Seller challenges Sibanye's move to scrap R15bn deal to buy mines after wall collapse

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Copper granules. (Photo by Donat Sorokin\TASS via Getty Images)
Copper granules. (Photo by Donat Sorokin\TASS via Getty Images)

Sibanye-Stillwater’s move to cancel its $1 billion (R15.3 billion) acquisition of nickel and copper mines in Brazil was challenged by the seller, which said there was no legal basis to terminate the deal.

The purchase was part of Sibanye’s drive to join the rush into metals that are key to powering electric vehicles and the wider green revolution. Sibanye said it terminated the deal after a material “geotechnical event” at the Santa Rita nickel mine. 

The assets are held by affiliates of funds advised by Appian Capital Advisory LLP, which disputes Sibanye’s interpretation. Appian said there was a localized fracture at Santa Rita, which wasn’t a “material adverse event” and occurs in the normal course of open pit operations.

“Appian is currently assessing all of its legal options and will take all necessary action to enforce its legal rights,” it said.

Sibanye shares extended losses after the statement from Appian, dropping as much as 8.6% in Johannesburg trading.

The collapse of the deal is a setback for Sibanye’s dealmaking Chief Executive Officer Neal Froneman, who expanded the company’s platinum-group metals business in South Africa by buying cheaper mines when metal prices were lower. Acquiring battery metals assets may prove more difficult after a sharp rally in prices.

James Wellsted, a spokesman for Sibanye, said the company will respond once it sees what action Appian plans to take.

Earlier on Monday, Wellsted told Fin24 the agreements were signed, but the transaction had not yet closed because all conditions precedent hadn't been fulfilled.

“So we've basically just terminated [the deal] and obviously the MAE [material adverse event] was provided for in the agreement,” he said.

“The company has assessed the event and its effect and has concluded that it is and is reasonably expected to be material and adverse to the business, financial condition, results of operations, the properties, assets, liabilities or operations of Santa Rita,” Sibanye said in a statement earlier Monday.

Sibanye acquired lithium assets in Europe and the US last year and a nickel-processing facility in France. 

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