How to make counter-cyclical bets
Sibanye-Stillwater (NYSE:SBSW) timed its entry into the platinum group metals space perfectly by picking up discounted platinum assets in the mid-2010s. Sibanye-Stillwater, which was spun out of South Africa's Gold Fields in 2013, picked up Anglo American’s Rustenburg for $95 million in 2015. It also purchased South African platinum miner Aquarius for $294 million 2016.
Palladium and rhodium were some of the top-performing metals of the past decade due to tighter automotive emission standards.
In 2016, palladium traded as low as $550 oz. It ended the decade well over $2,000 oz.
CEO Neal Froneman, who spoke to Kitco last month, said Sibanye-Stillwater will record a production hit in Q2 due to South Africa's COVID-19 restrictions. Froneman said mining activity was reduced from the beginning of the second quarter and into the month of May.
"Fortunately, Stillwater operations in Montana in the U.S. were declared a strategic and an essential service, because the platinum they produce is for medical purposes," said Froneman.
Sibanye added Stillwater mine in 2016 for $2.2B.
Froneman is proud of Sibanye-Stillwater's bets by entering areas of the market that are "counter-cyclical."