3 nations seek private input for €2.5bn critical mineral investment

ADVERTISEMENT

France, Germany and Italy appealed for private investment to match public funding to develop the critical raw materials’ value chain, when pitching national investment plans amounting to €2.5bn during a summit in Brussels.

The three EU nations laid down their intentions to finance domestic mining operations to secure critical raw materials for the energy transition at the EIT Raw Materials Summit this week, with plans for the capital to be available by the summer.

Raw Materials Funds across France, Germany and Italy will be focused on more than 30 critical minerals identified under the EU’s Critical Raw Materials Act (CRMA), the countries’ representatives said. Lithium, copper, battery metals and rare earth metals for the airspace and defence industries will be among the main targeted by the initiatives.

Benjamin Gallezot, an official within the French prime minister’s office responsible for managing the supply of strategic minerals and metals, announced the government is providing €500m to the country’s national minerals fund with the private-run Infravia Capital Partners raising the rest, with the ultimate goal of raising €2bn.

The Frenchman said the fund will cover the whole value chain — mining, processing and recycling — and will “take minority stakes in projects” which will require an “industry operator to run it”. However, Gallezot stressed the general strategy and investment objective of the fund are to be defined “jointly with the French government”.

Alberto Castronovo from the Ministry of Enterprises and Made in Italy, told the audience the government established the national “Made in Italy” fund last December with €1bn, saying the law foresees an equal private investor contribution of “at least €1bn”.

“We foresee a pipeline of projects that will be at least of €2bn, mainly of equity investment,” said Castronovo.

The Italian fund’s mandate is designed to support national strategic supply chain, with reference to CRMA mining transformation and recycling, Castronovo said, to speed up the energy transition process and circular economy models.

Germany has put aside another €1bn to be managed by the KfW Development Bank. Jan Klasen, KfW’s director stressed the “need for equity” whenever developing a market strategy.

“We want supply into Europe, into Germany, and for that we have €1bn by the German government for equity,” said Klasen, adding KfW’s role is to act as a “minority investment”.

“We need to have someone who knows what he or she is doing from a technical perspective and is running the show,” said Klasen.

The Germans will set up a government-led “raw materials committee”, where all the projects and associated commitments will be negotiated and ultimately approved.

When asked whether these three national Funds will compete with each other, all three representatives rejected the idea.

“The world of mining is very big, there are huge investments to do. We can co-invest and we need all that kind of investment. It’s a good thing to have all these governments developing investments,” said Gallezot.

Castronovo said there was “no space for competition, only for collaboration”, and that the three nations have a great collaboration and alignment”.