Kinterra Capital, a Canadian private equity firm, has recently closed its debut fund, raising an impressive $565 million. The fund’s primary objective is to acquire critical mineral assets necessary for battery development. In light of the growing demand for battery materials, the infusion of private capital comes at an opportune time, complementing government incentives aimed at strengthening the sourcing and production of battery components throughout North America.
Key Takeaway
Kinterra Capital has closed its debut $565 million fund to support mining for battery metals and secure critical mineral assets for battery development.
Funding for Asset-Level Investments
Kinterra’s oversubscribed round will target asset-level investments over the next eight to 10 years in North America, Western Europe, and Australia. These investments span various stages of the battery supply chain, including lithium mines, cobalt, nickel, and graphite operations, battery manufacturing plants, energy storage solutions, and raw materials processing plants. Kinterra aims to provide the necessary capital for projects that extract, process, and recycle critical battery minerals.
The company has already made substantial capital investments in a number of assets and boasts a robust near-term pipeline. Notable investments include Canon Resources, owner and operator of two nickel development projects in Western Australia, a nickel processing plant in Quebec, and White Pine North, a large copper development project in the U.S.
Addressing the Need for Battery Material Investments
Cheryl Brandon, co-founder and co-managing partner at Kinterra, acknowledges the structural underinvestment in critical minerals over the past decade and highlights the discounted valuations of excellent assets. She emphasizes the need for capital investment as countries transition to more sustainable energy sources. Kinterra aims to bridge this gap by combining active management, financial resources, deep sector knowledge, and cross-functional technical expertise to identify and develop assets across the battery material value chain.
While asset-level investments provide more direct control over specific projects, they also involve higher risk. Kinterra mitigates this risk through an in-house team of experts, including metallurgists, chemical engineers, geologists, permitting and sustainability experts, and mining engineers.
Enabling ‘Mine to Battery’ Solutions
Kinterra plans to collaborate with leading automotive OEMs, battery manufacturers, and offtake partners to address challenges within the electric vehicle (EV) supply chain. Through highly structured transactions, Kinterra aims to provide long-term solutions that enable complete ‘mine to battery’ integration. Kamal Toor, co-founder and co-managing partner at Kinterra, emphasizes that their investments will support OEMs in meeting their electrification objectives.
Furthermore, Kinterra seeks to contribute to the West’s generational energy transition by securing critical mineral supply, ensuring diversification of sources in stable jurisdictions, and promoting socially responsible practices. Toor believes that their strategy aligns with secular tailwinds, including downstream demand, global net-zero efforts, and government initiatives supporting materials supply chain repatriation.
Government Incentives and Regionalizat ion of the Industry
Government incentives in the U.S., Canada, and the European Union have significantly increased private investment in the battery materials industry, leading to its regionalization. President Joe Biden’s Inflation Reduction Act requires the majority of battery component value to be produced or assembled in North America to qualify for half of the legislation’s EV tax credit. Canada has also committed billions to support the transition to electric vehicles and energy, including investments in battery plants and critical materials mining. The European Union has set ambitious targets for mining, recycling, and processing critical raw materials.
To meet the objectives set by governments worldwide, there is a need for a substantial scale-up in mining and exploration projects. McKinsey estimates that investments in mining, refining, and smelting will require an increase of $3 trillion to $4 trillion by 2030 to bridge the raw material disconnect.
