Sibanye-Stillwater reports 13% annual profit rise, faces court battle over Brazil deal cancellation

South Africa’s Sibanye-Stillwater has today reported a 13% profit increase to US$2.16 billion in 2021, but is facing a high court battle over its decision to cancel a multi-million deal to acquire nickel and copper mines in Brazil.

In its latest annual report, Sibanye revealed that its platinum group metals (PGM) production in South Africa had increased by 20% in the last year, which – along with surging commodity prices and falling all-in sustaining costs (AISC) – helped boost the miners’ profit margin.

Sibanye’s PGM production in South Africa rose to 1.9 million ounces, while AISC across the assets actually fell by 5%, bucking a trend of cost inflation being observed across the mining industry.

The company noted in a separate statement that completing the annual report had taken longer than planned, due to an ‘apparent effort’ by Appian Capital Advisory to disrupt the announcement while ‘engaging in litigation’ via the media.

Appian advised on a $1.2 billion transaction relating to the Santa Rita nickel and Serrote copper mines in Brazil, which Sibanye agreed to acquire in October 2021 from two private equity funds.

However, Sibanye pulled out of the deal earlier this year, citing a ‘geotechnical event’ at the Santa Rita mine in Northeastern Brazil. Appian responded by stating that a ‘localised’ crack in the mine’s pit wall would have no impact on the open pit mine’s life.

The UK investment firm described Sibanye’s failure to close on the deal as ‘unlawful’ and claims that Sibanye’s chief technical officer concluded in a site report that the ‘geotechnical instability’ was an event ‘to be anticipated’ in mature mining operations.