Sibanye's Normandy landing


Sibanye's Normandy landing


Published Date: 2021-08-02 | Source: INCE|Community | Author: The Finance Ghost

Sibanye's Normandy landing

Sibanye-Stillwater (usually just called Sibanye for short) isn't shy when it comes to major deals. Neal Froneman has taken massive risks in the past and the commodity cycle has rewarded him (and shareholders) accordingly.

With a market cap of R187bn, Sibanye is still a relatively small player in the resources space. For context, Anglo American is worth R890bn.

Sibanye is focused on platinum group metals (PGMs) and gold. Like the biggest mining houses, the company has recognised a need to diversify the business into the energy sources of tomorrow - specifically, battery metals.

The first move was made in February 2021 with the purchase of a 30% stake in Keliber Oy, a Finnish mining and chemical company that aims to produce battery grade lithium hydroxide for the global lithium market.

The Keliber project has sufficient reserves for more than 13 years of operation.

Sibanye has followed this up with a deal for a nickel hydrometallurgical processing facility in France. That's a mouthful. It's known as the Sandouville facility, which is slightly easier.

The counterparty for this deal is French mining group Eramet SA and the facility is located in France's second largest industrial port. It is scalable for nickel, cobalt and lithium battery products, so this is an important platform play for Sibanye.

The estimated cost of the acquisition is EUR65m, subject to closing adjustments. Sibanye expects the transaction to close by the end of the year if all goes well with regulatory approvals.

It's a tiny deal in the context of the broader Sibanye business, but it demonstrates the focus of traditional mining houses going forward.

Disclosure: the author is a shareholder in Sibanye


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