By Felix Njini and Nelson Banya
JOHANNESBURG (Reuters) -Sibanye Stillwater shares fell more than 3% on Thursday after the company said it was considering further changes at its palladium mines in the U.S. to adjust the operations to metal prices that have dropped faster than it anticipated.
The Johannesburg-based precious metals producer’s shares were down 3.11% at 0900 GMT, extending losses to nearly 50% since the beginning of the year.
Last month, the company said it planned to cut more than 4,000 jobs and shut some platinum mining shafts in South Africa amid a worsening rout in prices of platinum group metals (PGMs), used in autocatalysts.
Sibanye has been battling to cut costs at its Montana-based Stillwater mines as palladium price weakened, and after the mines were hit by flooding last year that curbed output and pushed up production costs.
The changes at the Stillwater mines are needed after “the decline in the palladium price during 2023 has surpassed our expectations, dropping lower and faster than anticipated”, CEO Neal Froneman said in a statement.
The company did not specify what the changes would be.
Sibanye said that while U.S operations had recovered from an eight-week work stoppage after shaft damage at the Stillwater west mine in the first half, “cost pressures and a reliance on contractors due to the persistent skills shortage in Montana and the USA is likely to keep costs elevated”.
The miner cut its output forecast for its U.S PGM operations this year to 420,000-430,000 ounces from 460,000-480,000 ounces previously, within a higher all-in sustaining cost range of $1,750-$1,825 per ounce, up from the previously guided $1,550-$1,650 an ounce.
The major PGMs, platinum and palladium, are down about 14% and 38% respectively this year, with palladium prices near $1,110 an ounce on Thursday and platinum close to $930.
South African PGM and gold production guidance remains unchanged between 1.7 million-1.8 million ounces and 625,000-660,000 ounces respectively.
Sibanye also said a proposed restructure of its Kloof 4 gold shaft in South Africa due to operational issues and ongoing losses could affect 2,389 employees and 581 contractors.
The company, which has recently diversified into battery minerals, said the estimated capital expenditure for its Keliber lithium project in Finland had increased to 656 million euros from 588 million euros.
(Reporting by Felix Njini and Nelson Banya; Editing by Clarence Fernandez, Rashmi Aich and Jan Harvey)