Sibanye Stillwater SA PGM operations 4% lower than for Q1 2022
Total 4E PGM production of 403,699 4Eoz for Q1 2023 (including third party purchase of concentrate (PoC)) was only 4% lower than for Q1 2022, despite a more challenging operating environment than a year ago. Lower underground production of 344,052 4Eoz (7% loweryear-on-year) and surface production (excluding PoC) of 35,739 4Eoz, (12% lower), was partially offset by third party purchase of concentrate (PoC), which increased by 124% to 23,908 4Eoz due to higher concentrate deliveries from third parties to the ongoing planned closure and ceasing of production at Simunye shaft at Kroondal, copper theft related production disruptions (5,200 4Eoz impact), load curtailment (5,120 4Eoz impact) and productivity constraints in areas where operations are mining through adverse ground conditions (4,100 4Eoz impact).
Considering the decline in production including the planned Simunye shaft closure, the inclusion of the K4 project ORD costs at the Marikana operation and general mining inflation for 2022 which exceeded 14%, AISC was well managed during the quarter. AISC (excluding PoC) for Q1 2023 increased by 12% year-on-year to R20,043/4Eoz (US$1,129/4Eoz), with AISC for Q1 2023 (including PoC) increasing by 11% year-on-year to R20,686/4Eoz (US$1,165/4Eoz).
The increase in Q1 2023 AISC compared to Q1 2022, reflects a 68% increase in ORD (R262 million (US$11 million) higher) due to ORD costs from the K4 project which were capitalised in Q1 2022, being incorporated with ORD from the Marikana operations, resulting in a 98% year-on-year increase in Marikana ORD.
AISC for Q1 2023, also reflected lower royalties paid relative to Q1 2022 (64% lower or R410 million (US$29 million)) and 10% higher by-product credits (R200 million (US$7 million) higher year-on-year).
4E PGM production from the Rustenburg operation for Q1 2023 of 147,484 oz was only 1% lower year-on-year, despite the impact of load curtailment and ongoing cable theft. Underground production of 130,123 4Eoz was in line with Q1 2022 with surface production 8% lower than Q1 2022. The Bathopele mine has now successfully traversed the Hexriver fault, and, while experiencing difficult ground conditions, production is expected to normalise during H2 2023. AISC of R18,558/4Eoz (US$1,045/4Eoz) for Q1 2023 was 7% lower year-on-year due to various factors including: royalties declining by 92% to R29 million (US$2 million), R336 million lower than Q1 2022, due to a royalty tax reduction linked to the final Anglo Platinum deferred payment, which was made in Q1 2023 and increased byproduct credits which were 28% higher at R847 million (US$48 million), R184 million higher than Q1 2022, (primarily due to higher chrome prices), partially offset by an 18% increase in ORD to R168 million (US$9 milion).
4E PGM production from the Marikana operation (including PoC) declined by 2% to 175,530 oz, due to a 124% increase in PoC ounces, which partly offset lower production from underground and surface. The Marikana operation was impacted more by cable theft relative to the other SA PGM operations, which together with load curtailment and safety stoppages, resulted in production (excluding PoC) declining 10% year-on-year to 151,622 4Eoz. Production from underground of 146,346 4Eoz was 10% lower year-on-year, with surface production of 5,276 4Eoz 20% lower. AISC (excluding PoC) increased by 29% to R23,057/4Eoz (US$1,298/4Eoz) with AISC (including PoC) of R24,030/4Eoz (US$1,353/4Eoz), 24% higher year-on-year. While the K4 project remains in build up phase, elevated ORD costs, coupled with low, but ramping up production output is increasing AISC at Marikana.
The Kroondal operation performed largely in line with its expectations with production of 41,187 4Eoz, 17% lower than for Q1 2022. This was primarily due to the scheduled closure of the Simunye shaft at the end of 2022 (accounting for 75% of the year-on-year decline) and continued adverse ground conditions at some Kroondal shafts which negatively affected productivity. In addition, AISC of R17,311/4Eoz (US$975/4Eoz) was 16% higher than for Q1 2022 as a result of lower production (with Simunye still carrying overhead costs, which will be transferred to other operations in future), inflationary effects highlighted above and additional underground support required for the adverse ground conditions, in particular the Eastern shafts which are mining through a shear zone.
Attributable PGM production from Mimosa for Q1 2023 of 26,396 4Eoz was 6% lower than for Q1 2022. Milling operations at Mimosa were negatively impacted by sporadic regional power interruptions and a planned five-day plant shutdown
