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Western governments should provide price guarantees to key mineral miners to compete with large-scale state-backed Chinese rivals, the boss of large-scale platinum producer Sibanye-Stillwater.
Comments by Neil Fronemann come as developed countries are surprised by China’s dominance in the production and processing of key minerals, but have not set the price of raw materials or created a joint purchase program.
“They have to level our playing field as mining companies,” Fronemann, CEO of Johannesburg’s listed Platinum and Battery Metal Producers, told the Financial Times. “If mined for the US or Europe, you need to guarantee a certain price to get the right revenue.”
Over the past year, China has stopped exporting certain materials such as rare earths, gallium, germanium and graphite, creating a manufacturing supply chain aperture for Western defense, automobile and semiconductor industries.
According to those familiar with the government’s ideas, the idea of a joint purchase mechanism that promises allies such as Australia to buy materials at a certain lowest price has gained traction since last month’s G7 Summit.
G7 participants pledged to develop a “standards-based market” for important minerals at the summit. This is considered a potential first step towards a joint purchase pool.
Sibanye has expanded to battery metals in recent years as it seeks to benefit from increased demand due to electric vehicles and the energy transition. There is a Lithium Project in Finland and a Nickel Refinery in France.
Froneman, who is scheduled to retire in September, said that China’s mining rivals have access to lower financial costs and have followed a variety of environmental standards that reduce costs. However, he defended Sivany’s decision to primarily serve clients in the West.
“We realized that the world was trying to globalize and polarize around the East and West, and we specifically chose not to be a Chinese contract miner, as many miners do.”
Sibanye has received government support for certain projects, but Froneman has called on the US and Europe to do more.
“We have higher costs, we have higher costs of capital. We need some form of support to be more competitive. The model is the capitalist system in the Western world. Shareholders need returns,” he said.
Enterprise was valuated at $7 billion and reported net losses in the 2023 and 2024 fiscal years due to low prices of platinum and palladium and reduced US operations.
Richard Stewart, Chief Regional Officer of Sivany in South Africa, is set to replace Fronemann in October.
Sibanye’s Finland lithium project received a 500 million euro loan last year backed by Finland’s export credit institutions, the European Investment Bank and other funders. The French Gallicum Project was selected as a 144 million euro grant from the EU Innovation Fund as it reuses the nickel refinery to produce precursor battery metals.
The company’s project has received a tax credit worth $60 million this year, according to the company’s report.
