Sept 6 (Reuters) - African Rainbow Minerals (ARM)

is pursuing chrome and copper opportunities after

weaker platinum group metal (PGM) and coal prices drove its

annual profit 43% lower, the diversified miner said on Friday.

ARM's headline earnings slumped to 5.08 billion rand

($286.89 million) in the year ended June 30, from a restated

8.98 billion the previous year, mainly due to lower PGM and coal

prices.

The company's board has approved the construction of a

chrome recovery plant at its Bokoni platinum mine, where the

platinum ramp up will be "phased and measured" due to the lower

prices.

The basket price of PGMs fell about 40% last year and the

slide has continued into 2024.

South African platinum miners are increasingly turning to

chrome, which is a by-product of their primary production, to

offset the impact of low PGM prices.

"That is additional revenue. It comes on top of what you

already have in terms of fixed costs, therefore diluting your

overall operating costs," ARM CEO Phillip Tobias said during a

results call.

"If you look at the trends, you would have seen that China

has been buying a lot of chrome ore," he added.

Other miners, including Sibanye Stillwater and

Harmony Gold have recently diversified into critical

metals such as lithium and copper, which are vital for renewable

energy systems.

In May, ARM acquired a 15% stake in Surge Copper ( SRGXF ),

which has two copper exploration projects in Canada.

"We want to get in there. It is part of ARM's strategy of

diversification into copper," Mike Schmidt, ARM's executive for

growth and strategic development, said during the same call.

Tobias said the ARM board considered its 12% shareholding in

Harmony Gold to be more strategic now due to the gold

miner's copper assets.

Harmony expects to start producing from its Eva Copper

project in Australia by 2028. It also jointly owns the

Wafi-Golpu gold-copper project in Papua New Guinea with Newmont ( NEM )

.

($1=17.6982 rand)