Abu Dhabis ADQ To Partner US Government In $1.8bn Critical Minerals Project

The projects, in which private equity fund Orion Resource Partners is also partnering with a US$600 million investment, will be used to bolster access to lithium, rare earths and other critical minerals.

The announcement is seen as critical after China, market leaders in rare earths, restricted access to critical minerals. There has been an increasing demand for these minerals vital to energy, digital infrastructure, semiconductors, and other strategic areas.

The new entity is called Orion Critical Mineral Consortium (Orion CMC), and it will invest in strategic critical minerals projects in DFC-eligible markets.

Collectively, Orion CMC represents the largest initiative to create secure supply chains for critical minerals to the United States and its allies. The platform enables additional aligned capital providers to invest in the consortium alongside DFC to fund critical minerals projects.

In January this year, ADQ and Orion Resource Partners had entered an agreement to establish a new Abu Dhabi-based 50-50 joint venture to make strategic investments in the metals and mining sector to enhance supply chain security both locally and globally. The JV partners committed to deploying an initial US$1.2 billion of capital over the course of the first four years.

UAE-US fund tackles critical mineral supply

The newly formed Orion Critical Mineral Consortium now has the US International Development Finance Corp (DFC) as partners and is putting in US$600 million as well.

Ben Black, CEO of DFC, commented: “Securing critical minerals is a paramount matter of US strategic interest and economic prosperity. Orion CMC was created to establish a robust pipeline of secure critical mineral investments vital to advancing American economic prosperity. I’m proud of the incredible work by DFC and its partners to secure these vital resources, which will safeguard America’s leadership in advanced technologies.”

Oskar Lewnowski, Founder and Chief Executive Officer of Orion Resource Partners LP, added: “We are delighted to partner with DFC in establishing this mission-driven consortium to help bridge the substantial funding gap needed to accelerate investment in the critical minerals supply chain and drive US economic growth.

“Orion CMC brings together some of the most experienced operators in the industry with the expertise required to build a diversified portfolio of critical minerals assets across multiple jurisdictions. With the strong support of DFC and our partners, we look forward to delivering on the opportunity ahead.

“The (US) government certainly brings a lot to bear, particularly in emerging market contexts, and that makes investments that much more tenable for us.”

At the time of forming the new Abu Dhabi-based JV, Hamad Al Hammadi, Deputy Group Chief Executive Officer at ADQ, had said: “As a long-term investor, we are committed to ensuring that our portfolio companies are set up for success in an ever-changing operating environment.

“The establishment of Orion Abu Dhabi is a natural step for us, allowing our companies to execute their ambitious growth plans with the assurance of a resilient supply of essential resources. We are confident that Orion’s specialist expertise and strong global network will be a great asset to this partnership and look forward to our shared journey.”‍

The consortium, which hopes to grow to $5 billion with funds from others across the globe, aims to quickly get minerals supply to market and plans to avoid exploration-stage projects.

Orion’s announcement comes two days after private equity firm Appian Capital Advisory and the International Finance Corporation launched their own US$1 billion fund to invest in minerals projects in Africa and Latin America.