(Reuters) – South African miner Sibanye Stillwater has entered into a $500 million streaming agreement with Franco-Nevada Corp, the company said on Thursday, as it seeks to boost its balance sheet after the collapse of platinum group metal (PGM) prices.

Sibanye has said it will pursue metals streaming and prepayment arrangements, which involve selling future metals production in return for an upfront cash payment, to bolster its financial position. This is after its earnings plunged due to the collapse in metal prices.

“The group’s financial position has been reinforced at a competitive cost of capital,” Sibanye CEO Neal Froneman said in a statement.

The company and its industry peers are battling the impact of low prices of PGMs, which are used to curb emissions in vehicles.

PGM prices fell sharply in 2023 amid high inventory levels and concerns that the growth of battery-powered electric vehicles, which do not use PGMs, would reduce demand in future.

The diversified miner will receive the cash in exchange for gold and platinum from its South African operations, Sibanye said in a statement.

(Reporting by Aby Jose Koilparambil in Bengaluru and Nelson Banya in Harare; Editing by Mrigank Dhaniwala)