Sibanye Stillwater, Southern Copper cut at Deutsche Bank

TomasSereda/iStock via Getty Images

Sibanye Stillwater (NYSE:SBSW) and Southern Copper (NYSE:SCCO) trade lower Wednesday after Deutsche Bank downgraded shares of both miners, to Hold from Buy and to Sell from Hold, respectively.

The firm said Sibanye's (SBSW) South African assets are the only bright spot in the portfolio, and cites the miner's continued operational underperformance across the U.S. palladium, platinum and gold operations.

While Sibanye's (SBSW) balance sheet is in a solid position, it is unlikely to drive higher cash returns as the focus of the company remains on acquisitions and growing in the battery materials space, which will be an overhang on the stock, Deutsche Bank believes.

Southern Copper (SCCO) shares have jumped in recent weeks as copper prices rallied, but the firm said updated guidance indicates the miner is struggling to get its operations on track after COVID-related disruptions, as copper and zinc production was downgraded while cash cost guidance was increased by ~10%.

Deutsche Bank believes the issues are not a "one-off" and expects a step-up in sustaining capital and operating expense to get Southern Copper's (SCCO) operations on track again.

Sibanye Stillwater's (SBSW) South African platinum group metals operations were hurt by electricity shortages in Q3, part of the reason for disappointing earnings.