SIBANYE-Stillwater today approved a R5.5bn copper-gold Mt Lyell project in Australia’s island state Tasmania producing up to 26,000 tons a year of the in-demand red metal.
This is the second time the South African miner has approved an offshore greenfields project and comes despite the company refocusing the majority of its capital resources on organic growth, especially in its platinum group metals business in South Africa.
Its Keliber lithium project in Finland was commissioned earlier this year. The group said it would consider its expansion to a refined battery grade metal in 2027.
In addition to Mt Lyell, Sibanye-Stillwater also approved Burnstone project in Mpumalanga province. Widely-expected, the project’s approval will see R98m in capital spend this year. Burnstone will produce about 130,000 ounces of gold a year at steady state and has an estimated 25-year mine life. Sibanye plans to spend R3.5bn on project infrastructure over six years, with the processing plant expected to start in 2029.
In addition to copper output, Mt Lyell, near Queenstown in Tasmania, is also expected to produce about 16,000 oz of gold a year and 116,000 oz annually of silver once in steady state. First production is targeted for early 2029. Sibanye plans to spend A$11m ($7.5m/R136m) on Mt Lyell in 2026 as the project moves forward.
It said Burnstone would help shift its South African gold portfolio towards shallower, lower-risk and longer-life production.
“In addition, we are pleased that Burnstone and Mt Lyell have recently received a positive investment decision by the board to proceed, marking a further step in unlocking unrealised value from the Group’s organic project portfolio,” Sibanye-Stillwater said in its interim results announcement on Tuesday.
The group declared an interim dividend of 201 cents a share, worth R5.7bn, after headline earnings per share (HEPS) increased 216% to 601 cents from 190 cents a year earlier. Profit was R18.8bn, compared with a R3.9bn loss previously. Revenue increased 64% to R90bn, while adjusted EBITDA more than doubled to R31.8bn.
The average rand PGM basket price received by its South African operations increased 67%, while the gold price received was 35% higher. The average dollar PGM basket price at its US operations rose 70%.
Higher profits also resulted in a much larger tax and royalty bill. Royalties, carbon tax, mining and income taxes increased to R9bn from R1.7bn a year earlier.
Sibanye-Stillwater generated R20.7bn in cash from operations during the half, while net debt was halved and its gearing ratio fell to 0.18 times.
