Vision Blue Resources' Mick Davis
Energy and mining heavyweight Sir Mick Davis on Monday announced the launch of a $300-million special purpose acquisition company (SPAC) as part of his drive to invest in materials and commodities that will enable a shift to a low-carbon economy.
Davis’ Vision Blue Resources (VBR) has partnered with private equity firm The Energy and Minerals Company (EMG) as co-sponsors of NYSE-listed ESM Acquisition Corporation (ESM) - a $300-million SPAC.
Increasingly popular, SPACs are shell companies created for the purpose of raising funds through an initial public offering to acquire another company at a later stage. ESM floated in the US last week.
VBR said that ESM would identify and merge with a company and that would focus on a target that was positioned to benefit from the global decarbonisation drive. This included the shift away from fossil fuels, the light-weighting and electrification of vehicles and the reduction of carbon emissions from key industrial processes.
Davis would lead ESM as CEO and EMG cofounder and CEO John Raymond would take up the position of chairperson.
STRONG CASE FOR VANADIUM
Meanwhile, in a separate announcement, VBR announced an investment of $11.5-million in LSE-listed Ferro-Alloy Resources (FAR), which is developing the Balasausqandiq vanadium project, in Kazakhstan.
This is the second investment that VBR has made since its launch last month – the first being a $29.5-million investment in the Molo graphite project, owned by TSX-listed NextSource, in Madagascar.
“The strong investment case for vanadium is clear not only from a steel demand perspective, but even more when considering the huge potential for vanadium redox batteries to play an integral role in the establishment of reliable ‘baseload’ renewable energy, capable of reducing the world’s reliance on fossil fuels,” said Davis.
“The Balausa project is especially attractive in this respect given its production cost profile and the team’s conservative long term price assumptions.”
FAR believes that the Balausa project could support an operation of up to 10-million tons a year of ore, producing about 55 000 t/y of vanadium pentoxide.
VBR would make an initial investment of up to $3.1-million alongside a limited number of co-investors, including Tony Trahar, former CEO of Anglo American and a former director of Highveld Steel and Vanadium – which was at one point in time the largest producer of vanadium in the world.
The initial investment would be made in two stages, following which VBR had the right to make a further investment of up to $9.5-million.
The investment forms the majority of a $12.6-million funding package to be used for the completion of a bankable feasibility study on the Balausa project.
Davis would be appointed chairperson of the FAR board on the completion of the initial investment, succeeding Chris Thomas.