Q&A with Paul Schaffer, Managing Partner, Oryx Global Partners
Let’s start with some background on Oryx Global Partners and your team.
Oryx is a specialist investment firm dedicated to facilitating the energy transition and securing supply chains through our strategic investments in the minerals value chain.
Our team is made up of a whole set of experienced investors with long track records between leading mining private equity funds, international asset managers, and global mining companies.
We’re looking to invest across the whole minerals value chain globally, in energy transition and critical minerals assets. That means not only investing in the mines, but also in processing through to recycling and all the supporting infrastructure and services.
As investors, we’re looking to partner with groups to provide our value-add capital to assist with development projects, expansions, turnarounds, restarts. And our team are able to provide our operational insights and assistance to portfolio companies to help them deliver on the strategy.
The last thing I’ll note is, as a team, we’re also committed to being responsible and sustainable investors and operators to maximize investor returns and ensure our companies create a net positive impact on the ground.
The group is headquartered in Abu Dhabi, which is really a growing investment hub for the resources industry today. What makes Abu Dhabi, and the Middle East in general, a preferred jurisdiction for funds to be set up right now?
We’re based in the Abu Dhabi Global Market (ADGM), which is the financial center for Abu Dhabi, and is a business-friendly environment with a strong regulatory framework. The Gulf as a whole, but particularly the UAE, is an established hub for investment and capital, and it’s emerging as a strategic and neutral hub in the shift of critical mineral supply chains. That’s important for groups like ours who are in the global commodities business, and we feel we are well positioned to action global opportunities being based here.
Oryx Global Partners is focused on investing to facilitate the energy transition and to secure strategic supply chains. Can you talk about this focus for the company and how this influences your investment strategy?
Supply chains are shifting to ensure security of supply of critical minerals to host nations, and that means significant investment is required in various parts of the value chain to achieve that. On top of that, the energy transition, and electrification more broadly, is ongoing at a rapid pace and, importantly, it’s entirely dependent on significant new supply of minerals. So, trillions of dollars of investment is needed to achieve these objectives of securing supply chains and facilitating the energy transition and electrification.
That’s why we target opportunities across the value chain in energy transition and critical minerals assets. Ultimately, we’re trying to position our investments to align with supportive macroeconomic and geopolitical tailwinds.
As you mentioned, the energy transition is one of the key themes for the industry today. Can you talk about some of the more interesting trends or opportunities you’re seeing in this space at the moment?
There are a few things that come to mind. First, as supply chain security has become more and more critical, we see a large opportunity set not just in the mines themselves, but in the rest of the value chain. Things like processing, recycling, and the infrastructure and supporting services required to develop and sustain those changing supply chains. That’s drawing more and more attention lately.
Second, in terms of commodities, whilst some receive all the love and attention, like gold right now with its theoretically uncapped price potential, we focus instead on those that might be overlooked or, at the very least, whose price is underpinned by fundamental long-term supply deficits where we see deep value. And that ranges from things like copper to some more niche commodities like those found in mineral sands.
Then last of all, and more generally, we see a lot of opportunity in equity investments due to the lack of equity capital available to small and mid-cap companies in the sector.
We think there’s a growing role for patient private capital that allows companies to deliver on their long-term strategies and avoid the burdens and short-term nature of public markets. And unfortunately, these days, public markets just seem to be more supportive of large established multi-assets operating companies.
You spoke earlier about your strong focus on responsible and sustainable operations and how at Oryx you focus on creating a positive impact with your investments. Can you talk about why the special focus on this and how Oryx is looking to lead the investment community in this space?
This is something we feel very passionate about. To us, this very clearly benefits all stakeholders and everyone should do it. When you invest in the mineral sector, particularly in a way that helps facilitate the energy transition and secure these strategic supply chains, and you approach your investments in a responsible and sustainable way, which means, amongst other things, avoiding, minimizing, and offsetting environmental impact, and then ensuring you add value to the governments and communities in which you operate through things like social engagement, job creation, infrastructure development, and increased tax revenues amongst other things, then our view is we can and should almost inherently create a massive positive impact.
It’s not only the right thing to do, but from a company’s perspective, being a responsible and sustainable operator helps you reduce frictions and barriers to success, so you face fewer issues, therefore de-risk your operations, and ultimately it allows you to realize more value faster. So it’s a win-win – it’s mutually beneficial to the investors as shareholders and to broader stakeholders.
So at Oryx, we’ll lead by example through our actions and we hope that the industry as a whole will see the benefit it provides and move towards adopting this philosophy and approach over time.
Finally, can you outline any key plans for Oryx for the coming year? Is there any exciting news that we should be on the lookout for?
We continue to grow quickly as a firm, as we add more people to the team, and we’re always looking at interesting investment opportunities. There are some potentially very attractive opportunities we’re looking at right now, but it’s probably too soon to talk about them. So, I might have to save that until next time.
