‘Gold Fields or AngloGold merger is off the table’ – Sibanye-Stillwater CEO Neal Froneman

Chief executive of diversified miner Sibanye-Stillwater, Neal Froneman joined the BizNews team on a day where one of the world’s largest precious metals producers announced record financials. Froneman notes that although the robust commodity prices were a tailwind for the business, operational performance was excellent. There has been much speculation around the deal-maker looking to merge with the likes of Gold Fields or AngloGold, creating a mining behemoth that could compete with international peers such as Barrick Gold or Rio Tinto. Froneman says this is off the table and Sibanye will rather try accelerate its move to commodities that will benefit from the shift to a clean energy economy. – Justin Rowe-Roberts

Neal Froneman on Sibanye’s record financial results: 

I think I’m very mindful of two things. The one is that it was a solid operating performance and of course, that is totally within our control and we delivered. I think the other thing is – as you said – we had a bit of a tailwind from commodity prices. We are not naive to think that this continues for forever and a day. So we need to be prudent with our planning, but we are very happy with what we delivered.

On the move to commodities that will benefit from the shift to a green economy: 

I personally think it’s the future full stop. For two reasons – it’s the right thing to do. We have to create climate change resilient businesses and having an underlying portfolio of green metals is critically important. I think you can see the reverse in say coal and perhaps petroleum and so on. But also I think that green metals or green companies will trade at premiums to others because of – let’s call it enhanced an ESG profile. So absolutely, it’s the future and hence why we are actively pivoting into a green metals portfolio.

On the fundamentals of the precious metals basket: 

I think the fundamentals are good. I do think that we need to recognise that things like Rhodium – there were short-term headwinds in terms of supply. Demand was exacerbated by those headwinds because I think some of those producers actually went and bought commodities in the market to fulfil their contracts. So you’ve got a double whammy and certainly rhodium at $30,000 an ounce to me is not sustainable. I think Rhodium will come back.

On whether he pays much attention to Fed Jerome Powell’s monetary policy actions: 

It is something that we take note of, but in my mind – it’s more of an impact on gold than it is on the other commodities. What I do watch very carefully is interest rates. I think certainly when it comes to gold, that is a key indicator of potential price movements.

On the possibility of merging with the likes of Gold Fields or AngloGold: 

It’s not being considered. We don’t see value in gold. We really want to progress our battery strategy at the moment. When I say we don’t see value in gold – I like gold and I do believe that it’s a natural hedge to the industrial metals. But I think that interest rates are about to rise and I think there’s more pain to come in the gold sector.

On the employee vaccination progress at Sibanye: 

It’s a key responsibility and people in your business come absolutely first. Well ahead of profits. And as we know, protecting lives is our single biggest priority and I believe vaccinations do that. We were early in registering our facilities. We’ve had the backing of the Department of Health. We look forward to actually getting that number well above 70% and inoculating people in our communities as well. So that’s one small example of our contribution to society. I think there are many others, such as the funds that are flowing out of trusts to employees in terms of profit share schemes and our direct contribution to the fiscus and our contributions to communities in providing services and so on. So that’s a critical factor of our business and one of very significant priority.

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