Wrap Text
Interim Results for the six months ended 31 December 2013
African Rainbow Minerals Limited
Incorporated in the Republic of South Africa
Registration number 1933/004580/06
ISIN code: ZAE000054045
INTERIM RESULTS
For the six months ended 31 December 2013
Shareholder information
Issued share capital at 31 December 2013 216 462 130 shares
Market capitalisation at 31 December 2013 ZAR40.9 billion
Market capitalisation at 31 December 2013 US$3.9 billion
Closing share price at 31 December 2013 R189.00
Six-month month high (1 July 2013 - 31 December 2013) R208.38
Six-month month low (1 July 2013 - 31 December 2013) R143.00
Average daily volume traded for the six months 362 412 shares
Primary listing JSE Limited
Ticker symbol ARI
Investor relations
Jongisa Klaas
Corporate Development and Head of Investor Relations
Telephone: +27 11 779 1507
Fax: +27 11 779 1312
E-mail: jongisa.klaas@arm.co.za
Betty Mollo
Manager: Investor Relations and Corporate Development
Telephone: +27 11 779 1478
Fax: +27 11 779 1312
E-mail: betty.mollo@arm.co.za
Company secretary
Alyson D'Oyley, BCom, LLB, LLM
Telephone: +27 11 779 1300
Fax: +27 11 779 1318
E-mail: alyson.doyley@arm.co.za
Salient features
- Headline earnings increased by 66% to R2.34 billion (1H F2013: R1.41 billion).
Headline earnings per share were 1 084 cents compared to 654 cents per share
in the corresponding period.
- Basic earnings of R1.71 billion were negatively affected by exceptional items of R627 million.
The largest exceptional item related to a R510 million unrealised mark-to-market loss on the
Harmony investment.
- The ARM Ferrous contribution to headline earnings increased by 108% from R1.04 billion
(restated) to R2.15 billion mainly as a result of:
- higher US Dollar prices realised for iron ore and
- a weaker Rand.
- ARM Platinum's contribution to headline earnings increased from R299 million to R363 million.
The increase was achieved despite lower US Dollar PGM and nickel prices.
- Increased sales volumes were achieved in:
iron ore, PGMs, nickel, manganese alloys, export coal from Goedgevonden Mine, chrome
concentrate and copper.
- Decrease in unit production costs achieved at Nkomati Nickel Mine.
Cost increases at the Dwarsrivier and Two Rivers mines were lower than inflation.
- Update on growth projects:
- The Lubambe Copper Mine:
- the concentrate specification issues have been resolved.
- challenges with the late commissioning of the vertical shaft have also been resolved.
- Earthworks have commenced at the Sakura manganese alloy smelting project.
ARM operational review
The ARM Board of Directors (the Board) is pleased to report a 66% increase in headline earnings to R2.34 billion for the six
months ended 31 December 2013 (1H F2014). The higher earnings were achieved as a result of improved contributions
from ARM Ferrous and ARM Platinum.
ARM Ferrous headline earnings increased 108% buoyed by higher US Dollar iron ore prices as well as a 19% weakening of
the Rand versus the US Dollar. ARM Platinum headline earnings were higher mainly due to a solid operational performance
at the Two Rivers Platinum Mine and continued improvement at the Nkomati Nickel Mine. ARM Copper made a headline
loss of R122 million (1H F2013: R21 million loss) as production ramp-up at the Lubambe Mine experienced challenges.
The ARM Coal headline loss of R34 million was as a result of a disappointing performance at the Participating Coal
Business (PCB).
Sales volume increases at ARM's operations were as follows (on 100% basis):
- 4% increase in iron ore sales from 7.4 million tonnes to 7.7 million tonnes;
- 4% increase in nickel sales from 10 thousand tonnes to 10.3 thousand tonnes;
- 4% increase in Platinum Group Metal (PGM) sales from 409 thousand ounces to 427 thousand ounces;
- 9% increase in manganese alloy sales from 107 thousand tonnes to 117 thousand tonnes;
- 22% increase in export coal sales from Goedgevonden Mine from 1.74 million tonnes to 2.13 million tonnes;
- 55% increase in chrome concentrate sales from Nkomati Mine from 76 thousand tonnes to 117 thousand tonnes; and
- copper sales increased from 2.9 thousand tonnes to 14.3 thousand tonnes as the Lubambe Mine ramps up production.
In addition Two Rivers Mine started to produce chrome concentrate as a by-product and sold approximately 44 thousand
tonnes of concentrate over the six month period.
The interim results for the six months ended 31 December 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 six months ended 31 December
R million 2013 2012 % change
Platinum Group Metals 206 152 36
Nkomati nickel and chrome 157 147 7
Ferrous metals* 2 153 1 035 108
Coal (34) 105 (132)
Copper (122) (21) >(250)
Exploration (24) (36) 33
Gold - 32 -
Corporate and other* 5 (8) -
ARM headline earnings 2 341 1 406 66
* Includes IFRS 11 adjustments related to ARM Ferrous.
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).
Continuing to focus on operational efficiencies
The cost of mining has come under increasing pressure in recent years, with cost escalations for key inputs like electricity,
diesel, consumables and labour exceeding inflation. ARM continues to focus on cost containment to ensure that all our
operations remain positioned below the 50th percentile of each commodity's global cost curve. Interventions to contain
costs have included volume growth as well as improvements in productivity and efficiencies.
In the period under review Nkomati Nickel Mine achieved a further 5% reduction to its production costs per tonne milled
and a 15% decrease to the operation's C1 cash cost net of by-products. Costs were also well controlled at the Two Rivers
and Dwarsrivier mines where unit cost increases were lower than inflation. Cost escalations at the manganese operations
were in line with inflation.
Modikwa Mine unit costs increased by 14% as a result of the cessation of open-cast mining and an increase in the stoping
width of the mining area, which reduced PGMs produced in comparison to the corresponding period. Production unit cost
escalations of 13% at the iron ore operations exceeded inflation and were due to the increased cost of diesel and labour
as well as additional waste stripping to improve mining flexibility at the Khumani Mine. Manganese alloy costs increased
12% owing to lower alloy production, coupled with higher electricity prices and labour costs.
Unit production costs increases at the Goedgevonden and PCB mines were in excess of inflation at 31% and 38%,
respectively. The significant cost increase at Goedgevonden Mine was due to the burn-out of a mining excavator at the mine
as well as a low cost base in the corresponding period during which the mine depleted inventory. At the PCB operations
the strategic transition from underground to open-cast mining is slightly delayed. The delay has affected mining flexibility
as the low-cost, high-yield underground reserves are now depleted and as a result the high-cost, low-yield underground
areas were mined in the period under review. Mining in these areas is expected to continue for approximately another year
while the open-cast box cuts are prepared.
Quality growth continues
ARM has successfully ramped up three of its growth projects namely; Khumani Iron Ore Mine, Goedgevonden Coal
Mine and Nkomati Nickel Mine. ARM continues to focus on the growth of its portfolio of assets through both organic and
acquisitive growth.
Ramp-up of the Lubambe Copper Mine is progressing well. Challenges experienced with the concentrate have been
resolved. The plant is now producing concentrate to the specification of the contracted Zambian smelters. Delays were
experienced with the commissioning of the vertical shaft due to variations in the shaft bottom excavations compared to
the 1950's drawings. In addition, the ore and waste passes developed in the early 1950's were found to be incorrectly
developed. These delays have affected the targeted production ramp up. The shaft ore handling system however was
commissioned at the end of December 2013 and the mine remains on track to deliver the steady state 45 000 tonnes
copper per annum. Ramp-up to steady state is expected in F2016.
Assmang, China Steel Corporation and Sumitomo Corporation have approved development of the Sakura Ferroalloy
Project in the Sarawak State of Malaysia. Land for the US$328 million smelting project has been acquired and the power
purchase agreement was signed in October 2013. Metix has been appointed as the main project contractor. The project
is scheduled to achieve design production output of 170 000 tonnes of manganese alloy per annum in the second half
of 2016.
The detailed review of the Black Rock Mine expansion project from 3.2 million tonnes per annum to 4.6 million tonnes
per annum was completed in October 2013. The Boards of Directors of ARM and Assore have both approved the project.
The expansion will exploit the Seam 2 resource within the Nchwaning Mine lease area and will be developed in conjunction
with the expansion of the Nqura (Coega) Export Channel which is part of Transnet's Market Demand Strategy.
Changes to the Board of Directors
On 30 August 2013 ARM announced that Mr Michael W King, an Independent Non-executive Director, had informed
the Board that, on account of his age, he would not be standing for re-election at the 2013 Annual General Meeting.
Mr King, who is 76 years old, retired at the conclusion of this meeting. At the Company's Annual General Meeting,
held on 6 December 2013, ARM announced that Mr Thomas A Boardman had been appointed by the Board of Directors
of ARM as the Chairman of the Audit and Risk Committee.
Changes to mineral 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 2013, other than depletion due to continued mining activities at the operations and
increased resources at the Lubambe Extension Area.
The Lubambe Extension target area has increased the indicated and inferred mineral resources to 134 million tonnes
at an in-situ grade of 4.07% total copper based on an updated report released by AMEC E&C Services Inc (AMEC) on
27 February 2014. Drilling in this area is continuing.
Financial commentary
Headline earnings for the six-month period to 31 December 2013 were R2 341 million being 66% higher than the
corresponding period's headline earnings (1H F2013: R1 406 million). This equates to headline earnings per share of
R10.84 per share (1H F2013: R6.54 per share).
ARM's basic earnings for 1H F2014 were R1 714 million (1H F2013: R1 406 million) and were negatively impacted by
exceptional items of R627 million after tax. The largest exceptional item relates to the unrealised mark-to-market loss
of R510 million after tax on the Harmony investment made through the Income Statement. The reconciliation of basic
earnings to headline earnings is provided in note 8 of the financial statements.
As disclosed in the 2013 Integrated Annual Report, the new accounting standard, IFRS 11 Joint Arrangements, became
effective 1 July 2013. The adoption of the new standard requires a change in the manner in which joint arrangements
should be accounted for and prior period comparative IFRS results must be restated to reflect a consistent application
of the new accounting policy. This change has primarily impacted the manner in which ARM accounts for its investment
in Assmang, which ARM jointly manages and controls with its partner, Assore. Assmang is no longer proportionately
consolidated because IFRS 11 requires arrangements classified as joint ventures to be accounted for using the equity
method. ARM's share of its joint ventures are now disclosed as single line items on the consolidated Income Statement as
"Income from joint ventures" and as "Investment in joint ventures" on the statement of financial position. The Consolidated
Cash Flow Statement now only includes a single line for dividends received from joint ventures.
A full reconciliation of the effect of the changes resulting from the adoption of IFRS 11 is provided in note 12 to the
financial statements. The derivation of the statement of financial position value for the investment in joint venture
is reflected in note 4 to the financial statements.
While the change in accounting policy has a significant impact on the presentation of the consolidated financial statements
there is no impact on headline earnings, basic earnings or net assets. The segment reporting has been expanded to include
more detail on the ARM Ferrous (Assmang) results.
Sales for the reporting period were 29% higher than the corresponding period last year at R4 606 million (1H F2013
restated: R3 572 million).
The average gross profit margin of 22% (1H F2013 restated: 22%) has been maintained. The margins achieved at each
operation may be ascertained from the detailed segment reports provided in note 3 to the financial statements as well as
in the write-ups for each operation.
The 1H F2014 average Rand/US Dollar of R10.04/US$ is 19% weaker than the corresponding period average of R8.46/US$.
For reporting purposes the closing exchange rate was R10.46/US$ (1H 2013: R8.45/US$).
ARM's earnings before interest, tax, depreciation and amortisation (EBITDA) excluding exceptional items and income from
associates and joint ventures were R1 264 million, which represents an increase of 21% on the restated amount for 1H F2013.
The income from joint venture amounts to R2 153 million and is 108% higher than the corresponding period last year
(1H F2013 restated: R1 035 million). The expanded segment analysis for ARM Ferrous is shown in note 3 to the financial
statements.
The detailed segmental contribution analysis is provided in note 3 to the financial statements. Key features from the
segmental contribution analyses are:
- The ARM Ferrous contribution to ARM's headline earnings amounted to R2 153 million (1H F2013 restated:
R1 035 million). The increase is due to a significant increase in the iron ore division's contribution and a higher
contribution from the manganese division.
- The ARM Platinum segment contribution, which includes the results of Nkomati, was R363 million which is R64 million
higher than the corresponding period (1H F2013: R299 million). The increase was mainly as a result of higher headline
earnings from the Two Rivers and Nkomati mines.
- The ARM Coal segment result was a headline loss of R34 million (1H F2013: R105 million profit). Goedgevonden Mine
contributed increased headline earnings of R93 million (1H F2013: R63 million) while the PCB operations made a
headline loss of R127 million (1H F2013: R42 million profit).
- ARM Copper which mainly comprises the Vale/ARM joint venture interest in the Lubambe Copper Mine and related
costs amounted to a headline loss of R122 million for the period (1H F2013: R21 million loss).
- The costs for the ARM Exploration segment were R24 million (1H F2013: R36 million) and mainly include the cost of
exploration on the Rovuma project.
- The Corporate and other segment reflects headline earnings of R5 million as compared
to a headline loss of R8 million for the previous corresponding period.
At 31 December 2013, cash and cash equivalents (excluding cash in ARM Ferrous of R2 646 million: 1H F2013: R1 391 million)
amounted to R1 524 million (1H F2013 restated: R1 563 million) with gross debt being R3 854 million (1H F2013 restated:
R4 381million). The net debt position at 31 December 2013 therefore amounts to R2 330 million (1H F2013 restated: net
debt R2 818 million) which is a decrease of R488 million. The analysis of cash and cash equivalents as well as borrowings
is reflected in notes 5 and 6. The segment analysis for ARM Ferrous includes details on their cash and cash equivalents.
Cash generated from operations increased to R861 million from R384 million (restated) after a working capital requirement
of R671 million (1H F2013 restated: R948 million) which is mainly due to the increase in sales.
Capital expenditure amounted to R697 million for the period (1H F2013 restated: R904 million). Capital expenditure in
ARM Ferrous was R732 million for the period (1H F2013: R1 062 million).
Net debt at 31 December 2013 excluding partner loans (Anglo American Platinum: R114 million, ZCCM-IH:
R431 million and Glencore/Xstrata: R1 320 million) amounted to R465 million as compared to R778 million (restated)
at 31 December 2012.
ARM's consolidated total assets of R34 725 million (F2013: R33 839 million) include the marked-to-market valuation
of ARM's investment in Harmony of R1 648 million (F2013: R2 275 million) at a share price of R25.90 per share
(F2013: R35.75 per share).
Safety
ARM is pleased to report that no fatalities occurred at any of the ARM managed operations in the period under review.
As a result, the ARM managed operations have completed 23 months without a fatality. The Lost Time Injury Frequency
Rate (LTIFR) remained constant at 0.41 per 200 000 man-hours compared to the corresponding period. The number of
Lost Time Injuries (LTIs) decreased to 59 from 80 LTIs in 1H F2013. Of the 59 LTIs 34 were also classified as Reportable
Injuries in terms of the definitions of the Mine Health and Safety Act and Occupational Health and Safety Act (compared
to 45 in 1H F2013).
Safety is a key imperative for ARM and we remain committed to adhering to global best practice to ensure the safety and
health of all ARM's employees. This is illustrated in our safety achievements.
Safety achievements
- Beeshoek Mine completed four consecutive operating quarters without incurring a lost time injury. The mine has also
been fatality-free since March 2003.
- Dwarsrivier Mine achieved 2 million fatality-free shifts in November 2013.
Safety figures and statistics in this report are presented on a 100% basis and currently exclude the ARM Coal operations.
ARM Ferrous
ARM Ferrous achieved a 108% increase to headline earnings from R1 035 million (restated) in 1H F2013 to R2 153 million
in the period under review.
ARM Ferrous headline earnings (on 100% basis)
six months ended 31 December
R million 2013 2012 % change
Iron ore division 3 644 1 731 111
Manganese division 655 411 59
Chrome division 37 (20) -
Total 4 336 2 122 104
ARM share 2 168 1 061
Consolidation adjustments (15) (26)
Total per IFRS financial statements 2 153 1 035 108
Total sales of R14.0 billion were 33% higher mainly as a result of higher US Dollar prices realised for iron ore together with
a 19% weakening of the Rand.
Sales volumes compared to the same period last year were as follows:
- Total iron ore sales of 7.7 million tonnes were 4% higher, with export sales of 6.7 million tonnes being marginally (0.3%)
lower and local sales 45% higher at 1 million tonnes.
- Manganese ore sales (excluding intra-group sales) were 7% lower at 1.4 million tonnes. This was mainly due to the
balancing and maintaining of stockpile levels to satisfy quality and grade specifications.
- Chrome ore sales were similar at 477 thousand tonnes.
- Manganese alloys sales increased by 9% to 117 thousand tonnes due to stable and efficient furnace operations.
- Ferrochrome sales were down 65%, as the only ferrochrome production during the period came from the Metal
Recovery Plant which recovers the final metal entrapped in the slag.
Assmang sales volumes
100% basis six months ended 31 December
Thousand tonnes 2013 2012 % % change
Iron ore 7 738 7 433 4
Manganese ore* 1 411 1 513 (7)
Manganese alloys 117 107 9
Charge chrome 17 48 (65)
Chrome ore* 477 483 (1)
* Excluding intra-group sales.
Assmang production volumes
100% basis six months ended 31 December
Thousand tonnes 2013 2012 % change
Iron ore 7 606 7 730 (2)
Manganese ore 1 727 1 483 16
Manganese alloys 133 138 (4)
Chrome ore 496 496 -
On-mine production unit costs at the iron ore operations were 12.9% higher compared to 1H F2013. This higher than
inflation cost escalation was mainly as a result of increased labour and diesel costs which accounted for approximately
8% of the increase. The balance was due to additional waste stripping to improve mining flexibility at the Khumani Mine.
Manganese ore on-mine production unit costs increased marginally above inflation at 7.2%, whilst unit production costs at
the manganese alloy operations were above inflation at 12.3%. Costs at the manganese alloy operations were impacted
by above inflation increases in electricity and labour costs as well as a 3.6% reduction in production volumes. Costs at the
Dwarsrivier Chrome Mine were well contained remaining flat due to an improvement in operational efficiencies at the mine.
Assmang cost and EBITDA margin performance
On-mine
Cost of production
sales unit cost unit cost EBITDA
Commodity group cost change change margin
% % %
Iron ore* 11 13 58
Manganese ore 6 7 37
Manganese alloys 11 12 10
Chrome ore 1 1 9
* Excluding the Khumani Mine housing element.
Capital expenditure (on 100% basis) was 31% lower at R1.52 billion (1H F2013 restated: R2.22 billion). The main capital
expenditure items relate to the finalisation and commissioning of the Khumani Optimisation Project as well as the Wet
High Intensity Magnetic Separation (WHIMS) Plant. There was no capital waste stripping at the Khumani Mine during
the period under review. The mining fleet for the future mining area at Beeshoek Mine, namely the Village Pit, has been
ordered. Capital was also spent on the feasibility study and early works of the Black Rock Mine Expansion Project as well
as the underground mining fleet for the existing operations. The remaining capital was spent on information technology,
compliance and maintenance capital.
Assmang capital expenditure
100% basis six months ended 31 December
R million 2013 2012*
Iron ore 902 1 610
Manganese 541 547
Chrome 80 61
Total 1 523 2 218
* The capital expenditure for the six months ended 31 December 2012 has been restated.
Logistics
Iron ore railed to Saldanha Port, at 6.9 million tonnes, was marginally less than the 7.0 million tonnes railed in 1H F2013.
Assmang utilised the rapid load-out facility at Khumani Mine to assist Transnet to rail 113 thousand tonnes of iron ore for
a new emerging iron ore producer.
Assmang and Transnet continue to engage regarding future export capacity and growth in capacity for both iron ore and
manganese ore exports. To this effect, Transnet has officially engaged Assmang on the Manganese Export Capacity
Allocation - short term (MECA 2) and the Manganese Export Capacity Allocation - long term (MECA 3) processes.
MECA 2 will cover the period until the Ngqura Port is in operation and MECA 3 will regulate the Ngqura Supply Chain
Channel. Assmang has aligned its growth and ramp-up of the Black Rock Mine with Transnet's schedule and capacity
allocation.
Chrome ore is sold both locally and internationally, with exports channelled through the Richards Bay Port and Maputo.
Projects
Khumani Iron Ore Optimisation Project
The Khumani Mine Wet High Intensity Magnetic Separation (WHIMS) Plant was successfully commissioned on schedule
and within budget. The product recovered by the WHIMS plant will extend the life of Khumani Mine and materially improve
the quality of the final product.
Studies on the ratios and distribution of on-grade and off-grade ores at the Khumani Mine as well as a study on the
necessity for additional jigging capacity to maintain high quality production are in progress.
Beeshoek Iron Ore Mine
The establishment of the Village Pit at the Beeshoek Mine is progressing on schedule. The housing construction in
Postmasburg and the process of relocating employees residing in Beeshoek is ongoing. The first units of the new production
fleet have been delivered, with final units expected to be on site by July 2014.
Manganese Ore Expansion
A detailed review of the Black Rock Mine Expansion Project, which is expected to increase saleable production from
3.2 million tonnes per annum to 4.6 million tonnes per annum, was completed in October 2013. The review included the
relevant market evaluations, resource optimisation trade-offs, technical design reviews and a comprehensive financial
evaluation. The project involves exploitation of the Seam 2 resource within the Nchwaning lease area to improve the cost
effective extraction of the high grade manganese ore resources. This will allow ARM and Assore to capitalise on demand
growth in the international manganese ore market. The project's ramp-up will be synchronised with the expansion of the
manganese ore export channel through the Port of Ngqura.
The project has been approved by both the ARM and Assore Boards of Directors.
Sakura Manganese Alloy Project
The US$328 million joint venture manganese alloy smelting project between Assmang (54%), Sumitomo Corporation
(27%) and China Steel Corporation (19%), in the Sarawak State of Malaysia, has been approved by all the shareholders'
Boards of Directors. The project leverages on the long-term availability of reasonably priced hydro-electric power, with a
guaranteed low escalation rate within Malaysia, and allows Assmang to continue to supply its existing alloy customers.
Further, Assmang will sell manganese ore to the Sakura Ferroalloys Project.
Land for development of the project was acquired in the Samalaju Industrial Park and earthworks have commenced.
The power purchase agreement was signed on 11 October 2013 and the main project contractor, Metix, was appointed.
The project is scheduled to achieve its full design production output of 170 000 tonnes per annum of manganese alloy in
the second half of 2016.
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 attributable headline earnings increased by R64 million (21%) to R363 million driven mainly by improved
performances at Nkomati Mine and Two Rivers Mine and by increased Rand metal prices.
PGM production (on 100% basis including Nkomati Mine) increased 4% to 426 695 6E ounces (1H F2013: 409 014 ounces)
while Nkomati Mine's nickel produced increased by 5% to 11 859 tonnes (1H F2013: 11 258 tonnes) due to improved plant
recoveries and efficiencies.
US Dollar prices were lower than the corresponding period however a 19% 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 12% to
R305 767/kg (1H F2013: R271 808/kg) and R315 316/kg (1H F2013: R282 478/kg) respectively.
The tables below sets out the relevant price comparison:
Average US Dollar metal prices
Average for the six months ended 31 December
2013 2012 % change
Platinum US$/oz 1 424 1 550 (8)
Palladium US$/oz 724 633 14
Rhodium US$/oz 937 1 081 (13)
Nickel US$/t 13 935 16 376 (15)
Copper US$/t 7 177 7 729 (7)
Chrome concentrate (CIF) US$/t 133 142 (6)
Average Rand metal prices
Average for the six months ended 31 December
2013 2012 % change
Platinum R/oz 14 301 13 111 9
Palladium R/oz 7 267 5 354 36
Rhodium R/oz 9 403 9 142 3
Nickel R/t 139 910 138 538 1
Copper R/t 72 061 65 388 10
Chrome concentrate (CIF) R/t 1 333 1 197 11
Nkomati Mine's unit cost improved by 5% to R283 per tonne milled (1H F2013: R297 per tonne) while the C1 unit
cash cost net of by-products reduced by 15% to US$4.35/lb (1H F2013: US$5.13/lb) of nickel produced. Modikwa
Mine's unit production costs increased 14% whilst Two River Mine unit costs increased 1%. Despite these increases it is
expected that both Modikwa and Two Rivers will continue to be positioned below the 50th percentile of the global PGM
cost curve with respective unit costs of R6 639/6E PGM oz (1H F2013: R5 829/6E PGM oz) and R5 153/6E PGM ounce
(1H F2013: R5 121/6E PGM oz).
Capital expenditure at ARM Platinum operations (on 100% basis) was R640 million (R389 million attributable). Modikwa's major
capital items include construction of the Mainstream Inert Grinding (MIG) plant, deepening of North shaft, the sinking of
South 2 shaft, and the replacement of mining equipment. Of the capital spent at Two Rivers, 21% is associated with fleet
replacement and 20% on the PGM scavenger plant. The balance was incurred in the deepening of the Main and North
declines. Nkomati's capital expenditure relates to increased waste stripping activities and to sustain operations.
ARM Platinum capital expenditure
100% basis six months ended 31 December
R million 2013 2012
Modikwa 320 172
Two Rivers 138 266
Nkomati 182 98
Total 640 536
Modikwa Mine
Modikwa Mine's attributable headline earnings decreased by 9%.
Production at the mine was lower with PGMs produced for the six months of 154 911 6E ounces compared to 1H F2013
production of 176 701 6E ounces. As a result, production unit costs increased by 14% to R929 per tonne milled (1H F2013:
R812 per tonne milled) and R6 639 per 6E PGM ounce (1H F2013: R5 829 per 6E PGM ounce). The decline in production
is due to the cessation of open-cast mining as well as an increase in dilution due to wider stoping width, which resulted in
a decrease of 2% in the head grade.
Modikwa Mine operational statistics
100% basis six months ended 31 December
2013 2012 % change
Cash operating profit R million 226 250 (10)
Tonnes milled Mt 1.11 1.27 (13)
Head grade g/t, 6E 5.31 5.44 (2)
PGMs in concentrate Ounces, 6E 154 911 176 701 (12)
Average basket price R/kg, 6E 305 767 271 808 12
Average basket price US$/oz, 6E 947 999 (5)
Cash operating margin % 18 20 -
Cash cost R/kg, 6E 213 441 187 418 14
Cash cost R/tonne 929 812 14
Cash cost R/Pt oz 17 067 14 672 16
Cash cost R/oz, 6E 6 639 5 829 14
Cash cost US$/oz, 6E 661 689 (4)
Headline earnings attributable to ARM (41.5%) R million 49 54 (9)
Two Rivers Mine
The headline earnings contribution from the Two Rivers Mine increased 60% in comparison to the corresponding period
last year.
PGM ounces produced increased by 8% driven by an increase in tonnes milled (4%) and improved plant recovery
and efficiency. This, combined with enhanced Rand basket prices, resulted in a 34% increase in cash operating profit.
The mine's costs were well contained in the currently inflationary environment increasing only 1% to R5 153 per 6E ounce
compared to the 1H F2013 unit costs of R5 121 per 6E ounce.
There was a 153 083 tonnes increase in the Run of Mine (ROM) stockpile (including Merensky) to a total of 437 296 tonnes
of ore. The UG2 stock movement from December 2012 to December 2013 equates to R75 million. The closing UG2 stock
level for 1H F2014 was 302 327 tonnes (1H F2013: 143 515 tonnes).
Two Rivers Mine commenced chrome concentrate sales in October 2013, with a total of 43 787 tonnes being sold during
the period under review.
Two Rivers Mine operational statistics
100% basis six months ended 31 December
2013 2012 % % change
Cash operating profit R million 641 479 34
- PGMs R million 624 479 30
- Chrome R million 17 - -
Tonnes milled Mt 1.66 1.59 4
Head grade g/t, 6E 4.01 4.07 (1)
PGMs in concentrate Ounces, 6E 193 503 179 513 8
Chrome concentrate sold Tonnes 43 787 - -
Average basket price R/kg, 6E 315 316 282 478 12
Average basket price US$/oz, 6E 977 1 039 (6)
Cash operating margin % 38 34 -
Cash cost R/kg, 6E 165 667 164 629 1
Cash cost R/tonne 602 578 4
Cash cost R/Pt oz 11 068 11 050 -
Cash cost R/oz, 6E 5 153 5 121 1
Cash cost US$/oz, 6E 513 605 (15)
Headline earnings attributable to ARM (55%) R million 157 98 60
Nkomati Mine
Nkomati Mine continued to perform well during the period under review and increased its headline earnings contribution
by 7% when compared with the previous period.
Nkomati Mine nickel production increased by 5% to 11 859 tonnes and PGM production increased by 48% to
78 280 ounces for the six months. Chrome concentrate sales increased 55% to 117 211 tonnes (1H F2013: 75 849).
Despite the Rand nickel price increasing only 1%, Nkomati Mine generated cash operating profit of R748 million, an
8% increase over the corresponding period. This can be attributed to cost control, enhanced efficiencies and a 4%
increase in overall plant recoveries. Nkomati Mine achieved a 15% reduction in the C1 unit cash cost net of by-products
to US$4.35/lb of nickel produced (1H F2013: US$5.13/lb).
Nkomati Mine operational statistics
100% basis six months ended 31 December
2013 2012 % % change
Cash operating profit R million 748 694 8
- Nickel Mine R million 695 644 8
- Chrome Mine R million 53 50 6
Cash operating margin % 30 33 -
Tonnes milled Mt 3.96 3.74 6
Head grade % nickel 0.39 0.42 (7)
Nickel on-mine cash cost per tonne milled R/tonne 283 297 (5)
Cash cost net of by-products* US$/lb 4.35 5.13 (15)
Contained metal
Nickel Tonnes 11 859 11 258 5
PGMs Ounces 78 280 52 800 48
Copper Tonnes 5 171 4 988 4
Cobalt Tonnes 593 535 11
Chrome concentrate sold Tonnes 117 211 75 849 55
Headline earnings attributable to ARM (50%) R million 157 147 7
* 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 progressing on schedule with total development at 1 903 metres versus the feasibility
plan of 1 874 metres. 7 Level was handed over to the mine operations in December 2013. The decline system is currently
approaching 9 Level and North and South haulage development is progressing to the first raise lines on 8 Level.
The development at the South 2 project has progressed well to tie in with the existing haulages at the Hillside adits and
infrastructure development at the decline turning point is progressing as planned. The first two raise positions have been
exposed on -1 Level.
The installation of a Mainstream Inert Grinding (MIG) mill, to enhance PGM recoveries, was approved and construction
commenced in Q1 F2014 with completion expected in Q4 F2014.
Two Rivers Mine
The transfer of prospecting rights from Implats to Two Rivers in respect of portions of the farms Kalkfontein, Tweefontein
and Buffelshoek is awaiting approval from the Department of Mineral Resources.
The PGM Enhancement Project has been completed and the commissioning and ramp up is progressing as planned.
On completion of the feasibility study on the extraction of UG2 ore from the deeper southern strike extent of the Main
Decline, further optimisation of the ore extraction method will be evaluated.
Nkomati Mine
All the major construction activities relating to Eskom power supply for the Nkomati Expansion Project were completed.
Some minor items are outstanding and will be completed by end Q4 F2014.
Kalplats PGM Exploration Project
Platinum Australia (PLA) submitted a definitive feasibility study in 2012 thereby completing Phase II of the exploration
programme and earning 44% participation interest in the Kalplats Project. The viability of a possible mining operation at
Kalplats is adversely affected by the lack of Eskom power and the uncertainty regarding the timing of its delivery. Approval
of a Retention Permit application, which was submitted in July 2012, is still awaited.
The ARM Platinum division comprises:
- Three operating mines:
- Modikwa - ARM Mining Consortium has an effective 41.5% interest in Modikwa where local communities hold an
8.5% effective interest. The remaining 50% is held by Anglo American Platinum.
- Two Rivers - an incorporated joint venture with Implats, with ARM holding 55% and Implats 45%.
- Nkomati - a 50:50 partnership between ARM and Norilsk Nickel Africa.
- Two projects:
- the "Kalplats Platinum Project" in which ARM Platinum holds 46% and Platinum Australia (PLA) holds 44%, with
Anglo American holding 10%.
- the "Kalplats Extended Area Project" in which ARM Platinum and PLA each have a 50% interest.
ARM Coal
ARM Coal's total attributable cash operating profit of R275 million is 38% lower compared to the R443 million achieved
in 1H F2013. Attributable headline earnings were a loss of R34 million compared to a profit of R105 million in 1H F2013.
Consolidated export sales volumes were in line with 1H F2013 however realised US Dollar export prices decreased by
22% from US$94.89 to US$74.40 per tonne due to the market requiring lower quality coal. This resulted in a decrease of
R359 million in attributable export revenue. This was offset to an extent by the weakening of the Rand versus the US Dollar
which contribute R238 million to sales.
Total saleable coal production was 12% lower than in 1H F2013. At the Goedgevonden Mine, damage to a mining
excavator resulted in lower Run Of Mine (ROM) and plant feed, as well as lower in-pit inventories and raw coal stockpiles.
The excavator has since been replaced. At PCB, ROM production and plant feed were 10% and 2% higher respectively.
The average yield however decreased by 7% due the depletion of low-cost, high-yield underground reserves. The
areas mined in the period under review were therefore high-cost, low-yield underground reserves. Mining in the low-
yield underground areas is expected to continue until the Tweefontein Optimisation Project is commissioned. Unprotected
industrial action, which lasted 6 days during the reporting period, also had a negative impact on overall production.
ARM Coal attributable profit analysis
six months ended 31 December
R million 2013 2012 % change
Cash operating profit 275 443 (38)
Less: Interest paid (127) (103) (23)
Amortisation (178) (162) (10)
Fair value adjustments (15) (34) 56
Profit before tax (45) 144 (131)
Less: Tax 11 (39) -
Headline (loss)/earnings attributable to ARM (34) 105 (132)
Goedgevonden Coal Mine
The Goedgevonden Mine attributable headline earnings increased by 48% from R63 million to R93 million. Cash operating
profit increased by 26% from R183 million to R230 million.
Attributable revenue was R81 million higher than in 1H F2013 as a result of increased export sales volumes, and a
19% weakening of the Rand versus the US Dollar. Export sales volumes increased by 22% linked to the improvement
in performance by Transnet Freight Rail (TFR). Eskom curtailed buying of additional coal, resulting in a reduction of 21%
in Eskom sales.
On-mine unit cost increased by 31% to R207 per tonne as a result of an increase in labour, maintenance, diesel and
explosives costs combined with a decrease in saleable production. These accounted for approximately 16% of the overall
increase and lower yields accounted for the balance of the increase. Total labour costs escalated as the mine increased
its labour complement to perform certain activities previously performed by contractors. Maintenance cost increases are in
line with the age of the mining fleet.
Goedgevonden Mine operational statistics
six months ended 31 December
2013 2012 % change
Total production sales
Saleable production Mt 3.77 4.41 (15)
Export thermal coal sales Mt 2.13 1.74 22
Eskom thermal coal sales Mt 1.81 2.28 (21)
Attributable production and sales
Saleable production Mt 0.98 1.15 (15)
Export thermal coal sales Mt 0.55 0.45 22
Eskom thermal coal sales Mt 0.47 0.59 (20)
Average received coal price
Export (FOB) US$/tonne 79.98 93.20 (14)
Eskom (FOT) R/tonne 195.74 183.73 7
On-mine saleable cost R/tonne 207.20 157.98 31
Cash operating profit
Total R million 883 702 26
Attributable (26%) R million 230 183 26
Headline earnings attributable to ARM R million 93 63 48
Goedgevonden Mine attributable profit analysis
six months ended 31 December
R million 2013 2012 % change
Cash operating profit 230 183 26
Less: Interest paid (43) (43) -
Amortisation (48) (47) (2)
Fair value adjustments (8) (6) (33)
Profit before tax 131 87 51
Less: Tax (38) (24) -
Headline earnings attributable to ARM 93 63 48
Participating Coal Business (PCB)
PCB attributable cash operating profit decreased by 83% from R260 million to R45 million and attributable headline
earnings decreased from R42 million to a loss of R127 million.
Attributable revenue was R182 million lower than in 1H F2013, mainly due to lower export volumes and lower US Dollar
prices as lower quality coal was sold into the market. This was partially offset by a weaker Rand/ US Dollar exchange rate
and higher realised prices for Eskom and domestic coal sales.
Saleable production was 10% lower as the yield decreased by 7% due to a change in the quality of plant feed to produce
export product. The lower yield together with stockpiling of 750 000 tonnes to cater for the commissioning of the new central
plant resulted in saleable production being 10% lower. The new central plant forms part of the Tweefontein Optimisation
Project (TOP) which is planned for commissioning in 1H F2015.
Total on-mine cash costs were R98 million higher due to the increased ROM production together with mining in high-cost
low-yield areas of the underground mine. Labour, maintenance, diesel and explosives costs were higher due to an increase
in the labour compliment and the mobile equipment fleet. Diesel prices increased 17% over the period which also impacted
in unit costs. These increases, together with the decrease in saleable production, resulted in an increase of 38% in on-mine
cost to R417 per saleable tonne. The benefit of stockpiling ROM coal in anticipation of the commissioning of the TOP Plant
will be reflected in on-mine unit costs when the stockpiled coal is fed into the plant next year.
Participating Coal Business operational statistics
six months ended 31 December
2013 2012 % change
Total production sales
Saleable production Mt 5.98 6.65 (10)
Export thermal coal sales Mt 4.97 5.29 (6)
Eskom thermal coal sales Mt 0.78 0.84 (7)
Local thermal coal sales Mt 0.22 0.22 -
Attributable production and sales
Saleable production Mt 1.21 1.34 (10)
Export thermal coal sales Mt 1.00 1.07 (7)
Eskom thermal coal sales Mt 0.16 0.17 (6)
Local thermal coal sales Mt 0.04 0.04 -
Average received coal price
Export (FOB) US$/tonne 67.78 96.30 (30)
Eskom (FOT) R/tonne 201.83 179.13 13
Local (FOR) R/tonne 347.04 264.86 31
On-mine saleable cost R/tonne 417.44 302.06 38
Cash operating profit
Total R million 223 1 286 (83)
Attributable (20.2%) R million 45 260 (83)
Headline (loss)/earnings attributable to ARM R million (127) 42 >(250)
Participating Coal Business attributable profit analysis
six months ended 31 December
R million 2013 2012 % change
Cash operating profit 45 260 (83)
Less: Interest paid (84) (60) (40)
Amortisation (130) (115) (13)
Fair value adjustments (7) (28) 75
Profit/(loss) before tax (176) 57 >(250)
Less: Tax 49 (15) -
Headline (loss)/earnings attributable to ARM (127) 42 >(250)
Projects
Tweefontein Optimisation Project
Construction at The Tweefontein Optimisation Project (TOP) is progressing well and as at 31 December 2013, 72% of
the estimated cost of R8.2 billion had been committed or spent. Work on the project commenced towards the end of F2012
and the project is expected to be completed in F2015.
ARM's economic interest in 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 PCB whilst total refers to 100%.
ARM Copper
The concentrator plant is producing concentrate to the specification of the contracted Zambian smelters and the dispute
between Lubambe Copper Mine and Mopani Copper Mines regarding off-specification concentrate has been resolved.
All high grade concentrate which was in stock as at 30 June 2013 will be sold by end of February 2014.
The late commissioning of the vertical shaft negatively impacted on production for the first half of F2014. Constraints
on underground rock handling at both the vertical shaft (South Limb) and the decline Shaft (East Limb) received attention
and these bottlenecks have largely been addressed. The main focus remains on attaining the requisite mining ramp up
towards full production in F2016 in a sustainable manner whilst strengthening the good safety culture on the mine.
Operational statistics
six months ended 31 December
2013 2012 % % change
Waste development Metres 5 861 6 355 (8)
Ore development Metres 4 281 4 188 2
Ore development Tonnes 220 516 286 786 (23)
Ore stoping Tonnes 436 394 88 525 >250
Ore tonnes mined Tonnes 656 910 379 695 73
Tonnes milled Thousand 716 005 294 279 143
Mill head grade % copper 1.97 1.70 16
Concentrator recovery % 75.04 64.6 16
Copper concentrate produced Tonnes 25 167 10 212 146
Copper concentrate sold Tonnes 33 607 8 564 >250
Contained metal
Copper produced Tonnes 10 567 3 230 227
Copper sold Tonnes 14 325 2 874 >250
Headline loss attributable to ARM (40%) R million (122) (21) >(250)
The Lubambe Copper Mine
The mine is well advanced in its ramp-up to full production which is expected to be achieved in the 2016 financial year.
The full commissioning of the mine and the achievement of the ramp up remained the main focus for this period.
Commissioning of the refurbished shaft took much longer than anticipated mainly due to the actual shaft bottom excavations
being materially different from the 1950's drawings. In addition to this the ore and waste passes developed in the early 50's
were found to be incorrectly developed. This hampered ore and waste hoisting capacity and hence the production output
from Lubambe Copper Mine was below target. During December 2013 all the required modifications of the ore and waste
passes were completed successfully. During this period the mine also installed and commissioned an 850 MMD mineral
sizer on the main tips on the east limb in order to increase ore-flow through the mine. Today we have four rock passes
compared to only one in the comparable period. This improvement project was necessitated due to poor ground conditions
experienced at the second conveyor transfer section of the Eastern Limb.
The concentrator plant achieved full daily capacity on several occasions during the reporting period. Plant performance
is improving and further modifications and optimisation plans are being implemented to improve extraction and quality
from the plant. During the latter part of 1H F2014 an amenable agreement was reached with Mopani Copper Mines to buy back
the off specification concentrate and export it to smelters in China. As at 31 December 2013, 3 600 of the 15 500 tonnes
of disputed concentrate was sold and it is expected to have all the concentrate sold by the end of February 2014. All high
grade concentrate stocks accumulated on the mine as a result of the cessation of deliveries to Mopani have also been
depleted and sold to traders at acceptable terms. New and revised off take agreements have been put in place during this
reporting period and are now with Chambishi Copper Smelter (CCS) and Konkola Copper Mines (KCM).
In spite of the production tonnage constraints experienced on the mine during the first six months of F2014, access
development is still progressing well with ore drive development being ahead of schedule. Longitudinal Room and Pillar
Stoping is still the only mining method being used and at the end of December 2013 14 stopes are being mined. Poor
ground conditions are being experienced in places, but a proactive approach and innovation from the mining teams are
mitigating the negative effects of this to a large degree. Production ramp-up to full production of 45 000 tonnes of contained
copper is expected to be reached in F2016.
The mine has also delivered a good safety performance and has been fatality free since exploration commenced in 2007.
Capital expenditure to 31 December 2013 for development of the mine amounted to US$463 million comprising
project capital expenditure amounting to US$442 million and pre-production costs capitalised for the ten month period to
30 April 2013 amounting to US$21 million.
Development of the mine is effectively complete with only the reallocation action plan (RAP) project and project closure
outstanding. The RAP project is expected to be completed early in F2015 and construction of the 205 houses is progressing
well.
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 Lubambe Extension Project
The Lubambe Extension Project is situated 6km to the south of the present mine and may provide for the expansion of the
Lubambe Copper Mine to potentially increase the total production to more than 100 000 tonnes of copper from more than
5 million tonnes of ore milled on an annual basis.
Additional surface drilling has been completed during 1H F2014 in the Lubambe Extension Area to assist in determining the
ore body extent. These nine holes delivered very promising results and clearly indicated that the ore body extends further
east than originally expected. On 27 February 2014 AMEC released an updated report increasing the Lubambe Extension
Area indicated and inferred resources to 134 million tonnes at an in-situ grade of 4.07% total copper.
As the Lubambe Extension is in the Konkola Basin, a full hydrogeological survey has to be performed to assess the
dewatering requirements and pumping quantities of a new mine in this area. The hydrogeological hole has progressed
well to a depth of 650 metres. Drilling will continue to a depth of 1 250 metres after which the hydrological testwork will
commence.
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 conducting further
metallurgical test work and completing the hydrogeological borehole.
The Kalumines Copper Project
The decision to exit the Joint Venture from the Kalumines project in the Democratic Republic of the Congo (DRC) is almost
fully concluded. The mining licence was handed back to Gecamines. Gecamines paid a settlement fee for the mining of ore
and for geological drilling done by the partners. Most of the company's assets have been sold and the application for final
liquidation of the company in the DRC has been filed and is in an advanced stage of finalisation. Full closure and finalisation
is expected well before the end of F2014.
ARM owns 100% of ARM Copper. ARM Copper owns 50% of the Vale/ARM joint venture. The effective interest of ARM in
the Lubambe Copper Mine is 40% as ZCCM-IH has a 20% shareholding.
ARM Exploration
The ARM Exploration headline loss attributable was R24 million for the period (1H F2013: R36 million).
ARM's growth strategy comprises of:
- quality growth of existing assets pursued by the joint venture operations;
- continuing to assess acquisitions and partnership opportunities and
- exploration in Africa
New business opportunities
ARM's minimum requirement is that potential partners have completed methodological target generation and concept-
driven exploration, and have recorded discovery success. ARM will consider investing in such projects or companies and
in partnership would undertake further exploration.
The division is also tasked with identifying and evaluating merger and acquisition opportunities. Each project is assessed
in terms of its sustainability, value, and potential contribution to the Company's overall profitability. The size of ARM's
investment is determined by the quality and sustainability of the opportunity both for the ARM shareholders and the
communities and countries in which the development may take place.
Exploration
The agreement with Rovuma Resources Limited is ongoing. Rovuma explores in northern Mozambique and has identified
numerous occurrences of copper/zinc, nickel/copper/PGE, chromite/nickel and graphite mineralisation.
ARM has agreed to continue with the option for the second year (commencing April 2013) and to fund exploration at a cost
of approximately US$4 million for the year to April 2014. ARM will have exclusive rights to purchase prospecting and/or
mining rights to the resources.
The prospective geological units have a strike extent of approximately 80km and four target cluster areas have been
defined. Each cluster comprises numerous identified areas of base metal mineralisation. Three of the four clusters have
been drill tested during the 2013 field season. The complete suite of assay results are awaited from laboratories.
Harmony Gold Mining Company Limited (Harmony)
Harmony reported an operating loss of R125 million for the six months ended 31 December 2013, a significant decrease
compared to the previous corresponding period in which an operating profit of R1 395 million was reported. The lower profitability
was due to an 8% decrease in the realised gold price as well as a 5% increase in the R/kg cash operating costs. The
1H F2013 operating profit included a profit from the sale of property, plant and equipment of R124 million which was not
repeated in 1H F2014. Headline earnings were also lower at a loss of R71 million (1H F2014; R1 205 million profit).
Harmony continues to focus on cost containment and managing its operations so as to be profitable at current gold prices.
For the period under review, five of Harmony's mines were profitable with an all-in cost of below US$1 000/oz. Various
interventions, including restructuring and elimination of unprofitable low grade reserves, are already underway to improve
the cost position of the operations producing at above US$1 000/oz.
On 14 August 2013, Harmony announced that it would be repositioning development of the Wafi-Golpu Project in Papua
New Guinea to a modular, expandable mine approach, with lower capital requirements. Harmony and Newcrest plan
on completing a feasibility study to evaluate the underground exploration programme for the Wafi-Golpu Project. This
next phase of work requires a feasibility study on underground exploration access and associated underground staging
platforms to complete deep underground drilling and bulk sampling of the ore body. The Harmony and Newcrest joint
venture anticipates a final investment decision for the proposed underground access during the second half of calendar
2014, subject to receipt of necessary regulatory approvals.
The ARM Statement of Financial Position at 31 December 2013 reflects a mark-to-market investment in Harmony of R1.65 billion
at a share price of R25.90 per share (F2013: R35.75 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 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 six months ended 31 December 2013 can be viewed on Harmony's website at www.harmony.co.za.
ARM owns 14.6% of Harmony's issued share capital.
Outlook
Commodity prices and currencies continued to be volatile as a result of global economic developments particularly in
the US, China and Europe.
The positive impact of the economic recovery in the US has been tempered by the announced reductions in the central
bank bond repurchase programme. The Chinese economy remains supportive of demand for the commodities that
ARM produces. During the period under review, the price for iron ore has remained stable and was well above the price
in the corresponding period last year. It is expected that iron ore demand will remain robust especially for higher grade
quality ore.
The South African mining industry is being challenged by rising costs especially for labour, fuel and power costs. ARM is
focussing on controlling costs to ensure that its operations continue to be positioned below the 50th percentile of the global
costs curves. This is a core value driver in our business. ARM's operations strive to improve productivity through continuous
training, technical innovation and improvements in mining efficiencies. Stakeholder relationships are approached on an
inclusive basis.
ARM is also pursuing quality growth both in the existing portfolio of assets and through acquisitions to further improve cost
performance. ARM's acquisition criteria is based on ARM's strategy of being an owner operator of long-life, low unit cost
operations. Transnet's Market Demand Strategy, which will see the expansion of South Africa's iron ore and manganese
ore export capacity, allows ARM to expand and optimise its iron ore and manganese ore operations. Growth in ARM's
iron ore and manganese ore production will be aligned with Transnet's expansion plans. ARM's financial position allows
ARM to pursue value adding acquisitive growth.
ARM remains confident about the future and continues to build a diversified portfolio of mining assets that creates value
for its shareholders and all stakeholders.
Review by independent auditors
The financial results for the six months ended 31 December 2013 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
7 March 2014
Group statement of financial position
as at 31 December 2013
Unaudited Unaudited
Six months ended Year ended
31 December 30 June
Restated* Restated*
2013 2012 2013
Note Rm Rm Rm
ASSETS
Non-current assets
Property, plant and equipment 11 647 10 804 11 309
Investment property 12 12 12
Intangible assets 171 184 178
Deferred tax asset 426 4 327
Loans and long-term receivables 75 103 90
Financial assets 3 40 3
Inventories - 147 -
Investment in associate 1 211 1 449 1 420
Investment in joint venture 4 13 909 11 228 12 506
Other investments 1 779 4 813 2 391
29 233 28 784 28 236
Current assets
Inventories 1 101 747 1 096
Trade and other receivables 2 863 2 115 2 290
Taxation 3 32 22
Financial asset 1 - 39
Cash and cash equivalents 5 1 524 1 563 1 965
5 492 4 457 5 412
Assets held for sale - - 191
Total assets 34 725 33 241 33 839
EQUITY AND LIABILITIES
Capital and reserves
Ordinary share capital 11 11 11
Share premium 4 079 3 990 3 996
Other reserves 875 519 769
Retained earnings 19 736 19 066 19 294
Equity attributable to equity holders of ARM 24 701 23 586 24 070
Non-controlling interest 1 563 1 315 1 393
Total equity 26 264 24 901 25 463
Non-current liabilities
Long-term borrowings 6 3 148 3 370 3 293
Deferred tax liabilities 1 829 1 740 1 680
Long-term provisions 608 587 560
5 585 5 697 5 533
Current liabilities
Trade and other payables 1 817 1 320 1 599
Short-term provisions 278 220 494
Taxation 75 92 51
Overdrafts and short-term borrowings 6 706 1 011 699
2 876 2 643 2 843
Total equity and liabilities 34 725 33 241 33 839
Group income statement
for the six months ended 31 December 2013
Unaudited Unaudited
Six months ended Year ended
31 December 30 June
2013 2012 2013
Note Rm Rm Rm
Revenue 4 983 3 816 7 863
Sales 4 606 3 572 7 342
Cost of sales (3 582) (2 778) (5 866)
Gross profit 1 024 794 1 476
Other operating income 499 495 992
Other operating expenses (743) (625) (1 294)
Profit from operations before exceptional items 780 664 1 174
Income from investments 52 66 131
Finance costs (120) (99) (199)
(Loss)/income from associate** (240) 42 (14)
Income from joint venture 4 2 153 1 035 3 063
Profit before taxation and exceptional items 2 625 1 708 4 155
Exceptional items 7 (631) - (2 457)
Profit before taxation 1 994 1 708 1 698
Taxation 9 (164) (218) 84
Profit for the period 1 830 1 490 1 782
Attributable to:
Non-controlling interest 116 84 148
Equity holders of ARM 1 714 1 406 1 634
1 830 1 490 1 782
Additional information
Headline earnings (R million) 8 2 341 1 406 3 737
Headline earnings per share (cents) 1 084 654 1 735
Basic earnings (R million) 1 714 1 406 1 634
Basic earnings per share (cents) 794 654 759
Fully diluted headline earnings per share (cents) 1 076 650 1 723
Fully diluted basic earnings per share (cents) 788 650 753
Number of shares in issue at end of period (thousands) 216 462 215 532 215 625
Weighted average number of shares in issue (thousands) 215 971 215 122 215 357
Weighted average number of shares used in calculating
fully diluted earnings per share (thousands) 217 492 216 424 216 914
Net asset value per share (cents) 11 411 10 943 11 163
EBITDA (R million) 1 264 1 048 1 982
Dividend declared after year end (cents) - - 510
* Restated after adoption of IFRS 11 Joint Arrangements (Refer notes 2 and 12).
** Impairment included in (loss)/income from associate R113 million (1H 2012: R nil, F2013: R nil).
Group statement of comprehensive income
for the six months ended 31 December 2013
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 2013 (Unaudited)
Profit for the period - - 1 714 1 714 116 1 830
Other comprehensive income that may be
reclassified to the income statement in subsequent
periods:
Sale of subsidiary - (5) - (5) - (5)
Cash flow hedge reserve - 31 - 31 - 31
Foreign currency translation - 57 - 57 - 57
Total other comprehensive income - 83 - 83 - 83
Total comprehensive income for the period - 83 1 714 1 797 116 1 913
Six months ended
31 December 2012 restated* (Unaudited)
Profit for the period - - 1 406 1 406 84 1 490
Other comprehensive income that may be
reclassified to the income statement in subsequent
periods:
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 foreign Group entity - 20 - 20 - 20
Deferred tax on unrealised foreign exchange
movements on loans to a foreign Group entity - (5) - (5) - (5)
Cash flow hedge reserve - 1 - 1 - 1
Foreign currency translation reserve movement - 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
Year ended 30 June 2013 restated* (Unaudited)
Profit for the year - - 1 634 1 634 148 1 782
Other comprehensive income that may be
reclassified to the income statement in subsequent
periods:
Net impact of revaluation of listed investment (139) - - (139) - (139)
Reclassification adjustment due to impairment
of available-for-sale listed investment (170) - - (170) - (170)
Deferred tax on revaluation of listed investment 31 - - 31 - 31
Foreign exchange movements on loans
to 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 six months ended 31 December 2013
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 2013 (Unaudited)
Balance at 30 June 2013 4 007 - 769 19 294 24 070 1 393 25 463
Profit for the period - - - 1 714 1 714 116 1 830
Other comprehensive income - - 83 - 83 - 83
Total comprehensive income
for the period - - 83 1 714 1 797 116 1 913
Share-based payments - - 70 - 70 - 70
Share options exercised 36 - - - 36 - 36
Bonus and performance shares
issued to employees 47 - (47) - - - -
Dividend paid to Impala Platinum
by Two Rivers - - - - - (45) (45)
Dividend paid - - - (1 102) (1 102) - (1 102)
Sale of Kalumines - - - (170) (170) 99 (71)
Balance at 31 December 2013 4 090 - 875 19 736 24 701 1 563 26 264
Six months ended
31 December 2012 restated*
(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) - - - -
Dividends paid - - - (1 021) (1 021) - (1 021)
Contribution by ZCCM - - - - - 26 26
Balance at 31 December 2012 4 001 10 509 19 066 23 586 1 315 24 901
Year ended
30 June 2013 restated* (Unaudited)
Balance at 30 June 2012 3 948 139 432 18 681 23 200 1 205 24 405
Profit for the year - - - 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) - - - -
Dividends paid - - - (1 021) (1 021) - (1 021)
Contribution by ZCCM - - - - - 40 40
Balance at 30 June 2013 4 007 - 769 19 294 24 070 1 393 25 463
* Restated after adoption of IFRS 11 Joint Arrangements (Refer notes 2 and 12).
Group statement of cash flows
for the six months ended 31 December 2013
Unaudited Unaudited
Six months ended Year ended
31 December 30 June
2013 2012 2013
Note Rm Rm Rm
CASH FLOW FROM OPERATING ACTIVITIES
Cash receipts from customers 4 519 3 584 7 618
Cash paid to suppliers and employees (3 658) (3 200) (6 053)
Cash generated from operations 10 861 384 1 565
Interest received 42 32 62
Interest paid (65) (54) (115)
Dividends received - 32 64
Dividends received from joint venture 750 750 1 500
Dividends paid to non-controlling interest (45) - -
Dividends paid (1 102) (1 021) (1 021)
Taxation paid (72) (141) (286)
Net cash inflow/(outflow) from operating activities 369 (18) 1 769
CASH FLOW FROM INVESTING ACTIVITIES
Additions to property, plant and equipment
to maintain operations (321) (302) (544)
Additions to property, plant and equipment
to expand operations (358) (534) (1 063)
Proceeds on disposal of property, plant and equipment 184 - 1
Transfer of cash on disposal of subsidiary (15) - -
Investment in associate - (53) (112)
Investments in Richards Bay Coal Terminal (15) (13) (26)
Decrease in loans and long-term receivables 15 12 24
Net cash outflow from investing activities (510) (890) (1 720)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds on exercise of share options 36 22 28
Proceeds on subscription by minority shareholder
in Lubambe - 26 -
Payment to non controlling interest in Kalumines (71) - -
Long-term borrowings raised - 901 802
Long-term borrowings repaid (235) (110) (212)
(Decrease)/increase in short-term borrowings (49) 143 (144)
Net cash (outflow)/inflow from financing activities (319) 982 474
Net (decrease)/increase in cash and cash equivalents (460) 74 523
Cash and cash equivalents at beginning of period 1 569 998 998
Foreign currency translation on cash balances 4 6 48
Cash and cash equivalents at end of period 5 1 113 1 078 1 569
Cash generated from operations per share (cents) 399 179 727
* Restated after adoption of IFRS 11 Joint Arrangements (Refer notes 2 and 12).
Notes to the financial statements
for the six months ended 31 December 2013
1 STATEMENT OF COMPLIANCE
The Group financial statements for the six months ended 31 December 2013 are prepared in accordance with and containing
the information required by IAS 34 - Interim Financial Reporting and comply with International Financial Reporting Standards
(IFRS) and Interpretations of those standards, as adopted by the International Accounting Standards Board (IASB), requirements
of the South African Companies Act 2008, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee
and Financial Pronouncements as issued by the Financial Reporting Standards Council and the Listings Requirements of the JSE Limited.
BASIS OF PREPARATION
The Group financial statements for the six months ended 31 December 2013 have been prepared on the historical cost basis,
except for certain financial instruments, which includes listed investments, 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
and comply with IFRS.
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 on or before 1 January 2013.
Standard Subject Effective date
IFRS 1 First-time Adoption of International Financial Reporting Standards (Amendment) 1 January 2013
IFRS 7 Disclosures - Offsetting Financial Assets and Financial Liabilities 1 January 2013
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 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 34 Interim Financial Reporting (Amendment) 1 January 2013
Circular 2/2013 Headline earnings Annual periods ending 31 July 2013
The adoption of these amendments had no significant effect on the Group financial statements except for IFRS 11 Joint
Arrangements (Refer notes 2 and 12).
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 9 Financial Instruments - Classification and Measurement (Amendment) 1 January 2015
IFRS 7 Financial Instruments: Disclosures (Amendment) 1 January 2015
IFRS 10 Consolidated Financial Statements (Amendment) 1 January 2014
IFRS 12 Disclosure of Interest in Other Entities (Amendment) 1 January 2014
IAS 27 Separate Financial Statements (Amendment) 1 January 2014
IAS 32 Financial Instruments Presentation (Amendment) 1 January 2014
IAS 36 Impairment of Assets - Recoverable amount disclosure for non-financial assets
of impaired assets (Amendment) 1 January 2014
IAS 39 Financial Instruments: Recognition and Measurement - Novation of derivatives
and continuation of hedge accounting (Amendment) 1 January 2014
IFRIC 21 Levies 1 January 2014
The Group does not intend early adopting any of the above amendments, standards or interpretations.
2 Effect of adoption of new standards, amendments and interpretations
The Group applied for the first time, certain standards and amendments that require restatement of previous financial statements
(refer note 1).
The financial statements were only affected by the adoption of IFRS 11 and IAS 28.
As stated in our Integrated Annual Report for the 30 June 2013 financial statements, joint ventures have previously been
proportionately consolidated. IFRS 11 removes the option to account for joint venture entities using the proportionate
consolidation. Instead, joint arrangements that meet the definition of a joint venture must be accounted for using the equity
method. For a joint operation, the joint operator recognises its assets, liabilities, income and expenses and/or relative share
thereof.
The application of IFRS 11 and IAS 28 impacted the Group's accounting of its interest in its joint venture, Assmang Limited.
The Group has a 50% interest in Assmang Limited, which is jointly controlled by ARM and Assore Limited.
Prior to the adoption of IFRS 11, Assmang Limited was classified as a jointly controlled entity and the Group's share of the
assets, liabilities, revenue, income and expenses was proportionately consolidated in the consolidated financial statements.
Upon adoption of IFRS 11, the Group has determined its interest in Assmang Limited to be classified as a joint venture under
IFRS 11 and it is required to be accounted for using the equity method.
The transition was applied retrospectively as required by IFRS 11 and the comparative information has been restated.
The effect of applying IFRS 11 on the Group's financial statements are shown in detail in note 12.
For mangement purposes the Group is organised into operating divisions. The operating divisions are ARM Platinum
(which includes platinum and nickel), ARM Ferrous, ARM Coal, ARM Copper, Corporate and other, ARM Exploration
and Gold. Corporate and other, ARM Exploration and Gold are included in ARM Corporate in the table below.
Total per
IFRS
*IFRS financial
ARM ARM ARM ARM ARM adjust- state-
Platinum Ferrous Coal Copper Corporate Total ment ments
Rm Rm Rm Rm Rm Rm Rm Rm
3 SEGMENTAL INFORMATION
Primary segmental
information
Six months ended
31 December 2013
(Unaudited)
Sales 3 571 7 013 547 488 - 11 619 (7 013) 4 606
Cost of sales (2 747) (3 690) (386) (462) 23 (7 262) 3 680 (3 582)
Other operating income 35 105 17 - 417 574 (75) 499
Other operating expenses (162) (569) (1) (110) (470) (1 312) 569 (743)
Segment result 697 2 859 177 (84) (30) 3 619 (2 839) 780
Income from investments 15 100 - - 37 152 (100) 52
Finance cost (19) (12) (46) (64) 9 (132) 12 (120)
Loss from associate** - - (240) - - (240) - (240)
Income from joint venture - 7 - - - 7 2 146 2 153
Exceptional items - - - (10) (621) (631) - (631)
Taxation (193) (786) (38) - 72 (945) 781 (164)
Non-controlling interest (137) - - 26 (5) (116) - (116)
Consolidation adjustment - (15) - - 15 - - -
Contribution to earnings 363 2 153 (147) (132) (523) 1 714 - 1 714
Contribution to headline
earnings 363 2 153 (34) (122) (19) 2 341 - 2 341
Other information:
Segment assets including
investment in associate and
joint venture 10 336 17 940 2 949 3 649 3 882 38 756 (4 031) 34 725
Investment in joint venture 13 909 13 909
Investment in associate 1 211 1 211 1 211
Segment liabilities 1 909 1 486 1 528 1 025 2 095 8 043 (1 486) 6 557
Unallocated - deferred
taxation and taxation 4 452 (2 548) 1 904
Consolidated total liabilities 12 495 (4 034) 8 461
Cash generated from operations 663 2 480 272 (31) (43) 3 341 (2 480) 861
Cash inflow/outflow) from
operating activities 546 1 803 272 (31) (1 168) 1 422 (1 053) 369
Cash outflow from investing
activities (388) (1 041) (40) (63) (19) (1 551) 1 041 (510)
Cash (outflow)/inflow from
financing activities (48) - (235) (71) 35 (319) - (319)
Capital expenditure 389 732 58 247 3 1 429 (732) 697
Amortisation and depreciation 371 428 56 55 2 912 (428) 484
EBITDA 1 068 3 287 233 (29) (28) 4 531 (3 267) 1 264
* Includes IFRS 11 adjustments related to ARM Ferrous.
** Impairment included in loss from associate R113 million.
For mangement purposes the Group is organised into operating divisions. The operating divisions are ARM Platinum
(which includes platinum and nickel), ARM Ferrous, ARM Coal, ARM Copper, Corporate and other, ARM Exploration
and Gold. Corporate and other, ARM Exploration and Gold are included in ARM Corporate in the table below.
Total per
IFRS
*IFRS financial
ARM ARM ARM ARM ARM adjust- state-
Platinum Ferrous Coal Copper Corporate Total ment ments
Rm Rm Rm Rm Rm Rm Rm Rm
3 SEGMENTAL INFORMATION
(continued)
Six months ended
31 December 2012 restated
(Unaudited)
Sales 3 107 5 267 465 - - 8 839 (5 267) 3 572
Cost of sales (2 428) (3 601) (361) - 20 (6 370) 3 592 (2 778)
Other operating income 24 113 23 2 400 562 (67) 495
Other operating expenses (141) (345) (1) (29) (454) (970) 345 (625)
Segment result 562 1 434 126 (27) (34) 2 061 (1 397) 664
Income from investments 8 57 - - 58 123 (57) 66
Finance cost (20) (9) (39) - (36) (104) 9 (95)
Finance cost Impala Platinum
Limited: Shareholders' loan
Two Rivers (2) - - - - (2) - (2)
Finance cost ARM:
Shareholders loan Two Rivers (2) - - - - (2) - (2)
Income from associate - - 42 - - 42 - 42
Loss from joint venture - (1) - - - (1) 1 036 1 035
Taxation (154) (420) (24) - (29) (627) 409 (218)
Non-controlling interest (93) - - 6 3 (84) - (84)
Consolidation adjustment - (26) - - 26 - - -
Contribution to earnings 299 1 035 105 (21) (12) 1 406 - 1 406
Contribution to headline
earnings 299 1 035 105 (21) (12) 1 406 - 1 406
Other information:
Segment assets including
investment in associate and
joint venture 9 516 15 098 3 757 2 775 5 965 37 111 (3 870) 33 241
Investment in joint venture 11 228 11 228
Investment in associate 1 449 1 449 1 449
Segment liabilities 1 795 1 447 1 791 554 2 368 7 955 (1 447) 6 508
Unallocated - deferred
taxation and taxation 4 256 (2 424) 1 832
Consolidated total liabilities 12 211 (3 871) 8 340
Cash generated from operations 265 1 239 162 (54) 11 1 623 (1 239) 384
Cash inflow/outflow) from
operating activities 203 1 087 163 (55) (1 079) 319 (337) (18)
Cash outflow from investing
activities (334) (1 148) (72) (479) (5) (2 038) 1 148 (890)
Cash (outflow)/inflow from
financing activities (54) - (23) 121 938 982 - 982
Capital expenditure 401 1 062 13 486 4 1 966 (1 062) 904
Amortisation and depreciation 328 430 52 2 2 814 (430) 384
EBITDA 890 1 864 178 (25) (32) 2 875 (1 827) 1 048
* Includes IFRS 11 adjustments related to ARM Ferrous.
For mangement purposes the Group is organised into operating divisions. The operating divisions are ARM Platinum
(which includes platinum and nickel), ARM Ferrous, ARM Coal, ARM Copper, Corporate and other, ARM Exploration
and Gold. Corporate and other, ARM Exploration and Gold are included in ARM Corporate in the table below.
IFRS
*IFRS financial
ARM ARM ARM ARM ARM adjust- state-
Platinum Ferrous Coal Copper Corporate Total ment ments
Rm Rm Rm Rm Rm Rm Rm Rm
3 SEGMENTAL INFORMATION
(continued)
Year ended 30 June 2013
restated (Unaudited)
Sales 6 344 12 458 929 69 - 19 800 (12 458) 7 342
Cost of sales (5 102) (7 293) (656) (132) 46 (13 137) 7 271 (5 866)
Other operating income 87 312 37 11 776 1 223 (231) 992
Other operating expenses (294) (1 058) (2) (91) (907) (2 352) 1 058 (1 294)
Segment result 1 035 4 419 308 (143) (85) 5 534 (4 360) 1 174
Income from investments 21 137 - - 110 268 (137) 131
Finance cost (56) (26) (82) (20) (35) (219) 26 (193)
Finance cost Impala Platinum
Limited: Shareholders' loan
Two Rivers (3) - - - - (3) - (3)
Finance cost ARM:
Shareholders loan Two Rivers (3) - - - - (3) - (3)
Loss from associate - - (14) - - (14) - (14)
Income form joint venture - 3 - - - 3 3 060 3 063
Exceptional items - (182) (3) - (2 454) (2 639) 182 (2 457)
Taxation (285) (1 245) (63) (6) 454 (1 145) 1 229 84
Non-controlling interest (182) - - 34 - (148) - (148)
Consolidation adjustment - (43) - - 43 - - -
Contribution to earnings 527 3 063 146 (135) (1 967) 1 634 - 1 634
Contribution to headline
earnings 527 3 194 148 (135) 3 3 737 - 3 737
Other information:
Segment assets including
investment in associate 9 913 16 775 3 631 3 581 4 208 38 108 (4 269) 33 839
Investment in joint venture - 12 506 12 506
Investment in associate 1 420 1 420 1 420
Segment liabilities 2 008 1 724 1 717 919 2 001 8 369 (1 724) 6 645
Unallocated - deferred
taxation and taxation 4 277 (2 546) 1 731
Consolidated total liabilities 12 646 (4 270) 8 376
Cash inflow/outflow) from
operating activities 988 3 979 219 (48) (890) 4 248 (2 479) 1 769
Cash outflow from investing
activities (654) (2 041) (169) (888) (9) (3 761) 2 041 (1 720)
Cash (outflow)/inflow from
financing activities (149) - (155) 144 634 474 - 474
Capital expenditure 735 1 951 41 753 9 3 489 (1 951) 1 538
Amortisation and depreciation 676 885 106 21 5 1 693 (885) 808
Impairment - 156 - - - 156 (156) -
EBITDA 1 711 5 304 414 (122) (80) 7 227 (5 245) 1 982
* Includes IFRS 11 adjustments related to ARM Ferrous.
Additional information
ARM
Two Rivers Modikwa Nkomati Platinum
Platinum Rm Rm Rm Rm
3 Six months ended 31 December 2013 (Unaudited)
Sales 1 700 627 1 244 3 571
Cost of sales (1 242) (551) (954) (2 747)
Other operating income 11 7 17 35
Other operating expenses (59) (9) (94) (162)
Segment result 410 74 213 697
Income from investments 3 5 7 15
Finance cost (17) - (2) (19)
Taxation (112) (20) (61) (193)
Non-controlling interest (127) (10) - (137)
Contribution to earnings 157 49 157 363
Contribution to headline earnings 157 49 157 363
Other information:
Segment assets 3 896 2 889 3 551 10 336
Segment liabilities 842 406 661 1 909
Cash inflow from operating activities 337 154 55 546
Cash outflow from investing activities (140) (160) (88) (388)
Cash outflow from financing activities (48) - - (48)
Capital expenditure 138 160 91 389
Amortisation and depreciation 181 41 149 371
EBITDA 591 115 362 1 068
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 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
SEGMENTAL INFORMATION
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.
Total per
IFRS
Manga- *IFRS financial
Iron ore nese Chrome Ferrous ARM Adjust- state-
division division division Total share ment ments
Rm Rm Rm Rm Rm Rm Rm
3 SEGMENTAL INFORMATION
Six months ended 31 December 2013
(Unaudited)
Sales 9 222 4 022 782 14 026 7 013 (7 013) -
Other operating income 313 98 5 416 105 (105) -
Other operating expenses (887) (355) (102) (1 344) (569) 569 -
Operating profit 4 753 917 47 5 717 2 859 (2 859) -
Contribution to earnings 3 644 655 37 4 336 2 168 (15) 2 153
Contribution to headline earnings 3 644 655 37 4 336 2 168 (15) 2 153
Other information:
Segment assets 24 894 10 908 939 36 741 17 940 (4 031) 13 909
Segment liabilities 5 549 2 424 331 8 304 1 486 (1 486) -
Cash inflow from operating activities 1 576** 475 54 2 105 1 803 (1 803) -
Cash outflow from investing activities (795) (1 208) (78) (2 081) (1 041) 1 041 -
Capital expenditure 902 541 80 1 523 732 (732) -
Amortisation and depreciation 596 242 38 876 428 (428) -
EBITDA 5 349 1 159 85 6 593 3 287 (3 287) -
Additional information for
ARM Ferrous at 100%
Non-current assets
Property, plant and equipment 20 058 (20 058) -
Other non-current assets 1 554 (1 554) -
Current assets
Inventories 4 479 (4 479) -
Trade and other receivables 5 272 (5 272) -
Financial asset 85 (85) -
Cash and cash equivalents 5 293 (5 293) -
Non-current liabilities
Other non-current liabilities 5 779 (5 779) -
Current liabilities
Trade and other payables 1 732 (1 732) -
Short-term provisions 407 (407) -
Taxation 386 (386) -
* Includes consolidation and IFRS 11 adjustments.
** Dividend paid amounting to R1.5 billion included in cash flows from operating activities.
Additional information
Pro forma analysis of the ARM Ferrous segment on a 100% basis
Total per
IFRS
Manga- *IFRS financial
Iron ore nese Chrome Ferrous ARM Adjust- state-
division division division Total share ment ments
Rm Rm Rm Rm Rm Rm Rm
3 SEGMENTAL INFORMATION
Six months ended 31 December 2012
restated (Unaudited)
Sales 6 110 3 440 984 10 534 5 267 (5 267) -
Other operating income 266 100 68 434 113 (113) -
Other operating expenses (587) (95) (216) (898) (345) 345 -
Operating profit 2 361 545 (38) 2 868 1 434 (1 434) -
Contribution to earnings 1 731 412 (21) 2 122 1 061 (26) 1 035
Contribution to headline earnings 1 731 411 (20) 2 122 1 061 (26) 1 035
Other information:
Segment assets 20 033 9 626 1 314 30 973 15 098 (3 870) 11 228
Segment liabilities 5 118 2 238 604 7 960 1 447 (1 447) -
Cash inflow/(outflow) from operating
activities 391** 474 (191) 674 1 087 (1 087) -
Cash outflow from investing activities (1 693) (305) (298) (2 296) (1 148) 1 148 -
Cash (outflow)/inflow from financing
activities (414) (62) 476 - - - -
Capital expenditure 1 610 547 61 2 218 1 062 (1 062) -
Amortisation and depreciation 553 247 77 877 430 (430) -
EBITDA 2 914 792 39 3 745 1 864 (1 864) -
Additional information for
ARM Ferrous at 100%
Non-current assets
Property, plant and equipment 19 006 (19 006) -
Other non-current assets 744 (744) -
Current assets
Inventories 4 013 (4 013) -
Trade and other receivables 4 429 (4 429) -
Cash and cash equivalents 2 782 (2 782) -
Non-current liabilities
Other non-current liabilities 5 475 (5 475) -
Current liabilities
Trade and other payables 2 036 (2 036) -
Short-term provisions 175 (175) -
Taxation 274 (274) -
* Includes consolidation and IFRS 11 adjustments.
** Dividend paid amounting to R1.5 billion included in cash flows from operating activities.
Additional information
ARM Corporate as presented in the table on page 85 is analysed further into Corporate and other,
ARM Exploration and Gold segments.
Total
ARM Corporate* ARM
Exploration and other Gold Corporate
Rm Rm Rm Rm
3 SEGMENTAL INFORMATION
Primary segmental information
Six months ended 31 December 2013 (Unaudited)
Cost of sales - 23 - 23
Other operating income - 417 - 417
Other operating expenses (24) (446) - (470)
Segment result (24) (6) - (30)
Income from investments - 37 - 37
Finance cost - 9 - 9
Exceptional items - (621) - (621)
Taxation - 72 - 72
Non-controlling interest - (5) - (5)
Consolidation adjustment - 15 - 15
Contribution to earnings (24) (499) - (523)
Contribution to headline earnings (24) 5 - (19)
Other information:
Segment assets - 2 234 1 648 3 882
Segment liabilities - 2 095 - 2 095
Cash generated from operations (24) (19) - (43)
Cash outflow from operating activities (24) (1 144) - (1 168)
Cash outflow from investing activities - (19) - (19)
Cash inflow from financing activities - 35 - 35
Capital expenditure - 3 - 3
Amortisation and depreciation - 2 - 2
EBITDA (24) (4) - (28)
* Corporate, other companies and consolidation adjustments.
Additional information
ARM Corporate as presented in the table on page 86 is analysed further into Corporate and other,
ARM Exploration and Gold segments.
Total
ARM Corporate* ARM
Exploration and other Gold Corporate
Rm Rm Rm Rm
3 SEGMENTAL INFORMATION
Six months ended 31 December 2012
restated (Unaudited)
Cost of sales - 20 - 20
Other operating income - 400 - 400
Other operating expenses (36) (418) - (454)
Segment result (36) 2 - (34)
Income from investments - 26 32 58
Finance cost - (36) - (36)
Taxation - (29) - (29)
Non-controlling interest - 3 - 3
Consolidation adjustment - 26 - 26
Contribution to earnings (36) (8) 32 (12)
Contribution to headline earnings (36) (8) 32 (12)
Other information:
Segment assets - 1 256 4 709 5 965
Segment liabilities - 2 368 - 2 368
Cash generated from operations (36) 47 - 11
Cash generated from operations (36) (1 075) 32 (1 079)
Cash outflow from operating activities - (5) - (5)
Cash outflow from investing activities - 938 - 938
Capital expenditure - 4 - 4
Amortisation and depreciation - 2 - 2
EBITDA (36) 4 - (32)
* Corporate, other companies and consolidation adjustments.
Additional information
ARM Corporate as presented in the table on page 87 is analysed further into Corporate and other,
ARM Exploration and Gold segments.
Total
ARM Corporate* ARM
Exploration and other Gold Corporate
Rm Rm Rm Rm
3 SEGMENTAL INFORMATION
Year ended 30 June 2013 restated (Unaudited)
Cost of sales - 46 - 46
Other operating income - 776 - 776
Other operating expenses (88) (819) - (907)
Segment result (88) 3 - (85)
Income from investments - 46 64 110
Finance cost - (35) - (35)
Exceptional items - - (2 454) (2 454)
Taxation - (30) 484 454
Consolidation adjustment - 43 - 43
Contribution to earnings (88) 27 (1 906) (1 967)
Contribution to headline earnings (88) 27 64 3
Other information:
Segment assets - 1 933 2 275 4 208
Segment liabilities - 2 001 - 2 001
Cash (outflow)/inflow from operating activities (88) (866) 64 (890)
Cash outflow from investing activities - (9) - (9)
Cash inflow from financing activities - 634 - 634
Capital expenditure - 9 - 9
Amortisation and depreciation - 5 - 5
EBITDA (88) 8 - (80)
* Corporate, other companies and consolidation adjustments.
Unaudited Unaudited
Six months ended Year ended
31 December 30 June
Restated Restated
2013 2012 2013
Rm Rm Rm
4 INVESTMENT IN JOINT VENTURE
This investment relates to ARM Ferrous and comprises
Assmang as a joint venture which includes iron ore,
manganese and chrome operations.
Opening balance 12 506 10 943 10 943
Income for the period 2 168 1 061 3 106
Consolidation adjustments (15) (26) (43)
Net income for the period 2 153 1 035 3 063
Less dividends paid for the period (750) (750) (1 500)
Closing balance 13 909 11 228 12 506
5 CASH AND CASH EQUIVALENTS
- African Rainbow Minerals Limited 100 73 579
- ARM Coal Proprietary Limited - 64 4
- ARM Finance Company SA 81 106 60
- ARM Platinum Proprietary Limited 120 188 125
- Kingfisher Insurance Co Limited 192 150 134
- Nkomati 139 60 223
- Two Rivers Platinum Proprietary Limited 9 9 9
- Vale ARM joint venture 66 191 45
- Venture Building Trust Proprietary Limited 3 4 2
- Restricted cash 814 718 784
Total as per statement of financial position 1 524 1 563 1 965
Less overdrafts (refer note 6) 411 485 396
Total as per statement of cash flows 1 113 1 078 1 569
Unaudited Unaudited
Six months ended Year ended
31 December 30 June
Restated Restated
2013 2012 2013
Rm Rm Rm
6 BORROWINGS
Long-term borrowings are held as follows
- African Rainbow Minerals Limited 564 814 564
- ARM Finance Company SA 774 608 735
- ARM Coal Proprietary Limited 1 290 1 513 1 492
- Two Rivers Platinum Proprietary Limited 89 132 104
- Vale/ARM joint operation 431 303 398
3 148 3 370 3 293
Short-term borrowings are held as follows:
- African Rainbow Minerals Limited 8 203 3
- Anglo Platinum Limited (partner loan) 114 114 114
- ARM Coal Proprietary Limited 30 62 36
- ARM Finance Company SA 63 - 60
- Two Rivers Platinum Proprietary Limited 80 99 90
- Two Rivers Platinum Proprietary Limited -
Impala Platinum Limited - 48 -
295 526 303
Overdrafts are held as follows:
- ARM Mining Consortium Limited - 72 -
- Two Rivers Platinum Proprietary Limited 261 376 353
- Vale ARM joint operation 120 - 13
- Other 30 37 30
411 485 396
Overdrafts and short-term borrowings 706 1 011 699
Total borrowings 3 854 4 381 3 992
Interest of R nil was capitalised for the six months ended
31 December 2013
(Six months to 31 December 2012: R8 million,
Full year to 30 June 2013: R16 million).
Unaudited Unaudited
Six months ended Year ended
31 December 30 June
Restated Restated
2013 2012 2013
Rm Rm Rm
7 EXCEPTIONAL ITEMS
Impairment of available-for-sale listed investment (627) - (2 454)
Loss on sale of property, plant and equipment (10) - -
Profit on sale of subsidiary 6 - -
Scrapping of property, plant and equipment - - (3)
Exceptional items per income statement (631) - (2 457)
Impairment on property, plant and equipment in associate -
ARM Coal (157) - -
Impairment of property, plant and equipment in joint venture -
Assmang - - (182)
Exceptional items before taxation effect (788) - (2 639)
Taxation accounted for directly in associate - ARM Coal 44 - -
Taxation accounted for directly in joint venture - - 51
Taxation on impairment of available-for-sale listed investment 117 - 484
Taxation on other exceptional items - - 1
Total amount adjusted for headline earnings (627) - (2 103)
8 HEADLINE EARNINGS
Basic earnings per income statement 1 714 1 406 1 634
Impairment of available-for-sale listed investment 627 - 2 454
Scrapping of property, plant and equipment - - 3
Loss on sale of property, plant and equipment 10 - 182
Impairment of property, plant and equipment 157 - -
Profit on sale of subsidiary (6) - -
2 502 1 406 4 273
Taxation accounted for directly in associate and joint venture (44) - (51)
Taxation on impairment of available-for-sale listed investment (117) - (484)
Taxation on other exceptional items - - (1)
Headline earnings 2 341 1 406 3 737
9 TAXATION
South African normal tax - current year 116 94 247
- mining 101 56 126
- non-mining 15 38 121
- prior year - - (42)
Deferred tax - current year 48 124 (296)
Foreign taxes - - 7
164 218 (84)
Unaudited Unaudited
Six months ended Year ended
31 December 30 June
Restated Restated
2013 2012 2013
Rm Rm Rm
10 CASH GENERATED FROM OPERATIONS
Cash generated from operations before working capital movement 1 532 1 332 2 555
Working capital changes (671) (948) (990)
Movement in receivables (524) (483) (635)
Movement in payables and provisions (158) (274) 265
Movement in inventories 11 (191) (620)
Cash generated from operations (per statement of cash flows) 861 384 1 565
11 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 312 655 425
- not contracted for 120 74 120
Total commitments 432 729 545
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 2013 annual report.
12 Impact of accounting policy change on:
Group statement of financial position
Unaudited Unaudited Unaudited Audited
Six months ended 31 December 2013 Six months ended 31 December 2012 For the year ended 30 June 2013
Current Previous Current Previous Current Previous
accounting a accounting accounting accounting accounting accounting
policy policy Difference policy policy Difference policy policy Difference
Rm Rm Rm Rm Rm Rm Rm Rm Rm
ASSETS
Non-current assets
Property, plant and equipment 11 647 21 262 (9 615) 10 804 19 936 (9 132) 11 309 20 636 (9 327)
Investment property 12 12 - 12 12 - 12 12 -
Intangible assets 171 172 (1) 184 185 (1) 178 179 (1)
Deferred tax assets
Loans and long-term 426 426 - 4 4 - 327 327 -
receivables 75 317 (242) 103 266 (163) 90 285 (195)
Financial assets 3 98 (95) 40 134 (94) 3 98 (95)
Inventories - - - 147 147 - - - -
Investment in associate 1 211 1 211 - 1 449 1 449 - 1 420 1 420 -
Investment in joint venture 13 909 - 13 909 11 228 - 11 228 12 506 - 12 506
Other investments 1 779 1 779 - 4 813 4 813 - 2 391 2 391 -
29 233 25 277 3 956 28 784 26 946 1 838 28 236 25 348 2 888
Current assets
Inventories 1 101 3 425 (2 324) 747 2 837 (2 090) 1 096 3 222 (2 126)
Trade and other receivables 2 863 5 507 (2 644) 2 115 4 323 (2 208) 2 290 4 667 (2 377)
Taxation 3 3 - 32 32 - 22 22 -
Financial asset 1 44 (43) - - - 39 39 -
Cash and cash equivalents 1 524 4 525 (3 001) 1 563 2 971 (1 408) 1 965 4 632 (2 667)
5 492 13 504 (8 012) 4 457 10 163 (5 706) 5 412 12 582 (7 170)
Assets held for sale - - - - - - 191 191 -
Total assets 34 725 38 781 (4 056) 33 241 37 109 (3 868) 33 839 38 121 (4 282)
EQUITY AND LIABILITIES
Capital and reserves
Ordinary share capital 11 11 - 11 11 - 11 11 -
Share premium 4 079 4 079 - 3 990 3 990 - 3 996 3 996 -
Other reserves 875 885 (10) 519 519 - 769 769 -
Retained earnings 19 736 19 736 - 19 066 19 066 - 19 294 19 294 -
Equity attributable to
equity holders of ARM 24 701 24 711 (10) 23 586 23 586 - 24 070 24 070 -
Non-controlling interest 1 563 1 563 - 1 315 1 315 - 1 393 1 393 -
Total equity 26 264 26 274 (10) 24 901 24 901 - 25 463 25 463 -
Non-current liabilities
Long-term borrowings 3 148 3 148 - 3 370 3 370 - 3 293 3 293 -
Deferred tax liabilities 1 829 4 184 (2 355) 1 740 4 029 (2 289) 1 680 3 951 (2 271)
Long-term provisions 608 1 024 (416) 587 928 (341) 560 959 (399)
5 585 8 356 (2 771) 5 697 8 327 (2 630) 5 533 8 203 (2 670)
Current liabilities
Trade and other payables 1 817 2 694 (877) 1 320 2 331 (1 011) 1 599 2 678 (1 079)
Short-term provisions 278 481 (203) 220 308 (88) 494 746 (252)
Taxation 75 270 (195) 92 231 (139) 51 332 (281)
Overdrafts and short-term
borrowings 706 706 - 1 011 1 011 - 699 699 - -
2 876 4 151 (1 275) 2 643 3 881 (1 238) 2 843 4 455 (1 612)
Total equity and liabilities 34 725 38 781 (4 056) 33 241 37 109 (3 868) 33 839 38 121 (4 282)
12 Impact of accounting policy change on:
Group income statement
Unaudited Unaudited Unaudited Audited
Six months ended 31 December 2013 Six months ended 31 December 2012 For the year ended 30 June 2013
Current Previous Current Previous Current Previous
accounting accounting accounting accounting accounting accounting
policy policy Difference policy policy Difference policy policy Difference
Rm Rm Rm Rm Rm Rm Rm Rm Rm
Sales 4 606 11 637 (7 031) 3 572 8 845 (5 273) 7 342 19 844 (12 502)
Cost of sales (3 582) (7 271) 3 689 (2 778) (6 317) 3 539 (5 866) (13 115) 7 249
Gross profit 1 024 4 366 (3 342) 794 2 528 (1 734) 1 476 6 729 (5 253)
Other operating income 499 421 78 495 398 97 992 960 32
Other operating expenses (743) (1 161) 418 (625) (865) 240 (1 294) (2 152) 858
Profit from operations
before exceptional items 780 3 626 (2 846) 664 2 061 (1 397) 1 174 5 537 (4 363)
Income from investments 52 153 (101) 66 123 (57) 131 268 (137)
Finance costs (120) (132) 12 (99) (108) 9 (199) (225) 26
(Loss)/income from
associate (240) (240) - 42 42 - (14) (14) -
Income from joint venture 2 153 - 2 153 1 035 - 1 035 3 063 - 3 063
Profit before taxation
and exceptional items 2 625 3 407 (782) 1 708 2 118 (410) 4 155 5 566 (1 411)
Exceptional items (631) (631) - - - - (2 457) (2 639) 182
Profit before taxation 1 994 2 776 (782) 1 708 2 118 (410) 1 698 2 927 (1 229)
Taxation (164) (946) 782 (218) (628) 410 84 (1 145) 1 229
Profit for the period 1 830 1 830 - 1 490 1 490 - 1 782 1 782 -
Attributable to:
Non-controlling interest 116 116 - 84 84 - 148 148 -
Equity holders of ARM 1 714 1 714 - 1 406 1 406 - 1 634 1 634 -
1 830 1 830 - 1 490 1 490 - 1 782 1 782 -
Additional information
Headline earning
(R million) 2 341 2 341 - 1 406 1 406 - 3 737 3 737 -
Headline earnings
per share (cents) 1 084 1 084 - 654 654 - 1 735 1 735 -
Basic earnings
per share (cents) 794 794 - 654 654 - 759 759 -
Fully diluted headline
earnings per share (cents) 1 076 1 076 - 650 650 - 1 723 1 723 -
Fully diluted basic earnings
per share (cents) 788 788 - 650 650 - 753 753 -
Net asset value
per share (cents) 11 411 11 411 - 10 943 10 943 - 11 163 11 163 -
EBITDA (R million) 1 264 4 540 (3 276) 1 048 2 875 (1 827) 1 982 7 230 (5 248)
12 Impact of accounting policy change on:
Group statement of cash flows
Unaudited Unaudited Unaudited Audited
Six months ended 31 December 2013 Six months ended 31 December 2012 For the year ended 30 June 2013
Current Previous Current Previous Current Previous
accounting accounting accounting accounting accounting accounting
policy policy Difference policy policy Difference policy policy Difference
Rm Rm Rm Rm Rm Rm Rm Rm Rm
CASH FLOW FROM
OPERATING ACTIVITIES
Cash receipts from customers 4 519 11 144 (6 625) 3 584 8 540 (4 956) 7 618 19 611 (11 993)
Cash paid to suppliers
and employees (3 658) (7 799) 4 141 (3 200) (6 875) 3 675 (6 053) (13 299) 7 246
Cash generated from
operations 861 3 345 (2 484) 384 1 665 (1 281) 1 565 6 312 (4 747)
Interest received 42 142 (100) 32 89 (57) 62 199 (137)
Interest paid (65) (65) - (54) (54) - (115) (115) -
Dividends received - - - 32 32 - 64 64 -
Dividends received from
joint venture 750 - 750 750 - 750 1 500 - 1 500
Dividends paid to non-
controlling interest (45) (45) - - - - - - -
Dividends paid (1 102) (1 102) - (1 021) (1 021) - (1 021) (1 021) -
Taxation paid (72) (856) 784 (141) (350) 209 (286) (1 191) 905
Net cash inflow/(outflow)
from operating activities 369 1 419 (1 050) (18) 361 (379) 1 769 4 248 (2 479)
CASH FLOW FROM
INVESTING ACTIVITIES
Additions to property, plant
and equipment to maintain
operations (321) (821) 500 (302) (778) 476 (544) (1 452) 908
Additions to property, plant
and equipment to expand
operations (358) (594) 236 (534) (1 272) 738 (1 063) (2 224) 1 161
Proceeds on disposal
of property, plant and
equipment 184 201 (17) - 19 (19) 1 23 (22)
Transfer of cash on disposal
of subsidiary (15) (15) - - - - - - -
Investment in associate - - - (53) (53) - (112) (112) -
Investments in Richards Bay
Coal Terminal (15) (15) - (13) (13) - (26) (26) -
Decrease in loans and
long-term receivables 15 9 6 12 7 5 24 30 (6)
Net cash outflow from
investing activities (510) (1 235) 725 (890) (2 090) 1 200 (1 720) (3 761) 2 041
Unaudited Unaudited Unaudited Audited
Six months ended 31 December 2013 Six months ended 31 December 2012 For the year ended 30 June 2013
Current Previous Current Previous Current Previous
accounting accounting accounting accounting accounting accounting
policy policy Difference policy policy Difference policy policy Difference
Rm Rm Rm Rm Rm Rm Rm Rm Rm
CASH FLOW FROM
FINANCING ACTIVITIES
Proceeds on exercise
of share options 36 36 - 22 22 - 28 8 28 -
Proceeds on subscription
by minority shareholder in
Lubambe - - - 26 26 - - - - -
Payment to non-controlling
interest in Kalumines (71) (71) - - - - - - - -
Long-term borrowings raised - - - 901 901 - 802 2 802 -
Long-term borrowings repaid (235) (235) - (110) (110) ) - (212 2) (212) -
(Decrease)/increase in
short-term borrowings (49) (49) - 143 143 - (144 4) (144) -
Net cash (outflow)/inflow
from financing activities (319) (319) - 982 982 - 474 4 474 -
Net (decrease)/increase
in cash and cash
equivalents (460) (135) (325) 74 (747) ) 821 523 3 961 (438)
Cash and cash equivalents
at beginning of period 1 569 4 236 (2 667) 998 3 227 (2 229) 998 8 3 227 (2 229)
Foreign currency translation
on cash balances 4 13 (9) 6 6 - 48 8 48 -
Cash and cash equivalents
at end of period 1 113 4 114 (3 001) 1 078 2 486 (1 408) 1 569 9 4 236 (2 667)
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
Johannesburg, 2001
Registered office
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
Sponsor
Telephone: +27 11 779 1300 Deutsche Securities (SA) Proprietary Limited
Fax: +27 11 779 1312
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)
F Abbott*
M Arnold
Dr MMM Bakane-Tuoane*
TA Boardman*
AD Botha*
JA Chissano (Mozambican)*
* Independent non-executive
** Non-executive
WM Gule**
AK Maditsi*
DV Simelane
Dr RV Simelane*
ZB Swanepoel*
AJ Wilkens
www.arm.co.za
Date: 07/03/2014 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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