You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App

NEW SENS search and JSE share prices

More about the app

Sibanye buys Brazil mines in R14.7bn battery metals push

In race to supply battery metals to the booming electric-vehicle sector.
Neal Froneman. Image: Bloomberg

Sibanye Stillwater agreed to pay $1 billion in cash for nickel and copper mines in Brazil, in a deal that highlights the race to supply battery metals to the booming electric-vehicle sector.

Nickel, traditionally used to make stainless steel, is a key component in lithium-ion batteries and a favorite talking point of Elon Musk, who appealed to producers last year to “please mine more nickel.” That’s sparked a fight over nickel mines as the industry gears up for the green transition.

Flush with cash from a rally in the rhodium and palladium it mines in South Africa and Montana, Sibanye has joined the push into battery metals. Chief Executive Officer Neal Froneman has already acquired lithium assets in Europe and the U.S. this year and the purchase of Santa Rita — one of the largest nickel-cobalt sulphide mines in the world — furthers his ambitions.

“This transaction is a further meaningful step — adding two low-cost, producing assets to its green metals portfolio,” Johannesburg-based Sibanye said in a statement Tuesday.

Sibanye climbed as much as 3.9% in Johannesburg trading, after dropping 5.1% on Monday, when the company said it was in talks to buy the mines.

Sibanye is gaining “immediate exposure to the tight, underlying metal markets,” RMB Morgan Stanley analysts said in a note. The planned spending on deals doesn’t affect the company’s ability to pay dividends, although it could result in Sibanye moving into a net debt position, they said.

Santa Rita, along with the purchase of the Serrote copper mine, offers “substantial” long-term potential, Sibanye said. The deal to acquire the mines from affiliates of funds advised by Appian Capital Advisory LLP also includes a smelter royalty valued at $218 million, it said.

“The transaction also highlights the strong and growing demand for decarbonization commodities,” Michael Scherb, CEO and founder of Appian, said in a statement.

Since its formation in 2013, after Gold Fields Ltd. spun off its oldest South African gold mines, dealmaking CEO Froneman has transformed Sibanye through the acquisition of platinum-group metals assets from Zimbabwe to the U.S. Now he wants battery metals to contribute about a third of Sibanye’s earnings within four years as the transition to a greener economy spurs demand.

© 2021 Bloomberg L.P.

VIDEOS

COMMENTS   5

Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in and an Insider Gold subscriber to comment.

SUBSCRIBE NOW SIGN IN

Froneman is a ruthless dealmaker. Some call him lucky, I call him a genius. Sibanye are basically producing every naturally occuring metal known to man. Do you want EV’s? Sibanye. Do you want electronics? Sibanye. Do you want jewelry? Sibanye. Do you want autocatalysts? Sibanye. Hard for me not to be bullish.

Agreed. One of the best allocators of capital in the country.

Ditto

Always a pleasure to watch a competent dealmaker. The dishonourable minister and cohorts should take note.

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

SEARCH COMPANIES
Enter company name or share code:

ECONOMIC DATA  

  CPIThe Consumer Price Index (CPI) measures monthly changes in prices for a range of consumer products Oct 2021 5.00%
  CPI ex OERThe Consumer Price Index excluding Owners’ Equivalent Rent (CPI ex OER) measures monthly changes in prices for a range of consumer products excluding Owners’ equivalent rent that measures changes in the cost of owner-occupied housing Oct 2021 5.50%
  RepoThe rate at which the Reserve Bank lends money to the country’s commercial banks and set by the Reserve Bank’s Monetary Policy Committee. Nov 2021 3.75%
  Prime lendingThe Prime Lending Rate is the rate of interest that commercial banks will charge their clients when issuing a loan (home loan or vehicle finance) Nov 2021 7.00%
INSIDER SUBSCRIPTION APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING

Follow us:

Search Articles:
Click a Company: