SIBANYE-Stillwater said on Friday it stood to benefit from historic and current tax credits totalling $121m in Ebitda for its US platinum group metal operations, enough to have made the struggling Stillwater mine profitable.
The tax credits are in terms of US legislation the Inflation Reduction Act which was amended by the Department of Treasury last year to include miners and processors of critical minerals such as PGMs.
As the regulations are retrospective, Sibanye-Stillwater could claim $59m in subsidies, known as S 45X (Section 45X of the IRA), for Stillwater for 2023 and a further $32m for 2024, it said. Including $30m for this year the Johannesburg group could benefit to the tune of R2.2bn in local terms.
Including recycling of metals through Reldan, the US company Sibanye-Stillwater bought in 2024 for $155m, credits total R3.8bn (R2.2bn for 2023 and R1.6bn for 2024) and a further R1bn for the current financial year. A total of R4.8bn over the three years.
But Sibanye-Stillwater raised a flag. Commenting in his firm’s annual results today, CEO Neal Froneman said: “The change in the US administration in January 2025, has introduced some uncertainty regarding the Section 45X regulations”.
He added: “Ongoing resource nationalism and an imperative to secure local supply chains for many jurisdictions, provides a compelling case for continued support for local supply of critical minerals for the US”.
Sibanye-Stillwater’s full year results ended December were a significant improvement on the previous financial year but still showed it to be lossmaking. Basic earnings were a negative $398m for the year (2023: -$2bn).
There were negative Ebitda contributions from the US mine Stillwater and Sandouville, Sibanye-Stillwater’s nickel refinery in France, and a 57.5% decline in Ebitda from its South African PGM mines, albeit a profit.
On the upside, Sibanye-Stillwater’s gold division shot the lights out, powered by the improvement in the dollar price of the metal. Adjusted Ebitda increased to $323m from $193m in the previous financial year. Of this profit $206m was in the second half of the year hinting at additional leverage in recent gold price gains.
Sibanye-Stillwater raised $1.9bn in various measures including a $500m streaming agreement with Franco Nevada and a $50m chrome prepayment in order to secure its balance sheet.
After adjusting for upcoming benefit of the streaming deal, Sibanye-Stillwater has a proforma net debt to adjusted Ebitda of 1.08x, below the mid-cycle ‘comfort levels’ of 1x. As of December 31, Sibanye’s Ebitda to net debt was 1.79x compared to 3.5x ratio set in the firm’s upwardly adjusted debt covenants with lenders.
