Sibanye says new US Inflation Reduction Act offers opportunities

Sibanye Chief Executive, Neal Froneman. (Image: Sibanye Gold via YouTube)

The new US Inflation Reduction Act offers great opportunities for Sibanye Stillwater’s diversification into battery materials and it may look to add more such assets, CEO Neal Froneman said on Thursday.

Enacted this month, it includes climate and clean energy policies and rules on electric vehicle (EV) battery materials such as cobalt, lithium, nickel and graphite.

Sibanye, which started acquiring battery mineral assets in 2021, bought half of the Rhyolite Ridge lithium-boron project in the United States last September in a $490 million deal with Australian-listed ioneer Ltd.

Froneman said Sibanye, which already had platinum group metal (PGM) operations in Montana, invested in the Rhyolite Ridge project betting on the US ramping up domestic production of battery metals.

“We welcome the Inflation Reduction Act and we see a lot of benefit. Would we like to grow in the US? Absolutely, but that growth will only be if it’s value-accretive and we will look for those solutions,” Froneman said during a results call.

He added that the forecast economic downturn could present Sibanye with opportunities for acquisitions.

Sibanye said it was confident the Rhyolite Ridge project would overcome regulatory hurdles after ioneer submitted a revised project plan that sought to assure US regulators it would not impact the rare Tiehms buckwheat flower found in lithium-rich soils in Nevada.

Sibanye reported a 50% slump in its half-year profit on Thursday, after a three-month strike at its gold mines and floods at its United States platinum group metal (PGM) operations cut production.

Headline earnings per share – the main profit measure in South Africa – fell to 4.23 rand ($0.2513) from 8.43 rand a year earlier.

Production from Sibanye’s South African gold operations fell 63%, mainly due to the wage strike between March and June.

Severe flooding in June at Sibanye’s Stillwater mine in Montana suspended production for seven weeks, resulting in a 23% decline in production from a year earlier.

Sibanye also realised lower PGM prices during the just ended half, compared to historic highs recorded during the first half of 2021, when the global economic recovery from covid-19 lockdowns drove demand for the metals.

The company declared an interim dividend of 1.38 rand per share.

($1 = 16.8336 rand)

(By Sinchita Mitra; Editing by Rashmi Aich and Jason Neely)

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