Sibanye-Stillwater issues “dire” outlook for SA precious metals if power curtailments persist

SIBANYE-Stillwater warned continued power curtailments in South Africa at the current rate will have “dire” consequences for the country in which marginal shafts will face early closure and Government’s ambitions in tackling Eskom performance will be hurt by lower  mining sector taxes and royalties.

Richard Stewart, COO of the miner’s South African operations, said it lost 48 kilograms of gold and 23,000 ounces of platinum group metals (PGMs) last year as a result of higher and longer power curtailments imposed by Eskom during the fourth quarter of 2022.

If power curtailments of this order are sustained this year “as much as as 15% of total production output in our operations and in the South African industry in general” will be affected, said Stewart. This is equal to 118,000 oz of the upper end of Sibanye-Stillwater’s gold production for this year and 270,000 oz of PGMs.

“As levels and duration of curtailments goes up the potential impact on production goes up exponentially,” said Stewart.  “This unfortunately has significant unintended consequences not just for industry but for the country,” said Stewart.

“Losing revenue on our shafts will impact Government’s ability to earn revenue from taxes and royalties. This is the exact revenue they require in order to address the challenges at Eskom,” he said. “Marginal shafts will become increasingly unprofitable and this may force early closure of these shafts which will excerabate an already dire situation in country.”

There would also be a direct impact on downsteam industry, including communities near mines and Sibanye-Stillwater’s suppliers. “Ultimately, we are looking at a spiral here which will become increasingly worse,” said Stewart.

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