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Mining firm Sibanye-Stillwater has reached an agreement with the Association of Mineworkers and Construction Union (AMCU) and National Union of Mineworkers (NUM) on a five-year wage deal for its Kroondal Platinum Group Metals (PGM) operations in South Africa. This deal, announced Today, guarantees a 6% annual wage increase for all workers, similar to agreements at Rustenburg and Marikana operations in 2022.
The inflation-adjusted wage contract ensures a minimum 6% annual salary boost for specific worker categories, leading to an average total wage bill increase of about 6.4% annually over the next five years. The agreement is expected to promote wage stability for all parties involved, according to CEO Neal Froneman.
Despite this positive development, Sibanye-Stillwater has been facing operational challenges. The company reported a R2.53bn Ebitda decline in the third quarter of this year. Further, it closed two shafts affecting 4,095 jobs and is restructuring two other shafts, which puts nearly 3,000 jobs at risk at the Kloof 4 shaft.
InvestingPro Insights
As we delve into the financial aspects of Sibanye-Stillwater (SSWJ), InvestingPro data and tips provide valuable insights. SSWJ is known for yielding a high return on invested capital, which is a positive sign for investors looking for efficient capital usage. This aligns with the InvestingPro Tip that the company is a prominent player in the Metals & Mining industry.
InvestingPro data also shows a declining trend in SSWJ’s earnings per share, which may raise concerns over the company’s profitability. This trend could be related to the operational challenges and restructuring the company is currently undergoing.
Another InvestingPro Tip worth noting is that SSWJ is trading at a low EBITDA valuation multiple, indicating that the stock might be undervalued. This, coupled with the fact that the company pays a significant dividend to shareholders, might make it an attractive investment despite the recent challenges.
InvestingPro offers numerous additional tips that can provide a more comprehensive understanding of SSWJ’s financial performance and outlook. These insights can be invaluable in making informed investment decisions.
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