Ex-head of En+ digs in Brazil – Kommersant

Former head of En+ Artem Volynets bought nickel and copper mines in Brazil for $1 billion. The businessman’s company plans to ship nickel sulfide and copper concentrate to Europe for further processing. Automakers will become the final consumer. According to analysts, there are chances for the success of the enterprise, despite the higher cost of production compared to Russian projects.

Russian entrepreneur Artem Volynets’ ACG, a specialized targeted mergers and acquisitions company (SPAC), has agreed to acquire two mines in Brazil for $1 billion. Under the terms of the deal, ACG will acquire the Santa Rita nickel mine and the Cerrote copper mine from private equity funds advised by Appian Capital. In the future, nickel sulfide and copper concentrate from these mines will be supplied for processing to Europe and North America, and then to automakers for the production of electric vehicles.

The deal is backed by Swiss trading company Glencore, as well as automaker Stellantis and consulting company La Mancha Resource Capital, each of which agreed to buy ACG shares for $100 million. as an advance payment for the received nickel from Santa Rita. The lenders to the deal are Citigroup, ING and Societe Generale, which issued loans totaling $300 million.

As part of the deal, ACG will be renamed ACG Electric Metals and will also issue new shares. As a result, Glencore, Stellantis and La Mancha will own 51% of the company’s share capital, and 49% will be reserved for free float, said Reuters Artem Volynets.

Artem Volynets, in his statement, called the acquired mines of high quality, which will allow the company to become a supplier of environmentally friendly metals for Western electric car manufacturers.

The prospects for this market do look optimistic. Norilsk Nickel, in its May Metals Market Review, predicted that nickel demand would continue to grow steadily in the long term, driven by increasing consumption in the battery sector and the construction of renewable energy generation facilities. “At the same time, mass production of sodium-ion batteries for electric vehicles was launched in 2023, which also contain nickel in their cathode material, which is an additional source of demand for the metal,” the Russian company said.

The cost of production in Brazil is 1.5-2.5 times higher than in Russia, says independent industrial expert Maxim Shaposhnikov. However, capital costs in Brazil are significantly lower, so the project has every chance of paying off, despite the low nickel grade of 0.31%.

Kirill Sarkhanyants, Evgeny Zainullin