Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Mining veteran Mick Davis’s investment firm raised $590 million as the dealmaker steps up his hunt for the metals needed for the energy transition.
Davis launched Vision Blue Resources in 2021 to tap into the growing demand for so-called critical metals, the essential raw materials needed to decarbonize the global economy.
The latest round of funding brings the total to $650 million, as Davis originally raised $60 million in just over a month when the fund was started. The firm’s target in this round was $500 million.
The world’s shift to cleaner energy will need an estimated $6 trillion worth of metals, according to BloombergNEF. While commodities such as lithium, copper and nickel are vital — for their uses in batteries, solar panels and other green technologies — grab the most attention, lesser known metals such as vanadium and rare earths are also needed.
Davis — who built miner Xstrata Plc into a $50 billion giant before a friendly takeover by Glencore Plc — has focused on the second group. So far, he has bought into five companies, including silicon and tin producers.
“We have seen a growing realization amongst governments, investors, industry and others that the world is facing a major shortfall in the supply of metals and minerals needed to enable the transition to clean, low carbon energy production and usage,” Davis said in a statement.
After years of warnings from many in the industry about a looming shortage of metals, governments are increasingly paying attention. The US agreed last month with Japan to boost cooperation on critical mineral supply chains, and has been negotiating a similar deal with the European Union.
Vision Blue said it raised most of its recent funding from institutional, private and mining investors. The vehicle has so far focused on buying minority stakes in companies.
(By Thomas Biesheuvel)
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