Patrice Motsepe, one of South Africa’s most prominent figures and the first black billionaire in Africa, experienced a significant decline in his net worth, losing a staggering $1.1 billion due to the performance of his business, African Rainbow Minerals in 2023.
In 2022, the self-made billionaire, who is now 61 years old, was estimated to be worth $3.3 billion, according to Forbes billionaire reports. However, in 2023, his net worth plummeted to $2.2 billion primarily because of a 46% year-to-date drop in the share price of his company, African Rainbow Minerals Limited (ARM).
African Rainbow Minerals Limited is a leading diversified South African mining and minerals company that mines a variety of resources, including iron ore, manganese ore and alloys, chrome ore and alloys, platinum group metals, copper, nickel, and coal. Despite its long life, low unit-cost operations, and substantial growth opportunities, ARM’s share price declined from 28,733.00 ZAC ($1,508) to 15,554.090 ZAC ($816).
Several factors contributed to the decline in share price and investor confidence in ARM. The financial year 2023 presented challenges, with a 21% decrease in headline earnings to R8.981 billion, a significant drop from the R11.338 billion recorded in the previous year. Additionally, the company declared a final dividend of R12.00 per share, a substantial reduction compared to the R20.00 per share declared in the financial year 2023.
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Despite these challenges, ARM maintained a robust net cash position of R9.779 billion as of June 30, 2023, although it was lower than the previous year’s R11.175 billion. Operationally, the company faced difficulties, including logistics issues that impacted the volumes of iron ore, manganese ore, and thermal coal. Unit production costs were also under pressure due to lower production volumes and increased costs of essential items.
Patrice Motsepe, the founder and chairman of African Rainbow Minerals, made history by becoming the first black African to make the Forbes billionaire list in 2008. In 2016, he launched a private equity firm, African Rainbow Capital, with a focus on investing in Africa. Motsepe also has a stake in Sanlam, a listed financial services firm, and serves as the president and owner of the Mamelodi Sundowns Football Club.
In March 2021, he was elected president of the Confederation of African Football, the sport’s governing body on the continent. Motsepe’s journey to success began in 1994 when he became the first black partner at the law firm Bowman Gilfillan in Johannesburg. He later ventured into a mining service contracting business, acquiring low-producing gold mine shafts in 1997 and successfully turning them into profitable ventures. While his net worth has faced a setback in 2023, Patrice Motsepe’s remarkable journey as a trailblazing entrepreneur and leader continues to be an inspiring story in the world of business and sports.
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