JOHANNESBURG (miningweekly.com) – The safety performance of precious-metals mining company Sibanye-Stillwater improved markedly in the three months ended September 30 owing to ongoing safety interventions gaining traction at all operations, the company said on Thursday.

The tragic safety incidents in the first half of the year, compounded by seismicity-impacted areas requiring rehabilitation, had, however, resulted in a lowered 2018 gold production forecast of between 35 000 kg and 36 000 kg (1.13-million ounces and 1.16-million ounces), at an all-in sustaining cost (AISC) of between R550 000/kg and R565 000/kg ($1 311/oz and $1 347/oz), with capital expenditure (capex) at R3 000-million ($230-million).

The South African PGM operations were expected to produce between 1.1-million ounces and 1.15-million ounces at an AISC of between R10 750/oz and R11 250/oz ($825/oz and $860/oz), with capex at R1 000-million, R200-million lower than previously guided.

The Johannesburg- and New York-listed Sibanye-Stillwater, headed by CEO Neal Froneman, said the quarter’s safety improvement had been assisted by continuing tripartite cooperation and input from key stakeholders, arising from successful safety summits.

“The focus on safe production remains the highest priority across the group,” Froneman said, adding that the South African operations achieved more than 2.7-million fatality-free shifts as at October 31.

Production in the quarter yielded 30% higher adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) from South Africa’s platinum group metals (PGM) operations than for the comparable period in 2017.

A request by a stock-taking third party precious metals refiner to defer deliveries of September production, lowered the Ebitda yield of the PGM operations and lifted the AISC.

Additional safety interventions lowered productivity across the South African gold operations, resulting in lower production guidance for the year ended December 31.

Precious metal commodity prices in July and August were only marginally higher than for the comparable period in 2017.

As a result of the reduced contribution from South African gold mines and the US deferral, group adjusted Ebitda plummeted by 40%.

South African PGM production was flat at 305 227 oz for the three months to September 30, with underground operating costs rising 6% on above inflation wage and electricity cost increases.

Chrome production, made up of 204 277 t at Rustenburg and 78 285 t at Kroondal, was similar to levels produced in the three months to June 30.

South African gold production of 9 609 kg (308 922 oz) includes two months of production of 757 kg (24 323 oz) from DRDGold, which is engaged in surface gold recovery.

Underground PGM production in the US was a 3%-higher 139 178 oz, with early production shortfalls at the Stillwater mine being recovered at the end of the quarter.

Fourth-quarter production is expected to be higher owing to the coming online of a second stope block at the US’s Blitz project.

Recycling has been temporarily reduced at the Columbus Metallurgical Complex, where the processing of mined material yielded 126 744 oz and the processing of recycled material 144 585 oz for the quarter, compared with a combined 339 000 oz produced in the corresponding quarter of 2017.

Sibanye-Stillwater has received $500-million from Wheaton International in exchange for an agreed percentage of streamed gold and palladium production from its US PGM operations.

The competition tribunal hearing on Sibanye-Stillwater’s proposed acquisition of Lonmin Plc has been rescheduled for the week of November 12, with a ruling anticipated before the end of November.

Sibanye-Stillwater now owns 38.05% of surface mining company DRDGold, with an option to attain up to 50.1% and the company has entered into an agreement with Regulus Resources and its Aldebaran subsidiary to create a strategic partnership at the Altar copper/gold project in Argentina.

Sibanye-Stillwater intends to defend itself vigorously against class action lawsuits relating to statements on safety practices.

The company described the revised South African Mining Charter as providing improved investment certainty and reiterated that Minerals Council South Africa would continue to engage with the Department of Mineral Resources to resolve outstanding issues. Strike action remained a possibility as it engaged the labour unions in gold sector wage talks.

On the outlook, Sibanye-Stillwater said production at its South African and US PGM operations was likely to be sustained in the last three months of 2018, when the US PGM producers would benefit from the sale of deferred production and a partial unwinding of inventories, buoyed by noticeably higher October precious metal prices.