Appian in talks with EBRD, others, on critical minerals funds

SYDNEY, Oct 30 (Reuters) - Appian Capital Advisory, a London-based private equity firm, is in talks with the European Bank for Reconstruction and Development (EBRD) and others for funds to invest in critical minerals projects, an executive at the firm told Reuters.

Discussions around a potential transaction were confirmed by an EBRD spokesperson on Thursday, and while the scale of investment under consideration was not stated, the potential transaction comes in the wake of Appian's $1 billion joint fund with the International Finance Corporation (IFC).

Appian's link with the IFC has acted as a blueprint for more deals to come, said Paulo Castellari, Appian's CEO for critical minerals.

Western countries are racing to diversify their supply chains for the metals that are vital to industries ranging from automotive to defence after Beijing rattled global markets last year when it imposed export curbs on permanent magnets and exposed their reliance on a single source.

Governments, sovereign wealth and development bodies are allocating billions of dollars to the sector and increasingly tapping specialist private equity firms like Appian to help them effectively direct capital.

Appian's relationship with the IFC has helped it to establish connections with other European institutions and development agencies, Castellari said.

"We have been getting really good momentum in Europe," he said.

"We announced the partnership with the IFC a year ago. But it's something that has been in the making for many years. So likewise other partnerships will take time," he said on the sidelines of the IMARC mining conference in Sydney.

Because Appian has built 14 mine projects over the last five years, it has shown that it can build them on time, at cost, safely and responsibly, he said, and that track record has opened the door to new partnerships.

Appian plans to deploy $5 ‌billion to $7 billion globally over the next 12 to 24 months, with roughly $2 billion for Africa, though policy uncertainty is pushing investment toward Latin ​America, CEO Michael Scherb said earlier this week.

"We can confirm that discussions with Appian are ongoing. We do not comment on potential transactions before they are concluded," a spokesperson for the EBRD told Reuters.

Appian will also look at investing further downstream into processing assets, Castellari said. Processing has proven to be a greater chokepoint for some types of critical minerals like rare-earth magnets, a point that was raised by France's top critical minerals trade official in Sydney earlier this week.

"The beauty with critical minerals is that on average the ticket size is smaller," so more projects can be funded, said Castellari, who previously served as CEO of France's Eramet.

(Reporting by Melanie Burton in Sydney and Ernest Scheyder in Houston; Editing by Thomas Derpinghaus)