Sibanye-Stillwater CEO Neal Froneman is facing tough decisions as palladium prices continue to plummet, putting the future of the company’s Stillwater mine in the US in jeopardy. Froneman made it clear at the London Indaba conference that if prices do not improve, the mine may have to be put on care and maintenance.
The Stillwater mine, known for producing palladium and platinum, has already undergone restructuring, with job cuts and production target adjustments in the past year. Despite the challenges, Froneman has been hesitant to shut down the mine, emphasizing its strategic importance in the market.
The palladium price has seen a significant drop of nearly 30% in the last year, currently trading at $995/oz. However, Froneman remains optimistic about the longer-term prospects for PGM prices, predicting a potential increase in the basket price of the metals.
Sibanye-Stillwater recently reported a significant earnings loss for its 2023 financial year, further adding to the pressure on the company. To alleviate some of the financial strain, the group reached an agreement with lenders to relax debt covenants.
Despite the challenges, Sibanye-Stillwater is working towards generating additional cash through prepayment on by-product metal sales before the upcoming half-year results announcement. With uncertainties in the market and the need for price corrections, Froneman and the company are navigating through a complex landscape in the PGM industry.
