Table of Contents
Key Points
- ARM is weighing the sale of its $821.6 million stake in Harmony Gold as profits decline due to weak iron ore and PGM prices.
- Harmony Gold posted strong financials, with revenue rising 19.3% and a return to profitability, despite ARM’s struggles.
- ARM is shifting toward renewable energy, with a 100MW solar project launching in 2025, while reassessing its mining portfolio.
African Rainbow Minerals (ARM), the diversified mining group led by South African billionaire Patrice Motsepe, is considering selling its $821.6 million stake in Harmony Gold as it deals with a sharp drop in profits and looks to refocus its portfolio for long-term growth.
The potential sale—part of a broader strategy to boost shareholder value—comes as ARM faces growing pressure from weaker commodity prices, particularly in iron ore and platinum group metals (PGMs). The company, which has been expanding into renewable energy, is weighing whether to hold or offload its 11.8 percent stake in Harmony, South Africa’s largest gold miner.
ARM navigates a tough commodities market
During ARM’s interim results presentation, Motsepe said that “all options are on the table” regarding its Harmony stake, a holding the company has had since its 2003 merger with Avmin. Harmony, which operates in South Africa, Papua New Guinea, and Australia, has seen its market value rise to roughly R15 billion ($821.6 million), giving ARM potential financial flexibility at a time of market uncertainty.
Despite the broader challenges in the mining sector, Harmony has delivered strong financial results. The Johannesburg-based miner reported a 19.3 percent rise in revenue, reaching R35.45 billion ($2 billion) in H1 2025, up from R29.71 billion ($1.59 billion) a year earlier.
The company’s total assets grew 15.2 percent to R68.9 billion ($3.76 billion) as of December 31, 2024, from R59.79 billion ($3.26 billion) a year earlier, reflecting continued investment and expansion. Meanwhile, retained earnings rebounded sharply, jumping from R500 million ($27.27 million) in H1 2024 to R9.5 billion ($517.91 million) in H1 2025, a major turnaround from the $282.95 million loss recorded in fiscal 2023.
ARM’s profit decline triggers strategic review
While Harmony has posted gains, ARM has struggled in the first half of its 2025 fiscal year. The company’s headline earnings fell 49 percent to R1.52 billion ($83.43 million) in H1 2025, down from R2.96 billion ($162.2 million) a year earlier. The steep drop was mainly due to lower iron ore and PGM prices, which weighed on ARM Platinum—the division behind the Bokoni, Two Rivers, and Modikwa mines.
ARM Platinum posted a R689 million ($37.82 million) headline loss, more than doubling the R282 million ($15.48 million) loss from the previous year. Rising mechanized development costs at Bokoni and persistently weak PGM prices made matters worse. In response, ARM has been scaling back expansion projects and reassessing its strategic priorities.
Shifting toward renewable energy
Despite these financial challenges, ARM remains a key part of Motsepe’s billion-dollar business empire, with the billionaire holding a 45.9 percent stake. The company is pushing ahead with its renewable energy plans, including a 100MW solar PV project at ARM Platinum set to go live in August 2025. A feasibility study for ARM Ferrous was completed in December, and funding options are currently under review.
While ARM’s pivot to cleaner energy is central to its future, the possible sale of Harmony Gold could free up capital to strengthen its balance sheet and accelerate its investment in sustainable energy. As the company weighs its next move, the potential divestment underscores a broader shift in South Africa’s mining sector, where firms are navigating a changing economic landscape while balancing profitability with long-term diversification.
