Sibanye-Stillwater highlights “grey elephants” in its H1 2023 results
The Group financial and operating results for the six-months ended 30 June 2023 (H1 2023) reflect the challenging global macro-economic and turbulent geopolitical environment which has prevailed during 2023, with slowing global growth reducing demand for commodities, resulting in a significant decline in commodity prices other than gold during the period, says Neal Froneman, Chief Executive of Sibanye-Stillwater.
The operating environment has been equally demanding, with regional factors in its operating jurisdictions posing significant challenges. These regional factors include some which Sibanye-Stillwater has previously highlighted as “grey elephants” (highly probable, high impact yet often ignored global trends), such as climate change – causing extreme weather events which are becoming increasingly frequent globally, with severe storms disrupting our US PGM operations in mid-2022 and its New Century tailings operations in Australia in Q1 2023; social discontent – widespread strikes in France causing downtime at our Sandouville nickel refinery in Le Havre during H1 2023 and ongoing community and labour related disruptions common in South Africa.
Moreover, the shortage of critical skills impacting the mining industry globally, continues to impact productivity and costs at our US PGM operation, and electricity disruptions and crime (cable theft and illegal mining) have intensified in South Africa.
Neal Froneman, Chief Executive of Sibanye-Stillwater, stated: “The impacts of the precipitous decline in PGM prices and operational disruptions at our US and European regions, were cushioned by a significantly improved financial contribution from the SA gold operations. The normalisation of production after the industrial action and lock-out which resulted in operations being suspended for most of H1 2022 (during which the SA PGM operations provided the diversification benefits), ensured timeous exposure to the higher gold price during a period of strategic investment for the Group into the battery metals sector.
Our investments in future facing metals and the green economy in Europe, the US and Australia, are central to the delivery of our green metals and clean energy solutions strategic differentiator.
These strategic investments are expected to make an increasing financial contribution to the Group in the second half of this decade, by positioning the Group to benefit from the future global energy transition and will further diversify the Group portfolio.
We anticipate that these strategic investments will provide a critical offset against the declining contribution from the SA gold operations as they near the end of their reserve lives over this decade and are restructured in a phased manner.
Group adjusted EBITDA of R14.1 billion (US$776 million) for H1 2023 was 37% lower than adjusted EBITDA of R22.6 billion (US$1.5 billion) for the comparable period in 2022, primarily reflecting the significant decline in PGM prices and regional operational challenges partly offset by the improved performance from the SA gold operations.
