Sibanye-Stillwater could list uranium business as gold M&A ambition put on back-burner

Uranium concentrate

SIBANYE-Stillwater may separately list its uranium assets depending on studies the precious metals company is currently assessing.

The company said in an interim results presentation today that is was considering converting its ageing Beatrix West mine to uranium production as well as restarting uranium output from its Cooke tailings deposits west of Johannesburg.

“We could see an announcement over the next quarter,” said Neal Froneman, CEO of Sibanye-Stillwater, regarding the structure of its push into uranium. The company liked its 50.01% stake in DRDGOLD which housed its gold tailings retreatment business, he said.

Asked to clarify Froneman’s statement regarding externalising the uranium, Sibanye-Stillwater spokesman James Wellsted said: “It may be, yes. It depends on what makes the most sense from a value perspective”.

Details on the possible restructure of the uranium assets would be provided on the company’s investor day, scheduled for September 9.

Froneman today picked out uranium as part of the company’s ‘green metals’ push that included a concerted push into platinum group metals (PGMs) recycling that could also be extended into battery metals recycling.

In addition, the company promised to continue recent investments in battery metals production, currently focused on supplying the European lithium and nickel markets.

Beatrix West, which has about five years of gold production remaining, was originally known as Oryx. The mine was developed by Gencor in the Eighties at a then cost of R2.6bn in order to access the Beisa uranium deposit.

Froneman considered accessing the uranium deposit when running Sibanye-Stillwater forerunner, Sibanye Gold in 2013 before deciding not to press ahead. Froneman said today “not much uranium mining has taken place” from the Beisa deposit.

Gold M&A iced

Sibanye-Stillwater said there was a 125 GW pipeline of new nuclear capacity under development which would put the uranium market into deficit in the next five to 10 years. The uranium price would average $60 per pound in the long-term, it forecast.

Sibanye-Stillwater’s push into uranium would be managed by Sibanye-Stillwater’s long-standing associate and adviser, Dennis Tucker. Tucker was instrumental in Sibanye-Stillwater’s diversification into PGMs from gold mining.

Commenting on possible merger and acquisition activity in the gold sector, Froneman said there were no plans to follow up on comments earlier this year that the company could be the catalyst for the creation of “a South African mining champion”.

Offers of mergers were thought to have been put to Gold Fields and AngloGold Ashanti although Froneman has stopped short of confirming this.

“We are not focusing on gold,” said Froneman who added that Sibanye-Stillwater would continue with its South African gold production despite it forming “a drag” on the firm’s market valuation. “We employ about 40,000 people,” he said of the firm’s reticence to dispense with the local gold operations.