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Sibanye Stillwater reaches tentative agreement with union, but mine's future is cloudy

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Posted at 10:09 PM, Jun 28, 2024

The United Steelworkers reached a tentative agreement with Sibanye Stillwater for a new contract at the main Nye mine on Thursday, but recent comments from the company's CEO on slumping prices have cast a shadow on the mine's future.

Both sides say palladium markets worldwide have had an effect on contract negotiations. The company and the union just started negotiations Wednesday for the company's other Montana mine, East Boulder near Big Timber.

The mining industry has always been volatile, and company officials said palladium prices are continuing to plummet and hurt demand.

“We haven't had profitable operations for over nine months,” said Heather McDowell, Sibanye Stillwater vice president of legal and external affairs.

McDowell says palladium prices dropped to $979 an ounce on Friday, a sharp decline from about $1,900 an ounce 18 months ago. Sibanye Stillwater is North America's only producer of platinum and palladium, which primary use is to manufacture catalytic converters for automobiles.

The drop prompted South Africa-based Sibanye Stillwater CEO Neal Froneman to speak about the future of the Stillwater at an investor conference in London earlier this week,according to Bloomberg News.

“The future of Stillwater remains in the balance,” Froneman said, according to the wire service.  “If there's no correction in the price soon, as strategic as it is, we'll have to put it on care and maintenance.”

McDowell told MTN News to keep the operations running, the company can not lay off any more workers.

“We cut to what we could to run our operations,” McDowell said. “In order to get our costs where they need to be, we need to keep our volume production up.”

McDowell attributes much of the current climate to foreign influence with 40 percent of the market.

“You can actually see the Russian palladium operations from space because they don't have pollution control technology,” McDowell said.

That uncertainty is happening as the company negotiates a new contract with miners.

McDowell said the company and Steelworkers just agreed to a 3.5 percent increase for 900 workers, mainly at the Stillwater mine in Nye for the next year.

That shorter deal is a by-product of current palladium prices.

“We would not normally negotiate a one-year contract,” McDowell said.

John Kessler, United Steelworkers international rep and lead negotiator, agreed palladium prices affected the contract.

He said it was the last, best and final offer from the company, and he will recommend that the bargaining unit approve the proposed contract.

Last November, Sibanye Stillwater cut 100 workers in Montana.

While most were hired back, some may worry it might happen again.

“We're trying to survive a very negative market right now,” McDowell said. “But you know, we, we've got to have people to do that.”