|Bid||5.15 x 2200|
|Ask||5.22 x 800|
|Day's Range||5.07 - 5.35|
|52 Week Range||2.02 - 5.35|
|Beta (3Y Monthly)||0.23|
|PE Ratio (TTM)||92.50|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
(Bloomberg) -- South African platinum producers could use Sibanye Gold Ltd.’s pay settlement with gold miners earlier this year as a benchmark in wage talks with labor unions, according to a person familiar with the matter.Following a five-month strike that was eventually declared illegal, Sibanye agreed to increase the pay of workers at its three gold mines by 5.5%. Sibanye’s agreement is viewed as a good proxy for what’s possible in the platinum industry as the cost structures are similar to deep-level gold mining, said the person, asking not to be identified because the matter is private.Anglo American Platinum Ltd., Impala Platinum Holdings Ltd. and Sibanye last week began the first round of wage negotiations with the sector’s biggest labor union, which is demanding an increase of as much as 48%. While some producers have said that such a settlement would lead to job losses and mine closures, the Association of Mineworkers and Construction Union argues it’s justified as higher palladium and rhodium prices boost company earnings.AMCU doesn’t see Sibanye’s gold deal as a barometer for platinum workers.“The settlement in gold was just for gold,” said union Secretary General Jeffrey Mphahlele. “Salaries are too low and we must create a balance, companies must come to the party and assist the people.”Sibanye’s settlement for gold miners equated to 700 rand ($50) a month in the first year of a three-year deal. In the second and third years, miners will also get a 5.5% increment or an increase that matches the inflation rate, should that be higher. While AMCU was eventually forced to call off its strike, the company was obliged to hold talks with lenders as it came close to breaching bank covenants.The platinum wage negotiations are complicated by additional requests for higher medical aid and travel expenses, while AMCU has also revived a demand that its members’ pension funds are transferred by the companies to a fund it founded.“All our demands are important because they address the core issues of living standards for the workers,” Mphahlele said.In 2014, AMCU led the longest-ever platinum mining strike in the country, costing the sector about $2 billion in revenue. Two years later, the union accepted an increase of 12.5% for the lowest paid workers, after initially demanding a 47% increment.“While no one can ever discount the risk for strike action, it is our concerted view that our employees remain committed to finding a workable resolution,” said Johan Theron, a spokesman for Implats. “We may differ on the numbers and how we get there, but at the core we essentially want the same outcome, a profitable and sustainable business.”Producers would prefer an early settlement to end uncertainty and boost morale, said James Wellsted, a spokesman for Sibanye, which became the world’s biggest platinum miner after its takeover of Lonmin Plc.“That said, we will not accept unaffordable wage demands in the interests of an early settlement,” he said.Anglo American Platinum said it plans to negotiate in “good faith” and balance wage demands with making sure the company remains viable.“We are committed to reaching a mutually beneficial settlement as soon as possible,” said Jana Marais, a spokeswoman for the company.(Updates with chart of platinum mining companies shares.)To contact the reporter on this story: Felix Njini in Johannesburg at email@example.comTo contact the editors responsible for this story: Lynn Thomasson at firstname.lastname@example.org, Dylan Griffiths, Liezel HillFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- When the world’s biggest platinum miners sit down to hammer out a wage deal with one of South Africa’s most militant labor unions this week, they’ll hold two potentially winning cards in reserve: the cash and metal stockpiles to endure a strike.Those buffers may prove crucial as Anglo American Platinum Ltd., Impala Platinum Holdings Ltd. and Sibanye Gold Ltd. meet with the Association of Mineworkers and Construction Union on successive days from July 9. While the producers will be conscious that AMCU led the country’s longest ever platinum mining strike in 2014, none can meet its demand for a pay increase of as much as 48% without undermining their businesses.“Anglo has the balance sheet to withstand” a strike, plus its key operation is more mechanized, said Ben Davis, an analyst at Liberum Capital in London. “Impala and Sibanye are certainly the more exposed, but have the most to lose from large wage increases for the sustainability of their businesses.”During the 2014 strike, stockpiles of metal concentrates held by the producers were nearly depleted. Should an amicable settlement prove elusive, much will depend on the length of any strike, said James Wellsted, a spokesman for Sibanye, the largest platinum miner. Sibanye has also shored up its cash position ahead of the negotiations, he said.“We generally have stockpiles available for whenever there are operational disruptions but we can’t guarantee how long those will last in a strike situation,” Wellsted said. “Obviously we have to plan for the worst-case scenario."Meeting ObligationsLast November, AMCU started a five-month wage strike at Sibanye’s gold mines. While the union was eventually forced to call off the action, the company was obliged to hold talks with lenders as it came close to breaching bank covenants.Sibanye, Amplats and Implats all declined to comment on the size of their stockpiles of platinum-group metals.“We don’t believe there is an appetite for a prolonged strike in the current economic climate,” said Jana Marais, spokeswoman for Amplats. “Nevertheless, we have measures in place to ensure we will be able to meet our obligations to our customers.”Amplats, the most profitable producer, expects to triple first-half net income to at least 6.1 billion rand ($428 million). The company has also rebuilt its cash position, after selling or shutting down higher-cost mines.Implats said it expects to return to profit in the 12 months ended June 30, after a reporting a loss in the year-earlier period.Implats shares rose as much as 4.1% in Johannesburg, and the stock has doubled this year. Amplats has jumped 51% during the period and Sibanye rallied 61%.While AMCU has said its demands are justified as higher palladium and rhodium prices boost company earnings, producers will warn that such a settlement would lead to job losses and mine closures. For some investors, a relatively peaceful strike might be preferable to high wage increases, which would prove costly if metal prices decline, said Peter Major, an analyst at Mergence Corporate Solutions Ltd.A strike could cut platinum output by as much as 40,000 ounces to 45,000 ounces per week, according to Johnson Matthey Plc, a key maker of catalytic converters for the auto industry.“A disruption is not nice, but it doesn’t make you go broke,” Major said. “Previously, there was pressure on companies to avoid a disruption at all costs because it was a great commodities boom. This is no more la-la land.”(Updates with forecast for output cuts in penultimate paragraph.)\--With assistance from Liezel Hill.To contact the reporter on this story: Felix Njini in Johannesburg at email@example.comTo contact the editors responsible for this story: Lynn Thomasson at firstname.lastname@example.org, Dylan Griffiths, Nicholas LarkinFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The precious metals miner benefited from commodity news and corporate events in the first six months of the year.
(Bloomberg) -- The world’s biggest platinum producers face a dilemma: they’re reporting bumper profits just as they enter negotiations with labor unions over a three-year wage deal.That surge in earnings has been fueled by higher prices for palladium and rhodium, which are mined alongside platinum in South Africa. Noting the buoyancy of the market, the Association of Mineworkers and Construction Union has asked for a pay increase of as much as 48%. Satisfying that demand will lead to job losses and mine closures, companies say.“AMCU demands are ridiculous,” said Bernard Swanepoel, a former gold mine boss who now sits on the board of Impala Platinum Holdings Ltd. “Any increase above inflation will not serve the best interest of employees as jobs will be destroyed.”The wage talks, which start in earnest next week, come as President Cyril Ramaphosa seeks to reset an economy teetering on the brink of a second recession in successive years. An amicable outcome will bolster the former mine union leader’s bid to lure foreign investors, while a repeat of a strike five years ago could send metal prices soaring and undermine Ramaphosa’s reform agenda.“Society has no appetite or capacity to handle an industry strike,” said Swanepoel.In 2014, AMCU led the longest ever platinum mining strike in the country, costing the sector about $2 billion in revenue. Now, it wants the roughly 167,000 workers in South Africa’s platinum mines to partake in the metal-price bonanza.“We are really glad that it is going so well with platinum, and it is high time that the bosses share their hyper profits with the workers who toil every day,” President Joseph Mathunjwa said as the union presented its initial demand.Good TimesEarlier this week, Anglo American Platinum Ltd. said it expects first-half net income to almost triple to at least 6.1 billion rand ($425 million). The company will respond to AMCU’s demands in due course, said spokeswoman Jana Marais.Sibanye Gold Ltd., which became the world’s biggest platinum miner after its takeover of Lonmin Plc, acknowledged that higher prices have generated windfall profits, but said the wage demands are potentially damaging.“We have recently had a good run, yes, but it doesn’t mean we have to give it all away in the first round of wage negotiations,” said James Wellsted, a spokesman for Sibanye. “That demand isn’t affordable and will result in closing of mines.”Sibanye shares rose 0.9% as of 10:48 a.m. in Johannesburg, bringing this year’s gain to 65%. Impala declined 0.4%, while Amplats fell 1.8%.Mining investors will be watching the negotiations closely as less than a year ago producers were closing shafts and cutting thousands of jobs as a stronger rand combined with stagnating metal prices to squeeze profit margins. In March, an industry lobby group said more than half the country’s platinum-group metals output was either marginal or unprofitable.Risky Business“These kind of wage demands will keep investors away,” said Ross Harvey, an independent economist. “The costs of doing business in South Africa remain too high, and the policy environment too risky, to warrant large sunk-cost investments.”While its sister metals have surged, the price of platinum is trading near a decade low, leaving producers claiming they have little cushion to invest. Lonmin rebounded to profit in the six months through March, but only after four years of losses.“These demands mean that there will be no money to reinvest, which is necessary for a sustainable industry,” said Wellsted.Still, there are some causes for investor optimism. AMCU’s Mathunjwa has so far dispensed with most of his usual fiery rhetoric in favor of a more conciliatory tone. Moreover, three years ago, the union accepted a 12.5% wage increase for the lowest-paid workers after initially demanding 47%.Much will depend on whether platinum miners toughen their stance in a bid to limit any wage deal to a single-digit increase, said Ben Davis, a mining analyst at Liberum Capital.Settlement PossibleNortham Platinum Ltd. Chief Executive Officer Paul Dunne expects a “high single-digit increase” for the lowest-level employees.“It’s going to be difficult, but I believe we can settle,” Dunne said in an interview on Wednesday. “It’s too early to opine whether there will be or won’t be a strike.”While AMCU hasn’t ruled out industrial action, the union will be conscious that in April it was forced to call off a five-month strike at Sibanye’s gold mines with few gains to show for its members.“It is difficult to see which side is going to back down first,” Davis said. “The companies’ stances may well have hardened and they will be less likely to meet in the middle. Ultimately, it will depend on whether AMCU can convince workers to dig their heels in and whip-up their emotions.”\--With assistance from Paul Burkhardt.To contact the reporter on this story: Felix Njini in Johannesburg at email@example.comTo contact the editors responsible for this story: Lynn Thomasson at firstname.lastname@example.org, Dylan Griffiths, Nicholas LarkinFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The elite funds run by legendary investors such as David Tepper and Dan Loeb make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don't follow. Because of their pay structures, they have strong incentives to do the research necessary […]
South Africa's Sibanye-Stillwater is to sell a 51% stake in its PGM-copper project in northern Ontario to Generation Mining Ltd in a deal to further develop the asset, the previous miner said on Wednesday. Sibanye-Stillwater will receive 3.0 million Canadian dollars ($2.28 million) in upfront proceeds and 11 million shares at 0.2714 Canadian dollars per share in Generation Mining, equating to a 12.9% equity stake.
After a strong three-day run on central bank dovishness, the indices are resting Friday. It is a summer Friday and it has been a good week for the bulls so there are plenty of market participants that are happy to do a little selling and head out early.
Earlier on Tuesday, Sibanye-Stillwater said 87% of its shareholders backed the all-share offer, which it revised last month to value the struggling Lonmin at 226 million pounds ($286 million), 60 million pounds less than originally proposed. Lonmin was hit hard by the drop in platinum prices and has had to cut spending and jobs in order to retain a positive balance sheet, a condition of Sibanye's proposed offer. Shares in London-listed Lonmin were up 5.2% at 1131 GMT, while Sibanye's were up 5.8%.
South Africa's department of mineral resources says all 1,800 miners who had been caught underground have been freed overnight. Mining company Sibanye-Stillwater on Tuesday said some rails that were being ...
South Africa's department of mineral resources says plans are underway to free a large number of miners caught underground by hoisting them up an adjoining shaft. The department says it has an inspector monitoring the situation at the Thembelani shaft in Rustenberg run by mining company Sibanye-Stillwater.
The Zacks Analyst Blog Highlights: Kirkland Lake Gold, Osisko Gold Royalties and Sibanye Gold
Even though gold prices slipped on a stronger dollar, it will eventually pick up this year. We suggest few promising gold mining stocks to add to your portfolio.