Billionaire Patrice Motsepe’s crown jewel lost R2.88 billion in one day

Billionaire businessman Patrice Motsepe’s mining giant, African Rainbow Minerals (ARM), shaved R2.88 billion off its market cap on Thursday, 23 July.

This was due to an 8% plunge in the company’s share price on Thursday following the release of a concerning update to investors.

On Thursday morning, ARM, which is chaired by its founder, Motsepe, released an announcement on SENS stating that its board has approved investing R15.95 billion into two South African mining projects.

This investment will take place over seven years and will see ARM expand its Bokoni platinum group metals (PGMs) mine and reopen its Nkomati nickel operations.

Bokoni Platinum Mines is located in the Eastern Limb of South Africa’s highly lucrative Bushveld Complex in Limpopo.

ARM concluded its acquisition of Bokoni in September 2022 after buying out Anglo American Platinum, now Valterra Platinum, and Atlatsa Resources.

To complete the acquisition, ARM established a new wholly owned subsidiary, ARM Bokoni Mining Consortium, that was used to acquire 100% of the company’s shares and claims.

The acquisition cost ARM R3.5 billion, and the company projected that R5.3 billion in development capital would be spent over three years.

However, ARM believed this investment was worth it, saying in a 2021 investor presentation that Bokoni’s is the second-largest PGM resource in South Africa.

Its two processing facilities, UG2 and Merensky, have production capacities of 60,000 and 100,000 tonnes per month, respectively. This means Bokoni has a total capacity of 160,000 tonnes per month.

In its notice on 23 July, ARM said its board has approved the development of Bokoni’s ‘180,000 tonnes per month’ project following a definitive feasibility study (DFS) conducted in June.

As the name implies, this project will raise Bokoni’s production capacity to 180,000 tonnes per month by increasing Merensky’s capacity to 120,000.

ARM estimated the nominal capital expenditure for this project at R15.2 billion. To put this into perspective, ARM’s market cap on the JSE is currently R32.83 billion.

ARM justified this expenditure by saying that its long-term PGM market outlook remains constructive and that Bokoni is a strategic, long-term growth asset.

It said the internal rate of return for this project is estimated at 28%, with an expected pay-back period of 6.3 years.

“Management and the board have a high level of confidence in the DFS,” African Rainbow Minerals said in its announcement. 

“This is underpinned by the fact that Bokoni is a brownfield-led expansion, which materially derisks the project.” 

It added that the project benefits from an existing operating footprint, comprised of established and new declines, Bokoni’s existing UG2 concentrator, and surface infrastructure. 

“The commissioning of the existing 60,000 tonnes per month UG2 concentrator ahead of the new plant further reduces execution risk,” it said.

Another R753 million investment

In addition to the Bokoni expansion, ARM said its board approved the recommencement of operations at its Nkomati Nickel Mine in Mpumalanga.

Nkomati is a wholly owned subsidiary of ARM’s Platinum division and is an open-pit mechanised mine that has been mothballed since 2021.

Operations at Nkomati were placed on care and maintenance due to low nickel prices, high operating costs, and persistent financial losses.

At the time, ARM was a co-owner of the mine alongside Russia’s Norilsk Nickel, also known as Nornickel.

In July 2025, ARM bought out Nornickel’s stake, becoming the sole owner of Nkomati. This allowed the miner to determine the mine’s fate unilaterally.

In April 2026, ARM reached a conditional multi-year off-take agreement with Swedish mining company Boliden Commercial regarding Nkomati’s operations.

With this deal, the nickel concentrate Nkomati produces will be shipped to Boliden’s smelter in Finland, which is the only large-scale nickel smelter in Europe.

However, this deal is contingent upon two key conditions: Boliden must complete its responsible sourcing due diligence, and ARM’s board must approve the reopening of Nkomati’s operations.

In its notice on 23 July, ARM said it has now fulfilled its condition, with the board formally approving the recommencement of open-pit mining operations at Nkomati.

ARM told shareholders that this will lead to an estimated nominal project capital expenditure of R753 million. The project has an expected internal rate of return of 28.36%, with a projected pay-back period of 5.3 years.

Operations at Nkomati are scheduled to restart in October 2026, with plant refurbishment set to commence in July.

“The recommencement of operations at Nkomati represents a value-accretive investment,” African Rainbow Minerals said.

The mining giant said it would unlock a strategic resource, leverage existing infrastructure with low capital intensity, and generate compelling returns and sustainable cash flows.

These announcements were not received well. ARM’s share price fell by 8.04% on the day it was released, reducing the miner’s market cap by R2.88 billion.