MELBOURNE, Nov 29 (Reuters) - Iluka Resources Ltd said on Tuesday it may call off a planned 215 million-pound ($267 million) takeover of Sierra Rutile Ltd after raising concerns about its mine tailings dams.
Iluka said it had notified Sierra Rutile that a “material adverse change condition” of their merger agreement had been triggered “due to geotechnical risks of SRL’s tailings dams” and was in discussions to extend the Wednesday deadline for the deal.
If the companies fail to agree to extend the deadline within five business days after Wednesday, then either side may terminate the merger agreement, Iluka said in a statement to the Australian stock exchange.
Iluka wanted to take over Sierra Rutile to double its resource base of rutile, which is used to make white pigment and titanium metal. Sierra Rutile owns one of the world’s largest deposits of the premium mineral, in Sierra Leone. ($1 = 0.8056 pounds) (Reporting by Sonali Paul; Editing by Jonathan Oatis)