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Measures to address loss-making assets expected to secure R6.6bn yearly, Sibanye AGM hears

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Measures to address loss-making assets expected to secure R6.6bn yearly, Sibanye AGM hears

Dr Vincent Maphai (left) and Neal Froneman.
Dr Vincent Maphai (left) and Neal Froneman.

28th May 2024

By: Martin Creamer
Creamer Media Editor

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JOHANNESBURG (miningweekly.com) – The measures that green metals and gold mining company Sibanye- Stillwater has taken to address loss-making assets are expected to secure yearly savings and capital expenditure deferrals of R6.6-billion, chairperson Dr Vincent Maphai told the online AGM of the platinum group metals major on Tuesday.

The focus of the Johannesburg- and New York-listed Sibanye-Stillwater is on strategic essentials, which Maphai highlighted as being a reduction of operating and capital costs as well as the improvement of efficiencies.

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While the company is prepared for an extended period of low prices, it remains constructive about the outlook for metals it produces.

Low prices notwithstanding, this employer of 82 000-plus people reported a 2023 net debt to earnings ratio of 0.58 x at year-end 2023.

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“We’ll complement our extra existing business and deliver tangible value to our stakeholders,” Maphai added.

During question time, Sibanye-Stillwater was asked to give an update on pending retrenchments and whether these would be carried out in a sustainable and responsible manner. The questioner also requested to be advised how retrenched workers would be rehabilitated to alleviate the impact of job loss in South Africa’s tough unemployment environment.

In response, Sibanye-Stillwater CEO Neal Froneman said that at a time of some of mine shafts coming to the end of their lives, the company has had to move very quickly to ensure the sustainability of the overall business.

“That’s the nature of mining where you’re depleting a resource and some of those shafts should have closed pre-Covid.

“We are fortunate in that we have been able to keep them open for longer than what was originally anticipated. However, having said that, it's always tragic and it’s a very sensitive issue when you have to restructure your business.

“Unfortunately, we are price takers. We can't control the price of the metals and we’re dependent on the revenues and the only real lever we have to pull is costs,” said Froneman in pointing out that 60% to 70% of the company's costs are people-related.

“The last lot of restructuring that we're doing is at middle and senior management levels, where we’re dealing with adjusting the overheads of the company to be commensurate with the underlying production base. That is also a very sensitive retrenchment process.

“These are all conducted completely in line with the Labour Relations Act and the Section 189 process. We do our best to avoid retrenchments. We look at voluntary retrenchments, we look at retirements, we look at transfers, and, in fact, when you see us close out our 189 processes, there are actually very few people that are forcibly retrenched.

“The 189 process is actually a process that is designed to ameliorate job losses. Those people that do lose their jobs, we look to re-employ when things improve. We ensure they are trained and of course, they get appropriate benefits through that process,” Froneman spelt out during the AGM covered by Mining Weekly.

Questioned further on the implications of retrenchment for employees whose working contracts were tied to the mine houses in which they lived, Froneman said this was an issue to which the company would have to apply its mind.

SELF-GENERATION OF ENERGY

In South Africa, relatively little consequence resulted from 2023’s low energy availability factor of 55%, owing to solid energy curtailment management by the regional team.

Moreover, from 2025/26, the generation of renewable energy by Sibanye-Stillwater itself will provide close to a third of energy requirements. This will alleviate load curtailment pressures, assist the national effort to end loadshedding, lower costs and reduce the company’s carbon footprint.

In working with the authorities, meaningful inroads had been achieved in reducing illegal mining and copper cable theft risk.

“We value our constructive relationship with mine communities, governments, regulators, and stakeholders,” said Maphai, with outgoing social, ethics and sustainability chairperson Jerry Vilakazi outlining the extent to which Sibanye-Stillwater embeds environmental, social and governance (ESG) in all the regions in which it operates.

“There are no instances of reportable or material ESG-related fines to disclose,” Vilakazi added.

Sibanye-Stillwater is one of the world’s largest primary producers of platinum, palladium, and rhodium, besides being a gold producer.

It refines iridium and ruthenium, nickel, chrome, copper and cobalt and has begun to diversify its asset portfolio into battery metals and increase its presence in the circular economy by growing its recycling and tailings reprocessing exposure globally.

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