Sibanye-Stillwater: Lower PGM prices were moderated by restructuring
The impact of lower PGM prices and cost inflation on margins from the SA PGM operations was moderated by the restructuring and closure of loss-making operations during H1 2024.
Production from the SA PGM operations was 4% higher year-on-year, however,
additional production from the acquisition of Anglo American Platinum’s 50% share in Kroondal, was offset by lower production from the Rustenburg operation (following the collapse of the bin and conveyor at the Siphumelele shaft) and the Kroondal operation (following illegal industrial action), and the restructuring and closure of high-cost and end-of-life operations at the Marikana and Kroondal operations in H1 2024.
Operating cost was well managed, increasing by 6% to R23,608/4Eoz (US$1,317) for H2 2024, in line with inflation, with AISC increasing by 10% to R22,317/4Eoz (US$1,245/4Eoz) due to increased capital at the Rustenburg and Kroondal operations on extension and chrome projects.
At lower operating margins however, the SA PGM operations, are highly leveraged and due to a marginally lower average 4E basket price of R23,892/4Eoz (US$1,333/4Eoz) and a 10% increase in AISC, adjusted EBITDA for H2 2024 decreased by 55% to R2.6 billion (US$152 million) compared to H2 2023. The change from a PoC to Toll processing arrangement by the Kroondal operation, also resulted in production from 1 September 2024 (four months) not being sold due to the build-up of inventory in the processing pipeline.
A more stable production performance for 2025, is expected to moderate cost increases and preserve margins from the SA PGM operations, with the newly signed Glencore Merafe Venture chrome agreements potentially adding value in future.
