(Bloomberg) --

Sibanye-Stillwater Ltd. canceled its $1 billion acquisition of the Santa Rita nickel and Serrote copper mines in Brazil, walking away from assets that were key to its expansion into battery metals.

The deal was terminated after a “geotechnical event” at Santa Rita, Johannesburg-based Sibanye said in a statement on Monday. That’s a setback for Sibanye’s dealmaking Chief Executive Officer Neal Froneman, who is driving the South African platinum and gold miner to join the rush into metals that are key to powering electric vehicles and the wider green revolution.

“The company has assessed the event and its effect and has concluded that it is and is reasonably expected to be material and adverse to the business, financial condition, results of operations, the properties, assets, liabilities or operations of Santa Rita,” Sibanye said in the statement.

Read more: Sibanye Buys Brazil Mines in $1 Billion Battery Metals Push

Sibanye acquired lithium assets in Europe and the U.S. last year and a nickel-processing facility in France. The company will continue searching for new opportunities in battery metals, said spokesman James Wellsted. Wellsted declined to disclose the nature of the event that forced the miner to abandon the purchase from affiliates of funds advised by Appian Capital Advisory LLP.

“We are going to continue with our battery metals strategy,” Wellsted said. “We will continue to look for more opportunities.”

Sibanye’s shares fell 2.6% by 9:56 a.m. in Johannesburg, paring this year’s gain to 17%.

Sibanye, which expanded its platinum-group metals business in South Africa by buying cheaper mines when metal prices were lower, faces the risk of costly acquisitions in battery metals as commodities price rally, said Mandi Dungwa, an analyst at Kagiso Asset Management in Cape Town.

“Given where nickel, copper and lithium prices sit today, its going to be a lot more difficult to find cheaper assets,” Dungwa said. “Clearly those metals are worth a whole lot more given where we are in commodities prices than two years ago.”

(Updates with Sibanye spokesman comments in fourth paragraph and analyst in last)

©2022 Bloomberg L.P.