African Rainbow Minerals (ARM), founded by Africa’s first Black billionaire Patrice Motsepe, acquired a 15% investment in Surge Copper, a Toronto-listed exploration firm. The move is consistent with ARM’s strategic ambition of capitalizing on the growing demand for copper as the world shifts toward renewable energy solutions.
The subscription arrangement, at R52.5 million ($2.81 million), is a significant step forward for ARM, putting the company in the expanding North American copper projects. This expansion beyond ARM’s South African base strengthens its position in the extremely competitive mineral exploration market, especially given expectations of a copper price spike exceeding $10,000 per tonne by the end of the year.
Pending regulatory approvals, the acquisition is expected to close within four to six weeks, allowing ARM, led by Patrice Motsepe, to acquire a significant share in Surge Copper. The acquisition will result in 39,608,708 Surge ordinary shares, strengthening ARM’s position in Surge’s promising undertakings.
Surge CEO Leif Nilsson commented on the arrangement, saying, “We are delighted to welcome ARM as a strategic investor in Surge. Their extensive experience in large-scale mine development, along with a strong dedication to operational excellence and community participation, bodes well for our collaborative efforts.”
Concurrently, ARM and ARM Copper will sign into an investor rights agreement (IRA), which will ensure that ARM maintains minimum ownership requirements and actively participates in Surge’s strategic choices for two years. This agreement demonstrates ARM’s commitment to nurturing its investments and promoting collaborative growth prospects.
Motsepe’s $2.5 billion net worth is primarily derived from his shareholding in ARM, establishing him as a prominent African manufacturer. ARM is a key player in South Africa’s mining industry, having significant interests in iron, coal, copper, gold, and platinum.
ARM’s interim results show a 43% drop in headline earnings, from R5.17 billion ($275.5 million) in the first half of 2023 to R2.96 billion ($157.8 million) in 2024. This loss was related to a considerable drop in platinum group metals (PGM) commodity prices, which cut income from R9.37 billion ($499.34 million) to R6.6 billion ($351.7 million).
Despite the financial setback, ARM’s retained earnings decreased slightly from R41.08 billion ($2.19 billion) as of December 31, 2022 to R40.89 billion ($2.17 billion) as of December 31, 2023. Meanwhile, the company’s total assets increased from R60.4 billion ($3.22 billion) to R64.4 billion ($3.43 billion) over the same time period.
