Africa-Press – South-Africa. Precious metals miner Sibanye-Stillwater has reported an almost halving its core profit for its third quarter to end-September, with costs surging, as the firm grappled with lower production, flooding, load shedding, as well as pressure from input costs.
Adjusted earnings before interest, taxation, depreciation and amortisation (Ebitda) – or core profit – fell 43% year-on-year to R8.45 billion in the three months to end-September the firm, said, also falling 5% quarter on quarter. In SA, the rand price of platinum group metals (PGMs) only declined marginally in rand terms, while gold prices climbed almost 13%.
Sibanye’s shares lost more than 10% on Thursday, falling to R39.07, valuing it at around R120 billion on the JSE.
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In mid-June, the firm’s Stillwater operation in Montana was hit by regional flooding, resulting in production almost halving, though the firm had also planned lower production for its US operations, complicating comparisons. US production of platinum and palladium fell 40% to 85 889 ounces, while SA production of a basket of four PGM metals fell almost 14% to 432 143 ounces, amid “unprecedented power curtailment imposed by Eskom during the third quarter and a significant rise in cable theft”.
The firm also reported two fatalities at its Marikana operation, a winch and rigging incident and a mud rush. It said safety remained the priority, and group fatalities had fallen over the nine months from 11 to four, an almost two-thirds decline.
The grade at Stillwater was also affected by a need to mill low-grade reef sand to ensure adequate volumes of backfill for stope support after the flood, referring to a practice of stabilising masses of rocks in order to prevent collapses.
All-in-sustaining costs in the US climbed 88% to R30 947 per ounce of platinum and palladium, while in SA, costs climbed 20% at Sibanye’s PGM operations, and by over half at its gold operations.
The buildup to normalised levels of production at the SA gold operations, following a strike from 9 March to 13 June, proceeded according to plan, the miner said, with production falling 30% to 204 672 ounces. Sibanye has recently said it was looking to cut about 2 000 jobs at its Beatrix gold mine in the Free State.
However, the group signed a five-year wage agreement at its Marikana and Rustenburg operations, saying on Thursday that this “is expected to set the scene for five years of relative stability”.
“Despite deteriorating in the global political and economic environment during 2022, precious metals prices have remained well supported and within historically high ranges,” it 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,” Sibanye said.
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