Battery and precious metals producer Sibanye-Stillwater has maintained its full-year production guidance for its South African platinum group metals (PGMs) operations at between 1.75-million and 1.8-million ounces of platinum, palladium, rhodium and gold (4E), despite third-quarter production having decreased by 14% year-on-year.

The miner on November 3 reported that its South African PGM operations had been negatively impacted on in the third quarter, ended September 30, by unprecedented power curtailment imposed by power utility Eskom, as well as increased copper cable theft.

In addition, reduced output had been planned at the Siphumelele shaft owing to increased levels of seismicity.

The South African PGM operations produced 432 143 oz of 4E in the third quarter, which was 14% lower year-on-year.

"Severe loadshedding imposed by Eskom during September necessitated the curtailment of concentrator capacity across the South African PGM operations, impacting processed output and sales for the quarter," CEO Neal Froneman noted in a production update to shareholders.

Output was, however, 5% higher compared with the second quarter of this year.

"Pleasingly, mining has safely progressed through the challenging ground conditions associated with the Hex River Fault at the Bathopele mine, which has negatively impacted production during the second and third quarters and is expected to normalise by the end of the fourth quarter," Froneman said.

All-in sustaining costs (AISC) for the South African PGM operations increased by 20% year-on-year to $1 127/oz of 4E, as a result of lower production, lower by-product credits and inflationary cost pressures.

The full-year AISC guidance for the South African PGM operations remains at $1 233/oz.

Capital expenditure (capex) for the full-year is expected to reach R4.80-billion, which includes R950-million for the K4 project at Sibanye's Marikana operation.

Sibanye said the K4 project remained on schedule, with first ore hoisted in the first half of this year and the first production of 914 oz of 4E achieved in the third quarter.

For the third quarter, capex increased by 33% year-on-year to R1.26-billion. That included project capex of R208-million, which was 271% higher year-on-year, and attributable to the K4 project.

GOLD OPERATIONS
Throughout the third quarter, Sibanye's South African gold operations were building up to normalised levels of production following the industrial action from March 9 to June 13.

Sibanye noted that normalised production rates were achieved in October.

However, as a result of the build-up to normalised production, the gold operations (excluding DRDGold) produced 157 957 oz in the third quarter – a 36% year-on-year decrease.

AISC increased by 64% year-on-year to $2 460/oz.

Capex for the quarter increased by 10% year-on-year to R1.19-billion, mainly as a result of a four-fold increase in project capex to R420-million.

About R315-million was spent on the Burnstone project and R105-million on the Kloof shaft deepening project.

Capex for the full-year is expected to reach R3.90-billion, including R1.1-billion for the Burnstone project and R270-million on the Kloof 4 shaft deepening project.

The full-year gold production guidance has been maintained at between 450 000 oz and 466 000 oz and AISC at between $2 880/oz and $3 060/oz.

US PGM OPERATIONS
Mined platinum and palladium (2E) production from Sibanye's US PGM operations decreased by 40% year-on-year to 85 889 oz, mainly as a result of the suspension of production at the Stillwater East and Stillwater West mines following regional flooding in Montana in mid-June.

The Stillwater mines resumed production in a phased manner from the end of July, with production having normalised in October.

The lower production, combined with inflationary cost pressures, resulted in an 88% year-on-year increase in AISC to $1 815/oz.

Sibanye in August lowered its full-year guidance for the US PGM operations to between 445 000 oz and 460 000 oz of 2E, at an AISC of between $2 380/oz and $1 425/oz.

Owing to disruptions experienced during the third quarter and ongoing issues with employee attrition and skills availability, Sibanye expects full-year production to be at the lower end of that guidance.

Full-year capex for the US PGM operations is estimated at between $275-million and $285-million.

NICKEL & LITHIUM
Throughout the third quarter, Sibanye proceeded with the integration of the Sandouville nickel refinery, in France, into the group.

"Sandouville faced various operational and logistics issues during the quarter, including solvent supply constraints and engineering failures in July which temporarily took 40% of capacity offline," Sibanye noted.

In addition, a four-week technical shutdown started in September, with operations having restarted in mid-October.

The refinery produced 1 003 t of nickel, 650 t of nickel salts and 37 t of cobalt chloride during the quarter.

Sibanye is working to debottleneck the plant and to increase nameplate capacity to 12 000 t of nickel, 4 000 t of salts and 600 t of cobalt chloride by 2026.

Meanwhile, Sibanye had increased its shareholding in Finnish minerals group Keliber to 84.96%.

Sibanye intends to launch a capital raise to achieve Keliber's desired debt-to-equity ratio.