Billionaire businessman Patrice Motsepe loses $111 million as shares in South Africa’s first Black-owned mining group fall from record highs

Patrice Motsepe, a South African billionaire businessman, has seen the market value of his stake in his flagship company, African Rainbow Minerals (ARM), fall by R1.7 billion ($111 million) in the past 26 days.

ARM is a leading South African mining and minerals company with interests in a variety of mines, including iron, coal, copper, gold, platinum and other precious metals.

Motsepe, who founded the group in 1997 as South Africa’s first Black-owned mining company, owns 40 percent of the firm, representing 89,092,411 ordinary shares.

The multimillion-dollar drop in the market value of his stake can be attributed to a sustained sell-off in ARM shares, as investors on the Johannesburg Stock Exchange cycle capital out of the mining group.

This market action, combined with fund managers reallocation activities, caused the group’s shares on the local bourse to fall by a single digit from a 23-week high of R250.28 per share on Jan. 12 to its current price of R230.8 ($14.86) per share on the local bourse.

In the last 26 days, the downward price movement has resulted in a 7.8-percent loss for shareholders.

While Motsepe, who owns 40 percent of the mining group, saw the value of his stake fall from R22.3 billion ($1.4 billion) on Jan. 12 to R20.6 billion ($1.3 billion) at the time of writing this report.

This amounts to a total loss of R1.7 billion ($111 million) for the billionaire businessman over the last 26 days.

Motsepe founded ARM in 1997 after purchasing underperforming gold mine shafts and converting them into profitable assets. The billionaire has used this model several times in recent years, and it has produced value for the mining company.

ARM has recently made strategic moves to increase capacity, while leveraging operational efficiencies in its existing operations.

The mining company completed the purchase of the Bokoni Platinum Mine, a joint venture between Johannesburg-based Anglo-American Platinum (Amplats) and Toronto-based Atlatsa Resources Corporation.

The acquisition cost R3.5 billion ($334 million) and was completed as the Motsepe-led mining group seeks to expand its mining operations by acquiring mines with low operating costs.