Size matters, and Sibanye-Stillwater (JSE:SSW) may find scale in its home country. Company CEO Neal Froneman recently spoke to Kitco News. The company is headquartered in South Africa. Froneman said a $20 billion market capitalization is more relevant and investable for the broader market. Sibanye is sitting at $12.5 billion. To build size, Froneman noted that South African miners are trading at a discount compared to their North American peers. Business Day reported that a tie up of the country's top miners—Gold Fields and AngloGold Ashanti along with Sibanye - would be in the national interest.
Our guest has thoughts on how to assemble a new top tier minor. And it just is better being bigger with us as Neil ornament. He is CEO of Savani Stillwater. Neil, welcome to kick go. Hi, Michael. Now for on-demand you said you wanted to grow your gold business in some type of business combination with other miners in South Africa may make sense.
Yes, that's correct, Michael. Um, and it's, it's not something that is recent, uh, about a year ago, uh, as we came out of being, uh, um, quite highly leveraged, um, we made our intentions, uh, to the market clear that, uh, Our gold portfolio had become quite small relative to our PGM portfolio. And, um, and we really needed to get the earnings from our gold portfolio, uh, to a bigger proportion of the business.
Uh, um, at year end, uh, gold was represented on each 20% of earnings. So, so this has been a journey we've been on since the beginning of last year. Um, the universe of companies, uh, includes, uh, You know, the global universe of companies. Um, and then more recently I, an analyst pointed out something which is actually quite obvious is that some of the South African gold companies are trading at lower multiples.
That's something that we recognized, uh, for some time. And, and certainly, I suppose one of the options is, uh, about putting a number of South African gold companies, uh, together. There's a, there's some good South African, uh, golden precious metals companies. And, um, and that's an idea that, uh, um, certainly seems to have got quite a lot of speculation.
Why does size matter in this environment? Michael, um, uh, certainly does matter because, uh, Uh, investors and, and, and more specifically passive funds, um, do look at size. Um, so relevance, we talk about relevance. Um, not so much size, but size does matter. Um, you gotta be relevant to, to be investible when you are relevant, you do attract a bit of multiple.
Cause you're attracting a broader base of shareholders, uh, at $13 billion market cap. Uh, we don't consider ourselves relevant. We think you really have to be about $20 billion, um, uh, of size market cap. In other words, uh, to stop being relevant in today's, uh, investment market. Now, uh, you're looking to South Africa, it looks like lower multiples.
Uh, you want to see a champion out of there. You've also been slightly upset by the investment environment and the country. And you said that more projects could get green lit with structural change? Yes. Look, South Africa is not an easy place to, to run a, um, an operation, uh, being domiciled in South Africa.
Um, without any operations, um, really doesn't have an impact on your business, but, uh, for, for whatever reason, um, um, some of the South African companies trade at a, at a discount. And, um, and I think part of the reason is, uh, Um, it's a difficult to jurisdiction to prosper. One of our strategic focus areas is prospering in South Africa and we've actually done quite well.
Um, however, um, like any destination, if, uh, if the investor friendliness was to improve. There's many more projects we can do. So, um, we have announced a few projects which, uh, uh, achieved very significant hurdle rates and, um, and, and clearly, um, the hurdle rates are quite high. Sorry, excuse me, because of some of the challenges that I've just referred to, but, uh, we're not the only mining company with a number of projects that could under different conditions.
I think provide, um, um, you know, organic growth and, uh, create many more jobs which are desperately needed in South Africa. Uh, you were talking about, uh, business combinations in South Africa, but kind of stepping back and looking at the industry as a whole, uh, we've seen the odd, uh, M and a deal, uh, that has started.
Um, I think that that was, uh, kicked off, uh, by, um, uh, Agnico Eagle and, uh, the T-Mac deal at the start of the, we are, um, where are we right now? Um, you know, it doesn't seem 2011. Not that exuberant. Uh, but, uh, what is the state right now of play, you think in the larger industry, what are some of the seniors in neutral media it's doing.
Michael. I think that all of them recognize, um, the relevance issue that we spoke about earlier. I think last year with COVID, um, we had two impacts. The one was, uh, we saw the gold price run. So valuations were challenging. We saw that, uh, in what we were looking at. Um, but also you had the secondary impact of.
Um, COVID and, and travel restrictions make it very difficult, uh, to do due diligences, uh, outside of your, your home country. So, um, so MNA was subdued last year. I do think, uh, I do think it'll pick up this year as, um, as vaccinations, um, uh, take place and travel starts opening up. I think we also moving into a period of, of some weakness from a goal perspective, which obviously will get factored into share process and, and that'll create the opportunity to do smart things, uh, not at the top of the market.
And, and, um, I suspect, as I say, we will see more activity this year. Let's turn to energy transition. You recently announced a strategic partnership with Johnson, mathy to accelerate quote, new technologies for a low carbon future. We see a lot of investment in lithium-ion batteries, but what's the breakdown in future demand for platinum group metals.
The, um, the fundamentals for platinum group metals are really good, uh, especially for platinum Iridium and ruthenium, uh, which all play a significant roles in, in the hydrogen economy. Um, Rhodium is, is, has been in deficits and will continue trading in deficits for the foreseeable future that's, uh, predominantly used in, in older cats.
Um, palladium, I believe there's a strong underpin until about 2027, where some of these new technologies could well, Displace a palladium, but certainly out until 2027, I think we have robust underpinned for, for most of the, uh, the PGM metals. Um, in terms of battery metals, I think, uh, COVID is certainly, um, uh, seen.
Um, a much bigger focus on environmental issues. Um, and, um, and as you would have seen many countries have announced, uh, accelerating the, the battery, uh, drive, train, uh, programs, uh, through subsidies and so on. Um, and we will say into the battery metals market, because we believe in having. Um, a suite of green metals associated with, uh, with the business enhances ESG, um, of course, uh, uh, this, uh, proper and, uh, and good industrial demand and a plan for them as well.
And, um, they complimentary, um, and then of course you, you would probably ask why gold. Gold is counter cyclical to industrial metals. And it gives us that natural edge in terms of being able to pay industry leading dividends in a sustainable way. What is that? Um, different, uh, you've built mines, you've run mines, but what's really different about the space.
So when you get into something like lithium, I think chemistry is really more a play and a being a closer downstream. Correct. Yes. So, so there's a number of things that come into, um, making decisions around exposure to lithium, um, the quality, um, in terms of whether you, you you're going to produce a hydroxide or not is a, is important.
They are cost benefits in, in going down that route. Um, they are shelf life issues, so you've gotta be closer. Uh, to the market and it's not only shelf life, but as we know, lithium is, uh, is hazardous when it is mixed with water. So, um, so you have to be careful. So having, having a lithium, uh, operation close to the market is, is beneficial in, in many ways.
And that's what our caliber project in Finland does for us. Lastly, uh, you've built, as I said before, you have built minds, uh, you are into the space, but there's entirely new pressures upon now, this industry, carbon neutrality, ESG electrification. Uh, how do you build mine these days to serve those markets?
Yep. It's a, it's a very good question. Um, you have to build a green months. Uh, we've seen in our portfolio that, uh, Uh, some of the products we produce in the U S um, are considered some of the greenest PGMs in the world, and we get a bit, we get a, um, a premium for, for those products. So that's a. The first thing, there's real commercial imperatives, but from a, an ESG perspective and especially the, the E and the ESG, um, obviously having, uh, operations that recycle is important to investors and society at large, um, having operations that are not energy intensive and certainly having operations that, uh, Um, use renewables, uh, or low carbon emitting technologies are going to be important.
And that's on the East side, on the East side, of course, communities and, and the, the, the social aspects of money are also just as critical. Um, but, uh, um, environmentally, um, carbon neutrality is, is a given. And if you're not going to be carbon neutral, you're going to have. Uh, difficulty in finding investors.
We've been speaking with Neil Froman. He is CEO of Sylvania Stillwater. My name is Michael McCray with Kitco mining.