The co-founder of a US venture capital firm looking for more opportunities in the mining technology arena sees a group controlling more than half the land on which the world’s “transition” minerals projects occur becoming a bigger factor in the rate of the industry’s technological progress.
Batchimeg Ganbaatar, co-founder and managing partner of Nomadic Venture Partners, told InvestMETS.com indigenous people around the world had various incentives to push for innovation that helped protect historically significant lands while they generated economic and other benefits.
She said unique ties with the land were based on religion, ancestral sacred sites, medicine, and other factors.
“Indigenous people care about nature and preserving the environment they rely on for food and simply survival,” she said.
“They are also not tied to the way things have been done in the past across the mining industry.
“Research shows that 54% of the world’s transition minerals projects occur on or near indigenous lands. The number climbs to nearly 70% when unrecognised indigenous peoples and peoples without recognised land tenure are included.
“Given the history of the industry, mining represents a threat to their land, water, history, cultures and gender roles, but it also offers access to economic opportunities.
“If innovation can reduce the industry’s reliance on water, eliminate tailings waste, [produce] precise exploration tactics, develop surgical mining operations that reduce pollution around local areas, reduce safety hazards and so on, perhaps there would be less pushback from local communities.
“If this industry is going to ramp up on supply of the minerals the world needs, it’s going to have to find a way to address land stewardship challenges; not just environmental, but also social.
“This is fundamentally about the industry’s ability to recognise indigenous people as the stewards of land and work with them as partners rather than see them as something they have to deal with. Mining needs to be more intentional with how they build these partnerships and truly treat them as such to unlock the resources in a collaborative way.”
Nomadic Venture Partners was established in 2021 by Ganbaatar and Tem Tumurbat, who worked previously at Resource Capital Funds (RCF), Newmont Mining Corp and AngloGold Ashanti. Both born in Mongolia, they grew up and studied in the US, and both have been start-up founders.
Ganbaatar, who is based in Chicago, has a background in marketing communications and has worked with early-stage VCs and tech start- ups. She also spent more than five years at Boeing.
They intend to significantly expand the firm’s current investment portfolio after recently closing a new fund.
“We’ll invest in about 15 companies and then go on and raise the next fund and keep going,” Ganbaatar said.
“Our primary sector is the mining sector. But others we are targeting include heavy transportation and manufacturing.”
Nomadic wants to “accelerate decarbonisation” through pre-seed to series A investments in predominantly digital offerings.
“Typically, the types of companies we’re looking at range from pre-revenue to early revenue,” Ganbaatar said.
“The types of tech companies we’re targeting are both software and light hardware. For example, IOT, sensors, as well as small-scale modular units with capex topping at a few millions of dollars. We’re not investing in capital intensive technologies that would cost hundreds of millions of dollars.
“In terms of segments, we’re focused on drilling and blasting, hauling, as well as comminution. Because of our focus on sustainability and decarbonising mining, we’re also looking at secondary sources of metals extracted from tailings and other waste sources.”
Tumurbat wrote in a company post: “Rapidly increasing minerals supply will require pulling three levers at once. One, [the industry needs to] discover, plan and build 300-plus new mines as fast and as sustainably as possible. Two, efficiency: increase the productivity of existing mines, for example with digital solutions [and by] reusing and recycling mining waste. Three, innovation: leverage new technologies across the value chain to unlock net new sources and approaches.
“Mining needs its own fracking [moment], just like oil and gas in the 2000s.”
Ganbaatar said early-stage funding and expert advice remained a gap in the mining innovation ecosystem. Access to mining and metals sites and facilities was a continuing issue for newcomers, to help them break through and scale.
“I think adoption is definitely a hurdle. I do think the industry has more pressure. There’s more scrutiny from different stakeholders,” she said.
“We’ve developed a broad network of partners including many mining companies, consultants, engineering firms, OEMs, commodity traders, financiers, etc, who are eager to help us by being resources to us and our portfolio companies on a variety of needs and business challenges.
“Some of these challenges include obtaining ore samples to test their novel technologies or getting access to mine sites to complete a pilot to getting introduced to potential customers or securing talent to help them execute on their growth strategies.
“Depending on the company’s specific needs, we can pull on the right industry partners whose profiles match the needs to help get support.
“Innovation is going to help overcome some of the challenges that the industry is faced with.
“There’s a lot of opportunities ahead.
“We see an opportunity [and that] is potentially small-to-medium-sized mining companies that are private and can move quickly, where they have the nimbleness and flexibility to test new technology. And for them it’s an opportunity to get ahead and be more competitive within this large arena.
“Our hope is that we create more of those connections.”
Nomadic’s principals are seeing more mission-driven investors and foundations, including environmental organisations, pay attention to improving the mining industry given the important role it has to play in the clean energy transition.
“They are now investing in technologies in the mining sector,” Ganbaatar said.
“Some of these groups historically would be protesting outside of mining companies.
“I think they’re also aware of the humanitarian challenges, and a lot of the issues that the mining industry is currently dealing with.
“I’m sure innovation plays a role in solving some of these issues.
“I do think there’s also a downside. There are a lot of generalist investors out there who are investing in the space. And if those companies don’t prove to be valuable and potentially shut down, and investors lose their money, right. There’s going to be some heartache and in the long term more investors will shy away from investing more into mining technology companies.
“We have an opportunity to catch it before that happens and those current investors who are more generalist turn away from the industry long term.”
