Posted on 11/23/2024 11:14:33 PM PST by algore
Sibanye Stillwater, the South African company that operates the nation’s only major palladium mine in south-central Montana, said Thursday that it plans to lay off about 40% of its Montana workforce as it scales back its operation in an effort to offset losses caused by low metal prices.
In a letter to workers, U.S. Executive Vice President Kevin Robertson said the company will halt mining at the west section of its Stillwater mine southwest of Columbus until prices rise. It also plans to restructure operations at its East Boulder mine south of Big Timber and its Columbus-area processing and recycling plant. In total, Robertson wrote, layoffs will reduce the company’s current workforce of 1,680 to “just under 1,000” starting Nov. 12.
“We are proud to pay prevailing wages and follow robust environmental and other regulations. That’s why our communities thrive adjacent to our operations” Robertson wrote. “But, this responsible and sustainable mining and metals processing is much, much more expensive than that of our competitors in Russia and other areas.”
“To compete with those low-cost operations, we need to solidify government and other stakeholder support in the long-term,” Robertson continued. “In the short-term, we have no choice but to reduce our losses as we continue to lobby for additional forms of financial support.”
Heather McDowell, the company’s Montana-based spokesperson, echoed those claims in an interview Thursday.
“Without a restructure, we didn’t have a sustainable business plan,” she said, saying the company had been on track for a $230 million loss this year.
“When the market comes back, we can consider rebuilding our operations — that’s absolutely the idea,” McDowell said.
Sibanye Stillwater, an international mining conglomerate that purchased the Stillwater mine in 2017, also has operations in South Africa, Europe and Australia.
The Stillwater and East Boulder operations, which straddle a section of the Beartooth Mountains, mine underground at opposite ends of a globally notable palladium and platinum deposit. The West Stillwater section that the company plans to mothball has been in operation since 1986.
McDowell said Sibanye Stillwater conducted a prior round of cuts last year, laying off or reassigning about 90 workers as the company tried to reduce costs and boost production. However, she said, a quarterly filing deadline the publicly traded company faced this week forced it to announce further action in an effort to stem its ongoing losses.
In its letter, the company blamed its financial woes on current palladium prices — now below $1,000 an ounce, versus $2,305 an ounce two years ago — on “Russian dumping.” While the U.S. has banned imports of many Russian products as part of economic sanctions levied in protest of Russia’s 2022 invasion of Ukraine, it has not banned Russian palladium imports.
McDowell said the company had also been hoping a provision of the 2022 Inflation Reduction Act that authorized a manufacturing production tax credit for metals used in renewable energy production would lend its bottom line a helping hand. However, she said, the U.S. Treasury Department has interpreted that tax credit provision in a way that means it doesn’t apply to the company’s Montana operation, which sells partially processed palladium before the final step in the refining process.
Both of Montana’s U.S. senators, Democrat Jon Tester and Republican Steve Daines, announced separately Thursday that they will introduce bills that would ban Russian palladium imports. McDowell said both senators have also been pushing the federal treasury department to revise its interpretation of the Inflation Reduction Act (the full IRA was supported by Tester and opposed by Daines).
“It is totally unacceptable that Montanans are losing their jobs because Russia is dumping critical minerals into the American market to strangle our local operations,” Tester said in a statement announcing his palladium import ban bill.
“There is no reason the United States should be importing critical minerals that we can find right here at home,” Daines said in his announcement. “Montana is rich in minerals, and we need to be supporting American mines and American jobs, not Russia’s.”
Sibanye Stillwater workers in Montana are represented by United Steelworkers Local 11-0001, which declined to make a representative available for an interview Thursday through the Montana AFL-CIO, the state’s umbrella organization for private sector unions. Montana AFL-CIO Executive Secretary Jason Small called the layoffs “devastating news” that would affect currently high-wage workers — and businesses that rely on their spending — across south-central Montana.
“Those guys are making real money there — and a lot of them of course are bussing out of Billings, or other areas,” Small said. “It’s going to be pretty significant.”
Small also said that Montana AFL-CIO expects to work with the mine union and the state Department of Labor and Industry in an effort to support laid-off workers.
The state labor department said Thursday the 700-worker layoff represents about 13% of payroll jobs in Stillwater and Sweet Grass counties, as well as about 16% of mining jobs statewide. It also noted that mining jobs in Montana paid an average salary of $106,00 in 2023.
The department also said it plans to release a “skills matching tool” that will help laid-off workers identify new employment opportunities that take advantage of their current skills and hold in-person career fairs in Columbus in the coming weeks.
“We will help affected workers navigate employment opportunities, identify any skill gaps needed to advance into new careers, and source funding for any necessary training programs needed to acquire additional skills,” labor commissioner Sarah Swanson said in a statement.
I gave my kids some Lewis and Clark Palladium rounds back then cause I thought they were cool.
I wish I could get an eagle for even a few hundred over spot
Wow! Hubby and I just sold all our shares in SBSW a couple of weeks ago. We were reducing the number of different mining stocks we have shares in and putting the money in just a handful, such as GOLD, AEM, FCX, NEM and WPM.
It appears that when it comes to Sibayne-Stillwater, that was a smart move. The company lost a billion dollar lawsuit in the UK last month and the future of the company seemed a bit sketchy at the time given the low price of palladium, so we sold all our shares in that particular one and didn’t even bother to hold onto a few “just in case shares”.
Time to crank cold fusion back up again!
Nice group! I hold AEM, FCX, & CDE. All were at bargain prices during the scamdemic, so I loaded the boat. Very happy I did!
Palladium peaked in 2021 and 2022 near $3,000 per oz.
https://www.cnbc.com/quotes/@PA.1
For bulls - it has been a scary ride down ever since.
In 2024, it crashed below $900 per oz. several times.
I believe its primary use is in car catalytic converters.
If Electric Vehicle sales continue to grow, that is bad news for the price of Palladium.
Isn’t CDE buying SILV? That’s two more I had. We had CDE at around $2.25 (from before pandemic as well) and finally sold it when we were selling the others a couple weeks ago. Nice profit.
Take a look at SPPP.
I confess to being quite ignorant in matters related to economics, but I must say that I am uncomfortable with any foreign company owning property in America.
btt
Nice, my DCA om my Pal is $343/oz. Didn’t sell any during the run up. The only
metal holdings im upside down on, is Platinum.
More on the layoffs:
“Families Uprooted By Largest Mine Layoff In Montana History”
https://cowboystatedaily.com/2024/11/23/families-uprooted-by-largest-mine-layoff-in-montana-history/
“Terry Haney and his wife Shanda just completed construction of what they thought would be home for the rest of their lives and were settling into life in southwest Billings, Montana, when word came in September that Terry’s job with Sibanye-Stillwater Mining would be cut as part of a historic downsizing.
Friday was their last day in Billings before moving on to his new job at a gold mine in South Carolina.
Haney spent nearly six years mining palladium with Sibanye-Stillwater, but instead of continuing the job he loved in a place he loved living, he was instead saying goodbye to a good-paying job.
What gets emotional for him is thinking about “that brotherhood bond that guys build,” said Haney, who grew up in Fromberg, Montana, and hoped to spend his career at Sibanye-Stillwater. “You get two guys underground when it’s quiet, you talk about stuff you don’t even talk to your spouse about.
“When I got hired on, all they preached was, ‘We have resources for 70 years. Your grandkids will be able to work here.’”
The Stillwater mine is outside Columbus, 42 miles to the southwest in the shadow of Granite Peak, Montana’s tallest mountain.”
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