The U.K.'s High Court has ruled that Sibanye-Stillwater ( SBSW ) must compensate London-based Appian Capital Advisory for terminating a $1.2 billion deal to acquire two mines in Brazil. 

Appian, a private equity firm focused on mining, sued Sibanye after the South African mining company withdrew from purchasing Atlantic Nickel and Mineração Vale Verde, who owns the Santa Rita nickel mine and Serrote copper mine, respectively.

Sibanye-Stillwater ( SBSW ) is a global mining company and a major producer of precious metals, particularly platinum and gold. In recent years, it has sought to diversify its portfolio by investing in critical metals such as copper and nickel, with the proposed Brazilian acquisitions as a key part of its expansion into battery metals, crucial for the energy transition.

Santa Rita, located in Brazil's Bahia state, is one of the world's largest open-pit nickel sulfide mines and produces copper, cobalt, and platinum group metals as by-products. The mine is transitioning from open-pit to underground operations, extending its life by over 20 years. Serrote, another key asset in Brazil, is a producing copper mine in the northeastern state of Alagoas, further enhancing Sibanye's push into critical and battery metals.

However, Sibanye terminated the transaction in early 2022, citing a "geotechnical event" at Santa Rita as the reason for its decision. The company claimed that this event would have a materially adverse effect on the mine's operations. Appian disputed this, accusing Sibanye of using incorrect reasoning to cancel the deal and sued for damages.

The trial lasted five weeks, and the ruling from The Hon. Mr. Justice Butcher found that the geotechnical event was not expected to impact the mine's future performance significantly, nor was it reasonable for Sibanye to anticipate such an effect. 

Based on this event, the judge determined that Sibanye had no right to terminate the sale and purchase agreements (SPAs). However, Sibanye succeeded in dismissing Appian's claim of willful misconduct, with the judge concluding that the company's management genuinely believed they were acting in Sibanye's best interests by pulling out of the deal.

James Wellsted, a spokesperson for Sibanye, told Reuters that Appian is seeking up to $522 million in damages. However, Sibanye maintains that Appian is entitled to little or no compensation, arguing that the mines could have been sold to another buyer for a similar price. The company pointed out that Appian had received multiple offers for the mines after Sibanye's withdrawal.

The damages owed will be determined in a separate trial set for November 2025.

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