Blackstone Group Inc., one of the largest financial and real estate firms in the world, has announced that it has secured the option to acquire a major nickel asset from Highfield Resources. The asset is located in the famous “Nickel Triangle” of the Iberian Pyrite Belt in Spain, which provides Africa’s second-largest nickel reserves.
This is a major move on Blackstone Group’s part as it allows them to establish a stronghold in the nickel mining industry. Nickel is a vital metal used in everyday objects, such as phones, computers, and batteries, as well as stainless steel alloys and superalloys that are commonly used for transportation, aerospace, and medical equipment. With demand for these objects continuing to rise, Blackstone Group’s acquisition of the nickel asset will most likely prove to be a wise investment.
The acquisition will give Blackstone Group the option to purchase the asset from Highfield Resources under certain conditions. It is expected that Blackstone’s commitment to purchase the asset will cost approximately $107million. The agreement also gives Blackstone Group the option to acquire a minimum of 20% of Highfield Resources.
Given the overall rising demand for nickel products and Blackstone Group’s expertise in dealing with investments, the acquisition looks to be a great success for both companies. Highfield resources, in particular, will benefit greatly from the sale as the company can use the funds to invest in and expand their other nickel mining operations.
This acquisition shows Blackstone Group’s inclination towards long-term investments in the mining industry, as nickel reserves are expected to last for the long-term. As nickel continues to be necessary for technological advancements, there is no doubt that Blackstone Group’s acquisition of the nickel asset will benefit them greatly.