Canadian miners need more money to cash in on the critical mineral rush. With Chinese investments out of the question, the Middle East is stepping right up.
What happened: Qatar’s sovereign wealth fund invested US$500 million in Canadian miner Ivanhoe Mines in exchange for a 4% stake. In addition to funding critical mineral exploration in countries like Angola and Zambia, the deal will shake up Ivanhoe’s investor base, over a third of which consists of China-based companies.
Why it matters: Middle Eastern wealth funds and Canadian miners are, in theory, a perfect match. The former are looking to diversify investments away from oil and gas, while the latter are looking for non-Chinese cash to back over 100 mineral projects over the next 10 years.
- The Gulf also has untapped mining potential. Ivanhoe’s Robert Friedland told the Financial Times that “most of the world’s geologic potential lies in Islamic countries.”
Zoom out: The Saudi wealth fund could emerge as the biggest player. It took a 10% stake in Canada-based Vale Base Metals through its mining venture last year, and the kingdom’s industry minister has explicitly said that Saudi-backed funds are eyeing Canadian miners.
Yes, but: Geopolitical relations can turn on a dime, and Gulf state cash might one day be considered a security concern à la Chinese investments. After all, it wasn’t long ago that Saudi Arabia and Canada were in a spat, and a Saudi org posted this infamous tweet.—QH