Safety first Credit image Sibanye Stillwater

Sibanye-Stillwater may not return to 100% production even as restrictions ease, CEO Neal Froneman warned on Tuesday.

The mine – which is the country’s largest industrial employer – will only ramp up to full capacity when it is satisfied that safety protocols have been fully observed, Froneman told shareholders at the company’s Annual General Meeting.

Commercial gain would not be put ahead of employees’ wellbeing, he stressed.

Clusters of coronavirus infections have been detected at several mines following the easing of lockdown regulations.

Experts have warned that containing the coronavirus – already difficult – is potentially much more challenging in a mining environment.

Froneman’s remarks come as the country gears up for a shift to Level 3 of lockdown, which will bring a further easing of restrictions.

“We are not even sure that we will ramp up to 100%, and we will have to assess that in the next phase of the ramp-up,” he said, adding that the implementation of safety measures would be challenging at deep operations.

“What I have assured is that we are not putting commercial issues ahead of the wellbeing of our employees.”

More cases expected

Froneman said, however, that he was satisfied with the safety protocols adopted by the company, including quarantine facilities which have been prepared for workers.

Safety protocols implemented in South Africa were of the same standard as those used in the US, where the company operates a PGM mine, he noted.

Mines in SA are required to adopt the newly published Covid-19 safety guidelines which outline a range of measures that must be adhered to by companies in order to protect employees from the deadly virus.

But, said Froneman, more infections were likely.

“We are aware that we have not yet reached the peak. As time goes on, we will see more and more cases. We need to be psychologically prepared for that.”

On Monday, company spokesperson James Wellsted said Sibanye had so far registered 10 positive coronavirus cases at its local operations, and four have recovered fully.

Financial impact

As a global top producer of PGMs, Sibanye-Stillwater also operates gold companies, and Froneman said although the company had performed well in the first quarter, the second quarter is likely to be impacted by the current conditions.

“There is no doubt that second quarter would be very negatively impacted by the lockdown,” he said, also noting the effect of weak PGM prices.

“We expect some price weakness in the PGMs, and we need to see how our business is able to perform in addition to circumstances imposed by Covid-19.”

Asked if the company was likely to pay a dividend in the near future, Froneman said they had adopted a prudent approach to dividend payment and that the current conditions had resulted in a “complete reset of business” despite being initially confident at the beginning of the year.

Courtesy Fin24