Sibanye-Stillwater Halts PGMs Production at Rustenburg Shaft

Precious metals producer Sibanye-Stillwater (NYSE:SBSW) announced on Wednesday (March 20) that it has halted production at the Siphumelele shaft at its South Africa-based Rustenburg mine after an incident last month.

According to the company, a February 29 accident damaged critical surface infrastructure at the site.

An ore collector bin attached to the shaft headgear collapsed, causing damage to the surface ore conveyor belt system. While no injuries were reported, production has been suspended and Sibanye is investigating what caused the issue.

Siphumelele was expected to contribute approximately 4,500 4E ounces per month, or 54,000 4E ounces for 2024, accounting for about 3.5 percent of Sibanye's annual output from South African platinum-group metals (PGMs) mines.

Rustenburg, located on the western limb of the Bushveld Complex, is made up of three intermediate-depth vertical shafts. The mine has a rich history dating back to the 1920s, and has been under various ownerships since then, with Sibanye acquiring the asset from Anglo American Platinum (OTC Pink:AGPPF,JSE:AMS) in 2016.

The mine's production halt comes on the back of a significant 2023 platinum deficit of 878,000 ounces. South Africa, the leading platinum producer, has faced challenges due to electricity issues that have impacted companies' output.

Looking forward to 2024, the World Platinum Investment Council is forecasting another large platinum deficit in 2024, with a variety of themes in the market expected to persist in the months ahead.

Notably, total platinum supply decreased by 2 percent in 2023 and is forecast to decrease by another 1 percent in 2024, leaving 2024 supply 6 percent below the average annual supply over the previous five years.

Despite the ongoing deficit, platinum prices remain rangebound, and miners are feeling the effects. According to a Reuters article published in early February, South Africa's PGMs sector could see 4,000 to 7,000 job cuts.

At the time, a minerals organization in the country said the nation's PGMs sector, which is responsible for around 70 percent of global mined platinum output, is facing heightened uncertainty as the world shifts towards electric vehicles (EVs). Because PGMs are used to curb emissions, the transition to EVs is raising questions about future demand.

Against that backdrop, Sibanye also said on Wednesday that it will be appointing Greg Cochran as executive vice president head of uranium, potentially signaling a strategic move to capitalize on emerging opportunities in the sector.

With solid fundamentals underpinning the uranium market, Sibanye is looking to leverage its existing resources.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.