Sibanye sees other possible opportunities in the growing battery metals sector

Global production forecasts for battery electric vehicles (BEVs) have increased by 120% over the past two years, according to a study by research and consultancy firm SFA (Oxford).

SFA (Oxford) Senior Battery Markets Analyst Lakshya Guptawho presented the research findings during a webcast hosted by diversified miner Sibanye-Stillwater on Sept. 14, noted that some of BEV’s production appears to be more resilient to global component supply disruptions than production. production of internal combustion engine (ICE) vehicles.

“It’s a combination of strong consumer demand, with original equipment manufacturers (OEMs) prioritizing electric vehicles (EVs) over ICE cars throughout the recent shortage of semiconductor chips. “, did he declare.

Globally, the top 15 electric vehicle markets grew by around 80% in the first half of this year, amid a 10% decline in overall car sales.

“Fundamentally, the electric vehicle market has just become more competitive. OEMs are allocating more and more capital resources to realize this trend and extend and advance lead times. Consumers have more attractive models and more and more models to choose from every year, which generates demand,” Gupta explained.

Another key factor in the success of the electric vehicle market is the “carrot and stick” approach of governments, where subsidies or tax rebates make electric vehicles more competitive than ICE cars in terms of price, a- he declared.

LITHIUM

One of the metals most critical to the continued success of electric vehicle production is lithium, Gupta noted.

Lithium-ion batteries have the highest potential performance compared to other commercial rechargeable batteries. They also have the highest power density, which for an electric vehicle translates to acceleration, and they have the highest energy density, which translates to car range.

Lithium is required in BEVs for acceptable performance, based on consumer expectations of ICE cars. This performance is determined by the composition of the components of the cell.

Ions move through the separator during normal operation, between the two cell electrodes. Cathode materials are the main determinant of the price of electric vehicles. If the cost of cathodes can be reduced, the cost of electric vehicles will come down, Gupta explained.

Although lithium prices have peaked, they remain at extremely high levels for lithium carbonate and lithium hydroxide, he noted.

“The lithium market is expected to move towards growing deficits from next year, but the supply of “probable” and “possible low risk” projects could potentially keep the market balanced until 2025. Prices should reach a bottom in 2024, before starting to increase to encourage high-risk projects,” he explained.

So far this year, Gupta said, electric vehicle sales seemed inelastic to battery metal prices. This could be due to several factors, including strong demand, OEMs failing to pass on rising production costs, an increase in demand for electric vehicles due to pent-up savings since Covid-19 and the likelihood that OEMs have given priority to the production of electric vehicles during the semiconductor chip. shortage.

“Nevertheless, our analyzes and research over the past few years have shown that lithium is likely to be the bottleneck in responding to aggressive EV projections,” Gupta said.

SIBANYE’S INVOLVEMENT

Sibanye has taken steps to get involved in the battery metal market by completing a series of transactions in 2021.

Key among these was the company’s investment in Finland’s advanced Keliber lithium hydroxide project, aiming to be Europe’s first fully integrated lithium producer with direct access to the European BEV market.

Sibanye Spokesperson James Wellsted said that to date, the company has committed €176 million for its 50%+1 stake in the Keliber project.

The maximum amount to buy out the minority shareholders to increase the shareholding from 50%+1 to around 80% is estimated at 196 million euros, which the company aims to complete by October.

The Finnish minerals group plans to keep around 20% of the project, while Sibanye will subscribe to a new capital increase of 104 million euros. Following these investments, Keliber would have raised 250 million euros in equity and would then raise a minimum of 250 million euros in debt to ensure the full financing of the project.

A definitive feasibility study and a 31% increase in ore reserves confirmed the quality and value of the project amid continued improvement in the lithium market outlook, Wellsted said.

Additionally, permit approvals were progressing well with the associated Kokkola processing plant, with the environmental permit granted.

Sibanye has also invested in the nickel refinery in Sandouville, France, of which he acquired 100% in February for 85 million euros. Additionally, the company planned to acquire a 50% stake in the Rhyolite Ridge lithium project in Nevada, US for $70 million.

“We believe there will be other opportunities given the current economic outlook,” Wellsted said.

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