Speaker 1: With Laurent's segle and from London and Gerard Reed from Berlin.
Speaker 1: This is redefining energy today. I'm redefining energy. We're going
Speaker 1: to talk about critical minerals and a particular those in
Speaker 1: relation to batteries.
Speaker 2: Yeah, because there are hundreds of definition of critical minerals.
Speaker 2: If you look at the Europe and the US, they
Speaker 2: have a list, but of course it's not the same
Speaker 2: thing on the list. And right now you've got the
Speaker 2: rare earths and everybody's getting very excited about rare earths
Speaker 2: between Greenland and Ukraine. And so at some point we say, look,
Speaker 2: we are not specialists. We need to bring in a
Speaker 2: specialist to discuss critical minerals, how critical they are.
Speaker 3: Yeah.
Speaker 1: I think that the word critically is quite interesting around
Speaker 1: because it means different things to be people. So there's
Speaker 1: critical way you define it as rare, whether it's not
Speaker 1: a lot of something or good in the sense that
Speaker 1: there might be a lot of us, but there are
Speaker 1: only in a few countries, and those particular countries might
Speaker 1: be countries that are unstable or countries that you don't
Speaker 1: want to be the Panada. So it's a very interesting
Speaker 1: phrase that critical resources.
Speaker 2: Our guest today is Richard Ted. Richard is the chief
Speaker 2: investment officer in a company called tech Met. Now tech
Speaker 2: met is very interesting in the sense that it's originally
Speaker 2: a joint venture between the Pentagon and Energy and Minerals Group.
Speaker 2: Now it has really grown attracted a lot of new investors,
Speaker 2: including Golf investors. The mission of tech met is to
Speaker 2: develop a non China based supply chain in critical minerals.
Speaker 2: So they've invested in Littal, nickel, cobalt, rearers, and of
Speaker 2: course recycling, so there's a bit of processing as well.
Speaker 2: We're going to talk about all of those aspects. Before
Speaker 2: we do it, I just want to make a little
Speaker 2: caveat the global legion market into A twenty four was
Speaker 2: ten billion dollar, the rare earth market was fifteen billion dollar,
Speaker 2: the copper market was two hundred and fifty billion dollar,
Speaker 2: and your market three trillion dollar.
Speaker 1: So critical but niche, Well, let's bring them on the show.
Speaker 2: Richard, Welcome to the show.
Speaker 3: Thanks, Laron, really excited to be invited on. I'm a
Speaker 3: big fan of what you guys do.
Speaker 2: We are a big fan of what you're doing because
Speaker 2: critical materials people talk about critical matteral all the time.
Speaker 2: A lot of people get very heated around Joe politics,
Speaker 2: rare Earth and all those criticulats. Can you please explain
Speaker 2: a bit what's going on and what are those critical materials?
Speaker 3: Yeah? I think the word critical minerals of critical materials
Speaker 3: has been thrown around so much now that it's almost
Speaker 3: lost meaning because everyone projects onto that phrase what they
Speaker 3: wanted to mean. In the public sphere, when it's used,
Speaker 3: it often leads to more confusion than clarity, you know.
Speaker 3: Simply put, a critical material is something that you're worried
Speaker 3: you're not going to be able to get in the
Speaker 3: future at its basic level. But I think we have
Speaker 3: to kind of unpack the term a little bit into
Speaker 3: two kind of major categories. One is scarcity, and the
Speaker 3: scarcity of minerals is simply an economic issue. The last
Speaker 3: barrel of oil will have an infinite price, the last
Speaker 3: kilo of lithium will have an infinite price. The price
Speaker 3: mechanism over the long run will ration ultimately every resource
Speaker 3: that humanity needs for economic activity. If, for example, the
Speaker 3: lithium price ran up to hundreds of thousands of dollars
Speaker 3: per kilo, we could set up a dle project on
Speaker 3: the ocean and just process lithium from the ocean because
Speaker 3: it would be economic to do so. So the price
Speaker 3: mechanism in the long run rations everything, and therefore no
Speaker 3: mineral is critical in the sense that we're going to
Speaker 3: run out of it. However, certain critical minerals are crucial
Speaker 3: for certain new economic and technological applications, most obviously electric
Speaker 3: vehicles and lithium ion batteries. And the reason some critical
Speaker 3: minerals like lithium are being defined as such now is
Speaker 3: that they are needed in ever greater quantities because of
Speaker 3: booming demand because of an s curve adoption of a
Speaker 3: new technology, and they're having to grow off a very
Speaker 3: very low base. The lithium market before the EV boom
Speaker 3: was just a couple one hundred thousand tons a year,
Speaker 3: and now we're talking by twenty thirty it needs to
Speaker 3: be a three million ton of year market. So there
Speaker 3: is a concern around the ability of the production side
Speaker 3: to keep up with the demand growth. There's a sense
Speaker 3: that as we scale evs, will we have enough units
Speaker 3: of lithium to meet the consumer demand. That makes it
Speaker 3: critical in one sense, but actually the true criticality in
Speaker 3: the West about these materials is that there's plenty of
Speaker 3: lithium available to America and Europe in parts of the
Speaker 3: world where we can go and build minds quite easily.
Speaker 3: But you can't put dirt into a battery. You have
Speaker 3: to put a specialty chemical into a battery. And what's
Speaker 3: really critical about things like lithium and nickel and cobol
Speaker 3: is that they've got to be processed and refined into
Speaker 3: usable specialty chemicals which can then be put into batteries.
Speaker 3: And it's that part of the supply chain which has
Speaker 3: been up completely and utterly concentrated within China and in
Speaker 3: the context of geopolitical tensions and new trade wars, and
Speaker 3: there has been a lot of newsflow in the last
Speaker 3: few weeks around this. It's about the West's ability to
Speaker 3: have control over its own own industrial destiny, to be
Speaker 3: able to produce the specialty chemicals that these critical minerals
Speaker 3: get turned into insufficient quantities for their own manufacturing of
Speaker 3: their own ebs without having to go to China to
Speaker 3: get the ingredients. Because China, as it has shown, is
Speaker 3: quite willing and able to use its control over these
Speaker 3: supply chains to turn off the taps and basically create
Speaker 3: leverage over Western companies and Western governments.
Speaker 1: So Richard, really that's a brilliant beginning, and there's a
Speaker 1: lot there that you've said. I'd love to just sort
Speaker 1: of dig in a little bit into, first and foremost,
Speaker 1: not the processing side, but the mining side, because if
Speaker 1: I understand when I look at the Chinese and if
Speaker 1: I look at what they've done, they control the whole
Speaker 1: value chain. That's the reality of it. And as you
Speaker 1: describe them, these are critical materials. Now, let's go back
Speaker 1: to the mining side, and I'd love to hear what
Speaker 1: worries you in terms of materials. Which materials you go, Oh,
Speaker 1: my god, we're gonna have a shit oritage of that
Speaker 1: twenty thirty.
Speaker 3: I'm going to just be kind of quite straightforward this one,
Speaker 3: and I'm going to pick the lowest hanging fruit and
Speaker 3: talk about lithium again, because I think lithium is the
Speaker 3: one which illustrates the interplay of supply demand, economics and
Speaker 3: geopolitics the best. We need about three million tons per
Speaker 3: annum production of lithium by twenty thirty to meet the
Speaker 3: conservative demand projections of how much lithium we need to
Speaker 3: build the number of batteries that are being planned to
Speaker 3: be put into electric vehicles and energy storage systems, and
Speaker 3: let's not forget the new markets emerging in the field
Speaker 3: of drones and robots like the Optimus robot of Tesla.
Speaker 3: Lithium price ran up, as we all know, to a
Speaker 3: very very high level in twenty twenty two and then
Speaker 3: has crashed back down to around ten thousand dollars a ton.
Speaker 3: That crash has largely been engineered by the Chinese, who
Speaker 3: brought on stream some very marginal sources of lithium through
Speaker 3: lipidolite mining domestically within China, which are very low grade mines,
Speaker 3: very high cost, very hard to make any money out
Speaker 3: of them. And so we're now in a lithium market where,
Speaker 3: at ten thousand dollars a ton lithium carbon and equivalent price,
Speaker 3: very very few if any of the Western projects or
Speaker 3: the projects, let's say that are outside of Chinese hands,
Speaker 3: that are trying to be developed in Canada, in the US,
Speaker 3: in Latin America, in Africa, in Europe that is below
Speaker 3: the incentive price that private capital markets in the West
Speaker 3: where investors are going to get the IRRs they need
Speaker 3: to go and back those projects. So without an increase
Speaker 3: in the lithium price, over the next eighteen months. We're
Speaker 3: going to have a tremendous shortage of lithium in twenty
Speaker 3: thirty because the mines that need to be built to
Speaker 3: satisfy that demand to break ground now, because the lead
Speaker 3: time to get them into production is quite long. So
Speaker 3: if I'm worried about any critical minerals shortages at this
Speaker 3: point in time, it's lithium. And the challenge is that
Speaker 3: China is doing this deliberately to hamstring and kind of
Speaker 3: handcuff the options that the West will have in the
Speaker 3: future to determine its own industrial policies with this technology.
Speaker 3: And so we in the West and particularly the United States,
Speaker 3: which is leading the charge in all of this, governments
Speaker 3: have to work hand in glove with the private sector
Speaker 3: to invest counter cyclicly and fight back against China and
Speaker 3: start to stand up some of these lithium minds now
Speaker 3: during this bear market, while prices are depressed, so that
Speaker 3: we are not caught shorthanded when the inevitable next upswing
Speaker 3: in the market occurs.
Speaker 1: Can I just make a point, as you talk about
Speaker 1: opsing in the market, I mean, if lithium prices go
Speaker 1: back up, there'll be no upswing in the market, because
Speaker 1: what you're doing is you're making the batteries more expensive,
Speaker 1: which means that you're pushing evs out. So my view,
Speaker 1: i'd actually take a view of that, we're not going
Speaker 1: to see lithium prices going up.
Speaker 3: The question is, how are you going to get three
Speaker 3: million tons a year of lithium onto the market at
Speaker 3: ten thousand dollars a ton. Where's it going to come from?
Speaker 3: How many minds can profitably produce lithium at that level.
Speaker 1: And that's a very good question. So then what you're
Speaker 1: actually sort of saying is that actually the EV race
Speaker 1: is going to slow down.
Speaker 3: Something's got to give. The problem with commodity markets in
Speaker 3: general is that the supply response is very inelastic in
Speaker 3: the short term to the movement in the price. In
Speaker 3: the long term, the mining industry generally is able to
Speaker 3: respond to higher price incentives. And there is a lot
Speaker 3: of good news in the West. The dle revolution, which
Speaker 3: is the kind of equivalent of the racking revolution in oil,
Speaker 3: is already here. It's real. Exon is building DL plants
Speaker 3: in the Smackover formation. In America, tech met is building
Speaker 3: a DL plant on the salt and sea. DL is
Speaker 3: being stood up in Argentina as well, and these are
Speaker 3: much easier, simpler, lower cost projects to bring on stream
Speaker 3: relative to large Spogyman projects, which are traditional minds, which
Speaker 3: then have to be fed into very capital intensive hydroxide refineries.
Speaker 1: Richard, just for the non technical people that are listening
Speaker 1: to this, could you explain what DA is and really
Speaker 1: just in Layman's terms, just explain the revolution that's going
Speaker 1: on in mining, because I really like your Alan.
Speaker 4: Sure what's going from the oil and gas would go
Speaker 4: to shale. It's the exact same thing in mine exactly.
Speaker 4: DLE stands for direct lithium extraction. Prior to DLE, there
Speaker 4: were two ways to get lithium into the market. One
Speaker 4: was to exploit Hoigh rock lithium sources, particularly a mineral
Speaker 4: called spodymy, which you dig out of the ground, you concentrate,
Speaker 4: and then you have to put it through a relatively
Speaker 4: energy and carbon intensive refining process to turn it into
Speaker 4: lithium hydroxide, which then typically goes into nickel based batteries.
Speaker 4: The alternative source of lithium, and the lowest cost source
Speaker 4: of lithium for years, has been the brines from the
Speaker 4: lithium triangle down Latin America, Chili, Bolivia, Argentina, where the
Speaker 4: method of extraction is to pump lithium brines that are
Speaker 4: quite high in concentration in lithium and put them in
Speaker 4: huge ponds and evaporate them over time to kind of
Speaker 4: pre concentrate them and then process them into lithium carbonate.
Speaker 4: And it's very environmentally problematic and there's a huge kind
Speaker 4: of lead time from pumping the water out of the
Speaker 4: grounds to actually having a deliverable ton of lithium at
Speaker 4: the other end. So direct lithium extraction is where you
Speaker 4: take lithium bearing brines and you essentially run them through
Speaker 4: let's just call it a chemical plant for now, and
Speaker 4: within a few literally a few hours, you run it
Speaker 4: through a system where the Darly technology selectively strips the
Speaker 4: lithium from the brine to produce a lithium chloride, and
Speaker 4: from there it's a very simple step to produce lithium
Speaker 4: carbonate and then you can, of course, you can go
Speaker 4: on to produce a hydroxide as well if you wish
Speaker 4: from there, and that's a huge revolution in lithium production
Speaker 4: because it allows a much shorter cycle from extracting the
Speaker 4: brine to delivering the chemical and it's a completely closed
Speaker 4: loop system because the lithium depleted brine is then reinjected
Speaker 4: back underground and can often recharge with lithium once it's
Speaker 4: back underground. So the dly revolution not only going to
Speaker 4: be enabled the West to scale lithium quickly, it is
Speaker 4: also a very low carbon, low environmental footprint way of
Speaker 4: doing so is a really important revolutionary step in the
Speaker 4: lithium industry. There are a lot of skeptics out there
Speaker 4: who have said it's not going to happen.
Speaker 3: And the fact that the likes of Rio Tinto, Exxon
Speaker 3: equinor slumberget Arcadian, which has seemed to be quiet seem
Speaker 3: to of course become part of Rio Tinto are all
Speaker 3: doing it is proving the naysayers wrong.
Speaker 2: You name tech Met, tech Mets your company. I like
Speaker 2: to go back with you through the creation of tech Met,
Speaker 2: because you're one of the few companies who have the
Speaker 2: US government as shoulder or sponsor. Probably would explain, so
Speaker 2: go back to its creation and there's thesis around it,
Speaker 2: but probably we took already quite a note around the
Speaker 2: thesis and how you've delivered so far, because when I
Speaker 2: look at your activities. I see you have a mine
Speaker 2: ran dow or so, and you know your investment in lithium.
Speaker 2: So can you put this together please?
Speaker 3: So technetous sort of technology metals. And we define a
Speaker 3: technology metal as a metal where the demand for that
Speaker 3: metal is being driven by a technology adoption. Think about
Speaker 3: an S curve adoption of electric vehicles that is driving
Speaker 3: a kind of one time phacist in the demand for
Speaker 3: certain critical minerals. That's a definition that we tie to it,
Speaker 3: and particularly like our focus is on lithium, nickel, cobalt, vanadium, tin,
Speaker 3: and rare earth elements. We created the company in twenty seventeen.
Speaker 3: We're not structured as a fund. We're structured as a
Speaker 3: permanent capital vehicle, which makes us quite unique relative to
Speaker 3: some of the other private equity players in the space.
Speaker 3: And very early on we engaged with the US government
Speaker 3: and in December of twenty twenty, we closed our first
Speaker 3: significant investment from the United States government through an agency
Speaker 3: called the International Development Finance Corporation, which is a federal
Speaker 3: agency of the US government which used to be called OPIC,
Speaker 3: and under the first Trump administration, was given a new
Speaker 3: mandate from Congress with a lot more money, a much
Speaker 3: broader investment mandate, including the ability to do equity and
Speaker 3: to have a much more America first policy orientation in
Speaker 3: the way it deployed its capital, and so its investment
Speaker 3: into tech Met was its first ever equity investment. And
Speaker 3: really the purpose of the US government and the Trump
Speaker 3: administration backing tech Met initially was because they had the
Speaker 3: foresight to see this big geopolitical issue coming down the
Speaker 3: pike and it's something that we needed to start to
Speaker 3: address and challenge. We're not solely backed by the US government.
Speaker 3: We also have a huge amount of private capital behind us,
Speaker 3: including large scale family offices, institutional investors, and most recently
Speaker 3: the Katari Investment Authority. We've had two subsequent investments under
Speaker 3: the Biden administration, and so we're very much a bipartisan
Speaker 3: topic amongst Washington. Critical minerals and the fight against China
Speaker 3: is something that the whole of America is behind. It's
Speaker 3: something that we continue to work with the US government
Speaker 3: on very very closely, and we're really excited about working
Speaker 3: with the new Trump administration to do more and quicker
Speaker 3: and more aggressively because the Chinese stranglehold over the critical
Speaker 3: minerals supply chain has increased, not decreased, and therefore we
Speaker 3: need to fight back even harder to make sure that
Speaker 3: America command its own destiny over its own industrial future.
Speaker 1: Just one thing on the whole thing up, I can
Speaker 1: actually just be really take the exact tops of you,
Speaker 1: which is too late. Game's over. You can compete in
Speaker 1: any of the battery it met us, and the reason
Speaker 1: is is because China has the whole value chain, so
Speaker 1: you can try and catch up, but it's going to
Speaker 1: be a very very expensive ride. And the market power
Speaker 1: of the brand names, the technology it's ald with them.
Speaker 3: Yeah, and I would respectfully take the other side of
Speaker 3: that argument. Never ever bet against America. America has some
Speaker 3: of the most incredible innovative technology businesses in the world.
Speaker 3: It's got the deepest capital markets, it's got a powerful
Speaker 3: unified government capable of strong action, and it's going to
Speaker 3: take time to catch up with the Chinese. I concede
Speaker 3: that the Chinese have had a twenty year head start.
Speaker 3: But when America chooses to do something, it's like a
Speaker 3: sleeping giant, and when it wakes up, it can mobilize
Speaker 3: at an extraordinary scale. So there is a battery supply
Speaker 3: chain that is being stood up in America, and we
Speaker 3: will see it through to the end because we have
Speaker 3: no choice in the West if we want to have
Speaker 3: any control over the future technologies that are going to
Speaker 3: dominate the twenty first century, IE lithium ion batteries, which
Speaker 3: are not going to be just about electric vehicles. They're
Speaker 3: going to be about drone technologies, which are super important
Speaker 3: for defense purposes. They're going to be about robots and automation,
Speaker 3: which is going to be essential for economic productivity. The
Speaker 3: US absolutely needs to have control over its own destiny
Speaker 3: in this area, and we need to reduce the leverage
Speaker 3: in the international system that China has currently. And we
Speaker 3: are very very encouraged by what we're hearing from the
Speaker 3: new Trump administration that we're going to accelerate this fight
Speaker 3: against China, not decelerate.
Speaker 2: When I read the news, and again I don't know
Speaker 2: if it's true or not, but China has imposed export
Speaker 2: controls on tungst team, tillurioma, bismuth, moule denum, and indioma.
Speaker 1: And graphite, which is even more important.
Speaker 2: Right the next day, reach out, your telephony is ringing,
Speaker 2: you know, how is it working?
Speaker 3: We actually have a tungsten mind, so we're looking to
Speaker 3: ramp up production there and do our bit there. But
Speaker 3: these export controls, they're kind of the first firing salvos
Speaker 3: of a potential critical mineral trade war that could potentially
Speaker 3: increase in scale and breadth over time, and just sort
Speaker 3: of underscores how urgent it is that of how quickly
Speaker 3: we need to move in the West to counteract Chinese dominance.
Speaker 3: And it's clear that China is willing to use these
Speaker 3: levers as ways to advantage itself in the international system
Speaker 3: and in the sort of great power competition against America.
Speaker 3: The good news is is that America and I should
Speaker 3: say North America to include Canada here as well, because
Speaker 3: there is vast geological mineral wealth right across the North
Speaker 3: American continent. None of those minerals that you listed are
Speaker 3: absent from North America. They're all there for the taking.
Speaker 3: And so we need to radically liberate and deregulate mining
Speaker 3: regulations and loosen up some of the overbearing environmental hurdles
Speaker 3: that we have to jump over to stand up minds
Speaker 3: precisely so we can fight back against some of these
Speaker 3: export controls and take command of our own economic destiny.
Speaker 2: Richard, It's not just about mining, it's also about technology.
Speaker 2: So can you explain how you're not just into mining
Speaker 2: but into all those new technologies.
Speaker 3: Technology is the West's trump card, and it's particularly America's
Speaker 3: trump card, because America's the greatest technological innovation engine on
Speaker 3: planet Earth. Some of the ways we're going to fight
Speaker 3: back against China I've already touched on, For example, the
Speaker 3: DLE revolution. The company that we've invested in Energy Source
Speaker 3: Minerals with its ILIAD platform, which is the most advanced
Speaker 3: DLE technology in the West, is now extremely important because
Speaker 3: the Chinese have announced controls on the export of DLE sorbents,
Speaker 3: and Iliad is a completely China free technology and in
Speaker 3: fact a superior DLY technology to what the Chinese have
Speaker 3: for directlythmic extraction. But there are other areas in which
Speaker 3: American innovation is going to help in this fight back
Speaker 3: against Chinese control. We have a company called Zero Advanced
Speaker 3: Battery Corporation, which is looking to completely change the way
Speaker 3: that we make batteries. So if you think about the
Speaker 3: battery supply chain today, the stranglehold that China has is
Speaker 3: not necessarily on the upstream control of the mine itself.
Speaker 3: It's that middle part of the chain from how you
Speaker 3: get from a dirt to a specialty chemical that you
Speaker 3: can actually put into a battery. Typically, you have to
Speaker 3: refine it into a ninety nine point nine to nine
Speaker 3: percent pure metal salt that then has to be put
Speaker 3: into a cathode precursor. The precursor has to be litheated
Speaker 3: into an active cathode material. That cathode is then put
Speaker 3: onto an aluminum foil using a binder. It's glued onto
Speaker 3: a foil. Well, we backed a company which can basically
Speaker 3: do all of that in one step. We can take
Speaker 3: run of mind material and through a molten salt electroplating process,
Speaker 3: directly plate out active cathode material onto a current collector
Speaker 3: in one step. That's an example of fantastic American innovation
Speaker 3: that will essentially sidestep China's stranglehold on this part of
Speaker 3: the supply chain. And there are other there are plenty
Speaker 3: of other businesses doing other great innovative work in the
Speaker 3: battery area, and I think it's American technology which, when
Speaker 3: it starts to scale up, will be the key to
Speaker 3: some of the fight back against China. Remember, the litty
Speaker 3: mind battery was invented in the West. It's a Western technology.
Speaker 1: Firstly, it's not a Western technology. It comes out of Japan, Okay,
Speaker 1: And we've been asleep for twenty years. Everything you're saying
Speaker 1: is anti Chinese pro American. It comes across and I'm saying,
Speaker 1: this is a European where we live in a very
Speaker 1: difficult geopolitical world where Europe being forced to move away
Speaker 1: from the United States, and we have a world where
Speaker 1: I know there's a great power discussion going on here,
Speaker 1: but I'm just saying all I've got is anti Chinese sentiment,
Speaker 1: and I don't know if that's helpful.
Speaker 3: I would credit the Chinese. We're doing a fantastic job.
Speaker 3: Over the last twenty years. They prosecuted a fantastic leap
Speaker 3: frogging strategy of not chasing ice engines and simply going
Speaker 3: to degree leap frogging to dominate the next generation of
Speaker 3: electric vehicle technologies. And by the way, they've done an
Speaker 3: amazing job about it. So let me complement the Chinese.
Speaker 3: You know, then eighty percent dominant position of producing a
Speaker 3: percent of the lithumin batteries in the world. They're dominating
Speaker 3: the supply chains. They have got to scale quicker and
Speaker 3: better than anyone. They've looked at the entire supply chain
Speaker 3: and subsidized the parts of it the need subsidizing to
Speaker 3: get to scale. Okay, but are you suggesting that we
Speaker 3: should therefore be supplicant to the Chinese and simply wholesale
Speaker 3: allow them to drive the future of the ev industry
Speaker 3: and allow Stilantis and Mercedes and BMW and Ford and
Speaker 3: GM to just kind of go to the wall, or
Speaker 3: to just become entirely reliant on Chinese technology, that's my
Speaker 3: retort to you. Or should we also in the West
Speaker 3: try and use our own skill sets and talents and
Speaker 3: deep capital markets to try and innovate and also control
Speaker 3: our own economic future, or should we completely just give
Speaker 3: up the game.
Speaker 1: Never give up. But what you have to know is
Speaker 1: where can I win and where can I not win?
Speaker 1: And sometimes, and I would say, in the case of
Speaker 1: let's say, a lot of the enerergy technologies that are
Speaker 1: out there, soler and batteries being two examples, they're just
Speaker 1: so far ahead and control the whole value chain, including
Speaker 1: the equipment manufacturing, that actually you're going to have to
Speaker 1: partner with them. So that we can learn and learn
Speaker 1: from our mistakes and then see, Okay, when you have
Speaker 1: the knowledge and the know how here, then you can
Speaker 1: actually see how you compete them.
Speaker 3: That is happening that there are battery plants being stood
Speaker 3: up in America in partnership with certain Chinese battery makers.
Speaker 3: There are partnerships in Europe that are being stood up
Speaker 3: with certain Chinese battery makers. The fins are standing up
Speaker 3: some cathode plants themselves partnering the Chinese parties as well.
Speaker 3: Remember it's not just about China, though Japan and Korea
Speaker 3: have very impressive battery companies themselves who can also do
Speaker 3: things at scale. We have the SK's, the lgs, the
Speaker 3: Panasonics of this world. So we also have friendly Asian
Speaker 3: nations with excellent battery credentials and battery industrial know how
Speaker 3: that we can leverage as well. However, in a world
Speaker 3: of increasing geopolitical tensions, I would suggest it would be
Speaker 3: derelict of us not to leverage the inherent advantages we
Speaker 3: have in the West, which is our own mineral endowments
Speaker 3: and our own fantastic technology and innovative powers, to try
Speaker 3: and also stand up our own independent supply chains, and
Speaker 3: that's all I'm saying, and.
Speaker 1: I agree totally with you. That's what we should do.
Speaker 2: Okay, guys, peace, peace, peace, and serenity.
Speaker 1: Please.
Speaker 3: I think we ended up agingble.
Speaker 2: The relationship with China is very complex because on one hand, yes,
Speaker 2: they have technological advantage. On the others, they are financing
Speaker 2: the Russians. They are very remarkable but difficult people to
Speaker 2: deal with, and I can understand that it's easier to
Speaker 2: negotiate with them from a position of strengths than a
Speaker 2: position of weakness. And the fact that building our own
Speaker 2: supply chains makes what of a negotiation we're going to
Speaker 2: have with them easier. Exactly what we all want to
Speaker 2: live in a Kumbaya world, but unfortunately that's not what
Speaker 2: it is.
Speaker 3: We have to live alongside China. China's a reality. It
Speaker 3: has become a very substantial global power, and it really
Speaker 3: is about the kind of the terms of trade in
Speaker 3: and right now we have very little leverage and very
Speaker 3: little negotiating power in this narrow area of batteries, and
Speaker 3: what we need to do is do our best to
Speaker 3: increase our own industrial capacity in this area so we
Speaker 3: can have a fairer discussion with China in this area
Speaker 3: and not let them completely dictate the terms of the game.
Speaker 3: And that's all I'm really saying. It's really about great
Speaker 3: power competition and ensuring that we are not going to
Speaker 3: be dictated to by China in the future.
Speaker 2: On these wise words, Richard, I thank you very much
Speaker 2: for coming. Job is totally.
Speaker 1: Flambosty attacking them like America is doing right now. You're
Speaker 1: not going to win. You have to be much more
Speaker 1: subtle in the way you're doing it. That sounds pretty.
Speaker 2: Simple, okay, joh, thank you, reach out, thank you, thank you,
Speaker 2: thank you both. And the debate continues. We are excellent, Joa.
Speaker 2: Before you're going to say what you're going to say,
Speaker 2: I just want to tell our listeners I had to
Speaker 2: cut about five minutes of heated conversation between you and
Speaker 2: the guests, so I'm sorry listeners you get a sensored
Speaker 2: version of our conversation. But if there are something to say,
Speaker 2: y'all is now well.
Speaker 1: I just want to say, if you've got to beat China,
Speaker 1: you have to come up with a real long term
Speaker 1: strategy for beating China. And my own view on how
Speaker 1: you beat China is what I call more than before.
Speaker 1: So it is you need to be bigger than them
Speaker 1: in whatever area you go into, and you have to
Speaker 1: go there before they do it. Okay, If you try
Speaker 1: to compete with them when they're big and they're in
Speaker 1: the market already, you've no chance. And I really say
Speaker 1: no chance. Now, that does not mean you give up
Speaker 1: competing with them. It means you have to rethink how
Speaker 1: do you compete with them? So if I'm trying to
Speaker 1: think about how do I compete with China and say,
Speaker 1: litty MYWN batteries, well, you know, trying to do a
Speaker 1: North fold on it and vertically integrate and get your
Speaker 1: hands on more materials and actually go and get processing
Speaker 1: over here, and trying to do it ourselves. You have
Speaker 1: two hopes of succeeding, Bob hope and no hope. Okay.
Speaker 1: So then the question is how do you well? One,
Speaker 1: you partner with the other Asians. So you go and
Speaker 1: say to the Japanese and to the South Koreans, Okay, guys,
Speaker 1: how are we going to together compete against China? And
Speaker 1: you work with them. Okay. That's the strategy in terms
Speaker 1: of catching up with them. The other strategy, which probably
Speaker 1: nobody wants to hear is that you do a little
Speaker 1: bit what we did with them thirty years ago, which
Speaker 1: was instead of us going and investing and bringing internal
Speaker 1: combustion engine engineering expertise over to China chemical expertise going
Speaker 1: into change joint ventures with them, what you need to
Speaker 1: do is do the same on the way backward and say, okay, China,
Speaker 1: you come and manufacturer evs over here, you come and
Speaker 1: go and bring your factories over here, and that way. Okay,
Speaker 1: they're bringing jobs in here, and you're learning from them,
Speaker 1: and that gives you a chance to actually be in
Speaker 1: the game, because a present in that area, we're not
Speaker 1: in the game. So what I heard was a strategy
Speaker 1: that I don't think will win. That's what I heard.
Speaker 3: Wrong.
Speaker 2: Okay, that's your usual rumbling, but it's not very specific,
Speaker 2: so I'm going to be specific. I cannot understand his
Speaker 2: thesis and why the Pentagon liked it and the very
Speaker 2: bellicos rhetoric. The thing is, the price of rare earths
Speaker 2: is very low right now. Whatever the headlines say, there's
Speaker 2: no shortage of rare earth. You cannot go and see
Speaker 2: politicians and say, oh, you know, we have a problem
Speaker 2: with gallium. We have a problem with germanium, we have
Speaker 2: a problem with molybdenum wor problem with antimony. But rare
Speaker 2: earth sounds nice, even if nobody knows what's in it. Now,
Speaker 2: if you need those minerals, you just ask a Swiss
Speaker 2: trader or Japanese traders and they'll bit it from China
Speaker 2: and you will have it the next day in a
Speaker 2: warehouse in Singapore elsewhere. So first thing I'll say is
Speaker 2: tech met should erect the statue to Simon moorees when
Speaker 2: he did his legendary show in the US Senate and
Speaker 2: freak out everybody else. But when I look at the result,
Speaker 2: I'm sorry to say I think they're delusional for three reasons.
Speaker 2: The first one is from a technical point of view,
Speaker 2: whatever they say about the Leger market is going to
Speaker 2: get short, and you know, sorry, everything I see on
Speaker 2: the legion market contradicts is a very well supplied market.
Speaker 2: And also it's very bullish on directly legium extraction. Well,
Speaker 2: good luck with that because that's a tough one. So
Speaker 2: that's technical strategic. They've gone big on nickel and cobalt,
Speaker 2: I mean cobbold. There's so much cobalt right now that
Speaker 2: the DRC had to stop the export, kind of lower
Speaker 2: the inventories. And you know what, NIKEL and Cobbalt, we
Speaker 2: don't need them in batteries anymore, so why invest in there?
Speaker 2: And the third point you made it Okay, the US
Speaker 2: want to partner with allies, well, at the same time
Speaker 2: they are bullying them or ignoring them. So I mean,
Speaker 2: you can't have your cake and eat it for those
Speaker 2: three reason. I'm not convinced that is a good.
Speaker 1: Conclusion, my fad a good conclusion. You're definitely more diplomatic
Speaker 1: than I am.
Speaker 2: It was a great foot fight.
Speaker 1: It was a date.
Speaker 2: Okay, my friend, talk to you next week.
Speaker 1: Look forward to it. Thank you for listening to Redefining Energy.
Speaker 1: Don't forget to rate the show and subscribe on Apple, Podcast, Spotify,
Speaker 1: or the platform of your choice.