A recent amendment to US mining regulations is set to bring down costs for platinum group metals (PGM) miners operating in the country, says Sibanye-Stillwater.
On Friday, Sibanye highlighted changes to the US treasury’s Inflation Reduction Act (IRA): a bill that aims to grow the country’s domestic production of clean energy components.
The bill grants a 10% production credit for goods that use critical minerals — which, in the US context, includes platinum and palladium — allowing companies to claim back 10% of their production costs.
Since 2023, however, the costs that companies can receive credit for have excluded extraction costs — meaning most of the funding goes to final refiners of PGMs, while primary miners lose out.
This resulted in a much narrower benefit for the industry, said Sibanye, as the omission of extraction costs “excluded the vast majority of the costs incurred by the US PGM operations from being eligible, resulting in little financial benefit or support for the operations”.
After months of filing “extensive written submissions”, lobbying congress and the government to extend the credit provision to other the significant costs in critical mineral value chains, Sibanye said the final IRA, published last week, appears to have adopted the proposed amendments, allowing for the inclusion of extraction costs, along with processing and refining costs.
Sibanye said the amendments were likely to provide substantial relief for its US PGM operations in Montana, where the group implemented a restructuring to reduce costs amid low palladium prices.
This comes at a time when PGM miners have had to cut back on production in recent years, responding to margin pressure from low commodity prices and diminished PGM demand. According to the World Platinum Investment Council, the PGM sector has reduced its global headcount by about 10,000 workers this year.
“We welcome the amendments made by the US treasury and applaud its foresight and willingness to understand our industry and operations,” said Sibanye CEO Neal Froneman — adding that “such proactive and supporting legislation” will “ensure the future sustainability and growth of the regional critical minerals value chain in a responsible manner’.
“This final release is particularly significant for our group. By providing essential financial support for our US PGM operations as we focus on reducing costs and increasing productivity to stabilise our US PGM operations, we will be able to secure the long-term viability of these strategic assets.”
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