Sibanye-Stillwater Faces $2.58 Billion Impairments Amid Metal Price Decline
Multinational mining and metals processing giant Sibanye-Stillwater grapples with impairments totaling $2.58 billion (approximately R47.45 billion) for the 2023 fiscal year due to plummeting metal prices and operational challenges.
CEO Neal Froneman highlighted the adverse impact of sharply declining commodity prices on the group’s profitability, particularly affecting platinum group metal (PGM) operations in the United States and South Africa, as well as zinc operations in Australia.
The average rand-denominated platinum, palladium, rhodium, and gold (4E) PGMs basket price decreased by 32%, while the average dollar-denominated platinum and palladium (2E) PGMs basket price dropped by 33%, significantly affecting South African and US PGM operations.
Sibanye-Stillwater anticipates reporting a loss per share for 2023 between R12.68 ($0.69) and R14.01 ($0.76), compared to earnings per share (EPS) of R6.51 ($0.40) in 2022.
Additionally, headline earnings per share (HEPS) are projected to range between 60c ($0.03) and 66c ($0.04), a substantial decline from HEPS of R6.52 ($0.40) in 2022.
Despite challenges, Froneman assured shareholders of proactive measures to address operational inefficiencies and sustain profitability.
Notably, South African and Australian operations demonstrated profitability by the end of the fourth quarter of 2023. However, US PGM operations and the Sandouville refinery in France require further restructuring to mitigate losses amidst the prevailing commodity price downturn.
Regarding production, Sibanye’s South African PGM operations maintained a consistent performance, delivering 1.75 million ounces of 4E PGMs, while South African gold operations yielded 646,680 ounces. US PGM underground operations saw a modest increase in mined 2E PGMs production, reaching 427,272 ounces.
Despite challenges in the global economic outlook impacting demand for new vehicles and subsequent autocatalyst deliveries, total PGM ounces from US PGM recycling operations fell below guidance.
Meanwhile, nickel production at the Sandouville refinery met expectations, with 7,125 tons produced, including nickel salts and metal.
In Australia, Sibanye acquired control of New Century Resources, enhancing its presence in global tailings retreatment and the circular economy.
Production from the Century zinc tailings operation totaled 76,000 tons of metal (payable) in 2023, stabilizing after recovering from flooding earlier in the year.
