In 2023, one of South Africa’s most prominent figures and the first black billionaire in Africa, Patrice Motsepe, has seen a significant decline in his net worth, losing a staggering $1.1 billion due to the performance of his business, African Rainbow Minerals.
According to Forbes billionaire reports, in 2022, the self-made billionaire, now 61 years old, was estimated to be worth $3.3 billion.
However, in 2023, his net worth plummeted by $1.1 billion, to $2.2 billion primarily owing to a 46% year-to-date drop in the share price of his company, African Rainbow Minerals Limited (ARM).
African Rainbow Minerals Limited (ARM) is a leading diversified South African mining and minerals company, boasting long life, low unit-cost operations and substantial growth opportunities.
The company mines a variety of resources, including iron ore, manganese ore and alloys, chrome ore and alloys, platinum group metals, copper, nickel, and coal.
Initially, ARM’s share price stood at 28,733.00 ZAC ($1,508) but has dwindled to 15,554.090 ZAC ($816).
The decline in share price and investor confidence in ARM can be attributed to several factors.
The financial year 2023 proved challenging for ARM, with a 21% decrease in headline earnings to R8.981 billion, a significant drop from the R11.338 billion recorded in the previous year.
Additionally, the company declared a final dividend of R12.00 per share, a substantial reduction compared to the R20.00 per share declared in the financial year 2023.
Despite these challenges, ARM maintained a robust net cash position of R9.779 billion as of June 30, 2023, although it was lower than the previous year’s R11.175 billion.
Operationally, the company faced a host of difficulties, including logistics issues that impacted the volumes of iron ore, manganese ore, and thermal coal.
Furthermore, unit production costs were under pressure due to lower production volumes and above-inflation increases in the costs of essential items such as explosives, diesel, electricity, consumables, and maintenance costs.
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Patrice Motsepe, the founder and chairman of African Rainbow Minerals, is notable for becoming a billionaire in 2008, marking the first black African to make the Forbes list.
In 2016, he launched a private equity firm, African Rainbow Capital, focused on investing in Africa. Motsepe also has a stake in Sanlam, a listed financial services firm, and serves as the president and owner of the Mamelodi Sundowns Football Club.
In March 2021, he was elected president of the Confederation of African Football, the sport’s governing body on the continent. In 1994, he became the first black partner at the law firm Bowman Gilfillan in Johannesburg and later embarked on a mining service contracting business. In 1997, he acquired low-producing gold mine shafts and successfully turned them into profitable ventures.
How much more daft can you get? There’s been multi billionaires in Africa even before this man was born in South Africa! Perhaps you’ve never heard legendary names like Alhassan Dantata, Sir Louis Ojukwu and several others?