Sandouville Nickel: cathode production unit affected the overall performance

The acquisition of the Sandouville nickel refinery in Le Havre, France was concluded on 4 February 2022 and therefore comparing the operational results for Q1 2023 with Q1 2022 should be seen in this context. The tough H2 2022 where technical issues in the cathode production unit affected the overall performance continued into Q1 2023. The Q4 2022 start-up after the annual maintenance shutdown in October took longer than expected. Q1 2023 saw an improved performance on Q4 2022.

However, Q1 2023 was still challenging, with the breakdown of the cathode plant in late 2022 continuing into Q1 2023. Although most of the cathode cells had been repaired by the end of March 2023, the lack of full availability has throttled production.

It is expected that the plant will reach full production in Q3 2023. Production in Q1 2023 was also impacted by 32 days of lost production due to French national strikes, plant reliability and process issues.

Sandouville produced 1,180 tonnes of nickel metal in Q1 2023 (5% lower than *Q1 2022), 429 tonnes of nickel salts (8% higher than *Q1 2022) and 33 tonnes of cobalt chloride (6% lower than *Q1 2022) at a nickel equivalent sustaining cost of US$38,750/tNi (R688,196/tNi), 10% higher than Q1 2022. Unit costs were primarily impacted by production constraints as well as higher energy and raw material inputs.

Sustaining capital of US$2 million (R44 million) in Q1 2023 was 277% higher than for *Q1 2022 of US$1 million (R10 million) with increased expenditure on plant maintenance to achieve stability offset by-product credits which increased by 157% to US$3 million (R45 million).

A number of new management appointments were made in Q1 2023 including: Head of France, Chief technical officer and Sandouville financial manager and a turnaround plan was initiated focussed on cost analysis, adapting product mix to market requirements, plant recoveries and reliability.

Feasibility studies continue on the PGM autocatalyst recycling, battery grade nickel sulphate and battery metals recycling projects.

Sibanye-Stillwater acquired the Sandouville nickel refinery on 4 February 2021 and therefore amounts included for Q1 2022 are from the effective date of acquisition.

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