Sibanye (SSW) is a mining house that has been aggressively expanding through acquisitions, accumulating platinum and gold mines in South Africa and America, and now diversifying into base metals and "green" minerals. The company is led by Neal Froneman, a well-respected figure in the mining industry known for his toughness, expertise, and experience. Froneman has stated his intention to retire around 2024/5 but aims to double the size of the company before stepping down. Sibanye is also considering expanding into base minerals used in motor vehicle batteries, such as vanadium, copper, nickel, and lithium.
On 1st June 2021, the company announced a share buy-back program to repurchase up to 5% of its issued shares. On 30th June 2022, Sibanye announced its intention to increase its stake in Keliber, a Finnish lithium producer, to 80% at a cost of about R7,7bn. More recently, on 9th November 2023, the company announced the acquisition of Reldan, a US-based metals recycler, for $211,5m.
The company is well-positioned under Froneman's leadership, and there is potential for it to reach new all-time highs due to strategic management. Froneman believes that Sibanye shares are undervalued, a sentiment that may hold merit, although the company's success is heavily dependent on metal prices. On 25th October 2023, the company initiated section 189 consultations for the retrenchment of 4095 employees, and on 6th November 2023, it secured a five-year wage agreement with AMCU at its Kroondal PGM operation, guaranteeing a minimum 6% per annum wage increase.
However, on 21st November 2023, Sibanye announced the issuance of a $500m convertible bond with a 4% to 4.5% yield until conversion in 2028. This announcement led to some shareholders selling their shares, resulting in a 20% drop in the share price.
For the year ending 31st December 2023, the company reported revenue down 18% and a significant loss of R37,4bn. Despite this, the CEO expressed confidence that the PGM price weakness seen in 2023 is temporary rather than a structural change, and there are signs of a better demand outlook. On 11th April 2024, the company began section 189 consultations for the retrenchment of 3107 employees and around 900 contractors at its gold mines. By 3rd July 2024, Business Day reported that Sibanye had retrenched 11,000 workers over 18 months.
In an update on the three months to 31st March 2024, Sibanye reported a 3% increase in 4E PGM production. The company noted that Sandouville nickel production increased by 42%, and the nickel equivalent sustaining cost was reduced by 36%. The Keliber lithium project is progressing on budget and on schedule, and the Reldan acquisition has been successfully integrated. However, in a trading statement for the six months to 30th June 2024, the company estimated that HEPS would fall dramatically to between 4.6c and 5c compared with 208c in the previous period.
Technically, the share has been in a downward trend since March 2022, primarily due to falling commodity prices. It would be prudent to wait for the share to break upward through its downward trendline before considering further investigation.
On 1st June 2021, the company announced a share buy-back program to repurchase up to 5% of its issued shares. On 30th June 2022, Sibanye announced its intention to increase its stake in Keliber, a Finnish lithium producer, to 80% at a cost of about R7,7bn. More recently, on 9th November 2023, the company announced the acquisition of Reldan, a US-based metals recycler, for $211,5m.
The company is well-positioned under Froneman's leadership, and there is potential for it to reach new all-time highs due to strategic management. Froneman believes that Sibanye shares are undervalued, a sentiment that may hold merit, although the company's success is heavily dependent on metal prices. On 25th October 2023, the company initiated section 189 consultations for the retrenchment of 4095 employees, and on 6th November 2023, it secured a five-year wage agreement with AMCU at its Kroondal PGM operation, guaranteeing a minimum 6% per annum wage increase.
However, on 21st November 2023, Sibanye announced the issuance of a $500m convertible bond with a 4% to 4.5% yield until conversion in 2028. This announcement led to some shareholders selling their shares, resulting in a 20% drop in the share price.
For the year ending 31st December 2023, the company reported revenue down 18% and a significant loss of R37,4bn. Despite this, the CEO expressed confidence that the PGM price weakness seen in 2023 is temporary rather than a structural change, and there are signs of a better demand outlook. On 11th April 2024, the company began section 189 consultations for the retrenchment of 3107 employees and around 900 contractors at its gold mines. By 3rd July 2024, Business Day reported that Sibanye had retrenched 11,000 workers over 18 months.
In an update on the three months to 31st March 2024, Sibanye reported a 3% increase in 4E PGM production. The company noted that Sandouville nickel production increased by 42%, and the nickel equivalent sustaining cost was reduced by 36%. The Keliber lithium project is progressing on budget and on schedule, and the Reldan acquisition has been successfully integrated. However, in a trading statement for the six months to 30th June 2024, the company estimated that HEPS would fall dramatically to between 4.6c and 5c compared with 208c in the previous period.
Technically, the share has been in a downward trend since March 2022, primarily due to falling commodity prices. It would be prudent to wait for the share to break upward through its downward trendline before considering further investigation.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.