ISIF to invest €30m in mining fund backed by Lionhead private equity

● Injection set to create highly skilled jobs and comes as EU looks to diversify from China’s supply-chain dominance, writes Sean Pollock

The Ireland Strategic Investment Fund (ISIF) has announced a €30m investment into an Irish fund focused on investing in mining.

The fund ISIF will be investing into is the Irish Minerals Fund, which is sponsored by mining-focused private equity firm Lionhead Resources. It will seek minority investments in environmentally responsible mining investments in the Republic.

The Irish Minerals Fund will focus its investment strategy on projects with proven mineral deposits. These include those with zinc as the primary product.

Nick Ashmore, the director of ISIF, said the investment was significant and promoted the “responsible extraction of key minerals”.

“It supports indigenous business in a sector where Ireland has a natural advantage. An added benefit of this investment is the ability to support regional development through high-value, skilled jobs in rural locations. It’s an investment that combines benefits for the economy with climate action benefits and we expect ISIF’s capital will make a real difference.”

Finance Minister Michael McGrath also commented on the investment, saying it would help boost the mineral extraction sector. He noted Ireland had a long history in the sector, with the investment set to create highly skilled jobs in the regions.

Lionhead Resources is a mining-focused investment manager with bases in London and South Africa. It invests in mines that deliver future minerals essential for transitioning to a low-carbon, greener economy and developing a rapidly urbanised global population.

The investment comes as the EU Council gave final approval last month to its Critical Raw Materials Act (CRMA) as it looks to diversify away from Chinese supply-chain dominance. Final approval is the last stage in the process to formally implement the act.

The EU is looking to move away from Chinese market dominance in the mining of critical minerals and the production of energy transition technologies, particularly electric vehicles (EVs) and renewables such as solar power.

European Commission President Ursula von der Leyen criticised the swathes of cheap Chinese EVs “flooding” EU markets, saying their prices are kept “artificially low” by subsidies. Last week, the FT reported that European ports were being turned into car parks after industry executives pointed to a pile-up of Chinese electric cars.

Von Der Leyen also announced that the Commission would launch an anti-subsidy investigation into EVs manufactured in China.

The final text of the CRMA identifies two lists of materials – 34 critical and 17 strategic – that are crucial for the green and digital transitions, as well as the defence and space industries.

The act will also establish three benchmarks for the supply and processing of critical minerals used in the bloc. It stipulates that 10pc of supply should come from local extraction, with 40pc to be processed in the EU and 25pc to come from recycled materials.