SIBANYE-Stillwater was not justified in cancelling a 2021 deal to buy two mines from Appian Capital Advisory, the High Court of England and Wales said in a ruling on Thursday.
Sibanye-Stillwater pulled the plug on a share purchase agreement in January 2022 after the collapse of a pit wall at one of the mines – the Santa Rita nickel operation in Brazil – which the miner said was on the basis of a material adverse advent.
Appian Capital subsequently brought a $1.2bn compensation claim against Sibanye-Stillwater. In its ruling, the UK court agreed with Appian Capital that the pit wall collapse did not represent a material adverse event.
This means legal proceedings will now move to a second phase via trial in late 2025 in which the size of a potential compensation claim will be weighed.
Sibanye-Stillwater contends no compensation ought to be paid as Appian Capital received multiple alternative offers for its mines, eventually selling the operations, which also include the Serrote copper mine, for $1bn.
“Sibanye-Stillwater’s case on quantum is that Appian could have sold the Santa Rita and Serrote mines in Brazil to another purchaser for a similar purchase price after Sibanye-Stillwater terminated the SPAs and therefore cannot recover any loss it has suffered from Sibanye-Stillwater,” the company said.
“The ruling vindicates Appian’s claim that Sibanye unlawfully breached two SPAs for its acquisition of the Brazilian mining companies Atlantic Nickel and Mineração Vale Verde, said Appian Capital in a statement.
The court ruling “dictates” Sibanye-Stillwater “is liable to compensate Appian for all of the damages, it added. “Appian will seek to recover these losses in full, including the significant interest that would have accrued since January 2022.”
In Sibanye-Stillwater’s favour, the court’s Mr Justice Butcher dismissed Appian’s claim of wilful misconduct. The court “genuinely believed that it was entitled to terminate the SPAs in what they perceived as the best interests of Sibanye-Stillwater,” the company said.
The court outcome is not ideal for Sibanye-Stillwater.
Even though the trial over potential compensation to Appian Capital only takes place at the end of next year, Sibanye-Stillwater has only just recapitalised its balance sheet following 18 months of plummeting platinum group metal prices.
Shares in Sibanye-Stillwater fell nearly 11% in the immediate aftermath of the news announcement, capping the share’s gains over the last month at about 15%.