Platinum mines set for job cuts as prices plunge, warns Sibanye CEO
SA’s biggest mining employer may be forced to close some unprofitable shafts, says Neal Froneman
05 October 2023 - 05:00
by Felix Njini
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Sibanye-Stillwater CEO Neal Froneman. Picture: WALDO SWIEGERS/BLOOMBERG
Sibanye-Stillwater, SA’s biggest mining employer, may be forced to close unprofitable shafts, says CEO Neal Froneman.
Job cuts in platinum mining have become inevitable as prices of the precious metals fall, he says. “Significant restructuring” is likely in the platinum sector of the world’s top supplier of the metal as miners try to stay profitable.
“We certainly can’t run unprofitable shafts, and I know that our cost structure is probably the lowest in the industry. So if we have loss-making shafts, of which we have a few, they will have to be closed and I say this with all the sensitivities on potential job losses.”
Sibanye and its SA peers, including Impala Platinum and Northam Platinum, are among producers operating some of the world’s deepest platinum mines.
The companies were making record profits when platinum sister metals rhodium hit almost $30,000 an ounce in 2021 and palladium soared to more than $3,400 an ounce after Russia invaded Ukraine last year.
But the price of platinum touched its lowest level in a year on Wednesday before recovering to $875.86 an ounce, while palladium hit its lowest level since November 2018 at $1,179.66 an ounce.
Closing some operations running at a loss may be necessary to remain profitable and preserve the majority of jobs, said Froneman. Sibanye, which has platinum mines in SA and Montana, US, employs about 85,000 workers.
While prices for platinum metals, used in catalysts that curb toxic vehicle emissions, may recover, that is not likely to save mines that were profitable only with record high prices, said Froneman.
“I think it is highly likely there will be some significant restructuring in platinum, across the entire industry,” he said.
Platinum miners need to adjust to a “lower for longer” price environment, and potential for a price rebound is shallow, said RMB Morgan Stanley analysts.
“We will do our best to get productivity up, but inevitably the country should prepare for significant restructuring in the metals sector,” said Froneman.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Platinum mines set for job cuts as prices plunge, warns Sibanye CEO
SA’s biggest mining employer may be forced to close some unprofitable shafts, says Neal Froneman
Sibanye-Stillwater, SA’s biggest mining employer, may be forced to close unprofitable shafts, says CEO Neal Froneman.
Job cuts in platinum mining have become inevitable as prices of the precious metals fall, he says. “Significant restructuring” is likely in the platinum sector of the world’s top supplier of the metal as miners try to stay profitable.
“We certainly can’t run unprofitable shafts, and I know that our cost structure is probably the lowest in the industry. So if we have loss-making shafts, of which we have a few, they will have to be closed and I say this with all the sensitivities on potential job losses.”
Sibanye and its SA peers, including Impala Platinum and Northam Platinum, are among producers operating some of the world’s deepest platinum mines.
The companies were making record profits when platinum sister metals rhodium hit almost $30,000 an ounce in 2021 and palladium soared to more than $3,400 an ounce after Russia invaded Ukraine last year.
But the price of platinum touched its lowest level in a year on Wednesday before recovering to $875.86 an ounce, while palladium hit its lowest level since November 2018 at $1,179.66 an ounce.
Closing some operations running at a loss may be necessary to remain profitable and preserve the majority of jobs, said Froneman. Sibanye, which has platinum mines in SA and Montana, US, employs about 85,000 workers.
While prices for platinum metals, used in catalysts that curb toxic vehicle emissions, may recover, that is not likely to save mines that were profitable only with record high prices, said Froneman.
“I think it is highly likely there will be some significant restructuring in platinum, across the entire industry,” he said.
Platinum miners need to adjust to a “lower for longer” price environment, and potential for a price rebound is shallow, said RMB Morgan Stanley analysts.
“We will do our best to get productivity up, but inevitably the country should prepare for significant restructuring in the metals sector,” said Froneman.
Reuters
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