Sibanye-Stillwater calls a halt to SA spending and considers changing primary listing

Sibanye won't be spending new capital to grow local operations because of and uncertain investment environment.

Sibanye CEO Neal Froneman said on Wednesday that the company, which is the biggest producer of metal from South African mines, is not thinking of spending new capital to grow local operations because of an uncertain investment environment. 

“It’s difficult to convince shareholders that South African mining is an investment case,” he said, adding that the local investment climate is “not yet conducive to make decisions that require billions of rand.” 

He also said that the company is reconsidering its primary listing in South Africa in a bid to access more capital as it explores growth opportunities outside its home market. 

“In the future, we will probably have to look at our primary listing from the point of view of accessing capital more efficiently and we don’t know where that will be,” said Froneman.

The company is also listed on the New York Stock Exchange

“There is definitely a perception around a South Africa discount” relative to trading on exchanges in North America, he said. Although he acknowledged that the differential has narrowed since Cyril Ramaphosa took over as president and sentiment improved. 

“Is there potential for future growth in the [South Africa] gold sector? probably not, but is there potential for growth in gold outside of South Africa? Absolutely,” said Froneman.

This statement comes after Sibanye lost almost half its value in 2018 over concerns it had taken on too much debt for acquisitions, which it only managed to pay down with a $500 million cash injection from a deal with Wheaton Precious Metals Corp

“The other part of the equation is being able to access capital without always raising debt . If you do raise debt, that will require you to be in an area where that debt is cheaper or easier to raise, so that will require a change in primary listing but we will always have a secondary listing on the JSE,” Froneman said.