Sibanye-Stillwater to acquire Eramet’s Sandouville nickel processing facility in France

In its second acquisition in the battery metals space in six months, Sibanye-Stillwater (NYSE: SBSW), one of the world’s largest primary producers of platinum, palladium and rhodium and its third-largest gold producer on a gold-equivalent basis, is buying 100% of Eramet SA’s Sandouville nickel hydrometallurgical processing facility in Normandy, France, in a deal valued at €65 million ($96 million).

The Sandouville facility includes a hydrometallurgical nickel refinery with a production capacity of 12,000 tonnes a year of high-purity nickel metal, 4,000 tonnes a year of high-purity nickel salts and solutions, and about 600 tonnes a year of cobalt chloride.

Sandouville is “situated in the industrial heart of Europe at Le Havre, France’s second-largest industrial port,” and the facility, zoned for heavy industrial purposes, “is scaleable for nickel, cobalt and lithium battery grade products,” the company stated in a press release.

The company said the acquisition is a “low-risk entry into the nickel beneficiation business,” and noted that during its due diligence process it completed a scoping study on upgrading the facility “to target specific nickel battery metal products”.

The acquisition follows the company’s investment in February for a 30% stake in the Keliber lithium hydroxide project in Finland, in partnership with the state of Finland and the Finnish Metals Group.

Under the Keliber transaction, the company invested €30 million for its initial 30% stake, and offered a further €10 million equity issuance to existing shareholders. Sibanye-Stillwater also has a guaranteed option to achieve a majority stake in the project if and when an updated feasibility study is completed.

The total investment of €40 million will be used on optimization studies, permitting, metallurgical test work and engineering design.

The Keliber project is located in Finland’s Kaustinen region, a significant lithium-bearing area, and consists of several lithium spodumene deposits. A feasibility study completed in 2019 that was updated last year, outlined a mine life of at least 13 years and annual production of 15,000 tonnes of battery grade lithium hydroxide. Production could start as soon as 2024, and the project includes the development of a chemical plant in Kokkola, about 50 km away.

Sibanye-Stillwater’s two acquisitions in the battery metals space complement its leading platinum-group metals (PGM) position, it said.

“The company’s measured approach reflects the technological risk in the battery metals space with respect to the evolving chemistry and make of batteries,” Raj Ray of BMO Capital Markets commented in a research note to clients. “However, with exposure to lithium and nickel, both key elements in different types of batteries being used or under development, Sibanye-Stillwater seems to be well positioned.”

At presstime Sibanye-Stillwater was trading at US$17.38 per share within a 52-week trading range of US$10.26 and US$20.68 per share. The company has a market cap of about US$12.9 billion.