De-Risking Critical Minerals Investments

And that brings us to our last panel of the day. So this conversation gave us a little bit of a flavor of how strategic finance, private capital, and experienced operators can work together. But d-risking investment also requires cooperation across government, industry, finance, infrastructure, and technology and importantly the right public tools to unlock that capital. to ex to explore that. I am delighted to welcome Mark Mi Mark Mitchell, deputy assistant secretary at the US Department of Commerce, Mike Vincui, executive vice president energy fuels, Sandy Alexander, chief legal and external affairs of Cobalt Metals, and Chris Sha Walter, CEO of Life Zone Metals. This conversation will be moderated by Raheem, managing director at Beimo Capital Markets and a senior associate with the critical mineral security program at CSIS. All right, guys. Last uh last panel of the day. So, we'll uh we'll try to be uh we'll try to be good about it and get uh get everyone out to uh to have some drinks. My name is Raheem. I'm I'm an investment maker at uh at Beimo. And for the purposes of uh of today, I'm also a non-resident associate with CSIS. We have a great final panel to take us out of here and start talking about some real companies that are doing some real projects on the ground. uh and uh and and and understand how that works in Africa. But but we also have with us Mark Mitchell who is deputy assistant secretary for the office of Middle East and Africa in the International Trade Administration with the US Department of Commerce. And uh and we thought we would start there uh with with with a bit of a question to you Mark on you know as uh as you sit in your seat and you've come out of the you've come out of the private sector for many years you you now sit at uh in a role that is is in the intersection of commerce and trade and you know we've had a lot of discussion about how US companies can approach Africa. What what what are the tools that you see from a from a commercial diplomacy perspective that US companies should be aware of and how should they think about entering the the African market? >> Well, that's a great a great question. It's a pleasure to be here. Um you know it's a broad question coming from the private side of the equation most recently and uh looking at you know the the wealth of uh resources that the government has to bear and also the complexity sometimes of interacting with so many different agencies. I guess from our my perspective now um it's really focused on uh the projects and opportunities holistically as opposed to just looking at resources per se and saying wow that might be a strategic resource and these are great companies here and very sophisticated business models but it's really looking at that business model that allows us to help think through all the different places in the inter agency that we may be able to sort of bring that effort to bear and so one of the things we're doing at commerce is really sort of acting as the hub to the wheel of those activities. Um so it might be you know state or XM DFC type financing. It could be DOE type lens or even our department of war. Uh so bring together um and shepherd if you will in a sense what those inter agency resources are to accomplish the task. I think um in that regard some of the things we can do uh so we can never really change the geology right to think criticals we can't really change um the rail in an immediate sense but that holistic project business plan allows us to look at it and say what are the different elements of the government USG that we can bring to bear and then think um even more tactically so let's say it's political risk insurance how might we be able to pull down that risk profile because we can't really change the fundament al economics of the project but we can look at various different pieces of the equation. Uh so there are things on that front uh financing of course can be brought to bear uh for the right kinds of projects. Um there are also um other elements of what we do and what I spend a lot of my time doing and I spend most of my time about three weeks every month on the road. Um and I like to say to my wife there's nothing going on in the Middle East or Africa. So it's it's a it's a busy place but with ministers it's encouraging them to have clear and transparent regulations uh to enforce their rules their laws uh fairly between foreign and local companies um that in many respects I actually put the burden on them and I say they have the power they have the keys to the kingdom because they'll often say well why isn't America investing or you know why aren't we doing more of these mines they'll say well because the laws aren't clear the transparency isn't there they aren't you know companies aren't being treated fairly so But the power in that is that they actually have the tools to control those rules to take actions and live by them. So quick summary. >> That's that's so interesting. You know, we we do have a tendency and and maybe me in particular in my role in in investment banking, we have a we have a tendency to focus on the the problems with project finance, but there are uh there are a lot of other things that uh that come into play. Infrastructure uncertainty, regulatory gaps. um you know what which which of those barriers do you think a company can realistically come to the US government and ask for help on >> uh all of those I think um I think that you know if it's a federal procurement we have an advocacy center I mean get involved early reach out if you want to know more about how we actually can help a company position uh it's for American companies competing against a foreign competitor and it's a federal national procurement um we can as as I said advocate we shepherd through let's say organizations like the American Chamber in each of these nations to get a collection. Sometimes it's the mass of views on regulation that can actually influence it. One company's view, a a nation might look at it and say, "Well, that's sort of idiosyncratic that just benefits them." But if five major, you know, drug companies was my conversation a week ago in uh in Kenya, if five of them get together and say, "Look, if you want these drugs, this is how your privacy laws need to be." So, there's power in in that messaging. We can help shepherd that. So there are a number of different tools. >> Okay. Well, maybe maybe on on on on a you know related note um Sandy Mingamba has become one of the most closely watched projects in Africa and it's been uh fascinating to watch Cobalt really take the take the bull by the horns on that project and uh and start driving it forward. Can you tell us a little bit about what Zambia has got right that has allowed that to happen? Oh yeah. Oh, I love that. Um, so I mean, as as you know, Cobalt is exploring across Africa, Australia, Europe, North America, um, to develop the next generation of critical minerals mines. And the project that is at the most advanced, this one you've asked me about, Manga, is a spectacular copper deposit in Zambia. And when I went to Zambia for the first time four years ago, we had three employees there and we broke ground on the the major construction in April. Um and now there are hundreds of people working on the project every day and a lot of credit for that goes to the Zambian government. They have been great partners. Um the most important thing that they've done right has been speed. So, one of the favorite conversations I've had in my career was a meeting in 2022 in the Minister of Finance's office in Lusaka where he and I sat across the table from each other and he said, "You move fast, we move fast." And I almost felt like I had dropped into a movie script and I said back to him, "You move fast, we move fast." But that's what's required to to get a mine actually built. They need us to move fast. if we if we delay, we're screwing it up and we need the Zambian government to move fast. And that's actually happening. Um, so I mean, I think Ambassador Kanyama joked about it earlier when I saw he and I were going to be on the on the same program today. You know, I put in a folder. Here's the problem I need your help with this week. He knew what was in the folder when I walked over to him. And by next week, like there's going to be work done on that because nobody wants to go slow. >> Yeah. >> And and and maybe just to respond a tiny bit to to Mark's last point, I absolutely agree that you should be seeking if you're in our shoes, you should be seeking help from the administration, the US administration on everything. >> There's no significant problem we run into that we don't talk with the administration about. Even if I'm not sure how they can help us, I still bring it up. Um because it it's always it's always a smart move. >> Well, that that uh that is a powerful message. Mike, Energy Fuels is one of the most exciting companies in our space right now because of your ability to process radioactive material right here at home. >> Uh and uh and you have cracked the nut on railroad separation and and that's really exciting. You've also made the decision to enter Africa. How how how did you go about deciding that Madagascar was the right place to go? What what kind of learnings have has that brought along? >> Okay. Well, for the for the business that we're building right now, which is really this vertically integrated mines to magnet um uh business. Um we've completed that value chain. We actually bought a big magnet manufacturer. We got metal making. We've got the the oxide separation, but we need the fuel to put it into that system, right? like we got the super car, but I'm going to sit there and go vroom vroom because right now we've got no gas to make it go. Um, and so the upstream, the feed side was really important. So we've been scouring the planet to find highquality monzite resources which contain these rare earth elements, also radioactive, um, to feed into our white memill in Utah. Um, and actually Madagascar toara is the largest, highest grade undeveloped heavy mineral sands project on the planet. um it has up to 100 years of of mine life and can supply about 50% of our needs for the entire value chain. Um so that's how we ended up in in Madagascar and um that's uh that also puts in perspective um the next largest project in our portfolio is a 30% that size and the next largest project after that is maybe 10%. because the resources are extremely scarce. The geog the geology is very challenging and particularly with monzite um the existing resources that have monzite have always treated them as a waste product because of the radioactivity and so that becomes unreoverable sterilized resource um that we can't go after. So it's a big challenge to find the feed that we need for the supply chain. and and as an as an American company dealing in Madagascar, what's it been like learning the differences in terms of working with communities, getting a project advanced? >> Yeah. >> Getting to the next step and and how much dialogue have you had with the US government? >> So, um, so those are two, I think, very different questions. I think on the US government side, just very quickly, I can't reiterate enough um just how broadly uh our engagement is with with the US government um given all of our supply chain, not just the upstream mining side. um extremely supportive, extremely responsive, lots of expertise. Um, and you know, while I I I would absolutely recognize that this administration has really taken a quantum leap in in how they're dealing with it, uh, and supporting companies, um, I also think this is a relatively bipartisan issue that we need these critical minerals and and and regardless of what happens in the electoral calendar, I'm hoping that this trend will continue um into the future because it is a real enabler for our ability to do to do business around the world. Um on the toolar project specifically, there is always a reason why the largest highest grade undeveloped resource in the world is still the largest highest under undeveloped resource in the planet. Um this project's been around for about 20 years. Um what made a difference for us is it was always a titanium product project. Us coming in adds the monzite and really turns it into a world worldass uh operation. Um, but we inherited 20 years of of of history, junior mining company history, um, and legacy. And so we had to go through quite a reset in in the reputation of the project, the team, how we show up, um, in in the country in order to be able to create that platform and move it forward. >> Yeah. Yeah. You know, Sandy, both you and and and Mike talked about really large, really exciting projects. We have one other really large really exciting project on stage and uh the enormous enormous nickel project uh that lifes um one of the things I know you've been thinking about Chris and we were talking about just just uh uh backstage was the importance that producing countries are placing on downstream processing assets which um which is a different kind of nut to crack. uh how how do you think about like in in the context of all of the challenges that are involved even when you've got one of the most exciting projects out there uh one of the largest highest grade all the rest uh you still need to you know do some handhand combat to go get those things financed and go get them built when um when you add on to that the complexity of processing how do you how do you navigate that discussion with with with countries that are that are pushing you to do even more. >> I think and I'll start off by saying that you know if you listen to the the theme this morning you know through the subsequent panels um this is probably one of the first events I've participated in from a US perspective where value addition beneficiation has taken a massive tone through every single panel. I think that's that's refreshing because when you are a company on the ground, you know, with a commitment to benefici's been for quite quite a while now, especially in Tanzania, um that's really our leadin and that's been our commitment to our host, you know, opportunity. And you really you have to it's a balance because you have to listen to the host governments in terms of you know their policy initiatives and there is one consistent right now across a number of countries and and every sovereign nation is going to you know exercise their right to beneficiate and value add and maximize the value of that you know sovereign resource that they have on their soil and so you need to provide solutions. Now you then take it a step further. I mean the and it has to be a partnership. I think you you heard Assistant Secretary Garcia talk about we need to pursue these partnerships. Um you heard Secretary Wright talk about you know we need to focus on value addition beneficiation. Um you you heard Chris Kakundas talk about you know how does the state department support these negotiations and and support the you know the benefici overall part of the state department's initiative. Then you've got companies like Lifo we're there on the ground trying to figure out how to execute and how to get these done. I think the challenge is the confluence of where do you then how do you put that together because you have you have a scenario where a kabanga project does not have a nickel mine yet you need a nickel mine first you can envision downstream over time but it's how do you balance the political demand to have benefici now now and what is the sequence that's required from a capital investment development execution So that's where there's a a reality of okay how do we commercially you do that step by step and that's that's something where I think if you look at uh Indonesia as an example I mean their nickel industry is you know very much dominated the world right now in terms of the speed through which it's implemented new technology and kind of taken over the market share but they had a nickel mining industry for 20 years before they went down to that step in Tanzania we have to start at step one we have to build a mine and I think some of the the misconceptions of these host governments, you need to go step by step. You need to have a mind before you can go downstream. And it's the staging and the and these things take, you know, the the required capital and time. And there's an impatience for value addition, beneficiation right away. And that's that's a there's an alchemy there that we haven't perfectly gotten right. And that's I think that's one of the biggest challenges right now on the ground is you know how can we get in there get busy and focus on a step-by-step process. And I think that's something that is uh it's a it's a work in progress for us right now. Um just to allude to some of the initial questions on you know the support from the US government. I mean we being an executive in Africa for quite a long time now I've never seen the amount of support we've received you know in this current administration. It's something where you go back 15 years ago, I mean, I was usually hiding from the US embassy. I mean, I didn't want the IRS to know I was living in a foreign country and you look at the way the times have changed. I mean I can rely on numerous departments whether it's state um you know there's a number of different resources we can rely on and I think the toolbox through which the US is implementing all these different funding initiatives you know whether it's debt whether it's you know this new kind of equity um opportunity uh through various funds or whether it's the PRI you're seeing the whole deployment of all these funding mechanisms put in place to support projects like that's really exciting I think the more we we develop the blueprint for that uh we can really uh see some success stories here in the near term. >> Mark, you said something that's stuck with me, which is uh you know, can't change the minds, right? The resources are what they are, but you do have tools other than what's in the ground to to go and start start moving things around and and having an impact. I'm curious because there are three great projects on stage today. Uh, and I can vouch for all of them. And so you can you can you can credibly spend your time with any one of them, but I know there's going to be a lineup out your door with lots of different companies coming in asking for your time and attention. as you deal with that problem or opportunity, as you deal with that opportunity, the opportunity of all these all these great projects coming, h how are you how are you going through the process of prioritizing and figuring out which ones of those are going to get the full weight of the US government and all of those tools being applied to them and which ones get passed over? >> Uh, it's a great question. Uh, ruthless prioritization is the answer to it. That's my private side view of it. Um well it's not surprising that we have uh we're very much focused on outcomes not just activities of responding to calls and setting up meetings but it's really about the um the top level um priorities. So that's advanced manufacturing which includes you know the critical minerals that support the inputs to our national strategy on repatriation of fab. So these gentlemen here are working on very important parts of it. It's not just critical rarers, but of course base metals, copper, super important as supply, you know, in the supply chain part of the equation. I of course have a full responsibility for the Gulf nations who are big buyers of these things. So I sit on both sides of our national strategy there. That's very important. Um there are a lot of different lenses in making that priorization, but fundamentally AI, advanced manufacturing, secure ICT and energy are all part of the equation. Can't mine without energy. you know, you can't build advanced data centers without secure ICT. Of course, we have our own view on what that American stack should look like. Um, I would just underscoring a couple of the themes I heard that are very important. Um, it is about the ecosystem. Um, our view on, you know, on critical minerals, for example, is it's not about strip mining, putting on a rail car, putting it into a port and moving it halfway around the world to process it. No, by the way, there are countries that are doing that. It's not surprising. um our view is that it's about an ecosystem and enablement of prosperity in these nations as well. So it's important from the government's perspective these these partner nations uh and partner is a very important word that I heard and I'm going to underscore that because these are long run partnering relationships and um there's been it's a journey right I mean America in these countries over the years is a journey um but I would say all of them that I've been in and I'm physically spent a lot of time in them they appreciate that American partnership and they're trying to figure ways to navigate that. And so it is about a adjacent opportunities next to the railway. It's about enablement of uh knowledge transfer, enablement of local workforces. It's about the ports and and all the other things that go around it because in the end of the day, it's not just about making chips, if you will. It's about a leveling up of um economic prosperity for these nations. Um and that's an important part of this equation. So it is a little bit different than let's say the private side of the world. a great product. We might come to the table as a private person, great product, great service, maybe have a capital answer, but it really is more than that in reflecting that partnership. Um, and that is, I think, one of the unique things that is compelling about what we bring to the table. Um, and I proudly say this, we have worldclass technology. We have worldclass uh creativity and innovation in our nation. And we have literally um untold unlimited amounts of capital, public, private, uh all of our, you know, markets and and and and companies that are delivering this. I'd put that up against any player on the planet and our ability to deliver this. It's the question is do they trust us? Can we get in there and build these things incrementally? You can't build it all on the first day. You have to go down that path. And uh I think that partnering relationship will be long and strong in many of these nations because we're taking the route that we are. >> Ruthless prioritization. I like that. I think I'm going to use it myself in in future discussions. There there is another um there is another thing that I I hear a lot from uh from from clients. Uh and some clients like Chris spent uh spent 20 years trying to stay away from from the government and are and are now faced with a veritable alphabet soup of uh of different agencies and different parts of the government and different folks who have different portfolios. And one of the things that we often see is America's competitors will come to opportunities in a highly coordinated fashion and show up with all parts of a package really well thought out uh and and are able to put together something that's pretty compelling. How is how is the current administration thinking about integrating these various tools in a way that a American company can credibly interact with the US government and get access to to the full suite? >> Uh it's a fair question and you know there's been there's a history to that. I think I think these gentlemen have reflected the power of pulling in and working with um commerce and other parts of the government to to put their best foot forward. Um practically uh our foreign service officers which are located across the country of course we call them yuziacs but across the nations of the world we work within embassies. We have foreign service officers there. We have many locally employed staff, these local local uh nationals that work for us typically in embassies and various posts around the world. Those so if you're thinking about it from a project perspective, reach out to them. There's get all those names off our website or reach out to me. We can get you the right people. But they're going to be a point person in terms of the local area. They're going to have the kinds of relationships to influence ministers, not influence, wrong word. um get access to communicate to shepherd with the kinds of things we just described in terms of partnering. Um and then of course there is uh once those a officers are engaged they can they pull in and leverage uh the teams that we have in DC where I'm principally located. We have a world-class team here as well. It's small and thin. There's no question about it. But that ruthless priorization is about really bringing in the resources where it matters most and then from there it can be sort of hub and spoke to all the other different agencies and that drives from the project from the resources to the business model to that ecosystem to that partnership and how we can work together to deliver that story. >> Guys, we're uh we're we're getting up on the uh on the hour to get out and have drinks. So this will be the last question. >> Uh but I'll ask it uh I'll ask it to each of you. the um the excuse me. Um if we uh if if we if we think about where these private where these private public partnerships have really worked really worked well in our industry. Is there an example that you would point to and and and tell the group assembled here in the audience that that that that is that is a great example of how we should work in the future? >> Yeah. I mean, I'll be selfish and say I want to be that example. I think the Kamaga Nickel project, I think we're poised to be a demonstration of kind of this new partnership model. I mean the government of Tanzania has a 16% participation and so they're no longer uh just a tax collector or a royalty collector. They are a true partners partner in the project. They um they're intimately uh participating on the board of directors. And so I think this this will be an example of not only you know a critical new source of nickel and cobalt being secured for western markets but also an example of how we've worked in partnership with the government of Tanzania to execute that and then also brought the resources in these novel you know funding um mechanisms I alluded to of like different ways the US can help enable it. So collectively taking those opportunities um but then demonstrating through this project and it's going to say take something that builds time it's going to build over time it's going to be that trust. I think when I talk about this sequence of you know mine concentrator and then further downstream we've got to demonstrate a partnership model on step number one and then build on that over time. So I think the Kabanga project is is poised to be a great example of that and I think that's what we're you know we're excited about right now. So I'm going to give it a little different spin your question because you know a lot of the talk over the last day has been about that sort of government level and that financing level. But I think a really important point has been miss and that's around that that working of trust. That trust works with government. But when will government trust you is when you get it right on the ground. If you're creating problems with your local communities, you're not taking care of those those those those local stakeholders and building those relationships, that will b bubble up to distrust and issues and conflict, which puts government in a box. And when I look at what we're doing in Madagascar, um I think it's a great example not just of how we we're sort of resetting the legacy, but building real proper trust, getting it right on the ground with our with our communities and getting our communities to also be advocating up to these governments to say, "We want this project. We want this investor, we see the benefits, we like these people, we trust them." Um, and that takes a lot of effort and it takes um human intervention and uh to do that and and I think as companies and I'm sure you're all doing the same things u a lot of time and effort being put into getting it right on the ground as the whole foundation for all of this stuff and and I think that's where where the industry doesn't always and and that's I think also where companies these these American companies these western companies are generally far ahead of of many of the other competitors we face and if we we do that Right. It gives us a big competitive advantage in the long term. >> So I think any example of one of these partnerships is going to be doing something well that has always been hard. >> Yeah. >> But it's really fun when you can do something that used to be impossible and we should look for chances to do that. So one of my favorite is an agreement we made with the government of the DRC. It advances the strategic partnership agreement that has been discussed earlier in today. And as part of our agreement, we got access from the government to old public archives of geological information that were sitting in filing cabinets in Lubmbashi and a team of Congalles data scientists digitized 300,000 pages of these old geological records um as part of a cobalt project earlier this year. And each file as they digitized it was put on the public internet for the world to see within 60 seconds of us making the scan. And anyone in the world today can go to rdc.rocks and access this 300,000 pages of information. And you might say, what would I do with it? You have to have a big company like Cobalt Metals to even read 300,000 pages of documents. But that is not true. We are now in a world where any exploration company, maybe even any high school kid, could ask Claude or Chat GPT or whatever the next one of these things is, please read the 300,000 pages of old records and help me answer this science question, this investment question, this exploration question. That's something that it it's not that it used to be hard. This is something that until very recently would have been impossible and I think that's really exciting. >> I'll need to up my token count. >> And maybe just to finish on that, you know, I know this is a criticals event, but um and stand by. I'm not going to give you the the deal names, but come to ANGA next week and you'll hear some interesting announcements about AI related work that we've been doing. There's some extraordinary work on this front. This digital transformation is really important for the continent and ties to that economic prosperity to those people who are doing it and um it's an exciting period of time for sure. >> Yeah. >> Thank you. >> All right. >> Well, thank you to everyone. Thank you. >> Thanks for all the work you're doing. >> Thanks, Andy. Yeah. Thank you. Awesome. >> Thank you, Chris. Good to see you. Thank you, Mike. Good to see you. Thank you. >> Well, big thank you to Raheem, Mark, Mike, Sandy, and Chris. And thank you to everyone who joined today. We've we've covered an extraordinary amount of ground over the last six hours. It really was a tour to France of US Africa commercial diplomacy. But I think one message came through very clearly is that the next chapter of US Africa minerals diplomacy has to be about execution. We heard this morning about a more commercially focused US Africa or US approach to Africa from Assistant Secretary Garcia, Chairman Javanovich and Secretary Wright. We heard from investors, development finance institutions and industry about what it actually takes to move capital into projects. This afternoon, we heard from African leaders about what it takes to build those durable economic partnerships, to build value addition on the continent, and to uh make sure that the the people's lives are better off because we are developing those projects. And importantly, we talked about going from that strategy to transaction. There's no shortage of announcements that have been made or ambitious targets but eventually the measure how how we will measure success is a word that you heard a lot today which is deals. So the opportunity is enormous and before we close I want to thank every one of our speakers for giving their time and expertise. Our speakers flew in from all over the world today. We had people from London, Italy, Guinea, uh Iceland and more. Again, I want to thank our staff here and the Huelet Foundation for making today's event possible. And finally, thank you to all of you. The fact that so many people from government, industry, finance, and the diplomatic community this morning, we had over 2,000 people watching live online. And I think that really is a testament that the moment is here and we want to seize the moment. So, our work does not end here. In many ways, it's the beginning. But what an encouraging narrative to see how government and industry are working together. I always say I'm very lucky to work on one of the few areas that is both bipartisan and a mainstay of international cooperation. So, thank you again for joining us today. I do hope you will stay for a drinks reception. There are drinks and snacks out there. And I hope that you continue the conversations that started here. Have a wonderful evening.