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Sibanye-Stillwater profit soars, targets push for greener tech in future output

As metals prices climb.
Image: Waldo Swiegers/Bloomberg

South African miner Sibanye-Stillwater said on Thursday higher metals prices and stronger than forecast output had lifted 2020 earnings and cut debt, and that it would focus on serving the push for green technologies with future output.

The miner, which has previously said it was interested in expanding into battery metals, said it aimed to make one or two small- to medium-sized acquisitions in those materials – which typically include nickel, cobalt, and lithium – by year-end.

“They are going to be medium to small, perhaps with some early stage entries,” said Sibanye-Stillwater Chief Executive Neal Froneman, adding it would not be interested in greenfield projects.

“The global focus has shifted to prioritising a cleaner and greener future. Sibanye-Stillwater is particularly well placed in pursuing its growth strategy and producing the essential metals that the world requires,” he said.

High prices for metals extracted by Sibanye, including platinum, palladium and rhodium, boosted profits last year and helped the firm weather the impact of the Covid-19 pandemic.

The precious metals producer said headline earnings per share for 2020 soared to 1,068 cents ($0.73), compared with a headline loss of 40 cents a year earlier.

Revenue increased by 75% year-on-year to R127 billion ($8.65 billion).

Sibanye said the average basket price of four of the platinum group metals (PGM) it mines rose 83% and the average rand gold price increased by 43%.

A weak local currency, which reduces local costs, further boosted earnings.

Sibanye, which reinstated its dividend in 2020 for the first time since 2017, declared a full-year payout of 321 cents per share, bringing the total dividend for the year to 371 cents per share.

Pursuing growth

Sibanye said it had cut its debt pile by R5.354 billion last year, and was now at a net cash position of R3.1 billion. It said it was positioned for a stronger financial performance in 2021 due to strong commodities and higher output.

Its board on Tuesday approved capital investment of around R6.8 billion for the development of two South African PGM projects, K4 and Klipfontein, and the Burnstone gold project in the Free State province.

Output in 2020 from its South African PGM operations dipped 2% to 1.577 million ounces but exceeded annual guidance, while production at its US PGM operations ticked up 2% for the year to 603,067 ounces, missing its guidance due to a spike in Covid-19 infections, the company said.

Group gold production rose to 982,559 ounces from 932,659 ounces a year earlier, with output at its own mines exceeding its guidance.

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