NEW YORK: Private equity firm Global Emerging Markets Group said it plans to invest $450 million in lithium startup EnergyX, which is trying to revive its business prospects in Bolivia as it prepares to go public by 2024.
EnergyX is one of several companies developing its own version of a direct lithium extraction (DLE) technology, aiming to produce the metal less expensively and with a smaller environmental footprint than traditional open-pit mines and evaporation ponds.
None of these technologies, including EnergyX’s, have worked at commercial scale. Still, automakers and investors believe one or more DLE technologies could ultimately boost global lithium production. Ford Motor Co (F.N) inked two DLE-focused supply deals on Thursday.
“A tech-heavy ESG company mining in the emerging markets is a rare find,” Global Emerging Markets Group’s (GEM) Jonathan Collins said of EnergyX.
EnergyX will have 36 months after it launches an initial public offering to draw from the $450 million that GEM has committed. GEM will receive shares reflecting the value of EnergyX’s stock at the time of each drawdown. GEM will also receive warrants in EnergyX at an undisclosed strike price.
Teague Egan, EnergyX’s chief executive, said the funding will give the company a “war chest” to develop lithium projects in emerging economies.
GEM deployed a similar investing strategy with Surf Air Mobility Group in 2020, though the electric jet company has yet to go public. It also invests in pawn shop operator Pawn Plus Inc and other companies.
EnergyX, which previously raised $15.5 million via a private funding round and crowdfunding, said on Thursday it separately plans to raise up to $75 million in a private offering to retail investors.
Bolivian officials disqualified EnergyX this year from a DLE technology selection process after EnergyX submitted production data 10 minutes after the deadline. Egan took responsibility for the delay.
Earlier this year, the company had sent a shipping container filled with its DLE pilot equipment from Texas to Bolivia via the Panama Canal.