Stay informed with free updates
Simply sign up to the Commodities myFT Digest — delivered directly to your inbox.
Qatar has invested in a US-backed initiative designed to loosen China’s dominance of minerals critical to clean energy in the first such collaboration between a western and Gulf state.
Qatar’s sovereign wealth fund has agreed to invest $180mn in TechMet, a Dublin-based mining investment vehicle backed by the US International Development Finance Corporation, the country’s development bank.
The investment by the Qatar Investment Authority is a significant moment in the geopolitical tussle between the US and China for control over supplies of rare earths, lithium and cobalt used to power electric cars.
The administration of US President Joe Biden has escalated efforts to wrest dominance from China over critical minerals and made it one of its big strategic objectives in the switch to renewable power.
A plank of those efforts has been attempting to persuade Saudi Arabia, Qatar and the United Arab Emirates to use their financial muscle to invest in US initiatives to extract and process critical minerals for industrial use.
The wealthy Gulf states are hoping to become big players in the critical minerals market, using their neutrality in the geopolitical stand-off between the US and China to their advantage.
Qatar is designated by the US as a major non-Nato ally. It also has good ties with China, which is one of the biggest buyers of Qatar’s liquefied natural gas.
Brian Menell, chief executive of TechMet, said the initiative underlines Qatar’s desire to invest in critical minerals and an acknowledgment by the US that it needs partners to challenge China.
“The recognition that this needs to be in partnership with allies and sources of funding from allies is growing and will increasingly be a key element of how US interests are progressed globally,” he said.
“There’s a recognition it can’t just be domestic [mining and processing] and it can’t just be US money.”
However, the funding is just a fraction of the amount China has pumped into critical minerals.
The Asian nation accounts for about 90 per cent of global rare earth refining and processes 68 per cent of the world’s cobalt, 65 per cent of nickel and 60 per cent of EV battery-grade lithium, according to Goldman Sachs. This gives it a big advantage in manufacturing advanced technology.
The $180mn investment is part of a sixth funding round of $300mn, which was advised by Rothschild. It takes TechMet’s valuation to well over $1bn.
The US DFC agreed to invest $50mn in the round. A further $70mn has been raised by other investors and family offices including S2G Ventures, a venture capital arm of the Walton family, who founded Walmart.
Established in 2017, TechMet gained its first investment of $25mn three years later from the DFC and then from Mercuria, one of the world’s largest commodity traders
The Dublin-based group has deployed $450mn in 10 operations, including Cornish Lithium, a UK lithium miner; Rainbow Rare Earths, which aims to produce rare earths from old piles of phosphogypsum waste in South Africa; and Trinity Metals, a tin and tungsten producer in Tanzania.
The QIA has ambitions to invest in a broad range of industrial business and is no stranger to the mining industry, holding an 8.6 per cent stake in London-listed Glencore, one of the world’s largest mining and commodity trading companies.