JOHANNESBURG - Listed South African precious metals producer Sibanye-Stillwater surprisingly swung back to profitability in the six months ended June, buoyed by the performance of its platinum operations which offset a poor showing from its gold business.
The miner said yesterday that it was not disheartened by the performance of its mining businesses and expected the gold business to perform in the first quarter of next year.
“Our strategy to move into platinum has yielded results. But we are still going to grow our gold business. We do have some challenges in our gold business, which will be addressed. Beatrix and Kloof (mines) are working well, but Driefontein has let us down,” said Neal Froneman, chief executive of Sibanye-Stillwater.
The dual-listed group reported 26percent higher earnings before interest, taxes, depreciation and amortisation of R3.9billion in the first half of the year. It said gold production from its South African gold operations was 13percent lower year-on-year, declining from 688600 ounces (oz) in the first six months of last year to 598500oz in the period under review.
Gold production in South Africa has taken a battering since the start of the year as policy uncertainty and escalating costs weighed on the industry.
Statistics South Africa this month said output in gold tanked 19.2percent in June, worse than the 14.1percent fall in the prior month.
Sibanye saw a lot of fatalities and operational disruptions in its gold mining operations in the six months under review.
Its Beatrix mine experienced a power outage in February due to severe storm damage to Eskom power lines supplying the mine, while it recorded fatal incidents at the West Wits gold operations and seismic damage to infrastructure providing access to sections of the Driefontein Masakhane and Kloof Hlanganani shafts.
“The decisive response to these incidents and the relatively solid operating and financial outcomes for the six months ended June are pleasing to note,” Froneman said.
The group is set to further bolster its platinum operations with the £285million (R5.26bn) acquisition of long-suffering Lonmin.