SIBANYE-Stillwater was considering offers for its uranium assets which could see it swap resources for a stake in a pure-play miner of the fuel.
“We have had interest out of Canada, Australia – your key uranium jurisdictions,” said Sibanye-Stillwater CEO Neal Froneman who said his company was also weighing potential partnerships with mining companies on a “vanilla” joint venture basis.
“We have had lots of interest and we are very open-minded as to who we could work with. We have got to do it on the best commercial terms,” he said.
Sibanye-Stillwater has about 32 million pounds of uranium contained in tailings at its mothballed Cooke operations west of Johannesburg and about as much underground at the Beatrix mine in the Free State.
“These are some of the best pre-developed uranium assets in the world. The Cooke dumps, it is just uranium sitting on surface. It doesn’t really have to be mined,” he said.
Sibanye-Stillwater has once before studied building the Beisa uranium mine at Beatrix, but was deterred over concerns about the price of uranium, which can be volatile. Before Sibanye-Stillwater, Froneman was the founding CEO of Uranium One which ran into funding problems amid a burnout in the fuel’s price.
But uranium has been on a tear for the last year. According to the World Nuclear Association, global uranium demand is forecast to reach 83,840 tons in 2030, from 65,650t now, while supply falls 50%. A doubling in the development pipeline is needed to avoid a major supply deficit, the association said.
The development of Cooke, however has been hard to achieve without a processing unit but plans by Sibanye-Stillwater’s listed subsidiary, DRDGold to build a regional mill would provide downstreaming capacity, said Froneman.
Interest in Sibanye-Stillwater’s uranium is sure to come from Harmony Gold which said in February it was interested in acquiring third party resources of the material after reporting revenue from uranium of R435m in the six months ended December compared to R81m in revenue for the prior period.
“There are quite a few dumps in South Africa that contain a bit of uranium and have been operators. So our project team will be looking at it,” Beyers Nel, chief operating officer of Harmony Gold told Miningmx in an interview.
Froneman said Sibanye-Stillwater would “not be dragging its feet” in finalising a deal for its transaction with an outcome likely in a quarter or two.
One indisputable facet of monetising uranium, however, is that Sibanye-Stillwater would not use its own balance sheet which is heavily constrained following price declines in platinum group metals and nickel.
For this reason Sibanye-Stillwater would probably not enter into an outright asset sale, preferring instead “a partnership where a party with the balance sheet is willing to develop the assets and we get the benefit of them being developed and generating earnings”.
“It’s really a wide open space. There are combinations [with] pure uranium companies where we could sell those assets for a stake and achieve the same thing and end up being a significant shareholder that uses its balance sheet to develop the assets and so on. There are so many options, but we don’t have the answer,” said Froneman.
