African Rainbow Minerals Integrated annual report 2022

  • ARM in 2022
  • Our business
  • Governance
  • Creating, protecting
    and preserving value

Integrated annual report suite 2022

F2022 in review and investment case

ARM’s quality diversified portfolio enabled the company to navigate volatility and challenges in F2022 well, delivering an improved net cash position and higher dividends.

Key features of F2022 illustrate the effectiveness of our strategy and actions in navigating short-term impacts while preserving longer-term value.

Salient Features

Headwinds

  • Operational challenges on rail and port infrastructure
  • Security of water supply in the Northern Cape
  • Unit cost pressures
  • Volatility in commodity markets

Tailwinds

  • Commodity price rally in the last quarter of F2022
  • Robust financial position
  • Pipeline of quality growth projects

Financial

  • Headline earnings decreased by 13% to R11.3 billion (F2021: R13.1 billion)
  • Total dividend increased to R32 per share (F2021: R30 per share)
  • Robust net cash of R11.2 billion
  • Acquisition of Bokoni Mine completed post the financial year end
  • ARM Coal loans to Glencore Operations South Africa (GOSA) fully settled

Health and safety

  • Two fatalities, one at Modikwa Mine and one at Two Rivers Mine
  • Lost-time injury frequency (LTIFR) rate improved to 0.31 per 200 000 man-hours (F2021: 0.41)
  • Total recordable injury frequency rate improved to 0.69 (F2021: 0.81)
  • Black Rock Mine achieved 10 million fatality-free shifts over 13 years
  • Beeshoek Mine achieved 5 million fatality-free shifts over 18 years
  • 73% of workforce vaccinated against Covid-19

Operational

  • Iron ore, manganese ore and thermal coal volumes impacted by logistical challenges
  • Unit production costs were under pressure, mainly due to volume pressures and above-inflation increases for diesel, explosives and freight costs

Environmental

  • Scope 1 and 2 emissions were reduced by 8% to 0.9mt CO2e through emission-reduction initiatives
  • Development of decarbonisation pathways is under way
  • Water withdrawn decreased by 13% to 17.3 million m3
  • Implementation of global industry standards on tailings management (GISTM) is progressing on schedule

Social

  • R151 million invested in corporate social responsibility
  • ARM Mining Consortium declared a R255 million dividend to communities who have an effective 8.5% shareholding in Modikwa Mine
  • R198 million invested in skills development and training
  • Continuing positive relationships with communities neighbouring our mines

Investment case for ARM

  • Diversified portfolio of commodities
  • Quality, long-life assets and orebodies
  • Robust financial position to create and sustain value
  • Continuing positive relationships with communities neighbouring our mines
  • Strong pipeline of quality growth projects
  • Focused capital allocation to deliver competitive shareholder returns and ensure sustainability of the business
  • Experienced and entrepreneurial management
  • Proven track record in project execution and delivery
  • Good relationships with communities and local businesses which contributes to stability and sustainability of the operations
  • Integrated environmental, social and governance (ESG) strategy
  • High standards of governance and transparent reporting on operational, financial and sustainability performance
  • ARM is a constituent of the FTSE4Good Index Series

Next section

Stakeholders – hot topics in F2022

Our ability to achieve our strategic goals depends on the value we create for others. Equally, the sustainability of our operations requires that we balance stakeholder needs, interests and expectations with those of the company.

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Summarised Mineral Resources and Mineral Reserves report

Extracting optimal value from the Mineral Resources and Mineral Reserves in our portfolio is fully aligned to ARM’s purpose of delivering competitive returns and creating sustainable value for all our shareholders through its strategic objectives.

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