SIBANYE-Stillwater gave further evidence of its domestic priorities, opting not to take up shares in Generation Mining, a Canadian firm developing a copper and platinum group metals (PGM) project in Ontario.
The Johannesburg-headquartered group’s stake in Generation Mining was diluted to 4.7% from 10.15% after C$240m worth of shares in the exploration firm were issued through a bought deal and private placing totalling 750 million shares.
Sibanye-Stillwater’s decision not to participate is no great surprise: in 2021 it declined to exercise a back-in right for a 51% of Generation after first agreeing the option in 2019.
Generation hopes to develop the C$991m Marathon copper and palladium project in northwest Ontario. The project is backed by the Canada Growth Fund and the Canada Infrastructure Bank, while Wheaton Precious Metals has provided streaming finance.
Richard Stewart, CEO of Sibanye-Stillwater, announced earlier this year that the company was investing about R20bn in a fleet of life-extension and growth projects at its South African PGM mines. The projects aim to address a 500,000 oz/year production decline by 2030. If the expansion projects go ahead, output will be 300,000 oz/year higher by 2030, at some 1.5 million oz/year
“We can also go up to 1.8 million oz/year if the markets support it,” Stewart said at a Capital Markets Day in June. “That is the optionality we have and why I say what I do about our portfolio.”
East Boulder wage agreement
These events come amid a strike at the Nye section of Sibanye-Stillwater’s Stillwater palladium-platinum mine in Montana. The dispute relates to a remuneration and benefits plan attached to the mechanisation of Stillwater mine aimed at cutting all-in sustaining costs from $1,500 per two-element ounce to around $1,000/oz.
In a positive development, Sibanye-Stillwater signed a new wage agreement with employees at the East Boulder section of the Stillwater mine, the group said on Wednesday. The pact, with United Steel Workers International Union (USW), provides for a 4.5% wage lift in the first year. Wages will increase the greater of 3.5% or consumer price index in year two and the greater of 3% or CPI in year three of the agreement.
The agreement, effective from August 1 to July 31 in 2029, is encouraging for Sibanye-Stillwater as striking Nye employees are also represented by USW. But there have been no formal negotiations with about 400 miners at the Nye section since September 17, according to local reports.
The impasse raises doubts about the 284,000 oz/year Stillwater mine. Commenting on the mechanisation plan, Stewart said on September 2, when the strike began: “If that plan cannot be implemented and the operations remain unsustainable, there may ultimately be no viable basis for the continued operation.”
The US PGM operations produced 137,930 oz in the six months to end-June. Stillwater East contributed 76,334 oz, or about 55%, and East Boulder 61,595 oz. Overall, however, Stillwater is loss-making.
