CTM - Must get a BID Soon!!!!! Glencore, automakers to back $1 bln nickel, copper SPAC deal in Brazil

Glencore,automakers to back $1 bln nickel, copper SPAC deal in Brazil

Reuters

June 12, 202310:04 PM GMT+10Updated 13 hours ago

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LONDON,June 12 (Reuters) - Global miner Glencore (GLEN.L), Chrysler parent Stellantis (STLAM.MI) and Volkswagen's (VOWG_p.DE) battery unit PowerCo have agreed to back a $1 billion deal by blank-cheque fund ACG Acquisition Company to buy two mines in Brazil, ACG said on Monday.

Thedeal comes as a mining M&A spree picks up, spurred in part by investors betting on rising demand for metals needed for the global green energy transition in coming years.

ACG (ACGa.L), a London-listed special purpose acquisition company (SPAC), will buy the Santa Rita nickel sulphide and Serrote copper mines from private equity funds advised by Appian Capital, which has hired Standard Chartered and Citigroup on the sale, it said in a statement.

SPACsare shell companies that raise money via an initial public offering (IPO) andlater merge with a private company, taking it public.

Only afew such deals have taken place in mining, including Vision Blue Resources, afund founded by former Xstrata boss Mick Davis backing a $300 million SPAC, andMetals Acquisition Corp, which listed in New York and bought a copper mineowned by Glencore.

Postpurchase, the nickel concentrate will be refined at Glencore's facilities inWestern Europe and North America, the statement said, with the final productincorporated into electric vehicle (EV) batteries by Stellantis, PowerCo andother manufacturers.

Glencorewill invest $100 million in ACG equity. Stellantis and mining investment fundLa Mancha Resource Capital will each provide an equity investment of the sameamount, while PowerCo will make a $100 million nickel prepayment.

"PowerCothus secures the ramp-up of cell production at competitive prices,"Volkswagen told Reuters.

Duringthe process, ACG will become ACG Electric Metals and issue new shares, makingGlencore, Stellantis and La Mancha owners of 51% and leaving 49% for freefloat, Artem Volynets, ACG chief executive, told Reuters.

Bothmines use hydropower for production and are considering expansions.

A yearago, Appian began legal proceedings in a $1.2-billion claim against South Africa's Sibanye-Stillwater (SSWJ.J) after Sibanye pulled out of a deal to acquire the same two mines, citing a "geotechnical event" at Santa Rita.

Appiansaid Sibanye's decision to withdraw from the deal was based on an "incorrectassertion". Sibanye filed its defence and, according to its financialreport, expects a trial to begin in June 2024.

ACGhas full confidence in the mines.

Thedeal "will establish ACG Electric Metals as a premier supplier of criticalmetals into the western EV value chain," Volynets said.

Volynetsis the former boss of En+ Group and led the Hong Kong IPO of subsidiaryaluminium producer Rusal in 2010. He also led the merger of two Russianaluminium producers with Glencore's alumina assets in 2000s.