Sibanye Stillwater reports on its battery metals operations
For the 11 months since acquisition on 4 February 2022, the Sandouville nickel refinery produced 4,839 tonnes of nickel metal, 2,003 tonnes of nickel salts and 153 tonnes of cobalt chloride at a nickel equivalent sustaining cost of US$32,239/tNi (R527,676/tNi).
While lower production was expected as a result of planned annual plant maintenance, H2 2022 was impacted by technical challenges at the plant and higher input costs, primarily gas and electricity.
The focus for 2023 will be to improve plant availability and to reduce the frequency of unplanned maintenance. Progress has been made in reviewing and renegotiating contracts with suppliers and customers which should results in improved commercial terms at Sandouville for 2023.
Since year end there has been a change of leadership at Sandouville and several senior appointments have been made in the European region to further support the recovery at the Sandouville operations.
The focus is on continuity and stability of production by de-bottlenecking the plant to increase throughput to nameplate capacity of c.12kt of Ni metal, c.4kt of Ni salts and c.600t of CoCl2 by 2026.
STRATEGY REVIEW
A disciplined focus on capital allocation and value accretive M&A was maintained during 2022. Battery metal prices remained at elevated levels throughout the year and a move by other industry peers toward diversifying into the battery metals space was evident.
Meaningful progress has been achieved in 2022 with the growth in the European region. An 85% interest in Keliber was acquired by exercising our right to take a 50% stake and concurrently making an offer to minority shareholders other than the Finnish Minerals Group, which remains a key shareholder. The required permits to advance the project have been obtained and construction of the refinery has commenced in 2023.
The Sandouville recapitalisation is gathering momentum, and prospects are good for establishing PGM, and in time, battery metals recycling operations on a meaningful scale in Europe. We are also positioning to become more active in global tailings reprocessing through a recent increase in the investment in New Century.
Commitments have also been obtained from the US Department of Energy for loan funding of up to US$700 million for the development of the Rhyolite Ridge project in Nevada. This reflects the strong support for establishing local supply of the critical minerals required for a low carbon economy in both North America and in Europe, where the company purposefully built strategic beachheads.
These opportunities do not exclude selective expansion into Africa as part of its Africa Region strategy. Sibanye Stillwater have identified that Zambia, under President Hichilema’s new leadership, is transforming into an attractive jurisdiction seeking to attract mining capital under a favourable policy environment.
While the Zambian mining industry has been devastated through years of poor regulation and neglect, confidence is building that the changes will persist creating meaningful opportunities for renewal of its mining industry. The intended sale of the Mopani mine is of particular interest presenting a unique opportunity to secure meaningful production ounces of copper, a key green metal for the low carbon economy, at a favourable entry point in the commodity cycles.
With such opportunities scarce in other parts of the world and greater competition for resources due to perceptions of the risk context, we see diversification of specific commodities and jurisdictions within Africa as a meaningful contributor to growth in Sibanye Stillwater green metals strategy.
