New tech metals player launches $75M IPO
Welsbach to invest in energy transition metals supply chains Metal Tech News – December 29, 2021
Last updated 1/11/2022 at 2:28pm
Looking to establish itself as a major new player in the technology metals and energy transition metals space, Welsbach Technology Metals Acquisition Corp. has launched a $75 million initial public offering on the Nasdaq Global Market.
Led by CEO Daniel Mamadou, a technology metals advisor with more than 20 years of experience in global banking, Welsbach is being established as a blank check company that will use the funds raised through its IPO to invest in and support companies that are part of the supply chains for metals that are critical to the current global shift to renewable energy and electric mobility.
With all the major global economies committed to transitioning to low-carbon energy and transportation, including the expectation that the European Union Green Deal will funnel more than $12 trillion into clean energy infrastructure by 2050 and China's pledge to invest $16 trillion in renewable energy infrastructure by 2060, Welsbach foresees the massive new demand for energy transition metals outpacing supply.
"The coming dominance of renewables will place further pressure on the already strained ETMs supply chains. Easy monetary policy and zero-carbon policies have created the right setting to accelerate the transition away from fossil fuels. New supply chains will need to be created to accommodate the growth in demand for technology metals," Welsbach penned in its IPO registration statement.
The new technology metals investment firm is particularly interested in battery materials such as cobalt, graphite, lithium, manganese, nickel, and vanadium; as well as the critical rare earth technology metals neodymium, praseodymium, dysprosium, and terbium, which are widely used in the powerful magnets that make EV motors and wind turbine generators more efficient.
"Traditionally, the demand for these metals has been a fraction of the demand for major base metals consumption such as copper. Despite their critical nature, ETMs have historically been obtained as by-products of other metals mining activities," wrote Welsbach. "The rise of renewables, the de-carbonization of the grid, and the transition to electric vehicles is putting pressure on the ETMs supply chains, driving a fundamental transformation of the technology metals supply chains."
In addition to the niche energy metals, Welsbach sees massive new demand for the copper and aluminum needed to wire and build an electric-centric future.
The company anticipates that North America, where supply chains are underdeveloped in comparison to Asia, will especially be looking for energy metals investments.
According to a United States Department of Energy commissioned report on rare earth magnets, there is "little time for North American supply chain developers to move to action on economically U.S-based mine-to-magnet technologies to rebalance the supply chain away from China's dominance."
Welsbach points out that the situation is similar for battery metals and foresees major investments by the U.S. government to rectify this shortfall.
"We expect a significant ramp up of U.S. investment in ETMs and technology metals sectors over the coming years as the Biden administration advances its own net-zero-carbon policy," the technology metals investment company wrote.
With electric mobility and renewable energy rising to dominance in North American and European economies, Welsbach also believes the supply chains that feed technology metals into these economies should and will be restructured to withstand shocks that would disrupt critical materials.
"From the perspective of North American and European consumption, we expect this supply chain reconfiguration to include an emphasis on moving midstream activities currently located in Asia to European and American based operations," the technology company penned in its registration statement.
Though Welsbach is not constraining its technology and energy metals investments to any particular area of the globe, it has one country on its exclusion list – China.
As such, the company said it "will not undertake our initial business combination with any entity with its principal business operations in China (including Hong Kong and Macau)."
Outside of China, Welsbach is seeking to use the funds raised during its IPO to merge with, invest in, or acquire companies or assets in the technology metals and energy transition materials industry.
"By facilitating the sourcing and distribution of metals and materials that are critical to the clean energy transition, we fulfill our goal of becoming the partner of choice for technology metals supply chain stakeholders and participants," the company wrote. "Whether lithium or nickel for batteries, graphite for anode material, or neodymium for the production of permanent magnets, we strive to create reliable, efficient and resilient supply chains that deliver the highest quality product at the right time. We also ensure that our chains can withstand sudden shocks and disruptions."
Welsbach Technology Metals Acquisition Corp.'s IPO involves the issuance of 7.5 million units at $10 each. Each unit consists of one WTMA share and the right to receive one-tenth of a share once the company has completed its first business combination.
The offering opened on Dec. 28 and is expected to close by Dec. 30. Welsbach has also granted underwriters of the offering a 45-day option to purchase up to an additional 1.125 million units at the IPO price to cover any over-allotments.