ACG will be renamed ACG Electric Metals, creating the only London-listed nickel sulphide producer with pure-play electric metals exposure, and the teams operating at the assets included in the acquisition will join ACG
Appian to sell its Brazil companies to ACG. (Credit: Alex Banner from Pixabay)
UK-based private equity firm Appian Capital Advisory has announced the sale of its Brazilian companies Atlantic Nickel and Mineração Vale Verde (MVV) to ACG Acquisition Company (ACG) for $1bn.
The transaction also includes the sale of Appian’s gold royalty on MVV, for an additional $65m.
The Appian acquired Atlantic Nickel, previously known as Mirabela Nickel, in 2018.
Atlantic Nickel owns Santa Rita, one of the world’s largest open-pit nickel sulphide mines, located in Santa Rita, Bahia, Brazil.
In the same year, the company also purchased MVV, which owns the Serrote greenfield open-pit copper-gold asset located in Alagoas, Brazil.
The transaction is expected to be completed in July this year, subject to the customary shareholder consents and conditions precedent.
Upon completion of the transaction, ACG will be renamed ACG Electric Metals, creating the only London-listed nickel sulphide producer with pure-play electric metals exposure.
The teams operating at the assets included in the acquisition will join ACG, providing continuity to drive future success.
Appian managers Paulo Castellari-Porchia and Milson Mundim will continue to oversee Atlantic Nickel and MVV, who managed the assets for several years.
Appian founder and CEO Michael W Scherb said: “Appian began investing in decarbonisation commodities a decade ago, recognising that society was structurally undersupplied for the upcoming energy transition.
“This innovative transaction in the battery metals space will mark Appian’s 10th, 11th and 12th exits, reflecting the strength of our operating model and ability to identify, acquire and optimise mining assets.
“The Glencore, Volkswagen and Stellantis partnerships are particularly notable, underlining the growing need for EV commodities and the demand for robust, transparent and traceable supply chains from western automotive OEMs, industry and other stakeholders.”
ACG is supported by financing commitments from financial and strategic parties, including partnerships with commodity traders and automotive manufacturers.
Glencore has committed to a $100m investment and will off-take ACG’s nickel sulphide concentrate to feed its refineries in Europe and North America.
PowerCo, a wholly owned subsidiary of Volkswagen, has committed to make a binding prepayment of $100m to ACG, for equivalent nickel from Atlantic Nickel mine at Santa Rita.
Stellantis, the automotive conglomerate formed by the merger of Fiat Chrysler and PSA Group, has committed to a $100m equity investment in ACG.
La Mancha Resource Capital Fund, a mining investment fund, has also made a commitment to make a $100m anchor equity investment in ACG.
ACG will get the remaining funding from binding commitments in the form of royalty financing from Royal Gold, and senior bank debt by Citigroup, ING and Societe Generale.
The Appian funds will retain a 2.75% Net Smelter Royalty (NSR) on the Santa Rita, while La Mancha will retain a 2.5% NSR on the production at the mine.
Citigroup and Standard Chartered served as financial advisor, and Norton Rose Fulbright and Cescon, Barrieu, Flesch & Barreto as legal advisors to Appian, on the transaction.
ACG CEO Artem Volynets said: “We are very proud to announce this transaction in strategic partnership with Glencore, Stellantis, La Mancha, PowerCo and Royal Gold, as well as senior debt providers Citigroup, ING and Societe Generale.
“It will establish ACG Electric Metals as a premier supplier of critical metals into the western EV value chain, with best-in-class ESG characteristics and minimal CO2 emissions.
“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 metals, the polarisation of supply chains, and the need to reduce the world’s total carbon footprint – from the mine to the end-customer.”