Neal Froneman. Picture: FREDDY MAVUNDA
Neal Froneman. Picture: FREDDY MAVUNDA

Sibanye-Stillwater is considering moving its primary listing offshore to ensure it can compete for international assets, removing the perceived SA discount associated with being listed on the JSE, according to CEO Neal Froneman.

While not specific about the timing or destination of a new primary listing, Froneman said at the Breakfast Indaba in Johannesburg on Wednesday that Sibanye wants to use its equity to pursue deals, and that will need a change in the listing.

Froneman said the broad thinking is around looking at moving the listing in about two years. More than a third of Sibanye’s shareholders are domiciled in the US, a country, he said, that welcomes investments and where communities and labour are far less hostile towards mining operations than those in SA.

Sibanye ran up $2.6bn in debt, roughly R30bn, to buy the Stillwater Mining palladium and platinum assets in the US, loading its balance sheet with debt and unsettling investors. In the future Sibanye would prefer to use competitive equity to compete with its North American peers in securing more assets, Froneman said.

It is not an exit strategy from SA, with the company intending to stay domiciled in the country where it now has its gold and the bulk of its platinum-group metals business, he confirmed.

Sibanye will likely expand into metals and minerals used in batteries for motor vehicles and large stationary applications, Froneman said, suggesting that in about three years there could be an announcement in this regard.

Talking specifically about Sibanye’s three gold mines, Froneman said the large Driefontein mine near Carletonville was “for all intents and purposes mined out”.

While there could be a life extension through a multi-billion-rand depth extension that would take up to 15 years to begin delivering returns, it is highly unlikely the Sibanye board or the company’s shareholders would approve such an investment in the current risk environment in SA, which is fraught with electricity shortages, rampant power prices and fractious labour relations.

An extension to Driefontein would cost about R1bn, the company said, referring to a number it released in 2016. Driefontein has a life of about 10 years and the decision to not invest in the extension can be changed in that time.

Sibanye is weighing up foreign options against an investment in a deep-level SA gold mine in the light of the variability and cost of electricity from Eskom and the strike by the Association of Mineworkers and Construction Union (Amcu) at the company’s gold mines, which has entered a fifth month. This is highlighting the volatile nature of the relationship with some unions.

Sibanye has largely exhausted its growth options in SA and is considering an entry into battery minerals as it formulates a strategy around future demand for a variety of these minerals, including nickel, vanadium, lithium and copper. It will begin rolling out its plans in about two years, Froneman said, who  stressed the need for a mixed geographical and mineral risk profile for Sibanye, adding that it was very heavily exposed to SA for the next two or three decades.

Correction: March 27 2019
An earlier version of this story reported that Neal Froneman said the extension of Driefontein would cost R10bn; however, the company later corrected this figure to R1bn.