South African billionaire Patrice Motsepe has seen his net worth fall by $400 million since the start of the year due to a recent drop in the share price of his Johannesburg-based diversified mining corporation, African Rainbow Minerals (ARM).
ARM is a South African mining and minerals company with strategic positions in a variety of mining projects covering iron, coal, copper, gold, platinum, and other precious metals.
Patrice Motsepe owns 39.7 percent of ARM, which he founded in 1997 as South Africa’s first Black-owned mining company. His stake in the company is now worth more than $1.3 billion, accounting for the majority of his fortune.
According to the U.S. business magazine Forbes, which tracks the wealth of ultra-high-net-worth individuals, the South African billionaire’s net worth has dropped by $400 million since the beginning of the year, from $3.2 billion to $2.8 billion.
Patrice Motsepe’s YTD wealth decline linked to ARM share performance
The $400-million drop in his net worth can be attributed to the year-to-date (YTD) performance of his mining company, ARM. Despite growing optimism about its financial performance, ARM’s share price has fallen by more than seven percent this year, from R288 ($15.9 million) to R265.9 ($14.7).
On Fri., Feb. 17, ARM shares lost 2.98 percent of their market value, bringing the company’s market capitalization below R60 billion ($3.3 billion), as some investors and traders sold down stakes in the mining company.
The company’s share price has recently dropped as investors on the Johannesburg Stock Exchange (JSE) restructure their investment portfolios after shares of companies with active operations in the mining and technology sectors surged to record levels in January, pushing the JSE’s all-share index to an all-time high.
Patrice Motsepe could earn over $103 million in dividends this year
ARM, which is set to release its half-year financial results on March 6, has announced that it anticipates a significant increase in its headline earnings for the first half of its 2023 fiscal year.
The company expects a year-on-year jump of between 34 percent and 44 percent, driven largely by improved earnings from its manganese and coal operations. ARM’s headline earnings for the period are projected to fall in the range of R4.95 billion ($274 million) to R5.32 billion ($294.4 million).
If ARM is able to maintain this level of performance for the remainder of its 2023 fiscal year, the company’s billionaire founder, Motsepe, who ranks as one of South Africa’s richest billionaires, could potentially receive even larger dividends than the R1.78 billion ($103 million) he earned in final dividends for 2022.
