(electronic sounds)
>> Welcome to the C5 Innovation channel.
My name is Andre.
C5 is a specialist venture capital fund
focused on cybersecurity,
artificial intelligence
and cloud computing.
Today, here in London, at our boardroom,
we have Brian Menell, the
Chief Executive of TechMet
whose innovation lead
is changing the world
of mining and technology by focusing on
how we can secure the critical minerals
that are so crucial to the
future of the digital world.
Brian, welcome.
Thank you for coming down
to have a cup of tea with me today.
>> Andre.
>> TechMet is a new venture.
You've got a new and
innovative business model
for bringing the world of mining
and the world of technology together.
What led you to create
this new venture, Brian?
>> The three primary macrodrivers
behind our TechMet stragegy,
and TechMet is a private company
in which we're building projects
that produce or process or recycle
the key technology metals that are
amongst the most important ingredients
of the tech revolution.
So, the three drivers are
Firstly, the massive dislocation
that we're just at the beginning of,
between exponential growth
and demand for batteries,
electric vehicles,
renewable energy systems.
And the supply scalability of
the key ingredients of these systems.
So this enormous supply demand dislocation
will create unprecedented
value creation opportunities
for the suite of metals
that we focus on as TechMet.
The second driver behind
our TechMet strategy
is the extent to which
these key ingredients
of a big part of the tech revolution
have, over the last 15 years,
come to be controlled, or at least
very significantly influenced
by Chinese interests.
And this creates a geopolitical climate
in which we're investing and building
projects that is increasingly recognized
in Washington, Tokyo, and
other non-Chinese capitals
as in a major security issue.
The third driver behind our strategy
is the degree to which you can add
value to our products through
a pipelined consumer goods,
through very high level of social
and environmental government standards
and capacity to implement and execute.
>> The three big drivers
behind your strategy
sound very similar to
the three big drivers
behind the C5 investment strategy.
In the world of cybersecurity,
which is focused on just the
pace of digital transformation
which continues to outpace
our ability to secure it,
geopolitics, and the growing
importance of regulation.
So, some striking similarities there.
And it seems like TechMet is
at the one end of the spectrum,
and the venture capital industry
is at the front end of it,
but both of them are equally important
to the future of the digital world.
Brian, you've highlighted the importance
of certain critical minerals
to some of the key consumer products
and goods that we value so
much in the digital world
and in which most of the
innovation is taking place.
Do you want to expand a little bit
on what those minerals are,
and where the supply comes from?
>> Mm-hmm.
One of the key, probably
the single most important
driver of demand that
we are supplying into
is lithium-ion batteries
and electric vehicles.
The growth of the adoption
of electric vehicles
is now inevitable and unstoppable.
The three or four
million electric vehicles
in the world today, in ten years time
in very, very the most conservative,
pessimistic forecasts,
will be 120, 150 million.
In more, in my view, realistic forecasts,
will be in excess of 200 million.
That represents an enormous scale-up
of requirement for key battery metals.
So, lithium, cobalt, battery nickel,
are going to have to be produced
in many multiples of present global supply
in order to feed that demand.
And that growth of those
key globally transformative technologies.
This is probably the biggest dislocation
in supply demand equation of any set
of natural resources since the impact
of the industrial revolution on demand
for coal and iron ore.
>> That's fascinating.
And I think we all have to be concerned
about whether we will
have sufficient supply
to enable the innovation that we need
to sustain the digital
world that we are building
for the future.
>> Absolutely.
I think the supply of
the key technology metals
that we're engaged in the production
and processing and recycling of,
will be a key constraint with respect
to the growth of these technologies
that are enormously important to
build a sustainable and
green global industrial
and technological environment.
Added to this, as I mentioned,
is the extent of Chinese control
over these sources of supply.
Not only primary resources,
but processing capacity
and intermediate products.
>> Well, I'm fascinated by that,
because in the world of cybersecurity
the role that China is playing
is of growing concern in the West.
We are currently having a
big debate about Huawei,
the Chinese telecommunications company,
and the role they're going
to play in 5G going forward.
So, what you are saying is that
on the supply end of minerals,
we should also worry
about the extent to which
China is extending it's control.
>> Yeah, I mean, the Chinese have had
an enormously successful and coherent
15 year program of securing control
over these key imputs
to the tech revolution.
To the point where today,
China controls over 90 percent
of global rare earth supply.
>> 90 percent of global rare earth--
>> Yeah, which are key components
for a range of important technologies,
most notable of which is permanent magnets
for electric motors.
They control probably in excess
of 65 percent of global
cobalt primary supply
and probably over 80 percent
of processing and intermediary products.
Probably likewise over
60 percent of lithium,
70 percent of tungsten, et cetera.
So, this creates a
global supply environment
where, while the rest of
the world was sleeping
and not realizing that they were engaged
in a war that they lost before they knew
they were fighting it.
We have a situation where China
has an enormously powerful
tool in their hands.
Both to advantage their domestic industry
battery manufacturing,
electric vehicle manufacturing,
relative to those industries
in Japan, Europe and the US.
And, equally as importantly
and enormously powerful tool
in an escalating environment
of global trade disputes,
which, in my view, are
not simply a product
of the present US administration
but are going to be a feature of the world
in which we live for the
next five, 10, 15, 20 years.
>> Well, we are definitely
seeing a growing
divergence between the West and China.
China is a very important
global power for the future,
but it has a completely
alternative model of governance
to Western Democracy that we believe in
and that also underpins the innovation
in which we are investing venture capital.
So, what you are saying is very alarming
and TechMet's investment strategy is
clearly playing a crucial role
in helping to remedy this situation.
>> I think, you know,
we're a private company,
and the degree to which we can counter
Chinese dominance of these metals
and intermediate product
supply is obviously limited.
China is an enormously rich and powerful
force on the global stage.
However, we can
significantly counterbalance
China's control in certain niche areas
such as rare earth
metals, cobalt, et cetera.
And we can do this in a
way that also adds value
to the degree to which we can
educate government agencies
in the US and Japan
particularly as to how,
not only to understand the
landscape and the situation
that the world finds itself in,
but to find strategies to deploy
political support and capital
in order to, over time,
counterbalance the Chinese dominance.
>> Well, minerals and the mining industry
clearly have a very important role to play
in the creation of the
digital world of the future
and the making innovations
sustainable in the West.
So what TechMet is doing
sounds to be very important
and a very important contribution.
Your business model is
a very interesting one.
You've built a new
industrial minerals company
with a dedicated and
focused set of investors.
How do you see this business
model for the future
in terms of it's development
and do you believe that
building trusted communities
of investors around certain missions
is also a form of social
impact investment?
You've alluded to the ethical concerns
and to the importance
of ethical investment
earlier on in our conversation, Brian.
>> Yeah, I mean, that
is one of the core legs
of what we are as TechMet, is to invest in
and develop projects in
a sustainable, ethical
and responsible manner.
As you said, it's enormously
important to do that
from a solid platform and a solid platform
not only involves one's
company's ethics and culture,
but it involves an
ecosystem of shareholders,
executives, counterparties and partners
in projects that are all like-minded
and share a set of values
and a global vision.
And I think that's what we've done,
and that's what we're building on.
We created TechMet about
a year and a half ago,
we funded it with seven family offices
together with ourselves in
our round one financing.
We closed eight months ago.
We've acquired our first five assets,
which are all scalable
world class projects
in which we have the
initial equity interests
and the right to be dominant funders
and dominant participants.
As we grow those projects,
many of them are already producing,
some are in development.
And they range from mining,
processing, recycling
across North America,
South America and Africa.
Our shareholders are a very like-minded
group of private individuals.
We're busy raising a second
round of financing now.
Again with a focus on family offices
who have a shared long-term vision.
And the shared long-term
vision is what I've described.
I mean, you can't have
a sustainable, green,
technological revolution
without these key ingredients.
And these key ingredients
are not easily scalable
to the extent that they require.
They will be required for the growth
of the demand of these systems.
And they are in the hands of parties
to a large extent outside of
the non-Chinese consuming economies.
So, this is a landscape and a context
that is enormously compelling,
exciting and important.
>> Brian, it sounds
like what you are doing
is not only very exciting
and is offering a very
exciting opportunity
for good investment returns,
but it is also making social impact
and helping to secure the
future of the digital world.
Electrical cars is definitely one of the
most critically software
platforms of the future.
And is relevant to not only transport,
but also to cybersecurity,
to time and location,
and to building sustainable
cities and communities.
So what you are doing is tremendous.
Thank you so much for
joining us today, Brian,
and for sharing with us your vision
and the transformative
work that TechMet's doing.
>> Thank you very much, Andre.
