Strong platinum leadership needed – Sibanye
JOHANNESBURG (miningweekly.com) – Strong leadership is required in the fragmented South African platinum mining sector, which newcomer Sibanye Gold described on Friday as having too much unprofitable production and questionable capital allocation.
Speaking at the 2016 Oxford Platinum Lectures, CEO Neal Froneman told his UK audience that platinum was a logical extension to Sibanye’s success in gold, where it was a leading dividend payer that acknowledged modern mining’s duty to cause zero harm to both people and planet.
After outlining Sibanye’s top ten global position in gold, he flashed up a graphic to show its imminent top five global position in platinum with the acquisition of the synergistic Rustenburg and Aquarius platinum operations.
Pointing out how the company’s strategy of “winning hearts and minds” had resulted in three years of relative labour peace in gold, the company was seeking to migrate that positive result to platinum, where there had been excessive worker unrest and significant community unhappiness.
The “bitter medicine” required to cure this, as well as unprofitable production, was the closure of lossmaking and break-even production, better capital allocation, rigid cost control and a gold-mimicking consolidation of ownership that had seen the 69 listed gold companies of 1990 become only six today.
Sibanye would be mining platinum orebodies that strongly resembled gold’s tabular hard-rock orebodies, and would mine them using gold’s labour-intensive methods, but would ensure that free cash flow was generated and take advantage of platinum’s robust long-term demand fundamentals.
The acquisition of Rustenburg Platinum mine for R1.5-billion in cash or shares and Aquarium for $0.195 a share had given Sibanye a low-cost entry into platinum, which was providing management with significant flexibility.
Operating synergies were expected to provide a R800-million yearly bonsella for a company that had committed itself to disciplined production and capital allocation.
Comments
The
functionality
you are trying to access is only available to subscribers.
If you are already a subscriber, you can Login Here.
If you are not a subscriber, you can subscribe now, by selecting one of the below options.
For more information or assistance, please contact us at subscriptions@creamermedia.co.za.
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation