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Tailings dam jitters stall Iluka’s rutile deal

Perth-based mineral sands miner Iluka Resources has delayed its planned $350 million takeover of Sierra Rutile after raising concerns over tailings dams.

Iluka told the ASX on November 29 it had put the deal on hold due to a “material adverse change” in the terms, “due to geotechnical risks of [Sierra Rutile’s] tailings dams”.

Iluka says it will consult with Sierra Rutile, but says if the pair cannot agree within five business days of November 30, then it may cancel the deal altogether.

Sierra Rutile owns and operates what it says is the world’s largest primary rutile mine in Sierra Leone.

The company said on November 29 Iluka had notified it of what it considered to be geotechnical risks at two dams, which form part of Sierra’s operations.

“SRL does not believe that there has been any event or fact that will result in the non-satisfaction of the material adverse change condition precented under the Merger Implementation Agreement,” the company said.

“SRL’s production remains in line with management’s and market expectations and its operations within appropriate industry standards.”

Iluka said it would update the market when appropriate.

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