Franco-Nevada Invests $500 Million in South African PGM Operations
Franco-Nevada Corporation has entered into a $500 million precious metals streaming agreement with Sibanye-Stillwater, securing a stake in production from key mining operations in South Africa. The deal will provide Franco-Nevada with a stable supply of gold and platinum from the Marikana, Rustenburg, and Kroondal operations, located on the Bushveld Complex’s Western Limb.
Sibanye-Stillwater’s Western Limb mines are significant contributors to global platinum production, accounting for approximately 15% of the world’s supply. With extensive resources and established infrastructure, the operations offer long-term production potential, which has made them a strategic investment for Franco-Nevada. The streaming agreement includes gold deliveries for the life of the mines and platinum deliveries over a 25-year period.
The partnership highlights the global significance of Sibanye-Stillwater’s integrated PGM complex, which includes 13 underground mines supported by concentrators, a smelter, and a refining facility. Beyond platinum, the mines also produce palladium, rhodium, gold, and by-products such as iridium and ruthenium, which are vital for technologies like data storage and hydrogen fuel cells. This diversified output strengthens the value of the partnership.
Under the terms of the deal, Franco-Nevada will receive gold equivalent to a percentage of Sibanye-Stillwater’s PGM output. Initial deliveries will be tied to 1.1% of 4E PGM ounces in concentrate, transitioning to 0.75% after reaching certain thresholds. Platinum deliveries will similarly begin at 1% of production and increase to 2.1% before tapering off. Payments for the metals will be tied to spot prices, ensuring both parties retain a stake in market fluctuations.
This investment reflects Franco-Nevada’s strategy to diversify its portfolio with high-quality, long-life assets. For Sibanye-Stillwater, the partnership brings immediate financial benefits while maintaining leverage to rising PGM prices. The transaction also underscores the enduring value of South Africa’s mining sector, particularly as demand grows for metals critical to the global energy transition.
The streaming deal is expected to be finalized in the coming weeks, with deliveries beginning approximately 45 days after closing. The collaboration between Franco-Nevada and Sibanye-Stillwater positions both companies to benefit from the increasing importance of platinum group metals in the global economy.
