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SIBANYE-Stillwater CEO Richard Stewart warned the group's US platium group metal mine Stillwater would need time to rebuild after staff agreed a new three year wage.
The group said on Wednesday employees represented by the United Steel Workers International Union striking at the Stillwater East mine and Columbus metallurgical facility signed a new deal wage which brought the curtain down on a one month strike.
The agreement is effective from July and allows for an increase of 4.5% in the first year followed by an increase the greater of 3.5% and 3% or Consumer Price Index in years two and three respectively.
"I think we're going to have a period of needing to settle down after this and rebuild our momentum," said Stewart on the sidelines of the Joburg Indaba conference. "This has been a big disruption, and we're going to have to settle teams and rebuild."
Stillwater mined 137,930 ounces of PGMs in the first half of the financial year, down 2% year-on-year, but it out-performed all-in sustaining cost (AISC) guidance. Despite this, Stillwater's AISC for the half year was $1,347/2Eoz, 12% higher than last year and still above the long-term $1,000/oz AISC target set by Sibanye-Stillwater for the US mine.
However, Stewart said the wage agreement set a pathway for mechanisation at the mine considered central to lowering costs.
The strike was first announced on September 2 and turned partly on proposed changes to incentives. At the time, Stewart said Stillwater's future was at stake. “If that plan cannot be implemented and the operations remain unsustainable, there may ultimately be no viable basis for the continued operation,” he said at the time.
Stewart said today: "This is about a fundamental change to the business, so we can't blink. I don't think there was an expectation that the strike was going to last a month. I think people thought it would be a couple of days and over quickly. But it forced this difficult conversation: we fundamentally have to change this business".
"If we didn't get it right, Stillwater is going to continue to be at risk. The next big downturn could be the end. So it forced that conversation, which I think is good," he said.
A consequence of the proposed changes to wages, which have been in place for more than two decades, is loss of skills as employees seek the similar employment terms at other companies. Stewart said this was unavoidable. "The tough part is I think you're going to see change on the operation as a result of the strike. We've lost people as a result," he said.
Montana-based Stillwater is strategically important for Sibanye-Stillwater partly given the US government's requirement for PGMs, included in Washington's critical minerals, but also because it helps support the group's US recycling business. Stewart said, however, recycling would continue even if Stillwater had closed.
"For me, the recycling at Stillwater is an added opportunity," he said. "We've got all this infrastructure and we can use it to be competitive in recycling. That's the way I think about it.
"The Stillwater facility is a contributor to that business now, which is great, but it's not the lifeblood. We would never make a poor mining or hard-rock decision to try to support recycling. It's got to be sustainable across the board."