Sibanye-Stillwater approves R10.5bn Keliber project as green metals push begins in earnest

Lithium concentrate

SIBANYE-Stillwater has approved the €588m (R10.5bn) development of the Keliber lithium deposit in which it recently increased its shareholding to 85%.

The project, situated in Finland and part owned by the Finnish government, will begin with construction of the Kokkola refinery producing 15,000 tons a year of lithium hydroxide which is used in the manufacture of electric vehicle batteries.

Kokkola refinery will be supplied from the Päiväneva concentrator some 65 kilometres distant. It will, in turn, be supplied with ore from a large footprint of mines: four open cast and three underground operations scattered across three municipalities in Finland’s Central Ostrobothnia. Sibanye-Stillwater described it today as Europe’s largest source of lithium. The mines have an initial 16-year economic life attached to them.

Today’s capital estimate is €142m higher than previously forecast. The increase was put down to inflationary pressure as well as updated project parameters. “It’s not an onerous,” said Neal Froneman, CEO of Sibanye-Stillwater of the project funding requirements.

Approximately €146m has been raised for the project after Sibanye-Stillwater exercised a control option taking its stake to 50% plus one share. The consideration for this was new Keliber shares. The South African miner then made a €146m voluntary offer to minority shareholders with Finnish Metals Group, owned by Finland, retaining a 14% with an option to increase this to 20%.

An additional €104m will be raised towards end-January which will conclude the equity portion of the financing for the project.

The balance will be debt financed. Facilities are also under discussion with third party lenders to raise a minimum of €250m of debt to fully fund construction of the project, Sibanye-Stillwater said.

Permitting of the project is not 100% complete as yet. Sibanye-Stillwater said today construction of the Päiväneva concentrator and the initial two open pit mines, the Syväjärvi mine followed by the flagship Rapasaari mine will commence once all the environmental permits are received.

The Syväjärvi mine is fully permitted, while the environmental permits at the Rapasaari mine and the Päiväneva concentrator are currently outstanding, it said.

In the event the refinery is completed before the mines are permitted, the joint venture partners have the option of refining third party spodumene. This essentially means that the refinery can operate as a standalone facility. Discussions with potential suppliers are underway, said Sibanye-Stillwater.

Keliber will employ around 300 people (including contractors) at steady state with around 500 people involved in the construction phase, approximately half of them at the Kokkola refinery.

Sibanye-Stillwater also said it would allocate capital for further exploration in the region as Keliber was a scaleable project.

Keliber would be the first fully integrated European lithium hydoxide producer supplying the European market, said Froneman. “It is expected to have one of the lowest emission footprints in the industry.”