South African billionaire Patrice Motsepe is shutting down a struggling mining asset his African Rainbow Minerals co-owns with Norilsk Nickel of Russia.
On the 1st of July Motsepe reportedly sent letters to the workers at his Nkomati nickel mine signed by David Malunga, the mine’s General manager, telling them that the mine will be shut down very soon – a move that is likely to lead to the loss of thousands of jobs.
The Nkomati mine which is situated between situated between Badplaas and Machadodorp in eastern South Africa, is one of Africa’s largest nickel producers and is co-owned by JSE-listed African Rainbow Minerals (ARM), the mining company chaired by Patrice Motsepe. Norilsk Nickel, a giant Russian mining company, also owns a 50% stake in the mine.
While announcing its annual results in March this year, ARM noted that the Nkomati mine had been struggling for years to make money and had recorded a headline loss of more than $13 million. Nkomati was also unable to sell all the metal it produced between June to December 2018 while nickel prices were dropping. Spot nickel prices fell to $10,595 in December, from $14,940 on July 1, 2018, according to ARM.
“The most likely outcome is that operations will be ramped down over the next 12 and 14 months thereafter it will be placed on care and maintenance,” Malunga.
African Rainbow Minerals Limited (ARM) is a diversified mining and minerals company with assets in ferrous, platinum group metals, coal base metals and copper. Its controlling shareholder, Patrice Motsepe, owns more than 40% of the company and has a net worth FORBES estimates at $2.4 billion. Norilsk Nickel is a Russian nickel company whose largest shareholder is billionaire Vladimir Potanin.
Credit: www.forbes.com/sites/mfonobongnsehe