El Salvador president proposes bill to overturn metals mining ban
In 2017, El Salvador became the first country in the world to ban forms of metals mining.
Sibanye-Stillwater is in talks over a potential acquisition of the world’s deepest gold mine, Mponeng, as current owner AngloGold Ashanti plans its South African exit, Sibanye said on Thursday.
A spokesman for the diversified miner confirmed the talks, after AngloGold said in May that it would review divestment options for Mponeng and other South African assets to focus on higher returns elsewhere.
“We have said we are open minded to the opportunity,” Sibanye chief executive Neal Froneman said.
“We are not panting after more deep-level gold mines but there are significant synergies and opportunities between Driefontein and Mponeng.”
He declined to comment further due to a non-disclosure agreement.
A five-month strike at the firm’s gold operations over pay and job cuts, which ended in April and cost Sibanye more than $100 million in lost revenue, also hit gold output
Sibanye swung into the red in the first half as a five-month strike at its South African gold operations weighed on profits despite improved financial results from the South African and U.S. platinum group metals (PGMs) operations.
Sibanye on Thursday reported a headline loss for the six months to end June of 54 cents per share, compared with a profit of 4 cents per share a year before.
“We have successfully navigated our way through this challenging period and I am confident that we have emerged in a stronger position,” Froneman said in a statement.
A five-month strike at the firm’s gold operations over pay and job cuts, which ended in April and cost Sibanye more than $100 million in lost revenue, also hit gold output.
Bullion production for the period fell to 344,752 ounces from 598,517 ounces a year earlier.
The miner, which is currently engaged in wage negotiations in the platinum sector, said it would be able to sustain a strike in the sector but that it was an unlikely scenario as negotiations were ongoing.
The sector’s majority union the Association of Mineworkers and Construction Union (AMCU), which originally demanded a hike of around 48%, said earlier this month that the offer by Sibanye for the Lonmin operations was a “slap in the face”.
Sibanye, which concluded the Lonmin acquisition in June to become the world’s second-largest platinum producer, said the assets were currently under a review which would be concluded during the third quarter.
“Whilst the improved PGM price environment may justify extending the operating lives of some of these operations, thereby mitigating the impact on job losses, a number of shafts have finite reserves and derive limited benefit from higher PGM basket prices,” Sibanye said.
Platinum prices are up 15% this year, while those of sister metal palladium are nearly 17% higher.
Froneman said a supportive precious metals price and a positive operational outlook would benefit earnings and cash flow in the second half, enabling it to pay down debt and possibly resume cash dividends payments in 2020.
Sibanye last paid a dividend in February 2016.
The firm said debt reduction will continue to be a priority after it was delayed by the impact of this year’s strike on its South African gold business.
(By Tanisha Heiberg; Editing by Susan Fenton and Kirsten Donovan)
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