TechMet, a US government-backed investment vehicle, is set to launch a new trading arm dedicated to critical minerals.
This strategic move aims to carve out a significant presence in the rapidly expanding market for Western supplies of these essential materials, an area currently dominated by China.
The CEO of TechMet announced this initiative on Thursday, highlighting the increasing importance of securing diverse and reliable sources for critical minerals crucial to various high-tech industries and national security, according to a Reuters report.
This new trading division will specialise in navigating the complexities of this burgeoning market, focusing on establishing robust supply chains and fostering partnerships to reduce reliance on single-source suppliers.
Global drive for supply chain diversification
Nations worldwide, particularly the US, Europe, and several Asian countries, are urgently strategising to bolster their domestic production of critical materials.
A primary driver behind this concerted effort is the pervasive reliance on China for these essential resources, including vital rare earth elements.
The global scramble underscores a growing awareness of the potential vulnerabilities inherent in such concentrated supply chains, prompting a push for greater self-sufficiency and diversification.
TechMet SCM, a newly formed trading unit, will specialise in speciality metals sourced from both its portfolio companies and external third parties.
“We’re aligned with the re-shoring of the supply chains towards the West, and I think you can’t have a better differentiator than having this US DFC anchorage,” Quentin Lamarche, CEO of the new trading unit, was quoted in the report.
Operational focus and future expansion
TechMet’s primary investors include the US government’s International Development Finance Corp.
When questioned about potential deals with US agencies for the new trading arm, Lamarche stated that customer names would remain confidential.
He added:
It’s not a hidden secret that we want to play a role, right? And an active role.
TechMet SCM is expecting a new employee to join its Washington D.C. office in the coming weeks. This location is one of three trading arm branches.
Lamarche has offices in Brussels and South Korea. The South Korean office is strategically important due to the country’s prominent battery sector.
Lamarche stated that TechMet SCM aims to broaden its focus beyond current battery metals like lithium, cobalt, and nickel to include other critical minerals, with rare earths as a potential area for expansion.
TechMet, a private company, holds investments in 10 firms. Among these are Brazilian Nickel, Cornish Lithium, and Rainbow Rare Earths.
TechMet’s portfolio also includes Momentum Technologies, a company that has developed a method for recycling EV batteries and rare earth permanent magnets.
TechMet’s new trading arm will be wholly owned by the company, a shift from its previous joint venture with major shareholder Mercuria.
According to Lamarche, this new, fully-owned structure offers increased flexibility.
Mercuria remains a shareholder in TechMet and we will still do operations with them, but we’ll be more agile going forward.
Lamarche’s previous experience includes roles at Specialty Metals Resources in Hong Kong and Umicore in Belgium.
The Qatar Investment Authority, S2G Investments, and Lansdowne Partners are also significant shareholders in TechMet.
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