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S.African's ARM stops mining at Bokoni Platinum Mine

African Rainbow Minerals, a South African company, has suspended operations in its Bokoni platinum mining asset while it develops a revised mine plan. The announcement came on the heels of a dramatic fall in earnings.

ARM recorded a 2.2 billion rand ($125,000,000) impairment at Bokoni. The company cited a delay in ramping-up mining operations as well as a change of mining method.

This pushed ARM’s basic earnings to 330 millions rand for the year ending June 30 from 3.1 billion.

The company said that its headline earnings for the year, which excludes one-off items like impairments, was 2.695 billion Rands, down from 5.08 billion in previous years due to lower iron ore prices and coal.

ARM purchased Bokoni in 2022 from Anglo American Resources Corporation and Atlatsa Resources Corporation. The purchase price was 3.5 billion rand. In 2017, the platinum mine was put under care-and-maintenance after a series of losses.

ARM operates Bokoni with an existing 60,000 metric tons per month concentrator as part of an initial "early ounces plan" aimed at expanding the operations.

The collapse in platinum group metals prices in 2023 has forced ARM, however, to delay the planned mine development project of 240,000 metric tons per month.

"Without this greater scale, the lower volumes of production obtained from the Early Ounces Project could not achieve required economies-of-scale," ARM stated in a results report.

The company stated that the current capacity of mining and milling was not sufficient to offset fixed costs, and maintain profitability. As a result, operations were suspended at the end June.

The mine's cash cost increased by 48%, to $2,051 an ounce, as Bokoni's production of platinum group metals concentrates rose 62% in 2012.

ARM will now focus on the development of ore reserves at Bokoni, while a feasibility for a smaller mine producing 120,000 metric tons per month is in progress. The study should be completed by early 2026. ($1 = 17,5632 rand). (Reporting and editing by Nelson Banya, Jacqueline Wong Jamie Freed Emelia Sithole Matarise).

(source: Reuters)