The condensed group provisional results for the financial year under review have been prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), the South African Institute of Chartered Accountants (SAICA) Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and contains the information required by IAS 34 Interim Financial Reporting, requirements of the South African Companies Act and the Listings Requirements of the Johannesburg Stock Exchange (JSE) Limited.

Basis of preparation

The condensed group provisional results for the financial year under review have been prepared under the supervision of the finance director Ms TTA Mhlanga CA(SA). The condensed group provisional results for the financial year under review have been prepared on the historical cost basis, except for certain financial instruments that are fairly valued. The accounting policies used are in terms of IFRS and are consistent with those applied in the most recent annual financial statements, apart from the new standards adopted in the current year.

The condensed group provisional results for the financial year under review are prepared in accordance with the requirements of the JSE Limited Listings Requirements for provisional reports and the requirements of the Companies Act of South Africa. The Listings Requirements require provisional reports to be prepared in accordance with the framework concepts and the measurement and recognition requirements of IFRS and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by Financial Reporting Standards Council and to also, as a minimum, contain the information required by IAS 34 Interim Financial Reporting.

Adoption of new and revised accounting standards

The group has adopted the following new and/or revised standards and interpretations issued by the International Accounting Standards Board (IASB) that became effective.

Standard	Subject	Effective date
IFRS 3	Business Combinations – Amendments	1 January 2020
IFRS 9, IAS 39 and IFRS 7	Interest Rate Benchmark Reform	1 January 2020
IAS 1	Presentation of Financial Statements – Amendment	1 January 2020
IAS 8	Accounting Policies, Changes in Accounting Estimates and Errors – Amendment	1 January 2020
IFRS 16	Covid-19-Related Rent Concessions – Amendment	1 June 2020

The adoption of the above standards had no significant effect on the group financial statements.

IFRS 15 Revenue from Contracts with Customers

Contract assets

A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the group performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional. Some fees only become payable to the group when the entity paying the fees receives payments from its customers for saleable products.

Covid-19 impact on operations

Health and safety measures are complied with at all operations. Measures that have been put in place to reduce the risk of a Covid-19 outbreak include the following:

• Daily screening of all employees
• Compulsory wearing of face masks
• Social distancing throughout the mine
• Installation of hand wash basins and sanitising stations
• Regular disinfection of high risk areas
• Driving vaccinations.

ARM Platinum

Two Rivers

Two Rivers sells its PGM concentrate to African Rainbow Minerals Limited’s 46% partner Impala Platinum. There were no defaults on payments due during the F2021 reporting period. The mine was operating at 70% capacity and returned to full capacity towards the end of August 2020. The mine remained at full workforce capacity for the remainder of F2021.

It is estimated that the negative impact of Covid-19 on production is currently minimal.

Management continues to follow the safety measures put in place to curb the spread of Covid-19.

Two Rivers was selected to be a Covid-19 vaccination site by the Department of Health. A number of vaccinations have taken place since the opening of the vaccination site.

Modikwa

Modikwa Mine is allowed to produce at 100% capacity, with strict social distancing and other health and safety measures to be complied with. Modikwa Mine experienced a slower than anticipated ramp-up of production following the easing of the lockdown regulations.

It is estimated that the negative impact of Covid-19 on production is currently less than 10%.

Voluntary separation and early retirement options were given to Covid-19-vulnerable employees over the period.

Modikwa sells its concentrate to African Rainbow Minerals Limited’s 50% joint venture partner Rustenburg Platinum Mines. There were no defaults on payments due during F2021.

The mine was operating with 100% of the workforce as at the end of F2021.

Modikwa was selected to be a Covid-19 vaccination site by the Department of Health. A number of vaccinations have taken place since the opening of the vaccination site.

Nkomati

Nkomati did not experience any material challenges with the sales of its products during the reporting period.

The joint venture partners of Nkomati ceased mining operations on 14 March 2021. The mine is currently under care and maintenance.

ARM Ferrous

Assmang

All of Assmang’s operations were operating at 100% capacity for F2021. Sales volumes and production were not impacted by Covid-19, with the exception of Black Rock Mine, where production was impacted by Covid-19-related challenges and increasing community protest action.

The Northern Cape operations (Khumani, Black Rock and Beeshoek) were selected to be Covid-19 vaccination sites by the Department of Health. A number of vaccinations have taken place since the opening of the vaccination sites.

Sakura

At 30 June 2021 Sakura was operating at 100% capacity, sales and production were not impacted by Covid-19.

From 3 February 2021, a decision was taken to operate the plant with only essential personnel, in order to limit the possible exposure to Covid-19.

The identified positive cases had no impact on production. Hygiene and screening processes on-site remain enforced and are working well. The current recovery movement control order (RMCO) has been extended indefinitely until the high number of new positive cases in Malaysia drops below 4 000 cases per day.

ARM Coal

At the beginning of F2021 production volumes were negatively impacted by approximately 10% due to increased health and safety measures at the ARM Coal operations resulting from the Covid-19 pandemic.

The impact on production resulting from Covid-19 reduced to approximately 5% towards the latter part of F2021.

New standards issued but not yet effective

The following amendments, standards or interpretations have been issued but are not yet effective for the group. The effective date refers to periods beginning on or after, unless otherwise indicated.

Standard	Subject	Effective date
IFRS 3	Business Combinations – Amendments	1 January 2022
IAS 1	Presentation of Financial Statements – Amendment	1 January 2023
IAS 16	Property, Plant and Equipment – Amendment	1 January 2022
IAS 37	Provisions, Contingent Liabilities and Contingent assets – Amendment	1 January 2022
IFRS 9	Financial Instruments – Amendment	1 January 2022
IFRS 9, IFRS 7, IFRS 4, IAS 39 and IFRS 16	Interest Rate Benchmark Reform – Amendment	1 January 2021
IFRS 17	Insurance Contracts	1 January 2023
The group does not intend early adopting any of the above amendments or standards. ARM continuously evaluates the impact of these standards and amendments, the adoption of which are not expected to have a significant effect on the group financial statements.

Business segments

For management purposes, the group is organised into the following operating divisions: ARM Platinum (which includes platinum and nickel), ARM Ferrous, ARM Coal and ARM Corporate. Machadodorp Works, corporate and other and gold are included in ARM Corporate.

	Attributable	ARM Platinum Rm	ARM   Ferrous1 Rm	ARM Coal Rm	ARM Corporate Rm		Total Rm	IFRS   adjust-   ment2 Rm		Total per IFRS financial statements Rm
2.1	Year to 30 June 2021 (Reviewed)
	Sales	18 463	24 907	1 058	136		44 564	(24 907)		19 657
	Cost of sales	(6 687)	(11 046)	(1 078)	(93)		(18 904)	11 004		(7 900)
	Other operating income3	293	81	236	1 747		2 357	21		2 378
	Other operating expenses3	(1 611)	(2 914)	(50)	(1 056)		(5 631)	2 914		(2 717)
	Segment result	10 458	11 028	166	734		22 386	(10 968)		11 418
	Income from investments	72	245	11	404		732	(245)		487
	Finance cost	(95)	(37)	(175)	(59)		(366)	37		(329)
	Income from associate4	–	–	(260)	–		(260)	–		(260)
	Loss from joint venture	–	(3)	–	–		(3)	7 501		7 498
	Capital items before tax (refer note 9)	–	(502)	–	(9)		(511)	502		(9)
	Taxation	(2 925)	(3 190)	8	(399)		(6 506)	3 173		(3 333)
	Profit/(loss) after tax	7 510	7 541	(250)	671		15 472	–		15 472
	Non-controlling interest	(2 844)	–	–	(2)		(2 846)	–		(2 846)
	Consolidation adjustment5	–	(43)	–	43		–	–		–
	Contribution to basic earnings/(losses)	4 666	7 498	(250)	712		12 626	–		12 626
	Contribution to headline earnings/(losses)	4 666	7 927	(250)	721		13 064	–		13 064
	Other information
	Segment assets, including investment in associate	14 403	27 441	3 085	14 663		59 592	(6 503)		53 089
	Investment in associate			534			534			534
	Investment in joint venture							20 938		20 938
	Segment liabilities	2 644	2 997	1 847	1 699		9 187	(2 997)		6 190
	Unallocated liabilities (tax and deferred tax)						6 629	(3 506)		3 123
	Consolidated total liabilities						15 816	(6 503)		9 313
	Cash generated from operations	7 758	9 836	197	(153)		17 638	(9 836)		7 802
	Cash inflow/(outflow) from operating activities	4 742	7 255	199	(3 576)		8 620	(3 255)		5 365
	Cash (outflow)/inflow from investing activities	(1 562)	(2 345)	(193)	917		(3 183)	2 345		(838)
	Cash outflow from financing activities	(313)	(19)	(10)	(17)		(359)	19		(340)
	Capital expenditure	1 611	2 221	263	10		4 105	(2 221)		1 884
	Amortisation and depreciation	619	1 126	182	8		1 935	(1 126)		809
	Impairment before tax	–	500	–	9		509	(500)		9
	EBITDA	11 077	12 154	348	742		24 321	(12 094)		12 227

There were no significant inter-company sales. 1 Refer to ARM Ferrous segment note 2.4 and note 8 for more detail. 2 Includes IFRS 11 Joint Arrangements – adjustments related to ARM Ferrous. 3 The re-measurement of the ARM Coal loans amounts to R53 million gain with no tax effect. The re-measurement of the Modikwa loans amounts to R6 million loss with no tax effect. The fair value adjustment of the Harmony loan amounts to R47 million gain with no tax effect. 4 The re-measurement of the ARM Coal loans amounts to a gain of R36 million with no tax effect. 5 Relates to fees capitalised in ARM Ferrous and reversed upon consolidation.

	Attributable	ARM Platinum Rm	ARM   Ferrous1 Rm	ARM Coal Rm	ARM Corporate Rm		Total Rm	IFRS   adjust-   ment2 Rm		Total per IFRS financial statements Rm
2.2	Year to 30 June 2020 (Audited)
	Sales	10 548	15 717	1 056	49		27 370	(15 717)		11 653
	Cost of sales	(6 165)	(8 768)	(1 201)	(92)		(16 226)	8 734		(7 492)
	Other operating income3	120	538	232	713		1 603	(443)		1 160
	Other operating expenses3	(1 098)	(1 334)	(20)	(932)		(3 384)	1 334		(2 050)
	Segment result	3 405	6 153	67	(262)		9 363	(6 092)		3 271
	Income from investments	99	305	13	334		751	(305)		446
	Finance cost	(120)	(53)	(173)	(104)		(450)	53		(397)
	Profit from associate4	–	–	33	–		33	–		33
	Loss from joint venture	–	(127)	–	–		(127)	4 577		4 450
	Capital items before tax (refer note 9)	–	(38)	(937)	(756)		(1 731)	38		(1 693)
	Taxation	(1 174)	(1 746)	211	(96)		(2 805)	1 729		(1 076)
	Profit/(loss) after tax	2 210	4 494	(786)	(884)		5 034	–		5 034
	Non-controlling interest	(1 068)	–	–	(1)		(1 069)	–		(1 069)
	Consolidation adjustment5	–	(44)	–	44		–	–		–
	Contribution to basic earnings/(losses)	1 142	4 450	(786)	(841)		3 965	–		3 965
	Contribution to headline earnings/(losses)	1 142	4 479	(2)	(85)		5 534	–		5 534
	Other information
	Segment assets, including investment in associate	10 179	22 835	3 428	11 449		47 891	(5 290)		42 601
	Investment in associate			795			795	–		795
	Investment in joint venture							17 545		17 545
	Segment liabilities	2 924	2 090	1 801	1 580		8 395	(2 090)		6 305
	Unallocated liabilities (tax and deferred tax)						5 388	(3 200)		2 188
	Consolidated total liabilities						13 783	(5 290)		8 493
	Cash generated from operations	4 055	7 463	144	(333)		11 329	(7 463)		3 866
	Cash inflow/(outflow) from operating activities	2 608	6 080	161	(2 690)		6 159	(2 330)		3 829
	Cash outflow from investing activities	(829)	(2 183)	(192)	(1 322)		(4 526)	2 183		(2 343)
	Cash (outflow)/inflow from financing activities	(127)	9	–	(147)		(265)	(9)		(274)
	Capital expenditure	1 132	2 173	197	4		3 506	(2 173)		1 333
	Amortisation and depreciation	448	994	197	7		1 646	(994)		652
	Impairment before tax	–	7	941	750		1 698	(7)		1 691
	EBITDA	3 853	7 147	264	(255)		11 009	(7 086)		3 923

There were no significant inter-company sales. 1 Refer to ARM Ferrous segment note 2.4 and note 8 for more detail. 2 Includes IFRS 11 Joint Arrangements – adjustments related to ARM Ferrous. 3 The re-measurement of the ARM Coal loans amounts to R147 million gain with no tax effect. The re-measurement of the Modikwa loans amounts to R8 million loss. 4 The re-measurement of the ARM Coal loans amounts to a gain of R279 million with no tax effect. Impairment losses included in income from associate are R4 million before tax of R1 million. 5 Relates to fees capitalised in ARM Ferrous and reversed upon consolidation. The ARM Platinum segment is analysed further into Two Rivers Platinum Mine, ARM Mining Consortium (which includes Modikwa Platinum Mine) and Nkomati Nickel Mine.

	Attributable	Nkomati1 Rm	Two Rivers Rm	Modikwa Rm		Platinum Total Rm
2.3	Year to 30 June 2021 (Reviewed)
	External sales	1 547	11 992	4 924		18 463
	Cost of sales	(1 230)	(3 533)	(1 924)		(6 687)
	Other operating income	3	180	110		293
	Other operating expenses	(134)	(952)	(525)		(1 611)
	Segment result	186	7 687	2 585		10 458
	Income from investments	6	32	34		72
	Finance cost	(26)	(60)	(9)		(95)
	Taxation	(1)	(2 156)	(768)		(2 925)
	Profit after tax	165	5 503	1 842		7 510
	Non-controlling interest	–	(2 531)	(313)		(2 844)
	Contribution to basic earnings	165	2 972	1 529		4 666
	Contribution to headline earnings	165	2 972	1 529		4 666
	Other information
	Segment and consolidated assets	284	9 709	4 410		14 403
	Segment liabilities	690	1 402	552		2 644
	Unallocated liabilities (tax and deferred tax)					2 388
	Consolidated total liabilities					5 032
	Cash generated from operations	115	5 878	1 765		7 758
	Cash inflow from operating activities	119	3 289	1 334		4 742
	Cash outflow from investing activities	(6)	(1 182)	(374)		(1 562)
	Cash outflow from financing activities	–	(221)	(92)		(313)
	Capital expenditure	–	1 281	330		1 611
	Amortisation and depreciation	–	488	131		619
	EBITDA	186	8 175	2 716		11 077

1 Nkomati ceased mining operations on 14 March 2021. The mine is currently under care and maintenance.

	Attributable	Nkomati1 Rm	Two Rivers Rm	Modikwa Rm		Platinum Total Rm
2.3	Year to 30 June 2020 (Audited)
	External sales	1 282	6 173	3 093		10 548
	Cost of sales	(1 475)	(2 994)	(1 696)		(6 165)
	Other operating income	12	21	87		120
	Other operating expenses	(523)	(383)	(192)		(1 098)
	Segment result	(704)	2 817	1 292		3 405
	Income from investments	7	25	67		99
	Finance cost	(32)	(83)	(5)		(120)
	Taxation	25	(786)	(413)		(1 174)
	(Loss)/profit after tax	(704)	1 973	941		2 210
	Non-controlling interest	–	(908)	(160)		(1 068)
	Contribution to basic (losses)/earnings	(704)	1 065	781		1 142
	Contribution to headline (losses)/earnings	(704)	1 065	781		1 142
	Other information
	Segment and consolidated assets	445	6 029	3 705		10 179
	Segment liabilities	1 009	1 339	576		2 924
	Unallocated liabilities (tax and deferred tax)					1 363
	Consolidated total liabilities					4 287
	Cash generated from operations	(121)	2 641	1 535		4 055
	Cash (outflow)/inflow from operating activities	(132)	1 261	1 479		2 608
	Cash outflow from investing activities	(51)	(428)	(350)		(829)
	Cash outflow from financing activities	(6)	(72)	(49)		(127)
	Capital expenditure	–	813	319		1 132
	Amortisation and depreciation	–	355	93		448
	EBITDA	(704)	3 172	1 385		3 853

2.4     Analysis of the ARM Ferrous segment on a 100% basis

		Iron ore division Rm	Manganese division Rm		ARM Ferrous Total Rm	ARM share Rm	IFRS   adjust-   ment1 Rm	Total per IFRS financial statements Rm
	Year to 30 June 2021 (Reviewed)
	Sales	37 621	12 192		49 813	24 907	(24 907)	–
	Cost of sales	(12 286)	(9 807)		(22 093)	(11 046)	11 046	–
	Other operating income	1 329	168		1 497	81	(81)	–
	Other operating expense	(5 970)	(1 190)		(7 160)	(2 914)	2 914	–
	Segment result	20 694	1 363		22 057	11 028	(11 028)	–
	Income from investments	478	13		491	245	(245)	–
	Finance cost	(62)	(12)		(74)	(37)	37	–
	Loss from joint venture	–	(7)		(7)	(3)	3	–
	Capital items before tax (refer note 9)	(49)	(956)		(1 005)	(502)	502	–
	Taxation	(6 065)	(314)		(6 379)	(3 190)	3 190	–
	Profit after tax	14 996	87		15 083	7 541	(7 541)	–
	Consolidation adjustment					(43)	43	–
	Contribution to basic earnings	14 996	87		15 083	7 498	–	7 498
	Contribution to headline earnings	15 046	897		15 943	7 927	–	7 927
	Other information
	Consolidated total assets	35 662	20 806		56 468	27 441	(6 503)	20 938
	Consolidated total liabilities	6 846	6 606		13 452	2 997	(2 997)	–
	Capital expenditure	2 397	2 248		4 645	2 221	(2 221)	–
	Amortisation and depreciation	1 561	775		2 336	1 126	(1 126)	–
	Cash inflow/(outflow) from operating activities2	10 477	(3 968)		6 509	7 255	(7 255)	–
	Cash outflow from investing activities	(2 464)	(2 225)		(4 689)	(2 345)	2 345	–
	Cash outflow from financing activities	(39)	–		(39)	(19)	19	–
	EBITDA	22 255	2 138		24 393	12 154	(12 154)
	Additional information for ARM Ferrous at 100%
	Non-current assets
	Property, plant and equipment				29 029		(29 029)	–
	Investment in joint venture				778		(778)	–
	Other non-current assets				1 851		(1 851)	–
	Current assets
	Inventories				5 131		(5 131)	–
	Trade and other receivables				11 378		(11 378)	–
	Financial assets				102		(102)	–
	Cash and cash equivalents				8 198		(8 198)	–
	Non-current liabilities
	Other non-current liabilities				8 199		(8 199)	–
	Current liabilities
	Trade and other payables				3 511		(3 511)	–
	Short-term provisions				1 423		(1 423)	–
	Taxation				161		(161)
	Year to 30 June 2020 (Audited)
	Sales	20 638	10 795		31 433	15 717	(15 717)	–
	Cost of sales	(10 033)	(7 503)		(17 536)	(8 768)	8 768	–
	Other operating income	1 235	701		1 936	538	(538)	–
	Other operating expense	(2 267)	(1 258)		(3 525)	(1 334)	1 334	–
	Segment result	9 573	2 735		12 308	6 153	(6 153)	–
	Income from investments	595	15		610	305	(305)	–
	Finance cost	(48)	(56)		(104)	(53)	53	–
	Loss from joint venture	–	(254)		(254)	(127)	127	–
	Capital items before tax (refer note 9)	(64)	(13)		(77)	(38)	38	–
	Taxation	(2 730)	(764)		(3 494)	(1 746)	1 746	–
	Profit after tax	7 326	1 663		8 989	4 494	(4 494)	–
	Consolidation adjustment				–	(44)	44	–
	Contribution to basic earnings	7 326	1 663		8 989	4 450	–	4 450
	Contribution to headline earnings	7 376	1 672		9 048	4 479	–	4 479
	Other information
	Consolidated total assets	22 002	25 132		47 134	22 835	(5 290)	17 545
	Consolidated total liabilities	4 953	6 036		10 989	2 090	(2 090)	–
	Capital expenditure	2 223	2 314		4 537	2 173	(2 173)	–
	Amortisation and depreciation	1 419	637		2 056	994	(994)	–
	Cash inflow from operating activities	4 9802	3 429		8 409	6 080	(6 080)	–
	Cash outflow from investing activities	(2 099)	(2 267)		(4 366)	(2 183)	2 183	–
	EBITDA	10 992	3 372		14 364	7 147	(7 147)	–
	Additional information for ARM Ferrous at 100%
	Non-current assets
	Property, plant and equipment				27 306		(27 306)	–
	Investment in joint venture				1 442		(1 442)	–
	Other non-current assets				1 542		(1 542)	–
	Current assets
	Inventories				5 198		(5 198)	–
	Trade and other receivables				5 131		(5 131)	–
	Financial assets				99		(99)	–
	Cash and cash equivalents				6 416		(6 416)	–
	Taxation				189		(189)	–
	Non-current liabilities
	Other non-current liabilities				8 303		(8 303)	–
	Current liabilities
	Trade and other payables				1 813		(1 813)	–
	Short-term provisions				1 024		(1 024)	–

	1 Includes consolidation and IFRS 11 Joint Arrangements – adjustments. 2 Dividend paid amounting to R3.8 billion included in cash flows from operating activities. Refer note 2.1 and note 8 for more detail on the ARM Ferrous segment. Refer note 2.2 and note 8 for more detail on the ARM Ferrous segment.
2.5	Additional information ARM Corporate as presented in the table above is analysed further into Machadodorp, corporate and other, and gold segments.

		Machadodorp Works Rm	Corporate and other Rm	Gold Rm		Total ARM Corporate Rm
	Year to 30 June 2021 (Reviewed)
	Sales	136	–			136
	Cost of sales	(149)	56			(93)
	Other operating income1	7	1 740			1 747
	Other operating expenses1	(130)	(926)			(1 056)
	Segment result	(136)	870			734
	Income from investments	–	322	82		404
	Finance costs	(22)	(37)			(59)
	Capital item (refer note 9)	–	(9)			(9)
	Taxation	51	(450)			(399)
	(Loss)/profit after tax	(107)	696	82		671
	Non-controlling interest	–	(2)			(2)
	Consolidation adjustments2	–	43			43
	Contribution to basic losses	(107)	737	82		712
	Contribution to headline (losses)/earnings	(107)	746	82		721
	Other information
	Segment and consolidated assets	151	10 572	3 940		14 663
	Segment liabilities	298	1 401			1 699
	Cash outflow from operating activities	(4)	(3 654)	82		(3 576)
	Cash (outflow)/inflow from investing activities	(1)	918			917
	Cash outflow from financing activities	–	(17)			(17)
	Capital expenditure	1	9			10
	Amortisation and depreciation	–	8			8
	Impairment before tax	–	9			9
	EBITDA	(136)	878			742

1 Corporate and other includes a re-measurement loss on the loans to Modikwa and ARM Coal of R16 million and a fair value gain on the loan from Harmony of R47 million. 2 Relates to fees capitalised in ARM Ferrous and reversed on consolidation.

2.5     Additional information continued

		Machadodorp Works Rm	Corporate and other Rm	Gold Rm		Total ARM Corporate Rm
	Year to 30 June 2020 (Audited)
	Sales	49	–			49
	Cost of sales	(142)	50			(92)
	Other operating income1	5	708			713
	Other operating expenses1	(133)	(799)			(932)
	Segment result	(221)	(41)			(262)
	Income from investments	–	334			334
	Finance costs	(18)	(86)			(104)
	Capital item (refer note 9)	(7)	(749)			(756)
	Taxation	76	(172)			(96)
	Loss after tax	(170)	(714)			(884)
	Non-controlling interest	–	(1)			(1)
	Consolidation adjustment2	–	44			44
	Contribution to basic losses	(170)	(671)			(841)
	Contribution to headline (losses)/earnings	(163)	78			(85)
	Other information
	Segment and consolidated assets	89	5 994	5 366		11 449
	Segment liabilities	370	1 210			1 580
	Cash inflow/(outflow) from operating activities	4	(2 694)			(2 690)
	Cash outflow from investing activities	–	(1 322)			(1 322)
	Cash outflow from financing activities	–	(147)			(147)
	Capital expenditure	–	4			4
	Amortisation and depreciation	2	5			7
	Impairment before tax	7	743			750
	EBITDA	(219)	(36)			(255)

1 Corporate and other includes a re-measurement gain on the loans to Modikwa and ARM Coal of R68 million. 2 Relates to fees capitalised in ARM Ferrous and reversed on consolidation.

			Reviewed F2021 Rm		Audited F2020 Rm
Sales			19 657		11 653
Local sales			17 266		9 618
Export sales			2 391		2 035
Revenue			21 457		12 386
Fair value adjustments to revenue			792		539
Revenue from contracts with customers			20 665		11 847
Sales – mining and related products			19 273		11 527
Penalty and treatment charges			(408)		(413)
Modikwa			(2)		(11)
Nkomati			(58)		(99)
Two Rivers			(348)		(303)
Fees received			1 800		733

4.1 ARM Ferrous

Property, plant and equipment

Tshenolo Iron Ore Mine

An attributable impairment loss was recognised in F2021 on property, plant and equipment for R26 million with no tax effect (F2020: R7 million before tax of R2 million). The impairment relates to the prospecting right carried at cost in the Assmang subsidiary company Tshenolo Iron Ore Mine which was written down to zero. This is accounted for in the income from joint venture in the statement of profit and loss (refer note 9).

Cato Ridge Works

An impairment loss of R514 million before tax of R144 million was recognised in F2021 on property, plant and equipment. ARM’s attributable share of the impairment amounted to R257 million before tax of R72 million (refer note 9).

This impairment was due to a combination of:

• An increase in long-term manganese ore prices (market prices) (production cost)
• A decline in long-term high-carbon manganese alloys prices (sales prices)
• The strengthening of the rand to the US dollar.

Impairment indicators were identified at the Cato Ridge Works cash-generating unit (CGU). A discounted cash flow valuation was performed to determine the fair value less cost of disposal of the CGU.

The net discounted cash flow valuation resulted in a negative net present value (NPV), which resulted in the impairment of the total net asset value of Cato Ridge Works. The recoverable amount of the CGU amounted to Rnil at 30 June 2021.

The level 3 valuation model was calculated using a nominal pre-tax South African discount rate of 15.89%. The valuation period was based on two years. The short valuation period is due to the CGU generating negative cash flows from year one in the impairment model.

The following assumptions were used in the valuation model:

			F2022	F2023
Manganese Ore Price Assumptions (37% and 44%)	US$/dmtu CIF		4.82 – 5.16	5.10 – 5.54
HCFeMn Export Lumpy USA 77	US$/mt Ex Whse (USA)		1 384	1 268
HCFeMn Export Lumpy EUR 77	US$/mt DDP (Europe)		1 236	1 193
HCFeMn Export Lumpy OTH 77	US$/mt DDP (China)		1 150	1 226
Exchange rates
US$/ZAR	ZAR nominal		14.82	14.94
EUR/ZAR	ZAR nominal		18.37	18.92
US$/EUR	EUR nominal		0.81	0.81

Investments

Cato Ridge Alloys

An impairment of R97 million with no tax effect was recognised on Assmang’s equity-accounted investment in Cato Ridge Alloys. ARM’s attributable share of the impairment amounted to R48 million with no tax effect (refer note 9).

This impairment was due to a combination of:

• A decline in long-term medium-carbon manganese alloys prices
• The strengthening of the rand against the US dollar.

A discounted cash flow valuation was performed to determine the fair value less cost of disposal of the investment.

The level 3 valuation model was calculated using a nominal pre-tax South African discount rate of 15.89%. The valuation period was based on two years. The short valuation period is due to Cato Ridge Alloys generating losses from year one in the impairment model.

The following assumptions were used in the valuation model for the equity investment:

			F2022	F2023
HC FeMn Molten metal purchase price	ZAR/mt		14 505	14 785
MCFeMn Lumpy USA 80	US$/mt CIF (US)		1 883	1 826
MCFeMn Export Lumpy OTH 80	US$/mt CIF (US)		1 629	1 652
MCFeMn Export Lumpy EUR 80	EUR/mt DDP		1 568	1 447
Exchange rates
US$/ZAR	ZAR nominal		14.82	14.94
EUR/ZAR	ZAR nominal		18.37	18.92
US$/EUR	EUR nominal		0.81	0.81

Sakura

An impairment loss of R337 million with no tax effect was recognised on Assmang’s equity-accounted investment, Sakura Ferroalloys Sdh Bhd. ARM’s attributable share of the impairment loss amounted to R169 million with no tax effect (refer note 9).

This impairment was due to a combination of:

• A consistent decline in the long-term manganese alloys prices
• Lower sale volumes compared to prior year forecast.

A discounted cash flow valuation was performed to determine the fair value less cost of disposal of the investment. The valuation was performed in Malaysian Ringgit (MYR) and in terms of IFRS. The recoverable amount of the attributable investment amounted to R200 million at 31 December 2020, with no further impairment recognised at 30 June 2021.

The level 3 valuation model was calculated over a 15-year period with no terminal value assumptions at the end of year 15. A pre-tax Malaysian discount rate of 10.33% was used in the impairment calculation. The MYR valuation was converted to South African rand using an exchange rate of R3.62 at 31 December 2020.

The following assumptions were used in the valuation model:

			F2022	F2023	F2024	F2025
Manganese ore price assumptions – 44% Mn	US$/dmtu CIF		4.42	4.46	4.80	5.08
Manganese ore price assumptions – 36%-38% Mn	US$/dmtu CIF		4.16	4.09	4.43	4.61
Manganese alloy price assumptions – US import	US$/mt DDP		1 178	1 248	1 306	1 338
Manganese alloy price assumptions – Europe spot	US$/mt DDP		1 033	1 077	1 116	1 144
Exchange rates
US$/MYR	MYR nominal		4.15	4.15	4.10	4.00
US$/EUR	EUR nominal		0.85	0.87	0.84	0.82

4.2 ARM Coal

Cash-generating units

Impairment losses were recognised in F2020 in the GGV and PCB cash-generating units. ARM’s attributable share of the impairment losses amounted to R1 680 million before tax and R1 524 million after tax (refer note 9), with no further impairment recognised at 30 June 2021.

Details of the impairments were included in the financial results ended 30 June 2020, which can be found on www.arm.co.za.

Other impairment losses were recognised in F2020 on property, plant and equipment for R4 million before tax of R1 million (refer note 9). These were accounted for in the income from associate line in the statement of profit or loss.

4.3 Venture Building Trust

An impairment loss was recognised in F2021 on property, plant and equipment of R9 million with no tax effect (refer note 9).

4.4 Machadodorp Works

An impairment loss was recognised in F2020 on property, plant and equipment for R7 million with no tax effect (refer note 9).

	Reviewed F2021 Rm	Audited F2020 Rm
Deferred tax assets
Opening balance	–	485
Investment in Harmony recognised in other comprehensive income	64	(416)
Other	210	(69)
Deferred tax assets on the statement of financial position	274	–
Deferred tax liabilities
Opening balance	2 085	1 517
Investment in Harmony recognised in other comprehensive income	(255)	255
Two Rivers	691	333
Modikwa	271	292
ARM Coal	(8)	(211)
Other	184	(101)
Deferred tax liabilities on the statement of financial position	2 968	2 085

	Reviewed 30 June 2021 Rm	Restated 30 June 2020 Rm	Restated 1 July 2019 Rm
ARM Coal	40	48	53
Glencore South Africa	–	–	–
Total	40	48	53

ARM Coal, an entity jointly controlled by ARM Limited (51%) and Glencore Operations South Africa (Pty) Ltd (GOSA) (49%), in prior periods recorded an amount payable by GOSA to ARM Coal of R452 million (ARM’s attributable portion: R230 million) as a long-term receivable (receivable).

At the date of the previous year-end results, GOSA had not agreed the outstanding balance of the receivable and ARM Coal was at that time unable to provide sufficient evidence to validate this receivable in its accounting records. Details of this and the resulting qualification were included in the audited financial statements for the financial year ended 30 June 2020, which can be found on www.arm.co.za.

ARM has since completed the investigation and the entries which gave rise to the long-term receivable have been identified and agreed between ARM Coal, GGV and GOSA.

The results of the investigation concluded that all the items included in the ARM Coal long-term receivable were indeed receivables, however, R283 million should have been classified as trade and other receivables and R53 million should have been included in the long-term borrowings rather than being accounted for as long-term receivables in the statement of financial position.

Management have accounted for the above as a prior period error in terms of IAS 8.

The restatement had no impact on the statement of profit or loss, statement of comprehensive income and the statement of cash flows. The error has been corrected by restating each of the following affected line items in the statement of financial position for the prior periods as follows:

	Restated Year ended 30 June 2020 Rm	Restated Year starting 1 July 2019 Rm
STATEMENT OF FINANCIAL POSITION
Loans and long-term receivables
Previously reported balance	278	283
Reclassification	(230)	(230)
Restated balance	48	53
Long-term borrowings
Previously reported balance	1 512	1 095
Reclassification	53	53
Restated balance	1 565	1 148
Trade and other receivables
Previously reported balance	3 023	2 743
Reclassification	283	283
Loans and long-term receivables	230	230
Long-term borrowings	53	53
Restated balance	3 306	3 026
PRIMARY SEGMENTAL INFORMATION
ARM Coal: Segment assets, including investment in associate
Previously reported balance	3 375	4 962
Reclassification	53	53
Restated balance	3 428	5 015
ARM Coal: Segment liabilities
Previously reported balance	1 748	1 319
Reclassification	53	53
Restated balance	1 801	1 372

	Reviewed F2021 Rm	Audited F2020 Rm
Through ARM’s 51% investment in ARM Coal and ARM’s 10% direct investment, the group holds a 20.2% investment in the Participative Coal Business (PCB) of Glencore Operations South Africa Proprietary Limited (GOSA).
Opening balance	795	1 837
Share of (loss)/profit for the current year	(260)	33
Loss for the current year	(296)	(246)
Re-measurement of loans (refer note 16)	36	279
Movement in loans	(1)	46
Impairment on investment (refer note 4 and 9)	–	(1 121)
Closing balance	534	795

	Reviewed F2021 Rm	Audited F2020 Rm
The investment relates to ARM Ferrous and consists of Assmang as a joint venture which includes iron ore and manganese.
Opening balance	17 545	16 702
Net income for the period1	7 498	4 450
Income for the period	7 541	4 494
Consolidation adjustment	(43)	(44)
Foreign currency translation reserve	(105)	143
Less: Cash dividend received for the period	(4 000)	(3 750)
Closing balance	20 938	17 545

Refer note 2.1 and 2.4 for more detail on the ARM Ferrous segment.

¹ Includes expected credit losses recorded of R81 million less tax of R1 million (F2020: R74 million less tax of R1 million).

	Reviewed F2021 Rm	Audited F2020 Rm
Impairment loss on property, plant and equipment – Machadodorp Works (refer note 4)	–	(7)
Loss on sale of Lubambe – other	–	(6)
Impairment loss on property, plant and equipment and intangible assets – ARM Coal	–	(559)
Impairment loss on investment in 20.2% PCB – ARM (refer note 4)	–	(1 121)
Impairment loss of property, plant and equipment – Venture Building Trust	(9)	–
Capital items per statement of profit or loss before taxation effect	(9)	(1 693)
Impairment loss on property, plant and equipment accounted for directly in associate – ARM Coal (refer note 4)	–	(4)
Impairment loss on property, plant and equipment accounted for directly in joint venture – Assmang (refer note 4)	(283)	(7)
Impairment loss on investment in Sakura accounted for directly in joint venture – Assmang (refer note 4)	(169)	–
Impairment loss on investment in Cato Ridge accounted for directly in joint venture – Assmang (refer note 4)	(48)	–
Loss on sale on property, plant and equipment accounted for directly in joint venture – Assmang	(2)	(31)
Capital items before taxation effect	(511)	(1 735)
Taxation accounted for in joint venture – impairment loss of property, plant and equipment and intangible assets – Assmang	72	–
Taxation accounted for in joint venture – loss on disposal of property, plant and equipment – Assmang	1	9
Taxation accounted for in associate – impairment loss – ARM Coal	–	1
Taxation on impairment loss of property, plant and equipment and intangible assets – ARM Coal	–	156
Total	(438)	(1 569)

	Reviewed F2021 Rm	Audited F2020 Rm
Headline earnings (R million)	13 064	5 534
Headline earnings per share (cents)	6 688	2 850
Basic earnings per share (cents)	6 464	2 042
Diluted headline earnings per share (cents)	6 621	2 807
Diluted basic earnings per share (cents)	6 399	2 011
Number of shares in issue at end of year (thousands)	224 453	223 326
Weighted average number of shares (thousands)	195 333	194 188
Weighted average number of shares used in calculating diluted earnings per share (thousands)	197 314	197 170
Net asset value per share (cents)	17 908	14 365
EBITDA (R million)	12 227	3 923
Interim dividend declared (cents per share)	1 000	500
Dividend declared after year end (cents per share)	2 000	700
Reconciliation to headline earnings (R million)
Basic earnings attributable to equity holders of ARM	12 626	3 965
– Impairment loss on property, plant and equipment and intangible assets – ARM Coal	–	559
– Impairment loss on property, plant and equipment in associate – ARM Coal	–	4
– Impairment loss on property, plant and equipment in joint venture – Assmang	283	7
– Loss on sale of property, plant and equipment in joint venture – Assmang	2	31
– Impairment loss on investment in Sakura accounted for directly in joint venture – Assmang	169	–
– Impairment loss on investment in Cato Ridge Works accounted for directly in joint venture – Assmang	48	–
– Impairment loss on property, plant and equipment – Venture Building Trust	9	–
– Impairment loss of property, plant and equipment – Machadodorp Works	–	7
– Impairment loss on investment in 20.2% PCB – ARM	–	1 121
– Loss on sale of Lubambe – other	–	6
	13 137	5 700
– Taxation accounted for in joint venture – impairment loss at Assmang	(72)	–
– Taxation accounted for in joint venture – loss on disposal of fixed assets at Assmang	(1)	(9)
– Taxation accounted for in associate – impairment loss at ARM Coal	–	(157)
Headline earnings	13 064	5 534

	Reviewed F2021 Rm	Audited F2020 Rm
Harmony1	3 940	5 366
Opening balance	5 366	2 370
Fair value (loss)/gain in other comprehensive income	(1 426)	2 996
Guardrisk2	36	30
Preference shares	1	1
Richards Bay Coal Terminal3	233	238
Closing balance	4 210	5 635
1 This is a level 1 valuation in terms of IFRS 7 and 9. 2 This is a level 2 valuation in terms of IFRS 7 and 9.     Fair value based on the net asset value of the cell captive. 3 This is a level 3 valuation in terms of IFRS 7 and 9.
Richards Bay Coal Terminal (RBCT) The fair value of the RBCT investment was determined by calculating the present value of the future wharfage cost savings by being a shareholder in RBCT as opposed to the wharfage payable by non-shareholders. The fair value is most sensitive to wharfage cost. The current RBCT valuation is based on a wharfage cost differential ranging between R42/tonne and R48/tonne (F2020: R42/tonne and R46/tonne). If increased by 10% this would result in a R23 million (F2020: R24 million) increase in the valuation on the RBCT investment.
If decreased by 10% this would result in a R23 million (F2020: R24 million) decrease in the valuation on the RBCT investment. The valuation is calculated based on the duration of the RBCT lease agreement with Transnet SOC Limited to 31 December 2038, using a pre-tax discount rate of 19.1% (F2020: 19.4%).
Opening balance	238	251
Fair value loss	(5)	(13)
Closing balance	233	238

The increase in trade and other receivables is largely as a result of an increase in revenue during the reporting period.

Trade and other receivables contain provisional pricing features linked to commodity prices and exchange rates, which have been designated to be measured at fair value through profit or loss because of the embedded derivative. This is a level 2 valuation in terms of IFRS.

Trade and other receivables include a contract asset from Assmang of R1 156 million (F2020: Rnil). The contract asset resulted from revised fee arrangements whereby fees received from Assmang only become payable following receipt by Assmang from the relevant customer.

Trade and other receivables have been restated (refer note 6).

	Reviewed F2021 Rm	Audited F2020 Rm
Investments in fixed deposits
Current financial assets1
– ARM Corporate	–	1 074
– ARM Finance Company SA2	161	–
– Two Rivers	30	25
– Modikwa	203	105
– Nkomati	59	51
– Mannequin Captive Cell (Cell AVL 18) (refer note 23.2)	61	39
– Other	9	15
	523	1 309
Non-current financial assets1
– ARM Coal (investment in fixed deposit)	46	41
– Mannequin Captive Cell (Cell AVL 18) (refer note 23.2)	145	189
– Modikwa	1	–
– Venture Building Trust	1	–
	193	230
Total	716	1 539

1

Cash and cash equivalents were invested in fixed deposits with maturities longer than three months to achieve better returns. When these investments mature, to the extent that amounts are not re-invested in new investments with maturities of longer than three months, they will again form part of cash and cash equivalents. The carrying amounts of the financial assets shown above approximate their fair value.

2

During F2021 ARM Finance Company SA invested R173 million in fixed deposits with maturities longer than three months. The amount was translated at the 30 June 2021 closing exchange rate resulting in a foreign currency translation loss of R12 million.

The following guarantees issued are included in financial assets:

• Guarantees issued by Two Rivers to DMRE, Eskom and BP Oil amounting to R30 million (F2020: R25 million)
• Guarantees issued by Nkomati to DMRE and Eskom amounting to R59 million (F2020: R51 million)
• Guarantees issued by Modikwa to DMRE and Eskom amounting to R164 million (F2020: R105 million)
• Guarantees issued by ARM Coal to DMRE amounting to R46 million (F2020: R41 million).

Other financial assets include trust funds of R9 million (F2020: R15 million).

	Reviewed F2021 Rm	Audited F2020 Rm
Total cash at bank and on deposit	8 865	4 970
– African Rainbow Minerals Limited	7 739	3 294
– ARM BBEE Trust	4	66
– ARM Finance Company SA	81	295
– ARM Platinum Proprietary Limited	538	1 217
– ARM Treasury Investments Proprietary Limited	42	41
– Nkomati	106	1
– Two Rivers Platinum Proprietary Limited	329	21
– Other cash at bank and on deposit	26	35
Total cash set aside for specific use	806	745
– Mannequin Captive Cell (Cell AVL 18)1	681	644
– Rehabilitation trust funds1	44	45
– Other cash set aside for specific use1	81	56
Total as per statement of financial position	9 671	5 715
Less: Overdrafts (refer note 15)	(16)	(203)
Total as per statement of cash flows	9 655	5 512

Cash at bank and on deposit earns interest at floating rates based on daily bank deposit rates.

1

Cash set aside for specific use in respect of the group includes: - Mannequin Captive Cell is used as part of the group insurance programme. The cash held in the cell is invested in highly liquid investments and is used to settle claims as and when they arise as part of the risk finance retention strategy - The trust funds of R6 million (F2020: R12 million) - African Rainbow Mineral Limited of R35 million (F2020: Rnil) - Guarantees issued by ARM Coal to DMRE amounting to R44 million (F2020: R41 million) - Guarantees issued by Two Rivers to DMRE, Eskom and BP Oil amounting to Rnil (F2020: R4 million) - Guarantees issued by Nkomati to DMRE and Eskom amounting to R40 million (F2020: R44 million).

	Reviewed 30 June 2021 Rm	Restated1 30 June   2020   Rm
Long-term borrowings are held as follows:
ARM Coal Proprietary Limited (partner loans)1	707	1 016
ARM BBEE Trust (loan from Harmony Gold)2	217	316
African Rainbow Minerals Limited (lease liability)	–	2
Anglo Platinum Limited (lease liability)	29	39
Two Rivers Platinum Proprietary Limited (lease liability)	152	192
	1 105	1 565
Short-term borrowings
African Rainbow Minerals Limited (lease liability)	4	3
Anglo Platinum Limited (partner loans)	–	67
Anglo Platinum Limited (lease liability)	30	23
ARM Coal Proprietary Limited (partner loans)1	307	–
ARM Coal (lease liability)	1	6
Two Rivers Platinum Proprietary Limited (lease liability)	6	111
	348	210
Overdrafts (refer note 14)
Nkomati Mine	–	26
Two Rivers Platinum Proprietary Limited	–	150
Other	16	27
	16	203
Overdrafts and short-term borrowings
– interest bearing	57	413
– non-interest bearing	307	–
Overdrafts and short-term borrowings	364	413
Total borrowings	1 469	1 978

The carrying amounts of the financial liabilities shown above approximate their fair value.

1

Long-term borrowings have been restated (refer note 6). During F2021 R307 million was transferred to short-term borrowings.

2

On 28 June 2021 ARM and Harmony advanced new loans to the ARM BBEE Trust. The proceeds from the new loans were used to settle the old loans. This resulted in a gain for the ARM BBEE Trust. The new loans carry interest at zero percent, subject to the lenders reserving the right to charge interest in the future. The new loans are fully repayable on or before 30 June 2035. Earlier payments are at the discretion of the ARM BBEE Trust.

	Reviewed F2021 Rm	Audited F2020 Rm
ARM Coal
Included in other operating income and (loss)/income from associate are re-measurements with no tax effect in both years relating to the GGV and PCB loans. The gain and loss is as a result of a re-measurement of debt between ARM and Glencore Operations South Africa Proprietary Limited (GOSA) and ARM Coal Proprietary Limited.
The re-measurement adjustments are as follows:
Other operating income increase (re-measurement gain on loans)
– ARM Coal segment	206	206
– ARM Corporate segment	(153)	(59)
Re-measurement gain in operating income	53	147
Income from associate (re-measurement gain on loans) (refer note 7)	36	279
Net ARM Coal re-measurement gain	89	426
The re-measurements are as a result of changes in the future repayment cash flows applied to the net present value calculations. The discount rate used in the calculation of the re-measurement is 10%. A US$1 increase in commodity prices would decrease the re-measurement gain by R17 million (F2020: R6 million). A US$1 decrease in commodity prices would increase the re-measurement gain by R17 million (F2020: R17 million). This a level 3 valuation in terms of IFRS 13.
Modikwa
The re-measurement loss in Modikwa of R143 million (F2020: R135 million loss) is partially eliminated against a re-measurement gain in ARM Company of R137 million (F2020: R127 million). The net re-measurement gain attributable to ARM being R18 million (F2020: R15 million).
The re-measurement adjustments are as follows:
Other operating expense increase	(6)	(8)
ARM Platinum segment (re-measurement loss)	(143)	(135)
ARM Corporate segment (re-measurement gain)	137	127
Non-controlling interest	24	23
Net Modikwa re-measurement gain	18	15
The re-measurements are as a result of changes in the future repayment cash flows applied to the net present value calculations. The discount rate used in the calculation of the re-measurement is 5%. This a level 3 valuation in terms of IFRS 13.
ARM BBEE Trust (loan from Harmony)
Included in other operating income for F2021 is a fair value gain of R47 million (F2020: Rnil). The gain is as a result of the new loans advanced to the ARM BBEE Trust by Harmony.
The fair value gains are as follows:
Other operating income increase (fair value gain on loan) – ARM Corporate segment	47	–
Net ARM BBEE Trust fair value gain	47	–

The fair value at initial recognition is as a result of the difference in the stipulated interest rate the lender may charge in the future in the new loan agreement and the interest rate the ARM BBEE Trust would have to pay if the loan was advanced in an open market. The discount rate used in the calculation of the fair value is 9.04%.

The carrying amounts of the financial liabilities approximate their fair value.

	Reviewed F2021 Rm	Audited F2020 Rm
Management fees	1 800	733
Insurance income	92	84
Realised foreign exchange gains	1	9
Royalties received	173	80
Loan fair value gain (refer note 16)	47	–
Loan re-measurement gains (refer note 16)	53	147
Other	212	107
Total	2 378	1 160

	Reviewed F2021 Rm	Audited F2020 Rm
Provisions	233	574
Mineral royalty tax	1 215	381
Staff cost	317	347
Loan re-measurement loss (refer note 16)	6	8
Consulting fees	58	33
Share-based payments expense	220	211
Insurance	105	95
Research and development	105	115
Other	458	286
Total	2 717	2 050

	Reviewed F2021 Rm	Audited F2020 Rm
Loss (before re-measurement on loans)	(296)	(246)
Loan re-measurement gain (refer note 16)	36	279
Total	(260)	33

	Reviewed F2021 Rm	Audited F2020 Rm
South African normal taxation – current year	2 411	758
– mining	1 880	589
– non-mining	531	169
– prior year	(6)	(64)
Deferred taxation	928	382
Total taxation	3 333	1 076

	Reviewed F2021 Rm	Audited F2020 Rm
Cash generated from operations before working capital changes	13 107	5 055
Working capital changes	(5 305)	(1 189)
Movement in inventories	54	(3)
Movement in receivables	(4 630)	(157)
Movement in payables and provisions	(729)	(1 029)
Cash generated from operations	7 802	3 866

	Reviewed F2021 Rm	Audited F2020 Rm
Commitments in respect of future capital expenditure, which will be funded from operating cash flows and by utilising available cash and/or borrowing resources, are summarised below:
Commitments
Commitments in respect of capital expenditure:
Approved by directors
– contracted for	677	228
– not contracted for	126	–
Total commitments	803	228

		Reviewed F2021 Rm	Audited F2020 Rm
	Long-term provisions
	Opening balance	1 953	1 599
	Machadodorp Works restoration and decommissioning provision	1	52
	Nkomati restoration and decommissioning provision	42	322
	Two Rivers restoration and sterilisation provision	(65)	20
	ARM Coal restoration and decommissioning provision	93	46
	African Rainbow Minerals Silicosis provision	(43)	( 130)
	Other	(98)	44
	Closing balance	1 883	1 953
23.1	Nkomati restoration and decommissioning provision1
	Long-term provisions
	Opening balance	525	203
	Provision for the period1	(13)	370
	Transfer from/(to) short-term provisions	34	(63)
	Unwinding of discount rate	21	15
	Closing balance	567	525
	Short-term provision
	Opening balance	63	–
	Transfer (to)/from long-term provisions	(34)	63
	Closing balance	29	63
	Total Nkomati restoration and decommissioning provision	596	588
23.2	Silicosis and tuberculosis class action provision
	Long-term provision
	The provision movement is as follows:
	Opening balance	189	319
	Settlement payments	–	(92)
	Interest unwinding	16	25
	Demographic assumptions changes	(3)	(12)
	Transfer to short-term provisions	(56)	(51)
	Closing balance	146	189
	Short-term provision
	Opening balance	51	–
	Settlement payments	(47)	–
	Transfer from long-term provisions	56	51
	Closing balance	60	51
	Total silicosis and tuberculosis class action provision	206	240

1 Nkomati ceased mining operations on 14 March 2021. The mine is currently under care and maintenance. ARM has a contingency policy in this regard which covers environmental site liability and silicosis liability with Guardrisk Insurance Company Limited (Guardrisk). In turn, Guardrisk has reinsured the specified risks with Mannequin Insurance PCC Limited - Cell AVL 18, Guernsey which cell captive is held by ARM. Following the High Court judgment previously reported, the Tshiamiso Trust was registered in November 2019. As part of the settlement a guarantee of R304 million was issued by Guardrisk on behalf of ARM in favour of the Tshiamiso Trust on 13 December 2019 (refer note 13). Details of the provision were discussed in the 30 June 2020 financial results, which can be found on www.arm.co.za.

The company in the ordinary course of business enters into various sale, purchase, service and lease transactions with subsidiaries, associated companies, joint ventures and joint operations. Transactions between the company, its subsidiaries and joint operations related to fees, insurances, dividends, rentals and interest are regarded as intra-group transactions and eliminated on consolidation.

	Reviewed F2021 Rm	Audited F2020 Rm
Amounts accounted in the statement of profit or loss relating to transactions with related parties
Subsidiaries
Impala Platinum – sales	11 992	6 173
Joint operations
Rustenburg Platinum Mines – sales1	4 924	3 093
Glencore International AG – sales1	884	837
Norilsk Nickel – management fees	13	–
Glencore Operations SA – management fees	68	–
Joint venture
Assmang Proprietary Limited
– Management fees	1 770	730
– Dividends received	4 000	3 750
Amounts outstanding at year end (owing to)/receivable by ARM on current account
Joint venture
Assmang – debtor	1 156	110
Joint operations
Rustenburg Platinum Mines – debtor1	1 755	660
Norilsk Nickel – creditor	–	(4)
Norilsk Nickel – debtor	67	61
Rustenburg Platinum Mines – short-term borrowings1	–	(66)
Glencore Operations SA – long-term borrowings2	(707)	(1 016)
Glencore Operations SA – short-term borrowings2	(307)	–
Glencore Operations SA – trade and other receivables2	218	383
Glencore International AG – trade and other receivables1	120	55
Glencore Operations SA – loans and long-term receivables2	–	–
Subsidiary
Impala Platinum – debtor	4 324	1 812
Impala Platinum – dividend paid	1 219	566

1	These transactions and balances for joint operations do not meet the definition of a related party as per IAS 24 but have been included to provide additional information.
2	Comparative information has been restated. Refer note 6 for more detail.

Nkomati

The Nkomati Mine closure may have a potential exposure regarding rehabilitation and management of water post-closure. There are uncertainties regarding the ongoing assessment of long-term water management measures, and anticipated amendments to the existing Water Use Licence (WUL). Technical studies towards providing an integrated water management plan are underway. The results of the studies will be used as input towards a risk assessment that is required to apply for an amended WUL, such as applying for authorised water discharges. The WUL conditions are not yet known and the subsequent potential water resource impact liability as part of the mine rehabilitation and closure process is uncertain. The obligation will be recognised when it is probable and can be reliably estimated.

The environmental rehabilitation provision at 30 June 2021 is the best independent estimate and is based on the most reliable information currently available. It will be re-assessed on an ongoing basis as engineering designs evolve and new information becomes available, as well as when approvals of a revised environmental management plan and water use licence are secured.

ARM Coal

The South African Revenue Services (SARS) disallowed Glencore Operations South Africa (Pty) Ltd (GOSA) diesel rebates for the period 2011 to 2013 on the basis that the diesel was not considered to be used in the primary production activities in the mining process. GOSA lost the SARS internal appeal process and took the matter to the High Court. The matter was heard in the High Court, which ruled in favour of GOSA. SARS, however, appealed the ruling through the Supreme Court of Appeal (SCA). The dispute was heard on 27 May 2021 and judgment was handed down on 10 August 2021 where the SCA ruled in favour of SARS.

The ruling has an impact on ARM’s investment in the PCB associate for diesel rebates accounted for from 2011 to date. The portion of the diesel rebates that is not considered to be used in the primary production activities in the mining process, will have to be repaid if already received or written off if receivable at 30 June 2021. This financial effect of the SCA ruling is still to be quantified wherein an exercise will be undertaken to split the activities between primary and non-primary production activities in the mining process. The obligation will be recognised once the quantum can be reliably estimated.

No provision had been recognised previously due to the High Court ruling as evidence that the outcome would be positive.

There have been no other significant changes in the contingent liabilities of the group as disclosed since 30 June 2020 annual financial statements.

For a detailed disclosure on contingent liabilities, refer to ARM's annual financial statements for the year ended 30 June 2020 available on the group's website www.arm.co.za.

Subsequent to year end ARM received a dividend from Assmang of R3 500 million.

Harmony declared a final dividend of 27 cents per share, bringing their total dividend for F2021 to 137 cents per share. At 30 June 2021 and at the date of this report, ARM owned 74 665 545 Harmony shares.

No other significant events have occurred subsequent to the reporting date that could materially affect the reported results.

for the year ended 30 June 2021

	Notes	Reviewed F2021 Rm	Audited F2020 Rm
Revenue	3	21 457	12 386
Sales	3	19 657	11 653
Cost of sales		(7 900)	(7 492)
Gross profit		11 757	4 161
Other operating income	17	2 378	1 160
Other operating expenses	18	(2 717)	(2 050)
Profit from operations before capital items		11 418	3 271
Income from investments		487	446
Finance costs		(329)	(397)
(Loss)/income from associate	19	(260)	33
Income from joint venture	8	7 498	4 450
Profit before taxation and capital items		18 814	7 803
Capital items before tax	9	(9)	(1 693)
Profit before taxation		18 805	6 110
Taxation	20	(3 333)	(1 076)
Profit for the year		15 472	5 034
Attributable to:
Equity holders of ARM
Profit for the year		12 626	3 965
Basic earnings for the year		12 626	3 965
Non-controlling interest
Profit for the year		2 846	1 069
		2 846	1 069
Profit for the year		15 472	5 034
Earnings per share
Basic earnings per share (cents)	10	6 464	2 042
Diluted basic earnings per share (cents)	10	6 399	2 011

for the year ended 30 June 2021

	Financial instruments at fair value through other compre- hensive income Rm	Other Rm	Retained earnings Rm	Total share- holders of ARM Rm	Non- controlling interest Rm	Total Rm
For the year ended 30 June 2020 (Audited)
Profit for the year to 30 June 2020	–	–	3 965	3 965	1 069	5 034
Other comprehensive income that will not be reclassified to the statement of profit or loss in subsequent periods
Net impact of revaluation of listed investment	2 325	–	–	2 325	–	2 325
Revaluation of listed investment¹	2 996	–	–	2 996	–	2 996
Deferred tax on above	(671)	–	–	(671)	–	(671)
Other comprehensive income that may be reclassified to the statement of profit or loss in subsequent periods
Foreign currency translation reserve movement	–	203	–	203	–	203
Total other comprehensive income	2 325	203	–	2 528	–	2 528
Total comprehensive income for the year	2 325	203	3 965	6 493	1 069	7 562
For the year ended 30 June 2021 (Reviewed)
Profit for the year to 30 June 2021	–	–	12 626	12 626	2 846	15 472
Other comprehensive income that will not be reclassified to the statement of profit or loss in subsequent periods
Net impact of revaluation of listed investment	(1 107)	–	–	(1 107)	–	(1 107)
Revaluation of listed investment¹	(1 426)	–	–	(1 426)	–	(1 426)
Deferred tax on above	319	–	–	319	–	319
Other comprehensive income that may be reclassified to the statement of profit or loss in subsequent periods
Foreign currency translation reserve movement	–	(161)	–	(161)	–	(161)
Total other comprehensive loss	(1 107)	(161)	–	(1 268)	–	(1 268)
Total comprehensive (loss)/income for the year	(1 107)	(161)	12 626	11 358	2 846	14 204

1

The share price of Harmony decreased from R71.86 per share at 30 June 2020 to R52.76 at 30 June 2021 and increased from R31.74 at 30 June 2019 to R71.86 per share at 30 June 2020. The valuation of the investment in Harmony is based on a level 1 fair value hierarchy level in terms of International Financial Reporting Standards (IFRS).

for the year ended 30 June 2021

			Other reserves
	Share capital and premium Rm	Treasury shares Rm	Financial instruments at fair value through other comprehensive income Rm	Share-based payments Rm	Other1 Rm
Balance at 30 June 2019	4 711	(2 405)	1 019	1 003	(64)
Total comprehensive income for the year	–	–	2 325	–	203
Profit for the year to 30 June 2020	–	–	–	–	–
Other comprehensive income	–	–	2 325	–	203
Bonus and performance shares issued to employees	307	–	–	(298)	–
Dividend paid2	–	–	–	–	–
Dividend declared to non-controlling interests3	–	–	–	–	–
Share repurchase	(57)	–	–	–	–
Share-based payments expense	–	–	–	179	–
Balance at 30 June 2020	4 961	(2 405)	3 344	884	139
Total comprehensive income for the year	–	–	(1 107)	–	(161)
Profit for the year to 30 June 2021	–	–	–	–	–
Other comprehensive income	–	–	(1 107)	–	(161)
Bonus and performance shares issued to employees	262	–	–	(332)	–
Dividend paid2	–	–	–	–	–
Dividend declared to non-controlling interests3	–	–	–	–	–
Share-based payments expense	–	–	–	148	–
Balance at 30 June 2021	5 223	(2 405)	2 237	700	(22)

	Retained earnings Rm	Total share- holders of ARM Rm	Non- controlling interest Rm	Total Rm
Balance at 30 June 2019	23 909	28 173	1 530	29 703
Total comprehensive income for the year	3 965	6 493	1 069	7 562
Profit for the year to 30 June 2020	3 965	3 965	1 069	5 034
Other comprehensive income	–	2 528	–	2 528
Bonus and performance shares issued to employees	–	9	–	9
Dividend paid2	(2 717)	(2 717)	–	(2 717)
Dividend declared to non-controlling interests3	–	–	(571)	(571)
Share repurchase	–	(57)	–	(57)
Share-based payments expense	–	179	–	179
Balance at 30 June 2020	25 157	32 080	2 028	34 108
Total comprehensive income for the year	12 626	11 358	2 846	14 204
Profit for the year to 30 June 2021	12 626	12 626	2 846	15 472
Other comprehensive income	–	(1 268)	–	(1 268)
Bonus and performance shares issued to employees	–	(70)	–	(70)
Dividend paid2	(3 322)	(3 322)	–	(3 322)
Dividend declared to non-controlling interests3	–	–	(1 292)	(1 292)
Share-based payments expense	–	148	–	148
Balance at 30 June 2021	34 461	40 194	3 582	43 776

¹ Other reserves consist of the following:

	F2021 Rm	F2020 Rm	F2019 Rm
Dilution in Two Rivers	(26)	(26)	(26)
Foreign currency translation reserve –  Assmang	62	167	24
Foreign currency translation reserve – other entities	13	69	9
Capital redemption and prospecting loans written off	28	28	28
Tamboti assets sale to Two Rivers	(99)	(99)	(99)
Total	(22)	139	(64)

² Interim dividend paid of 1 000 cents (F2020: 500 cents) per share and final dividend paid of 700 cents (F2020: 900 cents) per share.
³ Dividends to Impala Platinum and Modikwa non-controlling interests.

for the year ended 30 June 2021

	Notes		Reviewed F2021 Rm	Audited F2020 Rm
CASH FLOW FROM OPERATING ACTIVITIES
Cash receipts from customers			17 189	12 499
Cash paid to suppliers and employees			(9 387)	(8 633)
Cash generated from operations	21		7 802	3 866
Interest received			358	373
Interest paid			(45)	(79)
Taxation paid			(2 291)	(800)
			5 824	3 360
Dividends received from joint venture	8		4 000	3 750
Dividends received from investments – Harmony			82	–
Dividends received from other			–	2
Dividend paid to non-controlling interest – Impala Platinum			(1 219)	(566)
Dividend paid to shareholders			(3 322)	(2 717)
Net cash inflow from operating activities			5 365	3 829
CASH FLOW FROM INVESTING ACTIVITIES
Additions to property, plant and equipment to maintain operations			(1 224)	(651)
Additions to property, plant and equipment to expand operations			(433)	(154)
Proceeds on disposal of property, plant and equipment			3	1
Investments in financial assets			(308)	(1 539)
Proceeds from financial assets matured			1 124	–
Net cash outflow from investing activities			(838)	(2 343)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from exercise of share options			44	4
Share buy back			–	(57)
Long-term borrowings raised			264	–
Long-term borrowings repaid			(461)	(216)
Short-term borrowings raised			–	43
Short-term borrowings repaid			(187)	(48)
Net cash outflow from financing activities			(340)	(274)
Net increase in cash and cash equivalents			4 187	1 212
Cash and cash equivalents at beginning of year			5 512	4 239
Foreign currency translation on cash balance			(44)	61
Cash and cash equivalents at end of year			9 655	5 512
Made up as follows:
– Available	14		8 849	4 767
– Cash set aside for specific use	14		806	745
			9 655	5 512
Overdrafts	15		16	203
Cash and cash equivalents per statement of financial position			9 671	5 715
Cash generated from operations per share (cents)			3 994	1 991

Headline earnings

ARM is pleased to report record headline earnings of R13 064 million in F2021, a 136% increase compared to the F2020 headline earnings of R5 534 million. Our diversified portfolio of commodities again stood us in good stead as significantly higher US dollar prices for PGMs and iron ore more than offset the negative impact of a stronger rand against the US dollar. Increased US dollar prices were further augmented by higher sales volumes delivered for iron ore, manganese ore and PGMs.

The average realised rand strengthened by 1.8% versus the US dollar to R15.39/US$ compared to R15.68/US$ in F2020. For reporting purposes, the closing exchange rate was R14.27/US$ (30 June 2020: R17.36/US$).

Headline earnings analysis

(R million)

*

Adjusted headline earnings exclude re-measurement and fair value gains and losses as summarised on the table on slide 35 of the F2021 results presentation. The adjusted headline earnings are included for illustrative purposes and are the responsibility of the board of directors. They should be considered in addition to, and not as a substitute for, or superior to, measures of financial performance, financial position or cash flows reported in line with IFRS.

HEADLINE EARNINGS/(LOSS) BY OPERATION/DIVISION

R million	Reviewed F2021	Audited F2020	% change
ARM Ferrous	7 927	4 479	77
Iron ore division	7 522	3 687	104
Manganese division	448	836	(46)
Consolidation adjustment	(43)	(44)
ARM Platinum	4 666	1 142	>200
Two Rivers Mine	2 972	1 065	179
Modikwa Mine	1 529	781	96
Nkomati Mine	165	(704)
ARM Coal	(250)	(2)	<(200)
Goedgevonden Mine	10	(38)
PCB operations*	(260)	36	<(200)
ARM Corporate and other	721	(85)
Corporate and other (including Gold)	828	78	>200
Machadodorp Works	(107)	(163)	34
Headline earnings	13 064	5 534	136

* Participative Coal Business.

ARM Ferrous headline earnings were 77% higher at R7 927 million (F2020: R4 479 million) as a 104% increase in the iron ore division's headline earnings more than offset a 46% decrease in the manganese division's headline earnings.

The iron ore division benefited from a 5% increase in sales volumes and a 79% rise in the average realised US dollar price for iron ore. These benefits were partially offset by a stronger average realised rand versus the US dollar coupled with a 16% increase in unit cost of sales (drivers of the unit cost increases are discussed in the ARM Ferrous operational performance section below). The iron ore division's headline earnings included an attributable R881 million positive fair value adjustment to revenue related to open iron ore sales which are expected to be realised at higher prices compared to initial prices recorded.

Despite a 22% increase in manganese ore sales volumes, the manganese ore operations reported lower headline earnings mainly due to the reduction in average realised US dollar prices for manganese ore as increased global supply put pressure on prices. The manganese alloy operations (including Sakura) reported improved attributable headline earnings of R37 million compared to an attributable headline loss of R114 million in F2020 as manganese alloy prices improved, particularly in the second half of the financial year.

ARM Platinum headline earnings increased by R3 524 million to R4 666 million in F2021 (F2020: R1 142 million), positively impacted by higher average realised US dollar PGM prices (particularly rhodium) coupled with a 3% increase in PGM production volumes (on 100% basis) as volumes recovered after Covid-19-related lockdowns at the end of F2020.

Headline earnings at Two Rivers Mine improved by 179% as the mine increased volumes by 15% and kept unit production costs flat year-on-year. Modikwa Mine headline earnings were 96% higher as the benefit of higher PGM prices was partially offset by lower volumes and above-inflation unit production cost increases which were due to safety-related stoppages after the two fatal accidents (discussed above) and 12 days of industrial action in the first half of the financial year. Modikwa Mine production volumes and unit production costs improved in the second half of the financial year, a trend that is expected to continue as the mine ramps up production volumes.

Nkomati Mine reported attributable headline earnings of R165 million for F2021 (F2020: R704 million headline loss). Scaling down is complete and the mine is now under care and maintenance as planned and previously communicated.

ARM Coal reported an attributable headline loss of R250 million (F2020: R2 million) which included re-measurement gains of R242 million (F2020: R485 million) on partner loans. Excluding these gains, the ARM Coal headline loss was R492 million (F2020: R487 million), mainly due to lower coal sales volumes (owing to underperformance from Transnet Freight Rail) and above-inflation unit cost increases which was partially offset by higher average received coal prices.

Corporate and other (including Gold) headline earnings were R828 million compared to R78 million in F2020. This was mainly due to higher management fees received of R1 800 million (F2020: R733 million) following revised fee arrangements at Assmang which align ARM's management fees to the performance of Assmang.

The Machadodorp Works headline loss was R107 million (F2020: R163 million) as research into developing energy-efficient smelting technology progressed.

Basic earnings and impairments

Basic earnings of R12 626 million (F2020: R3 965 million) included impairments of the following assets:

• Assmang's investment in Sakura Ferroalloys of R169 million (with no tax effect)
• Fixed assets of Cato Ridge Works of R185 million (after tax)
• Exploration assets that were aimed at increasing the Beeshoek Mine life-of-mine of R26 million (with no tax effect)
• Assmang's equity investment in Cato Ridge Alloys of R48 million (with no tax effect).

Refer to note 9 of the financial statements for further details.

Financial position and cash flow

At 30 June 2021, ARM's net cash was R8 202 million (30 June 2020: R3 737 million restated), an improvement of R4 465 million compared to the end of the 2020 financial year. This amount excludes attributable cash and cash equivalents held at ARM Ferrous (50% of Assmang) of R4 099 million (F2020: R3 208 million). There was no debt at ARM Ferrous in either of these reporting periods.

Cash generated from operations increased by R3 936 million to R7 802 million (F2020: R3 866 million) after a R5 305 million increase in working capital requirements (F2020: R1 189 million). This was mainly due to the increase in trade and other receivables, which in turn was due to higher revenue in the reporting period.

Dividends received from Modikwa, Two Rivers and Assmang amounted to R289 million, R1 431 million and R4 000 million, respectively (F2020: Rnil from Modikwa, R664 million from Two Rivers and R3 750 million from Assmang). A dividend of R82 million was received from Harmony (F2020: Rnil).

In F2021, R3 322 million in dividends was paid to ARM shareholders (representing the F2020 final dividend of R7.00 per share and the 1H F2021 interim dividend of R10.00 per share (F2020: R2 717 million was paid representing the F2019 final dividend of R9.00 per share and the 1H F2020 interim dividend of R5.00 per share).

Net cash outflow from investing activities was R838 million (F2020: R2 343 million outflow) and includes a net transfer from investments in financial assets of R816 million (F2020: R1 539 million transfer to investments in financial assets).

Borrowings of R648 million (F2020: R264 million) were repaid during the period, resulting in gross debt of R1 469 million at 30 June 2021 (30 June 2020: R1 978 million restated). Modikwa Mine fully repaid its partner loans in F2021.

Analysis of movements in net cash and cash equivalents

(R million)

Capital expenditure

Segmental capital expenditure was R4 105 million (F2020: R3 506 million) and included R426 million of capitalised waste stripping at the iron ore operations (F2020: R394 million). Capital expenditure for the divisions is shown below and discussed in each division's operational performance review.

CAPITAL EXPENDITURE BY OPERATION/DIVISION (ATTRIBUTABLE BASIS)

R million	F2021	F2020	% change
ARM Ferrous	2 221	2 173	2
Iron ore division	1 198	1 111	8
Manganese division	1 124	1 157	(3)
Consolidation adjustment	(101)	(95)	(6)
ARM Platinum	1 611	1 132	42
Two Rivers Mine	1 281	813	58
Modikwa Mine	330	319	3
Nkomati Mine	–	–
ARM Coal (Goedgevonden Mine)	263	197	33
ARM Corporate	10	4	150
Total	4 105	3 506	17

ARM Ferrous

Iron Ore division

Prices

Average realised US dollar export iron ore prices were 79% higher on a free-on-board (FOB) equivalent basis at US$156 per tonne (F2020: US$87 per tonne) driven by robust steel production in China and weather-related supply challenges in key iron ore-producing countries like Brazil and Australia. The 62% fines index (CIF China) reached a high of US$233.75 per tonne in May 2021. Average realised prices at our iron ore operations were further enhanced by a strong rally in iron ore lump premiums which also reached record levels. The iron ore operations opportunistically increased the ratio of lump to fines sales volumes from 54:46 in F2020 to 58:42 in F2021. A sustainable lump to fines ratio for the operations is expected to be 55:45.

Volumes

Total iron ore sales volumes increased by 5% to 16.4 million tonnes (F2020: 15.6 million tonnes). Export sales volumes were 1% higher at 13.3 million tonnes (F2020: 13.1 million tonnes). Local sales volumes were 29% higher at 3.1 million tonnes (F2020: 2.4 million tonnes) due to above-plan offtake from Arcelor Mittal South Africa.

Total iron ore production volumes decreased by 1% to 15.9 million tonnes (F2020: 16.1 million tonnes) as higher production volumes at Beeshoek Mine were offset by lower production volumes at Khumani Mine due to compromised water-supply reliability.

Production volumes at Khumani Mine were impacted by challenges related to water supply as the project to upgrade the Vaal Gamagara Water Supply System was delayed. Assmang is in extensive engagement with the Sedibeng Water Board, the Department of Water Affairs and the Minerals Council of South Africa to collaboratively ensure that Phase 1 of the refurbishment programme is completed, and that Phase 2 is started in order to sustain water supply to the area.

In total, 13.3 million tonnes of iron ore was railed and exported through the Sishen-Saldanha export channel, representing a deficit of just over one million tonnes compared to planned volumes. This was largely due to major operational and maintenance challenges, major port equipment breakdowns and abnormal weather conditions. Engagements with Transnet are ongoing to address these challenges.

Unit costs

On-mine unit production costs at Khumani Mine increased to R289 per tonne (F2020: R251 per tonne) mainly due to inflation, higher working cost waste tonnages, the impact of Covid-19-related expenses and lower production volumes.

On-mine unit production costs at Beeshoek Mine increased to R263 per tonne (F2020: R246) mainly due to inflation and higher working cost waste tonnages, partially offset by higher production volumes.

Unit cost of sales, which includes marketing and distribution costs, were 16% higher mainly due to the increase in unit production costs and sales and marketing costs (driven by higher US dollar iron ore prices) and an increase in sea-freight rates per tonne.

Capital expenditure

Capital expenditure (100% basis) was R2 397 million (F2020: R2 223 million), which includes capitalised waste-stripping costs of R851 million (F2020: R787 million).

Khumani Mine's capital expenditure (100% basis) was 18% higher at R1 820 million (F2020: R1 535 million) mainly due to increased replacement fleet and an investment in an automated discard spreader system aimed at increasing production efficiencies. The mine's capital expenditure includes capitalised waste-stripping costs of R438 million (F2020: R426 million).

Beeshoek Mine's capital expenditure (100% basis) was R614 million (F2020: R670 million) which includes capitalised waste-stripping costs of R412 million (F2020: R361 million).

IRON ORE OPERATIONAL STATISTICS (100% BASIS)

	unit	F2021	F2020	% change
Prices
Average realised export price*	US$/t	156	87	79
Volumes
Export sales	000t	13 269	13 129	1
Local sales	000t	3 148	2 439	29
Total sales	000t	16 417	15 568	5
Production	000t	15 928	16 092	(1)
Export sales lump/fines split	%	58:42	54:46
Export sales CIF/FOB** split	%	55:45	48:52
Unit costs
Change in on-mine production unit costs	%	13	10
Change in unit cost of sales	%	16	10
Capital expenditure	R million	2 397	2 223	8

*    Average realised export iron ore prices on an FOB equivalent basis.
** CIF – cost, insurance and freight; FOB - free-on-board.

Manganese ore operations

Prices

The index price for 44% manganese ore was US$4.57/mtu (CIF Tianjin) at 30 June 2020, declining to a low of US$4.09/mtu in July 2020. At 30 June 2021, the index price recovered to US$5.15/mtu.

The index price for carbonate manganese ore (37% manganese ore CIF Tianjin) was US$4.21/mtu at 30 June 2020, dropping to a low of US$3.78/mtu in July 2020. At 30 June 2021, the index price recovered to US$4.71/mtu.

Manganese ore prices have remained lower than expected during F2021 largely due to persistently high inventory levels (particularly in China) and increased global manganese ore supply.

Volumes

Manganese ore sales volumes increased by 22% from 3.2 million tonnes in F2020 to 3.9 million tonnes in F2021 mainly as a result of easing Covid-19 restrictions (compared to F2020) and ramp up of the Black Rock and Gloria projects.

Export sales volumes were 22% higher at 3.8 million tonnes (F2020: 3.1 million tonnes) while local sales volumes increased by 45% to 0.14 million tonnes (F2020: 0.10 million tonnes).

In total, 3.8 million tonnes of manganese ore was railed and exported through the Port Elizabeth Bulk Ore Terminal and Saldanha Multi-Purpose Terminal. To mitigate rail losses due to Covid-19 in the earlier months of the year and to build up port stocks, road transport was contracted for approximately 185 000 tonnes from May 2020 to July 2020.

Transnet experienced challenges at the rail and port due to operational issues. Engagements with Transnet are ongoing to address these issues. Further engagements with Transnet on rail and port allocation beyond the current contractual tonnages of 4.0 million tonnes per annum and current contractual period until March/June 2023 are also progressing.

Production volumes at Black Rock Mine rose by 12% to 4.0 million tonnes as the Black Rock and Gloria projects progressed. Production volumes were negatively impacted by Covid-19-related challenges, increasing community unrest and water supply challenges as discussed under iron ore volumes (above) in the financial year under review.

Unit costs

Black Rock Mine's on-mine unit production costs were 18% higher at R699 per tonne (F2020: R593 per tonne) mainly due to increased labour costs, inefficiencies after delayed delivery of the Black Rock and Gloria projects, Covid-19 compliance costs and above-inflation increases in insurance and steel-based products. Labour cost increases were driven by higher head count for additional shifts worked, increased long-term incentive expenses for A to C bands and higher costs associated with Covid-19 absenteeism, which resulted in 8 184 person-days lost in F2021 (including employees and contractors). Unit production cost improvements expected from the Black Rock and Gloria projects were not realised due to delays in commissioning certain Black Rock project and Gloria project systems. Unit production costs are expected to improve as completion and ramp up of the two projects delivers improved efficiencies.

Unit cost of sales (which include marketing and distribution costs) increased by 8% as a result of higher sales and marketing costs due to higher revenue, increased freight rates, higher on-mine unit production costs and increased depreciation as the Black Rock and Gloria projects move to commissioning phase.

Capital expenditure

Total capital expenditure for the manganese ore operations was R2 060 million on a 100% basis (F2020: R2 260 million) of which R845 million (F2020: R846 million) related to the Gloria project. At 30 June 2021, 84% of the approved capital of R3 billion was spent on the Gloria project and 95% of the approved capital of R7.2 billion was spent on the Black Rock project.

The Black Rock and Gloria projects aim to modernise and expand the mine's output by increasing volumes and flexibility to produce various grades of manganese ore at the three operating shafts while improving efficiencies. Ramp up of the Black Rock Mine operations is being closely synchronised with Transnet's rail availability and is informed by prevailing market conditions.

The estimated date of completion of the Black Rock and Gloria projects is August 2022. Difficult ground conditions in mining areas, complex geology, various labour incidents and Covid-19 resulted in delays on the estimated completion date. The Nchwaning 3 silo feed and satellite tip 1 systems were successfully commissioned and handed over to operations at the end of June 2021. The Nchwaning II Graben system is due for commissioning by September 2021.

MANGANESE ORE OPERATIONAL STATISTICS (100% BASIS)

	unit	F2021	F2020	% change
Volumes
Export sales	000t	3 823	3 128	22
Domestic sales*	000t	143	99	45
Total sales	000t	3 966	3 227	23
Production	000t	4 041	3 619	12
Unit costs
Change in on-mine production unit costs	%	18	(2)
Change in unit cost of sales	%	8	–
Capital expenditure	R million	2 060	2 228	(8)

* Excluding intra-group sales of 187 247 tonnes sold to Cato Ridge Works (F2020: 208 572 tonnes).

MANGANESE ORE FINANCIAL INFORMATION

R million	F2021	F2020	% change
Sales	10 236	9 005	14
Operating profit	1 202	2 595	(54)
Contribution to headline earnings	823	1 846	(55)
Capital expenditure	2 060	2 260	(9)
Depreciation	716	588	22
EBITDA	1 918	3 183	(40)

Manganese alloys operations

Prices

Average realised prices for high-carbon manganese alloy and medium-carbon manganese alloy at Cato Ridge Works decreased by 12% to US$937 per tonne (F2020: US$1 065 per tonne) and by 11% to US$1 364 per tonne (F2020: US$1 533 per tonne), respectively.

Volumes

High-carbon manganese alloy production at Sakura Ferroalloys (100% basis) decreased to 191 000 tonnes (F2020: 232 000 tonnes) mainly due to multiple transformer failures in January, April and May 2021. The April transformer failure left Furnace 1 out of operation as the only spare transformer was used during the first transformer failure that occurred in January 2021.

Sakura Ferroalloys declared force majeure on its customers due to lower-than-planned production caused by these events. Based on current planning, Furnace 1 is expected to be switched on by the end of September 2021.

High-carbon manganese alloy sales volumes (100% basis) increased by 1% to 218 000 tonnes (F2020: 216 000 tonnes). The impact of the transformer failures on high-carbon manganese alloy sales volumes for F2021 was limited as sufficient stock levels were available to service contracts.

High-carbon manganese alloy production at Cato Ridge Works decreased by 3% to 123 500 tonnes (F2020: 127 100 tonnes). Medium-carbon manganese alloy production at Cato Ridge Alloys (100% basis) decreased by 4% to 48 000 tonnes (F2020: 49 500 tonnes).

High-carbon manganese alloy sales at Cato Ridge Works increased by 17% to 76 000 tonnes (100% basis) (F2020: 65 000 tonnes). Medium-carbon manganese alloy sales at Cato Ridge Alloys (100% basis) increased by 37% to 58 100 tonnes (F2020: 42 400 tonnes).

Unit costs

Unit production costs at Sakura Ferroalloys increased by 1% from MYR3 691 per tonne in F2020 to MYR3 736 per tonne in F2021.

Unit production costs at Cato Ridge Works increased by 11% from R11 504 per tonne in F2020 to R12 798 per tonne in F2021 mainly due to lower production volumes, above-inflation power escalations and the variability of the ore grade.

Medium-carbon manganese alloy unit production costs at Cato Ridge Alloys decreased by 0.4% from R18 302 per tonne in F2020 to R18 221 per tonne in F2021 due to a reduction in the cost for molten metal.

MANGANESE ALLOY OPERATIONAL STATISTICS (100% BASIS)

	unit	F2021	F2020	% change
Volumes
Cato Ridge Works sales*	000t	76	65	17
Cato Ridge Alloys sales	000t	58	42	37
Sakura sales	000t	218	216	1
Cato Ridge Works production	000t	124	127	(3)
Cato Ridge Alloys production	000t	48	50	(4)
Sakura production	000t	191	232	(18)
Unit costs – Cato Ridge Works
Change in on-mine unit production costs	%	11	13
Change in unit cost of sales	%	5	–
Unit costs – Cato Ridge Alloys
Change in on-mine production unit costs	%	(1)	(2)
Change in unit cost of sales	%	–	1
Unit costs – Sakura
Change in on-mine production unit costs	%	1	(23)
Change in unit cost of sales	%	1	(17)

* Excluding intra-group sales of 57 431 tonnes sold to Cato Ridge Alloys (F2020: 59 841 tonnes).

MANGANESE ALLOY FINANCIAL INFORMATION

R million	F2021	F2021	% change
Sales	1 956	2 293	(15)
Operating profit	162	255	(37)
Contribution to headline earnings	74	(228)
Capital expenditure	188	54	248
Depreciation	58	70	(17)
EBITDA	220	356	(38)

ARM Platinum

Prices

Higher metal prices, particularly rhodium which increased by 179% in F2021, contributed significantly to the Modikwa and Two Rivers mines' F2021 results. Despite a slightly stronger rand/US dollar exchange rate, the average rand per 6E kilogram basket price increased by 71% and 74% to R1 457 843/kg (F2020: R850 909/kg) and R1 349 148/kg (F2020: R775 857/kg) for Modikwa and Two Rivers mines, respectively.

US dollar nickel prices were 18% higher, which contributed to Nkomati Mine's cash position.

AVERAGE US DOLLAR METAL PRICES

	unit	F2021	F2020	% change
Platinum	US$/oz	1 046	871	20
Palladium	US$/oz	2 427	1 901	28
Rhodium	US$/oz	17 478	6 275	179
Nickel	US$/t	16 447	13 964	18
Copper	US$/t	8 086	5 647	43
Cobalt	US$/lb	18	16	12
UG2 chrome concentrate – Two Rivers (CIF*)	US$/t	137	134	2
High sulphur chrome concentrate – Nkomati (FOT*)	US$/t	43	48	(10)

* CIF – cost, insurance and freight; FOT – free-on-truck.

AVERAGE RAND METAL PRICES

	unit	F2021	F2020	% change
Average exchange rate	R/US$	15.39	15.68	(2)
Platinum	R/oz	16 107	13 658	18
Palladium	R/oz	37 360	29 812	25
Rhodium	R/oz	269 071	98 399	173
Nickel	R/t	253 194	218 948	16
Copper	R/t	124 482	88 549	41
Cobalt	R/lb	283	257	10
UG2 chrome concentrate – Two Rivers (CIF*)	R/t	2 107	2 100	–
High sulphur chrome concentrate – Nkomati (FOT*)	R/t	662	748	(12)

* CIF – cost, insurance and freight; FOT – free-on-truck.

Two Rivers Mine

Volumes

PGM volumes increased from 261 024 6E ounces in F2020 to 300 172 6E ounces in F2021. Production rates are returning to normal after the Covid-19-related national lockdown and operational challenges in F2020.

The sinking of declines at Main shaft is progressing as planned with completion beyond level 13. This is improving mining flexibility to optimise the blend from normal and split reefs.

Mining of the split-reef is being managed with various cuts to optimise the grade.

PGM grades from North shaft have improved with this ore given processing priority at the concentrator plant.

Chrome concentrate sales volumes increased by 41% to 242 945 tonnes (F2020: 172 368). This, combined with a stable rand chrome price, resulted in chrome cash operating profit improving by 18% to R118 million (F2020: R100 million).

Unit costs

Unit production costs on a rand per tonne milled basis increased in line with inflation by 5% to R905 per tonne (F2020: R857 per tonne). The rand per 6E PGM ounce cost reduced to R9 893 per 6E PGM ounce (F2020: R9 908 per 6E PGM ounce), as a direct result of improved plant recoveries and cost containment.

Capital expenditure

Of the R1 281 million capital spent at Two Rivers Mine (F2020: R813 million), R210 million was for fleet replacement and refurbishment. Deepening the Main and North declines with respective electrical and mechanical installations accounted for R285 million of total capital expenditure. Capital expenditure on the new tailings dam and plant expansion was R294 million and R290 million, respectively.

Covid-19 restrictions and steel shortages delayed the plant expansion project completion date by two months. The additional mill is now expected to be commissioned in November 2021 with full ramp-up expected to be achieved in the third quarter of F2022.

Construction of the new tailings dam project was also delayed by Covid-19 and is expected to be finalised in October 2021.

Two Rivers' shareholders approved the Merensky Project which involves mining the Merensky Reef. Total capital expenditure for the project is R5.7 billion (100% basis) which will be spent over three years. The project entails annual production of 182 000 6E PGM ounces, 1 600 tonnes nickel, and 1 300 tonnes of copper.

Merensky underground mining is planned to commence in the fourth quarter of F2022, with the plant set to be commissioned in the second quarter of F2024.

TWO RIVERS MINE OPERATIONAL STATISTICS (100% BASIS)

	unit	F2021	F2020	% change
Cash operating profit	R million	8 949	3 535	153
– PGMs	R million	8 832	3 435	157
– Chrome	R million	118	100	18
Tonnes milled	Mt	3.28	3.02	9
Head grade	g/t 6E	3.43	3.45	(1)
PGMs in concentrate	ounces 6E	300 172	261 024	15
Chrome in concentrate sold	tonnes	242 945	172 368	41
Average basket price	R/kg 6E	1 349 148	775 857	74
Average basket price	US$/oz 6E	2 724	1 540	77
Cash operating margin	%	73	55
Cash cost	R/kg 6E	318 075	318 534	–
Cash cost	R/tonne	905	857	5
Cash cost	R/Pt oz	21 341	21 127	1
Cash cost	R/oz 6E	9 893	9 908	–
Cash cost	US$/oz 6E	643	632	2

Modikwa Mine

Volumes

Tonnes milled increased by 5% which was more than offset by a 7% decrease in head grade, reducing PGM production by 3% to 251 755 6E PGM ounces (F2020: 259 360 6E PGM ounces). The decline in head grade was mainly due to increased production from on-reef development at North shaft. Mining volumes were impacted by safety stoppages and industrial action by employees in the first half of the year. Measures implemented to prevent the spread of Covid-19 impacted the operation throughout the financial year due to high labour intensity.

The accelerated on-reef development is progressing to open stoping panels.

Mining volumes were impacted by Covid-19 restrictions with a proportionally larger impact on stoping than on development, given the higher labour intensity of stoping. The resultant lower stoping:development ratio gave rise to a decrease in head grade. More ore milled from historical low-grade stockpiles also contributed to reduced head grades.

In addition, in the first half of the financial year, Modikwa Mine lost approximately 5 200 6E PGM ounces following two fatal accidents. An additional estimated 14 800 6E PGM ounces were lost towards the end of 1H F2021 due to unprotected industrial action by National Union of Mineworkers (NUM) affiliated employees. This related to housing-related benefits which were overpaid in the fourth quarter of F2020 and employees incorrectly claiming that the mine owed them monies under the Temporary Employer/Employee Relief Scheme (TERS). All employees returned to work and the matter was resolved.

Production volumes at the mine improved in the second half of the financial year with the resolution of the above issues.

Unit costs

Unit production costs increased by 19% on both 6E PGM ounce and rand per tonne basis to R14 300 per 6E PGM ounce (F2020: R11 974 per 6E PGM ounce) and R1 757 per tonne (F2020: R1 598 per tonne). This was due to lower production volumes and Covid-19-related costs.

Capital expenditure

Capital expenditure at Modikwa Mine (100% basis) increased by 3% to R660 million (F2020: R638 million). Of this, R238 million related to construction of the chrome recovery plant, R62 million to fleet refurbishment and critical spares, R55 million for the North shaft deepening project and R43 million for the South shaft deepening project.

To maintain the current production profile and ramp-up production, Modikwa Mine initiated the North shaft and South 2 shaft projects:

• North shaft project – level 9 decline equipping was completed and commissioned. Level 9 strike development has started. The decline to level 10 is scheduled to commence in the first quarter of F2022
• South 2 shaft system produced an average of 51 258 tonnes per month in F2021. The project is on track and the opening of more working areas in the system achieved an average of 57 795 tonnes per month in 2H F2021. The mine is ramping up production.

Commissioning of the Chrome Recovery Plant (CRP) is underway as planned. Ramp up to nameplate capacity rate is envisaged in the second half of F2022.

MODIKWA MINE OPERATIONAL STATISTICS (100% BASIS)

	unit	F2021	F2020	% change
Cash operating profit	R million	6 248	3 079	103
Tonnes milled	Mt	2.05	1.94	5
Head grade	g/t 6E	4.51	4.82	(7)
PGMs in concentrate	6E oz	251 755	259 360	(3)
Average basket price	R/kg 6E	1 457 843	850 909	71
Average basket price	US$/oz 6E	2 945	1 688	75
Cash operating margin	%	63	50
Cash cost	R/kg 6E	459 745	384 984	19
Cash cost	R/tonne	1 757	1 598	10
Cash cost	R/Pt oz	36 405	30 746	18
Cash cost	R/oz 6E	14 300	11 974	19
Cash cost	US$/oz 6E	929	764	22

Nkomati Mine

Nkomati Mine was placed on care and maintenance in March 2021 in line with the strategy as planned and previously communicated.

Estimated rehabilitation costs

As at 30 June 2021, the estimated undiscounted rehabilitation costs attributable to ARM were determined to be R679 million (30 June 2020: R620 million) excluding VAT (discounted R596 million). The R59 million increase was due to increased contractor rates and inflation.

At 30 June 2021, R109 million (attributable to ARM) cash and financial assets were available to fund rehabilitation obligations for Nkomati Mine. The resulting attributable shortfall of R487 million is expected to be funded by ARM.

Nkomati Mine's estimated rehabilitation costs continue to be reassessed as engineering designs evolve and new information becomes available.

Volumes

Nkomati Mine ceased mining in February 2021. Nickel production for the nine months amounted to 8 016 tonnes (F2020: 10 638 tonnes). The last ore was processed through the concentrator plant in March 2021.

Chrome concentrate sales volumes were 116 298 tonnes (F2020: 222 110 tonnes) which, combined with a 10% reduction in average realised US dollar chrome prices, resulted in a cash operating loss from chrome of R7 million (F2020: R42 million cash operating profit).

Unit costs

On-mine unit production costs in F2021 were only 1% higher at R384 per tonne (F2020: R380 per tonne).

Unit cash costs net of by-products per nickel produced in F2021 were 53% lower at US$2.98/lb (F2020: US$6.29/lb). The improvement in unit cash costs was due to increased by-product credits.

NKOMATI MINE OPERATIONAL STATISTICS (100% BASIS)

	unit	F2021	F2020	% change
Cash operating profit	R million	750	14	>200
– Nickel	R million	758	(28)
– Chrome	R million	(7)	42
Cash operating margin	%	24	1
Tonnes milled	Mt	4.70	6.62	(29)
Head grade	% nickel	0.25	0.25	–
On-mine cash cost per tonne milled	R/tonne	384	380	1
Cash costs net of by-products*	US$/lb	2.98	6.29	(53)
Contained metal
Nickel	tonnes	8 016	10 638	(25)
PGMs	ounces	67 144	80 684	(17)
Copper	tonnes	4 409	5 169	(15)
Cobalt	tonnes	500	616	(19)
Chrome concentrate sold	tonnes	116 298	222 110	(48)

* This reflects US dollar cash costs net of by-products (PGMs and chrome) per pound of nickel produced.

ARM Coal

Prices

Thermal coal prices increased in F2021 due to the global economic recovery and supply shortages.

Global coal prices were supported after China increased demand for non-Australian thermal coal. Increased safety inspections at coal mines and enforcement of compliance to licensed production capacity restricted coal supply out of China. Prices were further assisted by the delayed start to the China hydro-generation season which increased thermal power generation compared to the prior year.

The Asian Liquefied Natural Gas (LNG) price increase to record levels resulted in LNG to coal switching, which further supported additional coal demand.

The impact of the higher market prices was reduced by increased exports of low-grade quality coal due to decreased domestic demand.

Goedgevonden Mine's average received US dollar prices increased by 19% to US$57 per tonne in F2021 (F2020: US$48 per tonne). PCB's average received US dollar prices increased by 12% from US$51 per tonne in F2020 to US$57 per tonne in F2021.

Approximately 56% (F2020: 62%) of export volumes at Goedgevonden Mine was high-quality coal while PCB exports of high-quality coal amounted to 62% (F2020: 65%).

Goedgevonden Mine

Volumes

Production was negatively impacted by challenges at Transnet Freight Rail, giving rise to full stockpiles at the mine. The underperformance was exacerbated by a derailment on the coal line in April 2021. Inclement weather in January and February 2021 also affected run-of-mine production.

The Covid-19 impact on production losses reduced in 2H F2021 due to improved protocols and management thereof.

ARM's attributable run-of-mine production from Goedgevonden Mine reduced by 16% from 2.85 million tonnes in F2020 to 2.39 million tonnes in F2021, while attributable saleable production was 1.5 million tonnes in F2021 compared to 1.76 million tonnes in F2020.

Unit costs

On-mine unit production costs per saleable tonne rose by 17% to R506 per tonne (F2020: R431 per tonne). The above-inflation increase in unit costs was due mainly to a 15% reduction in saleable production volumes.

GOEDGEVONDEN MINE OPERATIONAL STATISTICS

	unit	F2021	F2020	% change
Total production and sales (100% basis)
Saleable production	Mt	5.79	6.77	(15)
Export thermal coal sales	Mt	3.89	4.29	(9)
Domestic thermal coal sales	Mt	1.90	2.25	(16)
ARM attributable production and sales
Saleable production	Mt	1.50	1.76	(15)
Export thermal coal sales	Mt	1.01	1.12	(9)
Domestic thermal coal sales	Mt	0.49	0.59	(16)
Average received coal price
Export (FOB*)	US$/t	56.73	47.87	19
Domestic (FOT**)	R/t	354	305	16
Unit costs
On-mine saleable cost	R/t	506	431	17
Capital expenditure	R million	1 011	757	33

*    FOB – free-on-board.
** FOT – free-on-truck.

GOEDGEVONDEN MINE (GGV) ATTRIBUTABLE HEADLINE EARNINGS/(LOSS) ANALYSIS

R million	F2021	F2020	% change
Cash operating profit	148	56	164
Amortisation and depreciation	(182)	(197)	7
Imputed interest and other*	(170)	(160)	(6)
Loan re-measurement gain	206	207	–
Impairment loss	–	(559)
Profit/(loss) before tax	2	(653)
Add: Impairment loss	–	559	(100)
Add: tax	8	56	(86)
Headline earnings/(loss) attributable to ARM	10	(38)

* Post restructuring the ARM Coal loans, all interest expense on partner loans is imputed.

Participative Coal Business (PCB)

Volumes

During the year, the PCB operations were significantly impacted by challenges at Transnet Freight Rail. This resulted in full product stockpiles at both Impunzi and Tweefontein restricting production.

In the second half of the financial year, production at Tweefontein Mine was further impacted by hot coal and hard digging conditions at the Klipplaat pit. These conditions are expected to improve in F2022 as most of the production will come from the Makoupan pit. A programme of re-drilling and blasting hot areas where practical to improve digging conditions in Klipplaat has also been implemented.

ARM's attributable run-of-mine production from PCB reduced by 11%, from 4.28 million tonnes in F2020 to 3.79 million tonnes in F2021.

Export sales volumes were 3% higher at 8 million tonnes (F2020: 7.73 million tonnes). Domestic sales volumes declined from 5.74 million tonnes to 2.9 million tonnes largely due to decreased sales to Eskom.

ARM's attributable saleable production reduced by 13% from 2.69 million tonnes in F2020 to 2.34 million tonnes in F2021.

PCB successfully commissioned a second dragline at Tweefontein Mine in the latter part of 1H F2021. This is expected to improve both production and cost management.

Unit costs

Unit production costs per saleable tonne increased by 7% from R484 per tonne in F2020 to R520 per tonne in F2021, mainly due to lower saleable production volumes.

PCB OPERATIONAL STATISTICS

	Unit	F2021	F2020	% change
Total production sales (100% basis)
Saleable production	Mt	11.58	13.34	(13)
Export thermal coal sales	Mt	8.00	7.73	3
Domestic thermal coal sales	Mt	2.90	5.74	(49)
ARM attributable production and sales
Saleable production	Mt	2.34	2.69	(13)
Export thermal coal sales	Mt	1.62	1.56	3
Domestic thermal coal sales	Mt	0.59	1.16	(49)
Average received coal price
Export (FOB)*	US$/tonne	56.97	50.54	13
Domestic (FOT)**	R/tonne	678	666	2
Unit costs
On-mine saleable cost	R/tonne	520	484	7
Capital expenditure	R million	1 226	2 286	(46)

*   FOB – free-on-board.
** FOT – free-on-truck.

PCB ATTRIBUTABLE HEADLINE (LOSS)/EARNINGS ANALYSIS

R million	F2021	F2020	% change
Cash operating profit	299	304	(2)
Imputed interest	(104)	(118)	(12)
Amortisation and depreciation	(569)	(479)	19
Loan re-measurement gain	36	278	(87)
Loss on sale of asset	–	(2)
Impairment loss	–	(1 121)
Loss before tax	(338)	(1 138)	(70)
Add: impairment	–	1 123
Add: tax	78	51	53
Headline (loss)/earnings attributable to ARM	(260)	36	–

Harmony

ARM's investment in Harmony was negatively revalued by R1 426 million in F2021 (F2020: R2 996 million positive revaluation) as the Harmony share price decreased by 27% from R71.86 per share at 30 June 2020 to R52.76 per share at 30 June 2021. The Harmony investment is therefore reflected on the ARM statement of financial position at R3 940 million based on its share price at 30 June 2021.

Gains are accounted for, net of deferred capital gains tax, through the statement of comprehensive income. Dividends from Harmony are recognised in the ARM statement of profit or loss on the last day of registration following dividend declaration.

Harmony declared a final dividend of 27 cents per share, bringing their total dividend for F2021 to 137 cents per share.

Harmony's financial performance for F2021 reflects a net profit increase of 758% to R5 590 million compared to a net loss of R850 million in F2020. Headline earnings improved to 923 cents per share compared with a headline loss of 154 cents per share for F2020.

Revenue increased by R12 488 million or 43% to R41 733 million, mainly due to the operational expansion from the acquisition of Mponeng and related assets as well as an increase in the gold price received.

Production costs increased by R7 726 million or 35% to R29 774 million during F2021 predominantly due to the operational expansion as well as annual price increases.

As at 30 June 2021, net debt decreased by R819 million to R542 million. The cash generated by operations was sufficient to pay for capital expenditure, a dividend and significantly reduce the group's debt.

The reduction in debt as well as the stronger rand resulted in lower finance costs incurred during F2021 of R228 million compared with R424 million in F2020.

Harmony's results for the year ended 30 June 2021 can be found on Harmony's website: www.harmony.co.za