Private equity funds group Appian Capital Advisory has lodged a claim in the High Court of England and Wales seeking compensation from South Africa-based Sibanye-Stillwater, after the miner in January terminated a $1.2-billion transaction to buy Brazilian mining assets.
Appian claimed that Sibanye unlawfully breached two sale and purchase agreements (SPAs) when it failed to close the acquisition of Atlantic Nickel, the owner of the Santa Rita mine, and Mineração Vale Verde (MVV), which owns the Serrote mine.
Sibanye, at the time, explained that it did not follow through on the acquisition of the nickel assets owing to a geotechnical event at Santa Rita, which had a material and adverse impact on the financial conditions, properties, assets and liabilities of the mine.
Appian has disputed this and on Monday reiterated that Sibanye’s assertion that the geotechnical instability constituted a material adverse effect under the terms of the relevant SPA, was incorrect.
“In reality, the event, which Sibanye had previously assessed as an occurrence ‘to be anticipated in mature mining operations’, had minimal impact on the mine.
"Appian considers that Sibanye has improperly relied on the event to avoid its legal obligations and that Sibanye wished to terminate the SPAs for commercial reasons unrelated to the geotechnical event,” the firm said in a statement.
Appian reported that Sibanye's failure to close the transaction and incorrect public statements in relation to the Santa Rita mine had “materially damaged” the market perception of Atlantic Nickel and Appian.
The company is seeking to recover its losses in full.
Sibanye commented that it would defend the claim.
Santa Rita is one of the top ten global producing nickel sulphide mines, producing 16 000 t/y of nickel-equivalent, at a C1 operating cost of $1.97/lb. The conventional openpit operation has a seven-year mine life, but a preliminary economic assessment-stage underground project will extend that to 27 years. Santa Rita has mineral reserves of 43.3-million tonnes at an average grade of 0.31% nickel, 0.11% copper and 0.01% cobalt, containing 134 000 t of nickel, 49 000 t of copper and 5 000 t of cobalt. Its mineral resources contain about 1.38-million tonnes of nickel, 446 000 t of copper and 25 000 t of cobalt.
The Serrote mine has a reserve life of 13 yearsand will produce an average of 20 000 t/y of copper-equivalent at a C1 operating cost of $1.11/lb copper. Serrote has mineral reserves of 50.4-million tonnes at an average grade of 0.6% copper, 0.10 g/t gold, containing 299 000 t of copper and 159 000 oz of gold. Its mineral resources contain about 609 000 t of copper and 347 000 oz of gold.