British investment advisor Appian Capital Advisory has announced the sale of Atlantic Nickel and Mineração Vale Verde (MVV) operations to ACG Acquisition Company.

ACG Acquisition Company (ACG) will acquire the Santa Rita nickel sulphide and Serrote copper mines in Brazil for a total cash consideration of US$1Bn. ACG is a blank-cheque fund backed by Glencore, Stellantis, Volkswagen’s battery unit PowerCo and mining equity fund La Mancha Resource Capital. 

During the sale process, ACG will become ACG Electric Metals with Glencore, Stellantis and La Mancha each investing US$100M to become 51% owners with 49% remaining for free float. PowerCo will reportedly make a US$100M nickel prepayment and will therefore secure an important source of nickel units for its battery cell production. Nickel concentrate produced at Santa Rita will be refined at Glencore’s operations in North America and Western Europe with the end-product used in EV batteries for Stellantis, PowerCo and other automakers. 

Appian acquired Atlantic Nickel (formerly Mirabela Nickel), owner of the Santa Rita nickel sulphide mine located in Bahia, Brazil, in 2018. The mine was placed under care and maintenance between 2015 and 2018 owing to weak market conditions, but mining activity recommenced in mid-2019.  

The deal represents the latest mining M&A, a trend that is accelerating on the back of rising demand for metals crucial to drive the energy transition and move to clean mobility. For nickel, this is a significant source of supply from outside the China-Indonesia supply chain. Indonesian nickel production continues to attract intense ESG scrutiny and does not currently qualify for US IRA incentives. As such, the race to lock in nickel units from jurisdictions where ESG standards are more transparent is hotting up.