SIBANYE-Stillwater is to invest $490m for a 50% stake in a joint venture with Australian firm ioneer which is developing a lithium and boron mine in the US described by the South African firm’s CEO Neal Froneman has having potential to become its largest.
In addition, Sibanye-Stillwater will buy $70m worth of ioneer shares giving it a foothold 7.1% in the company.
The transaction represents Sibanye-Stillwater’s third investment in its quick-fire battery metals strategy having already in February invested €40m for a 30% stake in the Keliber lithium project in Finland with the country’s government, and then in July buying the Sandouville nickel processing facilities in France from Eramet for €65m.
Including today’s proposed investment in the joint venture with ioneer and share subscription, Sibanye-Stillwater has this year racked up R9.9bn in new investments in the battery metals field. Battery metals also include copper, cobalt and nickel. They are deemed crucial to decarbonisation globally as automakers move into electric vehicle manufacture and the world’s economies consider their renewable energy options.
“Consistent with this, the US Government has declared lithium as critical to economic and national security and has called for the development of US critical metal processing and refining capacity,” said Sibanye-Stillwater.
Ioneer owns the Rhylolite Ridge Lithium-Boron Project situated in Nevada. In terms of the agreement between Sibanye-Stillwater and ioneer, the South African firm will contribute $490m for a 50% interest in the joint venture. Ioneer will maintain a 50% stake and operate the project.
In addition, ioneer has agreed to provide Sibanye-Stillwater with an 18-month option to participate in 50% of the North Basin project requiring an investment of $50m to trigger that stake.
The partners said they would work collaboratively to raise finance for the project. They also held joint rights in terms of marketing the minerals produced by the project.
According to a presentation on ioneer’s website, the Rhyolite mine will produce 22,300 tons of lithium carbonate in its first three years of production and 22,000 tons annually of lithium hydroxide thereafter. Boron production will be 175,000 tons annually. First production is set to be in the second half of 2024. It will be one of the US’s first lithium projects to enter production, said Sibanye-Stillwater in its announcement.
It is forecast to be the lowest cost mine of its type in the world. “Rhyolite Ridge is a world class lithium project and we recognise its strategic value, with the potential to become the largest lithium mine in the US,” said Froneman in an announcement.