Funding gap for energy transition metals a 'massive problem,' TechMet CEO says

Investors are pouring billions into funds that aim to limit climate change, but none of the money appears to be going to projects that will supply and process the metals needed to decarbonize the world's economies, Brian Menell, CEO of mining investor TechMet Ltd., said in an interview Aug. 30.

"As far as I know, they're not looking at technology metals or metals processing at all because it's outside of their general comfort zone," Menell said. "It's a massive problem because our industry needs literally hundreds of billions of dollars of investment in the next five years to meet the needs of the energy transition."

Energy systems that run on wind, solar and battery resources are much more mineral-intensive than those fueled by hydrocarbon resources. Fatih Birol, executive director of the International Energy Agency, has warned of a "looming mismatch" between the world's climate targets and critical mineral supplies.

"It'll come, but it'll come too late," Menell said of investments that are needed in energy transition metals such as lithium and cobalt. "As a result of that dislocation and the lag of growth in supply to meet demand, prices will go up. ... And, inevitably, the uptake of these systems that the energy transition is dependent on will be somewhat [delayed] relative to if we had properly supplied and cheap inputs."

TechMet is a top shareholder in battery recycler Li-Cycle Holdings Corp. It also owns stakes in a vanadium plant in Arkansas, a tin and tungsten producer in Rwanda and a nickel-cobalt project in Brazil.

Spokespeople for Brookfield Asset Management Inc. and TPG Capital LP, which recently announced $12.4 billion in combined initial commitments for two separate climate funds, did not immediately respond to messages seeking comment Aug. 31.

In addition to investors in the private sector, the U.S. government has a major role to play, Menell said.

TechMet has received funding from the U.S. International Development Finance Corp., or DFC, for its nickel-cobalt project in Brazil. "That was very visionary and courageous of them because it was creating a new precedent," Menell said. "And there needs to be a lot more of that."

The DFC, which said in April that it will begin prioritizing investments in renewable energy and other "climate-focused projects," did not immediately respond to a message seeking comment Aug. 31.

"In the next five, 10, 20 years, control of lithium, cobalt, rare earth metals, nickel is going to be one of the key definers in the global geopolitical landscape and key determinants of national security and national competitiveness," Menell said. "So unless the U.S. system wakes up to that in a big way quickly, the U.S. is going to be radically disadvantaged relative to China," which has moved aggressively to control critical mineral supplies.