Sibanye-Stillwater, the precious metals mining company, has embarked on a restructuring process of its South African platinum group metal (PGM) shafts. This move will impact 4,095 employees and contractors due to escalating operational costs and plummeting PGM prices. The restructuring plan includes the closure of certain shafts and the reassessment of operations in others.
The affected shafts include Simunye at Kroondal, Rowland and 4 Belt at Marikana, and Siphumelele at Rustenburg. The Simunye and 4 Belt Shaft, which have been nearing depletion since their acquisition from Lonmin in 2019, are under closure discussions as part of rightsizing strategies. On the other hand, Rowland and Siphumelele are slated for restructuring due to operational constraints and seismic activity respectively.
The restructuring comes in the wake of a significant drop in Sibanye-Stillwater's financial performance. Its basic interim share earnings fell by 38% while headline interim share earnings saw a decrease of 51%. This decline is largely attributed to falling PGM basket prices. With current spot prices leading to an anticipated R6bn net cash outflow as predicted by RMB Morgan Stanley, CEO Neal Froneman hinted at no dividend payouts.
In an interview with Miningmx, Froneman considered centralizing services for the South African mines to offset part of the loss-making gold production which amounts to 330,000 oz. Despite a three-month production loss caused by a strike by union Amcu, there was a noted improvement in adjusted EBITDA for the gold division. However, up to 40% of its H1 production operated at or above a price of R1.15m, leading to lowered production guidance.
As part of the restructuring process, Sibanye-Stillwater is holding consultations with employees under Section 189 of the Labour Relations Act. This move follows the cessation of mining operations at the Simunye shaft in Q4 2022.
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