Earnings before interest, tax, depreciation and amortisation (Ebitda) from gold propped up Sibanye-Stillwater in the quarter to the end of September, with production of platinum group metals and zinc also rising on the back of the company securing a new €500 million green loan.
Ebitda for the quarter grew by 9% to R3.3 billion, boosted by the company’s South African gold operations that uplifted adjusted Ebitda by 292% to R1.35bn. Sibanye-Stillwater attributed the stronger gold category earnings to a 24% increase in the rand gold price received for the period.
“This improved financial performance was primarily due to significantly improved financial contributions from the SA gold operations and the Century re-treatment operations in Australia, which, due to greater operational stability and higher metal prices during Q3 2023, were able to deliver significantly improved financial contributions to the group,” said Sibanye-Stillwater CEO Neil Froneman.
Cratos Capital head of wealth Greg Davies, said Sibanye-Stillwater had recorded a “stronger quarter overall,” with shares in the company trading 6.35% higher in afternoon trade on the JSE at R21.59 yesterday.
Despite the company’s SA gold operations recording a dip in bullion production excluding DRDGOLD by 12% to 4.26 tons compared to 2023 same quarter, it benefited from a higher rand gold price.
All-in-sustaining-costs for Sibanye-Stillwater’s SA gold operations excluding DRDGOLD at R1.414 450 per kilogram was nonetheless 9% higher than the previous comparative period due to lower gold production and a 17% reduction in gold sold.
Sibanye-Stillwater’s South African PGM operations raised 4E PGM production excluding third party purchase of concentrate by 5% to 473 938 ounces. Adjusted Ebitda for the SA PGM operations dropped 37% to R1.58bn for the September quarter, attributable to “the inflation related increase” in all-in-sustaining-costs.
The company attributed this to “the consolidation of 100% of the Kroondal operation following the acquisition of Anglo American Platinum’s 50% share” in the operation in November last year.
This helped to offset lower production from the Rustenburg operation during the quarter under review.
Production from the Rustenburg operation was in build-up following repairs to the ore collector bin at the Siphumelele shaft, as well as restructuring and closure of high cost and end of life operations.
All-in-sustaining-costs for the SA PGM operations of R21 228 per 4E ounce was 6% higher compared to a year ago. The company however managed to contain the increase in unit cost to an inflation comparable percentage due to “strict cost containment” initiatives.
Positively though, Sibanye-Stillwater’s US PGM operation is expected to benefit from a new policy stance seeking to secure supply of key critical minerals. Financial benefits under this are likely to amount to an estimated $140m for 2023 and $100m for 2024.
“The tangible support from the US authorities to secure local supply of critical minerals through the IRA and S45X confirms the appropriateness of our strategic positioning in the US and European ecosystems in response to our expectations of increasing multi polarity and regionalisation of global trade,” said Froneman.
Moreover, the European Union and member countries had also “expressed similar intentions to support the development of regional supply chains” in the region.
The company’s recent R9.9 billion green loan for the Keliber lithium project in Finland has been supported by the European Investment Bank and Finnish credit agency, Finnvera, alongside a consortium of global banks.
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