NorthStar Impact – a leading positive impact fund investing in listed equities – recently hosted a webinar featuring Tim Lindley, Chair of Venture Minerals and James Clement, CEO of Vysarn, alongside Luke Fletcher, Director at mining research think tank, Jubilee Research Centre.
The speakers discussed a new standard of responsibility in critical minerals and water supply, and the distinct approaches being taken by Venture and Vysarn. NorthStar brought the speakers together as part of its Impact Alpha Webinar Series, which aims to connect and inform people from across their networks to encourage collaboration and action.
Claudia Kwan, Co-Portfolio Manager at NorthStar Impact and the host of the Impact Alpha series, shares a summary below.
Impact investing in critical minerals
Resource extraction presents an inherent dilemma. It can have significant negative impacts on biodiversity, First Nations’ communities, and water scarcity, and there are many challenges around remediation and tailings management. However, these same resources are necessary for a transition to a low-carbon economy with critical minerals, such as rare earths, essential for the development of renewable energy technologies.
Our investment objective at NorthStar is to invest in companies who have demonstrated their commitment to providing resources required for the energy transition according to a new standard required to ensure net benefits to people and planet. We assess the economic value creation for shareholders in conjunction with the social and environmental impact of the company including biodiversity and inclusion.
More broadly, we are advocating for capital to be directed to companies that have the potential to contribute to a national shift towards maximising the value of Australia’s natural resources, towards value-adding in the resource sector and away from a ‘dig and ship’ economy.
Venture Minerals
After seven years of running the fund, Venture Minerals (ASX:VMS) is NorthStar’s first investment into critical minerals. We gained confidence in the company due to a Board refresh and new Chair, and Tim Lindley’s public commitment to delivering the highest standards of reliability and responsibility in mining.
The key focus for Venture is the development of the Jupiter Rare Earths Project in Western Australia, which Tim spoke about on the webinar. It is located in a low-biodiversity area with no current native title claims and near other Australian rare earth explorers including Iluka and Lynas. This strategic position could help establish a rare earths precinct enabling Australia to capture more economic value and contribute to securing a supply of rare earths.
Vysarn
NorthStar has also invested in Vysarn (ASX:VYS), a company that helps its clients make better use of scarce water resources. On the webinar, Vysarn’s CEO, James Clement, highlighted the role his company plays in reducing the impacts of mining on water resources and spoke in detail about Vysarn’s Asset Management strategy, which includes a Joint Resource Agreement with the Kariyarra Aboriginal Corporation (KAC). This agreement establishes equal partnership to own, control and sustainably manage critical water assets across a strategically imperative 17,400 km² area of Kariyarra country. It’s a unique model that provides community with a 50% share in the economics of the project and sets a standard that could have intergenerational impact.
Moving forward
The webinar called for a new standard in mining with appropriate management of mine tailings, improved rehabilitation of mine sites and an end to mining in highly biodiverse areas. Our speakers emphasised the crucial role that institutional investors play in providing early-stage capital to miners. At risk capital needs to support companies that can demonstrate that they are moving towards this new standard. It is in the early stages that the crucial elements, including the mine design and construction plans, determine the overall environmental and economic impact of projects.
As impact investors, we are approaching our investment in this sector with the intention of helping achieve this new standard and supporting our portfolio companies to be leaders in achieving better social and environmental outcomes, alongside delivering attractive financial returns.
NorthStar’s next Impact Alpha Webinar
NorthStar’s next Impact Alpha Webinar will be on Tuesday 15 October. Claudia Kwan will be joined by Jay Weatherill (Minderoo Foundation) and Mathew Edwards (Nido Education) to discuss childcare in Australia – advocating for accessible and affordable high-quality childcare, sector wages, the Government’s recent announcement and the possibility of further policy change.
When: Tuesday 15 October, 11am – 12pm (AEST)
Where: Online Event
Click here to register
Equity Trustees Limited (“Equity Trustees”) (ABN 46 004 031 298) AFSL 240975, is the Responsible Entity for the NorthStar Impact Australian Equities Fund (“the Fund”). Equity Trustees is a subsidiary of EQT Holdings Limited (ABN 22 607 797 615), a publicly listed company on the Australian Securities Exchange (ASX: EQT). The Investment Manager for the Fund is North Star Impact Pty Ltd (“NorthStar”) (ABN 56 635 773 974), an Authorised Representative of Longreach Alternatives Pty Ltd (“Longreach”) (ABN 25 082 852 364) AFSL 246747.
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