South Africa’s Sibanye Gold to Buy Stillwater Mining for $2.2 Billion in Latest Platinum Push – by Alexandra Wexler (Wall Street Journal – December 9, 2016)

http://www.wsj.com/

JOHANNESBURG—Just over a year ago, South African miner Sibanye Gold Ltd. simply dug up its namesake yellow metal in its home market. Now the company is poised to become the world’s third-largest producer of palladium as well, with three sizable acquisitions over the last 15 months, crowned by Friday’s announcement that it plans to buy U.S. palladium and platinum miner Stillwater Mining Co. for $2.2 billion.

The moves illustrate the tectonic shifts recalibrating the global mining industry after the commodities bust. The Stillwater purchase is Sibanye’s first foray outside of Southern Africa and its latest bold move to diversify beyond gold mining.

The acquisition is also a vote of confidence in the platinum group of metals, which includes platinum and palladium, most commonly used in the auto industry to reduce engine emissions, in addition to a strategic diversification away from the often-difficult operating environment in South Africa.

Sibanye has a long and storied history in the mining industry. It was spun off in 2013 from three aging South African mines held by Gold Fields Ltd., a company founded by colonial pioneer Cecil John Rhodes.

In a press release Friday, Stillwater, of Littleton, Colo., which has two mines in Montana and Colorado, said its board approved the deal. The $18-a-share bid represents a 23% premium to Stillwater’s closing price on Dec. 8. The two largest shareholders of Johannesburg’s Sibanye have confirmed their support of the deal.

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