BL Premium reports fresh from a rights placement for R1.7bn, Sibanye-Stillwater is to raise a similar amount by selling future gold production to Citibank, giving it protection from a potential platinum sector strike.  

Amid the current protracted industrial action at its SA gold mines, the precious metals producer is reinforcing its balance sheet in case of a strike at its SA platinum division, as well as to prepare for any external events.  Sibanye’s increasingly bitter relationship with the Association of Mineworkers and Construction Union (Amcu), which is in the fifth month of a gold strike at Sibanye, could well spill over into local platinum group metals (PGM) businesses when wage talks start in June.  Nedbank analysts Leon Esterhuizen and Arnold van Graan commented:  "We believe there is an increasing risk of a strike at Sibanye’s SA PGM operations.  This is one of the biggest risks to the balance sheet, in our opinion.  Importantly, this move will give the company a stronger footing when it heads into PGM wage talks, as the unions won’t be able to exploit a weak balance sheet position to push for higher wages."  Combined with the issue of shares, the forward sales will give Sibanye undrawn facilities of R10bn.  Meanwhile, Sibanye is potentially a few weeks away from approaching the Labour Court to declare the strike at its gold mines unprotected.  The strike has cost Sibanye about R1.5bn so far.

• Read the full original of Allan Seccombe’s report on this story at BusinessLive (paywall access only)
• Read too, Sibanye raises another R1.75bn, reinforcing its balance sheet, at BusinessLive

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