PRECIOUS Metal producer Sibanye Stillwater yesterday announced its third investment into battery metals through a $490 million (R7.03 billion) 50-50 joint venture of a lithium project in Nevada, the US, in line with ambitions to diversify into green metals.
Sibanye yesterday announced the deal with Australian-listed Ioneer for the development of the Rhyolite Ridge Lithium-Boron Project.
Rhyolite Ridge is a large, shallow lithium-boron deposit expected to be one of the first large-scale US lithium projects to enter production, currently anticipated in the second half of 2024.
Sibanye, which operates several platinum and gold mines, also committed to purchasing 7.1 percent of Ioneer’s ordinary shares for about $70 million (R1.02 billion), pending approval of shareholders at an extraordinary general meeting next month.
The deal marks Sibanye’s third renewable energy addition after the acquisition of a 30 percent stake in Finnish-based lithium mine Keliber Oy and buying the Sandouville nickel hydrometallurgical processing facility, located in Normandy, France.
“This is Sibanye-Stillwater’s second lithium transaction and third transaction in the battery metals sector, which will be essential for the transition to a cleaner future,” Sibanye chief executive Neal Froneman said.
Sibanye said it had identified Ioneer as a partner and Rhyolite Ridge as a project that were aligned with the group’s strategy and the requirement for lithium in the US.
It said the investment came on the back of the US government declaring lithium as critical to economic national security. The US government also called for the development of US critical metal processing and refining capacity.
James Calaway, Ioneer’s executive chairperson, said proceeds from the Sibanye placement would be used towards Ioneer’s development capital requirement, medium-term working capital needs and to progress long-lead items to minimise time to production.
“With a strong strategic partner in place, we can now look to finalise the debt financing for the project and move towards construction. We are confident in the alignment of our companies. Our partnership with Sibanye-Stillwater will allow Ioneer to unlock the tremendous, long- term value of Rhyolite Ridge,” said Calaway.
Ioneer will be responsible for the development of and the subsequent operation of the mine. The companies are expected to work collaboratively to secure debt financing for the project on acceptable terms to ensure the project was appropriately fully financed to production.
Sibanye has previously said its areas of focus include lithium, nickel, hydrogen, cobalt, copper, manganese, graphite and uranium as the world flicks the switch on renewable energy. It committed its renewable energy acquisition strategy would not compromise the dividend.
Demand for lithium for battery production has picked up amid emission standards kicking in.
Sibanye on Wednesday estimated ore reserves of the company’s largest lithium deposit, Rapasaari, had increased by 55 percent as compared to the previous estimate, which was published in December 2019. The increase of more than 50 percent at Rapasaari is expected to extend the life of Keliber’s planned mining operations by more than two years.
Seleho Tsatsi, an investment analyst at Anchor Capital, said the investment was in line with Sibanye’s commitments to green metals.
“This is its biggest commitment of capital to date in this space. It has said that it has been looking at the battery metals space for over two years now so today’s move is in line with those previous statements,” said Tsatsi.
BUSINESS REPORT ONLINE