The World Economic Forum’s (WEF) annual meeting in Switzerland helped facilitate the creation of a battery metals investment fund worth half a billion euros.
InnoEnergy, a Netherlands-based investment company supported by the European Union’s Institute of Innovation & Technology (EIT), announced the establishment of the European Battery Alliance Strategic Battery Materials Fund on Thursday. The private equity and venture capital firm Demeter Investment Managers will be InnoEnergy’s partner in the initiative.
The firms say they launched the fund in response to soaring demand for batteries and inherent gaps in the mining and processing areas of the EU battery metals supply chain. It will aim to help enhance domestic capacity for raw battery materials such as lithium, cobalt and nickel in member countries while reducing reliance on foreign entities.
“To secure a thriving and resilient European battery industry, we must intensify our efforts in domestic battery raw materials production,” Diego Pavia, CEO of EIT InnoEnergy, said. Pavia says the fund will contribute to the development of early-stage battery materials projects in the EU.
Demeter will be responsible for managing the fund. The firm says its expertise in green investments and methodologies will be beneficial for the undertaking.
There will be a particular focus on developing raw materials extraction and refining technologies that minimize environmental damage with the funding.
⚡️Kicking off my 2 days at #wef24 with 🔝news on €500M European #battery #rawmaterials fund.
Batteries are a key battlefield for global competitiveness. Securing raw materials is the single biggest task ahead. This'll help boost domestic capacities and bolster diversification. pic.twitter.com/NOWAKptAMQ
— Maroš Šefčovič🇪🇺 (@MarosSefcovic) January 18, 2024
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Majority allocated to EU while 30 per cent is spent abroad
The fund will utilize at least 70 per cent of its resources on mining, processing, refining and recycling of battery materials within the EU and its neighbouring nations.
The other 30 per cent will be allocated to increasing the EU’s supply of battery materials being imported from countries like Canada, Namibia and Argentina.
“Today’s innovative announcement shows that we mean business – on both, boosting our domestic European capacities and bolstering diversification via trade and cooperation with reliable partners,” Maroš Šefčovič, European Commission Vice President, said.
Argentina’s President Javier Milei gave an interesting speech at the annual WEF meeting in Davos about his support for free trade capitalism and other topics. The South American country’s mining industry and lithium sector has seen an unprecedented rate of investments in recent days.
Major companies like South Korea’s Posco Holdings Inc. (KRX: 005490) and Arcadium Lithium plc (NYSE: ALTM) (ASX: LTM) have established large-scale multi-billion dollar lithium mining operations in the country’s salt flats.
Other early-stage companies like Lithium South Development Corporation (TSX-V: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ) and Argentina Lithium & Energy Corp. (TSX-V: LIT) (OTCQX: LILIF) have been developing the nation’s lithium brine resources as well.
Countries like France, India and major automotive corporations have invested millions in the sector.
Canada, specified by the fund managers as well, is a significant influence in the battery raw materials industries too. The country announced in November that it was investing C$1.5 billion in a critical minerals infrastructure fund over the next seven years.
Other battery materials specified by the new fund include manganese and graphite.
Lithium South Development Corporation is a sponsor of Mugglehead news coverage
rowan@mugglehead.com
