Sibanye Stillwater CEO Richard Stewart’s strategic overhaul has secured the confidence of Moody’s Ratings as the company doubles down on cost-cutting amid the recovery of platinum prices.
In a note last week, Moody’s upgraded Sibanye’s outlook to “stable”, meaning that the miner has shed its “negative outlook” label for the first time since May 2024.
Chief among Moody’s reasons for the upgrade was Sibanye’s “conservative financial policies”, particularly the goal of slashing net debt in half and achieving a 1.0x net debt to earnings before interest, tax, depreciation and amortisation (ebitda) through the cycle.
Since taking the helm in November, Stewart has laid out a major shift in Sibanye’s strategy from the serial dealmaking of his predecessor, Neal Froneman.
Rather than eyeing acquisitions, Stewart has focused on allocating funds to organic growth opportunities with low capital requirements in a bid to achieve R3bn in annual cost savings by 2027 and a 50% reduction in net debt over two years.
Moody’s said it anticipated that a “disciplined approach to M&A and capital investment” would allow the precious metal giant to capitalise on commodity prices, which are expected to remain around current levels over the next two years.
Though some moderate decline in prices is not off the table, “we do not expect PGM prices to return to the low levels seen in early 2025”, Moody’s said.
Big asset managers have shown a growing appetite for PGM miners such as Sibanye in recent months as demand for non-electric vehicles holds strong, supporting a sustained market deficit.
Moody’s baseline assumption is an average platinum price of $1,736/oz this year, up slightly from last year’s $1,680/oz average.
The price is forecast to decline to $1,470 in 2027, which is still a far cry from the sub-$1,000/oz lows witnessed from 2021 to mid-2025.
Palladium and rhodium are also expected to hold strong. The former is forecast at an average of $1,397/oz for 2026 and $1,241 the following year, compared to $1,463 in 2025. Rhodium is expected to average $7,000/oz in 2026 and $5,800/oz the following year.
Moody’s expects the gold price to fall considerably from the record highs seen in the past year, though it is still expected to remain well above $3,000 in 2026-27.
Together, Moody’s forecasts imply a 40% jump in Sibanye’s adjusted earnings before interest, tax, depreciation and amortisation to R42bn in 2026.
In a much-improved commodity market, Moody’s said it expects Sibanye’s significant restructurings in 2023-24, when the group fired more than 2,500 workers in response to low PGM demand, to continue to bear fruit.
“Multiple rounds of operational restructuring that the company has undertaken in 2023-24 [will] support profitability and cash generation of its gold and PGM operations, partially offsetting the impact of high mining inflation in South Africa,” the ratings agency said.
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