SA’s ability to work with both Western and Eastern countries is a “distinct advantage” for local mining companies as commodity producers look to step up production of “green” metals, according to Sibanye-Stillwater CEO Neal Froneman.
“SA is seen as going down the middle road. We believe this will give us a competitive edge as we go into battery metals” which are in growing demand as the world moves away from fossil fuels, Froneman told delegates attending The Joburg Indaba, a mining conference in the city, on Wednesday.
Froneman was part of a panel including Gold Fields CEO Chris Griffith, and Impala Platinum boss Nico Muller.
Griffith echoed Froneman’s sentiments, saying SA was still a good mining jurisdiction compared with some countries. “This isn’t the toughest place to work,” he said.
Gold Fields, one of the world’s largest gold miners, has operations in SA, Ghana, Australia, Chile and Peru, and made a bid earlier this year to acquire Yamana Gold, a Canadian company.
“We are not acquiring assets internationally because we feel we can no longer operate in SA, but because we are looking at where we can find the best quality assets,” Griffith said.
Gold miners had little choice but to look outside SA for new growth opportunities since gold mining had matured and production and reserves in SA were declining, he said.
Still, there is “massive” investment taking place in the SA mining sector, especially in platinum group metals (PGMs) and coal, which show that, from an investment perspective, SA is still considered a “relatively stable” mining jurisdiction, Griffith added.
However, companies with operations in SA have to contend with declining infrastructure, especially electricity supply and transport, but for investors the country offered many “protections”, which ensured that shareholders’ interests were safe, he said.
Froneman emphasised that Sibanye still saw plenty of opportunity in the local industry.
“We are not anti-SA and we will be mining here for a long time to come — our PGM assets in SA still have a 50-year lifespan. We know how to prosper here, I just wish it wasn’t so difficult,” Froneman said.
It was, however, “not prudent to have all your eggs in one basket, especially when there are concerns in the jurisdiction where you are operating”.
Sibanye, the world’s biggest producer of platinum, wants to grow its gold-mining portfolio, and the company is investing in new assets for metals used in the production of batteries to diversify its revenue sources beyond PGMs.
It has made several acquisitions in recent years, including an 85% stake in Finnish mining and battery chemical company Keliber, and Eramet Sandouville — the hydrometallurgical processing facilities of French mining group Eramet. It has also invested about $70m in the Rhyolite Ridge project in the US, which is expected to be one of the first large-scale US lithium producers.
Jurisdiction was not the only consideration when shopping for new assets, Froneman said. One of the most important criteria for Sibanye when looking at acquiring assets was ESG aspects. “There is no sense in buying assets that won’t [let] you reach climate neutrality.”
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