Sibanye-Stillwater rethinks mine closure following R550mn saving
It’s good news for Sibanye, as the company announced that it will no longer follow through on its plans to close a number of its mining operations.
In a report looking into the company’s current operations, Sibanye-Stillwater had issues a notice that close to 200,000oz-300,000oz 4E PGM production per annum could be at risk, due to some conventional shafts in its Rustenburg area continue to remain unprofitable.
At the time, Sibanye had informed that it would be making a final decision post September 2017.
“Sibanye-Stillwater is now pleased to advise that as a result of the realisation of substantial synergies, post the successful integration of Rustenburg and Aquarius into the larger Sibanye-Stillwater group, the closure of these conventional business units has been averted,” the announcement said.
In an earlier report, the company had revealed that it had already achieved benefits of around R550 mn of the initially identified R800 mn of annual synergies. By the end of 2017, it is believed that total annualised benefits could be close to R1bn.
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This is in effect, significantly earlier than the three-year period that Sibanye-Stillwater had earmarked and guided to, to realise these benefits.
Group CEO, Neal Froneman commented: “I am very pleased with the outcome of the review, which has been driven by the results of the efforts of our colleagues in the Rustenburg region. While we anticipate further opportunities to reduce costs and unlock operational synergies over time, the SA PGM operations are now well positioned to benefit from firmer PGM prices. I would also like to note the role that the Competition Commission played in ensuring this outcome, by approving upfront, the initial and very necessary restructuring of the operations, effectively saving many thousands of jobs.”