South African billionaire Patrice Motsepe to pocket $25.4 million from mining business

Key Points

• Patrice Motsepe will receive a $25.4 million dividend, down from $33.8 million, as African Rainbow Minerals slashes payouts due to declining earnings.
• ARM’s headline earnings fell 49% to $83.43 million, hit by lower iron ore and PGM prices, sluggish demand, and rising production costs.
• ARM ended 2024 with $344.53 million in net cash, but a $60.38 million cash outflow signals pressure from a volatile commodity market.

South African billionaire Patrice Motsepe is set to collect a $25.4 million interim dividend from his stake in African Rainbow Minerals (ARM), his flagship mining company. This payout comes despite the company cutting its dividend by 25 percent due to declining earnings and ongoing financial pressures in a volatile commodity market.

Dividend cut reflects caution amid profit slump

ARM’s decision to reduce its dividend reflects a cautious approach as it navigates industry headwinds. The company lowered its interim dividend per share from R6 ($0.33) to R4.5 ($0.247), bringing the total payout to R1.01 billion ($55.49 million)—down from R1.35 billion ($73.6 million) in the same period last year. The dividend will be paid on April 7, 2025.

As ARM’s largest shareholder, Motsepe, who owns 45.9 percent of the company (equivalent to 103.1 million shares), will take home $25.4 million. However, this is a drop from the $33.8 million he received last year, reflecting the broader slowdown in ARM’s financial performance.

Falling commodity prices hit ARM’s earnings

ARM’s latest financial results show a company under pressure. For the first half of its 2025 fiscal year, the company’s headline earnings fell 49 percent to R1.52 billion ($83.43 million), down from R2.96 billion ($162.2 million) a year earlier. The decline was largely due to weaker iron ore and platinum group metals (PGMs) prices, sluggish demand from ArcelorMittal South Africa, and rising production costs.

Despite these challenges, ARM still had R6.07 billion ($344.53 million) in net cash at the end of December 2024. However, the company reported a net cash outflow of R1.1 billion ($60.38 million) during the period—a reversal from the R449 million ($24.64 million) cash inflow recorded the previous year.

On the balance sheet, total assets grew from R64.4 billion ($3.52 billion) to R69.3 billion ($3.8 billion), while total equity increased from R54.4 billion ($2.97 billion) to R56.8 billion ($3.1 billion). Retained earnings also edged up from R40.9 billion ($2.2 billion) to R41.3 billion ($2.25 billion), showing resilience despite weaker profits.

Motsepe’s mining empire

Motsepe, South Africa’s first Black billionaire, has built a mining empire since founding ARM in 1997. Over the years, he has expanded the company’s operations across iron ore, manganese, PGMs, coal, and base metals, making ARM one of Africa’s most diversified mining firms. His stake in ARM remains a cornerstone of his fortune, which Forbes estimates at over $2.5 billion.

Beyond ARM, Motsepe also has an 11.8 percent indirect stake in Harmony Gold, a major gold mining company with operations in South Africa, Papua New Guinea, and Australia. He played a key role in Harmony Gold’s 2003 merger with Avmin, further cementing his influence in the mining sector.

Despite the current market challenges, ARM’s strong cash position and diversified portfolio suggest the company is focused on long-term stability. With commodity prices fluctuating, all eyes will be on how Motsepe and ARM navigate the changing landscape while maintaining business growth and shareholder returns.