Financial woes force ARM to suspend Bokoni platinum mine operations

Image credit: Ivan Bandura on Unsplash

ARM booked a R2.2bn impairment at Bokoni, citing a delay in ramping up mining operations and a change in mining method.

This pushed ARM's basic earnings down to R330m in the year ended 30 June, from R3.1bn previously.

Its headline earnings, which strip out one-off items such as impairments, were R2.695bn rand for the year, from R5.08bn rand previously due to lower iron ore and coal prices, it said.

ARM acquired Bokoni from Anglo American and Atlatsa Resources Corporation for R3.5bn in 2022. The platinum mine had been put under care and maintenance in 2017 following a string of losses.

ARM has been operating Bokoni using an existing 60,000 metric tonne per month concentrator under an "early ounces" initial plan aimed at expanding operations.

However, the collapse of platinum group metal prices in 2023 forced ARM to defer the planned 240,000 metric tonne per month mine development project.

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"Without this larger scale, the lower production volumes obtained from the early ounces project could not achieve the required economies of scale," ARM said in a results statement.

The current mining and milling capacity was insufficient to offset fixed costs and sustain profitability, leading to the suspension of operations at the end of June, the company said.

Bokoni's platinum group metal concentrate production rose 62% to 45,579 ounces in the year, but the mine's cash costs surged 48% to $2,051 per ounce.

ARM would now focus on ore reserve development at Bokoni while a feasibility study for a smaller 120,000 metric tonne per month mine is underway, it said. The study is expected to be completed in early 2026.