Sibanye bides time on battery metals push as asset prices soar
Sibanye Stillwater Ltd. chief executive officer Neal Froneman plans to resume battery-metals acquisitions within two to three years, once inflated asset valuations come down.
A gauge of lithium prices more than doubled in the first four months of this year after surging 280% last year. The rally in lithium prompted Tesla Inc. CEO Elon Musk to appeal for more mining investment to close the widening gap between supply and demand.
Sibanye will focus on opportunities in North America and Europe, positioning the South African miner for markets that will drive demand for EVs, the CEO said. Finland’s Keliber Oy lithium project, in which Sibanye has a 30% stake, could start producing battery grade metal as early as 2024. Increasing its presence in those regions will also help persuade investors to rerate the company, which is being held back by issues in its home country, Froneman said.
South African mining companies not only face the challenges of the world’s deepest platinum and gold deposits, but are grappling with electricity shortages, community unrest and crime.
“We are suffering the consequences of bad policies, inequality, poverty,” said Froneman. “All these things are now really creating a lot of difficulty for companies like ourselves to operate.”
Still, the company won’t seek to acquire assets at any cost and will be “patient” in its pursuit of new deals, Froneman said.
“We will look at smaller transactions and we’ll look at large transactions,” Froneman said. “We can buy operating assets and we can also buy assets that need to be turned around.”