Future of Nkomati Mine hangs in the balance

Future of Nkomati Mine hangs in the balance
DODGY: African Rainbow Mineral boss Patrice Motsepe is reportedly dodging Nkomati mine shareholders over its dividend policy. PICTURE BY BusinessLIVE.

They were currently discussing the issue of the mine with their business partners.

The future of Nkomati Mine in Mpumalanga hangs in a veil of uncertainty as it continues to be unprofitable.

The company said they are faced with “operational challenges” and were also considering the 8-years left for the open pit mine.

Co-owner Patrice Motsepe was also dodging shareholders about Nkomati Mine’s exact dividend policy.

The company impaired R1 billion between June and December 2018. It said that it’s R1.16 billion before tax and R892 million after tax impairment.

Impairment refers to the loss in value of the assets of a company or when the assets no longer generate sufficient money.

SEE ALSO: SANCO lays charges against marchers to Motsepe mine

The mine, situated between Badplaas and Machadodorp, is owned by Motsepe’s African Rainbow Mineral (ARM) and Russian mining giant Norilsk.

For years now Norilsk has been trying to sell its stake at the mine, citing the unprofitable environment.

Motsepe’s ARM said the loss in impairment were the result of increase in production costs. It is also the inability by the mine to generate enough money to assist on operational needs.

“We are in discussions with our partner on the future of the mine,” ARM said.

Nkomati Mine also recorded a headline loss of R186m  during the said period.

This was due to the shrinking of nickel prices, the company said.

ARM said much of the improvement in profits are the result of the good performance of Modikwa platinum mine in Limpopo and which Nkomati Mine was affecting.

Modikwa made R173 million compared to R36 million it made a previous period. But Nkomati Mine lost R186 million during the same period as a result of decreased demand in nickel.

Nkomati’s nickel production fell 2% to 6,624 tons because of stockpiled low-grade material.

(edited by ZK)

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