Russia metal boss taps VW, Glencore on $1bn mine SPAC deal

Russian metal industry veteran Artem Volynets’ blank check firm is nearing a US$1 billion deal to buy two Brazilian mines, in a bid to tap demand from electric-vehicle makers, people with knowledge of the matter said.

London-listed ACG Acquisition could announce an agreement as soon as Monday to acquire the assets from private equity firm Appian Capital Advisory, according to the people. Volkswagen AG’s battery arm and commodities trader Glencore Plc are each planning to commit around US$100 million of funding for the acquisition, the people said.

The proposed transaction includes a nickel sulphide mine in Santa Rita, known as Atlantic Nickel, as well as the Mineraçao Vale Verde copper mine in Serrote. Chrysler owner Stellantis NV and La Mancha Resource Capital are separately in talks to purchase ACG stock, the people said, asking not to be identified discussing confidential information.

Carmakers have been scrambling to secure supplies of key metals like copper needed for the production of electric vehicles. Nickel has also been in demand as it’s essential to the lithium-ion batteries powering such cars.

Essential supplies

Glencore plans to buy some of the mines’ output for its refineries in Europe and North America, the people said. Representatives for the companies declined to comment or couldn’t immediately be reached outside regular business hours.

ACG plans to raise another US$300 million in equity from other investors to support the deal, according to the people. The London-listed company will be renamed ACG Electric Metals after the merger and will consider making further acquisitions in the future, the people said.

South African metal producer Sibanye Stillwater had agreed to buy the same assets from Appian in 2021. It later pulled out of the deal, citing a geotechnical event at one of the properties.

Russian dealmaking

ACG raised US$125 million in a London initial public offering in late 2022 to target mining assets including those producing “new economy” metals. Its sponsors include Volynets, who is chief executive officer of the special purpose acquisition company, and emerging-markets specialist Argentem Creek Partners.

Volynets was previously an executive for companies backed by Russian tycoons Viktor Vekselberg and Oleg Deripaska. He worked as head of strategy at Deripaska’s United Co Rusal, one of the world’s largest aluminum producers, and helped arrange its US$2.2 billion Hong Kong initial public offering in 2010.

He later served as CEO of Rusal’s parent company, En+ Group. More recently, Volynets led Chaarat Gold Holdings Ltd. as it developed gold mines in Kyrgyzstan and Armenia.

Appian Capital, founded in 2012, is led by former JPMorgan Chase & Co. banker Michael Scherb and manages about US$3.6 billion.