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African Rainbow Minerals (ARM), the diversified mining company owned by South African billionaire Patrice Motsepe, plans to shut down its Beeshoek iron ore mine and place it on “care and maintenance” after ArcelorMittal South Africa halted purchases of its output.
The company said the mine ceased production at the end of October and 622 permanent workers will lose their jobs at the end of November. The only buyer was ArcelorMittal South Africa, which ended a decades-long supply relationship after a long-term contract expired in June. It continued buying iron ore month-to-month but stopped entirely on July 27.
ARM said an extensive assessment of the mine did not produce any option that would keep Beeshoek profitable. “In the absence of a sustainable offtake arrangement, Beeshoek Mine is no longer economically feasible to operate,” ARM said.
ARM confirms Beeshoek closure amid steel woes
The shutdown comes as ArcelorMittal South Africa, the country’s biggest steelmaker, faces weak local demand, high power costs, rail bottlenecks and rising imports of cheaper Chinese steel. It has also deferred the planned closure of its long steel plants in Newcastle and Vereeniging while it continues talks with the government and unions.
Consultations required under the Labour Relations Act have been completed and the Department of Mineral and Petroleum Resources has been notified, ARM said. The closure confirms ARM’s warning in August, when Assmang, the joint venture between ARM and Assore that operates Beeshoek, told unions it was considering shutting the mine after ArcelorMittal declined to sign a new three-year supply deal.
Earnings under pressure
ARM, founded in 1997, has grown into one of South Africa’s most influential mining groups, with interests in iron ore, manganese, copper, coal, gold and platinum group metals. Iron ore and PGMs remain central to its bottom line, but weaker prices have weighed on its financials.
Headline earnings fell 47 percent to R2.7 billion ($155.5 million) in the year to June 30, down from R5.1 billion ($293.7 million) the prior year. In September, ARM suspended operations at its Bokoni platinum mine after annual earnings slumped.
Motsepe’s broader portfolio
Motsepe, Africa’s first Black billionaire and the wealthiest Black person in Southern Africa, owns nearly 46 percent of ARM. While mining remains his primary source of wealth, he has gradually built out interests in financial services, energy and sports.
