TechMet to add to portfolio, fears Europe losing battle for critical minerals

Audio By Carbonatix

Enlarge

By Eric Onstad

LONDON (Reuters) -The CEO of U.S.-backed investment vehicle TechMet is evaluating portfolio additions, including bidding for a Ukraine lithium deposit, but worries that Europe is lagging behind the U.S. in building a critical minerals sector to reduce Chinese dominance.

Privately-held TechMet, which has stakes in 10 companies, ranging from Brazilian Nickel to South Africa’s Rainbow Rare Earths, aims to add more within 12 months, Chief Executive Brian Menell told Reuters. 

“This present short-term period of market weakness over supply of lithium, nickel, cobalt and rare earth metals is a fabulously enhanced opportunity to deploy capital,” he said in an interview.

The structure of TechMet limits the scope of investment due to its relatively low valuation of about $1.3 billion based on market prices of its portfolio.  

Raising large sums would dilute current investors, so TechMet is being very selective and strategic in its approach to new companies, he added.

REOPENING FUNDRAISING AND UKRAINE LITHIUM OPPORTUNITIES

TechMet raised $300 million earlier this year, including $180 million from the Qatar Investment Authority, but has reopened fundraising, which is expected to close in 3 to 5 weeks at a “significantly higher number”, Menell said.

One of TechMet’s opportunities is the Dobra lithium deposit in Ukraine, expected to be the first project in a joint investment fund with the United States created in April.

“We’re bidding for the rights, and I think we’re very credible in terms of operational, technical, and financial capacity,” he said. “We’re also backed by the U.S. government, which is certainly a plus given the Ukraine-U.S. reconstruction fund.”

Ukraine is expected to select the winning bidder and finalise agreements by the second quarter of 2026, he added.

The U.S. government’s International Development Finance Corp is one of TechMet’s biggest investors, while others include Mercuria, S2G Investments and Lansdowne Partners.

The United States has moved quickly to create a domestic critical minerals sector, including through a multibillion-dollar deal with rare earths group MP Materials in July.

‘FEARS FOR EUROPE’ AS IT WORKS TO END DEPENDENCE ON CHINA

The EU is also working to curb its reliance on Chinese critical raw materials, having implemented its Critical Raw Materials Act last year with a new plan to develop partnerships with producer countries announced by the bloc last week.

But Menell said European efforts were still falling short.

“I really fear for Europe,” said Menell, whose company is registered in Ireland.

“They’re quite good at talking, but it’s really frustrating. There’s a lot of dysfunctional bureaucracy and lack of political will and support and resolve,” he said, referring to his interactions with European officials.

Brussels says ending Europe’s dependence on China for critical minerals is a major priority, and its new partnership push is expected to mirror some aspects of its move away from Russian energy following Moscow’s 2022 invasion of Ukraine.

EU officials approved 47 strategic projects for critical minerals in March and are also working on a joint purchasing platform for critical minerals and energy.

(Reporting by Eric Onstad; Editing by Joe Bavier)