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In a pivot from Mercuria’s bulk metals expertise, the new entity will be wholly owned by TechMet and will focus on speciality metals and chemicals, the chief executive officer of TechMet SCM told Fastmarkets in an interview on Thursday August 28.
“We’ll lean on Mercuria’s global logistics and operational backbone where it makes sense, and on a deal-by-deal basis, but TechMet SCM will remain completely independent. Mercuria is a key shareholder in TechMet and a strategic partner but won’t be making day-to-day trading decisions for SCM,” Quentin Lamarche said.
“SCM will be able to consider alternative partnerships depending on opportunities,” he noted. “Operating as a 100% TechMet-owned business lets us be more agile with risk management and decision-making.”
The investment brings Mercuria’s total new capital in TechMet this year to $68 million and underscores a growing Western-aligned effort to secure supplies of critical minerals that are essential for energy, technology, aerospace and defense industries.
Techmet was founded by current chairman and chief executive officer Brian Menell in 2017. Its major shareholders include the US-based International Development Finance Corp (DFC), the Qatar Investment Authority, S2G Investments and Mercuria.
The company partnered with Mercuria in 2022 to create a joint venture, TechMet-Mercuria (TMM). TMM has since worked to secure agreements with TechMet portfolio companies, which include nickel and cobalt in Brazil, lithium in the US and UK, vanadium in the US, tin and tungsten in Rwanda, and rare earths in South Africa and Burundi.
It has also completed several third-party deals such as in black mass recycling, and an investment in Mitra Chem’s Series B funding round to become its exclusive lithium chemicals procurement agent, Lamarche said.
According to Lamarche, the logical next step was to build a trading entity focused on speciality metals and chemicals, where TechMet has deep expertise. This includes cobalt, nickel, lithium chemicals and a range of minor metals such as tungsten, tantalum, germanium and gallium.
“We’ll remain focused on critical minerals – that’s our expertise and TechMet’s mandate,” he said. “We’ll build on the success of TechMet-Mercuria and stay in our niche.”
Lamarche noted that the backing of an active investment platform gives TechMet both access to assets and deep sector expertise.
“The key difference,” he said, “is that we’re attached to an investment vehicle that is actively pursuing critical minerals investments. That gives us both access to assets and the expertise of TechMet’s team, which includes executives from a range of companies with deep sector knowledge.”
Lamarche, who began his commodities career in 2008 at Umicore, said that strategic alignment with Western governments is a key differentiator for the new venture with the global race for critical minerals becoming more intense.
“Having the DFC as a shareholder aligns us closely with Western governments’ critical mineral objectives,” Lamarche said. “Portfolio offtakes are central today, but we also see strong demand from third parties who want to work with Western-aligned entities, especially given China’s dominance in critical minerals.
“We think our position – backed by US government investment – will make us a preferred partner,” he added.
That could include a role in building strategic reserves and stockpiles, Lamarche said, an area that the US government has said it is actively exploring.
“We see ourselves as both an investment arm and a supply chain solutions provider,” Lamarche told Fastmarkets. “We’ll expand step by step, but stockpiling and strategic reserves are absolutely areas we’re exploring.
“Given the investment by DFC, the goal of securing strategic reserves is aligned,” he added. “We’ll set up a strategy as TechMet SCM and we’ll see if we need partners, but we definitely have an appetite to play a role in this area.”
Looking ahead, TechMet SCM plans to build a global footprint with teams in Washington DC, South Korea and Europe.
“We’ll grow methodically,” Lamarche said. “We’ll soon have someone in Washington DC and will continue to build teams on a step-by-step basis, and will make some announcements in the near future. We’ll scale step by step as the business develops.”
In Hotter Commodities, special correspondent Andrea Hotter covers some of the biggest stories impacting the natural resources sector. Read more coverage on our dedicated Hotter Commodities page here.