SIBANYE-Stillwater CEO Neal Froneman said he rated his firm’s chances of bidding successfully for Zambia’s Mopani Copper after jointly submitting an offer with a “substantial Chinese copper company”.
“I do think we can involve eastern partners and help resolve a conflict Zambia is dealing with between east and west,” said Froneman in an interview. “Zambia did not request it.”
A decision from Mopani’s current owner, the state-owned ZCCM-IH, was about “two to three weeks away” after which the successful bidder would begin negotiations on a long-term fiscal regime, royalties and a stability agreement, said Froneman.
“One competitive edge is that we can be a bridge between east and west,” said Froneman. “China has spent a lot of money in Zambia and it would be difficult for the government to exclude them. That was one consideration,” he said.
“The other is that we have knowledge of deep-level, labour-intensive mining, and work with communities that are centered around a mine. It is completely different type of community to, say, in the US.”
Bidding has been whittled down from about four or five companies to Sibanye-Stillwater and its partner, and China’s Zijin Mining, he said.
Froneman said that if the bid was successful the partners would embark on a capital reinvestment programme of the asset. But shareholders should not expect ” a large, upfront capital outlay”.
Froneman also raised the prospect of investing in other assets in Africa without sacrificing the company’s strategic intention of diversifying its political risk. “Africa has critical minerals and is under-explored. Not all of Africa fits the bill but Zambia and Botswana do have good perceptions,” he said.
Commenting on merger and acquisition activity broadly, Froneman said the company preferred to invest at the asset level where it didn’t “get sucked into a competitive bidding process”.
Froneman earlier presented Sibanye-Stillwater’s interim results for the six months ended June 30 in which platinum group metal and nickel production declines combined with heavy PGM price declines resulted in a 36% decline in profit to R7.8bn.
However, the company announced it would pay a 53 South African cents per share interim dividend, equal to 35% of normalised earnings – the upper end of its dividend policy. Despite this, Froneman said the company’s board would revisit the dividend policy when it met to decide the final payout for the 2023 financial year.
“We pride ourselves on paying an industry-leading dividend but 3% is not industry leading,” he said of the interim payout. “We can pay out 50% of normalised earnings but the board has to meet to decide it,” he said.
Good luck.
Best wishes for Sibanye🙏🙏🙏
Froneman running Sibanye deep into the ground….as the share price reflects.
I’m Zambian and don’t support your bid. You’ve got issues at some of your other mines, where you’ve had to shut down production “owing to operational mishaps, a strike, and lower metal prices” and yet you claim you can resolve the mess that’s Mopani. Sibanye-Stillwater maybe different from the West but you’re no better; with or without the Chinese partnership!
Funny how fast investors and institutions are to blame a CEO for metal prices and share performance based on factors outside of their control. Some of these fund managers should run a mine themselves, it would male them far better investors if they did. No wonder they are often so fickle!
The great thing about Mopani is the people and the Orebody – it will not take much to get this mine in full operation if the Underground fleet are replaced
we are tired of waiting, can you speed up things so that production resumes at full capacity so that the economy of copperbelt towns comes back to normal.