South Africa: PGM Bonanza - Sibanye-Stillwater Posts Record Q1 Earnings

analysis

What do central bankers and platinum group metals (PGMs) producers have in common? These days it can seem like they are both printing money.

Diversified precious metals producer Sibanye-Stillwater posted record quarterly earnings in the first three months of this year. Group adjusted Ebitda - earnings before interest, taxes, depreciation and amortisation - rose in Q1 by 78% compared with the same period last year to $1.3-billion, the company said in its quarterly operating update. And last year's Q1 performance was a record up to that point.

Sibanye was initially a spin-off that took over Gold Fields' conventional and labour-intensive gold operations in South Africa. It has since ventured into PGMs - a move that is paying off. It has acquired Anglo American Platinum's conventional mines and one of its mechanised operations, swallowed Lonmin and bought the palladium-rich Stillwater in the US state of Montana.

"Notably, adjusted Ebitda generated by the SA PGM operations for this quarter is higher than the total acquisition costs of these operations, emphasising the significant return on investment already delivered and the future windfalls stakeholders can continue to expect," Sibanye said in a statement.

So this investment has already paid for itself. This includes the...

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