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Moody’s upgrades Sibanye-Stillwater’s rating amid prolonged wage strike

MOODY’S noted that the rating action reflected the strong financial performance that the group had displayed over the past two years and its track record of maintaining capital allocation discipline. Picture: Timothy Bernard, ANA.

MOODY’S noted that the rating action reflected the strong financial performance that the group had displayed over the past two years and its track record of maintaining capital allocation discipline. Picture: Timothy Bernard, ANA.

Published May 3, 2022

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RATING agency Moody’s Investor Service has upgraded mining firm Sibanye-Stillwater’s rating due to the company’s disciplined capital allocation amid the continuing wage strike in its gold-producing plants.

Moody’s has upgraded the group’s corporate family rating (CFR) from Ba3 to Ba2 with a positive outlook.

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Sibanye said Moody’s had noted that the rating action reflected the strong financial performance that the group had displayed over the past two years and its track record of maintaining capital allocation discipline.

“The company has used its strong cash flows to balance between various strategic objectives, including strengthening its balance sheet and enhancing liquidity, investing in existing assets, and executing on its strategy to expand into battery metals, as well as rewarding shareholders through dividends and share buybacks,” Moody’s said.

Sibanye chief executive Neal Froneman said: “We are pleased that the market is starting to recognise our transition from a single commodity mining company in 2013 to a growing multinational mining and metals group, with a diverse portfolio of mining and processing operations, projects and investments across five continents.”

However, Sibanye is not the only mining firm which received an upgrade from a ratings company. Gold Fields also received an credit rating from S&P Global Ratings, which upgraded it from BBB- to BB+ as well as the debt ratings on the group’s senior unsecured notes.

Meanwhile, there seems to be no end in sight to the wage strike at Sibanye as National Union of Mineworkers (NUM) members rejected the latest offer from the mining company.

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Previously Sibanye offered workers a R700 increase in each year plus a R100 increase in the living-out allowance for each year.

On Friday, NUM called a meeting at Sibanye’s Driefontein and Kloof mines in Carletonville to deliver a new mandate and the workers rejected it.

NUM media officer Luphert Chilwane said the offer had since been increased to R800 for each year and a R50 increase in the living-out allowance.

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The Platinum Group Metals sector is also soon to start its wage negotiations season, and Chilwane said if there was no agreement reached with the workers regarding gold wages, there might be a secondary strike.

“Demands for the platinum sector wage demands are still coming in a few days. If the workers are not happy, the strike will intensify,” he said.

The other striking union, the Association of Mineworkers and Construction Union (Amcu), said it would meet with its members on Thursday to deliver the mandate and find a way forward.

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President Cyril Ramaphosa was booed off the stage as he was about to deliver the Workers’ Day speech on May 1 at a rally held at the Royal Bafokeng Stadium in Rustenburg.

Ramaphosa was unable to address the gathering because workers had grievances.

In a statement yesterday Ramaphosa said while the main grievance appeared to be about wage negotiations at nearby mines, the workers’ actions demonstrated a broader level of discontent.

“It reflects a weakening of trust in their union and federation as well as political leadership, including public institutions,” he said.

“The wage grievances of the workers in Rustenburg deserve the attention of all stakeholders, employers and labour so that a fair and sustainable settlement can be reached. As government, we are committed to play our part,” Ramaphosa said.

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