Sibanye Stillwater acquires the Santa Rita and Serrote mines
Join Our Newsletter - Get important industry news and analysis sent to your inbox – sign up to our e-Newsletter here
X

Sibanye Stillwater acquires the Santa Rita and Serrote mines

By Zachary Skidmore 26 Oct 2021 (Last Updated October 26th, 2021 15:54)

Sibanye Stillwater has announced that it will buy the Santa Rita nickel mine and Serrote copper-gold mine in Brazil.

Sibanye Stillwater acquires the Santa Rita and Serrote mines

South African miner Sibanye Stillwater has announced that it will buy the Santa Rita nickel mine and Serrote copper-gold mine in Brazil. The miner said it signed agreements with affiliates of funds advised by Appian Capital Advisory to buy both mines for $1bn and a 5% net smelter return royalty over potential future underground production at Santa Rita.

Santa Rita is one of the largest nickel-cobalt sulphide open-pit mines in the world, located in the State of Bahia. Serrate is a producing open-pit copper mine, currently in ramp-up, located in the State of Alagoas and developed at the cost of $195m.

Sibanye’s chief executive Neal Froneman said that the deal was a “significant additional step” in its transition into a “climate change-resilient business”. He went on to say that the deal would provide Sibanye with “significantly pre-developed and pre-capitalised, low-cost, producing nickel and copper assets with strong ESG credentials, which will continue to be managed by a high-quality team with a wealth of operating experience in Brazil”.

Shares of Sibanye climbed by 2.9% after the announcement. The Brazil deal will add two low-cost, producing assets to the company’s “green metals” portfolio and will immediately add to its cash flows and earnings, Sibanye said.

Transition metals

The $1bn purchase is Sibanye’s fourth deal this year in the battery metals sector, following a September purchase of a 50 % stake in the Rhyolite Ridge lithium project in Nevada.

The move by Sibanye comes as mining companies attempt to diversify their exposure to transition metals – including copper, nickel, and cobalt – to support the energy transition.

“We think this transaction has major strategic and valuation implications, pivoting Sibanye away from being a purely precious metals company towards a base metals profile,” said JPMorgan analyst Dominic O’Kane.