Precious metals producer Sibanye-Stillwater (NYSE: SBSW; JSE: SSW) said a planned restructuring could see it shut down four loss-making platinum group metal (PGM) mines in South Africa, resulting in the loss of 4,095 jobs.
The announcement comes barely six weeks after the company kicked off a similar process at one of its South African gold operations, the Kloof 4 shaft.
It means that Sibanye-Stillwater could eventually lay off more than 7,000 staff members and contractors in a country with one of the highest unemployment rates in the world.
The company said two of the shafts are mature, with one having stopped production in late 2022 and the other being at the end of its operating life, due to the depletion of available economic ore reserves. It said the other two shafts would be restructured to achieve viability.
Sibanye-Stillwater, which is starting talks with relevant labour unions, said the potential cuts come amid weak platinum-group metals prices and above-inflation cost increases for electricity, water, wages and fuel.
“While prices for platinum metals, which are used in catalysts that curb toxic vehicle emissions, may recover, that’s unlikely to save mines that were only profitable during record high prices,” the company’s CEO, Neal Froneman, said in early October.
Industry actors and analysts alike say the de-stocking of metal inventories that built up in the early days of Russia’s invasion of Ukraine could be contributing to depressed prices.
The biggest hit, according to Anglo American Platinum’s CEO, Craig Miller, is coming from China’s lower-than-expected economic growth.
The Anglo American unit, the world’s biggest platinum miner by value, said producers need to start aligning the business for the possibility that prices of platinum-group metals would not rise for some time.
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