Minerals sands miner Iluka Resources has been forced to delay its proposed $375 million takeover of Sierra Rutile because of geotechnical concerns with the West African company’s tailings dams.
Sierra Rutile has been notified that a “material adverse change condition” of their merger agreement with Iluka has taken place “due to geotechnical risks” of the tailings dams at the Sierra Leone operations.
Iluka will now consult Sierra Rutile over the matter, which has delayed plans to complete the deal. However, if the two companies do not come to an agreement over the concern after five business days from the November 30 deadline, then either party will have the opportunity to terminate the proposal.
In August, Iluka announced it would pay Sierra Rutile shareholders 36 pence ($0.63) per share in the proposed takeover.