Business Enquirer Issue 109 | Appian Capital Brazil | Jan'23

Investing in People Appian Capital

Investing in People

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.

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.

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

PROJECT DIRECTED BY WRITTEN BY Gary Smith Laura Watling

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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;

“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

Gender Equality & Support to Womenempowering women, providing support to improve self-esteem and independence to those in socially vulnerable situations and supporting female entrepreneurs.

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.

R&D Mineração e Construção LTDA

Established on August 13, 1986, as a familiar business, R&D Mineração e Construção is a company focused on projects that involves large amount of earthworks and open pit mining technique, with heavy equipments. In addition to mining, we work with infrastructure to industrial sector, logistics –highways, railways, ports and airport -, dams and dykes.

Our purpose is to provide high quality services with safety. R&D has an integrated management system certified by ISO 9001, ISO 14001 and ISO 45001, and is always looking for improvements in its processes. With a modern fleet and an effective maintenance program, we guarantee the operational standards, following all statutory and regulatory requirements, ensuring customer satisfaction. We believe that people are one of the most important parts of our business. Workers build the company’s legacy, that’s why we have qualification and training programs to keep them updated and motivated. Our partnership with Appian Capital started about 4 years ago, but we have been working at Mina Santa Rita since 2016, when the asset still belonged to Mirabela. Nowadays, we are responsible for the tailing dam raising with 1.350.000 m³ compacted rockfill embankment, 450.000 m³ of clay core and 85.000m³ of sand filter. Besides, we also are engaged to mining operation with the excavation and transport of 40.000.000 ton of ore and waste. R&D shares common values with Atlantic

Nickel. Safety is also our priority. For us success is only achieved when our team feels safe to carry out their activities. It’s fundamental to evaluate the risks and try to eliminate or at least reduce them. Only employees know the true risks of their jobs, which is why involving them or their representatives in decisions that may impact their safety and health is so important. By acting in this way, we can increase trust and commitement to established safety procedures. Another principle of our business is sustainable development. Operations impacts are always a concern for R&D. It’s our responsability to prevent environmental degradation and to comply with current legislation, mitigating the possible environmental impacts or interferences. We must also look at the social impacts in the areas where we operate, mapping their needs and trying to help them as much as we can, through donations and campaigns to collect food, clothes, etc.

R&D management is committed to integrity and excellence. The fight against corruption is a concern of the organization, which invests in actions to prevent, monitor, combat and denounce this practice. Ethics and transparency are values formalized in the corporate policy and are part of the employee integration plan. Finally, R&D aim to be a world-renowned mining and heavy construction company recognized for its high-quality services through the collective action of our employees. Challenges move us!

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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

FAGUNDES has been a specialist in construction and mining for over three decades. We congregate more than 5,500 people from all kinds of backgrounds.

The work of FAGUNDES is the beginning of many others and provides raw material for everything. Increasing the standards of construction and mining segments is our goal involving the best in terms of people, equipment and processes, searching for a better world.

We are always striving to go to the extra mile paying attention to every detail with being sure that there is nothing we cannot improve. We like to bring development to everywhere we go and leave a legacy for those who welcome us and walk beside us, as well as, those who haven’t even arrived yet.

We have a constant outlook towards the future. We always have the most modern assets at our disposal because we know that each update of our fleet results in increased efficiency, better results to our clients and investors and more safety for our teams. But that goes beyond the use of new technologies. It also includes a more humane way to manage the business.

There are already dozens of national and international companies that seek FAGUNDES’ reliability, innovation and efficiency. We can assure them unique quality standards in the most diverse services involving construction and mining. We are very proud of our partnerships lasting for many, many years. Searching for solutions in mining and construction in Brazil? Do not hesitate in contact us.

FAGUNDES | Together we have a world to build.

www.fagundes.com

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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,

Paulo CastellariPorchia, Chief Executive Officer at Appian Capital Brazil

Appian Capital

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.

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HOW ABOUT EXPERIMENTING WITH CHEIRO VERDE?

Cheiro Verde is a food company that was born from the dream of a young entrepreneur, passionate about gastronomy, and with a visionary vision of transforming asimple meal, an unforgettable experience.

Initially the company had a small restaurant in the interior of Bahia, where it washighlighting its quality and standard of care, all this success made it start the buffet for parties and events, which very quickly conquered

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the public of the most different levels of requirements.

Today, the company with more than 10 years in the market is able to operate restaurants corporate, buffet for large events, producing from simple meals to construction civil, the high standard buffet with the most varied and exclusive menus, being highly flexible and adaptable to any required need.

The company’s mission is to provide food experiences with great quality, flavor, safety and sustainability, always valuing ethics, satisfaction, commitment, innovation and gratitude.

Appian

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