Sibanye May Source Nickel for French Plant From New Caledonia's Prony

Sibanye's Nickel Ambitions

Sibanye Stillwater (NYSE:SBSW) is considering sourcing nickel for its proposed battery materials plant in France from the Prony mine in New Caledonia. The Prony mine is owned by a consortium led by Glencore. Sibanye is looking to secure a long-term supply of nickel to meet the growing demand for electric vehicles.

Prony Mine's Significance

The Prony mine is one of the world's largest nickel mines, with an estimated output of 40,000 tonnes per year. The mine has been plagued by operational challenges in recent years, but Glencore is investing in a revamp to increase production and reduce costs.

Benefits for Sibanye

Sourcing nickel from Prony would give Sibanye several advantages. First, it would secure a reliable supply of a key raw material for its battery materials plant. Second, it would reduce Sibanye's reliance on China, which currently dominates the nickel market. Third, it would allow Sibanye to benefit from Prony's low-cost production profile.

Challenges for Sibanye

However, there are also some challenges associated with sourcing nickel from Prony. First, the mine has a history of operational problems. Second, the nickel market is volatile, which could impact the profitability of Sibanye's battery materials plant. Third, Sibanye would need to invest in infrastructure to transport nickel from Prony to France.

Conclusion

Overall, Sibanye's decision to source nickel from Prony has both potential benefits and challenges. The company will need to carefully weigh these factors before making a final decision.