Sibanye Gold wants more platinum assets, but also eying base metals, coal, uranium

The Cooke operation (pictured) comprises four shallow to intermediate depth mines (~1,000m) located 30km west of Johannesburg in the West Wits Basin. (Image courtesy of Sibanye Gold)

Sibanye Gold (JSE:SGL) (NYSE:SBGL), the biggest producer of the precious metal in South Africa, is actively considering more platinum acquisitions, as it seeks to take advantage of its strong current position and the weakness of most competitors.

In September, Sibanye acquired Anglo American Platinum’s (Amplats) Rustenburg mines for 4.5 billion rand ($330 million at the time). A few weeks later, it bought Aquarius Platinum for $294 million.

Platinum prices plummeted in 2015 but have recovered by about 19% since the beginning of the year.

The company’s chief executive, Neal Froneman, told Reuters that despite the collapse in platinum prices last year, he is confident that the sector has turned a corner.

“You are already seeing the platinum price move (up). In fact, I am concerned that we may even be too late (to take full advantage),” he said.

Froneman, who has been at the helm of Sibanye since it was spun out of Gold Fields in 2012, noted Sibanye would not make a move “just for the sake of making a move,” but rather would focus on acquiring operations that can enhance the miner’s cash flows.

The company, which will soon change its name to Sibanye Resources, is not only looking at buying platinum and gold assets, but has also expressed interest in coal, uranium and base metals.

Last month, Sibanye said it plans to spend R3.9 billion (about $260 million) this year boosting infrastructure at most of its assets. It also expects to invest R1.7 billion ($114 million) to develop its new Burnstone gold mine on the South Rand.