Appian Capital to sell Brazilian battery metal companies to ACG for $1bn

Appian Capital Advisory, an investment advisor to long-term value-driven private capital funds that invest in mining companies, has announced it is selling its Brazilian battery metals-focused portfolio companies, Atlantic Nickel and Mineração Vale Verde (MVV) to ACG Acquisition Company.

The transaction amounts to a cash consideration of $1 billion, along with a sale of Appian Capital Advisory’s gold royalty on Mineração Vale Verde to ACG Acquisition Company for an additional $65 million.

Appian Capital Advisory acquired Atlantic Nickel, owner of Santa Rita, one of the largest open-pit nickel sulphide mines globally, and Mineração Vale Verde, owner of the Serrote greenfield open-pit copper-gold asset in Brazil, from bankruptcy in 2018.

Under Appian Capital Advisory’s management, both the mines were successfully restarted, and the companies were significantly de-risked and improved, showcasing the former’s business model and its ability to acquire and optimize mining projects for value creation. The mines are notable for their long life, low cost, and top-decile ranking for carbon emissions among global nickel and copper producers.

Michael W. Scherb — Appian Capital Advisory Founder and CEO said: “Appian began investing in decarbonization commodities a decade ago, recognizing that society was structurally undersupplied for the upcoming energy transition. This innovative transaction in the battery metals space will mark Appian’s 10th, 11th and 12th exits, reflecting the strength of our operating model and ability to identify, acquire and optimize mining assets.

“Likewise, ACG is a great custodian for Atlantic Nickel and MVV, and is well placed to unlock significant further growth from these market-leading companies.”

The transaction is expected to offer a significant value proposition for ACG Acquisition Company, Appian Capital Advisory, and their respective investors.

Post-acquisition, ACG Acquisition Company will undergo a name change to ACG Electric Metals and become the sole London-listed nickel sulphide producer with a pure play electric metals exposure. This positions the company as a robust platform for further growth and consolidation of critical metal assets dedicated to supplying leading western Original Equipment Manufacturers (OEMs).

The transaction, backed by financing commitments from both financial and strategic parties, brings together notable partnerships to aid the electric vehicle transition. Glencore is set to be an anchor investor, with a commitment of $100 million, making it a preferred off-taker for ACG Electric Metals. This partnership will facilitate the supply of ACG Electric Metals’ nickel sulphide concentrate to Glencore’s refineries in Western Europe and North America.

In addition, PowerCo, a wholly-owned subsidiary of Volkswagen, is committed to a binding prepayment of $100 million to ACG Electric Metals for equivalent nickel units in the concentrates produced by the Atlantic Nickel mine at Santa Rita.

Stellantis has also pledged a $100 million anchor equity investment in ACG Electric Metals. Both PowerCo and Stellantis are set to become long-term partners through off-take contracts for nickel refined from concentrate produced by Santa Rita.

Artem Volynets — ACG Acquisition Company CEO said: “We are very proud to announce this transaction in strategic partnership with Glencore, Stellantis, La Mancha, PowerCo and Royal Gold, as well as senior debt providers Citigroup, ING and Societe Generale. It will establish ACG Electric Metals as a premier supplier of critical metals into the western EV value chain, with best-in-class ESG characteristics and minimal CO2 emissions.”