Sibanye-Stillwater approves $342 million copper mine in Tasmania 

Sibanye-Stillwater has approved a R5.5 billion ($342 million) copper-gold project in Tasmania, Australia, as the South African mining group expands its portfolio beyond platinum group metals while keeping a close watch on capital spending. 

The Mt Lyell project, near Queenstown in Tasmania, is expected to produce up to 26,000 tons of copper a year once it reaches steady state, along with about 16,000 ounces of gold and 116,000 ounces of silver annually. First production is targeted for early 2029. 

The decision marks the second offshore greenfields project approved by Sibanye-Stillwater. It comes as the company directs most of its capital toward organic growth, particularly in its South African platinum group metals operations.

New copper and gold output 

Sibanye plans to spend A$11 million ($7.8 million, or R126.4 million) on the project in 2026 as development work moves ahead. The company said the project represents only its second offshore greenfields investment to receive board approval. 

The decision follows the commissioning of Sibanye’s Keliber lithium project in Finland earlier this year. The group has said it will consider expanding the operation into refined battery-grade lithium metal in 2027. 

Sibanye also approved the Burnstone gold project in South Africa’s Mpumalanga province. The company expects to spend R98 million ($6.1 million) this year, with the mine designed to produce about 130,000 ounces of gold a year at steady state. 

Burnstone has an estimated 25-year mine life, while Sibanye plans to invest about R3.5 billion ($217.5 million) in infrastructure over six years. The processing plant is expected to begin operating in 2029. 

The company said Burnstone would help reshape its South African gold portfolio around shallower mines with lower operating risks and longer mine lives. 

“We are pleased that Burnstone and Mt Lyell have recently received a positive investment decision by the board to proceed,” Sibanye-Stillwater said in its interim results announcement Tuesday.

Stronger earnings support investment 

Sibanye-Stillwater is one of the world’s largest producers of platinum group metals, including platinum, palladium, rhodium and ruthenium. The South African mining company is also a major gold producer and has broadened its business into battery metals and recycling operations across several continents.

The project approvals come after a sharp improvement in Sibanye’s financial performance. The company reported interim profit of R18.8 billion ($1.17 billion), compared with a R3.9 billion ($242.3 million) loss a year earlier. Revenue rose 64% to R90 billion ($5.6 billion), while adjusted EBITDA more than doubled to R31.8 billion ($1.97 billion). 

Higher metal prices were a major factor. The average rand PGM basket price received by its South African operations increased 67%, while the gold price received rose 35%. At its U.S. operations, the average dollar PGM basket price increased 70%. 

The stronger results also lifted Sibanye’s tax and royalty payments. Royalties, carbon tax, mining and income taxes increased to R9 billion ($559.1 million), from R1.7 billion ($105.6 million) a year earlier. 

Cash generated from operations reached R20.7 billion ($1.3 billion), while net debt was cut by half and the company’s gearing ratio declined to 0.18 times.

Dividend remains measured 

Sibanye declared an interim dividend of R2 ($0.12) a share, totaling R5.7 billion ($354.1 million), after headline earnings per share jumped 216% to R6 ($0.37). 

The company said its dividend payout ratio of 25% to 30% of normalized earnings remained slightly below the 30% to 40% range typically paid by peers. 

Sibanye said it was unlikely to change its capital allocation policy until gross debt had been reduced by at least 50%. 

The company’s message to investors was that debt reduction remains a priority even as commodity prices support stronger earnings. 

“It’s about the resilience of the business,” Sibanye said. “Commodity prices have been high, but we also live in very volatile times.” 

Once debt has fallen to the targeted level, management said it would be a logical time to revisit the capital allocation framework with the board.