Sibanye Stillwater SA PGM operations delivered solid performance
The SA PGM operations delivered another very solid operating performance for Sibanye Stillwater, which together with a higher 4E PGM basket price, resulted in another record financial result from the segment.
4E PGM production of 444,609oz for Q1 2021 was 6% higher than for the comparable period in 2020. AISC of R19,771/4Eoz (US$1,322/4Eoz) was 18% higher than for Q1 2020, primarily due to significantly higher cost of purchasing concentrate (PoC) from third parties. The processing of PoC contributed R350 million (US$23 million) at a margin of 22% to the Marikana adjusted EBITDA.
Adjusting for these higher PoC costs, AISC of the underlying operations are R17,738/4Eoz (US$1,186/4Eoz). Higher royalty taxes added R1,151/4Eoz (US$77/4Eoz) to AISC compared with Q1 2020, due to the higher PGM prices.
The average 4E PGM basket price of R52,722/4Eoz (US$3,524/4Eoz) for Q1 2021 was 59% higher than for Q1 2020, primarily due to due to a significant increase in the rhodium price (up 127% year-on-year) and the platinum price (up 28% year-on-year).
As a result of higher production and the significant increase in the 4E PGM basket price, adjusted EBITDA increased by 90% to R15,280 million (US$1,021 million) from R8,043 million (US$523 million) for Q1 2020, which was a record at the time. The adjusted EBITDA margin for Q1 2021 increased to 66% from 51% for the comparable period in 2020.
4E PGM production from the Rustenburg operation was 2% higher than for Q1 2020 at 156,956 4Eoz, with an increase in production from surface sources, offsetting marginally lower underground production. AISC from the Rustenburg operations increased by 4% to R19,002/4Eoz (US$1,270/4Eoz), year-on-year, despite the impact of higher royalties and taxes (due to the significantly improved margins) and above inflation electricity price increases, with an improvement in plant recoveries an offsetting factor.
The Kroondal operation continued to perform steadily, with 4E PGM production of 53,046 4Eoz for Q1 2021, 1% lower than comparable period in 2020. Despite marginally lower production and inflation increases, AISC of R12,137/4Eoz (US$811/4Eoz), was 4% lower than for the comparable period in 2020.
4E PGM production from the Marikana operation of 193,995 4Eoz for Q1 2021, was 13% higher than for the comparable period in 2020. Production from underground was 7% higher and production from surface sources and third party processing 66% higher.
The increase in surface production is primarily due to an increase in processing of third party concentrate, with 4E PGM production from PoC increasing by 140% year-on-year to 19,125 4Eoz for Q1 2021.
AISC of R23,000/4Eoz (US$1,537/4Eoz) reflect the additional cost of purchasing this concentrate from third parties at higher prevailing PGM prices. AISC from Marikana excluding third party PoC costs were R18,755/4Eoz (US$1,254/4Eoz) for Q1 2021.
The Mimosa operation continued to perform steadily, with attributable 4E PGM production of 29,878 4Eoz, 4% higher than for Q1 2020, and AISC of R13,401/4Eoz (US$896/4Eoz), 6% higher than the comparable period in 2020.
Chrome sales for Q1 2021 of approximately 370,000 tonnes were significantly lower than for Q1 2020 (approximately 507,0000 tonnes) due to a slow start up of operations and logistical issues in March which resulted in no chrome sales from the Rustenburg operation.
Chrome revenue was R347 million (US$23 million) for Q1 2021, 7% higher than the Q1 2020 chrome revenue of R324 million (US$21 million), due to an increase in the chrome price from $128/tonne for Q1 2020 to $162/tonne for Q1 2021.