Sibanye-Stillwater considering M&A to supplement its SA uranium resources

Stockpiles of uranium ore

SIBANYE-Stillwater would like to build its South African resources of uranium through merger and acquisition, said CEO Neal Froneman.

“We’re looking more broadly at uranium. We think it’s one of those metals that we need to have more exposure to. We should’ve been in uranium a year or 18 months back in a bigger way,” Froneman said in an interview.

Sibanye-Stillwater has uranium assets in its portfolio. At its  its half year results presentation last year it said it intended to mine the Beisa uranium resources at its Beatrix West gold mine as a way of extending the Free State province asset’s life, currently set at about four more years.

The company also has access to uranium contained in tailings dumps near its mothballed Cooke shafts, west of Johannesburg, which it now considers its best resource of the metal. It has even raised the possibility of separately floating a uranium company.

“It’s certainly part of, let’s call it sustainability in the Free State. But first of all, uranium has really come back into its own,” said Froneman of the metal’s price. The price for uranium oxide increased to $64/lb in April after trading in a narrow $20 to $30/lb for the previous four years.

Prices have since retreated but Paladin Energy announced this week it would proceed with the $117m reopening of its Heinrich Langer mine in Namibia.

“There are a number of uranium projects in the pipeline just waiting for the price to recover,” Namibia’s finance minister Ipumbu Shiimi told Bloomberg News in May. “If the price reaches $65-$70 a pound, then that will trigger more investment in uranium.”

The improvement in the uranium price this year is owing to a growing supply deficit. Globally, there are some 57 new nuclear plants under construction and a further 97 planned for construction.

Although Froneman said his company was interested in buying uranium assets, the market was expensive. “I do think that like all metals there’s still quite a lot of froth in the uranium space,” he said. “I just think there will be a bit of reality setting in with an economic reset which is why we are being patient and prudent with our balance sheet.

“At the right time we will make the moves when we see the value.”

Froneman said Sibanye-Stillwater was conducting a feasibility of its uranium resources. “The work we have been redoing is a feasibility study predominantly more on the Cooke side than Biesa because that’s the critical part.

“So, it’s happening and we’re also looking more broadly at uranium we think it’s one of those metals that we need to have more exposure to.”