Sibanye-Stillwater (JSE: SSW, NYSE: SBSW) has agreed to pay $215 million to settle a dispute with Appian Capital Advisory over its cancelled purchase of two of the firm’s Brazilian assets.
In October 2021, Sibanye announced the proposed acquisition of Atlantic Nickel and Mineração Vale Verde from Appian for a combined total of $1 billion. However, it abruptly walked away from the deal just three months later, citing a dislocation in a pit wall at Atlantic Nickel’s Santa Rita mine.
Appian did not accept the withdrawal, and in February 2022, it took legal action against Sibanye in the High Court of London seeking damages in excess of $1.2 billion, which comprises the $1 billion cash consideration of the deal and $218 million in estimated royalties.
The settlement comes just before a trial to determine damages was due to begin. In late 2024, a UK court determined that Sibanye had unlawfully abandoned the deal and was liable to compensate the seller. The South African miner said earlier this year that Appian could have recovered more than $720 million from a judgment.
‘Positive’ outcome
In a press release, Sibanye’s CEO Richard Stewart said the board and management are “convinced that the settlement of this protracted legal dispute is in the best interests” of the company.
“This positive outcome allows us to close this matter on appropriate terms and focus our full attention on managing our funds and driving continued growth across our portfolio,” Appian founder and CEO Michael Scherb also said.
BMO Capital Markets views the settlement as a slight “positive” for Sibanye. “They are able to comfortably pay this settlement out of current treasury, but it also removes any overhang for Sibanye-Stillwater, allowing them to focus on consistent operational delivery and growth,” the bank wrote in a note on Monday.
Investors also reacted positively to the news, with Sibanye’s US-listed shares opening Monday’s session 6.5% higher. Its current market capitalization stands at nearly $12 billion.
Battery metals push
In attempting to buy the Appian assets, Sibanye was looking to diversify its mining portfolio by increasing its exposure to battery metals, on top of its gold and PGM mines in South Africa and the US. The company currently has a lithium project in Finland and owns a nickel plant in France.
The Santa Rita mine has been one of the largest open-pit nickel sulphide mines that is nearing depletion, after which it will transition to underground. Mineração Vale Verde’s Serrote copper mine in Alagoas, eastern Brazil, is expected to produce about 20,000 tonnes copper-equivalent annually over 14 years.
The Appian transaction is not the only major battery metals deal that Sibanye has U-turned on. Earlier this year, the miner scrapped its planned investment in the Rhyolite Ridge lithium-boron project in Nevada, also announced in 2021, citing a weak market environment.
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Sibanye-Stillwater (JSE: SSW, NYSE: SBSW) has agreed to pay $215 million to settle a dispute with Appian Capital Advisory over its cancelled purchase of two of the firm’s Brazilian assets.
In October 2021, Sibanye announced the proposed acquisition of Atlantic Nickel and Mineração Vale Verde from Appian for a combined total of $1 billion. However, it abruptly walked away from the deal just three months later, citing a dislocation in a pit wall at Atlantic Nickel’s Santa Rita mine.
Appian did not accept the withdrawal, and in February 2022, it took legal action against Sibanye in the High Court of London seeking damages in excess of $1.2 billion, which comprises the $1 billion cash consideration of the deal and $218 million in estimated royalties.
The settlement comes just before a trial to determine damages was due to begin. In late 2024, a UK court determined that Sibanye had unlawfully abandoned the deal and was liable to compensate the seller. The South African miner said earlier this year that Appian could have recovered more than $720 million from a judgment.
‘Positive’ outcome
In a press release, Sibanye’s CEO Richard Stewart said the board and management are “convinced that the settlement of this protracted legal dispute is in the best interests” of the company.
“This positive outcome allows us to close this matter on appropriate terms and focus our full attention on managing our funds and driving continued growth across our portfolio,” Appian founder and CEO Michael Scherb also said.
BMO Capital Markets views the settlement as a slight “positive” for Sibanye. “They are able to comfortably pay this settlement out of current treasury, but it also removes any overhang for Sibanye-Stillwater, allowing them to focus on consistent operational delivery and growth,” the bank wrote in a note on Monday.
Investors also reacted positively to the news, with Sibanye’s US-listed shares opening Monday’s session 6.5% higher. Its current market capitalization stands at nearly $12 billion.
Battery metals push
In attempting to buy the Appian assets, Sibanye was looking to diversify its mining portfolio by increasing its exposure to battery metals, on top of its gold and PGM mines in South Africa and the US. The company currently has a lithium project in Finland and owns a nickel plant in France.
The Santa Rita mine has been one of the largest open-pit nickel sulphide mines that is nearing depletion, after which it will transition to underground. Mineração Vale Verde’s Serrote copper mine in Alagoas, eastern Brazil, is expected to produce about 20,000 tonnes copper-equivalent annually over 14 years.
The Appian transaction is not the only major battery metals deal that Sibanye has U-turned on. Earlier this year, the miner scrapped its planned investment in the Rhyolite Ridge lithium-boron project in Nevada, also announced in 2021, citing a weak market environment.