Posted on 13 Jun 2023
UK-based private equity firm Appian Capital Advisory is selling two Brazilian mining companies to a London-listed special purpose acquisition company backed by Glencore, Stellantis and PowerCo, Kallanish reports.
The $1.06 billion deal announced by Appian on Monday covers the purchase of Atlantic Nickel and Mineração Vale Verde (MVV) by ACG. The transaction, expected to complete next month, will create the only London-listed nickel sulphide producer of scale, the company says.
Atlantic Nickel’s Santa Rita operation in Bahia state includes an open pit and underground mine with a 35-year life of mine. The asset reached record production last year at 117,000 dry metric tonnes (dmt) of nickel concentrate, 5,000 t of copper and 291 t of cobalt.
MVV’s operation in Alagoas produces nickel sulphide and copper concentrates with low carbon emissions. It reported 19,800 t of copper production last year.
“Both mines are long-life, low-cost and ranked within the first decile of carbon emissions amongst all nickel and copper producers worldwide,” Appian says.
ACG, to be renamed ACG Electric Metals, has managed to craft long-term investment partnerships with Glencore, Stellantis and Volkswagen’s PowerCo through offtakes and funding. Glencore and Stellantis will become anchor investors committing $100m each.
The Swiss mining giant will be the offtaker of choice for ACG, using its refineries in Europe and North America to process the Brazilian products. Stellantis is targeting nickel refined from concentrate produced by Santa Rita under a long-term offtake agreement. The same applies to battery manufacturer PowerCo, which will make a $100m prepayment for equivalent nickel units to the tonnage contained in a portion of the concentrates produced by Santa Rita.
Additionally, ACG also secured $100m from La Mancha Resource Fund as an anchor equity investor; $50m from Appian-managed funds; and $250m from Royal Gold, Citigroup, ING and Société Générale. La Mancha will also receive a 2.5% net smelter royalty (NSR) on the underground production at Santa Rita, while Appian funds will retain their 2.75% NSR on the Santa Rita mine.
“ACG Electric Metals will be a company designed to take advantage of the opportunities presented by key global trends: the massive increase in demand for battery materials, the polarisation of supply chains, and the need to reduce the world’s total carbon footprint – from the mine to the end-customer,” comments ACG’s ceo Artem Volynets.
As part of its plan to attract western auto OEMs, ACG plans to have the Santa Rita mine compliant with the IRMA Standard for Responsible Mining by 2030.
Source:Kallanish
