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Mining for Returns: Private Equity’s Strategic Play in Metals & Mining

Mining for Returns: Private Equity’s Strategic Play in Metals & Mining

As global industries shift toward energy transition and infrastructure expansion, the metals and mining sector has emerged as a prime focus for private equity investments.

March 05, 2025 • Estimated Reading Time: 13 minutes

As global industries shift toward energy transition and infrastructure expansion, the metals and mining sector has emerged as a prime focus for private equity investments. From the surging demand for battery metals to the strategic push for supply chain localization, investors are positioning themselves in an industry that underpins the future of renewable energy, technology, and industrial growth. In 2023, the sector saw a record $10.52 billion in transaction value across 124 deals, signaling heightened investor confidence in critical materials like lithium, nickel, and copper.

While 2024 has seen a slowdown in both deal count and transaction value, this reflects a recalibration rather than a retreat. The fundamentals of the industry remain strong, with a growing emphasis on ESG-aligned investments, sustainable mining practices, and the localization of critical mineral supply chains. This report provides a deep dive into the key trends, regional investment hotspots, and strategic shifts driving private equity’s engagement in metals and mining, offering a roadmap for navigating this evolving landscape.

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PE investments in Metals & Mining sector

The metals and mining sector has become an increasingly strategic focus for private equity and venture capital investors, driven by global demand for resources critical to energy transition, infrastructure development, and manufacturing. Over the past five years, the sector has seen dramatic fluctuations in deal activity, with transaction values peaking at $10.52 billion in 2023, alongside 124 deals.

While 2024 data (through October) reflects a decline in both deal count (59) and transaction value ($4.76 billion), this moderation likely signals a recalibration rather than a retreat. Investors remain attuned to the sector's transformative opportunities, particularly in sustainable mining practices, battery metals, and supply chain localization. The following analysis unpacks key trends shaping this evolving landscape.

Key takeaways from chart

2023 as the High-Water Mark:
- With $10.52 billion in transaction value across 124 deals, 2023 marked the sector's most active year in the five-year period.
- The surge reflects heightened investor interest in critical materials like lithium, nickel, and copper, essential for renewable energy and electric vehicles.
2024 Decline Reflects Recalibration, Not Retreat:
- Through October, $4.76 billion in deals and 59 transactions were recorded, down significantly from 2023.
- This pullback suggests a focus on higher-quality opportunities amid rising interest rates and market volatility.
Shift Toward Strategic Investments:
- The slowdown in deal volume aligns with an increased emphasis on value-driven deals targeting assets with ESG alignment and long-term growth potential.
- Battery metals and greenfield mining projects remain particularly attractive to private equity due to their role in the energy transition.
Steady Momentum Post-COVID Recovery:
- After a pandemic-driven low of $1.9 billion in 2020, the sector rebounded strongly in subsequent years, highlighting the resilience of metals and mining in a volatile global economy.
Evolving Investor Playbook:
- Larger deals with fewer participants reflect consolidation trends as private equity firms build scale and expertise in the sector.
- Increasing interest from sovereign wealth funds and strategic buyers adds competitive pressure, elevating asset valuations.
Challenges in 2024:
- Inflationary pressures, operational costs, and geopolitical uncertainty are weighing on investor confidence, contributing to the reduced activity.
Outlook:
- Despite a quieter 2024, fundamentals remain strong. The metals and mining sector is set to remain a cornerstone for PE and VC investments, fueled by growing demand for materials critical to global economic transformation.

EU defying 2024 moderation

While global private equity and venture capital (PE/VC) investments in metals and mining moderated in 2024, the European Union defied the trend with a sharp spike in deal value. Total investments in the EU reached $4.19 billion across 14 deals, nearly doubling 2023’s aggregate transaction value of $2.23 billion despite a decline in deal count.

This divergence highlights the region’s growing strategic importance as it prioritizes securing critical mineral supply chains, driven by ambitious energy transition policies and geopolitical considerations.

Investors are increasingly focusing on European assets to capitalize on regional incentives and the global shift toward clean energy. Below is a detailed analysis of the trends shaping this regional surge.

Key takeaways from chart

EU Outpaces Global Trends:
- While global metals and mining PE/VC investments dropped from $10.52 billion in 2023 to $4.76 billion in 2024, the EU more than compensated with a nearly 88% increase in transaction value year-over-year.
- This demonstrates Europe’s rising focus on localizing critical resource supply chains to reduce dependency on foreign imports.
Fewer, Larger Deals in the EU:
- Deal count fell from 25 in 2023 to 14 in 2024, but the average deal size surged, reflecting a strategic shift toward big-ticket investments in high-value assets.
- These investments align with EU policies aimed at fostering green energy and sustainable mining practices.
Policy-Driven Momentum:
- The European Critical Raw Materials Act and increased subsidies for battery metals are likely driving the heightened investor interest in the region.
- Investments are targeting critical minerals like lithium, cobalt, and nickel, essential for meeting the EU’s ambitious electrification and renewable energy goals.
Geopolitical and ESG Focus:
- Rising geopolitical tensions and supply chain vulnerabilities are accelerating investments in Europe, seen as a stable and ESG-compliant market for metals and mining.
- Investors are responding to growing demand for sustainably sourced materials to align with global carbon neutrality targets.
Global Pullback Reflects Investor Discipline:
- The decline in global transaction value suggests a flight to quality, with investors prioritizing fewer, high-potential opportunities in key regions like Europe.
Outlook for the EU:
- With $4.19 billion already invested in 2024 (up to October), the EU is poised to remain a hotspot for metals and mining investments, fueled by government support and the growing imperative for secure supply chains.

Investment Funds overview

The metals and mining sector is drawing significant interest from private equity and venture capital, as evidenced by the scale of dedicated funds targeting this space. With a combined focus on critical minerals, renewable energy supply chains, and sustainable mining practices, the largest PE/VC funds are positioning themselves to capitalize on the industry’s transformation.

Notably, European-focused funds dominate in size, underscoring the region's alignment with ESG priorities and energy transition goals, while North American funds remain strong contenders, leveraging the region’s resource abundance and infrastructure.

Below is a breakdown of the largest PE/VC funds targeting metals and mining investments, showcasing their geographic focus, strategies, and scale.

Key takeaways from chart

KKR Global Climate Fund: Leading the Pack
- With a target size of $7 billion, KKR’s Europe-focused Global Climate Fund is the largest in the sector, reflecting Europe’s emphasis on green energy and sustainable resource extraction.
- The fund is still in the raising phase, signaling ongoing appetite for large-scale, ESG-aligned opportunities in the metals and mining space.
Orion Mine Finance Dominates North America
- Orion’s Mine Finance Co-Fund IV and Mine Finance Fund IV rank among the largest, with target sizes of $3 billion and $2.55 billion, respectively.
- These funds are in first and second close stages, indicating strong momentum as they focus on North American mining opportunities, particularly in battery metals like lithium and nickel.
Critical Metals Fund Reflects Europe’s Strategic Priorities
- Managed by InfraVia Capital Partners, this $2.18 billion fund underscores Europe’s commitment to securing critical mineral supplies for its clean energy transition.
- The fund is still raising capital, highlighting the region’s long-term focus on resource independence.
Smaller Funds Target Niche Opportunities
- The Taurus Mining Royalty Fund ($1 billion) and Noble Royalty Legacy Fund ($805.3 million) emphasize royalty strategies in North America and the US, catering to investors seeking stable, recurring revenue streams.
- Funds like the EBA Strategic Battery Materials Fund ($535.6 million) and Spicewood Mineral Partners II ($500 million) reflect rising demand for battery-related resources and niche mining projects.
Africa in the Spotlight
- The Sustainable Resources Fund ($400 million) focuses on Africa, signaling growing interest in the region's vast untapped reserves and its role in global supply chain diversification.
Trend Watch: ESG and Regional Focus
- European funds dominate in size, driven by ESG mandates and government incentives.
- North America remains a leader in royalty models and battery material investments, catering to both OEM and aftermarket demand.
- Africa's inclusion in top fund targets reflects its emerging importance in the global resource strategy.

Largest investments in the sector

The metals and mining sector continues to attract substantial private equity and venture capital investments in 2024, with high-profile deals showcasing the sector's strategic importance.

The largest transactions span critical materials, sustainable mining technologies, and green energy innovations, underlining the industry's role in the energy transition and global resource security.

Notably, H2GS AB’s $4.14 billion transaction reflects a growing appetite for sustainable steelmaking and low-carbon production solutions. Below is an analysis of the largest deals shaping the metals and mining investment landscape in 2024.

Chart breakdown

H2GS AB: A Landmark Deal in Green Steel
- At $4.14 billion, the acquisition of H2GS AB by Siemens Financial Services and other investors stands as the largest metals and mining deal in 2024.
- The transaction highlights surging interest in green steel production, driven by carbon reduction targets and increasing demand for sustainable building materials.
Wolverine Advanced Materials: Specialty Materials Gain Traction
- Acquired by Center Rock Capital Partners LP for $171 million, Wolverine Advanced Materials is an example of targeted investments in specialty materials for industrial and automotive applications.
- With Houlihan Lokey advising the seller, the deal reflects rising interest in materials innovation.
Niron Magnetics: Scaling Rare Earth Alternatives
- The $92.4 million investment in Niron Magnetics, backed by a diverse investor group including the University of Minnesota and Samsung Venture Investment Corp., emphasizes the push to scale rare-earth-free magnets, critical for renewable energy and electric vehicles.
Magnus Metal Ltd.: A Play on Advanced Metals
- At $74 million, Magnus Metal Ltd. secured funding from leading investors, including Next Gear Ventures and Caterpillar Venture Capital, showcasing a focus on innovative materials for construction and mining industries.
- The deal underscores the growing demand for advanced alloys and sustainable manufacturing processes.
Vulkam SAS and 44.01: Expanding into Niche Segments
- Vulkam SAS raised $37.2 million from a consortium of European investors, highlighting the focus on advanced manufacturing materials.
- 44.01, which raised $37 million, stands out for its focus on carbon capture and utilization technologies, signaling increased private equity interest in climate-focused innovation.

Trends Insights

Sustainability-Driven Investments:
- The dominance of green steel (H2GS AB) and carbon capture (44.01) investments demonstrates the critical role of sustainability in shaping deal flow.
Diverse Investor Pools:
- Transactions like Niron Magnetics showcase the blending of corporate venture capital, institutional investors, and sovereign wealth funds, reflecting the need for deep expertise and financial scale in key segments.
Europe’s Leadership:
- Many of the highlighted deals, including H2GS AB, Vulkam SAS, and 44.01, emphasize Europe’s leadership in green technologies and advanced materials, driven by policy incentives and strong ESG mandates.
Focus on Critical Resources:
- With rare earth alternatives (Niron) and advanced materials (Magnus), investors are positioning for long-term growth in areas pivotal to global supply chains and energy transitions.