JOHANNESBURG (miningweekly.com) – Precious and future-facing metals mining company Sibanye-Stillwater on Wednesday advised of an upcoming half-year earnings decline in a trading statement and operations update for the six months to June 30.

A decline of 47% to 52% is expected in earnings a share and headline earnings a share for the period compared with the comparative period in 2021.

The decline is put down to a second-quarter reduction in gold production from the South African gold operations owing to the industrial action that began on March 9 and was resolved on June 13.

An additional cause was the suspension of processing activities in December to allow for the reinforcement of the Beatrix tailings storage facility (TSF), which resulted in no first-quarter ore being processed or sold from the Beatrix operations.

Second-quarter production from the US platinum group metal (PGM) operations was also impacted by the severe regional flooding in Montana on June 12 and 13, with the Stillwater operations being suspended for a seven-week period.

Relative precious metals prices were also lower with the average first-half rand four-element (4E) PGMs basket price down 19% and the average US dollar 2E PGMs basket price 15% lower.

This decline in average commodity prices also resulted in the group recording a 45% decline in the results of equity-accounted investees after tax. These negative financial impacts were partially offset by lower royalties and mining and income taxes, the Johannesburg and New York-listed company, headed by CEO Neal Froneman, stated in a release to Mining Weekly.

OPERATING UPDATE

Sibanye-Stillwater’s half-year operating update reported lower 4E PGMs production from the South African PGM operations, including lower purchase of concentrate.

A 9% decrease in underground 4E PGMs production to 751 717 4Eoz was partly offset by a 6% increase in surface production of 72 089 4Eoz, with third-party purchase of concentrate treated at the Marikana smelting and refining operations of 25 346 4Eoz, 27% lower owing to the winding down of two third-party purchase of concentrate contracts.

Mined 2E PGMs production from the US PGM operations of 230 039 2Eoz was 23% lower year-on-year owing mainly to the temporary cessation of operations at the Stillwater mine following the regional flooding, as well as mining flexibility and labour constraints which continued to impact productivity at both operations. The Stillwater mine’s 2E PGMs production was 15 000 2Eoz lower, with a total 60 000 2Eoz of planned production impacted during the seven-week operational suspension.

First-half recycling ounces fed decreased by 10% to 361 333 3Eoz year-on-year mainly owing to ongoing logistical constraints globally and adjustments to the blend ratio of high-grade recycle feed following the reduction in volumes of mined concentrate post the flood event.

Production from the South African managed gold operations, excluding DRDGOLD, decreased by 77%.

Maintenance work on the Beatrix TSF was completed at the end of May.

Concluded was the first-quarter acquisition of the Sandouville nickel refinery in Le Havre, which produced 3 499 t of nickel metal, 1 066 t of nickel salts and 113 t of cobalt chloride since the acquisition.

Sibanye-Stillwater is a multinational mining and metals group with a diverse portfolio of mining and processing operations and projects and investments across five continents. The group is also a PGM autocatalytic recycler and has interests in mine tailings retreatment operations.

The company will release its half-year results on August 25.