#EUA – Sibanye Updates

Sibanye Stillwater have issued a few updates lately that are worth noting :

1. Increase in profits H1 2021 to $1.7bn (up 162%)

https://thevault.exchange/?get_group_doc=245/1628167650-sibanye-stillwate-trading-statement-operating-update-H12021-5aug2021.pdf

Generating profit generates options, with debt finance at record lows they now have the firepower to make an acquisition larger than Stillwater in 2017

2. Sibanye-Stillwater progresses battery metals strategy with the exclusive put option to acquire Eramet’s Sandouville nickel processing facilities

https://thevault.exchange/?get_group_doc=245/1627623615-Sibanye-Stillwater-progresses-battery-metals-strategy-exclusive-put-option-sandouville-nickel-30Jul2021.pdf

“The Sandouville facility is situated in the industrial heart of Europe at Le Havre, France’s second largest industrial port, with strategic access to extensive logistical infrastructure including shipping, rail and key motorways, supporting any future supply into the European end user markets. The current Sandouville facilities include a hydrometallurgical nickel refinery with a production capacity of 12,000 tonnes per annum of high-purity nickel metal, 4,000 tonnes per annum of high-purity nickel salts and solutions and around 600 tonnes per annum of cobalt chloride. For more information on the transaction, please refer to https://www.sibanyestillwater.com/news-investors/news/transactions/sandouville/.
Investment rationale
The transaction is the second step in Sibanye-Stillwater’s battery metals strategy, building on the investment in the Keliber lithium hydroxide project, in partnership with the State of Finland and the Finnish Minerals Group, announced in February 2021. The Sandouville site is a polyvalent facility which is already zoned for heavy industrial purposes. The site is scaleable for nickel, cobalt and lithium battery grade products, and will enable Sibanye-Stillwater to further advance its battery metals strategy and recycling activities.”

Thoughts

So why are these relevant ? Well for one it shows the increasing firepower and appetite to diversify away from South African assets. Stillwater acquisition showed Froneman is prepared to be brave and make big decisions and now they are building a battery metals business – but a nickel processing plant needs some nickel…

Also, they call it their ‘second step’ – not the final step. Crucial signal of more activity to follow as they build a European presence. If for example they shipped nickel from Murmansk area, they would not be reliant on NorNickel processing plant in Monchegorsk.

I think it was a huge clue as to the scale of Froneman’s ambitions and intrigued to see where it goes next. Very much on my shortlist of companies in talks with Eurasia, could even be the preferred bidder as announced on May 12th.

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