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‘Tech metal’ firm draws in $120m to fuel clean energy

TechMet, an investor in rare metals needed in EVs and renewable energy systems, has closed its second-round equity fundraising at $120m – a 50% oversubscription on its initial target.

Backed by the US government’s Development Finance Corporation, TechMet’s recent success reflects what it calls a period of “both enormous opportunity and enormous challenge”.

Growing demand for batteries, driven by private and public sector net-zero pledges and a shift to renewable energy, has resulted in an increase in supply-side pressures in the rare metals industry.

TechMet has forecast that the demand for lithium from EV batteries alone will rise from an estimated 117,000 tonnes per year in 2020 to 1.5m in 2030.

Following the success of the latest fundraise, TechMet is planning a third round later this year, targeting another $250m to expand its portfolio.

Founded in 2017, the company invests in projects across the supply chain of metals critical to EVs and other green technology. Its assets include Li-Cycle Corp, a lithium-ion battery recycling company; Brazilian Nickel, a mining and extraction company producing nickel and cobalt for EV batteries; and US Vanadium, which produces vanadium products for redox flow batteries.

Brian Menell, founder, chairman and CEO, said: “We are fortunate to be at an inflection point in history of both enormous opportunity and enormous challenge.

“We are at the beginning of an epic supply-demand dislocation for the metals that go into EVs and renewable energy systems, and our industry must completely transform itself in order to supply these strategic materials in the quantities necessary, and with the required high environmental, social and governance standards and low carbon footprint, to ensure the success of a clean energy future.”

A decade of growth

A recent report by Frost & Sullivan estimated that the size of the grid battery energy storage market will grow from $2bn in 2020 to just under $16bn by the end of the decade.

Asian and North American markets are anticipated to lead the industry, accounting for 78.6% of the total grid battery storage capacity by 2030. Meanwhile, Europe’s market share is expected to fall from about a quarter to 13.3% at the end of the decade.

Maria Benintende, energy and environment research analyst at Frost & Sullivan, said: “With climate change and environmental sustainability at the centre of national agendas, battery storage systems deployment is crucial to support the transition to higher levels of clean electrification relying primarily on variable renewable energy sources.

“Additionally, the increasing power demand and generation assets distant from consumption centres necessitate transmission grid reinforcement and optimisation. Batteries offer an attractive option in handling the evolving electrification issues, sparing massive investments in new transmission grids.”

In the UK, the government last month identified the UK’s extraction and supply of critical goods, including minerals such as lithium, as a priority in its integrated review of security, defence, development and foreign policy. Advocating for its recovery, recycling and reuse to establish a circular economy, the government has already funded lithium mining projects in Cornwall through its Getting Building Fund.

Responding to the government’s review, Jeremy Wrathall, CEO of Cornish Lithium, said he was “encouraged” by the report, adding: “A supply of lithium is key in the development of clean, green technologies that will contribute to achieving the country’s net zero emissions target.”

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