Sibanye-Stillwater bolsters balance sheet ahead of battery metals deal push in 2022

SIBANYE-Stillwater bolstered its balance sheet ahead of a renewed battery metals acquisition push in 2022 announcing today the terms of a $1.2bn bond.

About $700m of the new bond, which carries a 4% and 4.5% interest rates across two tranches, will be used to redeem an existing bond set to mature in 2025. This will leave the balance of $500m part of which was also for corporate expenses, the group said.

“We obviously still have to pay for the Appian assets which were $1bn,” said James Wellsted, spokesman for Sibanye-Stillwater, of corporate expenses. But coupled with the firm’s strong cash position and cash generating power, it is set up well for 2022.

Including $2.6bn in liquidity as of June 30, Sibanye-Stillwater would have financing capability of $3.1bn excluding cash generated in the second half of its financial year. The company reported earnings before interest, tax, depreciation and amortisation (EBITDA) of R15bn for the third quarter and was heading for about R70bn in EBITDA for the full year.

Neal Froneman, CEO of Sibanye-Stillwater, said: “We are not going to be stopping any work on our battery metals strategy. I think there is more to come. I can’t obviously lay it out in detail. We continue to look at opportunities. We are disciplined in what we do.”

His comments were made last month during a presentation of the firm’s $1bn acquisition of the Santa Rita nickel mine and Serrote copper project, both situated in Brazil.

The deals took total spending on battery metals acquisitions in 2021 to about $2bn which also included two lithium projects in Finland and the US each, and the Sandouville nickel processing facilities in France.

Gold division

Sibanye-Stillwater is meeting unions today under the auspices of the Commission for Conciliation, Mediation and Arbitration (CCMA) to consider its improved wage offer for employees at its gold mines.

On October 27, it increased its offer for entry-level category 4 to 8 employees to R480/month increasing to R570 and R600 per month more over the remaining term of the three-year deal. It had previously offered R400 more in the first month followed by increases to R520 and R570 a month over the other two years.

Sibanye-Stillwater executive vice president of the South African gold operations Richard Cox said today that the new offer was above inflation of 3.6%, but he added that the longevity of the mines – Kloof and Driefontein on the west Rand and Beatrix in the Free State province – would be imperilled by sustained above inflation increases.

The gold assets comprised 6% of EBITDA in Sibanye-Stillwater’s six months ended August financial results.