Lifting self-generation threshold is a step in the right direction, says Sibanye CEO

South Africa's mining industry has been experiencing some positive developments recently, with higher commodity prices boosting profits and President Ramaphosa raising the threshold for electricity self-generation for companies to 100 megawatts. These changes have created a favorable environment for mining in the country, as evidenced by the industry's significant contribution to the first quarter GDP numbers. Neal Froneman, CEO of Sibanye-Stillwater, recently spoke to CNBC Africa about the mining landscape in South Africa, highlighting the importance of the recent announcement regarding self-energy generation. Froneman emphasized that the move towards self-generation is a step in the right direction, particularly in the context of South Africa's efforts towards carbon neutrality. He noted that the mining industry, along with other large energy consumers, can play a crucial role in improving reliability of power supply and addressing concerns around carbon emissions and climate change. Froneman expressed optimism about the potential impact of the increased cap on self-generation projects, citing the significant investment opportunities it presents for the industry. He indicated that Sibanye-Stillwater alone had around six billion rand worth of projects that could now move forward, with the industry as a whole having plans for around five gigawatts of new projects. Despite the positive developments in the mining industry, Froneman also highlighted some key challenges that need to be addressed to attract more private sector investment. He mentioned issues such as regulatory red tape, renewal of mining licenses, labor flexibility, and land redistribution as areas that require attention to create a more enabling environment for investments. Froneman underscored the importance of resolving these issues to ensure continued growth and sustainability in the sector. Reflecting on the impact of the COVID-19 pandemic on the mining industry, Froneman commended the industry's response to the crisis, which led to lower infection rates among mine workers compared to the broader community. He highlighted the effectiveness of the lockdown protocols agreed upon between the industry and the government, which helped mitigate the spread of the virus. Looking ahead, Froneman expressed confidence in the industry's ability to operate safely under existing protocols, even in the face of potential tighter lockdown restrictions. The CEO also addressed the current pricing environment in the commodities market, noting that favorable prices have delayed consolidation in the industry. He explained that the recent surge in gold prices has impacted valuations and dampened the prospect of creating a gold mining African champion as previously envisioned. Froneman acknowledged that the current market conditions do not support the pursuit of such a strategy but left the door open for future considerations. On the issue of gender diversity and gender-based violence, Froneman shared Sibanye-Stillwater's commitment to promoting inclusivity and addressing gender-based violence. The company has actively participated in initiatives to combat gender-based violence and promote gender diversity within the organization. Froneman's discussion with CNBC Africa provided valuable insights into the opportunities and challenges facing the mining industry in South Africa, highlighting the need for continued collaboration and innovation to drive sustainable growth in the sector.