Sibanye Stillwater is considering the closure of its palladium mine in Montana, US, if palladium prices do not recover from their current slump, reported Bloomberg News, citing the company’s CEO Neal Froneman.
Froneman was reported by the news agency at a London conference as saying: “The future of Stillwater remains in the balance.
“I mean it is as simple as that. If there is no correction in the price soon, as strategic as it is, we will have to put it on care and maintenance.”
Earlier this year, Sibanye announced a $2.1bn writedown on its US assets, attributing the loss to a sharp decline in palladium prices, increased operational costs and challenges in executing an expansion plan.
In 2017, the South African mining company acquired the Montana site through the $2.2bn purchase of Stillwater Mining and had already reduced some positions at the mine to reduce expenses.
Despite the challenges, Froneman described the Montana mine as a “strategic asset” in March, stating that “it was not due for closure at this stage”.
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By GlobalData
He emphasised the necessity for the mine to become profitable, even amidst the ongoing palladium price depression.
Palladium is primarily used in catalytic converters for vehicles to reduce emissions.
Since March 2022, the price of palladium has plummeted by approximately 70%.
Demand for palladium is under threat due to the automotive industry’s transition towards electric vehicles, which do not require catalytic converters.
In April this year, Sibanye-Stillwater said it plans to close its lossmaking 4 Belt (4B) shaft at the Marikana platinum operations, putting 855 jobs at risk.
The miner recently also started Section 189 consultations as part of its gold operations restructuring plan. The move is set to affect 3,107 employees and 915 contractors.
