Sibanye targets big league

Sibanye Gold plans to be among the world’s top-five producers of bullion, platinum and any other metal it chooses to mine.

Johannesburg - Sibanye Gold plans to be among the world’s top-five producers of bullion, platinum and any other metal it chooses to mine as the slump in commodities brings acquisition opportunities not seen in 15 to 20 years, CEO Neal Froneman said.

Currently the biggest miner of South African gold, producing about 1.6 million ounces a year, Sibanye is targeting growth through purchases that would place it among the five largest producers, Froneman said in an interview in Cape Town. To reach that, the company would have to produce about 2.2 million ounces annually, he said.

Sibanye will become a top-five producer of platinum once it receives regulatory approval for the planned takeovers of Aquarius Platinum and three of Anglo American Platinum’s Rustenburg mines. Froneman said he will also consider producers of base metals that have been hurt by the commodity slump.

The Bloomberg Commodity Index of returns on raw materials slumped to a 25-year low last month, with copper, zinc and lead recently touching multi-year lows.

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“We have a vision to grow into the top five in commodities that we’re involved in,” Froneman said. “If you run a prudent company, you will be able to take advantage of these conditions.”

Buying assets

Sibanye, created in 2013 when three aging South African mines were spun out of Gold Fields, will only make acquisitions that boost its dividends or sustain the payout in the long term, Froneman said.

Sibanye’s share price has more than doubled this year, giving the company currency to buy assets outside South Africa, Froneman said.

“We’ve never had the valuation that allowed us to do that before,” he said. “We’re still undervalued but there are companies that are more undervalued than us sitting outside of South Africa at the moment who are more distressed.”

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