Sibanye Stillwater : Interim F2022

JOHANNESBURG, 25 August 2022: Sibanye Stillwater Limited (Sibanye-Stillwater or the Group) (JSE: SSW and NYSE: SBSW) is pleased to report operating results and condensed consolidated interim financial statements for the six months ended 30 June 2022.

SALIENT FEATURES FOR THE SIX MONTHS ENDED 30 JUNE 2022

• Significant safety performance improvements with reducing injury and fatality rate trends
• Profit of R12.3 billion (US$803 million)
• Net cash position maintained with 0.16 x Net cash: adjusted EBITDA*
• Interim dividend declared of 138 SA cps (32.46 US cents** per ADR) representing an annualised dividend yield of 7%
• Inflation-relatedthree-year wage settlement reached at the SA gold operations
• Good cost control at SA PGM operations despite lower volume
• Acquisition of a majority stake in the Keliber project progressing well with an anticipated ownership of more than 80%
• Sandouville nickel refinery - integration well advanced

• Refer note 11.1 (footnote 5) of the condensed consolidated interim financial statements

• Based on the closing share price of R40.67 at 30 June 2022 and an exchange rate of R17.0034/US$ at 22 August 2022 from IRESS

	US dollar						SA rand
Six months ended					Six months ended
Jun 2021	Dec 2021	Jun 2022		KEY STATISTICS		Jun 2022	Dec 2021	Jun 2021
					GROUP
1,707	527		782	US$m	Basic earnings	Rm	12,016	8,218	24,836
1,707	787		775	US$m	Headline earnings	Rm	11,938	12,045	24,833
2,787	1,852		1,465	US$m	Adjusted EBITDA1	Rm	22,561	28,057	40,549
14.55	15.03		15.40	R/US$	Average exchange rate using daily closing rate
					AMERICAS REGION
					US PGM underground operations2,3
298,301	272,099		230,039	oz	2E PGM production2,3	kg	7,155	8,463	9,278
2,286	1,913		1,935	US$/2Eoz	Average basket price	R/2Eoz	29,799	28,755	33,261
437	290		261	US$m	Adjusted EBITDA1	Rm	4,021	4,408	6,358
973	1,039		1,366	US$/2Eoz	All-in sustaining cost4	R/2Eoz	21,036	15,619	14,153
					US PGM recycling2,3
402,872	352,276		361,333	oz	3E PGM recycling2,3	kg	11,239	10,957	12,531
3,159	3,932		2,906	US$/3Eoz	Average basket price	R/3Eoz	44,752	59,098	45,963
50	51		39	US$m	Adjusted EBITDA1	Rm	598	757	733
					SOUTHERN AFRICA (SA) REGION
					PGM operations3
894,165	941,973		823,806	oz	4E PGM production3,5	kg	25,623	29,299	27,812
3,686	2,696		2,817	US$/4Eoz	Average basket price	R/4Eoz	43,379	40,517	53,629
2,154	1,336		1,374	US$m	Adjusted EBITDA1	Rm	21,152	20,270	31,338
1,163	1,134		1,179	US$/4Eoz	All-in sustaining cost4	R/4Eoz	18,160	17,037	16,921
					Gold operations
518,848	554,086		191,683	oz	Gold produced	kg	5,962	17,234	16,138
1,792	1,780		1,864	US$/oz	Average gold price	R/kg	922,851	860,303	838,088
162	184		(202)	US$m	Adjusted EBITDA1	Rm	(3,106)	2,762	2,351
1,691	1,685		3,115	US$/oz	All-in sustaining cost4	R/kg	1,542,355	814,347	791,171
					EUROPEAN REGION
					Battery Metals - Sandouville refinery6
-	-		4,565	tNi	Nickel production7	tNi	4,565	-	-
-	-		30,789	US$/tNi	Nickel equivalent average basket price8	R/tNi	474,144	-	-
-	-		4	US$m	Adjusted EBITDA1	Rm	60	-	-
-	-		29,896	US$/tNi	Nickel equivalent sustaining cost9	R/tNi	460,397	-	-

1. The Group reports adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) based on the formula included in the facility agreements for compliance with the debt covenant formula. Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Adjusted EBITDA is not a measure of performance under IFRS and should be considered in addition to and not as a substitute for other measures of financial performance and liquidity. For a reconciliation of profit before royalties and tax to adjusted EBITDA, see note 11.1 of the condensed consolidated interim financial statements

Sibanye-Stillwater Operating and financial results | Six months ended 30 June 2022

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1. The US PGM operations' underground production is converted to metric tonnes and kilograms, and performance is translated to SA rand (rand). In addition to the US PGM operations' underground production, the operation treats various recycling material which is excluded from the 2E PGM production, average basket price and All-in sustaining cost statistics shown. PGM recycling represents palladium, platinum and rhodium ounces fed to the furnace
2. The Platinum Group Metals (PGM) production in the SA operations is principally platinum, palladium, rhodium and gold, referred to as 4E (3PGM+Au), and in the US underground operations is principally platinum and palladium, referred to as 2E (2PGM) and US PGM recycling is principally platinum, palladium and rhodium referred to as 3E (3PGM)
3. See "Salient features and cost benchmarks - Six months " for the definition of All-in sustaining cost (AISC)
4. The SA PGM production excludes the production associated with the purchase of concentrate (PoC) from third parties. For a reconciliation of the production including third party PoC, refer to the "Reconciliation of operating cost excluding third party PoC for Total US and SA PGM, Total SA PGM and Marikana - Six months"
5. The Sandouville refinery processes nickel matte and is included in the Group results since the effective date of the acquisition on 4 February 2022
6. The nickel production at the Sandouville refinery operations is principally nickel metal and nickel salts (liquid form), together referred to as nickel equivalent products
7. The nickel equivalent average basket price per ton is the total nickel revenue adjusted for other income - non-product sales divided by the total nickel equivalent tons sold
8. See "Salient features and cost benchmarks - Six months Sibanye-Stillwater Sandouville Refinery" for a reconciliation of cost of sales before amortisation and depreciation to nickel equivalent sustaining cost

Share data for the Six months ended 30 June 2022		JSE Limited - (SSW)
Number of shares in issue		Price range per ordinary share (High/Low)	R40.67 to R75.40
- at 30 June 2022	2,830,018,926	Average daily volume	13,823,127
- weighted average	2,821,904,716	NYSE - (SBSW); one ADR represents four ordinary shares
Free Float	99%	Price range per ADR (High/Low)	US$9.97 to US$20.32
Bloomberg/Reuters	SSWSJ/SSWJ.J	Average daily volume	4,471,911

STATEMENT BY NEAL FRONEMAN, CHIEF EXECUTIVE OFFICER OF SIBANYE-STILLWATER

The Group performance for the six-months ended 30 June 2022 (H1 2022) reflects the deterioration in the global economic and political environment during the first half of 2022, and a challenging period for the Group due to significant disruptions experienced at the SA gold and US PGM operations.

The safety improvement initiatives which commenced during H2 2021 were extended into H1 2022, with meaningful improvements on all safety indicators. Tragically two fatal accidents were experienced early in the period; pleasingly however the group achieved a fatal free quarter in Q2 2022.

Production from the SA gold operations was 63% lower year-on-year, primarily due to industrial action which extended for more than three months, while the US PGM operations reported a 23% decline in 2E PGM production in H1 2022 compared with H1 2021, as a result of ongoing operational constraints and the temporary suspension of operations at the Stillwater mine following severe regional flooding that occurred in Montana from mid-June 2022.

4E PGM production from the SA PGM operations was 8% lower than for H1 2021, but remains well within guidance, with a continued cost management focus and higher by-product credits, resulting in AISC being maintained in line with inflation. This continued focus on cost management has resulted in the SA PGM operations migrating meaningfully down the industry cost curve since they were acquired.

Considering the significant operational disruptions during the period, and the deterioration in the macro-economic environment, the Group's financial performance for H1 2022 was notable. Group adjusted EBITDA of R22.6 billion (US$1.5 billion) for H1 2022 was only 19% lower than adjusted EBITDA of R28.1 billion (US$1.9 billion) for H2 2021, albeit 44% lower than adjusted EBITDA of R40.5 billion (US$2.8 billion) for the comparable period in 2021. H1 2021 was a record 6-month financial result for the Group by a substantial margin, driven by record PGM basket prices and strong operational performance by all the Group operating segments.

Profit for the period of R12.3 billion (US$803 million) was 51% lower than record profit for H1 2021 of R25.3 billion (US$1.7 billion), but compares favourably with profit achieved for H2 2021 of R8.5 billion (US$544 million), when average precious metals prices were at similar levels. This represents the third highest six-month period profit achieved since the Group's initial listing in 2013. Basic earnings per share and headline earnings per share of 426 SA cents (28 US cents) and 423 SA cents (27 US cents) were both approximately 49% lower year-on- year.

Normalised earnings of R11.2 billion (US$726 million) supported the declaration of an interim dividend by the Board of directors of R3.9 billion (US$230 million) (138 cents per share/US 32.46 cents** per ADR), which is at the upper end of the range of the Group dividend policy and equivalent to an annualised dividend yield of 7%.

The Group has maintained its strong financial position, with cash and cash equivalents of R27.2 billion (US$1.7 billion) only marginally lower than at the end of 2021 and exceeding borrowings (excluding non-recourse Burnstone debt) of R19.3 billion (US$1.2 billion), resulting in a R7.9 billion (US$487 million) net cash position and net cash: adjusted EBITDA of 0.2x at H1 2022.

With both the SA gold and US PGM operations resuming production from suspended operations during H2 2022, the outlook for the remainder of 2022 is significantly improved. The Group is financially sound, generating positive cash flow, with a robust balance sheet offering significant financial flexibility. We are well positioned both to endure the prevailing economic down-cycle, and also benefit from value opportunities which may eventuate.

SAFE PRODUCTION

Reflecting on H1 2022, we have made significant steps in our safety journey, with the improving trends in all safety indicators observed during H2 2021, continuing into H1 2022. While institutionalising the "Rules of Life" and other successful initiatives implemented in H2 2021 in order to maintain these positive trends is ongoing, a specific priority for 2022, is the elimination of fatal incidents, underpinned by the implementation of our Group wide Fatal Elimination Strategy.

This resulted in the Group achieving a fatality free quarter for Q2 2022, a notable milestone. Despite this encouraging decline in fatal incidents, the loss of two colleagues during Q1 2022 is a stark reminder that continued implementation and monitoring of our safety controls and behaviours to mitigate risk and stop unsafe work must remain our foremost priority.

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The health and safety of our employees is of fundamental importance for the Group, and as a leading international mining company responsible for the wellbeing and safety of more than 80,000 employees and contractors, we have committed to achieving world-class safety standards comparable to our international peers.

Following a relaxation in COVID-19 related restrictions by most countries and a significant decline in COVID-19 infections in our workforce, we have reviewed the overall risk at all our operations. Based on our risk assessment, including in excess of 90% vaccination rate in the majority of our operations, we are currently ensuring that our COVID-19 dedicated facilities are embedded into our Health Care operating practices. In line with our focus on becoming a pandemic resilient organisation, these learnings, including our vaccination strategy, are being incorporated into a newly developed "Pandemic Preparedness Response Plan" that will ensure we are able to respond rapidly to mitigate future risks associated with the COVID-19 or any other health related pandemics.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)

Marikana renewal

Following the acquisition of Lonmin in June 2019, Sibanye-Stillwater committed to a process of renewal at Marikana for the co-creation of a better future for all stakeholders at Marikana.

In 2020, the Marikana renewal process was launched to address the tragic Marikana legacy, rebuild trust between stakeholders and facilitate socio-economic redress. Guided by the themes of "Honour", "Engage" and "Create", the primary aim of the Marikana renewal process is the co-creation of a shared vision and the delivery of tangible socio-economic opportunities and value to the Marikana communities and the broader district, which will be sustainable long after mining has ceased.

In August 2020 Sibanye-Stillwater hosted the first Marikana Commemoration lecture. These annual lectures mark and commemorate the anniversary of the Marikana tragedy and seek to encourage and stimulate thought leadership and critical discourse on the issues that face us as a society today, particularly in the mining industry and in our operating districts.

In 2020 the keynote address was delivered by Adv Thuli Madonsela, who shared a Message of Renewal, Healing and Hope. For the second commemoration lecture held in August 2021, Dr Mamphela Ramphele delivered a message of Honour through Healing. The third lecture in August 2022 commemorated the 10th anniversary of the Marikana massacre. Professor Adam Habib discussed the Social Compact and the Importance of Rebuilding. On 16 August 2022, the entire South African mining industry came together, pausing for a moment of silence and reflection in honour of those who died in 2012 - a solemn occasion marking our collective commitment.

We continue to make progress on the commitments made to the widows and families of the deceased. Not least, this includes the completion and delivery of 16 houses to the widows and families of the deceased of which eight houses have been completed and handed over with the remaining eight houses scheduled for handover by the end of 2022.

We also continue to fund and in other ways support the education of the children impacted by the tragedy, many of whom are now young adults, through the Sixteen-Eight Memorial Trust. The Trust currently supports 139 beneficiaries, ranging in age from 9 to 41 years old. To date, the Trust has contributed R64.5 million in all to beneficiaries, averaging close on R460,000 per beneficiary since its inception. Six beneficiaries began their tertiary studies in 2022, bringing the total number studying at tertiary level to 25 (excluding post-graduates). One of the Trust's first tertiary-level beneficiaries, Mandla Yawa, recently graduated with a PhD in Agriculture and Animal Science from Fort Hare University. He initially joined Sibanye-Stillwater as an intern in September 2020 and in December 2021 was appointed as a Social Responsibility Supervisor, overseeing several of the projects falling under the Marikana Renewal and the social and labour plans.

Associated with the Marikana Renewal is the Letsema engagement process, a programme of engagement with a broad range of stakeholders in the region facilitated independently by a social facilitation organisation, ReimagineSA. The Letsema process uses South Africa's rich cultural heritage to collectively find solutions to common problems. In a multi-stakeholder initiative, the families, elected representatives, traditional leaders, NGOs, and communities have been brought into the process as part of the healing required to rebuild trust. Sibanye-Stillwater has a long-term vision for the Marikana region and has significant investments underway to create opportunities that change lives through investment, employment, and supporting local community development.

This year, a series of multi-stakeholder dialogues, or Pitsos, were launched as part of the Letsema process, to encourage information sharing relating to the realities faced by stakeholders. The first Pitso was held in May 2022 and attended by 94 family members of the deceased, as well as government officials, and NGOs. This Pitso encouraged engagements relating to the healing journey thus far and a dialogue dealing with memorialisation. Discussions occurred in the context of six focus areas identified as critical by the families: Justice, Memorial, Livelihoods, Education, Health, and Housing. These dialogues have the aim of fostering accountability and shared responsibility among stakeholders. Subsequent to these engagements, the families have established a task force to conceive and build a memorial site at the Koppie in Marikana.

The Marikana Renewal Programme supported by the Letsema process is a truly unique private sector initiative in terms of its inclusivity. Its aim is to come to terms with and learn from tragedy, while actively building on the seeds of hope and reconciliation. This is not a journey that we have travelled alone. We are very pleased to have received an overwhelmingly constructive response from those affected by the tragedy, and those in the district who live under its shadow. We are also pleased that, to mark the 10th anniversary, the South African government recognised Sibanye-Stillwater's work and expressly acknowledged its responsibilities. The government's statement can be read at: Government commemorates the Marikana tragedy.

The history of mining abounds with practices that damaged the fabric of society in the interests of a few. But we believe that we have learned since that era that mining must be conducted in a way that builds social and economic capital for all stakeholders. And by doing this in both a socially and environmentally responsible way companies, and especially mining companies, have the capacity to drive change, to achieve social justice and create enduring value.

We remain committed to honour, engage and create in collaboration with other stakeholders to ensure a positive future and legacy for Marikana and its people collectively. Significant detail on the Marikana Renewal can be found at: https://www.marikanarenewal.co.za. Wage negotiations

SA gold wage negotiations

On 9 March 2022 AMCU and the NUM (the Unions) gave notice that their members would be embarking on industrial action. This followed engagement with union representatives over a ten-month period including facilitation by the Commission for Conciliation, Mediation and

Sibanye-Stillwater Operating and financial results | Six months ended 30 June 2022

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Arbitration (CCMA) during which the Unions stuck rigidly to their demands for annual increases significantly above inflation. A decision was taken to implement a concurrent lockout of all employees on strike, partly in the interests of the safety of employees as well as to safeguard company infrastructure and assets. After more than three months of industrial action, an agreement was finally reached with the unions on 13 June 2022, following successful intervention by the CCMA at the behest of Sibanye-Stillwater.

The final wage agreement provides for inflation-linked annual increases (an average increase of 6.3% pa), which caters for the current elevated inflationary environment, and is fair to employees and protects the interests of other stakeholders. Importantly, improvements in several ancillary terms which are of significant strategic advantage were negotiated, including a wage averaging agreement that has been subject to dispute for several years.

Despite the significant disruption of this protracted industrial action, the firm position taken was a necessary investment in protecting the future of our gold operations. The above inflation increases demanded by the unions would have significantly impacted on the sustainability of the operations, with adverse consequences for all stakeholders, including employees, in the long term.

Pleasingly, the levels of violence and intimidation which characterised previous industrial action were significantly reduced, which can be largely attributed to the lockout effected by management at the start of the strike as well as reduced rivalry between the Unions. The proactive implementation of strike plans and management of fixed costs to contain the financial cost and preserve value, further mitigated the impact.

The return to work after the industrial action and safe resumption of operations is progressing according to plan with normalised production rates expected during October 2022 and the outlook for the remainder of the year significantly improved.

SA PGM wage negotiations

Initial engagement with representative unions at our Rustenburg and Marikana PGM operations commenced in early August, following pre-engagement sessions which included information sharing by economists and industry experts to establish a shared understanding of the prevailing operating and macro-economic environment. Multi-year agreements reached between the same representative unions and industry peers have already been achieved without disruptions.

Our positioning will continue to be based on inflation-related increases that accommodate the cost pressures facing our employees and ensure fair pay, while protecting the sustainability of the business for a lower PGM pricing environment than has been prevalent during the last two years. We are hopeful that the experience at the gold operations has set the scene for a smooth negotiation on reasonable terms.

OPERATING OVERVIEW (for more detail refer to the Group Safety and Operating Review)

SA PGM operations

The SA PGM operations' operating result for H1 2022 was below the levels reported during H1 2021 due to various operational challenges including seismicity, mining through the Hex River fault at the Bathopele mine and power constraints associated with load curtailment and copper cable theft. 4E PGM production including PoC of 849,152 4Eoz for H1 2022, was 9% lower than for H1 2021. Excluding PoC, 4E PGM production of 823,806 4Eoz, was 8% lower.

Costs were once again well managed with AISC (excluding PoC) of R18,160/4Eoz (US$1,179/4Eoz), benefiting from higher by-product credits, only 7% higher year-on-year despite 8% lower production. AISC including PoC of R18,804/4Eoz (US$1,221/4Eoz), was only 2% higher than for H1 2021, due to lower volumes of concentrate purchased.

The average 4E PGM basket price of R43,379/4Eoz (US$2,817/4Eoz) was 19% lower than for H1 2021. As a result of the lower average 4E basket price and lower production, adjusted EBITDA of R21.2 billion (US$1.4 billion) for H1 2022 was 33% lower than the record adjusted EBITDA of R31.3 billion (US$2.2 billion) for H1 2021, but was the second highest adjusted EBITDA achieved from the SA PGM operations and marginally higher than for H2 2021.

This solid financial contribution from the SA PGM operations more than offset the losses at the SA gold operations and was largely responsible for the positive cash flow recorded for the period, despite the operational challenges at the other operations. The deferred acquisition payment of 35% of cash flow from the Rustenburg operations to Anglo Platinum, will conclude during Q4 2022, further enhancing cash flow from the SA PGM operations.

US PGM operations

Mined 2E PGM production from the US PGM operations of 230,039 2Eoz for H1 2022 was 23% lower year-on-year due to ongoing operating constraints and the temporary cessation of operations at the Stillwater mine resulting from the flooding event on 12 and 13 June 2022 which restricted access to the Stillwater mine. AISC of US$1,366/2Eoz (R21,036/2Eoz) was 40% higher than for the comparable period in 2021 primarily due to reduced production, the reclassification of Stillwater East development from growth capital (Included in AIC) to sustaining capital (ore reserve development (ORD), included in AISC), continued inflationary pressures on stores, and premiums on contractor costs.

In addition to these factors, a 15% decrease in the average 2E PGM basket price to US$1,935/2Eoz (R29,799/2Eoz) resulted in adjusted EBITDA declining by 40% to US$261 million (R4.0 billion) for H1 2022.

Optimisation review

On 11 August 2022, a detailed overview of the repositioned US PGM operational plan was presented to the market by management. This strategic revision of the US PGM operations and expansion plans was prompted by various operational constraints together with changing macro environment and changing palladium market conditions.

The US PGM operations have delivered on the initial strategic intent and repaid the acquisition cost, hence repositioning the operations for greater flexibility and optimal long-term value, was deemed prudent. The revised plan envisages a production build-up to over 700,000 2Eoz by 2027 and AISC being maintained at below US$1,000/2Eoz (in 2022 real terms). Detail on the repositioning is available at: US PGM operations - repositioning for the changing market environment.

Sibanye-Stillwater Operating and financial results | Six months ended 30 June 2022

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US PGM recycling operation

The US PGM recycling operation fed an average of 22.9 tonnes of spent autocatalyst per day for H1 2022, 7% lower than for H1 2021 mainly due to ongoing global logistical constraints as well as reduced vehicle scrapping rates. During H1 2022, 4,235 tonnes of recycle material was received and 4,136 tonnes fed with recycle inventory increasing by approximately 100 tonnes.

Adjusted EBITDA from PGM recycling decreased by 22% year-on-year to US$39 million (R598 million) at a margin of 4%. The decrease was mainly due to an 8% decrease in the 3E PGM basket price received by the recycling operations to US$2,906/3Eoz (R44,752/3Eoz) and 14% lower 3Eoz sales.

SA gold operations

Operating activities across all managed SA gold operations (excluding DRDGOLD) ceased from 9 March 2022 due to industrial action until agreement was reached with the Unions and the lock-out was lifted on 13 June 2022. Underground production resumed from 28 June 2022 following medical screening, training and acclimatisation of returning employees, before being reintroduced in a phased manner in order to ensure safe resumption of underground mining activities. Surface mining operations were also curtailed during the industrial action with only Ezulwini plant processing material on a toll basis. It is expected that the surface operations will be fully operational by the end of August 2022, with the underground operations will ramping up to full production during October 2022.

Production was also impacted by the suspension of mining operations at Beatrix prior to the industrial action due to the self-imposed safety stoppage that continued from the previous year and also the suspension of milling operations at the Beatrix operation from 28 December 2021 to allow precautionary reinforcement and buttressing work to the tailings storage facilities (TSF). While this was completed by the end of May 2022, due to the industrial action mining was not feasible limiting the previously anticipated establishment of a stockpile.

As a result of the above factors, adjusted EBITDA (including DRDGOLD) declined from R2.4 billion (US$162 million) for H1 2021 to a negative R3.1 billion (negative US$202 million) for H1 2022, with DRDGOLD contributing R840 million (US$54 million).

Sandouville Nickel refinery

The acquisition of the Sandouville nickel refinery in Le Havre, France was concluded on 4 February 2022. Sandouville produced 3,499 tonnes of nickel metal, 1,066 tonnes of nickel salts and 113 tonnes of cobalt chloride at an average nickel equivalent sustaining cost of R460,397/tNi (US$29,896/tNi). Integration of the Sandouville refinery is progressing in line with expectations with a 10% increase in volumes produced year-on-year resulting from efficiency improvements and good recoveries. Recent increases in electricity and gas prices have reduced gross operating margin and will be a risk to costs depending on the direction of future European energy and gas supplies. The focus is on continuity and stability of production by de-bottlenecking the plant to increase throughput to nameplate capacity of ~12kt of Ni metal, ~4kt of Ni salts and ~600t of CoCl2 by 2026.

H1 2022 adjusted EBITDA was US$4 million (R60 million).

MARKET OVERVIEW

PGMs

The outlook for global auto production for H2 2022 appears more constructive, primarily due to resilience in the sector in China and an expected easing of supply chain constraints towards year-end. Improving inflation numbers from the US following a series of interest rate hikes during H1 2022 has resulted in some market optimism and an improvement in PGM prices since mid-year. Global macro-economic and political risks remain elevated however, with the probability of further disruption and an extended economic recession remaining high.

Global light duty vehicle (LDV) sales for H1 2022 declined by 8.5% year-on-year to 38.5 million units due to ongoing production constraints including continued semiconductor chip shortages, COVID-19 lockdowns in China and the war in Ukraine. PGM markets have been affected by the deteriorating global economic outlook and rising inflation.

Chinese LDV sales fell by 2.3% year-on-year to 11.9 million units with over 1 million passenger car sales estimated to have been lost between March and May due to regional lockdowns and quarantine measures imposed, although sales have improved since May 2022. The Chinese government recently halved the purchase duty for internal combustion engines and hybrid cars (with engine displacement of less than or equal to 2L and priced below CNY300,000 or approximately $45,000). This policy is expected to further incentivise LDV sales during H2 2022.

US LDV sales fell 18.2% year-on-year to 6.8 million units in H1 2022 as low inventories, rising inflation and interest rates drove LDV prices to record levels, with the average transaction price reaching a record high of approximately $47,000 in May 2022. Inventories averaged about 1 million units during H1 2022. Light vehicle registrations in Western Europe were down 15.5% year-on-year to approximately 5.8 million units in H1 2022. Major European markets all experienced double-digit contractions, with the overall passenger vehicle market falling by 16.3% in France, 11.0% in Germany, 22.7% in Italy, 10.7% in Spain and 11.9% in the United Kingdom.

Global LDV production forecasts have been downgraded since the end of 2021 with the latest global LDV production forecast by LMC Automotive consultants further reduced to 79.5 million units in 2022.

Despite initial market concerns about the possible impact of the war in Ukraine, sanctions imposed (primarily the LPPM removing Russian producers from its Good Delivery list earlier this year and sanctions being imposed by the UK government on Vladimir Potanin, the CEO and a significant shareholder in Norilsk Nickel) have resulted in relatively limited impact on global PGM supply. The availability of supply of capital equipment and critical parts into Russia may however constrain production and future growth plans in the near to medium term.

PGM supply from North America was affected by the regional flooding in Montana in mid-June reducing production from the region by approximately 60k 2Eoz for 2022.

PGM supply from South Africa is also anticipated to be lower in 2022 compared to the previous year due to the impact of prolonged power disruptions at Eskom, the state electricity utility and processing issues flagged by peers. Although many of the SA PGM producers have concluded wage negotiations, any social disruption or industrial action could further impact supply.

Sibanye-Stillwater Operating and financial results | Six months ended 30 June 2022

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