Sibanye-Stillwater announced that it would acquire the Mt Lyell copper mine in Australia shortly after the company announced retrenchments at four of its South African shafts.
Sibanye informed shareholders that it had exercised the option to acquire the Mt Lyell copper mine in Tasmania, Australia, before its expiry on 5 November 2023.
Sibanye obtained the option to acquire 100% of Copper Mines of Tasmania for a consideration of $10 million (R187.23 million) from Vedanta Limited through its acquisition of New Century Resources Limited (NCR) in 2021.
Mt Lyell is a previously operated underground copper mine with gold by-products that commenced production in 1894 and operated until it was put on care and maintenance in 2014.
The company said a feasibility study, which considers the re-establishment of the operation, is underway. Sibanye will review its options upon completion of the feasibility study.
Sibanye CEO Neal Froneman said, “We identified copper as an essential metal necessary to enable the clean energy transition.”
“Mt Lyell potentially provides a low-cost exposure to copper, adding primary production of copper to our current lithium and nickel exposure.”
“We look forward to working with all the local stakeholders, including the Tasmanian Government, as we consider the potential advancement of this opportunity.”
Sibanye also announced that it has agreed to provide loan funding to and a guarantee for and on behalf of NCR to facilitate the completion of the Mt Lyell Transaction.
The company said it has also internally restructured the acquisition financing related to NCR, which has resulted in the transfer of loan financing obligations between the Group companies.
This comes shortly after Sibanye announced that it would enter into Section 189 consultations to retrench over 4,000 workers amid the company’s restructuring.
The company said that above-inflation increases in key cost components such as electricity, water, wages, and fuel, combined with the recent decline in PGM prices, have significantly impacted the global PGM industry’s profitability, including Sibanye’s South African operations.
It said certain operating shafts are now loss-making and pose a risk to the sustainability of the remaining operations.
Therefore, Sibanye will enter into discussions with organised labour and other affected non-unionised employees through their representatives regarding the possible restructuring of four shafts at its Southern Africa PGM operations.
The proposed restructuring and shaft closures could potentially affect 4,095 South African employees and contractors – 3,500 employees and 595 contractors – including support services employees.
“We do not underestimate the potential impact of any form of restructuring and commit to constructively engaging with affected employees through their representatives in an effort to minimise job losses,” Africa Chief Regional Officer Richard Stewart said when the restructuring was announced.
“Unfortunately, it is imperative that we engage in this process to ensure the sustainability of our Southern Africa PGM operations and the benefits and value they bring to multiple stakeholders.”
“Various alternatives have already been considered by management and organised labour representatives in Future Forum meetings,” the company said.