Sibanye Stillwater to Lay Off Approximately 700 Employees

Carbon County will feel the effects

By Denise Rivette

Sibanye Stillwater announced today that they will undertake a huge restructuring of their Montana operations (located in Stillwater and Sweet Grass Counties) that will result in a workforce reduction of approximately 700 jobs (over one-third of their Montana workforce). Operations at Stillwater West will be paused and production at East Boulder will be curtailed by one-third. Because of bumping rights (a negotiated right granting the ability of one hourly employee to displace another in a layoff situation), it is unknown at this time how many Carbon County residents will lose their jobs. In any event, the Carbon County Commissioners anticipate a devastating impact on our county.

In a letter to employees from Kevin Robertson, Executive Vice President of U.S. Platinum Group Metals (PGM) Operations, it was explained that 60-day layoff notices would be sent out today to those salaried employees whose jobs would be eliminated or combined, while hourly employees would receive information from their union.

Robertson stated in his letter, “We produce about 78% palladium and 22% platinum from our Montana mining operations, with sufficient volumes between our production and the other American recyclers’ production to meet America’s palladium demand. Two years ago, palladium was trading at $2,305 per ounce. In late summer 2023, it was down to $1,280 per ounce. In the last three months, palladium has traded consistently below $1,000 per ounce. We believe Russian dumping is a cause of this sharp price dislocation. Russia produces over 40% of the global palladium supply, and rising imports of palladium have inundated the U.S. market over the last several years. Imported palladium prices have fallen by nearly 40% this year alone.”

In 2023, North America accounted for the largest consumption share of palladium worldwide, at 29 percent of global consumption. Catalytic converters in cars and trucks account for the highest industrial use of palladium. In 2023, according to the United States Geological Survey (USGS), the United States imported 2,257,534 ounces of palladium. In 2023, Sibanye Stillwater produced 427,272 ounces; 1,481,506 ounces were recycled in the U.S.

Montana is home to the only platinum and palladium mine in the United States and is a top producer of copper.

Robertson concludes his letter with:

“Our platinum and palladium mines are the highest grade in the world by at least three times. We are the example of responsible domestic critical minerals production because of the good work you have done throughout the history of these operations. We are committed to the vitality of our local communities. The decision to pause operations at Stillwater West and to curtail production at East Boulder was one we put considerable thought, time, and effort into and delayed as long as we could. But to continue to operate at these losses would jeopardize our ability to operate at all. We are therefore now undertaking this significant restructuring that we believe will ultimately result in a sustainable business.

“We are optimistic we will get the government support we need to continue being the example of responsible mining and metals recycling in the United States. We also believe the palladium market will recover with the right adjustments. We are very concerned about all of you, your families and loved ones, and our communities. We want to be writing a positive update to our employees in the future, and we are going to work hard over the next year to get our business to a place where we can do that.

“We will be updating you frequently as we navigate this difficult time.”

Read the entire letter HERE

Last November Sibanye Stillwater underwent a restructuring process that resulted in the loss of 100 jobs. They had hoped that those cuts combined with the critical minerals production tax credit authorized in Section 45X of the Inflation Reduction Act would offer them the relief needed to continue operations at a steady rate. However, Section 45X excluded mining and recycling costs from the tax credit. Sibanye Stillwater have undertaken significant efforts to lobby for a change to the rule to include those costs.

When asked if anything was being done to reverse that exclusion, Gabby Wiggins, spokesperson for Senator Steve Daines, stated, “Given the importance of mining to Montana’s economy, Senator Daines pressed the Biden-Harris Treasury Department in early January for answers on why mining was excluded from 45X and still has not received a response. This is simply unacceptable given the fact that 700 Montana miners are no longer employed today.”

In February, Senator Jon Tester sent a letter to Department of Treasury Secretary Janet Yellen expressing concerns that domestic critical mineral production at places like Sibanye-Stillwater was being curbed by reliance on foreign adversaries like China. Within hours of Sibyane-Stillwater’s announcement, Tester personally spoke with Deputy Treasury Secretary Wally Adeyamo pressing him on the need for the Biden Administration to support the impacted workers.

After receiving news of the layoff announcement, Senators Tester and Daines introduced similar bills to ban the importation of critical minerals produced in the Russian Federation. The key differences in the bills are the specific minerals subject to the ban, how soon the ban takes effect and the specifics of when the ban could be lifted.

In a press release, Tester stated, “It is totally unacceptable that the Sibanye-Stillwater mine is being forced to lay off hardworking Montana miners, and make no mistake: this is happening because Russia is dumping critical minerals into the American market to drive down our prices. But the Biden Administration also needs to step up and support these American workers. I personally spoke with the leaders of the Treasury Department about ways to support the local workforce, and I will hold them accountable to get the job done. I stand with these Montanans who power our economy and are the lifeblood of many of our communities, and we won’t take this sitting down.”

Tester’s bill states “On and after the date of the enactment of this Act, the importation of critical minerals extracted or otherwise produced in the Russian Federation is prohibited.” There is no expiration date for the import ban in Tester’s bill.

Critical minerals in Tester’s bill use the definition found in the Energy Act of 2020 and include: aluminum, antimony, arsenic, barite, beryllium, bismuth, cerium, cesium, chromium, cobalt, dysprosium, erbium, europium, fluorspar, gadolinium, gallium, germanium, graphite, hafnium, holmium, indium, iridium, lanthanum, lithium, lutetium, magnesium, manganese, neodymium, nickel, niobium, palladium, platinum, praseodymium, rhodium, rubidium, ruthenium, samarium, scandium, tantalum, tellurium, terbium, thulium, tin, titanium, tungsten, vanadium, ytterbium, yttrium, zinc, and zirconium.”

Read the text of Tester’s bill HERE.

Senator Daines introduced an alternate bill. In the accompanying press release, he states he believes the layoffs can be attributed to the Biden-Harris administration allowing imports of critical minerals from Russia rather than relying on Montana mines to provide critical minerals to American markets. In addition, the import of Russian minerals is actively funding Russia’s war against Ukraine.

“Joe Biden and Kamala Harris failed to protect Montana jobs. Rather than relying on our own Montana mines to provide palladium, the Biden-Harris administration is allowing critical mineral imports from Russia, which is costing Montana jobs and funding Russia’s unjust war against Ukraine,” said Daines. “There is no reason the United States should be importing critical minerals that we can find right here at home. Montana is rich in minerals, and we need to be supporting American mines and American jobs, not Russia’s.”

Daines’ bill takes effect 90 days after enactment of the bill, a timeline that is often provided in bills affecting commodities to give businesses time to diversify their supply chain and find new suppliers. His bill also has a provision to end the import ban one year after Russia’s war with Ukraine ends and provides a three year probationary period after that during which the ban can be reinstated if Russia resumes hostilities with Ukraine. His ban is also limited to eight minerals: Braggite, copper, nickel, palladium, platinum, rhodium, ruthenium and zinc.

Read the text of Daines’ bill HERE.

The Carbon County Affect

How this layoff will affect Carbon County is unclear, but Commissioner Bill Bullock, who toured the Sibanye Stillwater recycling plant just yesterday believes the effects will be serious. “We don’t how this catastrophic event for the area’s major employer is going to affect the surrounding communities, but we expect it to be significant. The loss of jobs will have a ripple effect we can only imagine. Sibanye Stillwater is an excellent neighbor and good corporate citizen. We can only hope the situation turns around quickly.”