(Ecofin Agency) – Sibanye-Stillwater faces a fine of several hundred million dollars, after a court decision concerning an interrupted acquisition in Brazil. Faced with operational and financial challenges, the company, however, sees opportunities in the growing demand for battery metals and the Keliber project.
Sibanye-Stillwater, a company listed on the Johannesburg Stock Exchange, whose largest shareholder is the Public Investment Corporation (which notably manages the South African public service retirees’ fund), is now awaiting the amount of the fine it must pay, following a court decision taken against it in a case of termination, deemed abusive, of an asset acquisition process in Brazil interrupted in 2022.
“The High Court upheld Appian’s position, ruling that Sibanye breached its contract by canceling the acquisition of Atlantic Nickel and Mineração Vale Verde without legal basis. The judge found that Sibanye is liable for losses suffered by Appian due to its illegal refusal to finalize the US$1.2 billion deal. Appian intends to recover all of its losses, including interest accrued since January 2022”said Appian Capital Advisory, plaintiff in this case.
According to the British media ReutersSibanye officials estimate that the amount of reparations could reach $522 million, but it will be necessary to wait for the judicial decision, scheduled for November 2025. Sibanye’s optimism is based on the fact that the judge recognized certain bad practices of the from his opponent.
The British judge’s decision comes in a difficult context for the South African mining operator. Its plan to diversify into batteries and other components is struggling to generate enough revenue to strengthen its financial position. In the first half of 2024, its available cash stood at $855 million in June, down from $1.3 billion at the start of the year. At the same time, its debt continued to rise, reaching $2 billion at the end of the third quarter, surpassing the average for the 2019-2023 period.
This new situation adds to several operational constraints, particularly in its activities in the gold sector in South Africa, where challenges are affecting its performance. High production costs are weighing on profitability, and the battery metals and recycling segments are negatively impacting results, putting additional pressure on Sibanye’s finances.
However, opportunities remain. Growing demand for battery metals, driven by the electric vehicle market, offers promising prospects. The Keliber project, focused on lithium, represents long-term growth potential as part of the global energy transition. Additionally, a recovery in platinum group metal (PGM) prices could support Sibanye’s existing operations and improve its future profitability.
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