The gold industry has seen some of the biggest mergers in history in the past two to three years, but there might be more brewing.

In an interview with the Johannesburg, South Africa, daily publication Business Day, Sibanye Stillwater's (SBSW 2.91%) CEO Neal Froneman suggested gold miners AngloGold Ashanti (AU 4.78%) and Gold Fields (GFI 6.06%) should combine with Sibanye to create one of the world's largest gold mining companies. All three companies are headquartered in South Africa.

Froneman believes such a mega-merger would not only help strengthen South Africa's gold industry, but also create a gold behemoth that could compete with the world's two largest gold mining companies, Newmont (NEM 2.21%) and Barrick Gold (GOLD 1.91%).

Gold bars.

Image source: Getty Images.

Sibanye was formed in 2013 when Gold Fields spun off some mines in South Africa. Since then, Sibanye has followed an aggressive acquisitive strategy to grow, but in doing so, it digressed largely into platinum-group metals, particularly after its acquisition of Stillwater in 2017. Gold constituted only 33% of Sibanye's total production in 2020. The company is, in fact, the world's largest primary producer of platinum and rhodium, and a primary producer of palladium.

Lately, though, management has been intently looking to expand its gold portfolio. "[We] remain interested in increasing our gold base, but we battled to find value within the sector that we continue to look," Froneman said during Sibanye's fourth-quarter earnings conference call last month.

Although it's merely an idea for now, if Sibanye, AngloGold, and Gold Fields were to combine as is right now, their combined market capitalization of nearly $31.5 billion would make it the third-largest listed gold company after Newmont Mining and Barrick Gold. It would also be one of the biggest deals in the gold industry after Barrick's merger with Randgold in 2018 and Newmont's acquisition of Goldcorp in 2019.

Froneman has publicly voiced his ambition to double Sibanye's size through acquisitions. Financially, the company is on strong footing right now, having earned record net income and free cash flows in 2020 and ending the year with cash and equivalents exceeding debt. Sibanye also reinstated a dividend last year and currently yields a solid 5%.