The operating environment for South African miners is regressing due to ongoing load-shedding, the deteriorating quality of public services, and increased organised crime.
This is from Sibanye-Stillwater’s operating update for the year until 31 March 2023. Sibanye is one of the world’s three largest Platinum Group Metals (PGM) miners.
The miner said that the “increasingly supportive environment in Europe is in stark contrast to the operating environment in South Africa, which has continued to regress.”
Sibanye pointed to the Fraser Institute’s Annual Survey of Mining Companies for 2022, ranking South Africa among the bottom ten global mining jurisdictions.
The Institute also ranked South Africa 57th out of 62 countries in its Investment Attractiveness Index. In 2018, the country ranked 36, highlighting its precipitous decline.
The miner primarily attributed this to the deteriorating quality of South Africa’s public services and a substantial increase in organised crime.
Sibanye flagged ongoing theft of copper and general cable theft in particular.
These issues compound the ongoing elevated stages of load-shedding and load-curtailment, which disrupt its operations in South Africa.
Sibanye has turned to self-generation projects to reduce its dependence on Eskom and reduces its carbon footprint.
Load-shedding and load-curtailment put the miner’s South African PGM operations under immense strain.
Its revenue from PGM operations declined year-on-year, with production from South Africa down 8% year-on-year.
This is not the first time Sibanye has criticised the operating environment in South Africa.
It has previously stated that it does not see significant growth for the company in South Africa, calling the country “too risky”.
However, it has maintained that it will still operate in South Africa for a long time.
Its South African gold mining operations returned to profitability in the third quarter of last year due to a wage agreement signed with unions and an elevated gold price.
The company is expanding in Europe, the United States, and other African countries. It has recently acquired copper mining operations in Tanzania and a Finnish lithium mining company.