A Tech-Savvy Mining Venture
Venture-capital firm fundraising is at a 9-year low. Earlier this year, 2022 fourth-quarter results revealed what most of the tech industry had already sensed – a 65% drop in new funds raised compared to 2021. Fund-backers only invested in 226 venture-capital funds in the 2022 fourth-quarter marking the fewest for that end-of-year period since 2012. In summary – a dry-up that continues to have the industry spooked.
Yet, in every down cycle, there are always a few surprises. But this surprise fuses a rather old industry with a very new one – a mining startup. KoBold Metals out of Berkeley, California uses artificial intelligence to explore cobalt, lithium, copper, and similar metals. The start-up is Silicon Valley’s latest unicorn (+ $1 billion valuation) and some prominent KoBold backers include none other than Bill Gates.
As part of Gates’s climate-tech venture-capital firm, Breakthrough Energy Ventures, KoBold’s latest round of fundraising netted roughly $200 million. Breakthrough Energy invests money on behalf of other high-profile figures such as Jack Ma and Jeff Bezos. KoBold also attracted the famed venture-capital firm Andreessen Horowitz, BOND, and T. Rowe Price.
KoBold is making a splash at a propitious time. Investors are keen to remain committed to a greener economy where carbon-removal projects, battery production for electric vehicles, and clean hydrogen initiatives are front and center. These all require metals that are becoming increasingly difficult to find. Couple this with advances in artificial intelligence and the merging of the two worlds is an ideal match in 2023.
KoBold’s algorithms are working and a recent nickel sulfide yield in Quebec grabbed investor attention. In a region that was not accustomed to overly abundant yields, KoBold managed to yield more than the industry average for Quebec. The company is operating in North America, Australia, and Africa, and in December plunked down $150 million to purchase a controlling stake in a Zambian copper deposit. Traditional methods of mining have not changed much and the success rates of locating new deposits are declining. Technological breakthroughs are desperately needed, especially against a backdrop of more metals to build a greener future.
Although KoBold’s influence continues to grow, they are expanding with an eye on partnering with some of the industry’s leading minters. For example, cooperation with BHP and Rio Tinto leverages tremendous mining expertise that KoBold can certainly benefit from while continuing to fine-tune their exploratory AI.
It’s heartening to see collaboration between two industries that will undoubtedly help the world advance in a more sustainable direction. We cannot relegate mining to the proverbial dustbin because new technologies cannot yet replace them. But working together to make the current process cleaner and more efficient is a laudable goal.
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