Sibanye said it will make an initial phased equity investment of 30 million euros ($36.49 million) for a 30% stake in Keliber, and will offer a further 10 million euros to the existing Keliber shareholders.
Sibanye, the world's largest source of platinum group metals (PGMs), plans to focus on expanding into battery metals as it looks to capitalise on the global push for green technologies.
Sibanye, along with Keliber's shareholders including Finnish Minerals Group, intend to make the project the first vertically integrated lithium producer in Europe.
The miner, which has operations in South Africa and the United States, said Keliber's lithium project would enable it to transport lithium hydroxide to European customers.
The Keliber project, which is in the Kaustinen region of Finland, consists of several advanced stage lithium spodumene deposits with 9.3 million tonnes of ore reserves and includes the development of a chemical plant in Kokkola.
"The investment offers the opportunity for further geographic diversification in an attractive mining destination and the opportunity to forge long term relationships with established lithium industry players," said Sibanye-Stillwater chief executive officer Neal Froneman.
Production is expected to start in 2024 with an annual output at 15,000 tonnes of battery grade lithium hydroxide, Sibanye said.
The precious metal producer has an option to acquire a majority shareholding in Keliber after the completion of an updated feasibility study which is expected in 18 to 24 months.
The deal, which is subject to the approval by the South African Reserve Bank, is expected to be completed in March.
($1 = 0.8221 euros)
(Reporting by Shanima A in Bengaluru and Tanisha Heiberg in Johannesburg; Editing by Rashmi Aich and Louise Heavens)