Erik Prince to launch fund focused on electric car battery metals
Blackwater founder to capitalise on the scramble for once niche metals across Africa
https://www.ft.com/content/89245498-0507-11e9-9d01-cd4d49afbbe3
Erik Prince to launch fund focused on electric car battery metals
Blackwater founder to capitalise on the scramble for once niche metals across Africa
Erik Prince said the new fund would target unexplored deposits that could be brought into production and then sold to larger mining companies
Erik Prince, the founder of private security company Blackwater, is launching a fund to capitalise on the scramble for battery metals across Africa and Asia, as the world’s largest carmakers gear up to go electric.
Mr Prince, a campaign adviser to president Donald Trump and brother of US education secretary Betsy DeVos, aims to raise up to $500m to invest in the supply of metals such as cobalt, copper and lithium that are needed for batteries.
“For all the talk of our virtual world, the innovation, you can’t build those vehicles without minerals that come from generally weird, hard-to-access places,” Mr Prince told the Financial Times.
Miners are pouring billions of dollars into developing deposits of the niche metals that will be increasingly needed for the global car industry to switch to electric cars.
One of the largest investors has been China, with Chinese companies buying stakes in deposits in the Democratic Republic of Congo and in Chile this year. Mr Prince also runs a Hong Kong-listed security and logistics company that is backed by China’s state-owned Citic Group.
Mr Prince said the new fund would target unexplored deposits that could be brought into production and then sold to larger mining companies. It will look to sell its investments after four to five years, Mr Prince said.
“ Chinese companies are not necessarily interested in the very upstream exploration,” he said. “They want to buy something in production which leaves that gap for us.”
Over 60 per cent of the world’s cobalt supply comes from the DRC, one of the poorest countries in the world. Chinese companies including Citic, Jinchuan Group and China Molybdenum are some of the largest investors in the African country.
Mr Prince, who wrote an opinion piece about Libya for the FT in 2017, made his name as a private military contractor in Iraq and Afghanistan with Blackwater, an operation that was eventually targeted by lawsuits and connected to civilian deaths in Baghdad in 2007. He sold the company in 2010.
Since then Mr Prince has run Frontier Services Group, which provides security and logistics services to companies in unstable countries. The company has won contracts to provide anti-piracy support to Somalia and security to oil companies in South Sudan.
But it has also ventured into natural resources, investing in a bauxite mine in Guinea, and discovering a copper and cobalt deposit in the Congo.
A former Navy Seal who now lives in Abu Dhabi, Mr Prince’s strong Chinese connections have helped with his mining investments. This year his mine in Guinea secured an agreement to supply China’s state-owned aluminium producer Chalco with bauxite.
Mr Prince, whose father founded a company in West Michigan that supplied the auto industry, said carmakers will need vast amounts of minerals to fulfil their visions.
“When I see the R&D budgets of all the major automakers ploughing huge money into hybrid or electric vehicles, I believe the demand curve for the unique minerals that make up an electric car and battery technology will be enormously high over the coming years,” Mr Prince said.
The Blackwater founder advised Mr Trump on his election campaign and met a Russian financier with direct ties to Vladimir Putin’s family in the weeks leading up to the US president’s inauguration — a meeting that is now being examined by special counsel Robert Mueller.
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