South Africa's Sibanye-Stillwater (JSE:SSW) is in advanced talks to buy two Brazilian nickel and copper assets as global miners try to secure the supply of metals for electric car batteries in order to transition to a green economy.
The precious metals miner confirmed on Monday that it had negotiated a potential deal with a fund subsidiary advised by Appian Capital Advisory LLP that would add Santa Rita nickel copper and Serrote copper and gold to its portfolio.
Although the company did not disclose the valuations under discussion, people familiar with the matter said the deals could be worth about $1 billion, including debt.
The figure is in line with estimates provided to MINING.COM last month, when news came out that Appian planned to sell Atlantic nickel for the first time.
The Santa Rita mine, operated by Atlantic Nickel, is described as one of the largest open-pit nickel sulphide assets in the world. Located in the northeastern state of Bahia, it is estimated that the annual production capacity of nickel sulphide concentrate is 16.5ktpa.
Appian, which acquired it in 2018 as part of bankruptcy proceedings, said it expected the opencast mining business to continue until 2028. Atlantic Nickel has said that Santa Rita will then turn into an underground mining business, extending the life of the mine from eight to 34 years.
Another acquisition target of Sibanye is Minera Portugal ã o Vale Verde, which has just completed the construction of the Serrote mine in Aragos, eastern Brazil.
Battery metal lifting
The deal will be the fourth battery metal investment this year after Sibanye acquired a 50 per cent stake in ioneer Ltd (ASX: INR) 's lithium-boron project in Nevada in September. Earlier this year, the company bought a 30 per cent stake in the Keliber lithium mine in Finland and a nickel processing plant in Normandy from Eramet of France.
The use of nickel in lithium-ion batteries has increased in the past two years. The accelerated introduction of electric vehicles has made certain types of metals popular with investors because they can be processed into battery precursors.
The more traditional use of nickel is to process stainless steel for kitchen utensils and utensils.
Analysts expect shortages of copper, cobalt, nickel and other industrial materials needed to move to a low-carbon world, in part because of underinvestment in the mining industry and accelerated demand.
