Sibanye Stillwater ends $1 billion Brazil mines deal, seller considers action

A mine shaft is seen at the Sibanye gold mine in Westonaria, west of Johannesburg, April 6, 2016. REUTERS/Siphiwe Sibeko/File Photo

Jan 24 (Reuters) - Sibanye Stillwater said on Monday it had abandoned a $1 billion deal to buy the Santa Rita nickel mine and Serrote copper-gold mine in Brazil after a "geotechnical event".

The South African precious metals miner, which had aimed to bolster its battery metals business with the Brazilian deal, said the event at Santa Rita would have had a material and adverse impact on mining operations there. It did not elaborate.

"A wholly owned subsidiary of Sibanye Stillwater has today given notice of termination," the company said in a statement, adding the related transaction for the Serrote copper mine was conditional on the closing of the deal for Santa Rita.

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A spokesperson for Appian Capital Advisory, a London-based investment company which advises two affiliated private equity funds which in turn own the Brazilian mines, said they believed there was no basis for the termination.

The spokesperson 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.

Sibanye has been diversifying into metals used in electric vehicle batteries in a bid to transform itself from a gold and platinum group metals producer to a diversified miner with a "green metals" portfolio.

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Reporting by Sinchita Mitra and Muhammed Husain in Bengaluru, Emma Rumney in Johannesburg and Clara Denina in London; Editing by Rashmi Aich, Kim Coghill and Alexander Smith

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