Sibanye May Boost Platinum Metals Output in South Africa

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Sibanye Stillwater Ltd. may spend 3.9 billion rand ($270 million) on extending the life of the Marikana operations it acquired with the purchase of Lonmin Plc two years ago after platinum-group metals rallied.

Chief Executive Officer Neal Froneman said last month that Sibanye plans further investments to boost PGMs output from South Africa. The head of the world’s No. 1 platinum miner said the metal could climb by more than 80% during the next four to five years as the global economy recovers and supply dwindles.

If the company’s board gives approval this month, work on the K4 and Klipfontein projects will start in 2021 and take eight years, the Johannesburg-based miner said in a statement Monday. That would boost annual output by about 250,000 ounces of PGMs. Sibanye shares rose 6.4% in Johannesburg, bringing this year’s gain to about 15%.

K4 would extend the life of Marikana by more than 50 years, said James Wellsted, a spokesman for Sibanye. The project would require the completion of shaft infrastructure to extract metal from both the Merensky and UG2 reefs.

Sibanye May Boost Platinum Metals Output in South Africa

The investment could potentially create about 4,500 new jobs if it goes ahead, Wellsted said. Sibanye employs more than 80,000 workers at its South African operations. Completing development of K4, shelved nearly a decade ago, suggests that higher metal prices are reigniting investors’ interest in reviving those mines that were shut when producers struggled to contain costs.

“The potential approval of K4 and hence reserve life extension could be an incremental positive for Sibanye,” RMB Morgan Stanley said in a note.

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