The race to secure critical minerals for the green energy transition is heating up, but low prices are proving to be a major hurdle for Western efforts to compete with China in the sector. According to TechMet CEO Brian Menell, oversupply and weak prices are hampering the cashflows of Western start-ups, making it difficult to keep up with China’s long-term investment strategy.
With the price of key minerals like lithium and rare earths plummeting, Western countries are looking to reduce their reliance on China, which currently dominates the market. However, with prices continuing to fall, many outside players are slowing down or even scrapping projects, while Chinese investment shows no signs of stopping.
Despite the challenging market conditions, TechMet, a US government-backed investment vehicle with stakes in various mineral companies, sees an opportunity to invest in more firms. Menell believes that the market weakness presents a significant opportunity for those with the resources to capitalize on it.
TechMet is currently in the process of raising an additional $300 million to support both new and existing investments. With major shareholders like the US government’s International Development Finance Corp and commodity trading house Mercuria, TechMet remains optimistic about its ability to navigate the turbulent market and emerge stronger than ever.
As the battle for critical minerals rages on, it is clear that the low prices are reshaping the landscape of the green energy sector. How Western countries respond to this challenge could have far-reaching implications for the future of the industry.
