SIBANYE-STILLWATER yesterday advised shareholders that it was in talks to acquire mining assets in Brazil amid reports that it planned to spend $1 billion (R14.8bn) towards the transaction.
In a cautionary statement the platinum and gold producer said it has entered into negotiations with affiliates of funds advised by Appian Capital Advisory, regarding the acquisition of both the Santa Rita nickel and the Serrote copper mines, in Brazil.
“If these negotiations are successfully concluded, they may have a material effect on the price of the company’s securities. Accordingly, shareholders of Sibanye-Stillwater are advised to exercise caution when dealing in the Company’s securities until a full announcement is made,” the company said.
Sibanye-Stillwater made the announcement after international publication Wall Street Journal reported that the company was in advanced talks to buy two Brazilian mining companies for about $1bn, including debt.
Citing a third party in the report said the company was betting on continued demand for metals used in the production of electric-car batteries.
Sibanye-Stillwater did not disclose the valuation of the transaction under discussion.
Commenting on the acquisition, Anchor Capital’s investment analyst Seleho Tsatsi said at this stage the market had not yet had any official announcements about the deal.
“If this deal does close at the reported $1bn amount, it would represent a sizeable investment in absolute terms and relative to Sibanye-Stillwater’s annual free cash flow,” Tsatsi said.
The announcement comes as Sibanye-Stillwater is increasingly becoming aggressive in the future facing battery metals by spending around R10bn in nickel and lithium processing investments in the US and Europe.
Last month. Sibanye announced that it was making its biggest investment into battery metals through the R7.25bn ($490 million) acquisition of a lithium project in Nevada in the US in line with ambitions to diversify into green metals. The group entered into a 50-50 joint venture with Australia’s Ioneer for the development of the Rhyolite Ridge Lithium-Boron Project.
The deal marked Sibanye’s third renewable energy addition after the acquisition of a 30 percent stake in Finnish based lithium mine Keliber Oy and buying the Sandouville nickel hydrometallurgical processing facility, located in Normandy, France.
Sibanye-Stillwater declared a R8.54bn interim dividend for the six months to the end of June after another record financial performance on the back of bumper precious metal prices.
BUSINESS REPORT ONLINE