AAL Nickel? Maybe.

Creating this thread on AAL Nickel as adding to S32's Ni business has to be considered a definite maybe.

GK & Team may well laugh at the foolishness of this, yet AAL's Barro Alto and Codemin mines are quality assets in a down-trodden sector. They will be cheap - meaning a price multiple based on contemporary prices and stainless steel uses, not groovy battery ingredient hot air.

Buying the mines to operate alongside Cerro Matoso in Columbia (40,000tpa) would double S32's Ni output.

S32 knows Ni, knows Brazil. It has cash from the sale of Illawarra Coal.

From today's AFR. Excerpts:

Anglo American poised to name banks for nickel sale

London-listed miner Anglo American has asked British investment bank Standard Chartered to come up with a solution for its 38,000 tonnes-a-year nickel business, marking the latest divestment to come out of CEO Duncan Wanblad’s defence strategy.

Sources said Standard Chartered’s bankers are close to being mandated for the advisory role, just as a collapse in nickel prices has forced miners across the world to halt operations. Anglo American’s nickel portfolio includes Brazil’s Barro Alto and Codemin mines, which supply to stainless-steel producers and are forecast to produce 36,000 to 38,000 tonnes of the metal this year.

The unit’s underlying EBITDA has plummeted from $US110 million ($165 million) in the first six months of 2023 to just $US28 million in the half-year to June 30 – a decline in EBITDA margin from 29 per cent to 8 per cent.

While the mines’ production levels were unchanged, earnings were hit by a collapse in commodity prices amid a global oversupply from Indonesia. Anglo went from selling the nickel at $US9 per pound mid-last year to $US6.85 at June 30.Anglo was reported last month to have said it had received ‘‘inbound interest from a number of credible parties, and we will be starting a formal process [for nickel assets] later this year’’.

(T)he situation is ... dire, with sell-side estimates ranging from as little as $US50 million to $US1 billion-plus, sources said.

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Global mining M&A action is fixated on Copper. A good time to buy Nickel and strengthen S32's base metals portfolio.

Ash