Sibanye posts record quarterly EBITDA due to improved PGM and gold pricing

Author Name
Respect Gwenzi
Analysis 2 weeks ago

Harare – South African miner, Sibanye Stillwater with a 50% holding in Zimbabwe based Mimosa gold mine has posted record quarterly Earnings Before Interest, Taxes, Depreciation and Amortization (EBIDTA) of US$922.1 million representing a 144% increase from the US$377.4 million posted in the comparative period in 2019.

The record earnings are as a result of improved production and improved pricing of Platinum Group Metals (PGM) and gold in the both the United States and Southern African operations and markets in which the miner operates.

In the United States operations 2E PGM production volumes improved slightly from 4583kgs in the third quarter in 2019 to 4598kgs in the quarter under review due to the effects of COVID 19. The average basket price however rose by 37% from US$1388 in Q3 2019 to US$1898 in Q3 2020 shooting up US EBITDA by 34% from US$123.4 million to US$190.8 million.

Meanwhile in the Southern African operations, 4E PGM production volumes fell from 16 131kgs in the comparative period in 2019 to 13 303kgs in the quarter under review, the average basket price however in the market shot up from US$1385 to US$2179, 81% than in the comparative period, which propelled EBITDA to US$549.2 million from US$199.7 million.

The reduced volumes in Southern Africa were due to reduced production at the Rustenburg operations which was 14% lower than for Q3 2019, reduced production at the Kroondal operation which was 21% lower for Q3 2020 than for Q3 2019 and also at the miner’s Marikana operation which was 26% lower than for Q3 2019 all due to the effects of COVID 19.

Mimosa in Zimbabwe however was largely unaffected by COVID-19 and continued to perform steadily, producing of 31,572 4Eoz, 23% higher than for Q3 2019.

Gold volumes rose slightly from 8937kgs in Q3 2019 to 8987kgs in Q3 2020 with the price for an ounce however going up US$1845 from US$1451 in Q3 2019 driving up EBITDA from gold operations to US$190.3 million in the period under review from US$57.4 million in the comparative period.

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