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Mining veteran wants to build a $1bn battery metals giant

Nov 01 2018 13:45
Thomas Biesheuvel, Bloomberg

South African mining veteran Brian Menell wants to build a battery material giant to help challenge China’s domination of the nascent industry.

It’s still early days for his privately funded company, TechMet, which controls just a handful of assets from Canada to Rwanda. But he’s raising more money and sees countries such as the US and Japan as potential partners to help catch China in the rapidly growing industry to provide battery grade supplies of everything from tin and tungsten to nickel and cobalt.

"There’s a degree of urgency now," said Menell, who started his mining career with diamond giant De Beers in the 1980s and whose family built one of South Africa’s largest mining companies. "It’s a massive problem" that China has dominated supply of these materials for about 15 years, he said.

demand surge

The western world has become increasingly dependent on China for many of the materials needed for batteries used in electric vehicles, and demand is expected to keep growing. The country has long dominated rare earth output, but is now grabbing more control in markets such as tungsten and cobalt.

So much so that President Donald Trump last year ordered the US to curb its dependence on external supplies of what America calls critical minerals.

It’s that sentiment that TechMet want to tap.

The company already has stakes in a tin and tungsten mine in Rwanda, a nickel project in Brazil, a US vanadium processing plant and a recycling facility in Canada that extracts cobalt and nickel from spent lithium batteries.

TechMet, which is backed by high-net-worth investors, will start another round of fundraising in the next month and is looking to raise about $80m. After that, Menell says he plans to further invest as much as $400m in three years, with an end goal of selling shares in a $1bn initial public offering in five years’ time.

"There’s something of a race to capture this industry," he said in an interview at his London office. "We want to be as big as possible as soon as possible."

Battery materials such as lithium, cobalt and nickel have been one of the mining industry’s bright spots in the last few years. Still, in recent months prices have retreated amid mounting concerns that miners are producing more cobalt and lithium than the market needs.

battery drain

But Menell isn’t too concerned about the latest price declines.

"There has been a cooling off around some of the hype," said Menell, who after De Beers joined Anglovaal Group, his family’s storied South African mining conglomerate that was taken over by African Rainbow Minerals. "Prices still do not reflect how quickly these techs will evolve and how much metal is needed to fuel that growth."

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