Some basic facts, page-26

Below article doesn't mention vanadium, however Aus Super and RCF have teamed up before, notably to fund PLS' acquisition of Altura

We will see how my best networked companies claim above pans out, but now that we are in the ASX 300, when we have EPA approval and a clear path to project developemnt (~Q3 this year) I can see superfunds jumping in either on market if there is sufficient float, or through raisings.
Some super funds are OBLIGATED to buy into companies that enter the 300 that are fully permitted, or fully funded etc. as part of their internal diversification policies. If we enter the ASX 200 someday there'll be a marked price rise as they all pile in.

AusSuper sets sights on becoming a global force in critical minerals
Elouise FowlerMay 20, 2024 – 5.00am

Luke Smith, portfolio manager from AustralianSuper, expects the super fund’s investment in lithium to exceed $2 billion. Arsineh Houspiannormal

“We’re building out investments in that space for the next five years-plus,” the fund manager said. “The energy transition is absolutely a great thematic to invest in.”

These plans will propel the industry fund to become one of the world’s largest investors in critical minerals as the world rushes to decarbonise and meet the Paris climate targets.

While prices for green metals slumped over the past year, long-term investment is vital to avoid projected demand outpacing supply, according to a report last week from the International Energy Agency. It found lithium supply will meet only half of global demand by 2035, while copper supplies will fill just over two-thirds of demand spanning electric vehicles, batteries, data centres and renewable energy infrastructure.

Trade war of subsidies
But the capital to boost the supply of these resources essential to economic and national security has been complicated by the US-China trade war. The US and its allies, including Australia, are seeking to dilute China’s dominance over producing and processing critical minerals, fearing Beijing could weaponise its market power by cutting off supply.

They are throwing taxpayer cash at miners and refiners central to non-Chinese global critical minerals supply chains. Export credit agencies and fiscal departments are shelling out grants and loans, which Mr Smith said were vital for bringing the next wave of mines into production.

The Biden administration has unleashed $369 billion in tax incentives and subsidies via the Inflation Reduction Act. The Albanese government has echoed this with a smaller-scale $17.6 billion over 14 years of tax credits that can apply to downstream processing of any of the 31 minerals the government considers “critical”. The opposition is vowing to repeal this if it wins next year’s federal election.

AusSuper’s move to increase its investment in critical minerals marks a watershed moment for miners that have typically been funded by end consumers in China, retail investors, offshore banks, or the whims of equity capital markets.

Nick Rees, who was NAB’s global head of resources until 2021, said AusSuper funds have a larger role to play backing mid-sized miners, alongside other sources of capital.

“The government is driving this pivot towards future-facing commodities and critical minerals through a variety of funding mechanisms and the recently announced production tax credit,” said Mr Rees, who founded Bridgend Capital Advisory, which provides lending advice for the natural resources sector.

“But government capital alone isn’t sufficient to achieve the sort of transformation that they’re targeting here. It’s going to require additional capital, both equity and debt. Is there a larger role for big super to play in that? Absolutely.”

AusSuper’s critical portfolio
Over the past decade, AusSuper has amassed a $3 billion portfolio of investments in six listed Australian miners including a 19 per cent stake in Syrah, the largest vertically integrated graphite producer outside China. The fund has also provided debt financing via convertible notes for the miner, which has received US government funding to set up a processing facility in Louisiana.

AusSuper also owns stakes in small-scale copper miners, including 14 per cent of 29Metals, and 15 per cent stakes in Sandfire and Evolution Mining. “We’re also looking at potash, like BCI Minerals,” Mr Smith said. BCI Minerals is a private company in which AusSuper holds a 31 per cent stake. Potash is essential for agriculture.

AusSuper can afford to be patient in its search for long-term returns. “Our mandate says we invest on average for five years or longer, which is great for critical mineral projects because they need patient capital,” Mr Smith said. “When investing in critical minerals, we will act like we normally do, which is patient, considered, and wait for the right opportunities to come along.”

Since the Melbourne lockdown lifted in 2022, Mr Smith and his team have scoured 72 global sites to assess assets and get to know mine owners. “It’s really important to meet management face to face. You learn a lot about them, often in long car rides to mines, that is more difficult to pick up in a boardroom presentation.”

New trade routes
Beijing remains Australia’s largest resource customer, but China’s investment in Australia dropped to historic lows under the Morrison government, and the Foreign Investment Review Board has signalled a tougher stance on overseas ownership of sensitive assets.

China refines 73 per cent of the world’s battery grade lithium, a significant portion of which is from Australian mines backed by Chinese lithium giants Tianqi and Ganfeng. Mr Smith observed it was unlikely that level of Chinese investment in lithium would ever be replicated in Australia.

Still, Australian and Chinese companies are finding innovative ways to work together, and Pilbara Minerals offers such a blueprint.

“The structure of the agreement Pilbara and Ganfeng have recently announced shows Pilbara are thinking ‘how can we work with the Chinese’, because they have great skill, knowledge and understanding of the lithium market,” Mr Smith said.

He was referring to the pair looking to build a battery-grade lithium processing plant outside China. Pilbara flagged the proposed joint venture earlier this year, explaining it hopes to access Western subsidies and diversify its business to protect against trade tensions between Washington DC and Beijing.

“That’s quite a sensible and pragmatic way to look at it,” Mr Smith said.