Platinum mining and Sibanye-Stillwater (SBSW)

Platinum is a precious metal that is part of the six-member family of platinum group metals  which also comprises: palladium, rhodium, iridium, osmium, and ruthenium. Mining platinum can be a challenging and very difficult  task and only about 170 tonnes of the platinum is mined  annually, compared to 3,300 tonnes of gold. Platinum is favored among jewelers because of its malleability and resistance to fading but platinum is not just used for jewellery alone. It serves various other purposes, especially as an industrial component in manufacturing and electronics. Platinum is also used to help catalytic converters remove pollutants from the exhaust gases of cars and is also used in the fuel cells of hydrogen-powered vehicles as a chemical catalyst. World platinum production passed eight million ounces in 2017 but had fallen to just over six million ounces by 2019. More than two thirds of global platinum production occurs in South Africa, with Russia in a distant second place. Let’s take a look at the top 3 biggest  platinum mines:

1-Anglo American Platinum, produces 2.05 million ounces of platinum.

2-Impala Platinum,  produces  1.31 million ounces of platinum.

3-Sibanye-Stillwater produces 1.08 million ounces of platinum. 

My choice is Sibanye-Stillwater because this company is in very good financial shape, smart management and future potential growth is on the horizon. Besides that there is one small detail why I decided this company to be my potential buy. Sibanye-Stillwater is a company listed on NYSE which means that I don’t have to pay commission each time buying shares of this company. Other companies from the list are bigger and they produce more platinum but they are not listed on the NYSE and each time when I buy their shares I’d have to pay a $50 fee for buying a company considered over the counter and that is a really hefty fee to pay for buying shares of any company. Now lets take a closer look at of the Sibanye-Stillwater.

Sibanye Stillwater Limited  is one of the world’s major producers of platinum, palladium, and rhodium. On a gold equivalent basis it is also a top-tier gold producer ranking third worldwide. The company is also a prominent global recycler and processor of wasted PGM catalytic converter materials, as well as a producer of iridium, ruthenium, chrome, copper, and nickel as by-products.  Sibanye-Stillwater operates a diversified portfolio in terms of products and geographical location. The company has engaged in various collaborations and acquisitions over the years, allowing it to expand from a sole gold producer to a globally competitive, diversified precious metals producer of gold and platinum group metals (PGM). The company, which is primarily based in South Africa also has operations in the United States and recently joined the battery metal market by investing in a lithium hydroxide facility in Finland. Most of the company’s revenue comes from PGM mining, however gold mining and recycling still account for 22.09 percent and 20.05 percent of total revenue, respectively. The contribution of gold mining activities to Sibanye’s revenue is likely to drop under current conditions, as the business aims to close three of its gold mines over the next ten years or so. At the same time recycling activities are predicted to grow in importance as a source of revenue because they do not require capital investment and provide a high-profit margin. All those things above show that Sibanye is one of the best companies in PGM industry and  they are diversifying their business model based on precious metals into the battery business which looks very promising.  In my view this is the best company to invest in if you want to have peace of the action in Platinum Group Metals.