Appian Capital Advisory has scored a big win after the UK top court ruled that Sibanye-Stillwater had to pay the London-based investment firm a $1.2 billion compensation for the termination of two Brazilian mines acquisition.
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Appian Capital Advisory LLP welcomes ruling from the High Court of England and Wales that Sibanye-Stillwater Limited and its subsidiary Sibanye BM Brazil (Pty) Ltd are liable for damages caused by unlawfully terminating their US$1.2 billion transaction with Appian to acquire shares in Atlantic Nickel and Mineração Vale Verde in January 2022.
The judgment was handed down following a five-week trial in the commercial list of the English High Court. The ruling vindicates Appian's claim that Sibanye unlawfully breached two sale and purchase agreements ("SPAs") for its acquisition of the Brazilian mining companies Atlantic Nickel and Mineração Vale Verde.
Sibanye's termination was based on the incorrect assertion that an insignificant and minor geotechnical event ("GE") at Atlantic Nickel's Santa Rita mine in November 2021 constituted a material adverse effect ("MAE") under the terms of the SPAs.
The event, which Sibanye had previously assessed as an occurrence "to be anticipated in mature mining operations", had minimal impact on the mine.
In 2022, the mine produced 117kdmt of nickel concentrate representing a 9% year-on-year increase and delivered strong financial growth with EBITDA increasing by 65% year on year. Sibanye improperly relied on the event to avoid its contractual obligations.
In the High Court ruling, Justice Butcher determined that "the GE was not and would not reasonably have been expected to be material, and none of the bases relied on by the Defendants (Sibanye) demonstrated that it was or would" and that "there was no other basis on which the Defendants (Sibanye) were entitled to terminate the SPAs."
This ruling dictates that Sibanye is liable to compensate Appian for all of the damages which resulted from Sibanye's unlawful termination of the US$1.2 billion transaction.
Appian will seek to recover these losses in full, including the significant interest that would have accrued since January 2022.
The hearing to deal with the quantum of these damages will be tried in November 2025. If Sibanye cannot pay in full the damages awarded to Appian in the quantum trial, Appian will pursue all enforcement options.
Atlantic Nickel's Santa Rita project is one of a few long-life nickel sulphide mines, with a copper, cobalt and platinum group metals by-product, producing globally.
Atlantic Nickel will continue progressing the asset's large underground extension development through the transition from open pit to underground mining.
The underground development with higher-grade nickel will increase the production rate and extend the life of the mine to over 20 years. ■