Africa’s first Black billionaire Patrice Motsepe loses $100 million as ARM struggles

Key Points

• Patrice Motsepe’s fortune fell to $2.7 billion as ARM shares tumbled 16% on the JSE after a bleak earnings forecast.
• African Rainbow Minerals expects first-half earnings to slump due to weaker iron ore prices, lower sales, and rising costs.
• Holding a 45.9% stake in ARM, Motsepe’s fortune is vulnerable to mining downturns despite his diversified investments.

Patrice Motsepe, Africa’s first Black billionaire, has lost $100 million this week after shares of African Rainbow Minerals Ltd. (ARM), the South African mining company he controls, took a sharp hit on the Johannesburg Stock Exchange (JSE).

Motsepe’s fortune, which had been stable in recent months, fell from $2.8 billion to $2.7 billion, according to Forbes. The decline follows a steep 16 percent drop in ARM’s share price over the past five days, with the stock sliding from R162 ($8.8) to R135 ($7.33).

Profit warning sends investors fleeing

ARM’s stock nosedived after the company issued a trading statement warning that its headline earnings for the first half of its 2025 fiscal year could drop by as much as 55 percent. The mining group cited weaker iron ore prices, lower sales volumes, and rising costs as key reasons for the expected decline.

For the six months ending Dec. 31, 2024, ARM expects headline earnings to fall to between R1.33 billion ($72 million) and R1.625 billion ($88 million), down from R2.955 billion ($160 million) a year ago. That translates to headline earnings per share (HEPS) of R6.78 ($0.366) to R8.29 ($0.448), compared to R15.07 ($0.815) in the same period last year.

The warning adds to what has already been a tough period for ARM. The company reported its lowest annual profit in seven years in 2024, and investors appear to be bracing for more challenges ahead. The group is set to release its full first-half financial results on Mar. 7, 2025.

Iron ore slump and rising costs squeeze ARM

ARM, which mines iron ore, manganese, platinum group metals (PGMs), coal, and base metals, pointed to a 22 percent drop in average realized U.S. dollar iron ore prices as a major factor behind its profit warning.

Lower sales volumes of iron ore and manganese ore, higher cash costs, and a stronger rand also put pressure on the company’s bottom line. While ARM saw a slight boost from increased PGM production, it wasn’t enough to offset the broader weakness in its mining portfolio.

Motsepe’s wealth tied to ARM’s performance

Motsepe, who became a billionaire in 2008—the first black African on the Forbes billionaire list—holds a 45.9 percent stake in ARM, making it the cornerstone of his wealth. While he has diversified investments in financial services, insurance, and technology, ARM remains his biggest asset.

As president of the Confederation of African Football (CAF), Motsepe’s wealth has often moved in tandem with ARM’s stock performance. With commodity prices under pressure and investor confidence shaken, his fortune could take further hits if the downturn in mining continues.