Sibanye-Stillwater’s Cost-Cutting Measures to Save R6.6 Billion Annually
Green metals and gold mining company Sibanye-Stillwater has implemented measures to address loss-making assets, which are expected to secure annual savings and capital expenditure deferrals of R6.6 billion, announced Chairperson Dr. Vincent Maphai at the company’s online AGM on Tuesday.
The Johannesburg- and New York-listed platinum group metals major is focusing on strategic essentials, such as reducing operating and capital costs and improving efficiencies.
While prepared for an extended period of low prices, the company remains optimistic about the outlook for its produced metals. Despite the low prices, Sibanye-Stillwater, which employs over 82,000 people, reported a 2023 net debt-to-earnings ratio of 0.58x at year-end 2023.
“We’ll complement our existing business and deliver tangible value to our stakeholders,” Maphai added.
During the Q&A session, Sibanye-Stillwater was asked for an update on pending retrenchments and how these would be managed sustainably and responsibly.
The question also addressed the rehabilitation of retrenched workers to alleviate the impact of job loss in South Africa’s challenging unemployment environment.
In response, CEO Neal Froneman acknowledged that some mine shafts reaching the end of their life spans required swift action to ensure the business’s overall sustainability.
“That’s the nature of mining, where you’re depleting a resource, and some of those shafts should have closed pre-COVID,” Froneman explained.
“We are fortunate to have kept them open longer than anticipated. However, it’s always tragic and sensitive when restructuring is necessary.
Unfortunately, we are price takers and dependent on revenues, with the only real lever we can pull being costs, 60% to 70% of which are people-related.”
Froneman emphasized that recent restructuring targeted middle and senior management to align overheads with the production base, a sensitive process conducted in line with the Labour Relations Act and Section 189 process.
Efforts are made to avoid forced retrenchments through voluntary options, retirements, and transfers, with retrenched employees considered for re-employment when conditions improve.
SELF-GENERATION OF ENERGY
In South Africa, the low energy availability factor of 55% in 2023 had little impact due to effective energy curtailment management by the regional team.
By 2025/26, Sibanye-Stillwater aims to generate renewable energy to meet nearly a third of its energy needs, reducing load curtailment pressures, assisting in ending load shedding, lowering costs, and decreasing the company’s carbon footprint.
Collaborations with authorities have made meaningful progress in reducing illegal mining and copper cable theft risks. “We value our constructive relationship with mine communities, governments, regulators, and stakeholders,” Maphai stated.
Outgoing social, ethics, and sustainability chairperson Jerry Vilakazi highlighted Sibanye-Stillwater’s commitment to embedding environmental, social, and governance (ESG) principles across all operating regions.
“There are no instances of reportable or material ESG-related fines to disclose,” Vilakazi added.
Sibanye-Stillwater is one of the world’s largest primary producers of platinum, palladium, and rhodium, as well as a gold producer.
The company refines iridium, ruthenium, nickel, chrome, copper, and cobalt and is diversifying its asset portfolio into battery metals and increasing its global presence in recycling and tailings reprocessing.
SOURCE:miningweekly.com
