US invests $25M in Brazilian Nickel mine
Part of Trump strategy to secure non-Chinese critical metals Metal Tech News – October 14, 2020
Last updated 10/13/2020 at 3:46pm
A week after President Donald Trump declared America's heavy reliance on adversarial nations for critical minerals a national emergency, U.S. International Development Finance Corporation invested US$25 million towards development of the Piauí nickel-cobalt mine project in northeastern Brazil. This investment is expected to fund further developments that will help create jobs in one of the poorest regions of Brazil while providing a new source of battery metals vital to manufacturing in the U.S.
"This important financing will support economic growth in one of Brazil's most underdeveloped areas," said U.S. International Development Finance Corporation CEO Adam Boehler. "Investments in critical materials for advanced technology support development and advance U.S. foreign policy."
DFC, which partners with the private sector to finance solutions to the most critical challenges facing the developing world, made this investment into TechMet Ltd., a privately held Ireland-based firm focused on building world class projects that produce, process and recycle technology metals critical to electric vehicles, renewable energy systems, and energy storage.
One of TechMet's core investments is Brazilian Nickel, a United Kingdom-based private company focused on producing nickel and cobalt, two metals key to the manufacturing of lithium-ion batteries.
Market analysts forecast that global automakers will be producing at least 55 million electric vehicles per year by 2040, more than 25 times the roughly 2 million being produced this year. This is going to put a strain on the supplies of the materials needed for the batteries that power these EVs – cobalt, graphite, lithium, nickel, and manganese.
Tesla CEO Elon Musk is particularly concerned about the global mining sector's ability to keep up with the nickel demands of the vastly expanding lithium-ion battery sector.
"Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way," he said. "So, hopefully, this message goes out to all mining companies – please get nickel."
Brazilian Nickel hopes to help answer this plea with its Piauí mine project in Brazil.
Piauí hosts 42.3 million metric tons of measured and indicated resources averaging 1% nickel and 0.05% cobalt.
Brazilian Nickel has already developed a small demonstration plant, which it plans to expand. With a US$16 million investment, this successful demonstration facility could quickly be expanded to produce 1,400 metric tons of nickel per year.
The ultimate goal for Piauí, however, is to develop a mine that would produce 25,000 metric tons of nickel and 900 metric tons of cobalt per year. This larger mine would require a roughly US$465 million investment and additional permitting.
For a more modest US$195 million investment, Brazilian says the project could start with an initial phase of commercial mining capable of producing 10,000 metric tons of nickel and 450 metric tons of cobalt per year by the end of 2022, before ramping up to the higher production level.
TechMet, Brazilian's funding partner, said the US$25 million from DFC is part of a larger financing it is currently carrying out to complete the first phase of commercial production at Piauí.
"We are very pleased to have secured this funding and support from DFC, which enables Brazilian Nickel PLC to begin the commercial production of nickel and cobalt products used in the production of EV batteries," said TechMet Chairman and CEO Brian Menell.
DFC's groundbreaking investment into the Ireland-based technology metals company also demonstrates the U.S.'s heightened focus on countering China's control over the supply chains of metals critical to the electric vehicle and renewable energy revolution.
President Trump made this focus clear with the Sept. 30 signing of the "Executive order on addressing the threat to the domestic supply chain from reliance on critical minerals from foreign adversaries."
"Our dependence on one country, the People's Republic of China, for multiple critical minerals is particularly concerning," Trump penned in the Sept. 30 executive order.
To curb this dependence on China and other foreign adversaries, the Trump order calls on federal agencies to investigate various avenues for bolstering critical minerals mining and processing in the U.S. and allied nations.
DFC, which has a budget of roughly US$150 million for fiscal year 2020 and has requested US$700 million for FY2021, appears to be one of the mechanisms the Trump administration plans to use to finance critical minerals projects in developing nations. The finance institution also has an overall lending capacity of US$60 billion.
TechMet says it is aligned with U.S. interests in developing environmentally sound critical mineral supply chains outside of China and is committed to developing an independent source of nickel and cobalt in Brazil.
"Through DFC's investment process we have demonstrated our commitment to achieving positive environmental and social impact across our projects," said Menell. "With the development of the Piauí Nickel project together with Brazilian Nickel's world-class management team, we can make a meaningful and lasting impact on the local Piauí economy."
In addition to Brazilian Nickel, TechMet's core investments include:
• Li-Cycle Corp. – A Canada-based lithium-ion battery recycling company with a producing plant in Ontario and a plant under construction in Rochester, New York.
• U.S. Vanadium LLC – An Arkansas-based producer of high-purity vanadium pentoxide, a critical metal used in aerospace-grade alloys and grid-scale redox flow batteries.
• Tinco – A UK-based mining company that is the largest tin and tungsten producer in Rwanda.
TechMet also has an interest in a producing rare earths metals project in Africa and is developing TechMet Ventures to invest in new opportunities across the technology meta