South Africa’s mining company African Rainbow Minerals (ARM), led by Africa’s first Black billionaire, Patrice Motsepe, is set to acquire full ownership of the Nkomati nickel mine in Mpumalanga.
ARM will purchase the remaining 50% stake from Norilsk Nickel Africa (NNA), a subsidiary of Russian mining giant Norilsk Nickel, for $17.7 million, including liabilities and obligations.
Under the agreement, ARM will assume NNA’s share of obligations and liabilities related to the mine’s assets and environmental responsibilities. This includes a contribution of $17.7 million from NNA. Additionally, the South African company has earmarked $45.5 million for the mine’s rehabilitation.
This acquisition comes nine months after ARM purchased a 50% joint venture stake in the Nkomati nickel mine for $54,440 in cash. In that deal, ARM also took over NNA’s share of environmental liabilities and obligations related to the mine’s assets.
ARM’s decision to acquire the Nkomati mine is driven by the mine’s rich deposits of nickel, copper, cobalt, and platinum group metals. The mine also has a low carbon footprint, short lead times for production, and offers attractive bi-metal product credits. This aligns with ARM’s push for minerals and metals that are critical to decarbonisation and sustainable development.
“The most important is if you look at its orebody; it is a class one sulphide orebody. Its carbon intensity is low; it is a clean environment and those options we need to look at. It is well endowed with water, and water can be energy; it has extensive sunlight,” Mike Schmidt, executive in charge of growth for ARM, said earlier this year.
“It has the optionality of supplying clean, green energy up to our smelting which we are advancing. There’s a lot of opportunity but we have to manage it,” he added.
With complete ownership of the Nkomati Mine, ARM will have greater control over its future development and potential restart of operations. This acquisition is expected to close later this year, pending final regulatory approvals. It is a significant step in ARM’s strategy to consolidate its mining assets and strengthen its South African mining sector presence.
This latest acquisition aligns with Motsepe’s strategy to advance the company’s mining assets portfolio amid rising global demand driven by the clean energy transition.
A few months ago, the billionaire, through ARM, secured a 15% strategic shareholding in Surge Copper. This Toronto Stock Exchange-Venture Exchange company is advancing an emerging critical metals district in British Columbia, Canada.
The South African mining company is now a cornerstone investor in Surge, which owns 100% of the emerging Berg project and the longer-term Ootsa asset, which hosts porphyry copper, molybdenum, gold, and silver deposits.
ARM’s $2.8 million investment in Surge was the largest component of Surge’s completed $3.6 million funding package, reinforcing ARM’s commitment to advancing projects that align with global climate goals and the transition to clean energy.
Although nickel mines across the globe are under huge pressure amid a price crash caused by an influx of new, low-grade supply from Indonesia, ARM’s acquisition of the Nkomati mine has the potential to be quite lucrative due to its low carbon footprint.
