Keliber

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• Investment rationale

  The lithium battery market is growing worldwide as traffic is becoming increasingly electric and the battery needs of several industries are increasing. The growing demand for batteries results in substantial demand for raw materials such as lithium.

  The importance of Europe in the lithium-ion value chain is expected to increase during the 2020’s. Keliber is expected to be the first vertically-integrated lithium producer in Europe.

  
• Transaction overview

  Sibanye-Stillwater will make an initial phased equity investment of EUR30 million, for an approximate 30% equity shareholding into Keliber. In addition a further EUR10 million equity issuance will simultaneously be offered to the existing Keliber shareholders, on the same terms as Sibanye-Stillwater’s EUR30 million investment.

  This financing, together with a combination of Sibanye-Stillwater’s extensive mining expertise that will complement the skills and local knowledge of the experienced Keliber team, will ensure the continued progress of the project to a build ready phase. The EUR40 million investment will allow for the completion of further detailed mining optimisation studies, permitting, metallurgical test work and detailed engineering design. In addition, the Kaustinen region is highly prospective and further exploration work to increase the current Mineral Resource and Reserve base will be undertaken. The initial project work will be overseen by a joint technical committee, working under the guidance of the Keliber Board, on which Sibanye-Stillwater will have representation.

  Subsequent to the Initial Investment, Keliber has completed a definitive feasibility study (“DFS”) which has confirmed the quality and inherent value of the Keliber project. This positive DFS is underpinned by a 31% increase in Mineral Reserves, as announced by Keliber on 15 September 2021.

  On 30 June 2021, Sibanye-Stillwater announced that it intends to exercise its pre-emptive right to increase its shareholding in Keliber to 50% plus 1 share. Simultaneous with the Pre-emptive Offer, the Company will also make a voluntary cash offer to minority shareholders of Keliber, other than the Finnish Minerals Group, which could initially increase its shareholding in Keliber to over 80%. The Finnish Minerals Group, a Finnish State-owned holding and development company which manages the State’s mining industry shareholdings, is the second largest shareholder in Keliber behind Sibanye-Stillwater with a current circa 20% shareholding. Subsequent to completion of the Voluntary Offer, a capital raise by Keliber will be executed. If required post the above-described transactions, an equalization mechanism may be implemented such that Sibanye-Stillwater achieves its targeted 80% shareholding in Keliber.

• Keliber’s lithium project in a nutshell

  Keliber’s wholly owned, advanced lithium project, the Keliber project, located in the Kaustinen region of Finland, is one of the most significant lithium-bearing areas in Europe. Finland represents an attractive low risk mining jurisdiction (top five jurisdiction in the Fraser Institute) and has developed a National Battery Strategy that outlines the objectives for the country to become a competitive, competent and sustainable player in the international battery industry. Europe is rapidly becoming a leading hub for the manufacture of batteries for electric vehicles and Keliber’s location in Finland enables efficient transport to European customers.

  The Finnish Minerals Group (“FMG”), which manages the Finnish State’s mining industry shareholdings, is the largest shareholder in Keliber and is focused on creating partnerships and co-investments with a view to developing the Finnish battery electric vehicle supply chain. Sibanye-Stillwater shares this vision and in partnership with Keliber, FMG and other shareholders, will progress the project to be the first vertically integrated lithium producer in Europe.

  

  

  The Keliber project consists of several advanced stage lithium spodumene deposits, with significant exploration upside in close proximity to the existing project. Based on a feasibility study completed in 2019 and improved in 2020, Planned annual production is 15,000 tonnes of battery grade lithium hydroxide. Production is anticipated to start in 2024. The project includes the development of a chemical plant in Kokkola, approximately 50 kilometres from the mining area, which will produce battery grade lithium hydroxide. Future lithium hydroxide production has not been committed to any offtake party.

  At 31 December 2021, Keliber had an attributable Mineral Resource of 42,500 tonnes at 1.1% lithium oxide (Li₂O), and a lithium carbonate equivalent (LCE) Mineral Resource of 105,100 tonnes.

  For more information, visit Keliber’s website, www.keliber.fi