Sibanye Stillwater to raise about $500 million in prepayments
JOHANNESBURG – Sibanye Stillwater to raise about $500 million in prepayments arrangements such as so-called metals streaming to shore up its cash position, even as the company sees an improvement in metal prices and the market outlook.
Metals streaming involves selling future metals production in return for an upfront cash payment. While Sibanye is not facing any risk of running out of money as metal prices continue to improve, it is prudent for the company to build sufficient liquidity buffers, he said. He ruled out issuing equity to raise the money.
The Johannesburg-based precious metals producer saw profits tumble $2 billion last year due to lower metal prices and after the producer reported $2.6 billion of impairments at its U.S. palladium mines, a nickel operation in France and a gold mine in South Africa.
The company, which has grown from a South African gold and platinum miner to a diversified producer with operations in Australia, Europe and the United States, is starting to see the benefits of restructuring at its South African platinum and gold mines where it has cut some jobs.
While Sibanye’s debt is expected to rise, it will stay well within the level of its borrowing agreements. South African PGM producers have resorted to cutting jobs and restructuring operations to cope with lower prices of the metals used in vehicle autocatalysts to help curb toxic emissions.
