Sibanye and Stillwater Mining: The biggest PGM acquisition in South Africa in years

The mining industry is no stranger to acquisitions and mergers. In recent years, acquisitions have become more common place in the search for capital, future proofing operations, and clearing debt.

Sibanye Gold, the largest individual producer of gold from South Africa, that also sits as one of the 10 largest gold producers in the world (and soon to be the world’s fifth largest platinum group metals (PGM) producer) has announced that the company has acquired Stillwater Mining Company.

The deal in question has been dubbed as the “largest PGM transaction globally in over a decade”.

The art of the deal

Stillwater, located in Montana, United States, owns the highest grade PGM mines in the world and the lowest cost PGM producers in the world.

Not only that, Stillwater is also the only primary palladium producer in the world.

Sibanye has quite the deal on its hands here.

Stillwater currently produces approximately 550,000 ounces of 2E PGM per annum (PGM split of approximately 78 percent Palladium and 22 percent Platinum) from two operating mines. The company is also developing a low risk organic growth project the Blitz project, which is expected to add between 270,000oz and 330,000 ounces 2E PGM per annum by 2021.

The accolades are seemingly never ending with Stillwater as it is also the biggest PG recycling business in the world, with around 668,000 ounces of PGMs recycled in 2016 alone.

“This transformative transaction uniquely positions Sibanye as a global precious metals company with a unique mix of commodities, Sibanye is now the third largest producer of palladium (and only primary producer of palladium) and the third largest producer of platinum in the world and also features in the top ten global gold companies”

You said it guys.

The deal itself "ranks among the largest mining transactions conclude by a South African company since 2001,” said Neal Froneman, CEO of Sibanye.