VW, Stellantis & Glencore mine deal falls through

In June, VW, Stellantis and the mining company Glencore announced their interest in two mining projects for raw battery materials. However, nothing came of it, as the deal apparently fell through in the end because of the price.

The plan of carmakers Volkswagen and Stellantis to buy two mines for battery raw materials in Brazil together with mining group Glencore has fallen through. According to ACG, the financial company involved in the deal, “despite all efforts, no revisions to the acquisition agreement could be agreed”. The contract has thus been terminated.

Reuters news agency, citing several sources, reports that at the time of ACG’s planned US$300 million capital increase, which was part of the deal, there was no longer any interest among the minority investors, although Stellantis and Glencore were on board as anchor investors. “The deal failed because of the price,” an insider said.

The nickel price has fallen by 37 per cent since the beginning of the year. The price called by ACG was higher than buyers would have considered realistic after the drop in the nickel price, writes Reuters. Attempts to renegotiate the terms of the deal after the low interest have also failed, according to the report.

The plan to purchase the mines had officially been announced in June of this year, but the timing was not great, as ACG wanted to buy both mines from Appian Capital and profit at a time of rising demand for nickel and copper materials for the drive and energy transition.

This is not the first time that a potential buyer has backed out from the mine, as 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. Whether ACG will be facing similar legal repercussions is not yet clear.

reuters.com