The mining sector is seeing a wave of mergers and acquisitions as demand for metals needed for green energy and electric vehicles is expected to increase in the coming years. Capitalizing on this, SPAC ACG Acquisition Company is acquiring the Santa Rita nickel and Serrote copper mines in Brazil for $1 billion with the backing of major miners and automakers.
Glencore, Stellantis and Volkswagen's battery unit PowerCo have agreed to support the deal by investing in ACG. Glencore will invest $100 million for equity, while Stellantis and La Mancha Resource Capital will each invest $100 million. PowerCo will make a $100 million nickel prepayment.
The mines use hydroelectric power and are considering expansions. The nickel concentrate will be refined by Glencore and used in EV batteries by Stellantis, PowerCo and other manufacturers.
ACG CEO Artem Volynets said the deal "will establish ACG Electric Metals as a premier supplier of critical metals into the western EV value chain." Volynets has previous experience with Russian aluminium producers and Glencore.
The mines were previously owned by Appian Capital which had initiated legal proceedings against Sibanye-Stillwater for pulling out of a deal to acquire the mines in 2021, citing a geotechnical issue. Appian contends Sibanye's decision was based on an incorrect assertion.
