The metal industry veteran Artem Volynets' special purpose acquisition company, ACG Acquisition Co., has agreed to acquire two Brazilian mines for $1 billion, including debt. The move aims to tap into the increasing demand for essential metals from electric vehicle makers, as car manufacturers rush to secure supplies of copper and nickel, which are both crucial components in the production of electric cars. The acquisition will include a nickel sulphide mine in Santa Rita, known as Atlantic Nickel, as well as the Mineraçao Vale Verde copper mine in Serrote.
The London-listed ACG Acquisition Co. will buy these assets from Appian Capital Advisory, a private equity firm. The deal includes commitments from Volkswagen AG's battery arm, which will support the agreement with a prepayment of $100 million for future nickel deliveries, and commodities trader Glencore Plc, which will purchase $100 million of ACG stock.
Moreover, the announcement reveals that Stellantis NV and La Mancha Resource Capital will acquire $100 million of ACG stock apiece. As for Glencore, the company will buy some ACG’s nickel to supply its refineries in western Europe and North America. ACG plans to raise another $300 million in equity from other investors to support the agreement.
The newly merged company, ACG Electric Metals Ltd., will focus on the production of "green metals" for the western auto industry and plans to seek further consolidation in the metals sector. The deal will allow ACG to become "the green metal supplier of choice," according to Volynets, the CEO of the special purpose acquisition company.
In addition, Royal Gold Inc. has committed $250 million of royalty financing across the two mines. Meanwhile, Citigroup Inc., ING Groep NV, and Societe Generale SA will help arrange $300 million of senior debt, consisting of a $225 million term loan facility and $75 million revolving credit facility.
Sibanye Stillwater Ltd., a South African metal producer, had initially agreed to purchase the same assets from Appian in 2021 but later withdrew from the deal citing a geotechnical event at one of the sites.
ACG Acquisition Co. had raised $125 million in a London initial public offering in late 2022, with a focus on buying mining assets that produce "new economy" metals. Its sponsors include Volynets, headed by Argentem Creek Partners, a specialist in emerging markets.
Volynets has a wealth of experience in the metal industry, having previously worked as an executive for companies backed by Russian billionaires Viktor Vekselberg and Oleg Deripaska. He served as head of strategy at Deripaska’s United Co. Rusal and later worked as CEO of Rusal’s parent company, En+ Group. In recent years, Volynets was CEO of Chaarat Gold Holdings Ltd., a company that specializes in developing gold mines in Kyrgyzstan and Armenia.
Appian Capital, founded in 2012, manages around $3.6 billion and is led by former JPMorgan Chase & Co. banker Michael Scherb. Rothschild & Co. advised ACG on the deal, while Citigroup and Standard Chartered Plc worked with Appian. Bank of Montreal, Citigroup, and Royal Bank of Canada acted as the placement agents in relation to the acquisition and equity offering.