On February 16, funds sponsored by Appian Capital Advisory LLP served Sibanye-Stillwater and its subsidiary Sibanye BM Brazil Ltd. with a notice of claim seeking compensation for what Appian called Sibanye’s “unlawful failure” to close on the transaction worth more than $1.2 billion in purchase consideration (consisting of $1 billion in cash and a royalty valued by Sibanye at $218 million) along with other associated material breaches.
The transaction relates to two sale and purchase agreements pursuant to which Sibanye had committed to acquire both Atlantic Nickel (the owner of the Santa Rita nickel mine) and Mineração Vale Verde (the owner of the Serrote copper mine). All conditions to closing under the SPAs had been satisfied, and Appian said it will assert its legal rights and intends to seek compensation from Sibanye in full.
To justify its termination, Sibanye said the material and adverse events had occurred at the Santa Rita mine. Appian believes this characterization is false, damaging and defamatory. “In reality, the geotechnical event relied upon by Sibanye is a localized instability that has little impact on the productivity of the mine,” the company said.
According to Appian, the Sibanye team, led by its chief technical officer, visited the Santa Rita mine in mid-November, a week after the geotechnical instability occurred, and concluded that the risk of such instability is “to be anticipated in mature mining operations.”
Appian said Sibanye’s assertions that the instability reduces a six-year mine life by two to three years are “highly damaging and clearly unsupportable.”
Appian believes that, in reality, Sibanye intentionally chose to breach its obligations for commercial reasons alone. Appian intends to rigorously enforce its legal rights and pursue Sibanye for all damages and losses incurred.