Sibanye says strike has limited impact


Sibanye says strike has limited impact

Published Date: 2019-01-11 | Source: Stephen Gunnion | Author: Stephen Gunnion

Sibanye says strike has limited impact

Gold production for 2018 is likely to be slightly lower than forecast but PGM output and palladium prices are buoyant.

Sibanye-Stillwater says a strike by the Association of Mineworkers and Construction Union (AMCU) at its SA gold operations has had a limited effect thanks to the contingency measures it put in place.

In a strategic update, the gold and platinum producer said it optimised production at its SA gold mines to mitigate against the effects of the no-work-no-pay strike, which has been ongoing since 21 November. Employees reporting for duty have been deployed to specific production areas, while overhead costs have been lowered by shutting down services to areas which are not operational. It said due to the successful implementation of its strike plans, gold production for 2018 is expected to be about 34,600kg, slightly below previous guidance of 35,000kg and 36,000kg for the year.

In the meantime, platinum group metals (PGMs) are playing an increasingly important role in Sibanye-Stillwater's portfolio. Almost three-quarters of first-half adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) were derived from its PGM operations, rising to 85% in the third quarter of the year. In the third quarter of 2017, PGMs contributed just under half of group adjusted EBITDA. The increase has been aided by a more than 75% improvement in the palladium price to over $1,300 per ounce since it announced the acquisition of US PGM producer Stillwater just over two years ago.

The group said higher basket prices and increased production were expected to boost revenue for its US PGM operations. In SA, its PGM operations also continued to perform well, with 2018 production expected to be ahead of guidance and costs coming in at the lower end of earlier forecasts.

Following the Competition Tribunal's approval of its acquisition of Lonmin, Sibanye-Stillwater said it was awaiting a final hearing date from the Competition Appeal Court after AMCU filed an appeal against the Tribunal's decision.

Its share closed 3% higher at R10.97 yesterday.

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