Sibanye Stillwater costs up 9% y/y

Mining group Sibanye Stillwater has reported a significant drop in profit for the first six months of the year, ending June 30th. The company saw a 37% decline to R7.8 billion, attributing the decrease to slowing global growth impacting commodity prices, with the exception of gold, and facing challenges in PGM production after an incident at its Stillwater West mine. James Wellsted, the EVP for Investor Relations & Corporate Affairs at Sibanye Stillwater, shed light on the operational environment and the hurdles faced during this period. The impact of global economic conditions, particularly a slowdown in growth and low demand for commodities, has been a key driver behind the decline in profits. Gold, serving as a safe-haven asset in times of uncertainty, has outperformed other commodities but PGMs have taken a hit due to reduced industrial demand. The PGM prices saw a substantial fall due to destocking and suppressed demand, leading to a strain on earnings. Regional challenges, including extreme weather events and operational mishaps like the shaft incident in the US, have further added to the company's difficulties. Looking ahead, Wellsted discussed the growth prospects amidst the current price environment and challenges. While there are signs of recovery in auto production and sales, the company anticipates a tough period ahead, necessitating a review of their portfolio and tough decisions to endure the effects of low prices. The strategic approach involves investments in green metals with recent acquisitions in lithium, nickel, and zinc projects. The focus is on developing these projects to cater to the increasing demand in the market, especially in the battery electric vehicle sector. Sibanye Stillwater is also eyeing opportunities in copper mining in Zambia, aligning with the future trend of electrification and clean energy transition. In addition to acquisitions, restructuring operations at underperforming sites is on the agenda to address losses effectively. The company is poised to navigate through the challenging market conditions and position itself for long-term sustainability and growth.