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Sibanye-Stillwater, a South African mining group led by leading businessman Neal Froneman, has canceled plans to acquire two mines in Brazil in a deal worth $1 billion as it moves to deepen its operating portfolio of green metals and related technologies.
The leading mining group, which is the world’s largest primary producer of platinum and second-largest primary producer of palladium, unveiled the news in an announcement related to the proposed acquisition.
The move comes nearly three months after the South African mining behemoth signed a definitive purchase and sale agreement to acquire a 100-percent stake in the Santa Rita nickel mine and the Serrote copper mine in Brazil for $1 billion in cash.
The transaction, which followed announcements of the Keliber, Sandouville and Rhyolite Ridge transactions, was expected to be completed in Q4 2021, with the cash consideration funded by the company’s internal reserves.
According to the recent disclosure by Sibanye-Stillwater, the transaction was terminated due to a geotechnical event at Santa Rita that is reasonably expected to be material and adverse to Santa Rita’s business, financial conditions, results of operations, properties, assets and liabilities.
The cancellation of the $1-billion transaction is a setback to Froneman’s strategy, which includes driving the South African miner to acquire lucrative mines that can be mined for metals critical to powering electric vehicles and the larger green revolution.
Santa Rita is one of the world’s largest nickel-cobalt sulphide open-pit mines, according to Sibanye-Stillwater, while Serrote is an advanced and pre-developed open-pit copper mine with a reserve life of 13 years.
Both mines generate a sulphide concentrate that can be used in downstream processing to create battery precursors.
Santa Rita and Serrote’s combined net asset value is estimated at $258 million as of December 2020, with the mines incurring a total loss of $143 million at the end of 2020.
