Powered by commodity requirements to feed the energy transition and green-tech, Appian Capital is considered the premier operating value investor in the metals, mining, and infrastructure sectors.
Throughout its history, the business has realised six investments and has brought seven mines into production.
Representing its operations in Brazil, Appian Capital Brazil currently operates assets with a value worth more than $1 billion.
Currently focussing on two assets, Atlantic Nickel and Mineração Vale Verde (MVV), Appian Capital Brazil’s USP is its moral value, with a developed and successful ESG programme, sustainable methodology and employee focus.
Masters of Responsible Investments
“Part of our mission is to ensure we follow good practice from the beginning of any project or strategy,” shared CEO of the Brazilian operations, Paulo Castellari, when speaking with Business Enquirer.
Of course, Appian Capital Brazil ensures it has all the essentials in order, including meeting IFC Performance Standards and aiming for the relevant ISO accreditation. It is also a signatory to the UN backed Principles for Responsible Investment.
“Being responsible is at the forefront of what we do, we’re always part of the first 10% of the curve,” said Paulo.
A key area of Appian Capital Brazil’s responsibility is a focussed approach to its Environment, Social and Governance standards. Appian Capital Brazil’s Director of Corporate Affairs and People, Silvio Lima, explained to Business Enquirer four of its key social investments:
Education – including improving literacy and implementing initiatives to remove young children from vulnerable situations;
Capacity Building – improving local working conditions, offering training to local people;
Income Generation – Appian Capital Brazil has improved income of families benefited by the income generation programmes by 40% in its regions;
Gender Equality & Support to Women – empowering women, providing support to improve self-esteem and independence to those in socially vulnerable situations and supporting female entrepreneurs.
“Around 70% of the workforce at both sites are employed from the local community. At MVV 21% of the total employees are female. Meanwhile at Atlantic Nickel around 14% of staff are women,” shared Silvio.
Appian Capital Brazil’s ESG programme has seen great success and received much positive feedback. “We’re currently developing a Diversity and Inclusion Strategy which will be fully integrated throughout the business and will support the assets in becoming even more diverse,” explained Paulo, “we’re really proud of what we’ve achieved”.
Enabling the business to analyse its ROI, Appian Capital has developed tools to understand the impact of its initiatives.
Applying High Sustainable Standards
As well as its community responsibility, Appian Capital Brazil has addressed the need to be sustainably responsible, too.
The business implements sustainable strategies across both of its existing projects – Atlantic Nickel and MVV. A major benefit of mining projects in Brazil is that power from the country’s grid is already highly sustainable. The country’s capacity to generate renewable energy equates to 84%, far improved on the world average of 38%.
Further making Brazil an attractive place to mine, is that processing doesn’t require the use of coal. “We are within the top 10% of businesses producing nickel versus our carbon output. Atlantic Nickel is a strategic asset in that sense,” said Paulo.
In addition, Atlantic Nickel and MVV circulate up to 90% of water used. At MVV’s greenfield mine this technology was implemented from the offset, whilst adjustments were made to meet this requirement at Atlantic Nickel.
Three Pillars to Social Integration
Having worked within the mining industry for 30 years and with previous roles including CEO of Guinea Alumina Corporation, Paulo has built his leadership values on the foundations of social integration.
“Of course, our employees are the foundation of our success and so we ensure we employ the right team, with the right incentives in place, giving them the right motivation to raise anything to our attention,” explained Paulo.
Paulo highlights that “safety, integrity, collaboration, delivery and entrepreneurship” are all values which Appian Capital Brazil looks for in its colleagues.
The business runs a safety initiative called Pare (meaning “Stop” in Portuguese). It empowers all colleagues in the business to stop any unsafe operation, from minor to major. Information is then captured enabling the business to learn from the incident and understand why issues arise.
Using KPIs to develop teams, 20% of the performance marker is based on safety, whilst 100% of leadership has safety targets within their Performance Contracts.
“We employ the right incentives to motivate our employees. We have built a culture in which all employees are motivated to bring any news, good or bad, to management’s attention,” Paulo said, “we use a saying “we love good news, we like bad news, but we hate surprises””.
“I also think it’s important to apply the phrase “two ears, one mouth” whether that’s from a leadership, community initiative or government liaison perspective. If you listen and act accordingly and make yourself part of the community, you won’t need a social licence. You’ll be integrated into the community,” he continued, noting that social licence is, of course, different to legal permitting.
Atlantic Nickel
Acquired in 2018 out of a bankruptcy process Atlantic Nickel (previously known as Mirabela Nickel) is the owner of the Santa Rita mine, one of the largest open pit nickel sulphide mines in the world.
The region in which Atlantic Nickel is located, Bahia (Brazil), is the biggest growing state regarding general mining production and the third largest state in mining of iron ore and precious metals.
After investing both finance and due diligence, Atlantic Nickel started processing at the mine in October 2019, with its first concentrate shipment in January 2020.
Of course, now is a good time to be mining sulphide nickel as not only is it used in the production of stainless steel, it is also a key component in e-vehicle batteries.
“Appian invested technical expertise, geophysical and modelling techniques to understand the pit and we are finding grades are improving as we move deeper,” shared Paulo.
The mine at the open pit has around six to seven years of production left. However, once the open pit has been mined, Atlantic Nickel foresees another 24 years life underground.
During Appian Capital Brazil’s time at the Santa Rita mine, the team has grown from 40 employees to over 2500, providing a significant, positive impact to the local community.
“It’s all hands on deck now to transition the mine from the open pit to the underground operation,” said the CEO.
Mineração Vale Verde
Mineração Vale Verde, also known as MVV, wholly owns the Serrote Copper-Gold mine found in Alagoas (Brazil). The asset is a conventional open pit copper-gold mine.
Since Appian’s acquisition in 2018 (from Aura Minerals), the business has introduced creative measures to roll out an additional greenfield pit, producing a further 20,000 tonnes of copper.
“The greenfield project at MVV was built during the Covid pandemic, becoming operational in June 2021. Appian managed the pandemic really well, implementing a robust risk management strategy, and the project was delivered with a leading safety record,” said Paulo.
The pit at Alagoas has recently reached capacity and is now at the base of production. The next steps for the project will be to undergo studies to double its production life to 20 years.
With people at the heart of its business, Appian is proud of the lasting positive impact MVV has had on the communities in the region to date. Its direct economic contribution represents 8% of the GDP of Craíbas and Arapiraca (cities in Alagoas), and around 70% of its employees are hired locally.
One thing is clear from Business Enquirer’s conversation with Paulo and Silvio: Brazil is a well- positioned area for mining, with talented people readily available and fantastic opportunities for growth.
The next 12-24 months look thoroughly optimistic for Appian Capital’s Brazilian portfolio, with plans to not only organically grow operations at Atlantic Nickel and MVV, but also research into new investments in the energy transition value chain.