VW, Stellantis & Glencore invest in Brazilian mines

Volkswagen, Stellantis and the mining company Glencore support the purchase of two mines for battery raw materials in Brazil by the financial company ACG. The latter wants to buy a nickel sulphide and a copper mine for one billion US dollars.

To start off the transaction, the Volkswagen subsidiary PowerCo will make an advance payment of 100 million US dollars for nickel sulphide, while Stellantis, Glencore and a mining investment fund will each contribute equally large sums. The remaining funds are to be raised on the capital market. Over the process, ACG will become ACG Electric Metals and issue new shares, making Glencore, Stellantis and mining investment firm La Mancha owners of the 51% majority and leaving 49% open, Artem Volynets, ACG chief executive told Reuters. Both Stellantis and La Mancha will have the right to nominate one director each to the Board of ACG.

The specific mines in question are the Santa Rita nickel sulphide and Serrote copper mines, which will be sold by private equity funds advised by Appian Capital. Following the raw material purchase, the nickel concentrate will be refined at Glencore’s facilities in Western Europe and North America, with the final product incorporated into Stellantis, PowerCo’s and other manufacturers’ EV batteries.

“Atlantic Nickel and MVV are market-leading assets, which Appian has optimized through the strength of its operating model and its ability to identify, acquire and develop mining projects having built and financed 9 mines into production in the last 7 years,” said Michael Scherb, CEO of Appian, adding: “. Now they are in production, ACG is the ideal steward for their next phase of growth. This transaction highlights the importance of robust, reliable and sustainable supplies of EV commodities for western automotive OEMs and industry, a core pillar of Appian’s investment strategy.”

Interestingly enough, the two mines were to be purchased by the South African company Sibanye-Stillwater last year, who then pulled out due to a “geotechnical event”. Legal proceedings were then launched in a $1.2-billion claim, for which trial is expected to begin in 2024. For the moment, “ACG has full confidence in the mines,” as Reuters writes.

acgcorp.co (PDF), reuters.com