The South African miner, Sibanye, has announced a $2.58 billion write-down only two months after revealing plans to lay off 1,500 workers from its gold mines. The company is also in discussions that may impact 4,000 more employees at its platinum group metals (PGMs) operations, including those in the United States.
Commenting on the situation, the company stated, “We have already taken proactive steps to address loss-making production at unprofitable operations. The group remains focused on ensuring the sustainability of our business and delivering on our strategic essentials through this period of low commodity prices.”
Following the announcement, Sibanye shares plunged over 5% in afternoon trading in Johannesburg, ultimately closing at ZAC 1,994. Over the past year, the stock has plummeted by nearly 48%, primarily due to the sharp decline in palladium and rhodium prices.
The steep drop in PGMs prices has prompted producers to implement severe cost-cutting measures. For instance, Anglo American Platinum recently declared its intention to slash 3,700 jobs at its South African operations, which amounts to 17% of the Anglo American unit’s workforce. Meanwhile, Impala Platinum Holdings has offered voluntary job cuts, including at its deep-level Rustenburg complex.
Despite the formidable challenges, Sibanye highlighted that all its South African and Australian operations were profitable before the end of the fourth quarter of 2023.
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