Sibanye says its local PGM operations continued to deliver consistent operational results despite challenges associated with Eskom load curtailment and the increased incidence of copper cable theft. Picture: File
Sibanye-Stillwater’s shares plummeted by almost 11% after it posted an operating update for the quarter ended September 30, which showed production volumes were down in a challenging third quarter as it faced flooding, load shedding, a strike and higher input costs.
Earlier this week Sibanye announced that it planned to restructure about 2000 at its Beatrix mine in Welkom, Free State.
“We are committed to minimising the impact of the proposed restructuring and will engage with all relevant stakeholders in an effort to avoid job losses, while attempting to limit the impact on the remainder of the operations and employees at the SA gold operations and the sustainability of the group," Sibanye said.
The shares were at R38.87 in intraday trade yesterday and have decreased by 21.99% in the past six months.
The diversified precious metals miner said adjusted earnings before interest, taxation, depreciation and amortisation (Ebitda) fell 43% year-on-year to R8.45 billion in the reported period. And fell 5% quarter on quarter.
Anchor group Investment analyst Seleho Tsatsi said the shares decreased following the group saying its adjusted Ebitda was down 43% in the third quarter.
“Production volumes are down significantly across the group, particularly for the company’s US platinum group metals (PGM) operations (down 40%) and South African gold operations (down 30%). The South Africa gold business is still ramping up following the strike at its operations earlier this year. So it was quite a challenging quarter for Sibanye-Stillwater,” he said.
According to the Sibanye, it had successfully navigated a challenging period, with production from the South Africa gold and the Stillwater operation building up during the third quarter of 2022 from operational disruptions, which occurred in the first half of the year and returning to normalised levels of production during October at both of these operations.
“The SA PGM operations continued to deliver consistent operational results despite challenges associated with Eskom load curtailment and the increased incidence of copper cable theft, which disrupted operations during Q3 (third quarter) 2022,” it said.
Sibanye said despite deteriorating in the global political and economic environment during 2022, precious metals prices had remained well supported and within historically high ranges.
A seven-week stoppage in June in its Montana, US, operation, resulted in production decreasing. Its US production of platinum and palladium fell 40% to 85 889 ounces, while South African production of a basket of four PGM metals fell almost 14% to 432 143 ounces, during unprecedented power curtailment imposed by Eskom during the third quarter and a significant rise in cable theft.
All-in-sustaining costs in the US increased 88% to R30 947 per ounce of platinum and palladium, while in South Africa, costs surged by 20% at Sibanye's PGM operations.
The build-up to normalised levels of production at the South Africa gold operations following a strike from March 9 to June 13, 2022, proceeded according to plan.
“Production from the SA gold operations, including DRDGold, for the third quarter of 2022 was 204 672 ounces, 30% lower compared with the comparable period. Gold production in the third quarter of 2022, excluding DRDGold, decreased by 36% to 157 957 ounces due to the phased resumption of safe production over the quarter,” it said.
Meanwhile, during the reported period, the group signed a five-year wage agreement concluded at its Marikana and Rustenburg operations.
The group said underground production from the Driefontein operation decreased by 34% to 52 727 ounces compared to the same period in 2021 as a result of the phased return to work post-industrial action.
“Underground production from the Kloof operation decreased by 50% to 44 786 ounces, with the underground yield 27% lower due to a slower start at the higher grade 4 and 8 shafts," it said.
Looking forward, Sibanye said greater operational stability across the group, should enable improved cost management for 2023, ensuring more stable earnings and cash flow and consolidating the already robust group financial position.
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