Can you tell us about Tembo Capital’s focus and strategy?
Tembo Capital is a long-term investor focused on identifying and supporting mining projects throughout their lifecycle. We target quality assets, quality management teams, and projects with strong growth potential which can become significant operations. Tembo provides both the capital and technical expertise needed to derisk projects and unlock value. We are flexible on deal structure – typically investing via significant equity stakes, convertible notes, and royalties. Rather than seeking a controlling stake in our investments, we usually partner closely with management teams through a collaborative approach, providing technical and financial/strategic input to help grow the companies.
Tembo Capital has a deep focus on African projects. What makes the continent significant for you?
Tembo was originally an Africa focused fund, but our most recent fund has a global mandate. Africa is one of the most resource-rich continents with great untapped mineral potential, and therefore there are always opportunities. It is a region where we see a lot of underexplored geological opportunities and it has the ability to supply the growing demand for critical minerals. We have been less active in Africa recently, but we would be open to investing in Africa for the right project or opportunity.
What do you look for in a potential investment? How do you assess different opportunities?
Whether in Africa or elsewhere in the world, we have the same approach when assessing opportunities, focusing on a few key areas. First, we don’t tend to stray far off the fairway in terms of commodities; we’re largely focused on copper, gold, lithium, and other battery and base metals. Second, is asset quality – projects with high-grade resources, scalability, and strong economic fundamentals. We also prioritize experienced management teams with a proven track record on similar assets. We specifically look for assets which have the potential to grow both the resource base and the project’s NPV over time.
We have quite a rigorous assessment process, driven by our technical team, which includes geologists, engineers, and financiers. We conduct detailed evaluations of projects, benchmarking them against peers and looking for investments which can meet our return criteria.
What would you tell investors who are interested in getting involved in the African market? What are key things to know about navigating investments into Africa?
People often tend to generalize about Africa but, in reality, there are 54 countries across the continent, each with its own nuances and risk profile. Investors need to understand the particular country’s profile, political situation, and mining code. Second, infrastructure is key, especially for base metals and bulk commodities. Certain African countries can come with increased political risk but this can sometimes be partially offset by other factors, for example the speed of permitting and project approvals which can be much quicker than North America and other jurisdictions.
Africa is set to play a crucial role in the energy transition, with a significant amount of critical minerals found across the continent. What are the key opportunities you’re finding across the critical minerals space?
Africa is home to vast resources of critical minerals, including copper, lithium, cobalt, nickel, graphite, and many others, all of which are essential for the global energy transition.
We are seeing a push from some Western countries to reduce reliance on China in their supply chains for critical minerals. This provides Africa with a significant opportunity to become a key player in the global critical minerals supply chain.
How can investors be sure they’re entering the local market in a productive way that benefits local communities?
We spend a lot of time looking at the ESG metrics of our investments and we look to partner with companies which have strong local community relationships – this is increasingly important, and can significantly reduce project risk. Most companies will tell you that they have great community and local relationships, so its important to try and understand what that actually means on the ground in terms of local employment, skills development and community/stakeholder engagement. It’s important to look for mining companies that have these values fully embedded in their culture.
