Sibanye-Stillwater in talks to buy two Brazilian nickel-copper mines

The precious metals miner confirmed on Monday negotiations with affiliates of funds advised by Appian Capital Advisory LLP, regarding a potential deal that would add the Santa Rita nickel-copper and the Serrote copper-gold mines to its portfolio.

While the company did not disclose the valuation under discussion, sources familiar with the matter told The Wall Street Journal the transactions could be valued at about $1 billion, including debt.

The Santa Rita mine, operated by Atlantic Nickel, is described as one of the world’s biggest open-pit nickel sulfide assets. Located in the northeastern state of Bahia, it has an estimated annual production capacity of 16.5ktpa of nickel in sulphide concentrate.

Appian, which acquired it in 2018 as part of a bankruptcy process, says that open-pit operations are expected to last until 2028. Santa Rita will then be transitioned into an underground mining operation, extending the life of the mine from eight to 34 years, Atlantic Nickel has said.

Sibanye’s other acquisition target is Mineração Vale Verde, which has just finished construction of the Serrote mine, located in Alagoas, eastern Brazil.
Battery metals boost

The deal would be Sibanye’s fourth battery metal investment this year, following its acquisition in September of 50% of ioneer Ltd’s (ASX: INR) lithium-boron project in Nevada. Earlier this year, the company bought a 30% interest in the Keliber lithium mine in Finland and purchased a nickel processing plant in Normandy from France’s Eramet.

Nickel’s usage has grown over the past two years in lithium-ion batteries. The accelerated roll-out of EVs is making certain types of the metal popular among investors, as it can be processed into battery precursor materials.

The more traditional use of nickel is in the processing of stainless steel for kitchen appliances and utensils.

Analysts expect shortages of copper, cobalt, nickel and other industrial materials needed for the shift to a low carbon world, partly due to underinvestment in the mining sector and accelerating demand.