Key Points
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ARM negotiates with Assore over Assmang’s final dividend to determine how much cash flows to shareholders.
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Assmang holds R3.57 billion in cash for ARM, which could boost dividends or fund future projects.
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Beeshoek mine faces care and maintenance after ArcelorMittal stops buying ore, pressuring production and operations.
South African billionaire Patrice Motsepe faces a key financial decision as African Rainbow Minerals negotiates how much cash it can take from Assmang, its manganese and iron-ore joint venture.
ARM, the diversified mining company Motsepe chairs, told shareholders it is still in discussions with fellow investor Assore South Africa over the size of a final dividend for the year ending June 30.
The talks are being handled by directors appointed by both companies. The outcome will directly influence Motsepe’s ability to maintain investor confidence amid a weaker commodity cycle.
Assmang’s Operations and Cash Reserves
Assmang operates several manganese and iron-ore mines, including the long-standing Beeshoek mine. Its board is responsible for setting dividend payments twice a year while considering funding and capital needs.
At the end of June, ARM’s share of Assmang’s cash and cash equivalents stood at about R3.57 billion, not including any additional cash flow generated since then. ARM itself reported net cash of R6.6 billion at the same time.
The Assmang balance represents a substantial reserve that could support dividends or fund future projects if released.
Weaker Earnings and Operational Pressure
ARM’s headline earnings fell sharply for the year to June 30, affected by lower iron-ore and coal prices and a stronger rand. The company cut its final dividend to R6 per share from R9 a year earlier.
Assmang is also under operational pressure. Beeshoek is being placed on care and maintenance after ArcelorMittal South Africa stopped buying its ore.
The move threatens hundreds of jobs and reduces production, complicating the decision of how much cash to distribute to shareholders.
Balancing Shareholder Expectations
For Motsepe, who built his fortune by buying and turning around marginal mining assets, the moment highlights how quickly market conditions can change.
ARM has emphasized a strong balance sheet and cautious debt approach. The cash held in Assmang aligns with that strategy, but investors will watch closely to see how much is released.
ARM has not provided a timeline for when Assmang’s board will decide on the dividend. The company promised to update the market once a decision is made.
Until then, the question remains over how much of Assmang’s cash Motsepe can release while protecting the business in a volatile market.
