Sibanye Stillwater announced a significant annual loss of $2 billion and decided to forgo its final dividend, attributing the financial setback to a sharp decline in platinum group metal (PGM) prices. The challenging market conditions have prompted South African mining companies to undergo restructuring efforts and job cuts to navigate the turbulent landscape.
Despite facing financial hurdles, Sibanye continues to progress with key projects, including a lithium mine in Finland and plans for another venture in the United States. CEO Neal Froneman acknowledged the possibility of a capital raise if prolonged lower metal prices persist, ruling out the likelihood of a rights issue during a results call.
The precious metals producer transitioned from a $1.2 billion profit in the previous year to a substantial loss in the current year, following record earnings in 2021 fueled by the rally in rhodium and palladium prices. Sibanye reported impairments of $2.6 billion primarily at its U.S. palladium mines, a nickel operation in France, and a gold mine in South Africa, reflecting the impact of declining metal prices and an uncertain market outlook.
The company’s strategic acquisitions of battery metal assets in France, Finland, Australia, and the U.S. have positioned it for future growth despite the prevailing challenges in the industry. The downturn in PGM prices, crucial for emission control technologies in the automotive sector, has necessitated restructuring efforts and job cuts among South African mining firms.
CEO Froneman highlighted the potential need for further restructuring, particularly at Sibanye’s U.S. PGM operations and the Sandouville nickel refinery in France, emphasizing the ongoing pressure on earnings amid low commodity prices and inflationary cost pressures.
Sibanye’s industry counterparts, such as Anglo American Platinum and Impala Platinum, are also undergoing restructuring initiatives to streamline operations and reduce costs, a process that is expected to result in significant job losses across the sector.