Sibanye-Stillwater CEO Richard Stewart has laid out a fresh capital allocation framework aimed at cutting costs and slashing debt over the next few years as precious metal prices bolster the miner’s balance sheet. Stewart, in his first major presentation since taking the helm from Neal Froneman in November, told shareholders on Thursday that his “back to basics” strategy will target paying off debt and investing in the existing portfolio rather than inorganic growth. The new framework marks a shift from Sibanye’s strategy under Froneman whose serial dealmaking grew the group from a local gold player into a platinum group metals (PGMs) heavyweight with a presence in the battery metals market.
Fronemanwas at the helm when the company was founded in 2013 through the unbundling of Gold Fields’ South African mines and steered the group into the PGM sector through its purchase of Stillwater Mining Company in the US in 2017. But this acquisition-hungry approach has also left the group with two assets of uncertain future ― the cash-sapping French Sandouville refinery, which has bled cash since its acquisition in 2022, and the Finnish Keliber lithium project. Instead of targeting acquisitions, Stewart’s strategy aims to allocate the funds to organic growth opportunities with low capital requirements.
He told investors the group aims to achieve R3bn in yearly cost savings by 2027 and a 50% reduction in net debt over the next two years. In platinum, investment opportunities include drilling deeper into its Rustenburg mines in Kroondal and Marikana to expand output over the next decade. Ingold, the group plans to maximise production at Driefontein in Gauteng and make a final investment decision about its Mpumalanga Burnstone mine in the second half of the year.
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It would add 120,000oz to the miner’s annual output over two decades. The update comes after the group announced earlier this month that it will embark on a phased implementation approach for itsFinnish lithium projectafter costs surged 17% to €783m due to regulatory changes and expanded project scope. The decision will also maintain project financing flexibility by enabling “capital expenditures and refining ramp-up costs to be deferred, based on lithium prices” and other market factors and conditions, Sibanye said earlier this month. The mine and refinery in Finland are expected to help Europe reduce its reliance on China for the vital battery metal for electric vehicles (EVs).
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