Mine or Be Mined

Procurement teams at large car companies told one founder exactly how they buy raw materials. They buy the cheapest, and they do not care whether it comes from Europe or China. The founder, who is scaling a metals-processing technology, drew the conclusion at the Mine or Be Mined Ripple. If a European process ever matches China's price, China will cut its price again. That problem, more than geology, ran through the hour.

Johan Attby of Norrsken Evolve said nobody much cared about critical raw materials five years ago. Then came the pandemic, Russia's war on Ukraine, on-off US tariffs and a war with Iran that blocked the Strait of Hormuz. Industrial companies now ask what happens if China, which processes most of the world's copper, decides Europe gets none. Johan saw three strategies for Europe, to dig, to ally and to substitute, and said it needs all three. Mining sets the floor, alliances buy time, and substitution and recovery are the only parts with venture-scale returns. Doing only one, Johan said, means choosing "which decade you lose". Lasse Köhler of EIFO, Denmark's sovereign wealth fund, asked whether the EU's Critical Raw Materials Act is realistic when China has a 20-year head start.

Nobody pays for independence

Johan's fund backs only technologies that can match the price of the incumbent, which rules out many. Corporates see the geopolitical risk, Johan said, but their procurement teams do not own it, and nobody is yet willing to pay for independence. Even a French portfolio company that recycles copper to a grade good enough for motor wiring, now a favourite of industrials, aims for price parity. The processing founder wanted governments to secure long-term contracts for local supply, because without them new technologies cannot be financed. Established players had told the founder that pricing is why they hesitate to invest.

An investor proposed a way round it, a contract for difference that they had discussed with senior officials in Brussels. The state would guarantee that a corporate buyer of a novel material pays only today's market price. In return the buyer keeps paying the market price whatever happens. If China cuts supply and prices shoot up, the state recoups its money and possibly more. Solar was once ten times more expensive, the investor said, and heavy investment brought it down the learning curve. The investor predicted with near certainty that China will restrict supply, and looks for processes whose inputs, such as mine tailings or industrial byproducts, cost nothing or less.

I would argue that they're effectively the same thing. Both of them are separations.

The first-plant gap

Cheap inputs do not solve financing. Johan described a portfolio company making climate-neutral cement from a steel byproduct. It holds offtake agreements for twice what its first plant can produce and needs hundreds of millions of euros to build it, yet banks balk at the escape clauses in those agreements. Johan hoped some of the €22.5bn behind the Critical Raw Materials Act would go to that gap. One of the hosts cited a US Department of Energy report on first-of-a-kind plants whose capital stacks varied widely, some with 30% grants and some with 50% debt. Once a first plant proves demand and unit economics, cheaper debt follows.

The processing founder disagreed about the banks. Offtakes with escape clauses still attract debt, they said, only at a higher rate. The founder had just raised money for a first-of-a-kind plant with about 40% coming from grants, and pointed to the European Investment Bank for the riskiest capital and to a €13bn German programme to rebuild a former coal-mining region. A US-based investor said start-ups there win grants by applying with junior miners, now that Washington has announced about $100bn for a domestic chain from mine to magnet.

Johan suggested the public sector could itself buy these offtakes, since Europe's governments are large customers, but tender rules favour the cheapest bid. Incumbents with 40-person government-affairs teams work to keep those rules as they are, Lasse said. An angel investor who has worked with EU funding for more than 20 years said the people to reach are those who write tender specifications, not legislators.

What Europe has in a blockade

Recycling looked harder up close. Johan's fund is looking at textile recycling and had found it far harder than a pair of jeans suggests. Recycling battery black mass, where the fund has also invested, is really hard too, Johan said. Better sorting technology could bring the cost down.

A founder developing well-field mining, which aims to cut the capex of a mine from billions to single-digit millions, refused the choice between mining and recycling. "I would argue that they're effectively the same thing. Both of them are separations." Substitution only shifts demand onto other materials, the founder said. And when Europe is desperate and cut off from supply, prices stop mattering. What matters is what it has to scale from. By the founder's figures, Europe uses about 4.1 million tonnes of copper a year. Recycling could supply about two million, tailings about five years' worth and the ore in the ground about a century. China may set the price in peacetime. In a blockade, the founder's numbers point back underground.

This Ripple was hosted by Lasse Köhler (EIFO) and Johan Attby (Norrsken Evolve) at The Drop 2026 on 16 September.