Former Rusal chief launches London’s first mining Spac

One of the crucial distinguished Anglo-Russian executives within the metals business is looking for to lift $125mn for a brand new mining enterprise by way of a London-listed particular objective acquisition firm.

Artem Volynets, former chief government of EN+ Group, believes now is an efficient time for mining offers, significantly for important metals reminiscent of copper and cobalt, regardless of troublesome market situations.

“This can be a nice time. The valuations are depressed,” Volynets informed the Monetary Instances. “The following 12 months is a terrific time to barter a transaction . . . It has been positioned into our palms.”

The brand new blank-cheque fund, ACG, is looking for to lift as much as $125mn in its preliminary public providing on Thursday and can determine a goal mine producing copper, nickel, cobalt or one other metallic.

Costs of those metals have all fallen in current months owing to fears of financial recession, however demand is predicted to rise over the following decade due to demand for clear power merchandise and electrical autos.

The Spac construction permits executives to lift cash by way of an IPO then merge with one other firm, successfully taking the goal public.

Volynets, who led the itemizing of the Russian aluminium big Rusal in Hong Kong in 2010, mentioned Spacs are well-suited for mining ventures as a result of they provide a comparatively fast path to going public.

“I’ve executed IPOs with mining firms. It is vitally troublesome . . . and also you don’t know whether or not it’ll occur, till the final second,” he mentioned.

Final 12 months the London itemizing of Russian miner Nordgold was pulled on the final second owing to commodity value fluctuations.

Volynets was deputy chief government at Rusal till 2010 and labored for billionaire mining magnate Oleg Deripaska till 2013.

The mining sector has been largely unaffected by the Spac craze, with solely a handful of great offers materialising to date

Essentially the most distinguished of those was Metals Acquisition Corp; it listed in New York in 2021 and agreed to purchase Glencore’s CSA copper mine in Australia for $1.1bn earlier this 12 months.

Imaginative and prescient Blue Assets, a fund based by former Xstrata chief government Mick Davis, backed a Spac that raised $300mn in New York final 12 months.

One of many downsides of the Spac format comes within the occasion of shareholders selecting to train their redemption rights, during which case the corporate must repurchase their shares, doubtlessly presenting a liquidity problem.

Volynets say ACG can keep away from that by exercising a $100mn forward-purchase settlement it has inked with IXM, a subsidiary of China Molybdenum.

The corporate will search for a goal mine that’s already producing ore or very near manufacturing. Copper, nickel and cobalt are “on the high of our record” for a goal which may very well be anyplace on the planet exterior Russia, Volynets mentioned.