UK’s Appian Capital lodges R18.7bn compensation claim against Sibanye

‘We are very confident. We spent a lot of time looking at it. We spent a lot of time with our legal advisors and we are very confident’: James Wellsted – senior VP, investor relations.

FIFI PETERS: Mining matters now. Sibanye-Stillwater has run into some legal issues over its decision to pull the plug on its $1 billion Brazil deal. The mining group walked away from the deal to buy the Santa Rita nickel and the Serrote copper mines in Brazil. That happened in January after a geotechnical event took the shine off the assets and also the financial attractiveness of them.

But the sellers are taking Sibanye to court for doing so. We have James Wellsted, the senior vice-president for investor relations at Sibanye-Stillwater, for more on the story. James, thanks for your time as always. I spoke to an analyst yesterday; he said that this was inevitable. I’m just interested – did you see the legal action coming? Are you prepared?

JAMES WELLSTED: Evening, Fifi, and evening to the listeners. Yes, we obviously saw the possibility of this happening. We hoped it wouldn’t. We terminated the transaction within the rights that were contained in the contract that we’d signed with Appian when we first announced the transaction in October. But clearly they’ve got their right to try and protect their assets or the value for their stakeholders, as do we, so we’ll defend it in court if they continue with this process.

FIFI PETERS: Do you know what exactly they want?

JAMES WELLSTED: They’ve said that they’re looking for $1.2 billion. Remember we were going to buy the Santa Rita nickel mine and Serrote copper mines for $1 billion. Then we terminated the transaction in January after a material adverse event that happened some months before in 2021.

They are asking for – it looks like the $1 billion, plus $200 million for additional value, I think from potentially the underground mine and some brand value or, I guess, reputation value that they feel has been impacted.

FIFI PETERS: And this case is going to take place in the High Court of England and Wales. Why is that so?

JAMES WELLSTED: Well, I think those companies are constituted there. I believe that that’s the jurisdiction where the hearings will take place. So it falls under that jurisdiction.

FIFI PETERS: Should your shareholders be worried?

JAMES WELLSTED: Obviously with any litigation there’s always a risk of something that may not go our way. But, as we’ve said from the start, we spent several months really looking into the impact of this event. We brought in experts to look at that, and we did a lot of careful thinking and careful analysing before we made the decision. We liked the assets initially. We were very keen to pursue the transaction, which was furthering our battery-metals strategy.

But ultimately, when we looked at the impact of that event, we decided it was material and it would impact on the value for our stakeholders. Hence we decided to terminate.

FIFI PETERS: So are you making any provisions for a worst-case scenario, in the event that things don’t go your way?

JAMES WELLSTED: We haven’t provided for it. Obviously at the end of the year in our integrated report, which we published recently, we made no provision for it. We’ve had a look at it, we’ve spoken to our auditors, and the decision was that [it] didn’t want warrant a provision.

FIFI PETERS: All right. I suppose that also signals confidence in your prospects of winning?

JAMES WELLSTED: We are very confident. As I said, we spent a lot of time looking at it. We spent a lot of time with our legal advisors and we are very confident.

FIFI PETERS: Parting shots, unrelated to the actual transaction, but rather to the strike at the gold operations – how are things going there? What’s the latest?

JAMES WELLSTED: We are still engaging. Remember last week we actually asked the unions whether they would again consider, because we’re still in deadlock with them, we asked if they’d again consider mediation through the CCMA [Commission for Conciliation, Mediation and Arbitration], and we had some sessions on Thursday and Friday last week. That continued this week. Again, we are engaging today. Our teams are engaging with the unions and the CCMA in an attempt to find a solution to this.

FIFI PETERS: All right. Final question, James – when exactly is the first showing in court?

JAMES WELLSTED: I’m not sure. Sorry, I’ve been away. I believe they served or gave us notification that they would be going to court, but I don’t think there are any dates set as yet.

FIFI PETERS: All right. We’ll be following that story and reaching out as the developments unfold. Thanks always for your time, James. We’ll leave it there. James Wellsted is the senior vice-president of investor relations at Sibanye-Stillwater.

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