Appian Capital Advisory LLP (“Appian”), the investment advisor to private capital funds focusing on metals, mining, and adjacent industries, has welcomed today’s landmark ruling from the High Court of England and Wales. The court found that Sibanye-Stillwater Limited and its subsidiary, Sibanye BM Brazil (Pty) Ltd, unlawfully terminated a US$1.2 billion transaction with Appian to acquire shares in Atlantic Nickel and Mineração Vale Verde in January 2022.
Key Highlights
- High Court Decision: The ruling confirms that Sibanye-Stillwater breached its contract by unlawfully terminating the acquisition of Atlantic Nickel and Mineração Vale Verde, with no legal basis for their actions.
- Damages Awarded: The court held Sibanye liable for the damages caused by its wrongful refusal to close the US$1.2 billion deal, and Appian is seeking full compensation, including interest accrued since January 2022.
- Quantum Trial Scheduled: The quantum of the damages will be determined in a trial set for November 2025.
The case stems from Sibanye-Stillwater’s decision to terminate the US$1.2 billion deal following a minor geotechnical event (“GE”) at Atlantic Nickel’s Santa Rita mine in November 2021. Sibanye claimed that this event constituted a material adverse effect (“MAE”) under the terms of the sale and purchase agreements (SPAs), thereby justifying the termination of the transaction. However, the court disagreed, stating that the GE had minimal impact on the mine’s operations and did not meet the criteria for a material adverse effect.
Justice Butcher, in his ruling, emphasized that the GE was neither material nor reasonably expected to have significant consequences. Sibanye’s actions were found to be unjustified, as no legitimate basis was provided for terminating the deal.
Implications for the Mining Sector
The ruling sends a strong message to the mining and business sectors about the importance of adhering to contractual obligations. While minor events may occur in mining operations, they should not be used as a basis for avoiding valid agreements. This decision reinforces the idea that the integrity of business contracts must be upheld, even in complex transactions involving large sums.
Appian, having invested considerable resources in pursuing justice, intends to recover all its losses. The legal proceedings will continue, and the damages will be determined during the upcoming trial. Appian will also seek interest payments from the period since the original termination of the deal, adding significant value to its claim.
The Santa Rita Project
The Santa Rita project, one of the few long-life nickel sulphide mines globally, continues to thrive despite the ongoing legal dispute. The mine, which also produces copper, cobalt, and platinum group metals, is in the process of transitioning from open-pit to underground mining. This shift is expected to increase production and extend the life of the mine for over 20 years, benefiting from higher-grade nickel deposits.
The continued success of the Santa Rita project further highlights the resilience of Atlantic Nickel and its potential for long-term growth. Appian’s victory in court adds momentum to the development of this important asset, which plays a crucial role in the global supply of nickel and other strategic metals.
Next Steps for Appian
Appian now focuses on seeking compensation for the damages it incurred due to Sibanye’s unlawful actions. The quantum of the damages will be fully assessed in November 2025, and Appian is determined to recover every penny lost due to the unlawful termination of the agreement. If Sibanye is unable to pay the awarded damages, Appian will explore all enforcement avenues to secure the payment.