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Sibanye-Stillwater canceled its $1 billion acquisition of the Santa Rita nickel and Serrote copper mines in Brazil, strolling away from property that had been key to its growth into battery metals.
The deal was terminated after a “geotechnical occasion” at Santa Rita, Johannesburg-based Sibanye mentioned in an announcement on Monday.
That’s a setback for Sibanye’s dealmaking Chief Govt Officer Neal Froneman, who’s driving the South African platinum and gold miner to affix the frenzy into metals which might be key to powering electrical autos and the broader inexperienced revolution. Sibanye’s shares fell as a lot as 5.7%.
“The corporate has assessed the occasion and its impact and has concluded that it’s and is fairly anticipated to be materials and adversarial to the enterprise, monetary situation, outcomes of operations, the properties, property, liabilities or operations of Santa Rita,” Sibanye mentioned within the assertion.
Sibanye acquired lithium property in Europe and the US final yr and a nickel-processing facility in France.
The corporate will proceed trying to find new alternatives in battery metals, mentioned spokesman James Wellsted.
Wellsted declined to reveal the character of the occasion that pressured the miner to desert the acquisition from associates of funds suggested by Appian Capital Advisory LLP.
“We’re going to proceed with our battery metals technique,” Wellsted mentioned. “We are going to proceed to search for extra alternatives.”
Sibanye dropped 5.5% at 12:46 p.m. in Johannesburg, paring this yr’s acquire to 13%.
Sibanye, which expanded its platinum-group metals enterprise in South Africa by shopping for cheaper mines when metallic costs had been decrease, faces the danger of pricey acquisitions in battery metals as commodities worth rally, mentioned Mandi Dungwa, an analyst at Kagiso Asset Administration in Cape City.
“Given the place nickel, copper and lithium costs sit as we speak, its going to be much more tough to seek out cheaper property,” Dungwa mentioned.
“Clearly these metals are price a complete lot extra given the place we’re in commodities costs than two years in the past.”
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