(Bloomberg) -- Sibanye Stillwater Ltd. expects to post a first-half loss, as the depressed outlook for palladium prices triggered another impairment on its US mines.
The Johannesburg-listed company wrote down its US platinum-group metal operations by 7.5 billion rand ($420 million), it said in a statement on Monday. That follows an impairment of about $2 billion at the Montana project last year. Sibanye fell as much as 8.8%, the most since November.
South African platinum miners are under pressure as PGM prices decline amid destocking and a weakening demand outlook from the auto sector, where the metals are used in devices to curb emissions in gasoline and diesel vehicles. That’s forced companies, including Sibanye and Impala Platinum Holdings Ltd., to cut jobs as they try to lower costs.
The price of palladium — the main metal produced at Sibanye’s US operations — has slumped 43% since the start of last year. While there have been operational improvements since an expansion plan at the Stillwater mines was shelved in late-2023, more may be required.
“Further actions to address the cost structures at the US PGM operations are being assessed,” Sibanye said in the statement.
The company said it will likely report a loss of 2.51 to 2.77 rand per share for the first six months of 2024, compared with a profit of 2.62 rand a year earlier. Profit before some one-time items – known as headline earnings – declined as much as 98% year-on-year to 4.6 South African cents.
Sibanye has diversified away from its original dependence on aging South African gold mines – first acquiring PGM assets and later investing in metals key to the green-energy transition.
The company said its gold production likely fell by more than a fifth in the first half of the year after the firm closed an old shaft and seismic activity limited its access to high-grade material. That decrease came as the bullion price has hit successive records, rising more than 20% since the start of 2024.
Output from its South African platinum mines climbed slightly, according to the statement.
The company has been bolstering its financial position. Last month, Sibanye announced it had agreed €500 million of financing for a lithium project in Finland, concluded a 1.8 billion rand prepayment deal for gold production and upsized its rand revolving-credit facility to 6 billion rand.
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