Minor ACG Raises $300 Million in London Capital Markets Test

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Mining company ACG is seeking to raise $300 million to acquire two Brazilian mines, testing the demand of London’s capital markets. The deal confirms growing interest from automakers and investors in battery metals.

ACG, first in London mining special purpose Acquisition company Spak plans to buy the nickel and copper mines in a $1.1 billion deal, in which Swiss mining company Glencore, investment fund La Mancha, and automakers Volkswagen and Stellantis have already invested $100 million each. is standing

“London is perfect for us,” said ACG CEO Artem Volinetz, as he gears up for the start of the fundraising roadshow on Monday. place,” he said.

“There is a lot of expertise accumulated here among investors who have been watching mining stocks,” added the former En+ Group CEO.

The funding, which Volinetz describes as more of an initial public offering than a Spac, will be a touchstone for natural resource investors and comes at a difficult time for the London market.

Recent $7.5 billion IPO WE Soda was abandoned due to low investor interest. Meanwhile, some London-listed companies are planning to use the higher valuations to move to the New York market.

“We all know the capital markets are tough at the moment, but the IPO market has been tough for the last two years. Patrick Evans, managing director and advisor on the transaction, said.

other mining companies criticized European investors place too much emphasis on environmental, social and governance (ESG) concerns, said Volinetz, who welcomes the attention to such criteria.

“We supply low-carbon metal units manufactured with best-in-class ESG properties,” he said. “It resonates with investor types and the atmosphere of London.”

The deal, in which ACG acquires two mines from private equity group Appian Capital, also highlights how the auto group is making direct mining investments unheard of even a few years ago.

Volkswagen, through its PowerCo subsidiary, is investing $100 million in the contract as an advance payment for future nickel supply from the mine.

Stellantis, which owns brands such as Fiat Chrysler and Peugeot, invested $100 million directly in ACG.

The Santa Rita mine in southeastern Brazil produces nickel sulfide, while the Cerote mine in eastern Brazil produces copper and gold.

Automakers have become aggressive in securing battery metals as Western governments worry about China’s monopoly on key minerals used to make electric vehicle batteries.

“The global supply chain is collapsing, splitting into Eastern and Western supply chains,” said Volinets. “And we are at the forefront of that, supplying the Western supply chain.”

Citi’s Evans said the fixed-price financing arrangement has already been signed up by major investors and is structured in a way that minimizes risk in a tough market.