two months ahead
of schedule and produced 14 871 tonnes of copper. The mine is addressing challenges
with the quality of the concentrate delivered to a smelter.
- ARM remains financially robust with consolidated net cash (excluding partner loans)
of R2.7 billion (F2012: R2.3 billion).
ARM operational review
The ARM Board of Directors (the Board) is pleased to announce an 8% increase in headline earnings for the
year ended 30 June 2013 (F2013). The increased earnings were achieved despite extremely challenging global
macroeconomic conditions that have adversely affected US Dollar commodity prices. The improved results were
largely as a result of increased sales volumes, increasing focus on cost control and the weakening of the Rand against
the US Dollar. The significantly improved contribution from the Nkomati Mine of R232 million (F2012: R130 million
loss) positively impacted on ARM's headline earnings. The ARM Platinum contribution to headline earnings increased
from R60 million to R527 million (778%) year-on-year and ARM Coal Division from R52 million to R148 million (185%).
ARM Ferrous contributed R3.2 billion (F2012: R3.5 billion) to headline earnings.
Headline earnings for the year were R3.737 billion compared to R3.451 billion in the preceding year ended 30 June 2012
(F2012). Headline earnings per share were 1 735 cents per share based on a weighted average number of shares of
215.36 million shares (F2012: 1 615 cents per share based on 213.69 million shares).
Increases in sales volumes on a 100% basis were as follows:
- 71% increase in nickel sales from 12.6 thousand tonnes to 21.6 thousand tonnes;
- 9% increase in iron ore sales from 14.8 million tonnes to 16.1 million tonnes;
- 22% increase in the Goedgevonden (GGV) Mine Eskom coal sales from 3.7 million tonnes to 4.5 million tonnes;
- 11% increase in GGV Mine export coal from 3.1 million tonnes to 3.4 million tonnes;
- 6% increase in export coal sales at the Participating Coal Business (PCB) from 9.3 million tonnes to 9.8 million
tonnes; and
- 102% increase in the Dwarsrivier Mine chrome ore sales from 521 thousand tonnes to 1.05 million tonnes.
418 thousand tonnes of chrome ore was sold internally at cost to Machadodorp Works in F2012, which has
subsequently been converted to ferromanganese production.
The provisional results for the year ended 30 June 2013 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
Commodity group 12 months ended 30 June
R million Reviewed Audited % change
2013 2012
Platinum Group Metals 295 190 55
Nkomati nickel and chrome 232 (130) -
Ferrous metals 3 237 3 495 (7)
Coal 148 52 185
Copper (135) (31) >(250)
Exploration (88) (113) 22
Gold 64 64 -
Corporate and other (16) (76) 79
ARM headline earnings 3 737 3 451 8
These results have been 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 (Pty) Ltd (Norilsk), GlencoreXstrata South Africa (GlencoreXstrata), Vale S.A. (Vale) and Zambian
Consolidated Copper Mines Investment Holdings (ZCCM-IH).
Delivering quality growth projects
ARM continues to focus on quality growth in its portfolio of assets and has successfully ramped up three of its four
growth projects.
After completing the expansion of the Khumani Mine one year ahead of schedule and well below budget, additional
work is underway to further optimise the Khumani Mine. The Wet High Intensity Magnetic Separation (WHIMS)
Plant which improves recoveries and optimises the life of the Khumani Mine was commissioned within budget and
ahead of schedule. Building of an additional finished product stockpile area has also been completed.
The Nkomati Mine, which initially experienced significant ramp-up challenges, has achieved a major turnaround in the
period under review. Nickel production increased by 66% to 23 220 tonnes in F2013 exceeding the expected steady
state production of 20 500 tonnes per annum by 13%. Production exceeded expectations as a result of higher tonnes
milled together with improved grades and efficiencies as the operation achieved full ramp-up.
The Goedgevonden Mine has reached and exceeded its ramp-up capacity. The mine, which was commissioned to
produce 6.7 million tonnes saleable product per annum, produced 8.2 million tonnes in the year under review. The
mine achieved a 14% decrease in its on-mine unit production costs as a result of the increase in production.
The Lubambe Copper Mine commissioned its concentrator plant in October 2012, two months ahead of schedule.
Mechanised development at the mine is progressing well and despite challenging ground conditions experienced
in some areas and a delay in the refurbishment of the vertical shaft, the mine produced 14 871 tonnes of copper
since the plant was commissioned. Challenges have been experienced with copper concentrate deliveries due to
concentrate not being within specifications of the Mopani off-take agreement. Of the 17 878 tonnes of concentrate
delivered to Mopani Copper Mine's smelter only 2 618 tonnes have been smelted. The concentrate quality issues
are being addressed. Ongoing concentrate production is being treated and off-take agreements are being finalised.
The mine remains on track to achieve steady state production of 45 000 tonnes of copper per annum by 2015.
Quality growth continues
On 19 June 2013 ARM announced that through Assmang Limited (Assmang) it had conditionally approved the establishment of a joint
venture manganese alloy smelting facility in the Sarawak State of Malaysia with Sumitomo Corporation and China
Steel Corporation.
The project is expected to cost US$328 million at full capacity of 169 000 tonnes per annum. This will allow Assmang
to leverage on the long-term availability of reasonably priced hydro power with guaranteed low escalation rates in
Malaysia whilst maintaining its existing alloy customers and accessing the growing Asian markets. Assmang will
sell manganese ore to the joint venture at commercial prices and will be responsible for the technical services,
management and marketing of alloys from the project. Construction of the two 81MVA furnaces and all related
infrastructure is due to start in the 2014 calendar year and will be commissioned in 2016.
The second phase of the Lubambe Copper Mine provides for the exploitation of the Lubambe Extension (previously
known as Area A) with the potential to increase Lubambe Mine's annual production to more than 100 000 tonnes
of copper. The drilling programme of the Lubambe Extension is continuing in order to validate the pre-feasibility
assumptions in preparation for a full feasibility study. The pre-feasibility results of this extensive drilling programme
have yielded better than expected results with the resource estimation of the target area growing from 75.7 million
tonnes inferred resource, at an average grade of 2.81% total copper to a 105 million tonnes inferred resource at an
average grade of 3.66%.
ARM has a number of other potential projects including further expansion of its iron ore operations, increasing
manganese ore production and the expansion of Modikwa Mine. Feasibility studies on these projects are well
advanced. ARM is confident about developing these projects in the future as additional infrastructure capacity in
water, electricity, rail and port becomes available.
Focus on operational efficiencies
Managing costs in the currently challenging commodity price environment is a continuing core focus. Margins are
under pressure as a result of lower US commodity prices as well as above inflation cost escalations in the key cost
inputs for mining which include labour, electricity, diesel and consumables.
ARM has controlled costs well in the period under review and achieved a reduction in unit production costs at the
Nkomati Nickel and Goedgevonden Coal mines and the chrome alloy operation.
Nkomati Mine achieved a 42% reduction in its cash costs net of by-products from US$8.58/lb to US$4.98/lb. This
reduction was achieved despite lower than expected by-product credits and was as a result of increased volumes, improved grades and
concentrator recoveries which led to a 66% increase in the nickel produced. This reduction in unit costs has moved
the Nkomati Mine substantially down the global cost curve with Nkomati now positioned below the 50th percentile of
the curve.
The Goedgevonden Mine reduced on-mine unit saleable costs by 14% as a result of a higher run of mine production
and consistent performance in the coal handling processing plant as the plant achieved design capacity. The
Goedgevonden Mine saleable production increased by 28% to 8.2 million tonnes.
At the Two Rivers, Modikwa, Dwarsrivier and PCB operations unit costs increases were kept to single digits. Unit
production costs at the manganese ore operations were 23% higher, mainly as a result of an increased labour
complement, as additional people were employed to improve mining flexibility and open up additional ore reserves.
On-mine unit costs at the Khumani Mine were higher due to increased waste stripping as well as a reduction in the
capitalisation of costs compared to the previous year. Unit cost of sales for Khumani increased only 9% in Rand terms
and decreased in US Dollar terms.
ARM's target is to have all its operations positioned below the 50th percentile of each commodity's respective global
cost curve. ARM has to date managed to achieve this target for all its operations except the Dwarsrivier Mine,
Lubambe Mine and the ferromanganese smelters. The Lubambe Mine is expected to be positioned close to the 50th
percentile when it reaches steady state production in 2015 and the Dwarsrivier Mine is currently under review.
Changes to the Board of Directors
On 2 July 2013 ARM announced Mr Mangisi Gule's retirement as ARM Executive Director: Corporate Affairs with
effect from 30 June 2013. Mr Gule remains on the ARM Board as a Non-executive Director. Mr Dan Simelane, the
Chief Executive of ARM Copper was appointed as an Executive Director of ARM with effect from 1 July 2013.
On 30 August 2013 ARM announced that Mr Michael W King, an Independent Non-executive Director, informed
the Board that on account of his age he does not intend to stand for re-election at the next Annual General Meeting.
Mr King is currently 76 years old and will retire at the conclusion of such meeting.
Changes to resources and reserves
There has been no material change 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 Extension Area ore resources increased to 105 million tonnes at an in situ grade of 3.66% total
copper based on a report released by AMEC EC&C Services Inc. on 14 February 2013.
Financial commentary
Headline earnings for the year to 30 June 2013 at R3 737 million were 8% or R286 million higher than the prior
year's headline earnings (F2012: R3 451 million). This equates to headline earnings per share of R17.35 per share
(F2012: R16.15 per share).
The Board declared an increased annual dividend of R5.10 per share (F2012: R4.75 per share) after the year-end
ARM's basic earnings for F2013, which were negatively impacted by significant exceptional items of R2.1 billion,
were R1.6 billion (F2012: R3.4 billion). The largest exceptional item relates to the unrealised mark-to-market loss
resulting in the impairment of the original cost of the investment in Harmony. The mark-to-market adjustment of the
Harmony investment has been made through the Income Statement, in accordance with ARM's accounting policy, as
a result of the significant decline in the market value below cost of the investment. The impairment is R2.0 billion after
tax (F2012: R775 million negative adjustment through other comprehensive income). The Harmony share price at
30 June 2013 was R35.75 per share (30 June 2012; R76.50 per share). Other exceptional items comprise mainly
furnace and pelletising plant impairments in ARM Ferrous and amounts to R159 million. The reconciliation of basic
earnings to headline earnings is provided in note 4 of the financial statements.
Sales for the year increased by 13.1% to R19.8 billion (F2012: R17.5 billion).
The average gross profit margin of 34% (F2012: 35%) is slightly lower than that for the corresponding period largely
due to (i) a fall in US Dollar commodity prices during the year, (ii) above inflation unit cost increases at some operations
and (iii) increased amortisation charges at Nkomati, Khumani and Two Rivers, largely related to increased production
volumes. In addition, margins were supported by the weakening of the Rand/US Dollar exchange rate during the year.
The F2013 average Rand/US Dollar of R8.83/US$ is 13.6% higher than the average of R7.77/US$ for F2012. For
reporting purposes the closing exchange rate was R9.93/US$.
ARM's earnings before interest, tax, depreciation and amortisation (EBITDA) excluding exceptional items and income
from associates were R7.23 billion, which is 11% higher than that achieved in F2012.
The detailed segmental contribution analysis is provided in note 2 of the financial statements.
- The ARM Ferrous contribution to headline earnings amounted to R3 237 million (F2012: R3 495 million). This is a
decrease of 7% in comparison to the F2012 result and is due to reduced contributions from the ferromanganese
operations and iron ore.
- The ARM Platinum segment contribution, which includes the results of Nkomati Mine, was R527 million which
represents a significant improvement on the R60 million contribution for F2012. This improvement is due to a
R362 million turnaround at Nkomati Mine driven by increased sales volumes and excellent cost control. Modikwa
and Two Rivers mines also achieved higher earnings compared to F2012.
- The ARM Coal segment contribution improved by 185% to R148 million (F2012: R52 million) as a result of improved
earnings from the Goedgevonden Mine.
- The ARM Exploration segment costs amounted to R88 million (F2012: R113 million) and were largely expended on
exploration at Rovuma in Mozambique as well as on staff costs.
- The ARM Copper result was a loss of R135 million (F2012: R31 million loss). Costs at the new Lubambe Mine
were capitalised to the end of April 2013. Costs on the feasibility work on the Lubambe Extension Area continue
to be capitalised.
- The ARM Corporate, other companies and consolidation segment showed a loss of R16 million for the year as
compared to a R76 million loss for F2012.
- ARM received dividends of R64 million (F2012: R64 million) from its investment in Harmony during the year.
The net cash at 30 June 2013 amounts to R640 million as compared to the net cash position of R327 million at 30 June 2012.
- Cash generated from operations increased by R343 million from R5 969 million to R6 312 million after an
increased working capital requirement of R1 609 million (F2012: R1 189 million) resulting from the increased
activity levels at operations.
- Capital expenditure reduced to R3 489 million for the year (F2012: R4 321 million) and was mainly expended
within ARM Ferrous (R1.95 billion) and at Lubambe Copper (R753 million).
- Net cash at 30 June 2013 excluding partner loans (Anglo Platinum: R114 million, ZCCM-IH:
R398 million and GlencoreXstrata: R1 528 million) amounted to R2 680 million as compared to R2 302 million
at 30 June 2012.
The ARM consolidated total assets of R38.1 billion (F2012: R35.3 billion) include the mark-to-market valuation
of ARM's investment in Harmony of R2.27 billion (F2012: R4.87 billion) at a share price of R35.75 per share
(F2012: R76.50 per share).
The effective tax rate, excluding the impact of exceptional items, for the year remained constant at 31%. The expense
for mineral royalty tax is included in Other Expenses and amounts to R551 million for the year (F2012: R492 million).
The new accounting standards of IFRS 10, 11 and 12, which become effective for financial years commencing after
1 January 2013, may have an impact on the disclosure of the financial statements for ARM as the group has a number
of significant joint ventures and investments. Management is evaluating the impact of these standards.
Safety
ARM is proud to declare that no fatalities occurred at any of the mines which ARM manages in F2013. Some of the
safety indices deteriorated slightly. ARM's Lost Time Injury Frequency Rate (LTIFR) for F2013 was 0.50 (per 200 000
man hours) compared to 0.40 in F2012. The number of Lost Time Injuries (LTIs) increased from 121 in F2012 to 153
in F2013 whilst the number of reportable accidents recorded increased from 75 in F2012 to 80 in F2013.
Safety achievements
- Modikwa achieved 1 million fatality-free shifts in November 2012.
- Nkomati achieved 3 million fatality-free shifts in March 2013.
- Two Rivers achieved 1 million fatality-free shifts in May 2013.
- Khumani Mine achieved 3 million fatality-free shifts in January 2013.
- Machadodorp Works recorded zero lost-time injuries for the financial year under review.
Safety figures and statistics in this report are presented on a 100% basis and currently exclude the ARM Coal operations.
ARM Ferrous
ARM Ferrous reported headline earnings of R3 237 million compared to R3 495 million in F2012.
Assmang reported turnover of R25.01 billion which was 5% more than the previous year
(F2012: R23.8 billion). This increased revenue was mainly due to the record sales volumes in iron ore, the higher
US Dollar prices received for manganese ore and manganese alloy and the 13.6% weakening of the Rand against the
US Dollar which was partly offset by weaker US Dollar prices received for both iron ore and chrome ore.
Headline earnings were 7% less than the previous year mainly as a result of a reduced contribution from the iron ore
and ferromanganese operations. The iron ore headline earnings were lower as a result of higher cost of sales, whilst
the ferromanganese earnings were negatively impacted by the shutdown of three furnaces. One ferromanganese
furnace was shut down at Machadodorp Works and two uneconomical furnaces have been closed indefinitely at the
Cato Ridge operation. The production volumes for ferromanganese and ferrochrome were substantially reduced due
to the oversupply in the market.
Assmang headline earnings
100% basis 12 months ended 30 June
R million Reviewed Audited % change
2013 2012
Iron ore division 5 531 5 935 (7)
Manganese division 940 1 222 (23)
Chrome division 1 (171) -
Total 6 472 6 986 (7)
Headline earnings attributable to ARM (50%) 3 237 3 495 (7)
Sales volumes compared to the same period last year were as follows:
- Iron ore export sales were 5% higher at 14 million tonnes and local sales increased by 50% to 2 million tonnes
with total sales of 16 million tonnes being 9% higher than the previous year;
- Chrome ore sales increased by 102% to 1.05 million tonnes. 418 thousand tonnes of chrome ore was sold
internally at cost to Machadodorp Works in F2012, which has subsequently been converted to ferromanganese
production;
- Manganese ore external sales decreased by 2% to 2.9 million tonnes;
- Manganese alloys volumes decreased by 4% to 0.26 million tonnes; and
- Chrome alloys decreased by 56% to 0.08 million tonnes as part of a strategy to reduce chrome alloy production.
Assmang sales volumes
100% basis 12 months ended 30 June
Thousand tonnes 2013 2012 % change
Iron ore 16 070 14 753 9
Manganese ore* 2 856 2 905 (2)
Manganese alloys 260 270 (4)
Charge chrome 77 174 (56)
Chrome ore* 1 054 521 102
* Excluding intra-group sales
Assmang production volumes
100% basis 12 months ended 30 June
Thousand tonnes 2013 2012 % change
Iron ore 16 103 13 658 18
Manganese ore 3 199 3 296 (3)
Manganese alloys 332 373 (11)
Charge chrome 23 186 (88)
Chrome ore 1 033 1 004 3
On-mine unit production cost changes were:
- Iron ore production unit costs increased by 20% mainly at Khumani mine where pits are being opened. The strip
ratio was 2.5 and is in alignment with the Life of Mine (LOM) strip ratio of 2.6. This is now the base cost for steady
state production as the waste stripping, which was previously capitalised was expensed in the current year. There
is limited capitalisation as the mine matures. At the Beeshoek mine saleable production volumes increased by
almost 40%, resulting in a unit cost decrease of 3%.
- Manganese ore production costs increased by 23%, of which 19% was due to increased labour cost as a result
of an accumulation of additional people employed to prepare the mine for increased production and development
in the future. The lower volumes and higher fuel prices, electricity cost and inflation accounted for the balance of
the increase.
- The unit cost increase for chrome ore was well contained at an increase of only 2% year-on-year mainly due to
the 3% higher production volume and various other planned operational efficiencies realised.
- Manganese alloys unit costs increased by 12% due to the closure of inefficient furnaces at Machadodorp and
Cato Ridge Works.
- Chrome alloy production costs decreased by 52% due to the conversion of all furnaces to ferromanganese at
Machadodorp and no more ferrochrome production from furnaces. The only ferrochrome production was from the
Metal Recovery Plant (MRP) which recovers the final metal entrapped in the historically produced ferrochrome
slag.
Assmang cost and EBITDA margin performance
Commodity group On-mine
Cost of sales production cost
unit cost unit cost EBITDA
change change margin
% % %
Iron ore 9* 20 55
Manganese ore 15 23 37
Manganese alloys 5 12 6
Charge chrome 17 (52) (24)
Chrome Ore 20 2 6
* Excluding the Khumani Mine housing element
The total capital expenditure was 10% less at R4.06 billion (F2012: R4.52 billion).
The main capital expenditure items included the Khumani Optimisation Project, the Wet High Intensity Magnetic
Separation (WHIMS) Plant at Khumani, the railway line deviation around the King Pit as well as the waste stripping at
both Khumani and Beeshoek mines and the preparation work and new road around the Village pit for Beeshoek. Other
capital was spent on the feasibility study for and the early works for the Black Rock expansion project and equipment
purchased. The remaining capital was spent on the Sakura project feasibility studies, information technology,
replacement of vehicles and ensuring legislative compliance changes and sustainability capital.
Assmang capital expenditure
100% basis 12 months ended 30 June
R million Reviewed Audited
2013 2012
Iron ore 2 709 3 339
Manganese 1 223 886
Chrome 132 293
Total 4 064 4 518
Projects
Khumani Iron Ore Expansion Project
The commissioning of the WHIMS (Wet High Intensity Magnetic Separation) Plant at Khumani to improve the
recovery of very fine and high grade ore, currently lost to the slimes dam is in progress and the first units have been
commissioned within budget and ahead of time. Building of additional final product stockpile area at the mine has been
completed. The diversion of the Transnet Freight Rail (TFR) main line which runs through the King mining area will be
completed and handed over by April 2014.
Beeshoek Iron Ore Mine
The R885 million development of the East pit to extend production to July 2018 is in progress and 15 million tonnes
of overburden have been mined from this pit this year. The diversion of the R385 road between Postmasburg and
Olifantshoek to allow for the mining of the future Beeshoek Village pit has been completed. The servicing of the stands
for housing in Postmasburg was completed and the construction of housing is in progress.
Manganese Ore Expansion
A complete review of the initial scope to expand the Black Rock Mine operations from 3 million tonnes per annum
to above 4 million tonnes per annum is underway. This review was necessitated following a marketing study on the
demand for the various grades which can be mined from the Nchwaning Mine. Several trade-off studies are underway
to ensure that the scope is re-defined to capitalise on this opportunity and to ensure that capital will be spent efficiently.
The operating expenditure, capital expenditure and financial modelling for the revised scope will be completed by
Q2 F2014.
Sakura Manganese Project
Assmang (54%), Sumitomo Corporation (27%) and China Steel Corporation (19%) have agreed to establish a joint
venture manganese alloy smelting facility in the Sarawak State of Malaysia, Sakura Ferroalloys SDN.BHD (Sakura).
Sakura is a greenfields project and the facility will be constructed in the Samalaju Industrial Park in Sarawak. The
intention is to commission and operate two 81MVA furnaces complete with all related infrastructure, equipment and
services to allow for the production of manganese alloy.
Besides being the majority shareholder, Assmang will provide marketing, management and technical services
to Sakura. The project is estimated to cost US$328 million and is due to start in the 2014 calendar year and be
commissioned in the second half of 2016.
Logistics
Iron ore export sales were 14 million tonnes due to the excellent performance and co-operation between Transnet,
the marketing team and the operational team at Khumani Mine. Transnet also railed 270 000 tonnes of ore for a new
BEE entrant by utilising the rapid load-out facility at Khumani.
The manganese ore export channel to Port Elizabeth continued to operate under difficult conditions and many
challenges were overcome allowing increased volumes of ore to be transported by rail. This reduced the ore tonnages
transported by road, however manganese ore exported through the port of Durban increased.
Assmang and Transnet continue to engage regarding future export capacity and growth for both iron ore and
manganese ore. To this effect Transnet concluded the feasibility study to expand its manganese ore export capacity to
12 mtpa through the Port of Ngqura from April 2018. This schedule and capacity allocation is aligned with the Assmang
growth plan and ramp-up schedule for the Black Rock mine.
Assmang and Transnet will engage on a new manganese ore export contract through the port of Port Elizabeth and
future allocation through this channel for the period 1 October 2013 until 31 March 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
ARM Platinum generated improved results with all operations reflecting substantial improvement in production and
financial performance despite the platinum industry experiencing a challenging year.
Attributable headline earnings increased by R467 million to R527 million (778%) driven mainly by improved volumes,
grades, efficiencies and recoveries at Nkomati and an increased output at Two Rivers and Modikwa.
PGM production (on 100% basis including Nkomati) increased 11% to 783 254 6E ounces (F2012: 708 201 ounces)
while Nkomati's nickel production increased by 66% to 23 220 tonnes (F2012: 14 004 tonnes) and copper production
increased by 34% to 9 877 tonnes (F2012: 7 371 tonnes).
Nkomati's C1 unit cash cost net of by-products, reduced by 42% to US$4.98/lb (F2012: US$8.58/lb) of nickel produced.
Despite the increase in unit production cost, Two Rivers and Modikwa continue to be positioned below the 50th
percentile of the global PGM cost curve with respective unit costs of R5 244/6E PGM oz (F2012: R4 779/6E PGM oz)
and R6 275/6E PGM oz (F2012: R5 864/6E PGM oz).
Dollar prices, excluding palladium, were lower than the corresponding period but a 14% weakening of the Rand against
the US Dollar compensated for the lower PGM prices, resulting in the basket prices for Modikwa and Two Rivers
increasing by 7% to R287 424/kg (F2012: R267 998/kg) and R298 384/kg (F2012: R279 804/kg) respectively.
The tables below set out the relevant price comparison:
Average US Dollar metal prices
2013 2012 % change
Platinum US$/oz 1 550 1 603 (3)
Palladium US$/oz 680 673 1
Rhodium US$/oz 1 090 1 495 (27)
Nickel US$/t 16 245 18 815 (14)
Copper US$/t 7 632 8 047 (5)
Chrome concentrate (CIF) US$/t 147 168 (13)
Average Rand metal prices
2013 2012 % change
Platinum R/oz 13 684 12 457 10
Palladium R/oz 6 001 5 233 15
Rhodium R/oz 9 621 11 614 (17)
Nickel R/t 143 447 146 190 (2)
Copper R/t 67 390 62 529 8
Chrome concentrate (CIF) R/t 1 294 1 303 (1)
The debtors reported at 30 June 2012 were realised for less as a result of a negative mark-to-market adjustment of
R73 million (F2012: positive R97 million).
Capital expenditure at ARM Platinum was R973 million (R735 million attributable). Modikwa's major capital items
included the deepening of North shaft, the sinking of South 2 shaft, phase 2 development on South 1 shaft and the
replacement of mining equipment. Of the capital spent at Two Rivers, 24% is associated with the replacement of the
underground mining fleet and 20% on the PGM enhancement and chrome recovery plant. The balance was incurred
in the deepening of the Main and North declines. Nkomati's capital expenditure was mainly to sustain and maintain
production.
ARM Platinum capital expenditure
100% basis
R million Reviewed Audited
2013 2012
Modikwa 286 438
Two Rivers 498 467
Nkomati 189 484
Total 973 1 389
Modikwa Mine
Production at Modikwa increased by 7%, with PGMs for the year totalling 324 626 6E PGM ounces (F2012: 304 044 6E
PGM ounces). Unit costs were well contained, with a 7% increase in Rand per tonne milled to R876 (F2012: R819 per
tonne milled) as well as the Rand per 6E PGM ounce to R6 275 (F2012: R5 864 per 6E ounce).
Modikwa operational statistics
100% basis 12 months ended 30 June
2013 2012 % change
Cash operating profit R million 428 267 60
Tonnes milled Mt 2.33 2.18 7
Head grade g/t, 6E 5.35 5.39 (1)
PGMs in concentrate Ounces, 6E 324 626 304 044 7
Average basket price R/kg, 6E 287 424 267 998 7
Average basket price US$/oz, 6E 1 012 1 073 (6)
Cash operating margin % 17 13
Cash cost R/kg, 6E 201 752 188 538 7
Cash cost R/tonne 876 819 7
Cash cost R/Pt oz 15 897 14 706 8
Cash cost R/oz, 6E 6 275 5 864 7
Cash cost US$/oz, 6E 711 755 (6)
Headline earnings attributable to ARM (41.5%) R million 96 26 >250
Two Rivers Mine
PGM ounces produced increased by 9% driven by an increase in tonnes milled (2%) and an improved head grade (4%),
this combined with enhanced Rand basket prices resulted in a 28% increase in cash operating profit. Unit cost increased
by 10% to R5 244 per 6E PGM oz (F2012: R4 779 per 6E PGM oz). There was a 162 901 tonnes increase in the Run of
Mine (ROM) stockpile to a total of 446 026 tonnes of ore. The UG2 stock movement equates to R17 million for F2013.
The year-end UG2 stockpile was 305 328 tonnes (F2012: 182 306 tonnes).
Two Rivers operational statistics
100% basis 12 months ended 30 June
2013 2012 % change
Cash operating profit R million 1 011 788 28
Tonnes milled Mt 3.17 3.10 2
Head grade g/t, 6E 4.02 3.86 4
PGMs in concentrate Ounces, 6E 350 443 320 113 9
Average basket price R/kg, 6E 298 384 279 804 7
Average basket price US$/oz, 6E 1 051 1 120 (6)
Cash operating margin % 35 34
Cash cost R/kg, 6E 168 594 153 642 10
Cash cost R/tonne 579 493 17
Cash cost R/Pt oz 11 331 10 205 11
Cash cost R/oz, 6E 5 244 4 779 10
Cash cost US$/oz, 6E 594 615 (3)
Headline earnings attributable to ARM (55%) R million 199 164 21
Nkomati Mine
ARM Platinum is pleased to report a significant turnaround in operational results at Nkomati Mine.
A 19% increase in total tonnes milled, a 21% improvement in overall head grade and a substantial enhancement in
concentrator recoveries, resulted in a 66% increase in nickel production.
Chrome concentrate sales were lower at 224 754 tonnes (F2012: 441 173 tonnes) as the chrome spiral plant was on
care and maintenance during F2013 due to a depressed market.
Nkomati generated a cash operating profit of R1.18 billion, a substantial increase from the R130 million in the
corresponding period. The improvement in results can be attributed to good cost control, increased volumes,
enhanced efficiencies, grades and recoveries. An average overall recovery of 75% was achieved in the concentrators,
albeit at a higher head grade of 0.41% nickel. We are confident that these recoveries are sustainable.
Despite lower than expected by-product credits, the operation achieved a C1 unit cost of US$4.98/lb net of by-
products (F2012: US$8.58/lb). The unit cost is below the 50th percentile of the global cost curve.
Nkomati operational statistics
100% basis 12 months ended 30 June
2013 2012 % change
Cash operating profit R million 1 178 130 >250
- Nickel Mine R million 1 054 115 >250
- Chrome Mine R million 124 15 >250
Cash operating margin % 26 4
Tonnes milled Thousand 7.59 6.39 19
Head grade % nickel 0.41 0.34 21
Nickel on-mine cash cost per tonne milled R/tonne 292 272 7
Cash cost net of by-products* US$/lb 4.98 8.58 (42)
Contained metal
Nickel Tonnes 23 220 14 004 66
PGMs Ounces 111 185 84 044 32
Copper Tonnes 9 877 7 371 34
Cobalt Tonnes 1 101 744 48
Chrome ore sold Tonnes - 64 144 -
Chrome concentrate sold Tonnes 224 754 441 173 (49)
Headline earnings/(loss) attributable to ARM (50%) R million 232 (130) -
* This reflects US Dollar cash costs net of by-products (PGMs and Chrome) per pound of nickel produced.
Projects
Modikwa Mine
The North shaft deepening project is ongoing with total development for the project at 1 137 metres vs. the feasibility
plan of 1 124 metres. The decline system is currently at 8 level.
The total development for the South 2 project advanced 2 569 metres. Development has progressed and access to
-1 level has been achieved with level development progressing past the first crosscut breakaway positions on both
north and south haulage. Access to the first reef raise on -1 level is estimated to be in Q1 F2014.
The installation of a Mainstream Inert Grinding (MIG) mill, to enhance PGM recoveries, was approved and construction
is planned to start in Q1 F2014 with completion expected in Q2 F2015.
Two Rivers Mine
The transfers of Kalkfontein portions 4, 5 and 6, and the Tweefontein prospecting rights to Two Rivers, are awaiting
approval from the Department of Mineral Resources.
The Tertiary Milling Plant was commissioned in June 2013 and the PGM Enhancement Project is progressing as
planned and is expected to be commissioned in Q1 F2014.
Nkomati Nickel Large Scale Expansion Project
The project has now been completed and all capital votes have been closed. Some minor work on the 132kV overhead
line is outstanding and scheduled for completion by November 2013. This delay has no material impact on Nkomati
in the short to medium term.
Kalplats PGM Exploration Project
ARM Platinum completed its review of the revised Definitive Feasibility Study (DFS) submitted by Platinum Australia
(PLA). The viability of a possible mining operation is adversely affected by the lack of Eskom power 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 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
ARM Coal's cash operating profit attributable to ARM increased by 20% from R686 million to R822 million in F2013. This
improvement was mainly due to increased export sales volumes achieved at both GGV and PCB. Although a weaker
Rand contributed to the improvement in cash operating profit, export US Dollar prices decreased by an average of
10% which negated the benefit derived from this weakening of the Rand. ARM Coal headline earnings attributable to
ARM were R148 million for F2013 compared to R52 million in F2012, an increase of 185%. The increase is mainly due
to the increase in cash operating profit offset by an increase in taxation.
Operational performance at GGV continued the positive trend that started in 2H F2012 and this resulted in an increase
of 28% in saleable production year-on-year but saleable production at PCB decreased by 4% year-on-year due to
further closures of underground operations.
Goedgevonden Coal Mine
Run of mine production increased by 10% year-on-year as the mine has now reached steady state production levels.
The Coal Handling and Processing Plant (CHPP) at GGV has achieved design capacity levels of performance on a
consistent basis during the year which resulted in an increase of 28% in saleable production compared to F2012.
An improved and more consistent performance by TFR since Q1 F2013 resulted in increases in export volumes of
11% while a combination of increased rail and road haulage resulted in Eskom sales volumes being up by 22%.
Attributable cash operating profit increased by 32% from R316 million to R417 million and headline earnings increased
by 108% from R78 million to R162 million. Attributable export revenue in F2013 increased by R77 million due
to increases in sales volumes (R71 million) and a weaker Rand (R91 million) but decreased by R85 million as a
result of a reduction in export prices. The cost per saleable tonne decreased by 14% from R200 per tonne in F2012
to R171 per tonne in F2013.
The increase in headline earnings is mainly due to the increase in cash operating profit offset by an increase of
R32 million in income tax.
Goedgevonden operational statistics
100% basis 12 months ended 30 June
2013 2012 % change
Total production sales
Saleable production Mt 8.16 6.37 28
Export thermal coal sales Mt 3.40 3.06 11
Eskom thermal coal sales Mt 4.52 3.69 22
Attributable production and sales
Saleable production Mt 2.12 1.66 28
Export thermal coal sales Mt 0.90 0.80 13
Eskom thermal coal sales Mt 1.18 0.96 23
Average received coal price
Export (FOB) US$/tonne 91.00 101.90 (11)
Eskom (FOT) R/tonne 187.57 146.06 28
On-mine saleable cost R/tonne 171.20 199.80 (14)
Cash operating profit
Total R million 1 603 1 216 32
Attributable (26%) R million 417 316 32
Headline earnings attributable to ARM R million 162 78 108
Attributable profit analysis
R million 12 months ended 30 June
Reviewed Audited % change
2013 2012
Cash operating profit 417 316 32
Less: interest paid (86) (97) 11
Less: amortisation (94) (98) 4
Less: fair value adjustments (11) (11) -
Profit before tax 226 110 105
Less: Tax (64) (32) (100)
Headline earnings attributable to ARM 162 78 108
Participating Coal Business
The PCB attributable cash operating profit increased by 10% to R405 million. Attributable headline loss reduced by
46% from a R26 million loss to a R14 million loss mainly due to the increase of R36 million in operating profit, offset
by small increases in interest, depreciation and taxation.
Attributable export revenue in F2013 increased by R122 million due to increases in sales volumes (R80 million) and a
weaker Rand (R196 million) but decreased by R154 million due to a reduction in export prices. The export US Dollar
price at US$83.88 per tonne is 15% lower than F2012, but it is also a different product mix into the Asian markets.
A decrease in inland sales resulted in a R55 million reduction in revenue. Total attributable on-mine costs decreased
by R9 million mainly due to savings achieved by the closure of the South Stock underground operation offset by
inflation and a substantial increase in the price of diesel.
Attributable ROM production and saleable production were respectively 6% and 4% lower than F2012 mainly due
to the closure of the South Stock underground operation which were partially offset by increased production at the
Tweefontein and iMpunzi East mining complexes.
The on-mine cost per saleable tonne increased marginally from R321 per tonne in F2012 to R326 per tonne in F2013
as costs were well controlled. This reduction is also evidence of the benefits that will result from ARM Coal's long-term
strategy to move to large scale opencast operations.
Participating Coal Business operational statistics
100% basis 12 months ended 30 June
2013 2012 % change
Total production sales
Saleable production Mt 12.71 13.23 (4)
Export thermal coal sales Mt 9.81 9.29 6
Eskom thermal coal sales Mt 1.65 3.28 (50)
Local thermal coal sales Mt 0.45 0.74 (39)
Attributable production and sales
Saleable production Mt 2.57 2.67 (4)
Export thermal coal sales Mt 1.98 1.88 5
Eskom thermal coal sales Mt 0.33 0.66 (50)
Local thermal coal sales Mt 0.09 0.15 (40)
Average received coal price
Export (FOB) US$/tonne 83.88 98.75 (15)
Eskom (FOT) R/tonne 157.70 120.31 31
Local (FOR) R/tonne 262.24 262.12 -
On-mine saleable cost R/tonne 326.29 321.37 2
Cash operating profit
Total R million 2 005 1 828 10
Attributable (20.2%) R million 405 369 10
Headline earnings/(loss) attributable to ARM R million (14) (26) 46
Attributable profit analysis
R million 12 months ended 30 June
Reviewed Audited % change
2013 2012
Cash operating profit 405 369 10
Less: interest paid (125) (117) (7)
Less: amortisation (270) (268) (1)
Less: fair value adjustments (29) (20) (45)
Profit/(loss) before tax (19) (36) 47
Less: Tax 5 10 (50)
Headline loss attributable to ARM (14) (26) 46
ARM's economic interest in GlencoreXstrata Coal South Africa (PCB) is 20.2%. PCB consists of two large mining
complexes situated in Mpumalanga. ARM has a 26% effective interest in the GGV Mine situated near Ogies in
Mpumalanga.
Attributable refers to 20.2% of GlencoreXstrata Coal South Africa Operations whilst total refers to 100%.
ARM Copper
The Lubambe Copper Mine (previously Konkola North Project) commissioned the concentrator in October 2012, two
months ahead of schedule. By June 2013, 1 046 559 tonnes of copper-bearing ore had been milled. The tonnes milled
achieved for the year was almost 10% above the target of 951 000 tonnes which yielded 14 871 tonnes of copper in
concentrate.
Operational statistics
100% basis 12 months
ended
30 June
2013
Waste development Metres 11 434
Ore development Metres 9 396
Ore development Tonnes 596 783
Ore stoping Tonnes 403 178
Ore tonnes mined Tonnes 999 961
Tonnes milled Thousand 1 046 559
Mill head grade % copper 1.92
Concentrator recovery % 71.4
Copper concentrate produced Tonnes 40 331
Copper concentrate sold Tonnes 27 502
Contained metal
Copper produced Tonnes 14 871
Copper sold Tonnes 9 943
Headline loss attributable to ARM (40%) R million (135)
Copper concentrate deliveries to the Zambian Smelters have been much slower than anticipated due to two smelter
shutdowns and concentrate delivered from the Lubambe Concentrator not being within specifications of the Mopani
Copper Mines off-take agreement. Of the 17 878 tonnes of concentrate delivered to Mopani Copper Mine's smelter
only 2 618 tonnes have been smelted. The concentrate quality issues are being addressed. Ongoing concentrate
production is being treated and off-take agreements are being finalised.
Mechanised development is progressing well with ore drive development ahead of schedule. Longitudinal Room and
Pillar (LRP) Stoping commenced in August 2012 and by the end of June 2013 12 stopes had been established and
are being mined. Poor ground conditions are being experienced in places but a proactive approach from the mining
teams is mitigating the negative effects of this to a large degree. Refurbishing of the No. 2 Vertical shaft has been
delayed, and is scheduled for completion by August 2013. The delays were mainly due to the actual shaft bottom
excavations being materially different from the 1950's drawings, a steel strike early on and an undulation in the
actual shaft lining profile resulting in refurbishing taking longer than planned. All other project capital work regarding
outstanding underground and surface infrastructure work was completed on schedule and on budget. The relocation
of informal settlements from the potential subsidence area of the mine will now only be completed in March 2014 due
to slower than anticipated construction progress and rain delays. This will however not impact on the mining ramp-up
to full production of 45 000 tonnes of contained copper by the end of F2015.
The Lubambe Copper Mine
Capitalised expenditure to 30 June 2013 amounted to US$469 million comprising project capital expenditure
amounting to US$439 million and pre-production costs capitalised for the ten month period to 30 April 2013 amounting
to US$30 million. Previously it was expected that pre-production costs would be capitalised to 31 December 2012,
however the mine was only considered to be in the condition necessary to be capable of operating in the manner as
intended by 30 April 2013. Accordingly the development costs were capitalised to 30 April 2013.
The mine's throughput design for both the South and East Limb ore bodies remains at 2.5 million tonnes per annum
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.
This project is the first phase of the exploitation of the total resource presently known on mining licence 7061 - HQ - LML
(Previously LML 20), covering an area of 240km2.
The Lubambe Extension Project
This second phase of the Lubambe Copper Mine situated 6km to the south of the present mine development, may
provide for the expansion of the Lubambe Copper Mine's processing plant to potentially increase the total production to
more than 100 000 tonnes of copper from more than 5 million tonnes of ore mined and processed on an annual basis.
A pre-feasibility study was conducted in 2010 on a target area now known as Lubambe Extension (Previously Area A).
Following the results of that pre-feasibility study a drilling program was conducted and in November 2012 a full study
team was re-established to validate the pre-feasibility study assumptions and do trade-off studies in preparation for a
full feasibility study. Resource estimation has been validated by experts and the resource of the target area has grown
from 75.7 million tonnes, of which all were inferred, at an average grade 2.81% total copper to 105 million tonnes of
ore at an average grade of 3.66%.
A number of different mining and access methods and positions have been evaluated as part of the trade-off study.
Additional surface drilling is continuing in the Lubambe Extension Area and during F2013 6 exploration drill rigs
were deployed and a total of 18 501 metres drilled to enhance the confidence levels and provide the required study
information regarding the resource. Due to the mine being in the Konkola Basin, a full hydrogeological survey will be
done to assess the dewatering requirements and pumping quantities of a new mine in this area. Further to the drilling
programme the analysis of the Aero Magnetic and Aero Electric surveys has been completed across the whole Mining
Lease area with the intention to identify further exploration targets. For the remainder of F2014 the team will focus on
assessing different mining access options and conduct further metallurgical test work.
The Kalumines Copper Project
The decision to exit the Kalumines Project in the Democratic Republic of the Congo (DRC) has been implemented
since the end of the financial year. The mining licence was handed back to Gecamines (our 40% partner) and
Gecamines also paid the Vale/ARM Joint Venture a settlement fee of US$21 million for the mining of ore and for
geological drilling done by the partners. As a result the assets are reflected as held-for-sale on the statement of
financial position.
ARM owns 100% of ARM Copper. ARM Copper owns 50% of the Vale/ARM joint venture.
ARM Exploration
ARM Exploration continues to evaluate mineral business investment opportunities that offer sustainable investment
possibilities for a medium to long-term project pipeline in resource commodities for which ARM has experience and
a competitive advantage.
Exploration during F2013 focused on the integration and interpretation of all previously gathered data which included
mapping airborne gravity and diamond drilling in Northern Mozambique a joint venture with Rovuma Resources
Limitada (Rovuma).
The Rovuma project has a strike length of approximately 100km containing four target cluster areas with potential for
magmatic nickel/copper/PGM. Reconnaissance diamond drilling was carried out on two of the clusters and although
encouraging base metal sulphide mineralization was encountered, it was decided to defer further drilling in order to
test other high priority targets. Diamond drilling of these targets is continuing.
ARM Exploration has established a database of mining and exploration projects in Africa focusing on platinum group
metals, iron ore, manganese ore, base metals and coal.
The headline loss attributable to ARM for Exploration is R88 million (F2012: R113 million).
Harmony Gold Mining Company Limited
Harmony reported a 14% decrease in its operating profit from continuing operations from R5 258 million in F2012 to
R4 502 million in the year under review. Headline earnings were 92% lower at R204 million (F2012: R2 372 million).
The decline in headline earnings was mainly as a result of a 3% decrease in gold sold as a result of a management
decision to stop mining at Kusasalethu due to a dispute with labour, as well a 19% increase in the cash operating cost
per kilogram produced to R327 210/kg. The US$/oz cash operating costs increased only 5% due to the weakening of
the Rand against the US Dollar.
Harmony recorded a net loss of R2.4 billion for the year compared to a net profit of R2.6 billion for the 2012 financial
year. This was mainly due to the impairment of the Hidden Valley asset.
On 14 August 2013 Harmony announced that it would be repositioning development of the Wafi Golpu project and is
considering ways to develop the project with lower capital requirements utilising a modular approach to access the
ore body sooner.
Harmony continues to focus on the optimisation of its South African assets and in the period under review completed
the disposal of its Evander operations to Pan African Resources plc for a purchase consideration of R1.5 billion less
certain distributions. The transaction was completed on 28 February 2013 and in terms of the agreement Harmony
received a distribution of R210 million and a purchase consideration of R1 314 million.
ARM received dividends of R64 million in the financial year (F2012: R64 million).
The ARM Statement of Financial Position at 30 June 2013 reflects a mark-to-market investment in Harmony of
R2.27 billion (F2012: R4.87 billion) at a share price of R35.75 per share (F2012: R76.50 per share). Changes in the
value of the investment in Harmony, to the extent that they represent a significant or prolonged decline below the cost
of the investment, are adjusted through the Income Statement, net of deferred capital gains tax. Gains above the cost are accounted for,
net of deferred capital gains tax, through the Statement of Comprehensive Income. Dividends are recognised in the
ARM Income Statement on the last day of registration following dividend declaration.
Harmony's results for the year ended 30 June 2013 can be viewed on Harmony's website at www.harmony.co.za.
ARM owns 14.6% of Harmony's issued share capital.
Outlook
The impact on global commodity prices and currency volatility remained high during the past year particularly as a
result of pronouncements out of the US and developments in China, and is not expected to abate in the short term.
The US economy has shown some resilience in 2013 with unemployment reaching new lows since the global financial
crisis. Speculation continues around the possibility of the central bank scaling back its US$85 billion a month bond
repurchase programme.
Despite growth in China refocusing towards a consumer driven economy and concern over China's imports of raw
materials slowing, Chinese commodity demand is expected to be supported by a stabilising economy and pro-growth
policies outlined by the Chinese government. These include increased investment in infrastructure and rail projects
which are expected to have a positive impact on demand and prices for certain commodities.
Cost increases for important inputs like labour and electricity remains higher than inflation.
ARM's operational strategy in a flat commodity price environment remains focused on operational efficiencies, with a
target to have all its operations positioned below the 50th percentile of each commodity's respective global cost curve.
Capital allocation is aimed at achieving quality growth. ARM will continue to consider quality acquisitions as part of
its allocation strategy. ARM remains financially robust and its positive cash flow enables ARM to invest in growth and
pay dividends.
In addition, ARM continues to strive towards maintaining good relationships with labour, communities and other
stakeholders.
Dividends
The ARM Board has approved and declared a seventh annual dividend of 510 cents per share (gross) in respect of
the year ended 30 June 2013 (F2012: 475 cents per share). The amount to be paid is approximately R1 099.7 million.
This dividend is consistent with ARM's commitment as a globally competitive company to pay dividends and fund
growth of the Company in the future.
The dividend will be subject to Dividend Withholding Tax. In accordance with paragraphs 11.17(a) (i) to (x) and 11.17(c)
of the JSE Listings Requirements the following additional information is disclosed:
- The dividend has been declared out of income reserves;
- The South African Dividends Tax rate is 15% (fifteen percent);
- There are residual Secondary Tax on Companies (STC) credits utilised in an amount of R992 980 098 or
460.51257 SA cents per share. No STC credits remain after this dividend;
- The gross local dividend amount is 510 cents per ordinary share for shareholders exempt from the Dividends Tax;
- The net local dividend amount is 502.57689 cents per share for shareholders liable to pay the Dividends Tax;
- ARM currently has 215 624 972 ordinary shares in issue; and
- ARM's income tax reference number is 9030/018/60/1.
A gross dividend of 510 cents per ordinary share, being the dividend for the year ended 30 June 2013, has been
declared payable on Monday, 30 September 2013 to those shareholders recorded in the books of the Company at the
close of business on Friday, 27 September 2013. The dividend is declared in the currency of South Africa. Any change
in address or dividend instruction to apply to this dividend must be received by the Company's transfer secretaries or
registrar not later than Thursday, 19 September 2013. The last day to trade ordinary shares cum dividend is Thursday,
19 September 2013. Ordinary shares trade ex-dividend from Friday, 20 September 2013. The record date is Friday,
27 September 2013 whilst the payment date is Monday, 30 September 2013.
No dematerialisation or rematerialisation of share certificates may occur between Friday, 20 September 2013 and
Friday, 27 September 2013, both dates inclusive, nor may any transfers between registers take place during this
period.
Review by independent auditors
The financial information has been reviewed by EAL Botha CA (SA) of Ernst & Young Inc. whose unqualified review
report will be available for inspection at the Company's registered office.
The Integrated Annual Report containing a detailed review of the operations of the Company together with the audited
financial statements will be distributed to shareholders at the end of October 2013.
Any reference to future financial performance included in these results has not been reviewed or reported on by ARM's
external auditors.
Signed on behalf of the Board:
PT Motsepe MP Schmidt
Executive Chairman Chief Executive Officer
Johannesburg
2 September 2013
Financial statements
Reviewed Audited
2013 2012
Note Rm Rm
ASSETS
Non-current assets
Property, plant and equipment 20 636 18 707
Investment property 12 12
Intangible assets 179 191
Deferred tax asset 327 3
Loans and long-term receivables 285 221
Financial assets 137 74
Inventories 141
Investment in associate 1 420 1 354
Other investments 2 391 4 959
25 387 25 662
Current assets
Inventories 3 222 2 458
Trade and other receivables 4 667 3 606
Taxation 22 26
Cash and cash equivalents 5 4 632 3 564
12 543 9 654
Assets held for sale 191
Total assets 38 121 35 316
EQUITY AND LIABILITIES
Capital and reserves
Ordinary share capital 11 11
Share premium 3 996 3 937
Other reserves 769 571
Retained earnings 19 294 18 681
Equity attributable to equity holders of ARM 24 070 23 200
Non-controlling interest 1 393 1 205
Total equity 25 463 24 405
Non-current liabilities
Long-term borrowings 6 3 293 2 216
Deferred tax liabilities 3 951 3 777
Long-term provisions 991 892
8 235 6 885
Current liabilities
Trade and other payables 2 678 2 318
Short-term provisions 714 463
Taxation 332 224
Overdrafts and short-term borrowings 7 699 1 021
4 423 4 026
Total equity and liabilities 38 121 35 316
Group income statement
for the year ended 30 June 2013
Reviewed Audited
2013 2012
Note Rm Rm
Revenue 20 519 18 142
Sales 19 844 17 530
Cost of sales (13 115) (11 463)
Gross profit 6 729 6 067
Other operating income 960 859
Other operating expenses 9 (2 152) (1 710)
Profit from operations before exceptional items 5 537 5 216
Income from investments 268 279
Finance costs (225) (232)
(Loss)/income from associate (14) 11
Profit before taxation and exceptional items 5 566 5 274
Exceptional items excluding tax 3 (2 639) (70)
Profit before taxation 2 927 5 204
Taxation 8 (1 145) (1 633)
Profit for the year 1 782 3 571
Attributable to:
Non-controlling interest 148 133
Equity holders of ARM 1 634 3 438
1 782 3 571
Additional information
Headline earnings (R million) 4 3 737 3 451
Headline earnings per share (cents) 1 735 1 615
Basic earnings per share (cents) 759 1 609
Diluted headline earnings per share (cents) 1 723 1 604
Diluted basic earnings per share (cents) 753 1 598
Number of shares in issue at end of year (thousands) 215 625 214 852
Weighted average number of shares in issue (thousands) 215 357 213 689
Weighted average number of shares used in calculating diluted
earnings per share (thousands) 216 914 215 118
Net asset value per share (cents) 11 163 10 798
EBITDA (R million) 7 230 6 531
Dividend declared after year-end (cents per share) 510 475
Group statement of comprehensive income
for the year ended 30 June 2013
Total
Available- share- Non-
for-sale Retained holders controlling
reserve Other earnings of ARM interest Total
Group Rm Rm Rm Rm Rm Rm
For the year ended 30 June 2012
(Audited)
Profit for the year to 30 June 2012 3 438 3 438 133 3 571
Revaluation of listed investment (856) (856) (856)
Deferred tax on revaluation of listed
investment 81 81 81
Net impact of revaluation of listed
investment (775) (775) (775)
Realisation of foreign exchange movements
on loans to a foreign Group entity 87 87 87
Deferred tax on realisation of foreign exchange
on loans to a foreign Group entity (12) (12) (12)
Foreign exchange on loans to foreign
Group entity 30 30 30
Deferred tax on unrealised foreign exchange
movements on loans to a foreign Group entity (8) (8) (8)
Cash flow hedge reserve (11) (11) (11)
Foreign currency translation reserve movement 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
For the year ended 30 June 2013
(Reviewed)
Profit for the year to 30 June 2013 1 634 1 634 148 1 782
Reclassification adjustment due to impairment
of available-for-sale listed investment (170) (170) (170)
Deferred tax on above 31 31 31
Net impact of revaluation of listed investment (139) (139) (139)
Foreign exchange movements on loans
to a foreign Group entity 57 57 57
Deferred tax on unrealised foreign exchange
movements on loans to a foreign Group entity (16) (16) (16)
Cash flow hedge reserve (32) (32) (32)
Foreign currency translation reserve movement 227 227 227
Total other comprehensive income (139) 236 97 97
Total comprehensive income for the year (139) 236 1 634 1 731 148 1 879
Group statement of changes in equity
for the year ended 30 June 2013
Share Total
capital Available- share- Non-
and for-sale Retained holders controlling
premium reserve Other* earnings of ARM interest Total
Group Rm Rm Rm Rm Rm Rm Rm
Balance at 30 June 2011
(Audited) 3 851 914 287 16 160 21 212 958 22 170
Profit for the year to
30 June 2012 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)
Dividend paid (959) (959) (959)
Part disposal of interest
in Lubambe 38 38 114 152
Other (4) 4
Balance at 30 June 2012
(Audited) 3 948 139 432 18 681 23 200 1 205 24 405
Profit for the year to
30 June 2013 1 634 1 634 148 1 782
Other comprehensive income (139) 236 97 97
Total comprehensive income
for the year (139) 236 1 634 1 731 148 1 879
Share-based payments 133 133 133
Share options exercised 27 27 27
Bonus and performance shares
issued to employees 32 (32)
Dividend paid (1 021) (1 021) (1 021)
Contribution by ZCCM 40 40
Balance at 30 June 2013
(Reviewed) 4 007 769 19 294 24 070 1 393 25 463
2013 2012 2011
* Other reserves consist of the
following: Rm Rm Rm
General reserve 32 32 32
Insurance contingency 14 14 18
Share-based payments 452 351 304
Foreign currency translation
reserve (31) 1 12
Foreign exchange on loans
to foreign Group entity 61 20 (77)
Foreign currency translation
reserve (FCTR) 255 28 12
Premium paid on purchase
of non-controlling interest (14) (14) (14)
Total 769 432 287
Group statement of cash flows
for the year ended 30 June 2013
Reviewed Audited
2013 2012
Note Rm Rm
CASH FLOW FROM OPERATING ACTIVITIES
Cash receipts from customers 19 611 17 883
Cash paid to suppliers and employees (13 299) (11 914)
Cash generated from operations 10 6 312 5 969
Interest received 199 214
Interest paid (115) (106)
Dividends received 64 64
Dividend paid (1 021) (959)
Taxation paid (1 191) (1 294)
Net cash inflow from operating activities 4 248 3 888
CASH FLOW FROM INVESTING ACTIVITIES
Additions to property, plant and equipment to maintain operations (1 452) (1 180)
Additions to property, plant and equipment to expand operations (2 224) (2 866)
Proceeds on disposal of property, plant and equipment 23 1
Investment in associate (112) (23)
Investment in RBCT (26) (17)
Decrease in loans and receivables 30 8
Net cash outflow from investing activities (3 761) (4 077)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds on exercise of share options 28 50
Long-term borrowings raised 802 501
Long-term borrowings repaid (212) (294)
Decrease in short-term borrowings (144) (78)
Net cash inflow from financing activities 474 179
Net increase/(decrease) in cash and cash equivalents 961 (10)
Cash and cash equivalents at beginning of year 3 227 3 227
Foreign currency translation on cash balance 48 10
Cash and cash equivalents at end of year 5 4 236 3 227
Notes to the financial statements
for the year ended 30 June 2013 (reviewed)
1 STATEMENT OF COMPLIANCE
The Group's provisional financial statements have been prepared in accordance with the framework concepts and
the measurement and recognition requirements of International Financial Reporting Standards (IFRS) and the SAICA
Financial Reporting Guides as issued by the Accounting Practice Committee and Financial Pronouncements as issued by
the Financial Reporting Standards Council and contains the information required by IAS 34 Interim Financial Reporting ,
requirements of the South African Companies Act and the Listings Requirements of the JSE Limited.
BASIS OF PREPARATION
The Group provisional results for the year under review have been prepared under the supervision of the financial director
Mr M Arnold CA (SA). The Group provisional financial statements have been prepared on the historical cost basis, except
for certain financial instruments that are fairly valued by mark to market. The accounting policies used are consistent with
those in the most recent annual financial statements except for those listed below.
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 during the course of the year:
Standard Subject
IAS 1 Presentation of other comprehensive income (Amendment)
IAS 12 Income taxes Recovering of underlying assets (Amendment)
The adoption of these amendments only resulted in changes to the manner in which the annual financial statements are
presented as well as additional disclosures in the annual financial statements.
In addition the following amendments, standards or interpretations have been issued but are not yet effective. The effective
date refers to reporting periods beginning on or after, unless otherwise indicated.
Standard Subject Effective date
IFRS 1 First-time amendment of International Financial Reporting Standards (Amendment) 1 January 2013
IFRS 7 Disclosures offsetting financial assets and financial liabilities 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 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 Offsetting financial assets and financial liabilities 1 January 2014
IAS 36 Disclosure requirements for the recoverable amount of impaired assets 1 January 2014
IFRIC 21 Levies 1 May 2013
The Group does not intend early adopting any of the above amendments, standards or interpretations.
ARM Corporate
ARM ARM ARM ARM Explora- and
Platinum Ferrous Coal Copper tion other* Gold Total
Rm Rm Rm Rm Rm Rm Rm Rm
2.1 Year to 30 June 2013
(Reviewed)
Sales 6 344 12 502 929 69 19 844
Cost of sales (5 102) (7 271) (656) (132) 46 (13 115)
Other operating income 87 306 37 11 519 960
Other operating expense (294) (1 115) (2) (91) (88) (562) (2 152)
Segment result 1 035 4 422 308 (143) (88) 3 5 537
Income from investments 21 137 46 64 268
Finance cost (56) (26) (82) (20) (35) (219)
Finance cost Implats:
Shareholders' loan
Two Rivers (3) (3)
Finance cost ARM:
Shareholders' loan
Two Rivers (3) (3)
Income from associate (14) (14)
Exceptional items (182) (3) (2 454) (2 639)
Taxation (285) (1 245) (63) (6) (30) 484 (1 145)
Non-controlling interest (182) 34 (148)
Contribution to
basic earnings 527 3 106 146 (135) (88) (16) (1 906) 1 634
Contribution to
headline earnings 527 3 237 148 (135) (88) (16) 64 3 737
Other information:
Segment assets,
including investment
in associate 9 913 16 826 3 631 3 581 1 895 2 275 38 121
Investment in associate 1 420 1 420
Segment liabilities 2 008 1 617 1 717 919 2 114 8 375
Unallocated liabilities
(tax and deferred tax) 4 283
Consolidated total
liabilities 12 658
Cash inflow/(outflow)
from operating activities 988 3 979 219 (48) (88) (866) 64 4 248
Cash outflow from
investing activities (654) (2 041) (169) (888) (9) (3 761)
Cash (outflow)/inflow
from financing activities (149) (155) 144 634 474
Capital expenditure 735 1 951 41 753 9 3 489
Amortisation and
depreciation 676 885 106 21 5 1 693
Impairment 156 156
EBITDA 1 711 5 307 414 (122) (88) 8 7 230
* 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
2.2 Year to 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 Implats:
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 basic
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 liabilities
(tax and deferred tax) 4 001
Consolidated total
liabilities 10 911
Cash inflow/(outflow)
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 (outflow)/inflow
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 (7) (113) 103 6 531
* Corporate, other companies and consolidation adjustments.
The ARM platinum segment is analysed further into Two Rivers Platinum (Pty) Limited, ARM M Mining Consortium Limited which
includes Modikwa Platinum Mine and Nkomati Nickel Mine.
Platinum
Nkomati Two Rivers Modikwa Total
Rm Rm Rm Rm
2.3 Year to 30 June 2013
(Reviewed)
Sales
External sales 2 244 2 868 1 232 6 344
Cost of sales (1 810) (2 216) (1 076) (5 102)
Other operating income 54 21 12 87
Other operating expenses (168) (114) (12) (294)
Segment result 320 559 156 1 035
Income from investments 9 4 8 21
Finance cost (3) (50) (3) (56)
Finance cost Implats: Shareholders' loan
Two Rivers Platinum (Pty) Limited (3) (3)
Finance cost ARM: Shareholders' loan
Two Rivers Platinum (Pty) Limited (3) (3)
Taxation (94) (146) (45) (285)
Non-controlling interest (162) (20) (182)
Contribution to basic earnings 232 199 96 527
Contribution to headline earnings 232 199 96 527
Other information:
Segment and consolidated assets 3 316 3 823 2 774 9 913
Segment liabilities 608 1 037 363 2 008
Unallocated liabilities (tax and deferred tax) 1 354
Consolidated total liabilities 3 362
Cash inflow from operating activities 314 539 135 988
Cash outflow from investing activities (80) (427) (147) (654)
Cash outflow from financing activities (149) (149)
Capital expenditure 94 498 143 735
Amortisation and depreciation 254 350 72 676
EBITDA 574 909 228 1 711
Platinum
Nkomati Two Rivers Modikwa Total
Rm Rm Rm Rm
2.4 Year to 30 June 2012
(Audited)
Sales
External sales 1 554 2 335 1 025 4 914
Cost of sales (1 497) (1 811) (953) (4 261)
Other operating income 11 10 12 33
Other operating expenses (234) (68) (53) (355)
Segment result (166) 466 31 331
Income from investments 6 13 14 33
Finance cost (3) (42) (2) (47)
Finance cost Implats: Shareholders' loan
Two Rivers Platinum (Pty) Limited (4) (4)
Finance cost ARM: Shareholders' loan
Two Rivers Platinum (Pty) Limited (4) (4)
Exceptional items 1 1
Taxation 33 (132) (11) (110)
Non-controlling interest (133) (6) (139)
Contribution to basic earnings (129) 164 26 61
Contribution to headline earnings (130) 164 26 60
Other information:
Segment and consolidated assets 2 786 3 443 2 592 8 821
Segment liabilities 366 1 048 414 1 828
Unallocated liabilities (tax and deferred tax) 1 224
Consolidated total liabilities 3 052
Cash inflow from operating activities 13 588 50 651
Cash outflow from investing activities (272) (332) (224) (828)
Cash outflow from financing activities (3) (74) (1) (78)
Capital expenditure 242 467 219 928
Amortisation and depreciation 192 249 80 521
Reversal of impairment (1) (1)
EBITDA 26 715 111 852
Additional information
Pro forma analysis of the Iron Ore Manganese Chrome Attributable
Ferrous segment Division Division Division Total to ARM
on a 100% basis Rm Rm Rm Rm Rm
2.5 Year to 30 June 2013
(Reviewed)
Sales 15 690 7 437 1 876 25 003 12 502
Other operating income 854 272 22 1 148 306
Other operating expense (1 576) (878) (313) (2 767) (1 115)
Operating profit 7 466 1 555 (179) 8 842 4 422
Contribution to earnings 5 517 827 (134) 6 210 3 106
Contribution to headline earnings 5 531 940 1 6 472 3 237
Other information:
Consolidated total assets 23 185 10 513 776 34 474 16 826
Consolidated total liabilities 5 985 2 555 332 8 872 1 617
Capital expenditure 2 709 1 223 132 4 064 1 951
Amortisation and depreciation 1 180 533 102 1 815 885
Cash inflow/(outflow) from
operating activities 3 694* 1 314 (51) 4 957 3 979
Cash outflow from investing activities (2 791) (1 164) (127) (4 082) (2 041)
EBITDA 8 646 2 088 (77) 10 657 5 307
2.6 Year to 30 June 2012
(Audited)
Sales 15 296 6 352 2 040 23 688 11 844
Other operating income 1 022 417 163 1 602 435
Other operating expense (1 688) (596) (234) (2 518) (893)
Operating profit 8 370 1 280 (258) 9 392 4 696
Contribution to earnings 5 835 1 223 (174) 6 884 3 443
Contribution to headline earnings 5 935 1 222 (171) 6 986 3 495
Other information:
Consolidated total assets 19 718 9 316 1 172 30 206 14 751
Consolidated total liabilities 5 042 1 934 838 7 814 1 548
Capital expenditure 3 339 886 293 4 518 2 171
Amortisation and depreciation 910 321 163 1 394 677
Cash inflow from operating activities 4 284* 1 244 229 5 757 3 879
Cash outflow from investing activities (3 262) (602) (494) (4 358) (2 179)
Cash outflow from financing activities (5) (5) (2)
EBITDA 9 280 1 601 (95) 10 786 5 373
* Dividend paid amounting to R3 billion (F2012: R2 billion) included in cash flows from operating activities.
Notes to the financial statements
for the year ended 30 June 2013
Reviewed Audited
2013 2012
Rm Rm
3 EXCEPTIONAL ITEMS
Loss on sale of property, plant and equipment (26) (2)
Impairment of available-for-sale listed investment (2 454)
Impairments and scrapping of property, plant and equipment (159) (68)
Exceptional items per income statement (2 639) (70)
Profit on sale of property, plant and equipment accounted for directly
in associate ARM Coal 52
Taxation accounted for in associate (14)
Taxation on impairment of available-for-sale investment 484
Taxation on other exceptional items 52 19
Total amount adjusted for headline earnings (2 103) (13)
4 HEADLINE EARNINGS
Basic earnings attributable to equity holders of ARM 1 634 3 438
Profit on sale of property, plant and equipment in associate ARM Coal (52)
Impairment of available-for-sale listed investment 2 454
Impairments and scrapping of property, plant and equipment 159 68
Loss on disposal of property, plant and equipment 26 2
4 273 3 456
Taxation on impairment of available-for-sale investment (484)
Taxation on other exceptional items (52) (5)
3 737 3 451
5 CASH AND CASH EQUIVALENTS
African Rainbow Minerals Limited 579 161
ARM Finance Company SA 60 107
ARM Coal Proprietary Limited 4
Assmang Limited 2 588 2 160
ARM Platinum Proprietary Limited 125 152
Kingfisher Insurance Co Limited 134 146
Nkomati 223 43
Two Rivers Platinum Proprietary Limited 9 2
Vale/ARM joint venture 45 60
Venture Building Trust Proprietary Limited 2 4
Restricted cash 863 729
Total as per statement of financial position 4 632 3 564
Less: Overdrafts (included in note 7) 396 337
Total as per statement of cash flows 4 236 3 227
6 LONG-TERM BORROWINGS
African Rainbow Minerals Limited 564
ARM Finance Company SA 735 277
ARM Coal Proprietary Limited (partner loan) 1 492 1 604
Two Rivers Platinum Proprietary Limited 104 140
Vale/ARM joint venture (partner loan) 398 195
3 293 2 216
Reviewed Audited
2013 2012
Rm Rm
7 OVERDRAFTS AND SHORT-TERM BORROWINGS
African Rainbow Minerals Limited 3 415
ARM Mining Consortium Limited 57
ARM Mining Consortium Limited Anglo Platinum Limited (partner loan) 114 114
ARM Coal Proprietary Limited 36 14
ARM Finance Company SA 60
Two Rivers Platinum Proprietary Limited Bank loans and overdrafts 443 338
Two Rivers Platinum Proprietary Limited Impala Platinum (partner loan) 48
Vale/ARM joint venture 13
Other 30 35
699 1 021
Overdrafts included above and referred to in note 5
ARM Mining Consortium Limited 57
Two Rivers Platinum Proprietary Limited 353 245
Vale/ARM joint venture 13
Other 30 35
396 337
8 TAXATION
South African normal taxation
current year 1 344 1 184
mining 1 185 1 043
non-mining 159 141
prior year (42) 69
Deferred taxation (164) 329
Foreign taxes 7 1
Secondary Tax on Companies 50
1 145 1 633
9 MINERAL ROYALTY TAXATION
Included in other operating expenses are amounts relating to ARM's
attributable portion of mineral royalty taxes paid
Assmang Limited 445 438
ARM Mining Consortium Limited 3
Vale/ARM joint venture 4
ARM Coal Proprietary Limited 1 1
Nkomati 8 7
Two Rivers Platinum Proprietary Limited 93 43
551 492
10 CASH GENERATED FROM OPERATIONS BEFORE
WORKING CAPITAL MOVEMENTS
Cash generated from operations before working capital movement 7 921 7 158
Working capital changes (1 609) (1 189)
Movement in inventories (863) (375)
Movement in receivables (1 066) (528)
Movement in payables and provisions 320 (286)
Cash generated from operations (per cash flow) 6 312 5 969
Reviewed Audited
2013 2012
Rm Rm
11 COMMITMENTS
Commitments in respect of future capital expenditure, which will be funded
from operating cash flows and by utilising available cash and borrowing
resources, are summarised below:
Commitments
Commitments in respect of capital expenditure:
Approved by directors
contracted for 1 265 3 580
not contracted for 482 419
Total commitments 1 747 3 999
12 CONTINGENT LIABILITIES
There have been no significant changes in the contingent liabilities of the Group as disclosed in the 30 June 2012 annual
report.
13 EVENTS AFTER REPORTING DATE
The Kalumines transaction was concluded after the year-end. As a result, all the Kalumines assets are reflected as held-
for-sale.
No other significant events have occurred subsequent to the reporting date that could materially affect the reported results.
Contact details and administration
African Rainbow Minerals Limited Transfer secretaries
Incorporated in the Republic of South Africa Computershare Investor Services
Registration number 1933/004580/06 Proprietary Limited
ISIN code: ZAE 000054045 Ground Floor, 70 Marshall Street
Registered office Johannesburg, 2001
ARM House PO Box 61051, Marshalltown, 2107
29 Impala Road Telephone: +27 11 370 5000
Chislehurston, Sandton, 2196 Telefax: +27 11 688 5222
South Africa
E-mail: web.queries@computershare.co.za
PO Box 786136, Sandton, 2146 Website: http://www.computershare.co.za
South Africa
Telephone: +27 11 779 1300 Sponsor
Fax: +27 11 779 1312 Deutsche Securities (SA) Proprietary Limited
E-mail: ir.admin@arm.co.za
Website: http://www.arm.co.za
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.
Directors
PT Motsepe (Executive Chairman)
MP Schmidt (Chief Executive Officer) WM Gule**
F Abbott* MW King*
M Arnold AK Maditsi*
Dr MMM Bakane-Tuoane* DV Simelane
TA Boardman* Dr RV Simelane*
AD Botha* ZB Swanepoel*
JA Chissano (Mozambican)* AJ Wilkens
* Independent non-executive
** Non-executive
www.arm.co.za
Date: 02/09/2013 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
