South African billionaire Patrice Motsepe loses over $320 million in less than one month

Yusuf Abdulfatai -

Patrice Motsepe, a South African billionaire businessman, has seen the market value of his stake in African Rainbow Minerals (ARM) fall by more than $320 million in the past 28 days, as shares in the South African diversified mining group have fallen from record highs.

The recent drop in ARM shares from a record high price of R301.66 ($19.34) per share on March 25 can be attributed to profit-taking activities as portfolio investors cycle out funds in the group following a double-digit percentage drop in headline earnings.

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

Motsepe, the South African billionaire and current president of the Confederation of African Football (CAF), founded the mining company in 1997 as South Africa’s first Black-owned mining company.

He owns 89,092,411 shares of the company, representing a substantial 39.7-percent stake.

As of press time on April 22, shares in the mining group were worth R244.57 ($15.68), down 18.9 percent from their closing price of R301.66 ($19.34) on March 25, nearly 28 days ago, as investors booked profits on their stake.

As a result of recent price declines, the market value of Motsepe’s 39.7 percent stake in ARM has dropped by R5.1 billion ($326.2 million) in the last 28 days, from a valuation of R26.9 billion ($1.72 billion) on March 25 to R21.8 billion ($1.4 billion) at the time of writing.

Despite the multi-million dollar loss, the South African billionaire remains one of the wealthiest investors on the Johannesburg Stock Exchange, as well as one of Africa’s wealthiest businessmen. He is on track to receive R1.07 billion ($69.6 million) in interim dividends from his ARM holding.

At the end of the first six months of 2022, the miner’s headline earnings declined by 27 percent for the six months ending Dec. 31, 2021, from 5.04 billion ($330 million) in 2021 to R3.7 billion ($242 million).

The decline in earnings can be linked to lower average iron ore and palladium prices, as well as the rand strengthening against the U.S. dollar, resulting in a sharp drop in revenue from R9.8 billion ($641 million) to R7.7 billion ($503.5 million).