Pallinghurst Group, the investment group chaired by former BHP boss Brian Gilbertson, have announced plans to invest up to $2bn in mining projects for battery materials, including copper and nickel.
The Pallinghurst-Traxys Battery Materials joint venture will look to take controlling stakes in lithium, graphite and cobalt projects in developed countries and invest in associated facilities that process and improve ore.
“The electric vehicle and energy storage revolution is gaining pace. The future demand for the critical battery grade materials is set for explosive growth,” said Arne Frandsen, co-founder of Pallinghurst.
The launch comes as the Trump administration and other western countries seek to develop their own supply chains of responsibly sourced minerals critical to meet the boom in demand driven by electrification and green technologies.
The companies will not be targeting investments in continents such as resource-rich Africa and Latin America through the venture but only projects in North America, Europe and Australasia.
David Merriman, a battery metals analyst at Roskill, a consultancy, said “there has been a real focus on regional supply chains for more ethical reasons . . . but also due to a number of more economic and technical benefits.”
Under the deal, Pallinghurst will identify and manage projects, while Traxys will help to market and deliver the minerals to end users. This will allow Traxys to broaden the range of materials it supplies to battery manufacturers, which is currently limited to cobalt, copper and nickel.
Pallinghurst had already pledged $1bn in July to develop projects to extract battery metals and the most recent deal sees Traxys matching the investment fund’s commitment.
Mr Merriman said it is a good time to invest as the market capitalisation of projects to extract raw materials for batteries have “dropped to more reasonable levels” after a wave of investor excitement.
The London investor has made two investments into Canadian battery metal miners this year. It acquired about 20 per cent in Nouveau Monde Graphite, which is developing the Matawinie graphite project near Montreal, and has invested C$337m ($258m) in Nemaska Lithium, a venture backed by Japan’s SoftBank that hopes to develop a lithium project in Quebec.
It is engaged in exclusive negotiations until the end of the year with Nemaska for a further C$600m ($452m) investment that would enable the miner to complete construction of its lithium mine.