NEAL Froneman, CEO of Sibanye-Stillwater, is an interesting chap. Among the most watchable of his many drawcards is the fact he rarely sticks to the corporate line.
If his PR team spends any time with him rehearsing responses to questions at events such as annual results presentation, it doesn’t tend to show; not because of any shortcoming in the PR team, but because Froneman frequently goes off-piste, his entrepreneur’s appetite for open, off-the-bat thought, an unstoppable force of nature.
This sometimes becomes exaggerated in media interviews, and with variable results. He told Miningmx in February (reported in March) that he hadn’t lately considered a move for AngloGold Ashanti despite the fact it looks like the kind of company Sibanye-Stillwater should be dipping at in order to take revenue from gold back to 50%.
A few weeks later, however, he told BusinessLive AngloGold Ashanti is exactly the kind of company Sibanye-Stillwater should buy. He also threw in Gold Fields for good measure, a statement that has the look of delicious, pot-stirring delivery about it. Not only would such a deal undo the de-merger that Gold Fields CEO, Nick Holland, recently claimed was a career highlight, but it also threatens it just as Holland exits and his replacement, Chris Griffith, prepares to replace him.
Why, though, declare such an interest in these companies when any likely purchase is going to involve issuing shares?
It may well be due to frustrated ambition, or an attempt to get the ball rolling in some national debate involving ‘mining champions’ – a moniker that could only be interesting to government officials. Yet Froneman also has past form in publicly anticipating his own mergers and acquisition activity. He raised the prospect of taking out Lonmin a full 18 months before doing it.
Who knows outside of the Sibanye-Stillwater executive coterie if Sibanye-Stillwater is imminently preparing a knock-out consolidation of South Africa’s gold sector. It’s worth pointing out, though, that a ‘mega-merger’ of South Africa’s gold firms is not a novel thought. Barrick Gold CEO, Mark Bristow, wondered out loud in an interview with Miningmx in October whether Sibanye-Stillwater and his firm could, maybe, dismember AngloGold Ashanti – an aspiration from which he has since backed away.
If anyone’s going to have a crack at South African gold consolidation, it will be Froneman; in fact, it can only be Froneman. Sibanye-Stillwater’s strategy is not very unlike that of his former employer, Bernard Swanepoel at Harmony Gold: buying rather than building. And the truth is, Sibanye-Stillwater’s current gold portfolio needs refreshing as it is long on liability and in danger of getting lost as the firm’s battery materials strategy picks up pace.