By David Ogbonna

The Dubai Investment Fund (DIF) will participate in the new ‘Ignitica Minerals’  project, which will develop deposits and mine niobium in Nigeria and Brazil.

Since this rare-earth metal is mainly used in the aerospace, aviation, nuclear power and electronics industries, we can assume that the company expects to diversify its profits by carving out a new niche in this market.

The Ignitica Minerals will start its operations from the year 2025 and will invest approximately $430 million dollars in the first five years. The project will aim at establishing a first-class open-cast mining facility in Minas Gerais, Brazil. In Nigeria, a new type of industrial zone will be constructed, while the newly formed company will be responsible for the mining of rare earth elements. At the end of the period of operations, the mine will produce about 5,000 tons of rare minerals per year.

At least 1,500 new jobs are expected to be created during the construction and development phases of the project, and about 800 new jobs will be created once the project is operational.

The company’s choice to invest in niobium deposits and mining in Brazil seems justified, since Brazil is now home to the world’s largest deposits of these ores. As for Nigeria, its niobium and tantalum reserves are much smaller, but there is potential for opening new mines in the region. 

According to our analysis, the fund’s investment history shows that DIF has a history of investing in companies in the heavy industry sector. Such investments have included the purchase of shares in Statoil and Petrobras, major oil and gas companies involved in the production, refining, transportation and sale of oil and gas in Latin American, African and European markets, which was made in 2002.

Besides, in 2008, the company put some of its cash into the shares of TSMC, the most valuable semiconductor company in the world, as well as BP, a giant in the oil and gas markets.

In 2011 they made equity investments and took a stake in China Construction Bank, in 2014 they bought shares in ArcelorMittal, the world’s second-largest steel producer, and in 2016 they made an equity investment in China Steel Corp.

An examination of their investment activity shows that the fund has regularly expanded its portfolio with investments in the oil and gas and steel industries and has now taken another step in that direction. Most likely, this may indicate that large investment companies are not yet ready to abandon investing in traditional energy assets.