RCE Q&A With TechMet CEO, Brian Menell, on the Metal Supply Chain

For the "energy transition" to have a real chance, America needs a mining revolution.
RCE Q&A With TechMet CEO, Brian Menell, on the Metal Supply Chain
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The Following is a RealClearEnergy Q&A with Brian Menell, Chairman and CEO of TechMet

"TechMet is a private industrial company that is building controlling or significant minority positions in world-class projects across the technology metal supply chain."

Question: RealClearEnergy

Tell us about your views on Biden's American Jobs Plan and why the pursuit of sourcing strategic renewable metals for U.S. stockpiles is critical to building, or as some would say, rebuilding American infrastructure...

Answer: Brian Menell (TechMet):

The American Jobs Plan outlines a series of steps consistent with the objective of dramatically accelerating America's transition to renewable energy and the aim of achieving net-zero emissions by 2050, a goal shared by several countries. These steps include grants and incentives to build a national network of 500,000 EV chargers by 2030, expand EV manufacturing, new battery production facilities, and R&D into advanced batteries, just to name a few. 

However, much like every other initiative in this area to date, it does not sufficiently address the supply of technology metals, critical to achieve these goals.

Part of the success or failure for America, and the world overall, in this global energy transition will be in securing access to these critical minerals, the primary building blocks of renewable energy systems, batteries, electric vehicles, etc.  The transition will require an exponential increase to the current levels of technology metal supply.

At the moment, America is a long way behindChina, who have executed an extremely successful 20-year program of securing control over the supply pipeline of these key strategic materials.

If the U.S. is going to successfully transition to a more sustainable, clean energy future, based on wind, solar, electric vehicles, etc, in order to protect and build US industry, and hence jobs, and maintain a dominant global commercial economic position, this issue has to be remedied very urgently.

At the moment, it's great having Tesla, as an example, at the forefront of the EV industry, growing every month; however, the Chinese government could conceivably close it down in a matter of weeks, because Tesla is reliant on companies that are owned or heavily influenced by the Chinese government for the majority of their inputs. Either from a sustainable competitiveness point of view or a national security point of view, this is a massive issue.

What we do at TechMet is produce, process, and recycle technology metals in alignment with US interests. The US government's equity investment in TechMet is a big deal for us, but it barely registers against the scale of funding required in order for the US to be at the forefront of this global transition.

Question: RealClearEnergy

China has been dominant in the renewable metal space for what seems like decades.

Answer: Brian Menell (TechMet):

Clearly, 20 years ago, China defined what would be the elements of the equation that would ensure that their country, in 50 years time, would be the dominant global commercial trading and industrial power.

One of the conclusions they came to was that battery metals and other technology metals must be secured.  They therefore set about securing control not only of primary resources both domestically and internationally, but also building an overwhelming domestic capacity to process the raw materials into the intermediate metal chemicals required to build the batteries.

China was ramping up investments in their critical mineral supply chains while the US was divesting, unfortunately. So, it will take a lot for the US to catch up.

To put it in context, the United States is currently 100% import reliant for 14 of the 33 minerals on the critical minerals list, aside from a small amount of recycling. Companies owned or influenced by the Chinese government currently account for 72% of global cobalt refining capacity and over 85% of the global supply of rare-earth elements.   

It is also worth noting that it takes several years to get a mining project off the ground, especially one that will be managed in a way that is consistent with American environmental, social, and governance (ESG) guidelines. TechMet is committed to playing a role in securing these critical mineral supply chains in a sustainable and responsible way, which, unfortunately, cannot be said for every other mining company or project in some parts of the world.

Question: RealClearEnergy

Tell us about the importance of this new 'race'? Do you think it should be entirely front and centre of American foreign policy pertaining to China?

Answer: Brian Menell (TechMet):

First and foremost, the world cannot meet its clean energy goals without rapidly increasing the supply of critical minerals. We cannot produce the amount of EVs or renewable energy systems required at the current rate of supply. 

So, the first priority should be securing the materials required to build what we need to combat climate change and achieve a sustainable, clean energy future. You can't have an energy transition and a sustainable future without the inputs that go into batteries and renewable energy systems.

Regarding the foreign policy implications, if China continues to control the supply pipeline of these inputs, they will use that position to advantage Chinese domestic industry for batteries, electric vehicles, relative to the United States industry. They will use it as a tool in in any escalation of global trade conflict between the US and China, which is not going to go away. It might have colder times and hotter times, but it's going to be a feature of the world we live in for many years and decades to come. The Chinese government has already demonstrated a willingness to do so when they halted exports of rare earth elements to Japan in 2010 as part of a diplomatic dispute.

I'm biased, because it's my industry and my business, but I think it should be entirely front and centre of everything that the Biden Administration is doing if they want the United States to succeed, to create jobs at home, to have a sustainable energy transition. All of these priorities are dependent on lithium, cobalt, rare earth metals, not only in terms of independence of supply from China, not only in terms of scaling the quantity of supply to meet the growth of industry sectors, but also to ensure the supply pipeline is ethical, ESG compliant, and has a low carbon footprint. 

Otherwise, this sustainable clean energy future is built on sand.

Question: RealClearEnergy

What role can TechMet and the private sector at large play in meeting the green energy revolution ambitions of the Biden Administration?

Answer: Brian Menell (TechMet):

It's a crucial role, as the private sector will be the ones to source the materials and build the EVs, charging stations, and renewable energy systems that will help to achieve these ambitions. But these are obviously issues that extend beyond any single Administration. The transition to a renewable energy future, securing critical minerals supply chains, and incentivizing innovation and job creation in the sector, will be beneficial to the entire country for decades to come.

We have to build more mines, and we have to do it in an ethical, sustainable, and low carbon footprint manner. We have to build up processing capacity to provide metal chemicals, electric magnet manufacturers, for electric motors, etc. The scale on which we have to do that, particularly in competition with China, who's very good at financing their domestic industry to be cost-effective, requires effort beyond anything that we can do as a private company, or that our industry can do, including the big global mining companies. It's so big, and so demanding, and so important a mission, that it requires concerted government support on the part of the United States, and the United States' allies, to ensure there's adequate funding, and adequate mitigation of risks in place to compete with China and to scale the industry to the extent that's required.

To some extent, we were the beneficiaries of that realization., because we have been the focus of investment from the DFC as a US Government funding agency.(which was a first). We as TechMet, represent the first metals and mining company ever that has received direct US Government funding agency equity investments. There have been other debts and grants over the years, of which there's more going on now, but not equity ownership.

I hope there'll be a lot more of that. Not only for us, but for others in our industry who we want to see grow as much as we want ourselves to grow. I'm not under any illusions that we can do it alone or suddenly provide the answers without many, many others.

Question: RealClearEnergy

So where do you envision TechMet in the future?

Answer: Brian Menell (TechMet):

In terms of projects in the US, we've got vanadium processing and are looking at lithium production. We've been the primary funder of the biggest lithium-ion battery recycling company in the US, Li-Cycle, which will soon list on the New York Stock Exchange (NYSE). We've also got nickel, cobalt, tin, and tungsten projects elsewhere in the world. 

I think recycling is an important area to focus on and we will continue to play a role as part of the supply equation, and ensure that the environmental requirements are in place to do so properly. That's important.

We want to continue to do more of what we're doing. We want to make all of our projects bigger. We want to deploy more capital to add to our portfolio and scale our projects with a view to being a meaningful, non-Chinese influenced player in the supply pipeline for these critical metals, in alignment with US interests, and Japanese interests, because we do some work with the Japanese Government, as well.

So we hope to expand our capacity to supply these critical minerals, while also demonstrating that this can be done in a secure and sustainable way. We want to serve as an example of what can be done by a responsible company, in coordination with a government partner to help de-risk projects and provide the financing necessary to transition to a clean energy future.

 

Brian Menell is Chairman and CEO of TechMet



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