Kinterra Capital debuts $565M fund to support mining for battery metals

Kinterra Capital, a Canadian private equity firm, has closed its $565 million debut fund dedicated to securing critical mineral assets for battery development. An influx of private capital comes in between increasing government incentives to the sourcing and production of battery materials in North America.

Kinterra’s oversubscribed round will target asset-level investments in North America, Western Europe and Australia over the next eight to 10 years, according to the company. That means investments in lithium mines, operations to discover cobalt, nickel and graphite, battery manufacturing plants, energy storage solutions, raw material processing plants and other necessary technologies. to extract, process and recycle critical battery minerals.

Kinterra said its fund has already invested “substantial capital” in several properties with “a strong near-term pipeline.” Specifically, the company invested in Canon Resources, an owner and operator of two nickel development projects in Western Australia; another nickel processing plant in Quebec; and White Pine North, a large copper development project in the US

“The structural underinvestment in critical minerals over the past decade has resulted in deeply discounted valuations for excellent assets and created a huge need for capital investment, as countries transition to more sustainable energy source,” said Cheryl Brandon, co-founder and co-managing. with Kinterra, in a statement.

“Kinterra meets the need by bringing the right combination of proactive management, financial resources, deep sector knowledge and cross-functional technical expertise needed to identify and develop assets across the supply chain. amount,” Brandon continued.

Asset-level investments give investors more direct control over specific projects or assets, but that also leaves them open to more risk. Kinterra says its in-house team includes metallurgists, chemical engineers, geologists, permitting and sustainability experts and mining engineers to ensure the company makes sound investments.

The company intends to work with leading automotive OEMs, battery manufacturers and other offtake partners in “highly structured transactions that provide long-term solutions to EV supply chain challenges,” according to by Kamal Toor, co-founder and co-managing partner of Kinterra.

“Our investments will enable the complete ‘battery mine’ solutions that OEMs need to achieve their electrification goals,” Toor said in a statement. He noted that Kinterra hopes to help the West’s generational energy transition by: 1) securing critical mineral supplies to meet growing demand; 2) ensuring that the supply comes from various sources in a stable jurisdiction; and 3) produced in a socially responsible manner.

“Our strategy is supported by strong secular tailwinds, including strong and fundamental downstream demand, global net-zero efforts, and strategic government initiatives that support repatriation of supply chains of materials,” Toor continued.

Government incentives across the US, Canada and the European Union have encouraged more private investment into an industry that is becoming more regional.

by President Joe Biden Inflation Reduction Act, signed into law August 16, 2022, requires that the majority of the cost of battery components be manufactured or assembled in North America by 2024 to qualify for half of the law’s EV tax credit, or $3,750. To get the other half, battery manufacturers must source most of the cost of critical materials from the US or a free trade agreement country. In addition to encourage domestic industrythe bill’s stipulations are designed to reduce China’s reliance on supplying and manufacturing lithium-ion batteries.

Canada also agreed to spend billions to support the transition to electric vehicles and energy. In the summer, the government gave the $15 billion CAD of automaker Stellantis and battery maker LGES to build an EV battery plant in Ontario. Canada is also supplying billions to boost the country’s critical mining materials.

the EU Green Deal Industrial Plan It also set targets for the region to mine 10% of the critical raw materials it uses, with recycling increasing by 15%. The bloc also aims to increase the processing of 40% of its needs by 2030.

In order to achieve the goals set by governments around the world, there must be a large scale of mining and exploration projects. According to McKinseyinvestments in mining, refining and smelting must increase by $3 trillion to $4 trillion by 2030 to “bridge the huge raw material disconnect.”

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