Sibanye Stillwater (NYSE:SBSW) announced today that it expects to report a first-half loss due to the ongoing decline in palladium prices, which has led to another significant impairment of its US-based platinum-group metal operations.
In a statement released on Monday, Sibanye disclosed a write-down of 7.5 billion rand ($420 million) on its US operations, following a previous impairment of approximately $2 billion at its Montana project last year.
As a result, Sibanye's share price dropped by as much as 8.8%, marking the steepest decline since November.
The broader South African platinum mining sector is facing challenges as platinum-group metal (PGM) prices continue to fall.
This decline is driven by destocking and a weakening demand outlook from the automotive sector, where PGMs are essential for emission control in gasoline and diesel vehicles. In response, companies like Sibanye and Impala Platinum Holdings have been forced to cut jobs to reduce costs.
Palladium, the primary metal produced at Sibanye's US operations, has seen a 43% decrease in price since the beginning of 2023.
Although there have been operational improvements since the shelving of an expansion plan at the Stillwater mines in late 2023, further measures may be necessary.
For the first six months of 2024, Sibanye anticipates a loss of 2.51 to 2.77 rand per share, a sharp contrast to the profit of 2.62 rand per share recorded in the same period last year.