South African tycoon Neal Froneman-led Sibanye posts $2-billion loss

Sibanye-Stillwater, a multinational precious metal mining company led by South African magnate Neal Froneman, faced a challenging financial year in 2023, reporting a net loss of $2 billion — a stark contrast to the $1.1-billion profit recorded the previous year.

The downturn is primarily attributed to a $2.52-billion impairment charge associated with the company’s U.S.-based palladium mine and the sharp decline in prices of platinum, palladium, and rhodium.

Neal Froneman addresses speculation on Sibanye’s capital raise and restructuring plans

The poor financial performance comes on the heels of Sibanye’s aggressive acquisition strategy, including battery metal assets in France, Finland, Australia, and the United States. To mitigate the impact and ensure the sustainability of its South African platinum group metals (PGM) operations, the company has announced cost-cutting measures.

During a results call, Sibanye-Stillwater CEO Neal Froneman clarified the company’s strategy, stating, “We are going to raise additional capital, but this perception that it’s going to be a rights issue is completely wrong.” Froneman acknowledged the need for further restructuring, particularly at Sibanye’s U.S. PGM operations and the Sandouville nickel refinery in France.

Sibanye’s market capitalization drops to $2.72 billion

The financial turmoil at Sibanye in 2023 has taken its toll on shareholders, including Froneman, who holds a 0.3-percent stake in the company. Froneman, a pivotal figure in the company’s evolution into a leading producer of precious metals, has seen the market value of his shares decline significantly.

Sibanye’s shares on the Johannesburg Stock Exchange have plummeted by more than 26 percent this year alone, resulting in a market capitalization slump to R51.5 billion ($2.72 billion). Froneman’s stake, now valued at R152.74 million ($8.06 million), reflects the broader challenges facing the precious metals industry amid declining prices.

The fall in prices for platinum group metals (PGMs), driven by factors like global economic uncertainties and a shift towards electric vehicles, is not unique to Sibanye. South African mining companies are grappling with the need for restructuring and job cuts to navigate the challenging market conditions.