Mining company Glencore, along with Stellantis and Volkswagen's battery unit PowerGo, have agreed to back a $1 billion deal by special purpose acquisition firm ACG Acquisitions to acquire two Brazilian mines.

The UK-listed SPAC will buy a nickel sulfide mine in Santa Rita and a copper mine in Serrote from private equity funds. Both mines use hydroelectric power for production and are already considering expansion projects. ACG has hired Standard Chartered and Citigroup to conduct the sale. Once the sale is completed, Glencore's refineries in Western Europe and North America will refine the mined nickel sulfide, according to the statement. The final product will be used by Stellantis and PowerGo as well as several other manufacturers for electric vehicle batteries.

Glencore plans to invest $100m in ACG equity. Stellantis will provide an equity investment of the same amount and PowerGo will pay a $100 million upfront nickel payment. Mining investment fund La Mancha Resource Capital will also provide £100m of equity.

During the takeover, ACG will change its name to ACG Electric Metals and issue new shares, leaving Glencore, Stellantis and La Mancha Resource Capital with 51 percent of the company, leaving 49 percent up for grabs. The deal will make ACG Electric Metals a major supplier of key metals in the electric vehicle value chain in the West, Volynets said in the statement.

So far, there have been only a handful of other SPAC deals in the mining sector, one of which included a New York-listed metals acquisition firm buying mines owned by Glencore. In April 2023, Stellantis entered into an agreement with Australian mining company Alliance Nickel for electric vehicle battery minerals. Through the deal, Alliance will supply Stellantis with approximately 154,000 tonnes of nickel and 11,000 tonnes of cobalt from its NiWest mining project in Western Australia over the next five years. That's about 40 percent of the mine's projected total production over five years.Editor/XingWentao