Sibanye-Stillwater Ltd. announced Monday that it has entered into advanced talks to buy the Santa Rita nickel and Serrote copper mines in Brazil. The company is likely aiming to shore up its supplies of mined metals, which are key components to the global transition to low-carbon emission energy sources.
The South African mining company said it has begun discussions with affiliates of funds represented by London-based investment firm Appian Capital Advisory LLP. It advised shareholders to take cautious ahead of a deal announcement.
The deal is estimated to be worth around $1 billion, including debt, people familiar with the matter said. Analysts said the deals are likely part of a global race among mining companies to acquire stockpiles of crucial metals used in batteries, which are now in high demand. As supply chain restrictions stifle movement, several metals, including nickel, have recently hit multi-year highs.
Atlantic Nickel, which runs one of the world's largest open-pit nickel sulfide mines, and Mineracao Vale Verde, which is building a copper-and-gold mine, would be acquired by Sibanye-Stillwater if the deal pushes through.
The Santa Rita nickel-cobalt mine in Brazil, which reopened in 2019 after bankruptcy, has a processing capacity of 6.5 million metric tons of ore per year. Appian rescued the Santa Rita mine from bankruptcy and brought it back into production. The former owner, Mirabela Nickel of Australia, spent nearly $1 billion on the mine.
In recent months, Sibanye-Stillwater has increased its footprint in the battery materials supply chain. In Nevada, the miner has committed $490 million in a lithium-boron mining operation. It has also made arrangements to buy a nickel hydrometallurgical processing facility in France and a share in the owner of a lithium project in Finland.
Mining companies all across the world are rushing to boost their exposure to metals that are critical to a low-carbon future. Major companies have already committed to lowering their carbon emissions over the coming years, which means that demand for products such as car batteries and electronics that use mined metals is going to increase. BHP Billiton and Australian billionaire Andrew Forrest are both pursuing an undeveloped nickel, copper, and chrome asset in northern Ontario, Canada.