Sibanye excluded from NYSE ARCA Gold Miners index amid platinum growth, drop in gold revenue | Fin24
 
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Sibanye excluded from NYSE ARCA Gold Miners index amid platinum growth, drop in gold revenue

Dec 27 2018 18:55

Mining group Sibanye-Stillwater [JSE:SGL] has been excluded from the NYSE ARCA Gold Miners index and has received notification that long-time shareholder Van Eck has substantially reduced its stake in company, it said in a statement on Thursday. 

Sibanye received formal notification from Van Eck Associates Corporation - which has long been a shareholder - that it had disposed of American Depositary Receipts (ADRs) of the company, which reduced Van Eck's stake from 9.12% to 4.97%. 

"As a result of the Group's growth in the Platinum Group Metals (PGMs) sector and high prevailing PGM spot prices, revenue from Sibanye-Stillwater's gold operations has reduced to less than 40% of its total revenues, and it was consequently excluded from the NYSE ARCA Gold Miners index, the the benchmark for the Van Eck ETF fund, during the recent quarterly review. 

"As required in terms of Section 122 of the Companies Act, the required notice will be filed with the Takeover Regulation Panel," Sibanye said. 

Sibanye-Stillwater has had a difficult year.

Fin24 reported in November that Sibanye-Stillwater had been granted an interdict by the Labour Court against the National Union of Mineworkers (NUM) and the Association of Mineworkers & Construction Union (AMCU) after a wage strike by AMCU claimed its first life.

NUM alleged that the worker, who was killed on Thursday morning, belonged to the union, and had been attacked by AMCU members at Sibanye’s Beatrix operations in Welkom, Free State.

AMCU denied it was involved in violence, and blamed private security guards for escalating tensions.

The mining group has since concluded wage deals with the National Union of Mineworkers, Solidarity and UASA.

The company's third quarter operational update showed adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell 40% to R1.6bn from R2.7bn a year earlier. This was partly due to work stoppages amidst safety concerns in the first half of the year.

The planned buyout of platinum group metals firm Lonmin has also hit regulatory hurdles, with AMCU asking the Competition Tribunal not to give Sibanye-Stillwater the go-ahead for the acquisition, with more than 10 000 jobs on the line.

The Competition Commission recommended the merger be given the green light, on condition that Sibanye tries to save about 3 700 jobs if prices improve and the company can maintain production costs at some shafts.

By afternoon on Thursday Sibanye-Stillwater's share price was up 5.65% to R9.53 per share.

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