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South African gold miner Sibanye-Stillwater has taken a 50 per cent stake in a Nevada lithium mine for $490m, its latest move to increase exposure to battery metals amid weakness in the gold and precious metals market.
The deal marks Sibanye’s third this year in metals used in electric vehicle batteries, following its acquisition of a 30 per cent stake in the Keliber lithium mine in Finland and the purchase of a nickel processing project in Normandy from France’s Eramet.
It comes amid a surge in lithium carbonate prices, which have risen 189 per cent in China this year, according to Benchmark Mineral Intelligence. Australia’s second-largest lithium miner, Pilbara Minerals, this week sold a lithium shipment at a price 79 per cent higher than in July.
Growth in electric vehicles has sparked fierce competition for new lithium resources. Canada’s Millennial Lithium, which has two lithium projects in Argentina and received a takeover offer in July from China’s Ganfeng Lithium, said this week it had received a higher bid from a battery producer.
Sibanye said it had entered a 50/50 joint venture with Ioneer for the development of its Rhyolite Ridge lithium project in Nevada. Ioneer will retain operational management.
Sibanye said it would also commit to buying 7 per cent of new shares in Ioneer for $70m, as part of a planned share sale in the fourth quarter.
“This transaction is the most significant yet for the company in green/battery metals and in line with the strategy of acquiring assets with proximity to end-user markets,” said analysts at BMO Capital Markets.
Shares in South Africa-listed Sibanye, which have fallen 19 per cent this year amid weak gold, platinum and palladium prices, were flat in morning trading.
BMO said this week that there was a need for “new sector themes” to attract investor interest in gold mining companies.
Once operational the Nevada mine, construction of which is expected to cost $785m, will produce 22,00 tonnes of lithium hydroxide, the type used in most Tesla batteries.
It will help provide a homegrown supply of lithium to US carmakers and battery producers. In June Ioneer signed an agreement to supply lithium carbonate to a unit of South Korean battery maker Ecopro.
Tiehm’s Buckwheat is only found in 10 acres of public land in Esmeralda County in western Nevada, the location of the Rhyolite lithium project, according to the Center for Biological Diversity.