In a significant development for the electric vehicle (EV) industry, Volkswagen, Stellantis, and mining company Glencore have thrown their support behind the financial firm ACG’s plan to acquire two mines in Brazil. ACG aims to purchase a nickel sulphide mine and a copper mine for a total of one billion US dollars, further solidifying the growing demand for battery raw materials.
To kickstart the transaction, Volkswagen’s subsidiary PowerCo will provide an upfront payment of 100 million US dollars for the nickel sulphide mine. Additionally, Stellantis, Glencore, and a mining investment fund will each contribute substantial amounts towards the purchase. The remaining funds required will be raised through capital market initiatives. As part of the process, ACG will undergo a transformation, becoming ACG Electric Metals and issuing new shares. This move will result in Glencore, Stellantis, and mining investment firm La Mancha collectively owning a majority stake of 51%, while the remaining 49% will be open for investment.
ACG’s CEO, Artem Volynets, informed Reuters that Glencore, Stellantis, and La Mancha will have the right to nominate one director each to the Board of ACG. This partnership highlights the commitment of both Stellantis and La Mancha to the success and growth of ACG Electric Metals.
The mines being targeted in this acquisition are the Santa Rita nickel sulphide mine and the Serrote copper mine, currently owned by private equity funds advised by Appian Capital. Once the raw materials are obtained, Glencore will refine the nickel concentrate at its facilities in Western Europe and North America. The refined nickel will then be incorporated into the production of EV batteries by Stellantis, PowerCo, and other manufacturers.
Michael Scherb, CEO of Appian Capital, expressed confidence in ACG’s ability to take these market-leading assets, optimize their potential, and drive their growth. Scherb emphasized the importance of sustainable and reliable supplies of EV commodities for western automotive original equipment manufacturers (OEMs) and industries, aligning with Appian’s investment strategy.
Interestingly, the Santa Rita and Serrote mines were initially set to be acquired by South African company Sibanye-Stillwater last year. However, Sibanye-Stillwater withdrew from the deal due to a “geotechnical event.” As a result, legal proceedings were initiated, with a $1.2 billion claim being filed. The trial for this claim is expected to commence in 2024. Meanwhile, ACG has expressed full confidence in the mines’ current status, according to Reuters.
The acquisition of these mines by ACG represents a significant step towards ensuring a steady supply of essential raw materials for the rapidly expanding EV industry. With the support of key players like Volkswagen, Stellantis, and Glencore, ACG Electric Metals is well-positioned to play a pivotal role in meeting the growing demand for battery materials in the electric vehicle sector.