Commodity trading house Mercuria is ramping up exposure to metals needed for the green transition such as copper, cobalt and lithium, both through buying company stakes and forging trading relationships, an executive said.
In the past two years the Swiss trader has invested in several firms involved in critical minerals, even when there is no immediate prospect of getting offtake deals, Guillaume de Dardel, head of energy transition metals, told Reuters.
The companies are in different parts of the supply chain providing raw materials needed for electric vehicles, renewable energy and energy storage.
Mercuria has targeted 50% of investments by the firm would be in the energy transition sector by 2025, de Dardel added in an interview.
"We have investments where there's no immediate trade flow angle, we did it to build partnerships and equity exposure. It's a hybrid model," he said.
"Once we decided to have exposure, then we try to find synergies, overlap or touch points with more our more traditional business, but that's not the starting point."
Mercuria holds many of its investments through privately held TechMet, which has stakes in companies such as Brazilian Nickel plc, Cornish Lithium and U.S. Vanadium.
The U.S. International Development Finance Corp is TechMet's second biggest investor after Mercuria, and partnership with the U.S. government is one of the attractive factors of the investment, De Dardel said.
Both the EU and United States are seeking to curb their dependence on China, which supplies about 95% of the EU's rare earths, needed for EVs and wind turbines.
"TechMet is also addressing the geopolitical constraints around rebuilding supply chains for the West in a very strict ESG framework."
Mercuria also has holdings in Australia-listed Jervois Global Ltd (JRV.AX), which owns the only cobalt mine in the United States, an operating cobalt refinery in Finland, and is restarting a nickel refinery in Brazil.
It also invested in Norway's REEtec to increase its exposure to the processing area of the supply chain, De Dardel said. The company uses environmentally friendly technology to separate rare earths in Europe, which still relies on Chinese refining capacity.
Reuters