PGM price slide sees Sibanye-Stillwater post R5bn decline in quarterly EBITDA

PLATINUM group metal (PGM) prices had stabilised following a shortage of microprocessing chips earlier in the year which had impacted automotive production, said Sibanye-Stillwater in its third quarter production review.

The group’s South African PGM operations saw the average basket price decline to  R42,347/4E per ounce in the September quarter from R54,148/4E oz in the June quarter which was partly behind lower group earnings before interest, tax, depreciation and amortisation (EBITDA) of R14.9bn. In the June quarter, Sibanye-Stillwater reported record group EBITDA of R20.7bn.

Commenting on PGM pricing, Sibanye-Stillwater CEO, Neal Froneman said he remained “… confident that the automotive supply chain constraints should start to ease in the course of 2022”. Car manufacturers use PGMs for their use in autocatalysis.

The group’s US operation at Stillwater also recorded a decline in the average PGM price received as well as lower production. The production hit was in line with restricted operations at Stillwater West following a fatality at that section of the mine. As per its June quarter guidance, full year production from the US operations have been downgraded 40,000 oz – about 20% – to between 620,000 to 660,000 oz.

But full year production from Sibanye-Stillwater’s other operations – its South African PGM mines, the US-based recycling facilities, and its gold production in South Africa – were on track as previously guided.

Third quarter production increased at the gold mines largely owing to an improved performance of Beatrix, the Free State province gold mine earmarked for closure in about five years. (Studies are currently weighing a life extension project mining uranium).

Froneman said that while Sibanye-Stillwater had scored success in its Covid-19 vaccination drive in South Africa, the company was considering its next steps in order to improve compliance. Some 50,000 employees, equal to 76% of its total South African full-time employees, had been vaccination. The company has previously raised the prospect of mandating vaccination.

Outside of the market and operations, Sibanye-Stillwater has been highly active in corporate respects. It redeemed early a $353m corporate bond and completed the R8.1bn buyback of some 147.7 million shares.

It has also been active in merger and acquisition activity totalling $1.68bn. During the quarter it announced the €65m ($75.6m) acquisition of Eramet’s Sandouville nickel processing facilities in France; a $560m joint venture with Australian firm ioneer on its Rhyolite Ridge lithium project in the US; the $1bn acquisition of a nickel and a copper mine in Brazil from Appian Capital Advisory; and a $46m stake in New Century Resources, a battery metals tailings retreatment company operating in Australia.

1 COMMENT

  1. Mandate vaccinations Neal and you’ll loose half your North American support base. Vaccination is fine for those who want it! Mandate it at your peril!

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