SHARES in Sibanye-Stillwater climbed about 10% in Johannesburg on Thursday following a positive bump in platinum group metal prices. The palladium price increased to $1,032.97 per ounce, a gain of 2.38% while platinum increased 1.95% to $972.52/oz.
“About 5% of that gain is probably the PGM prices because you’ve seen gains in the likes of Implats (Impala Platinum),” said Neal Froneman, CEO of Sibanye-Stillwater. “But I think the rest is pretty much a positive reaction to our results today.”
“I think we are very close to a turn in the palladium market. We are taking out 200,000 ounces a year from next year which is a healthy chunk of the current supply deficit,” Froneman said. Implats gained 6.3% while Amplats shares were 5.5% higher and Northam Holdings 4.8% higher.
Sibanye-Stillwater posted a 100% deterioration in the firm’s taxed profit for the six months ended June. This outcome was previously guided in a trading statement with the presentation today falling on efforts to bolster the firm’s balance sheet. As part of this, Sibanye-Stillwater pre-sold gold production for R1.8bn and said it was working on further metal pre-sales agreements totalling $600m to $700m (R10.7bn to R12.5bn).
The group also announced it was mothballing its Stillwater West mine in Montana which would reduce the mine’s total production in 2025 to 200,000 oz/year. Froneman said the outright closure of the mine would have baked in a long-term cash outflow whereas his group’s approach was to keep optionality to a rising PGM market.
“We are retaining the ability to recycle PGMs in the US and cutting production which I think is a happy medium,” he said. Froneman confirmed his company had met with “prominent” US officials during the process, partly because the group wants to protect its reputation in a country where it could build the Rhyolite Ridge lithium/boron mine.
Asked about when Rhyolite Ridge would come on to Sibanye-Stillwater’s radar, Froneman said: “The only commitment we have made to the project is to make a decision to invest or not. We are not hellbent on expanding our lithium production if it is not commercial.
“But first we have to get an environmental authorisation and do a Class 2 feasibility study which will focus on the economics. Right now, we don’t have that so we can’t make a decision,” he added.
Earlier on Thursday, Sibanye-Stillwater said it remained bullish on the lithium market despite price pressure this year. In August, it secured a €500m (R10bn) ‘green’ financing package to pay for its proposed Keliber lithium mine project in Finland.
While PGMs looked strong, the gold price posted new all-time price highs owing to an increase in the US consumer price index and an uptick in applications for unemployment benefits, according to a report by Bloomberg News.
Shares in Harmony Gold were 9.3% higher on Thursday valuing the company at R106.7bn and representing a gain of just over 43% year-to-date.
