Finace And Stock

WSJ News Exclusive | Sibanye-Stillwater Nears $1 Billion Deal to Acquire Brazil Nickel and Copper Projects

Sibanye-Stillwater Ltd.


SBSW 0.42%

is in advanced talks to buy two Brazilian miners for about $1 billion including debt, people familiar with the matter said, a bet on continued demand for metals used in the production of electric-car batteries.

The South Africa-based miner would acquire Atlantic Nickel, which operates the Santa Rita mine, one of the world’s biggest open-pit nickel sulfide mines, and Mineracao Vale Verde, which is developing a copper-and-gold mine, the people said. The deal is expected to be announced in the coming days, assuming it doesn’t fall apart.

Miners are racing to secure supplies of key metals that will be needed to keep pace with rising demand for electric vehicles. Nickel is a component in the cathodes that go into lithium-ion batteries used by most car makers.

BHP Group Ltd.


BHP 1.41%

said this month it had produced the first nickel sulfate crystals from its Kwinana plant in Western Australia. The facility is expected to produce enough of the compound to make 700,000 vehicle batteries a year.

The deal would be a triumph for the mines’ current owner, London-based investment firm Appian Capital Advisory LLP, which acquired the Santa Rita mine out of bankruptcy in 2018 and restarted production the next year. The mine has an estimated annual processing capacity of 6.5 million metric tons of ore, according to Appian’s website.

Vale Verde is developing the Serrote copper-and-gold mine in eastern Brazil. Construction at the project, which Appian bought in 2018 for $40 million, is complete and the mine has secured the major permits needed to produce copper, according to Appian’s website. The buyout firm estimates Serrote will produce concentrates containing about 20,000 metric tons of copper annually over 14 years once it is up and running.

Battery makers still account for only a small slice of global nickel demand—stainless-steel producers are the biggest buyers—but analysts expect that to grow over the next decade as electric vehicles become more popular.

Nickel prices so far this year are up 19% to $19,739 a metric ton on the London Metal Exchange. Analysts at

Goldman Sachs Group Inc.

say they could hit $22,000 next year.

Many metals are touching multiyear or record highs as supply-chain delays hamper their movement around the world and as higher power prices raise the cost for some producers.

South Africa-based Sibanye-Stillwater, whose shares are listed in Johannesburg and New York, is mostly known as a gold producer. It also mines precious metals such as platinum, palladium and rhodium, which are used to remove toxic pollutants from exhaust fumes to meet tightening emissions standards.

In July, it agreed to acquire the Sandouville nickel hydrometallurgical processing facility in Le Havre, France’s second-largest industrial port. Sibanye-Stillwater could use that operation to process nickel from the Atlantic Nickel mine. In February, it took a minority stake in a lithium company in Finland that produces another compound used in electric-car batteries.

In addition to gaining exposure to fast-growing demand from battery makers, Sibanye is also balancing its portfolio for a mix of economic conditions. Gold prices typically rise in times of economic uncertainty, while copper and other metals used in industrial production are more valuable when business is booming.

Write to Ben Dummett at ben.dummett@wsj.com and Joe Wallace at Joe.Wallace@wsj.com

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