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Business model

Sibanye-Stillwater’s business model is to optimise its operations by managing the fundamental inputs of safety, cost, grade and tonnes, and, by leveraging its low-cost operating expertise, to realise additional value from new acquisitions.

Sustainability is achieved by investing in organic projects and making value-accretive acquisitions, which support the ability to continue paying industry leading dividends. Sibanye-Stillwater views proactive stakeholder engagement as a critical factor in ensuring business stability and sustainability.

Business activities

  • Mine development and mining operations, primarily underground ore bodies
  • Processing of ore mined
  • Tailings retreatment
  • Developing organic growth projects
  • Beneficiation and further refining as required
  • Sale of end products produced
  • Exploring for and/or acquiring new ventures

Community and social development initiatives and environmental management and rehabilitation are allied to the activities above.

OVERALL OBJECTIVE

Superior value creation for all stakeholders through mining our multi-commodity resources in a safe and healthy environment.


OUR CORE PURPOSE

Sibanye-Stillwater’s mining improves lives.

HOW WE CREATE VALUE

RESOURCE INPUTS

FINANCIAL CAPITAL

Access to financial capital and its management are critical to the sustainability of our business and superior value creation. Financial capital is necessary to:

  • acquire and optimise the other inputs needed to conduct our business, such as resources and reserves
  • employ and develop people
  • maintain infrastructure
  • procure goods and services
  • finance capital expenditure to sustain and grow the business

In 2016, R5.8 billion was invested in diversifying our commodity base and acquiring additional resources.

For further details, see the CFO’s report

SOCIAL AND RELATIONSHIP CAPITAL

Honest, transparent stakeholder engagement is vital in ensuring we earn and maintain our social and legal licence to operate, and in enabling us to continue operating in the long term.

Employee engagement continues to be a focus, especially at the newly-acquired platinum operations.

For further details, see Social upliftment and community development.

NATURAL CAPITAL

Having a pipeline of resources to mine and exploit over the longer term is fundamental to the sustainability of our business. In 2016, we acquired PGM resources to ensure the sustainability of our mining base. At year end, group Mineral Resources, including Mineral Reserves, totalled:

  • Gold:
    102Moz
  • 4E PGMs:
    126.5Moz

For further details, see Statement of Mineral Resources and Mineral Reserves – a summary and the detailed statement.

In addition, resources such as water, electricity and land are used. See Enhancing outcomes and impacts 2016 below.

HUMAN AND INTELLECTUAL CAPITAL

The success of our business depends, inter alia, on employing people with the necessary skills and capabilities. A skilled, productive, motivated workforce, in conjunction with the application of relevant technologies, enhances our operational efficiency.

People employed:
74,531 (including contractors)
Training and development:
R403 million
Research and development (technology):
R16 million

For further details, see Superior value for our workforce

MANUFACTURED CAPITAL

Acquiring, developing and maintaining property, plant and equipment is essential to ensuring we operate cost-efficiently and generate sustainable returns

Operating costs:
R20.7 billion
Maintenance of infrastructure (property plant and equipment):
R1.0 billion
Discretionary* procurement:
R9.9 billion

For further details, see Creating value from our operations, projects, technology and reserves

*The procurement targets given by the Mining Charter apply to procurement that “excludes non-discretionary procurement expenditure”, which is defined as expenditure that cannot be influenced by a mining company, such as procurement from the public sector and state enterprises. The procurement targets thus apply to discretionary expenditure over which Sibanye-Stillwater has influence.

Numbers quoted are based on the Sibanye Group as at end December 2016 and therefore exclude the Stillwater operations acquired in May 2017.

OUTPUTS

  • Gold:
    1.51Moz
  • Platinum:
    238,662oz
  • Palladium:
    136,156oz
  • 4E PGM:
    420,763oz
  • Uranium:
    123,000lb
  • Nickel:
    2,060t
  • Chrome:
    274,109t

FINANCIAL OUTCOMES

Of the R31.2 billion revenue generated from the sale of metals in 2016, value was distributed as follows:

  • Employees – salaries and wages paid Salaries and wages: R9,276 million
  • Government taxes and royalties paid:
    R1,733 million
  • Procurement – total discretionary:
    R9,914 million
  • Proportion BEE procurement: 77%
  • Communities – socio-economic development:
    R656 million
  • Profit: R3,271 million
  • Investors – dividends declared:
    R1,343 million
  • Dividend yield*: 5.7%

* The dividend yield is a financial ratio that indicates how much a company pays out in dividends each year relative to its share price. Dividend yield is represented as a percentage and is calculated by dividing the dividends per share declared in a given year by the ordinary share price at the end of the year.

Numbers quoted are based on the Sibanye Group as at end December 2016 and therefore exclude the Stillwater operations acquired in May 2017.

ENHANCING OUTCOMES AND IMPACTS

FINANCIAL AND MANUFACTURED CAPITAL

Optimising processes to reduce costs, maintain infrastructure and invest in organic growth:

  • GOLD DIVISION: Total cash cost:
    R377,034/kg (US$799/oz)
  • GOLD DIVISION: All-in sustaining cost:
    R450,152/kg (US$954/oz)
  • PLATINUM DIVISION: Operating cost:
    R10,296/oz (US$701/oz)
  • GROUP: Operating margin: 34%
  • Market capitalisation:
    R23.6 billion (US$1.7 billion)
  • Share price: R25.39 (US$7.06)
  • Total shareholder returns:
    36% dividend payout ratio

For further details, see Chief Financial Officer’s report and Creating value from our operations, projects, technology and reserves.

NATURAL CAPITAL:

Creating value by extracting, mining and processing ore:

  • Volume of ore mined:
    31.8Mt
  • Water used:
    45,860Ml
  • Electricity consumed:
    4,720,323MWh
  • Scope 1 and 2 greenhouse gas emissions:
    R1,733 million
  • Total closure liability:
    R6.1 billion
  • Environmental incidents (levels 3 and 4):
    19

For further details, see Minimising our environmental impact

HUMAN AND INTELLECTUAL CAPITAL

Creating employment, ensuring the safety, health and wellbeing of employees, enhancing skills development and training:

  • Occupational health expenditure: R38.5 million
  • Training and skills development:
    6.99 million training hours
  • Investment in systems and engineering to improve safety and productivity: R6.1 billion
  • Fatalities: 14
  • LTIFR: 6.62 per million hours worked

For further details, see Health and safety focus

SOCIAL AND RELATIONSHIP CAPITAL

Creating employment, alleviating poverty, promoting enterprise development and social upliftment:

  • BEE procurement spend:
    R7.6 billion (77% of total discretionary spend)
  • Socio-economic development expenditure:
    R656 million
  • Spend on approved social and labour plan projects: R59 million

For further details, see Social upliftment and community development