Cape Town – Sibanye Gold [JSE:SGL] has changed its name to Sibanye-Stillwater due to its transformation from a gold mining company based in South Africa to a leading global precious metals company, it announced on Wednesday.
“Sibanye- Stillwater has become a truly competitive, international mining company with a unique portfolio of world class, scalable, precious metal assets,” Sibanye-Stillwater CEO Neal Froneman explained in a statement.
The miner was trading 6.35% higher on the JSE at the close of business on Tuesday at R21.77 a share. Its market cap stood at R42.71bn.
It also announced its six-month results to end-June 2017 on Wednesday, which revealed the miner made a headline loss of R2.181bn, impacted by a lower average gold price and gold production.
Going global as SA throttles investment confidence
The company's re-branding exercise came after it announced a restructuring plan at the beginning of the month that could see about 7 400 jobs being cut. Miners in South Africa are coming under increasing pressure regarding "radical economic transformation", spearheaded by Mineral Resources Minister Mosebenzi Zwane's Mining Charter plan, a pending law that has been taken to court by the Chamber of Mines.
"Sibanye-Stillwater fully supports the chamber's application and its view that the reviewed Mining Charter in its current form will deter investment and cause significant harm to the industry. The negative market reaction to the reviewed Mining Charter and its specific impact on investor sentiment at the time that Sibanye-Stillwater was issuing its corporate bond, are evidence of this," Froneman said in a separate statement on Wednesday.
"Capital investment is a prerequisite to ensure ongoing value creation, sustainability and growth, but unfortunately the current uncertain regulatory environment in South Africa is problematic and is not conducive to long term capital investment, resulting in low economic growth and high rates of unemployment.
"The group as whole has undergone significant change and done so under challenging circumstances, with commodity prices subdued and the South African operating environment uncertain. Sibanye-Stillwater is now well positioned to benefit from any upside in precious metal prices."
Transformation into global precious metal miner
Sibanye said it transformed its strategy from a South African gold mining company into a global precious metals miner over four years, after it was unbundled by Gold Fields and listed on the JSE and NYSE on February 11 2013.
First, it gained cost reductions and increased production in its gold miners and was able to extend the lives of these operations, making it among the lowest cost mines in the world, it explained.
“In early 2014, an opportunity to unlock significant value through consolidation and the application of Sibanye’s operating model in the South African Platinum Group Metals (PGM) industry was identified,” the company said.
“The acquisition of Aquarius Platinum Limited in April 2016 and the Rustenburg Operations shortly thereafter, established Sibanye, in a relatively short time, as a major participant in the global PGM sector.
“The subsequent acquisition of Stillwater, a high quality, low cost PGM producer located in Montana in the United States of America in May 2017, was a further transformative strategic step for the group.
“Sibanye recognised the strategic value of Stillwater, both as the only sizeable primary palladium producer, but also for the significant growth opportunities the operations offer with the Stillwater, the only PGM producer funding significant growth from internal cash flow at the bottom of the commodity price cycle.
“The Blitz project will add approximately 300 000oz of 2E PGM production to Stillwater’s existing annual production of approximately 550 000oz, by 2021/2022. The successful acquisition of Stillwater has created a unique and truly international, precious metals company.”
Its legal name will remain Sibanye Gold Limited, but will trade as Sibanye-Stillwater going forward. Its trading tickers will remain unchanged for the time being, it said.