← Back to Investments

SIBANYE STILLWATER LIMITED

SSW JSE Listed
Market Cap
~R198.0 Billion

Role: Senior Equity Analyst (JSE) Subject: Investment Analysis – Sibanye Stillwater Limited (JSE: SSW) Date: 13 January 2026

Here is the comprehensive investment analysis for Sibanye Stillwater Limited, the diversified precious and battery metals miner currently navigating a major operational turnaround.

Step 1: Data Gathering & Source Verification

Reporting Periods Analyzed:

Key SENS Announcements (Last 12 Months):

  • 02 Dec 2025: Three-year wage agreement reached at SA gold operations (Removing major strike risk).
  • 10 Nov 2025: Settlement agreement with Appian regarding the Santa Rita/Serrote dispute.
  • 28 Aug 2025: H1 2025 Results – Return to Headline Earnings profit; "Inflation Reduction Act" credits boost US margins.

Step 2: Metric Extraction

  • Market Cap: ~R198.0 Billion

  • Context: The share price has recovered to ~R69.30, reflecting renewed market confidence.

  • Dividend Yield (L12M): 0.0% (Dividends Suspended)

  • Status: The group passed its final 2024 and interim 2025 dividends to prioritize balance sheet stability during the PGM price downturn.

  • Outlook: Management has signaled a potential "return to dividend" in FY2026 as cash flows stabilize and debt reduces.

  • Liquidity Check: High (Low Risk)

  • Metric: Average daily volume is robust (>11 million shares/day). It is one of the most liquid resource stocks on the JSE.

  • P/E Ratio: ~17.3x (Forward)

  • Calculation: Based on annualized H1 2025 Headline Earnings Per Share (HEPS) of ~400c relative to a share price of 6930c.

  • Note: Trailing P/E is negative due to the massive impairments and losses in FY2024. The forward multiple reflects the recovery earnings base.

  • Net Asset Value (NAV): Price-to-NAV ~2.0x

  • Metric Used: The stock trades at a premium to its book value (NAV approx. R34.00/share), indicating the market is pricing in future cash flows from the battery metals pivot rather than just current liquidation value.

Step 3: Operational & Strategic Analysis

Business Overview: Sibanye is a multinational mining & metals processing group with a unique portfolio mix:

  1. PGMs (Platinum Group Metals): Major operations in South Africa (Rustenburg, Marikana) and the USA (Stillwater).
  2. Gold: Deep-level mines in South Africa (Kloof, Driefontein) and the DRDGOLD retreatment partnership.
  3. Battery Metals: Growing exposure to Lithium (Keliber project in Finland), Nickel, and Zinc (Century in Australia).

Performance Trend (H1 2025 vs Prior):

  • Turnaround Confirmed: After a loss-making 2024, H1 2025 Headline Earnings surged 19-fold to R5.4bn.
  • The "Gold" Hedge: While PGM prices remained soft, the booming Gold price saved the day. SA Gold operations increased Adjusted EBITDA by 118% to R4.8bn.
  • US Operations Rescue: The US PGM operations, previously a cash drain, recognized R5.1bn in Section 45X credits (US Inflation Reduction Act subsidies). This effectively lowered their costs and swung the division back to positive cash flow.

Sector Context (Macro Factor):

  • The "Green" Subsidy Race: The global race to secure critical mineral supply chains has benefited Sibanye directly via the US Inflation Reduction Act (IRA). These government credits are not just accounting adjustments; they are real cash subsidies for producing "critical minerals" (PGMs) in the USA, acting as a floor for their high-cost Stillwater mine.

Step 4: The Verdict

Bull Case (The "Gold & Government" Put): Subsidized Turnaround. Sibanye has successfully navigated its "death valley." The US operations are now effectively subsidized by the US government (Section 45X credits), removing the biggest risk to the balance sheet. Simultaneously, the record Gold price is generating massive free cash flow from assets that were previously considered "sunset" mines. You are buying a PGM recovery option for free, paid for by the Gold rally.

Bear Case (Debt & Complexity): A Complicated Beast. This is no longer a simple miner. It is a complex conglomerate of deep-level SA mines (high safety/strike risk), US recycling, and European battery projects. The debt covenants were tight in 2024 (reaching 1.79x Net Debt:EBITDA), and while they have improved (0.89x), the company is still deleveraging. If the Gold price corrects sharply, the "safety net" vanishes.

Fair Value Estimate: R75.00 - R80.00 Based on a Sum-of-the-Parts (SOTP) recovery model. The battery metal projects (Keliber) are not yet fully valued by the market, and the US operations are now de-risked.

Final Rating: BUY (Recovery / High Beta)

Rationale: The worst is likely behind them. The wage deal (Dec 2025) removes labor risk for 3 years, and the US subsidies provide a cash floor. It is a high-beta stock (volatile), but the risk-reward ratio has shifted in favor of the bulls as they transition from "survival" to "stabilization."

AI Generated Analysis Last Updated: 2026-01-14