Sibanye Stillwater reports on South African PGM operations

The SA PGM operations continued to perform consistently, with 4E PGM production in line with annual guidance and costs well managed.

The restructuring of the SA operational and regional services which was concluded towards the end of H1 2024 is expected to deliver further cost and efficiency benefits during Q4 2024 and into 2025.

4E PGM production (excluding third party purchase of concentrate (PoC)) from the SA PGM operations, increased by 5% to 473,938 4Eoz.

Production was positively impacted by the consolidation of 100% of the Kroondal operation following the acquisition of Anglo American Platinum’s 50% share in the Pool and Share Agreement (PSA) in November 2023.

This offset lower production from the Rustenburg operation in Q3 2024, primarily due to production still being in build-up during the quarter 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 during H1 2024. 4E PGM production from underground increased by 6% to 431,584 4Eoz, with surface production (excluding PoC) declining by 7% to 42,354 4Eoz.

4E PGM production (including PoC) increased by 5% to 499,056 4Eoz, with PoC production of 25,118 4Eoz, 5% higher year-on-year.

AISC (excluding PoC) for the SA PGM operations of R21,228/4Eoz (US$1,182/4Eoz) was 6% higher year-on-year. Containing the increase in unit cost to an inflation comparable percentage was primarily a result of strict cost containment initiatives, partially offset by higher AISC from the Rustenburg operation due to lower production from the Siphumelele shaft and a relative decrease in production from the Kroondal operation year-on-year following the closure of the low cost Simunye shaft and Klipfontein open cast mine during Q4 2023.

By-product credits for Q3 2024, increased by 20% to R3.0 billion (US$165 million), reducing AISC by R6,256/4Eoz (US$348/4Eoz). Chrome ore credits, which comprise over 50% of the total by-product value, increased by 55% year-on-year, to R1,613 million (US$90 million).

This increase was primarily driven by higher chrome sales of 694kt (from 554kt for Q3 2023), in line with our strategy to grow chrome production, underpinned by a 5% rise in the average spot chrome price to US$305/t for Q3 2024.

The Platinum Mile chrome project, which was completed during December 2023, added 23kt to chrome production, coupled with the consolidation of 100% of Kroondal, which added 40kt, and production from Marikana was 33kt higher. AISC (including PoC) of R21,176/4Eoz (US$1,179/4Eoz) also increased by 6% year-on-year.

Total capital expenditure for Q3 2024, of R1.4 billion (US$77 million) was 5% lower than for Q3 2023, with K4 project capex decreasing by 41% to R159 million (US$9 million). Sustaining capital increased 8% to R521 million (US$29 million), mainly due to a 34% increase in SIB capex at the Rustenburg operation and the consolidation of 100% of Kroondal which offset an R78 million (US$4 million) reduction in SIB from the Marikana operation.

Project capital fell 52% to R161 million (US$9 million) following the commissioning of the chrome plant at Platinum Mile towards the end of December 2023.

Adjusted EBITDA of R1,584 million (US$88 million) from the SA PGM operations for Q3 2024 was 37% lower than for Q3 2023, primarily due to the inflation related increase in AISC and a 2% decline in the average 4E PGM basket price to R23,909/4Eoz (US$1,331/4Eoz).

The SA PGM operations retain significant leverage to higher 4E PGM basket prices which, together with expected production and cost improvements, should result in an improved adjusted EBITDA contribution from the SA PGM operations for Q4 2024.

4E PGM production from the Rustenburg operation decreased by 8% year-on-year to 167,085 4Eoz primarily due to the build up in production from the Siphumelele shaft after completing repairs to the head gear infrastructure in late July 2024.

AISC of R21,570/4Eoz (US$1,201/4Eoz) for Q3 2024 increased by 15% due to lower production, inflationary cost pressures, and a 34% increase in SIB capital expenditure to R206 million (US$11 million). The increased SIB spend was mainly for the Klipfontein re-pulping plant to stabilise the throughput for the Western Limb tailings facility.

SIB and ORD spend of R238 million (US$13 million), planned for but not yet invested by the end of Q3 2024, will roll over to Q4 2024 resulting in forecasted SIB and ORD spend for Q4 2024 of R616 million (US$34 million).

The Marikana operation had a solid quarter operationally, with 4E PGM production (excluding PoC), increasing by 4% to 185,854 4Eoz.

Underground production of 176,406 4Eoz, was 3% higher, despite the restructuring of the Rowland shaft and the closure of 4B shaft, due to the ongoing ramp up at K4 shaft (K4 production increased by 13,502 4Eoz year-on-year to 21,702 4Eoz). Third party PoC increased by 5% to 25,118 4Eoz, resulting in production from the Marikana operation (including PoC) of 210,972 4Eoz for Q3 2024.

Costs were well managed, with AISC (excluding PoC) 2% lower at R22,265/4Eoz (US$1,240/4Eoz) due to higher production and lower SIB. AISC (including PoC) of R22,027/4Eoz (US$1,226/4Eoz) was 1% lower year-on-year, benefiting from increased production and PoC volumes at lower prices.

Project capital expenditure for Q3 2024 was R159 million (US$9 million). Capital expenditure is expected to increase in Q4 2024 mainly due to increased spend on the smelters furnace rebuild and the ruthenium plant upgrade at the precious metals refinery.

The Kroondal operation produced 77,150 4Eoz for Q3 2024 (100% attributable), 62% higher year-on-year, due to the acquisition of Anglo Platinum’s 50% share in the PSA from 1 November 2023. On a comparable basis year-on-year (50%), production declined by 19% or 9,025 4Eoz compared with Q3 2023, primarily due to the closure of the Simunye shaft and the Klipfontein opencast mine during 2023.

As a result of the relative decline in production, AISC increased by 11% to R20,518/4Eoz (US$1,142/4Eoz). Kroondal capital expenditure is forecast to increase in Q4 2024 due to investment in trackless mobile machinery and ongoing establishment of underground infrastructure to access additional reserves.

4E PGM production from Platinum Mile declined by 10% to 12,441 4Eoz primarily due to a 6% decrease in run of mine tonnes from the Rustenburg operation and reduced surface tailings feed. The chrome extraction plant which was commissioned at the end of 2023, produced 23kt of chrome for Q3 2024 and is expected to reach nameplate capacity of about 10kt per month by Q1 2025.

Despite the lower PGM production and inflationary cost pressures, the increase in chrome credits resulted in AISC at Platinum Mile for Q3 2024 declining by 64% compared with Q3 2023, to R5,546/4Eoz (US$309/4Eoz).

Attributable 4E PGM production from the Mimosa JV for Q3 2024 of 31,408 4Eoz, was 8% higher than for Q3 2023. This increase in production offset significant inflationary cost pressures in Zimbabwe, resulting in operating cost being maintained at US$95/tonne (R1,710/ tonne), with AISC decreasing by 16% year-on-year to US$1,147/4Eoz (R20,600/4Eoz). AISC also benefited from lower SIB expenditure of US$7 million (R129 million) following the completion of the plant optimisation project, and reduced expenditure on the new tailings storage facility which is close to completion.