Swiss bank places $130-million bet on mining group led by South African tycoon Neal Froneman

Feyisayo Ajayi -

Key points:

  • Swiss bank UBS increased its stake in South African mining giant Sibanye-Stillwater to over 7%, a $130-million bet on the company’s future.
  • This comes after UBS sold some shares in May, but their latest purchase signals renewed confidence in Sibanye’s potential.
  • UBS joins JPMorgan in backing Sibanye, potentially boosting the company’s access to capital and investor optimism.

Swiss banking powerhouse UBS Group has increased its interest in Sibanye-Stillwater, acquiring additional shares valued at over $130 million in the Johannesburg-based mining and metals processing conglomerate led by South African tycoon Neal Froneman.

The move, disclosed in a recent filing with the Johannesburg Stock Exchange (JSE), marks a significant increase in UBS’ stake from 3.26 percent to 7.36 percent in Sibanye-Stillwater. This strategic maneuver follows a prior divestment by UBS in mid-May, when it reduced its stake from 5.07 percent to 3.26 percent — valued at R1.87 billion ($103.93 million).

UBS ups Sibanye stake with additional acquisition

UBS’ renewed investment comes amidst recent market shifts and challenges within the mining sector, which have impacted Sibanye-Stillwater’s financial performance and valuation in recent years. The bank’s decision to increase its stake could be interpreted as a strategic realignment, underscoring its confidence in the potential gains and opportunities offered by the mining giant.

Earlier in May, UBS had sold off an $11.8-million stake in Sibanye-Stillwater, prompting speculation about its long-term strategy with the South African company. The latest acquisition not only reverses this divestment but also positions UBS more prominently within Sibanye-Stillwater’s shareholder landscape.

Neal Froneman, instrumental in Sibanye-Stillwater’s recent expansion efforts, holds a 0.3-percent stake in the Johannesburg-based multinational mining and metals processing group. UBS’ increased investment is expected to inject optimism into the mining sector, potentially bolstering Sibanye-Stillwater’s financial outlook and growth prospects.

Major banks boost Sibanye-Stillwater

UBS’ move follows a similar investment by JPMorgan Chase & Co., which secured a 6.32-percent stake in Sibanye-Stillwater with an investment of R3.98 billion ($215.4 million) on May 10. The combined backing of major financial institutions like UBS and JPMorgan is likely to provide Sibanye-Stillwater with improved access to capital for future expansion initiatives.

As Sibanye-Stillwater navigates ongoing market dynamics, UBS’ expanded involvement underscores its confidence in the mining sector’s resilience and long-term prospects. Analysts and market participants are closely watching these developments, anticipating their impact on Sibanye-Stillwater’s trajectory and the broader mining industry.