By William Clowes, Bloomberg.
Sibanye Stillwater plans to restructure its mines in Montana, cutting output of palladium and platinum by as much as 45% in a bid to return them to profitability.
Palladium – the main metal produced at Sibanye’s US operations – is trading at less than a third of its peak in March 2022. The company has already written down the value its American mining assets by about $2.4 billion, but says further cost-cutting is required.
“The capital investment required is not feasible at current PGM prices and as a result, further restructuring of the US PGM operations is necessary to reduce cash outflows, “Sibanye said in a statement on Thursday.
A “fundamental review” of the operations to bring down costs will follow, it said.
Sibanye’s diversification into platinum-group metals — from its original dependence on aging South African gold mines — yielded bumper profits in the early years of this decade. Now slumping prices are forcing the company to slash costs and reduce its workforce both at home and in the US.
Sibanye rose as much as 9.2% in Johannesburg trading.
The restructuring is likely to result in platinum and palladium production from the Stillwater assets being reduced by approximately 200 000 ounces in 2025. Sibanye is forecasting output of 440 000-460 000 ounces this year.
The Johannesburg-listed company posted a first-half loss of R7.1 billion ($396 million).