JOHANNESBURG (Reuters) – South African miner Sibanye-Stillwater reported record annual profit on Thursday as commodity prices surged, while costs ballooned at its U.S. operations in a sign of the broad inflation squeeze facing the industry.
Profit rose by 13% in 2021 to 33.1 billion rand ($2.16 billion) from 29.3 billion rand in the previous year, in what Chief Executive Officer Neal Froneman said was a record.
Production at Sibanye’s South African PGM operations jumped to 1.9 million ounces, while all-in sustaining costs – a measure of the cost of mining – fell by 5%.
Sibanye’s PGM operations in the United States, however, saw all-in sustaining costs jump by 15% to $1,004 per ounce, as a skills shortage in Montana and high employee attrition rates drove the miner to rely more on higher-cost contract labour.
The company said it would reassess the optimal future output at its U.S.
operations after costs increased “well above planned and historical levels”.
Costs at Sibanye’s South African gold operations climbed by 7%, which the company attributed to above-inflation increases in the cost of electricity and some consumables.
Sibanye said its South African PGM mines would produce between 1.75 million ounces and 1.85 million ounces in 2022, while its South African gold mines would produce between 813,000 ounces and 873,000 ounces.
The company, which is in talks with unions over wages at its South African gold operations, reiterated that it has been unable to reach an agreement with organised labour representatives.
While talks with three unions are ongoing, the Solidarity union split from the rest on Wednesday by saying it had accepted Sibanye’s final wage offer of a 5% annual pay increase.
($1 = 15.3245 rand)
(Reporting by Helen Reid; Editing by Jacqueline Wong, Sherry Jacob-Phillips and Subhranshu Sahu)
