Billionaire Friedland’s SPAC readies funds for clean-power push

The pursuit reflects a broad move among energy and raw-materials producers toward low-carbon power sources, with customers demanding less-polluting supply chains and investors seeing opportunity in products that promise to help slow global warming. U.S. President-elect Joe Biden’s administration is expected to increase the push for clean-energy infrastructure.

“The global shift away from carbon, boosted by ostensible Chinese environmental concerns as well as Biden’s recent win, is driving capital to sectors involved with or likely to benefit from the focus on green or renewable resources,” said Tai Wong, head of metal derivatives trading at BMO Capital Markets. “This focus is likely to improve supply over time.”

Those concerns have spurred growth in battery and EV makers and helped fuel a rally in metals including nickel and copper. Nickel is a key component for cathodes in electric-vehicle batteries, and Tesla Inc. Chief Executive Officer Elon Musk has expressed worry about supply due to challenges in sustainable sourcing.

“Over the past decade, the growing impact of climate change has begun to create significant urgency to manage our global carbon emissions,” Ivanhoe Capital said in the filing. Rules to limit carbon emissions, “together with the heightened focus on environmental and social governance by the private sector, has precipitated a paradigmatic shift in the global economy towards electrification.”

Ivanhoe Mines didn’t immediately comment.

The filing lists as potential objectives companies mining or processing metals necessary for electrification, such as copper, nickel and the platinum group metals, as well as battery manufacturers and producers of electric vehicles. Friedland is co-chair of Clean TeQ Holdings Ltd., the developer of the Sunrise nickel-cobalt-scandium project in Australia.

Copper, which stands to benefit from the clean-energy transformation given how much of the conduit is used in renewable sources, posted a ninth straight monthly gain on the London Metal Exchange, the longest run since 1994. Nickel recently touched the highest in more than a year. Chile, the biggest copper-producing nation, said earlier this month it would merge its mining and energy ministries, highlighting the extent to which the two sectors are becoming intertwined.

“Decarbonizaton is bullish metals,” Francisco Blanch, head of global commodities & derivatives research at Bank of America Securities, said Thursday in an interview on Bloomberg Television. “Copper goes through the eye of the decarbonization process.”

Ivanhoe Capital said in the filing that, based on McKinsey & Co. estimates, global electricity consumption will double by 2050, led by the electrification of transport and buildings. Also, according to Morgan Stanley, electrification, together with other decarbonization technologies, will require $50 trillion of investment over the next 30 years.

The emergence of special purpose acquisition vehicles helped lift equity issuance to new heights, while SPACs have raised the most money on record. David Hermer, head of global debt and equity capital markets at Credit Suisse Group AG, calculated that SPACs represent more than half the initial public offering market in the U.S.

(By Joe Richter and Yvonne Yue Li)