Assmang Reports significant half-year earnings increase

Assmang Limited (Assmang), the manganese ore, manganese alloy, iron ore, chrome ore and alloy producer that is jointly controlled by African Rainbow Minerals Limited (ARM) and Assore Limited (Assore) today announced a significant increase in attributable earnings for the half-year ended 31 December 2004.

Financial Results
Earnings increased to R361,4 million (31 December 2003: R4,1 million), which equates to R101,87 per share (R1,15 per share). Headline earnings also increased substantially to R353,0 million (R4,0 million) which equates to R99,49 per share (R1,12 per share).

The increase in attributable and headline earnings can be primarily attributed to positive market conditions over the past six months, mainly in terms of manganese alloys prices, significant increase in sales volumes of manganese ore and continuing cost saving exercises at the Group’s operations.

The results include a final dividend of R7,50 per share, which was paid on 13 September 2004. Given the Company’s improved results and cash flow position, which has resulted from the significant increase in earnings, an interim dividend of R18,00 per share (R2,50 per share) was declared today.

The Group’s turnover for the half-year ended 31 December 2004 increased by 41,6 per cent to R1 887,3 million (R1 332,7 million) and sales volumes for the period under review are detailed in the table below:

Six months ended 31 December %
2004 (tons) 2003 (Tons) Volume Increase/(decrease)
Manganese ore* 767 986 662 867 16%
Iron ore 2 540 595 2 493 824 2%
Manganese alloys 105 272 113 452 (7%)
Charge chrome 104 371 126 860 (18%)
* Excluding sales to the Company’s Cato Ridge Works

Major capital projects
Assmang continued its capital expenditure program, spending R285,7 million (R208,1 million) during the period under review. Of this R110,4 million was spent on the new shaft complex at the Nchwaning manganese mine, which commenced production during the current financial year. Production is in the process of being ramped-up with the total capital cost of this project estimated to be R748 million. A further R31,4 million was spent on the construction of the Dwarsrivier underground chrome mine, which commenced with the initial phases of production during January 2005.

Current projects underway within Assmang’s growth strategy include:

The final commissioning of the Nchwaning shaft complex;
The completion of the underground mine at Dwarsrivier to replace the existing opencast mine, which is expected to be completed during the 2005/2006 financial year; and
The development of additional mineable reserves at the iron ore division, which includes an additional open cast mining area at Assmang’s Beeshoek mine, as well as a feasibility study that is underway to assess the viability of exploiting vast resources north of the Beeshoek mine on the Bruce, King and Mokaning properties.
Outlook for the next six months
Sales volumes remain fairly buoyant and tonnages are expected to exceed those of the period under review. Manganese and iron ore prices for the next six months are expected to be higher than those of the period under review, whilst manganese alloy prices are expected to be lower. Earnings growth will, however, be dependent on the United States Dollar / South African Rand exchange rate and cost saving measures within all divisions.

Note to Editors:
Assmang, a company incorporated in the Republic of South Africa, mines manganese and iron ores in the Northern Cape Province and chrome ore at Dwarsrivier in the Mpumalanga Province. It also produces manganese alloys at its works at Cato Ridge in the Kwazulu-Natal Province, and chrome alloys at its works at Machadodorp, in the Mpumalanga Province.

Cato Ridge Alloys (Proprietary) Limited (“Cato Ridge Alloys”), a joint venture between Assmang, Mizushima Ferroalloys Company Limited (“Mizushima”) and Sumitomo Corporation (“Sumitomo”), produces refined ferro-manganese at the ferro-manganese works. The major portion of the alloy products is exported.

Assmang mines iron and manganese ore near Postmasburg and Hotazel about 700 kilometres southwest of Johannesburg respectively. Most of the Group’s production is exported to the Far East, Europe and the United States of America. The balance of production is sold locally, principally manganese ore to the Cato Ridge Works, where it is used in the production of manganese alloys. Assmang’s Dwarsrivier chrome ore mine supplies ore to the Machadodorp Works for the production of chrome alloys for the export market.

Formed in 1935 – and listed on the Johannesburg Stock Exchange in 1936 – the Group employs 2 602 people. In terms of a long standing arrangement the Company is controlled jointly by African Rainbow Mineral Limited (which holds 50,4%) and Assore Limited (which holds 45,7%), both of which are listed on the JSE Securities Exchange South Africa.

Additional information at: www.assmang.co.za

For more information please contact:
Pieter R�rich
Office: +27(11) 779 1300
or: 082 570 5064
Email: pieter.rorich@arm.co.za

Jan Steenkamp
Office: +27(11) 779 1000
or: +27(0)82 492 6948
Email: jan.steenkamp@arm.co.za

Phil Crous
Office: +27(11) 770 6909
or: +27(0)83 250 9994br /> Email: philcrous@assore.com

Disclaimer:
Forward Looking Statements Certain statements in this presentation constitute �forward looking statements� within the meaning of Section 27A of the US Securities Act of 1933 and Section 21E of the US Securities Exchange Act of 1934. Such forward looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the company to be materially different from the future results, performance or achievements expressed or implied by such forward looking statements. Such risks, uncertainties and other important factors include among others: economic, business and political conditions in South Africa; decreases in the market price of commodities; hazards associated with underground and surface mining; labour disruptions; changes in government regulations, particularly environmental regulations; changes in exchange rates; currency devaluations; inflation and other macro-economic factors; and the impact of the AIDS crisis in South Africa. These forward looking statements speak only as of the date of publication of these pages. The company undertakes no obligation to update publicly or release any revisions to these forward looking statements to reflect events or circumstances after the date of publication of these pages or to reflect the occurrence of unanticipated events.