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September 28, 2021

Appian Capital in advanced discussions for $1bn sale of Atlantic Nickel

Earlier this year, Atlantic Nickel hired investment banks to help explore strategic options, which includes a potential sale.

UK-based private equity fund Appian Capital Advisory is reportedly in advanced talks with Canada’s Teck Resources for the sale of its Brazilian subsidiary Atlantic Nickel for around $1bn.

Teck Resources is cited as one of the likely buyers, reported O Estado de S. Paulo newspaper.

In May 2021, Reuters reported that Atlantic Nickel hired investment banks, including Citi and Standard Chartered, to help explore strategic options include a potential sale.

Talks with Canadian banks RBC Capital Markets and Bank of Montreal (BOM) focused on considering a potential listing, possibly in Toronto.

According to the sources, Atlantic Nickel is working with Goldman Sachs on the option of going public through a combination with a special-purpose acquisition company (SPAC).

The sale is part of the firm’s efforts to capitalise on the surging demand for metals, which are used in electric batteries, reported the newspaper citing four sources.

Atlantic Nickel operates the Santa Rita open pit nickel-copper-cobalt mine, in the northeastern state of Bahia. It is claimed to be one of the largest open-pit nickel sulphide mines in the world.

The fully permitted, past-producing nickel mine has an estimated production capacity of 6.5 million tonnes per annum (Mtpa).

The mine was operated for six years by Mirabela Nickel prior to being placed on care and maintenance due in 2015, due to low nickel prices.

In 2018, Appian purchased the mine by acquiring Mirabela Nickel as part of a bankruptcy process during the same year.

Upon completion of the open-pit operations scheduled until 2028, the mine is planned to be transitioned into an underground mining operation to extend the operational life from eight to 34 years.

Last year, Atlantic Nickel signed a three-year offtake contract for a part of the production from the Santa Rita project with global commodities trader Trafigura.

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