Sibanye-Stillwater, a precious metals producer, said yesterday that 2022 was a challenging year due to load-curtailment, flooding which negatively impacted its production but also proved the group’s resilience.
In its 2022 integrated report released yesterday, the group said, despite industrial action and electrical load-curtailment at its South African operations and extreme weather-related regional flooding, which affected its US operations, it still delivered its third-highest annual adjusted earnings before interest, taxes, depreciation, and amortisation.
The JSE and New York-listed mining company, headed by co-chairmen Vincent Maphai and CEO Neal Froneman, said: “Our operating results for 2022 were strongly influenced by two significant events: industrial action and lockout at the SA gold operations; and extreme weather-related regional flooding which severely disrupted our US platinum group metals (PGM) operations during the second half of 2022.
“Elevated levels of load-curtailment and the increased intensity of criminal activity orchestrated by syndicates raised operational challenges in South Africa above the expected risk-level," the group said.
Sibanye said the three-month industrial action and lockout at its South African gold operations which ended in June, 2022 were regrettable with unreasonable wage demands.
“The long-term sustainability of these operations required us to secure an inflation-related wage agreement. With the phased production build-up from the SA gold operations completed by November, 2022; the closure of the Beatrix 4; and the Kloof 1 plant now complete, prospects are good for a more stable operating period in 2023 with improvements in production and operating costs,” the group said.
Its next gold wage negotiation was expected in July, 2024.
The industrial action at the SA gold operations laid the foundation for the SA PGM operations to secure a five-year inflation-linked wage agreement, without disruption for their Rustenburg and Marikana operations, Sibanye said.
“This underpins the prospects for operational continuity and stability over the extended term of the wage agreement. Production from the SA PGM operations remained relatively consistent, given the challenges.
“All-in sustaining cost (AISC) at just over R19 000 per 4E ounce was 14% higher than 2021 – mainly due to reduced volumes as a result of load shedding and copper cable- theft. This is a commendable achievement with South African mining inflation running at 18% in 2022,” it said.
Sibanye said the US PGM operations lost seven weeks of production in mid-2022 due to severe regional flooding in Montana.
“This reaffirmed our strategic consideration that global warming will make extreme weather events more likely. The experience affirms the importance of re-evaluating weather-related risks,” the group said.
Sibanye said in 2022, its PGM-recycling volumes were down to 60 0000 ounces from 755 000 ounces in 2021, in line with global PGM-recycling trends.
“The global economic downturn combined with continued pressure on automotive manufacturing volumes as a result of the extended chip shortage suppressed consumer demand for new vehicles.
“This was compounded by Russia’s invasion of Ukraine, which further disrupted global supply chains and negatively impacted economic growth. The net result is that fewer vehicles were being scrapped as older vehicles continue in service for longer,” it said.
Sibanye said during 2022 it generated R138 billion in revenue. This was down 20% year on year driven by lower volumes due to disruptions to operations and reduced commodity prices.
Looking ahead, the group said as was the norm for conducting business since 2020, it expected to encounter significant disruption and challenges.
“These include social unrest, industrial action, pandemics, extreme weather events, rapid change in technology and more,” it said.
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