High-calibre institutions and family offices feature on an expanding list of international investors heading to Resourcing Tomorrow in London in early December.
European Union financing arm, the European Investment Bank Group, Africa50, IDC South Africa, Rotterdam-based Robeco, Australia’s Alphinity Investment Management and New York- and London-headquartered hedge fund Squarepoint Capital are just some of the names swelling Resourcing Tomorrow investor numbers, which are up 20 per cent at the same time last year.
The global mining and investment conference is held at London’s Business Design Centre from December 1-3.
Last year’s event drew more than 630 investors among 2300 attendees from nearly 90 countries.
A recent poll of this year’s investors indicated Resourcing Tomorrow’s 100-plus juniors will be the main focus of their attention at the event. While copper, gold, silver and lithium top the list of sought-after commodities, nearly half the investors also said they would seek out other critical mineral companies.
Interest in North American, European and African resource investments continues to be high.
Nearly one-third of this year’s investors are writing cheques up to US$100 million for exposure to the sector, and this increasingly includes energy, infrastructure and mining technology as well as resource exploration and development.
Africa50 investment director Folaseto Akin-Olugbade said in a recent interview that enabling infrastructure was vital to realising Africa’s critical minerals opportunity.
“Power, transport and logistics must be developed as integrated, multi-user assets that support industrial development beyond individual mining operations,” she said.
“African capital should play a leading role in financing the region’s own infrastructure. Partnerships between governments, mining companies, infrastructure developers, DFIs and institutional investors are crucial to unlock Africa’s full mining potential.
“African pension funds, sovereign wealth funds and insurers hold around $2.4 trillion in assets, projected to reach $6.4 trillion by 2040, yet less than 2 per cent is invested in infrastructure. We want to create investment models that African institutions can support at scale.”
Akin-Olugbade said Africa50 had delivered 33 projects worth more than $8 billion in just over a decade, achieving initial exits at a 10 per cent IRR. She said this showed African infrastructure could “generate competitive returns alongside strong development impact”.
At the other end of the value chain, European Investment Bank vice-president Nicola Beer says a recent study highlighted the need for “better geological data, faster and more predictable permitting, and financial tools that help attract private investment” into Europe’s mineral exploration sector.
“Europe’s debate on critical raw materials often starts with imports,” she said.
“This can create the impression that Europe will remain largely dependent on external supply … but this study shows that Europe has significant mineral potential of its own, which could play a much bigger role in strengthening our supply security.”
The EIB, among the world’s largest multilateral development banks, signed €100 billion of new financing and advisory services for more than 870 projects last year.
The EU’s Critical Raw Materials Act set a target for at least 10 per cent of the EU’s annual consumption of strategic raw materials to come from domestic extraction by 2030.
Beer said current mineral exploration spending in the EU needed to increase tenfold to circa € 2 billion a year over the next five years to help the region reduce dependence on external sources to provide basic materials to major manufacturing and industrial supply chains.
Robeco “smart materials strategy” portfolio managers Pieter Busscher and Mutlu Gundogan said this month resource constraints, bottlenecks and chokepoints were shifting investment capital towards new supply, including recycling, alternative materials and “yield-enhancing technologies”.
The international asset manager, which has US$470 billion in client assets under management, is investing in “resource constraints, innovation and disruption”.
“Robeco’s Smart Materials strategy is not based solely on rising demand for scarce resources or higher commodity prices,” Busscher and Gundogan said.
“It also rests on how industries respond to scarcity.
“New mines are time- and capital-intensive, taking years to permit, finance and build. And getting a mine operational is the first hurdle; finding high-quality raw materials is another. Declining ore grades mean that more rock may have to be mined, crushed and processed to produce the same quantity of metal.
“Supply will eventually expand but not immediately, meaning bottlenecks could mean persistently elevated prices.
“The [Robeco] strategy invests in a broad opportunity set, combining exposure to upstream companies supplying raw, refined, recovered and recycled materials with companies further downstream which provide specialised manufacturing equipment, software, automation systems and industrial technologies.
“By investing across these adjustment mechanisms, the Smart Materials strategy seeks to capture value and growth wherever it develops along the materials and manufacturing supply chain.”