Sibanye walks away from $1 billion nickel deal after ‘geotechnical event’ in Brazil

Sibanye Stillwater today announced it has scrapped a US$1 billion deal to buy the Santa Rita nickel mine and Serrote copper-gold mine in Brazil after a ‘geotechnical event’.

The South African miner said the event at Santa Rita would have had a material and adverse impact on mining operations, but did not provide any further explanation regarding the issue.

In a statement, Sibanye said that a wholly owned subsidiary ‘has today given notice of termination’, before adding that the related transaction for the Serrote copper mine was conditional on the closing of the deal for Santa Rita.

Meanwhile, a spokesperson for Appian Capital Advisory, the London-based investment company which played an instrumental role in the deal, said they believed there was no basis for the termination.

They said that the ‘geotechnical event’ referred to by Sibanye amounts to a localised fracture that occurs in the normal course of open pit operations.

“To remedy the condition of the area in question, some amount of additional waste will need to be mined earlier in the mine plan which equates to less than 1% of the mine’s volume over a 34-year mine life,” Appian said.

Appian said it did not agree that the fracture constituted a material adverse event and the spokesperson said it would take all necessary action to enforce its legal rights.