London-listed ACG Acquisition Co. may announce as early as Monday an agreement to acquire assets from Appian Capital Advisory, a private equity firm. Volkswagen AG’s battery division and Glencore Plc, a multinational commodity trading company, plan to commit about $100 million to the deal, sources said.
The proposed agreement includes the Santa Rita nickel sulfide mine, known as Atlantic Nickel, and the Mineraçao Vale Verde copper mine in Serrota. Chrysler owner Stellantis NV and La Mancha Resource Capital are separately in talks to buy shares in ACG, the sources said, who asked not to be named in a confidential discussion.
Automakers are struggling to secure supplies of key metals such as copper needed to make electric vehicles. Nickel is also in demand, as it is essential for the lithium-ion batteries in these vehicles.
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Glencore plans to purchase some of the output from these mines for its refineries in Europe and North America, the sources said. Representatives of the companies declined to comment or could not be contacted after business hours.
ACG plans to raise another $300 million in capital from other investors to support the deal, sources said. Following the merger, the London-listed company will be rebranded as ACG Electric Metals and will consider further similar acquisitions in the future, sources said.
Earlier in 2021, South African metals producer Sibanye Stillwater Ltd. agreed to buy the same assets from Appian. He later backed out of the deal, citing a geotechnical event at one of the facilities.
At the end of 2022, ACG raised $125 million in an initial public offering in London targeting mining assets, including those producing “new economy” metals. Sponsors included Volyntz, the company’s chief acquisition officer, and an emerging markets specialist at Argentem Creek Partners.
Volynets led the companies of Russian billionaires Viktor Vekselberg and Oleg Deripaska. He worked as head of strategy for Deripaska’s combined RUSAL, one of the world’s largest aluminum producers. He also helped arrange the company’s $2.2 billion initial public offering in Hong Kong in 2010.
He later served as CEO of En+ Group, RUSAL’s parent company. More recently, Volynets headed Chaarat Gold Holdings Ltd., which was engaged in the development of gold mines in Kyrgyzstan and Armenia.
Appian Capital, founded in 2012, is led by a former JPMorgan Chase & Co. banker. Michael Sherb, he manages about $3.6 billion in assets.