Sibanye Gold mulling move into platinum industry by year-end

Sibanye Gold fine-tunes details for Anglo’s platinum assets buyout

South Africa’s top gold producer, Sibanye Gold (NYSE:SBGL) is going ahead with plans to expand into the country’s platinum sector before the end of the year, especially now that Anglo American Platinum (Amplats) has officially put up its mines for sale.

Chief executive, Neal Froneman, told Ft.com Monday (subs. required) the company is “positive and bullish” about platinum as a commodity, and its supply and demand fundamentals.

While he declined to be explicit about which assets Sibanye is interested in, market speculation about the miner buying off the three mines in the platinum belt operated by Anglo, has been mounting since early this year.

Back in April, the gold firm’s spokesperson James Wellsted acknolewged the company had interest in the commodity, but added there wasn’t anything specific on the table at that moment.

Froneman sees similarities between platinum operations and mature gold mines he has turned round since Sibanye was formed in late 2012, by Gold Fields. The company has thrived relative to its competitors. Over the last year the company has increased 64% to about $9.14 per share.

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But Sibanye has its own challenges. The gold miner recently warned over its earnings, saying that it expects at least 20% decline in its earnings per share in the six months ending June 2014.

The company has taken aging mines and restructured operations to make them more cost efficient. It has also negotiated wage agreements to limit disruption.

Sibanye operates the Kloof, Driefontein and Beatrix gold mines as well as various service companies.