South Africa-based diversified miner Sibanye Stillwater has entered into a chrome management agreement with Glencore’s Merafe Venture in South Africa, reported Reuters.
This strategic move aims to mitigate the financial impact caused by the prolonged dip in platinum group metals (PGM) prices.
Under the arrangement, Merafe Venture will operate the majority of Sibanye’s chrome recovery plants at its South African PGM operations.
According to Sibanye, this collaboration is expected to “enable both parties to leverage synergies and increase chrome output”.
Ferrochrome producer Merafe Resources, a partner in Glencore’s Merafe Venture, also confirmed the deal.
Chrome, a by-product of platinum mining, has seen an increase in revenue for South African miners such as Sibanye, particularly when primary mineral prices are falling.
The PGM market is currently experiencing a significant price decline. This downturn coincides with the rise in electric vehicle sales, which do not require these metals for emission control.
In contrast, the chrome market has remained robust, largely due to sustained demand from China, with expectations of a market recovery following a cooling-off period in the last quarter of 2024.
Sibanye reported a 42% increase in chrome sales revenue to $168.84m (R3.11bn) in the first half of 2024, compared with the same period in 2023, with sales volumes up by 19% at 1.3 million tonnes.
In addition to the chrome deal, Sibanye-Stillwater announced stable 4E PGM mineral resources and reserves in its South African operations.
The company also reported changes in other mineral resources and reserves, including an increase in lithium reserves at the Keliber project in Finland and updates to copper resources at projects in Tasmania and Argentina.
However, there were reductions in gold and zinc reserves, primarily due to depletion and geological changes.
In December 2024, Sibanye-Stillwater secured a $500m streaming deal with Franco-Nevada for gold and platinum.
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