Sibanye gold rush not enough

Sibanye Stillwater’s full-year loss narrowed after higher gold prices offset low palladium rates that weighed on the company’s US mining operations.

The Johannesburg-based producer made a loss of $398 million (R7.3 billion) in 2024 after taking an additional impairment of R8.8 billion on platinum-group metals mines in Montana, it said Friday.

That brought total writedowns on the US assets — including a larger one announced a year ago — to about $2.6 billion. 

While Sibanye’s earnings were an improvement on a $2 billion loss in 2023, the recent performance is a sharp reversal for a miner whose core PGM business drove bumper profits in the early part of this decade.

Under soon-to-retire boss Neal Froneman, the company has diversified away from ageing South African gold mines, initially acquiring PGM assets both in its home country and the US before investing in metals key to the green-energy transition.

The shares fell as much as 6.1% — the biggest drop in three months — and were 5.9% lower at 9:40 a.m. in Johannesburg.

Sibanye – like peers Anglo American Platinum and Impala Platinum – has cut costs as it battles persistently weak PGM prices.

In September, the company announced further restructuring at its loss-making Stillwater mines in the US that could curb palladium and platinum output from the assets by as much as 45%.

The price of palladium – the main metal Sibanye produces in Montana – is trading at less than a third of its 2022 peak.

South African PGM mines – richer in platinum, whose prices have been steadier over the same period – turned a profit, as did gold assets in the country.

PGMs are used in devices that lower emissions from gasoline and diesel vehicles. Sibanye and rivals are focused on finding alternative sources of consumption for the metals to compensate for demand that’s forecast to fall from the auto sector as electric vehicles gain market share.

Froneman’s firm is also developing a lithium mining and processing project in Finland and owns a nickel refinery in France as it expands in materials used in EV batteries.

While Sibanye was founded on high-cost gold mines spun off by Gold Fields in 2013, the company’s production of the precious metal has reduced by more than half over the years.

However, with the price of bullion soaring more than 40% in the last 14 months and notching multiple records, income from the assets increased by two-thirds last year to R5.8 billion.

“These mature mines, buoyed by the tailwind of a strong gold price, delivered materially better financial results for 2024, during a challenging period for most of our other metals, which are more aligned with industrial economic cycles,” Sibanye said.

The company’s profit before some one-time items – known as headline earnings – was similar to 2023 at $99 million.