Multinational mining and metals processing group Sibanye-Stillwater has reported that all conditions precedent necessary for the implementation of its new chrome agreements with the Glencore Merafe Venture (GM Venture) have been fulfilled, with the agreements to become effective from November 1.

“The closure of the Glencore Merafe agreements marks a pivotal step in unlocking long-term value from our significant chrome by-products at our South Africa platinum group metal (PGM) operations. Aligning operational expertise and commercial interests, we are laying the foundation for sustainability at our South African PGM operations, benefitting all stakeholders and enhancing returns for the group,” Sibanye-Stillwater CEO Richard Stewart commented.

Through their respective subsidiaries, Sibanye-Stillwater and the GM Venture will consolidate the management of several chrome recovery plants in South Africa.

The agreements include strategic and mutually beneficial enhancements to the historical contract previously concluded between Lonmin and the GM Venture (Marikana Contract) and a new chrome management agreement (CMA) at Sibanye-Stillwater's South African PGM operations.

Sibanye-Stillwater said the enhancements to the Marikana Contract were expected to accelerate the completion of delivery of contracted chrome volumes by about 20 years, through increasing feed and improving recoveries from the Marikana chrome recovery plants (CRPs). Accelerated delivery will, upon expiry of the Marikana Contract and the Marikana CRPs becoming subject to the CMA, increase Sibanye-Stillwater's share of free cash flow from chrome production from the Marikana CRPs.

Other than the Marikana CRPs, Sibanye-Stillwater CRPs will immediately be subject to and benefit from the value-enhancing provisions of the CMA, once the transaction becomes effective.

Further, Glencore will leverage its processing expertise to optimise chrome production yields, which is expected to reduce operational costs across all relevant CRPs.

The improved economics of Sibanye-Stillwater's chrome production resulting from the transaction, are expected to enhance the inherent value and commercial viability of brownfield extension projects at the South African PGM operations, which are currently being assessed.