The Green Energy Race - Glencore, Stellantis, PowerCo To Back $1B SPAC Mining Deal In Brazil

Mining giant Glencore plc GLCNF and automakers Stellantis NV STLA, and the battery unit of Volkswagen AG VWAGY PowerCo are expected to support a $1 billion mining deal in Brazil.

The Special Purpose Acquisition Company (SPAC), ACG Acquisition company, plans to acquire two mines in Brazil. The Atlantic Nickel nickel sulphide mine in Santa Rita and the Mineraçao Vale Verde (MVV) copper mine in Serrote will be acquired on a cash- and debt-free basis from funds advised by Appian Capital Advisory LLP for an enterprise value of $1.0 billion.

The company, to be renamed ACG Electric Metals after the completion of transaction, will offer the investors exposure to long-term demand generated by the global energy transition, high-calibre management and governance.

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Both mines are long-life, low-cost and ranked within the first decile for carbon emissions amongst all nickel and copper producers worldwide. They have a combined 2022 Adjusted EBITDA of $260 million.

Critical minerals mined at the Brazilian sites will be refined in Europe and North America and then supplied to car manufacturers, fortifying the EV supply chain in Western countries. 

The acquisition is supported by $100 million commitments to subscribe for ACG equity from each of Glencore, Stellantis and La Mancha, and a $100 million prepayment from PowerCo.

"These high-quality mines will enable ACG's mission to be the green metals supplier of choice to western EV automakers. This acquisition establishes a solid platform for further growth and long-term shareholder value creation," said ACG CEO Artem Volynets.

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Price Action: STLA shares are trading higher by 1.60% at $16.50 in premarket on the last check Monday.