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Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email [email protected] to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at [link] [link] Neil Hume in Cape Town FEBRUARY 9 2020Print this page0 The chief executive of South Africa’s Sibanye-Stillwater hailed as a success its acquisition of Lonmin, a rival platinum producer, and forecast that dividend payments could resume this year. Neal Froneman said the £285m purchase of London-listed Lonmin was shaping up to have the “lowest payback period” of all the deals done by the highly acquisitive company. “It is literally going to be a little bit more than a year,” he said. “We took a lot of flak when we announced the deal but we have had commodity prices behind us. The wind in our sails.” Johannesburg-listed Sibanye launched its all-stock takeover of Lonmin in December 2017 but the deal was not finally closed until June 2019.  The timing of the takeover surprised analysts because Sibanye’s balance sheet was stretched after paying $2.2bn in cash for Stillwater, a US palladium producer. However, over the past year the prices of palladium and rhodium — two of the company’s main commodities — have surged to record or multiyear highs on strong demand from global carmakers.  Recommended Tail RiskNeil Hume Analysts wonder when palladium’s record run will be exhausted Palladium and rhodium are critical ingredients in catalysts for petrol and hybrid cars that convert toxic emissions, such as carbon monoxide and nitrogen oxide, to carbon dioxide, water and nitrogen. After nearly a decade of undersupply, analysts say stocks of the metals are almost exhausted. “I don’t want to mention a name but there has been a senior car company that has experienced a real shortage in rhodium,” said Mr Froneman.  “You can’t run deficits and consume surface stockpiles and inventories for ever and a day. At some point that turns into a real shortage. And that’s what happened in rhodium and I dare say it could happen in palladium.” I don’t want to mention a name but there has been a senior car company that has experienced a real shortage in rhodium Neal Froneman Rising platinum group metals and gold prices meant that Sibanye was deleveraging fast and would be in a position to return cash to shareholders in 2020, Mr Froneman said. Sibanye last paid a dividend in 2016. James Bell, analyst at RBC Capital Markets, said he expected Sibanye to reinstate its dividend once net debt was lower than one times underlying earnings. “This would mean scope for a potential interim dividend this year. In terms of structure of the policy this will probably be a share of earnings rather than a link to free cash flow,” he said. Known in the industry as Neal “the deal” Froneman, the South African has turned Sibanye into a big force in the precious metals market through a string of acquisitions. As well as PGM’s it is also a big gold producer. The company now has a market value of nearly $7bn and Mr Froneman is weighing plans to list in either London, New York or Toronto. Its shares have risen almost 190 per cent in the past year. Mr Froneman confirmed Sibanye had made an offer for AngloGold Ashanti’s Mponeng, the world’s deepest gold mine, but doubted it would be accepted. “We put in an offer we thought was commensurate with the risk . . . I’m not sure they have decided on the outcome yet but if we are not successful it is not the end of the world for us.” Mr Froneman said Sibanye’s next deal was likely to be outside South Africa and in battery metals.  “We want to play in the international arena. We are probably ex-growth in South African because of our market position in PGMs,” he said.