Abu Dhabi sovereign investment company ADQ and metals and materials investment firm Orion Resource Partners have entered into an agreement to establish a new Abu Dhabi-based joint venture (JV) that will make strategic investments in the metals and mining sector to enhance supply chain security locally and globally.

The JV partners are committed to deploying an initial $1.2-billion of capital over the course of the first four years.

Based out of Abu Dhabi Global Market, Orion Abu Dhabi will work towards investing in mining companies through multiple asset classes, including equity, senior debt and production-linked instruments, such as royalties, streams and offtakes.

The 50:50 JV will invest in metals and mining companies and acquire the physical offtake of strategic materials crucial to supply chain security, the ADQ and Orion say.

The JV will target investments in a diverse range of metals and minerals in various geographies, initially focusing on emerging markets in Africa, Asia and Latin America.

As part of its investment strategy, Orion Abu Dhabi will secure long-term agreements to source essential minerals, including copper, high grade iron-ore and other key commodities important for global supply chain security and the energy transition.

In line with ADQ’s mission to invest in the development of global business platforms delivering value and long-term financial returns for Abu Dhabi, the JV with Orion will be part of ADQ’s recently established Infrastructure and Critical Minerals cluster, the sovereign investment company says.

While also encompassing ADQ’s investments in prominent local and international firms such as Alpha Dhabi Construction Group, the cluster aims to contribute to the resilience of the local economy while enabling the continued growth of the wider investment portfolio in other sectors.

Downstream sectors such as manufacturing and clean energy are expected to directly benefit from the sourcing of critical raw materials through Orion Abu Dhabi, ADQ says.

Additionally, as it builds its investment portfolio over the next years, the JV is set to derive added value from ADQ’s strong global reach and standing as well as Orion’s deep sector expertise and transactional excellence, the sovereign investment company says.

ADQ manages a portfolio of companies across key sectors of Abu Dhabi’s rapidly transforming economy, including energy and utilities, food and agriculture, healthcare and life sciences and transport and logistics.

Further, the new office in Abu Dhabi will expand Orion’s international presence to five offices globally. It will be headed by Philip Clegg, who has served as managing partner at Orion and brings more than 20 years of experience in the natural resources and mining investments to his role.

“As a long-term investor, we are committed to ensuring that our portfolio companies are set up for success in an ever-changing operating environment. The establishment of Orion Abu Dhabi is a natural step for us, allowing our companies to execute their ambitious growth plans with the assurance of a resilient supply of essential resources,” says ADQ deputy Group CEO Hamad Al Hammadi.

“We are confident that Orion’s specialist expertise and strong global network will be a great asset to this partnership and look forward to our shared journey,” he adds.

Over the past decade, Orion has partnered with leading corporations to finance and advance the sustainable production of the resources that are essential to our society, says Orion Resource Partners founder and group CEO Oskar Lewnowski.

“Through Orion Abu Dhabi, we are bringing our successful partnership model to Abu Dhabi to support the security of critical material supply chains, global decarbonisation efforts, and to contribute to long-term value for the United Arab Emirates (UAE) economy,” he says.

Meanwhile, Clegg says Orion Abu Dhabi is dedicated to investing responsibly in best-in-class mining projects that produce the materials that underpin global economic growth, focusing on megatrends including urbanisation, societal development and the energy transition.

“We look forward to delivering a meaningful contribution to Abu Dhabi’s economic vision through the development of resilient and adaptable supply chains and contributing to the UAE's emerging role as a leader in the global green economy,” he adds.