Sibanye Stillwater Ltd. experienced a significant downturn last year, reporting a $2 billion loss due to an impairment charge against its US palladium mine. This marked a sharp contrast from the previous year when the miner posted a $1.1 billion profit. The company’s shares dropped as much as 7.4% in Johannesburg trading following the announcement.
The decline in earnings was not unique to Sibanye but was also seen among its South African peers, Anglo American Platinum Ltd. and Impala Platinum Holdings Ltd., due to falling prices of platinum, palladium, and rhodium. Under CEO Neal Froneman, Sibanye had diversified from its original focus on gold mining to include platinum-group metals, lithium, and nickel. However, the company noted a “structural change” in the nickel market, with battery metal prices also experiencing a downturn.
Sibanye remains optimistic about the medium to long-term outlook for its metals, except for nickel. The company has implemented cost-cutting measures expected to save around $375 million. The Stillwater palladium project in Montana was a significant factor in the company’s impairments, accounting for 82% of the total 47.4 billion rand ($2.5 billion).
Sibanye warned that if low commodity prices continue, further restructuring might be necessary, particularly concerning the US palladium mine and its French nickel refinery. In an effort to reduce costs, the company recently eliminated over 4,000 jobs across its gold and platinum group metal operations in South Africa. Despite these challenges, Sibanye’s gold mines managed to return to profitability last year.
Here’s an illustration depicting Sibanye Stillwater Ltd.’s financial challenges and diversification efforts. The image shows a graph with a downward trend representing the $2 billion loss, alongside a depiction of the US palladium mine with a red impairment symbol. In the background, symbols for platinum-group metals, lithium, and nickel indicate the company’s diversification. Additionally, there’s a representation of job cuts with a figure holding a pink slip and a gold mine with a green upward arrow symbolizing the return to profitability of Sibanye’s gold operations.