Sibanye-Stillwater Faces Losses Amidst Challenging Commodity Market

  • Sibanye-Stillwater anticipates significant losses for 2023 due to volatile commodity prices and operational challenges.
  • Production updates reveal mixed results, with some operations meeting targets while others face setbacks.
  • CEO Neal Froneman vows to address losses and ensure business sustainability amidst turbulent market conditions.
Published by
Lethabo Ntsoane

Sibanye-Stillwater braces itself for challenging times ahead as it anticipates reporting a significant loss per share for the year ended December 31, 2023. The company, known for its diversified portfolio of operations across five continents, released a production update and trading statement today, shedding light on its performance amidst a tumultuous commodity market landscape.

Production Update Highlights

Sibanye-Stillwater’s operations witnessed a mixed bag of results for the year 2023. While the South African platinum group metals (PGM) operations managed to meet production targets, challenges loomed over the US PGM recycling operations due to depressed deliveries of used autocatalysts. The acquisition of New Century Resources Limited in Australia bolstered zinc tailings production, contributing to stabilizing results after facing setbacks such as the Kloof 4 shaft incident.

OperationProduction (2023)Guidance
SA PGM1,748,430 4Eoz1.7M – 1.8M 4Eoz
SA Gold20,114 kg19,500 kg – 20,500 kg
US PGM427,272 2Eoz420k – 430k 2Eoz
US PGM Recycling310,314 3Eoz350k – 400k 3Eoz
Nickel7,125 tonnes7.0 kt – 7.5 kt

Trading Statement Unveils Challenges

In line with the volatility of the commodity market, Sibanye-Stillwater expects to report a loss per share between 1,268 and 1,401 SA cents for 2023, a stark contrast to the previous year’s earnings. The decline is attributed to various factors, including a significant drop in metal prices, operational challenges, and impairments across several operations.

The company cited a 32% decline in the average rand 4E PGM basket price and a 33% decline in the average US dollar 2E PGM basket price as major contributors to the decreased profitability. Additionally, impairments totaling R47,454 million (US$2,576 million) were recognized due to operational repositioning, cost increases, and changes in mineralogy affecting recovery grades.

Metric20232022
Loss per Share (SA cents)1,268 – 1,401651
HEPS (SA cents)60 – 66652
Impairments (R million)47,454

Looking Ahead

Neal Froneman, CEO of Sibanye-Stillwater, acknowledged the challenging year but expressed determination to address the losses and ensure the sustainability of the business. Proactive steps have already been taken to mitigate loss-making operations, with a focus on strategic essentials amidst the low commodity price environment.

Investors and stakeholders await the full operating and financial results for 2023, scheduled to be released on March 5, 2024, through a virtual presentation. Despite the current challenges, Sibanye-Stillwater remains committed to navigating through the turbulent market conditions and emerging stronger in the long run.

Conclusion

As Sibanye-Stillwater navigates through a challenging period characterized by volatile commodity prices and operational hurdles, the company’s resilience and strategic foresight will be put to the test. With a focus on addressing loss-making operations and ensuring sustainability, the mining giant remains poised to weather the storm and emerge stronger in the face of adversity.

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Lethabo Ntsoane

Lethabo Ntsoane holds a Bachelors Degree in Accounting from the University of South Africa. He is a Financial Product commentator at Rateweb. He is an expect financial product analyst with years of experience in reviewing products and offering commentary. Lethabo majors in financial news, reviews and financial tips. He can be contacted: Email: lethabo@rateweb.co.za Twitter: @NtsoaneLethabo