Sibanye-Stillwater / Enterprise Africa

SIBANYE-STILLWATER

SIBANYE-STILLWATER

Success from Sustainability

at Sibanye-Stillwater PRODUCTION: Eleanor Sarbutt-King

Repositioning a company with deep South African mining heritage, to focus on battery metals, and the green and recycling economies is the current task for management at Sibanye-Stillwater. James Wellsted, Senior Vice President: Investor Relations talks to Enterprise Africa about progress.

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Stillwater valley at our US PGM operations

INDUSTRY FOCUS: MINING

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Sibanye-Stillwater is emerging from the years of pandemic and economic turmoil in solid shape following a period of strong acquisitive activity, and a focus on efficiencies. In terms of financial results, this powerhouse has delivered record financial results while continuing to transform its operations, putting sustainability at the core of everything it does.

Since 2020, the company has continued to grow and diversify, acquiring various operations globally, expanding the portfolio to realign its drive for sustainability by producing battery metals and participating in the circular economy.

The company acquired the Sandouville nickel hydrometallurgical processing facility in France, which is now fully owned by SibanyeStillwater alongside a proposed 50/50 joint-venture with ioneer to develop the Rhyolite Ridge Lithium-Boron Project in the USA. Finally it acquired a 19.9% stake in a leading Australian tailings retreatment business, New Century Resources. During 2022, a transaction with Anglo American Platinum was announced which will result in the Kroondal platinum mine in Rustenburg being fully owned by Sibanye-Stillwater.

The strategic shift is obvious.

From its origin as a leading gold mining producer, Sibanye-Stillwater has diversified its portfolio, becoming a leading global PGM producer and now entering the battery metals sector, establishing a portfolio of metals that will be necessary for the transition to greener energy and industries of the future.

James Wellsted, Senior Vice President: Investor Relations at Sibanye-Stillwater, tells Enterprise Africa that the acquisitions came at a good time, and while most struggled with the impact from Covid, SibanyeStillwater was looking forward.

“We have grown significantly, largely through acquisitions in recent

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// GIVEN THE FACT THAT WE HAD INHERITED QUITE MATURE MINES WITH LIMITED OPERATING LIFE, WE NEEDED TO LOOK FOR ALTERNATIVE MINES TO GROW THE BUSINESS // years and this momentum continued last year. We announced five transactions of which one fell through, and we would like to grow our battery metal portfolio further,” he says.

Kroondal was another transaction of importance, doubling the life of the mine to 2029 and creating significant shared value. Completion of this deal was hailed by SibanyeStillwater CEO Neal Froneman, who said benefits for stakeholders would be significant: “This will accelerate the extraction of more remote parts of the Rustenburg operation orebody, sustain employment for more than 2,500 people until 2029, and ensure the creation of significant value for all stakeholders in the region.”

“It was our first PGM acquisition in 2016,” adds Wellsted, “but the way the business was structured was a 50/50 profit share with Anglo Platinum.

They still own half until now, but post 2024 we will take full ownership. It is a sensible transaction from a value perspective as it will extend the life of the business, create jobs, have

benefits for other stakeholders, while bringing forward a lot of value for our company and Anglo Platinum.”

MINERAL DIVERSIFICATION Sibanye-Stillwater was formed through the unbundling of three mature South African gold mines by Gold Fields in 2013, and listed separately.

“Given the fact that we had inherited quite mature mines, we needed to grow the business to ensure sustainability and risk diversification.

Opportunities in the gold space were limited and the environment competitive resulting in elevated prices, with limited value evident so we started looking for alternative growth options and identified that the PGM industry offered significant value and with a lot of similarities to the South African gold industry, offered significant opportunity to unlock value by consolidating different operations and realising synergies, much like we are doing with Kroondal right now. In 2016, we made our first acquisitions and by mid-2019 we had concluded

SIBANYE-STILLWATER

four significant transactions to become one of the biggest PGM producers in the world with one of the leading global PGM recycling businesses,” explains Wellsted.

Sibanye-Stillwater quickly turned around its inherited, mature gold mines during 2013 and 2014 establishing its position as a leading dividend paying company, averaging a dividend yields of around 5% for the first four years. This helped to differentiate the company from its gold mining peers with the robust cash flows driving growth in the PGM sector.

“That has been an incredibly successful strategy” Wellsted says, “but we have started to look for other opportunities to grow the business and enhance its sustainability outside of the PGM space, where due to our size, we have limited growth opportunities.

We already have a meaningful presence in the green economy through our PGMs which are used in cars to clean noxious gases that come from internal combustion engines and will play an important role in the future hydrogen economy. We are expanding that positioning with green metals – that is lithium, copper, nickel, and also growing our exposure to the circular economy - becoming a force for good around climate change. We have stakes in tailings retreatment companies in SA and Australia. There is a lot of opportunity to expand this portfolio at the moment.”

This opportunity is being realised as the company as it posted strong results for the year ended 31 December 2021. Headline earnings for the year increased by 27% to R36.9

// IT WAS A FUNCTION OF THE GROWTH THAT WE HAVE SEEN, AND THE GOOD TIMING OF OUR ACQUISITIONS // www.enterprise-africa.net / 5

INDUSTRY FOCUS: MINING

Water monitoring at one of the SA operation’s water plants

Biomonitoring in the pristine environment surrounding our UG PGM operations

billion. Profit attributable to owners of Sibanye-Stillwater increased by 13% to R33.1 billion. A 19% increase in net cashflow from operating activities was recorded, and a strong balance sheet was displayed with net cash increasing further to R11.5 billion on 31 December 2021. A record financial performance also showed revenue of R172.2 billion, up 35% on 2020.

Asked about the key to these robust results, Wellsted highlights several intertwined factors.

“It was a function of the growth that we have seen, and the good timing of our acquisitions and the integration of those acquisitions where we have been able to unlock a lot of value by realising synergies, saving costs, and improving efficiencies. We also acquired at a low point in the precious metals cycle, and

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we are now benefitting from much better operational performance and higher prices.”

MANAGED THROUGH Sibanye-Stillwater quickly developed and implemented effective health a safety protocols as the Covid-19 pandemic swept through the country.

Being by far the number one priority in the mining industry, the health and safety of people comes naturally to those planning processes.

“Our efforts to reduce the risk of the Covid-19 pandemic in the workplace have met with significant success over the course of the last two years,” said Neal Froneman.

As of 27 February 2022, 53,000 employees and 12,000 contractors at SA operations were fully vaccinated, equating to 83% of the company’s SA

workforce. 88% had received at least one dose of the vaccine.

Wellsted praises the company’s nimble approach and ability to shift quickly despite its mammoth size.

“We took quick steps in the beginning,” he says. “We came up with, developed, and implemented processes across our operations – preparing quarantine and isolation facilities, setting up testing centres, sourcing the necessary protective equipment, constant sanitising and cleaning, implementing social distancing. At the start of 2020, the government shut down all industry in the country and we were impacted by that. But the mining industry - because of its long history having to deal with issues around TB and HIV and the general intense focus on health and safety – became the first industry allowed to resume operations.”

SIBANYE-STILLWATER

He adds that it took the final three full quarters of 2020 to back to a normal operating position, and that 2021 played out with minimal disruption.

“We offered a lot of support to communities. The quarantine facilities that we set up were with the intent of relieving some of the pressure on state facilities. We offered a lot of support financially and we also offered counselling through the lockdowns,” Wellsted says.

GREEN & CIRCULAR In the future, Sibanye-Stillwater is looking to continue delivering operational excellence while bolstering its green credentials through acquiring assets that produce metals required in the global energy transition, and improving its own processes.

Wellsted - a geologist by training with experience across finance and investments – says that the company has identified a clear strategy that gravitates around a circular, green economy.

“It’s all about growing the battery metals business,” he enthuses.

“We see our opportunities in this clear shift towards a greener approach to business and a focus on all stakeholders and not just shareholders. We want to become climate resilient and we want to be part of the new green economy by impacting the climate in a positive way rather than contributing to climate change.

“The metals we will produce will actually benefit the climate over the longer-term,” he concludes. “These metals clean exhaust fumes and go into batteries and fuel cells which

will store and generate clean energy.

The circular economy and recycling will become a bigger part of what we do, and we want to become a bigger part of those overall energy and environmental solutions rather than being perceived as a problem, which is how the mining industry has been viewed for a long time.”

Well-positioned to deliver on its purpose of improving lives through mining, Sibanye-Stillwater is ensuring this will carry on into the future as it continues to build as a responsible, sustainable, transparent, and forwardthinking business.

WWW.SIBANYESTILLWATER.COM

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April 2022

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Success from Sustainability at Sibanye-Stillwater Exclusive interview with James Wellsted, Senior Vice President: Investor Relations

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