PARIS, July 12 (Reuters) - Low prices for critical

minerals for the green energy transition, such as lithium,

cobalt and rare earths, are curbing efforts by the West to fight

the dominance of China in the sector, the CEO of U.S.

government-backed investment vehicle TechMet said.

Oversupply and weak prices are dampening cashflows of

Western start-ups, making it more difficult to compete with a

Chinese government investment strategy that takes a long-term

view, TechMet CEO Brian Menell said in an interview.

"A lot of the players outside of China are very subject to

market moves and sentiment and are therefore slowing down or

scrapping projects, but the Chinese are not slowing down their

investment," Menell told Reuters this week at the World

Materials Forum in Paris.

The price of lithium for instance has tumbled by

more than 80% since the beginning of 2023, while key rare earth

neodymium has halved in the same period, mainly

due to oversupply.

Both Europe and the United States are seeking to curb their

dependence on China, which supplies about 90% of global

processed rare earths and two-thirds of processed lithium.

Privately-held TechMet has a valuation of more than $1

billion and has stakes in 10 companies, including Brazilian

Nickel, Cornish Lithium and Rainbow Rare Earths.

TechMet plans to use the market weakness to invest in more

firms, including those involved in lithium and tin.

"If you have money, it's a massive opportunity because

there's a lot of short-term stress," Menell said.

Despite a tough funding environment, TechMet is raising an

additional $300 million, which Menell expects to finalise in a

matter of months.

Some funds may also have to support existing companies, he

added.

"Some of our projects may need more investment from us than

we expected because cashflows have been reduced by the low

prices."

The U.S. government's International Development Finance Corp

is one of TechMet's biggest investors. Other major shareholders

are commodity trading house Mercuria and the company's

management.