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A U.S. government-backed mining start-up has raised $200 million in new equity capital, on track to become one of the industry’s few unicorns valued at more than $1 billion.
The funding from TechMet, a Dublin-based private investment vehicle for nickel, lithium and other metals, will help Western countries counter Chinese dominance in the supply of minerals critical to clean energy technologies.
The funding comes at a challenging time for early-stage mining companies, as higher interest rates squeeze the funds available to develop expensive projects.
TechMet’s investment activity is also aimed at addressing mineral shortages as electric vehicles and wind farms roll out later in the decade and beyond.
According to the International Energy Agency, demand for critical minerals is expected to grow three and a half times by 2030, putting the world on track to reach net-zero emissions.
However, mining projects can take years or even decades to develop, which can lead to shortages.
TechMet chairman Brian Menell said the funds would be used to accelerate the development of 10 projects in his portfolio that would help reduce Western pressure on China for procurement of minerals such as graphite, vanadium and rare earths. rely.
“This is a big problem for the world because yesterday tens of billions of dollars needed to be invested to avoid a structural deficit in lithium, nickel and cobalt,” he said.
He added that his company’s goal was to “balance China’s overwhelming dominance in all these critical mineral supply chains”.
The Biden administration’s $369 billion inflation bill and bipartisan infrastructure laws have provided generous incentives for companies to build mineral processing facilities in the U.S., but TechMet has helped the U.S. bolster supplies of key raw materials to mines around the world.
US-based S2G Ventures, the venture capital arm of Wal-Mart founder Walton’s family, is also one of the new shareholders participating in TechMet’s latest round of financing.
The company’s existing investors include the U.S. International Development Finance Corporation (DFC), the U.S. government development bank, Swiss commodities trader Mercuria and London-based asset manager Lansdowne Partners, all of which participated in the latest round.
The equity round was oversubscribed and the company plans to launch another funding round before the end of the year with the goal of raising several hundred million more dollars, Menell said.
The group has invested over US$180 million in key mining companies over the past 12 months.
Three years after TechMet was launched in 2017, the US DFC bought a $25 million stake in the Irish company, at a time when concerns intensified in Washington over China’s control of key minerals.
Last year, the U.S. government agency invested another $30 million and plans to invest another $80 million this year.
TechMet has stakes in Brazil Nickel, a nickel-cobalt project in northeast Brazil; Cornish Lithium, a lithium project developer focused on the south-west of the UK; and EnergySource Minerals, a US lithium technology developer backed by oilfield services giant Schlumberger.
China controls 63% of global lithium refining, 70% of nickel processing and 65% of graphite mining, according to information provider Benchmark Mineral Intelligence.
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