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Why Shares of Sibanye Stillwater Are Falling Today

By Scott Levine – Nov 26, 2021 at 2:08PM

Key Points

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Forget the price of gold, there are other causes making investors shy away from this precious-metals stock.

What happened

The price of gold is dipping a little lower today (about 0.1% as of this writing), but shares of the gold mining company Sibanye Stillwater (SBSW -1.87%) are plunging. As of 12:15 p.m. EDT on Friday, the stock was down 8.7%.

Concerns about a new COVID variant detected in South Africa and the company's strained labor negotiations have precious metals investors looking elsewhere.

A map of South Africa.

Image source: Getty Images.

So what

While Sibanye Stillwater operates some projects in the United States, the company relies predominantly on its South Africa assets, which are dedicated to mining gold as well as platinum group metals. Investors, therefore, are acutely attuned to news of the new COVID strain in South Africa, fearing that the government might implement lockdowns that could curb the company's ability to operate its various assets in the country.

Contributing further to investors' concerns today, Sibanye Stillwater reported this week that it has failed to reach an agreement with labor unions at its gold assets. Richard Cox, executive vice president of the company's South Africa Gold Operations, said, "It is disappointing that, while the company has increased its offer five times, the unions have not moved significantly from their initial demands."

With negotiations seeming to be at a standstill, investors appear doubtful that a resolution is in sight.

Now what

Although Sibanye Stillwater is a leading gold producer in South Africa, investors have plenty of choices in deciding how to add some luster to their portfolios. Between the concern over a new COVID variant and tense relations with labor unions, it's not surprising that investors are looking elsewhere.

Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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