Kallanish Power Materials: Q&A with Charles Bray
With a range of African assets, critical metal-focused exploration and development company Aterian is working to discover, develop and deliver the much-needed green minerals. The London-listed firm seeks to support ethical and sustainable supply chains by developing its resources into production assets. It is currently targeting lithium in Rwanda, copper in Morocco and both minerals in Botswana, as well as other metals.
Aterian aims to unlock the potential of critical and strategic metals in Africa, adding value to the continent and its people, committed to ESG principles. It says its multi-commodity portfolio in mining-supportive jurisdictions will maximise stakeholder value. It is confident in copper’s positive long-term outlook and lithium’s long-term demand growth. Having secured a lithium joint venture with Rio Tinto in Rwanda and a recent acquisition in the renowned Kalahari Copperbelt in Botswana, the company is managing over 20 projects whilst evaluating future acquisitions and partnerships.
KALLANISH SPOKE WITH ATERIAN’S CHAIRMAN CHARLES BRAY TO LEARN MORE ABOUT THE COMPANY AND ITS FUTURE PLANS.
The recent Atlantis Metals acquisition has given Aterian access to the renowned Kalahari Copperbelt in Botswana, with identified potential for lithium brine. What are the plans for this project/new licences?
We are thrilled with the Atlantis Metals acquisition. The initial acquisition comprised a very promising licence in the Kalahari Copperbelt and three lithium brine licences in the Sua Pan region, a newly designated lithium target area. At present, we plan to execute re-interpretation of the Kalahari licence historical airborne geophysical survey data to better understand the basic regional geology to allow us to target areas for later drilling. At the same time, we will be seeking to analyse data from sampling efforts in the Sua Pan to establish the sources of the lithium brine and how best to proceed. It’s a lot of work to gain a lot of knowledge.
With such a vast asset portfolio with projects focusing primarily on copper and lithium, two critical battery minerals, is there a flagship project?
Our flagship asset is the HCK licence in Rwanda as it’s the most advanced and offers the potential for tremendous scale. This is our joint-venture project with the major Rio Tinto, where they have a $7.5m earn-in for a 75% stake. This JV represented a real transformative moment for the company as it demonstrated our ability to pass Rio Tinto’s high sets of expectations; both with regards to project and corporate expectations. Rio Tinto is the operator, and the initial ground survey work has been very promising, with drilling to commence shortly. We believe that Rwanda could be a new lithium province in Africa and a global battery destination; truly anchoring Africa on the global map in the ‘Age of the Battery.
Scaling up critical minerals supply in time to meet rising battery demand is essential to the success of electrification. What do you see as the major barriers to progressing Aterian’s projects towards production?
The scarcity of capital is presently the greatest barrier to successful discovery and development of critical minerals. Capital has flowed to the OEMs far more readily than to the upstream natural resource companies. At the end of the day, without the raw materials there will be no energy transition products, so I am confident that investors, and their capital allocations, will wake up and realise the disparity and take advantage of the quality opportunities in the exploration sector.
Africa offers a huge opportunity in terms of mineral resources, but also poses a number of challenges. How does Aterian plan to manoeuvre country-related and project execution risks?
Our approach is to work in countries which have excellent reputations with respect to mining, business, and trade generally, and of course safety. We attempt to mitigate risk by simply working in excellent jurisdictions.
Does the company plan further partnerships such as the lithium earn-in joint venture Aterian holds with Rio Tinto in Rwanda? Given the intense presence of Chinese firms in Africa, would Aterian consider a partnership with a Chinese player?
Most definitely we intend to have new partnerships. We have a large portfolio of exploration assets, and our approach is to partner our assets to advance both the asset and the company’s capital position. We believe that we can leverage our assets in a way to allow and maximise value realisation while minimising shareholder dilution.
What would you say about the bullish sentiment in the copper market today? Is it here to stay? Can we expect prices to firm up?
Copper is without doubt a bellwether and is a cornerstone metal for the energy transition. And the global economy at large. Prices will likely remain strong, simply because medium to long term demand will remain firm, even with increased recycling capacity. There are looming deficits in supply on the horizon and if capital is not being deployed efficiently, as previously mentioned, copper prices will simply go higher and force the reallocation of capital. The BHP announcement targeting Anglo American is an example of capital recognising a set of undervalued assets. We expect this to eventually flow from the majors to the small caps. Exciting times.
What do you think about BHP’s proposal to acquire Anglo American, eyeing its Tier-1 copper assets?
Mega deals like BHP / Anglo underscores that Aterian Plc is operating in the right space, with the right business model. The world needs copper, lithium, and all the other energy transition enabler metals. And it needs them fast. Just look at the
reaction of the traded copper price to the news. These are exciting times to be operating in the sector, and at Aterian we have the added driver of responsibly delivering value add to the people of Africa.
Finally, moving on to lithium. Have you already considered potential partners for direct lithium extraction (DLE) technology? When could we expect further progress on the lithium projects in Rwanda and Botswana?
We are very excited with DLE technology and obviously eagerly follow the technological advances in the industry. At present though, we are focussed on doing the very necessary preliminary work to understand and establish the prospective resources in both Rwanda and Botswana. We eagerly await the results of the Phase I drill program in Rwanda which are likely to come in Q3 2024.
For the full PDF version of the Kallanish Power Materials interview with Charles Bray.
