The US government has taken an equity stake in a battery-metals company in a move that undercuts dependence on China for a key material used in electric vehicles.
TechMet Ltd. received a $25 million investment from the US International Development Finance Corporation to help develop a Brazilian nickel and cobalt mine, the Dublin-based company said Monday in a statement. Cobalt is an important ingredient in cathodes of most electric-vehicle batteries and its refining capacity is largely under China’s control.
“Investments in critical materials for advanced technology support development and advance US foreign policy," Adam Boehler, chief executive officer of the government agency, said in TechMet’s statement.
(Also read: Tesla to acquire German battery assembly maker ATW Automation)
The move is another example of US efforts to reduce reliance on its greatest geopolitical rival for key materials and comes days after President Donald Trump signed an executive order to expand domestic production of rare-earth minerals -- another sector China dominates. Such minerals are needed for magnets in a broad range of products including electric vehicles.
TechMet’s main investments include lithium-ion battery recycling plants in Canada and the US, a Rwandan tin and tungsten mine and a US vanadium facility. Most metals targeted by the company fall under China’s influence at some stage of the global supply chain -- a fact TechMet CEO Brian Menell is keen to highlight.
(Also read: Shares of LG Chem rise after report of Tesla's interest in battery unit)
“TechMet represents a real opportunity for its investors not only to profit from the impending supply-demand dislocation for critical metals, but also to invest into ethical sources of supply that are aligned with US interests, thereby playing a part in redressing the supply-chain imbalance," he said in the statement.
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