Sibanye-Stillwater's Strategy in Europe and Focus on Critical Raw Materials

Sibanye-Stillwater is developing its strategy in Europe and Seitovirta said the firm felt it had spotted the two states that are focusing on critical raw materials, namely Finland and France.

It is also seeking to replicate its approach to North America from Europe, Sibanye-Stillwater CEO Neal Froneman told S&P Global.

The green profile of the company, battery ecosystems in Europe and North America, and starting to see tangible ties to lithium with proximity to the Finnish lithium developer Keliber, currently producing product and likely with one of the lowest carbon footprints around, as well, Froneman said.

“Sandouville [nickel refinery] is the same, and these two countries do have very well-defined battery metals strategies, and we are happy and we are privileged that we have positioned ourselves in these two countries and that we have been well received there,” Froneman said.

The half-year miner paid the last tranche of Eur5 million ($5.55 million) of an Eur30 million investment that will give an effective majority 30% interest in Keliber, the deal was announced in February 2021.

The company's 100%-owned Keliber lithium project in Finland's Kaustinen region produces 15,000 mt/year of battery-grade lithium hydroxide over 9.3 million mt of ore reserves, enough for over 13 years at a 2019 feasibility study updated in 2020.

The first project with integrated lithium hydroxide production is expected to come in 2024 at Keliber, with the company having control over the entire process from end to end as well as control over the CO2 footprint, Seitovirta said.

The project had sourcing of energy 100% carbon-free, a low-emission soda leaching process and a short logistics path from Finland to customers in continental Europe, which all combined, kept the costs at almost none, since the company would spend little to nothing on the transportation charges for the fleet, which meant that Keliber would likely have one of the greenest lithium hydroxides in the market, which would give the company some leverage if the European Commission commissioned a carbon tax on batteries, said Seitovirta.

The miner also said in March that it was investing Rand 425 million ($28.5 million) in French electric vehicle battery manufacturer Verkor, which is set to build a 16 GWh gigafactory in the Dunkirk region.

In February, it completed a full takeover of Eramet’s nickel processing plant at Sandouville in France, which Seitovirta said lent several competencies and abilities that the company in the past had not been strong in.

“And the same is with Keliber, because Keliber is not only a mining project, but is also a chemical project, and we start to learn through these capabilities also the chemical play of this industry, which is very important.”

He said Finland was developing their battery ecosystem and that France was doing the same, with both countries seeking to be players in the battery market while protecting critical materials supplies.

Not enough battery metals

“I think it's pretty clear there isn't enough battery metals to underpin the battery electric vehicle penetration forecast and we've intentionally, for a variety of reasons, decided to be part of both the ecosystems of Europe and North America and so we do want to provide as much primary metal from those regions as we can, but it's limited,” Froneman said.

With the European landscape and the demand-supply balance up to 2030, in addition to Seitovirta, there simply was not going to be enough material, which was not news, but "dramatically less" than previously thought.

“Nickel sulfate, just to give you some example, there’s going to be in 2030 less than 10% to be supplied from the demand if you take the current projects from European suppliers to European customers,” he said.

“If you take up lithium hydroxide you are going to have less than 50 percent given that the projects in the pipeline are going to happen and again the question here is the feed and well there is no feed so these types of forecasts that there are not sustainable and they are going to mean that also other technologies probably going to be needed perhaps traditional technologies on the side so that the CO2 emissions are going down,” Seitovirta said.

There were a lot of projects and initiatives proceeding at the time, but not all were going to produce, he said, but Sibanye-Stillwater thought the projects it was part of would.

Having said that, for us to be able to identify the value in the whole supply chain, that means we also look at other growth opportunities,” We want to grow with lithium... We want to grow also with nickel, interesting pockets there,” he said.

Although Sibanye-Stillwater had exciting opportunities for growth in lithium, nickel, and the other products it was exploring, Seitovirta said it was also focusing on recycling, which was "definitely the future," now and into the future.

“We work on different opportunities and try to find value,” Seitovirta said.

“The market is moving very fast, we are also moving very fast but we are only targeting areas where we can see clearly that we can understand this well and create shareholder value … I don’t see the two positions we have in Europe as the end station, I see it as the starting point,” he said.