(Bloomberg) -- African Rainbow Minerals Ltd. is looking for acquisitions after higher iron-ore and manganese prices helped the miner chaired by South Africa's richest black businessman to pay a record dividend and cut its debt.
“The focus over the next few years, in the short to medium term, is on external growth,” Executive Chairman Patrice Motsepe said Thursday at ARM's full-year earnings presentation in Johannesburg. “You cannot be in the mining industry without long-term reserves.”
ARM is in the early stages of examining two copper operations outside of Africa and is also looking at acquisition opportunities in platinum and iron ore, Chief Executive Officer Mike Schmidt said in an interview. The company wants all its operations to be among the 50 percent lowest-cost producers in all the commodities it operates in, he said.
ARM will pay investors 6.50 rand a share, almost triple that of the previous year, and its 11th consecutive dividend, the Johannesburg-based company said in a statement. The company benefited from a 45 percent increase in prices received for exported iron ore and 93 percent more for its manganese.
The stock climbed 0.9 percent to 112.99 rand a share at 3:05 p.m. in Johannesburg, bringing this year's gain to 15 percent. That's helped boost the wealth of Motsepe, who owns about 40 percent of the company. The former lawyer turned entrepreneur is worth about $2 billion, according to data compiled by Bloomberg.
ARM's headline earnings tripled to 3.2 billion rand ($250 million) in the year to June 30, the company said in the statement. That was mainly due to the performance of its ferrous division, but it also turned losses to profits at its coal and platinum operations. The company made a 203 million-rand loss at its copper division and is planning to sell its stake in the Lubambe mine in Zambia to private-equity firm EMR Capital Advisors (Pty) Ltd.
To contact the reporter on this story: Kevin Crowley in Johannesburg at kcrowley1@bloomberg.net.
To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Liezel Hill, Ana Monteiro
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