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Western governments should provide price guarantees for critical minerals miners if they are to compete with Chinese rivals who receive huge state support, the boss of leading platinum producer Sibanye-Stillwater has said.
The comments by Neal Froneman come as industrialised nations have become alarmed by China’s dominance in the production and processing of critical minerals — but have stopped short of setting prices for raw materials or creating a joint buying programme.
“They have to level the playing field for us as mining companies,” Froneman, chief executive of the Johannesburg-listed platinum and battery metals producer, told the Financial Times. “If we mine for the US or even Europe, we should be guaranteed certain prices so that we get the right returns.”
Over the past year, China has halted exports of certain materials such as rare earths, gallium, germanium and graphite, creating a squeeze on manufacturing supply chains for the defence, automotive and semiconductor industries in western countries.
The idea of a joint buying mechanism, in which the US and allies such as Australia would commit to purchasing materials at certain minimum prices, has been gaining traction since the G7 summit last month, according to people familiar with the governments’ thinking.
G7 participants pledged at the summit to develop “standards-based markets” for critical minerals, which is seen as a potential first step towards a joint buying pool.
Sibanye has expanded into battery metals in recent years as it seeks to benefit from rising demand due to electric vehicles and the energy transition. It has a lithium project in Finland and a nickel refinery in France.
Froneman, who is set to retire in September, said that Chinese mining rivals had access to a lower cost of finance and followed different environmental standards that cut their costs. But he defended Sibanye’s decision to cater primarily to customers in the west.
“We recognised that the world was going to de-globalise, and polarise around the east and the west. And we specifically chose not to be a contract miner for the Chinese, like so many miners are,” said Froneman, who has led Sibanye since it was formed in 2013.
Sibanye has received some government support for specific projects, but Froneman called on the US and Europe to do more.
“We incur higher costs, and we have higher costs of capital. There needs to be some form of support to make us competitive, because the model is that it’s a western-world, capitalist system. Shareholders require returns,” he said.
The company, which has an enterprise valuation of $7bn, reported net losses in the 2023 and 2024 financial years, due to low prices for platinum and palladium, and a writedown on its US operations.
Richard Stewart, Sibanye’s chief regional officer in South Africa, is due to succeed Froneman from October.
Sibanye’s Finnish lithium project received a €500mn loan last year backed by Finland’s Export Credit Agency, the European Investment Bank and other funders. Its GalliCam project in France, which is repurposing a nickel refinery to produce precursor battery metals, has been selected for a €144mn grant from the EU Innovation Fund.
Its projects in the US have received tax credits that will be worth as much as $60mn this year, according to company reports.
https://www.ft.com/content/fa9d2102-ccd3-4e86-b415-f7f7e3f13c6f
