Mining Mindset: Brian Savage – We need to be disrupting everything…

Anya (00:00)
Today I’m speaking with Brian Savage who is the CEO of Electric Metals and he has a fascinating transition from being a coal miner to basically electric minerals. Brian, does it, how did it happen? What happened?

Brian (00:22)
Well, was a long transition. Maybe this green energy transition will be a little bit shorter. But I started out

Anya (00:26)
Yeah.

Brian (00:36)
as a coal miner working in actually it was a surface coal mine in West Virginia when I was 17.

and went to Colorado School of Mines, worked in the coal mines during the summer, so pretty much did everything that there was to do in underground coal mines. Went to Colorado School of Mines, actually got a minor in coal, got a Bachelor of Science in mining engineering with a minor in coal. Went to work in the coal mines after I graduated and then

Anya (01:02)
Okay.

Brian (01:08)
went back to school mines for a master’s degree in mineral economics and I wrote my master’s thesis valuing gold mining companies. And so that’s probably where the transition started from coal, moving from coal into other metals. And when I was a mining engineer for Bank of New York,

Anya (01:26)
Mm-hmm.

Brian (01:33)
We looked at lot of coal assets, copper, and etc. And then at Bank of Montreal, we really liked coal. You know, our portfolio of financing included a lot of coal mines. But during that time, there were a lot of these mines in Nevada that were being developed and were looking for funding. And gold loans were kind of the, just, I guess, maybe kind of just starting off.

And it was very interesting for me to be in doing the gold loans. And so there was a transition, I think, along that lines as well, because the bank really liked gold. And I liked the gold lending because it was pretty profitable. Wound up putting $500 million of gold loans on the books of the bank, even though the bank didn’t like them. But they were incredibly, once they found out that they were incredibly profitable, then they liked them.

Anya (02:29)
Mm.

Brian (02:31)
But that was, I think, the transition from coal into non-coal assets.

the initial stages of the energy transition, I’m an old coal miner. I didn’t want to get rid of hydrocarbons. We’ve got more coal in the United States for three, 500 years of power.

You know, it’s a great resource. Throw in natural gas and oil. The United States, I think, or could be, anyway, the largest producer of oil in the world. It also happens to be the largest consumer of oil. But it all relates

Anya (03:09)
Mm.

Brian (03:12)
I’ll say green energy sources, nuclear power, which, you know, it got a really bad rap, for a whole bunch of reasons. Three mile Island, was one of them.

Anya (03:15)
Yeah.

Brian (03:25)
Fukushima, you know, those are some issues where, you know, nuclear power comes under question, but it’s actually very low cost and green, it’s a green energy. So there needs to be a mix. don’t, I’m not against an energy transition. The question becomes the rate of change of energy transition and how do you go about doing it?

Anya (03:51)
But when you… So at what point you were like, okay, you know, the world, at least the West, moving towards electric and like green energy and like everything, let me just forget about coal. And what was anything besides the mining? You mentioned that like in the beginning you were pushed back because of the background as a coal miner. I guess, was it only…

political incentives that pushed this transition or you kind of change your mind.

Brian (04:27)
Well, I would say it was probably 10 or so years ago. I sat in on a

for Tesla back when it was private. Talking with some people and going, need a lot of these various metals are going to be required for this electrification. So that was kind of the very early days of electrification.

Anya (04:41)
Yeah.

Yeah.

Brian (04:58)
And that’s, I was working in the Congo and so, you know, they’ve got some pretty interesting lithium assets in the Congo and that was one of the things we were looking at. They’ve also got tin tantalum, you know.

from a transition to tantalum is really using capacitors and or tantalum is using the capacitors, tin is replacing lead and solder. So from an electronics perspective, you could call them technology. I called them technology metals back then. And so it moved from kind of technology metals to critical metals. So it was really tin, tantalum, tungsten, which were of interest and manganese.

Anya (05:32)
Mm-hmm.

Brian (05:45)
the manganese was really

kind of the entree into the battery scene, the electrification of vehicles.

Anya (05:54)
And you also worked in Century Foods with blockchain technology. What was your experience and how do you think currently it’s shaping and influencing the mining industry?

Brian (06:08)
Sure.

Yeah, that was actually born out of kind of our early days in the Congo.

know, because that was back when they passed legislation that tin, tan, lim, tungsten, and gold from the Congo and surrounding areas were so-called conflict minerals and they had to be traced. Back, you know, in 2010-ish, it was a paper system and it was corruptible.

because it was a paper system. I always thought that there should be a better, more efficient digital way of doing it. Then we move into the 2013-ish, 2014, blockchain started making its early entree, primarily a result of Bitcoin. And so I was thinking, wow, we could really use a blockchain as a really good tool for traceability.

Anya (06:38)
Yeah.

Brian (07:06)
and that kind of morphed into Centrifuge, was the idea was buying Coltan, which is tantalum niobium from artisanal miners, upgrading it and then selling it and using a blockchain traceability to manage that process. Now, it’s a good technology.

You know, people are saying, you know, we want traceability. We want, we don’t want to fund the bad guys. And, particularly when it comes to diamonds, you know, this whole thing about blood diamonds and the Kimberly certificates. I think the Kimberly certificates are probably ripe for disruption with the blockchain as well. And there’ve been a few companies that have been looking at using blockchain technology to trace various things. But the realities of life are nobody wants to pay for it.

Anya (07:40)
Yeah.

Brian (08:01)
what what the so-called consumers of materials right that whether it’s diamonds or or gold for a watch or or jewelry They want the traceability, but they don’t want to pay a premium for that traceability

Anya (08:05)
Mm.

Brian (08:19)
And what happens is it goes down the food chain to the poor artisanal miner who they’re theoretically trying to protect. And they’re forcing the artisanal miner to pay for the cost of the traceability. Essentially throwing a huge roadblock up in the artisanal miners way. Then you start getting into the groups that are trying to protect the artisanal miners by chucking in lawsuits.

to the so-called brands, right? And the brands would be like Intel, Google, et cetera. And so then they start fighting each other with lawyers. And rather than spending that money on trying to actually help the guy that they’re theoretically trying to protect, which they’re doing nothing for, and that’s the artisanal minor.

Anya (08:59)
Yeah.

Brian (09:12)
And so it became pretty difficult, at least from our perspective.

to see who was actually gonna pay for this service and how we could go about doing it. And there were some other groups that were developing blockchain systems. They were providing, I would say more kind of consulting services on the side as opposed to trying to develop their blockchain system. And so we…

Anya (09:35)
.

So is there

any of the traction of blockchain now? Like in terms of like not theoretical but actually practical. Because like for example what I know like

Brian (09:49)
yeah, there’s…

Anya (09:54)
Before I was working in a software company as well and we were trying to do like a blockchain technology for real estate like because like smart contracts, things like that. And what I noticed is that people are very stuck.

Brian (10:06)
Mm-hmm.

Anya (10:12)
to do things the old way. It’s very hard to think out of sight of the box. you know, even like, why do I need all this? Like, we’ve been dealing with this for many years. We were fine. You know, like, why do we need this? And another thing was that some people actually, you know, want to have transparency only theoretical, but not practical.

you know and that’s kind of like a big thing so I wonder like what is it do you think it’s coming to actually mining industry like would do do you think it will take over or do you think that it’s kind of like too much of a hassle and you know maybe this whole layer of old school

CEOs and old school miners have to kind of like leave the area to, know, and then open it for a new generation. That would be kind of like a switch.

Brian (11:16)
Yeah.

Well, I grew up in the era when I think the talk was, if it ain’t broke, don’t fix it.

So status quo, if it’s working fine, it’s working fine. Then you look at Kaizen, was a Japanese practice of continuous improvement. So even though you’ve got a process,

That process can continually be improved and so that started the shift in people’s thinking about If it’s not broken, don’t try to fix it to well this process can always be made better Let’s let’s take it to the next step in the next step in the next step. Then you get into software development Where? You don’t need perfection You need to get it kind of 60 % of the way there

and put it out to the users who embrace technology, let them beat it up, and then they come back and they provide fixes, and then you move that 60 % of the way there and 80 % of the way there, and then eventually you get the people who are the laggards of uptake on technology, and finally after it’s gone through that process, then they’re ready to take it on.

Anya (12:38)
Yeah.

Brian (12:46)
I would say that we’re, that we’re now in more of a philosophy of disrupt everything. Disrupt the thing that was disrupted last week, disrupt that process. And so I think, you know, everybody talks about it. They call it innovation. And, and I look at it more from, from a, we’re in a, we need to be disrupting everything, everything. Everything should be disrupted. That process that you’ve been using.

Anya (13:04)
Yeah.

Brian (13:16)
for 10 years should be done better and we’re going to disrupt it. That disruptive technology that we developed last year, guess what? There’s somebody that’s coming out of university that wants to disrupt that. it’s disruption everywhere. Giving back to blockchain, we were too early and too late at the same time.

late because in 2017 I think was a big year of blockchain being used for everything and there were I call them the charlatans it almost didn’t matter didn’t matter what they have that was going to solve a problem a pile of money got out the door and guess what they didn’t do anything they were just milking the market and so in 2018 when we were really

Anya (13:56)
Yeah.

Yeah.

Yeah.

Brian (14:11)
trying to get this off the ground. There was a backlash against all that was a flash in the pan technology. It’s never gonna work. It’s certainly never gonna work in the Congo or these high risk areas, cetera, et cetera. And so, we were in on a co-creation workshop that was being hosted and funded by the USAID to how do we facilitate our

gold that’s leaving the so-called back door in the Congo. And a lot of that artisanal gold goes into the illegitimate supply chain. And so what can we do to solve that? And we were proposing a blockchain solution to do that. And again, I think it came down to the fact that 2017, lot of charlatans in the market, 2018, there were just a whole bunch of people in that community.

that were completely anti-blockchain. And so the project didn’t get approved. There were some other groups that continued to press and push and move the blockchain down

track and they were using them in the mining space. And they’re getting some minor traction, but I wouldn’t call it mainstream.

Anya (15:28)
So there are some companies that using blockchain for in mining industry, right?

Brian (15:34)
Yeah, there are some diamond groups, know, basically almost kind of calling it more for

for tracking and ensuring what I call high value assets. Whiskey, art, diamonds, I guess, real estate. could you could do that. Basically, you you digitize an asset and you can stick it on the blockchain. And it it becomes a function of

Anya (15:44)
you

Right.

Brian (16:00)
You know, it’s that age old problem also of I have a solution looking for a problem. And so a lot of people, I think at that point, were viewing blockchain as a solution to a problem that doesn’t exist or an overkill solution to a problem when there are other things that you can use, right? You don’t need a super mainframe computer to multiply

Anya (16:17)
Good.

Brian (16:31)
35 times 76 you pick up your iPhone and you do it there So I think there there are really good

Anya (16:35)
Yeah.

Brian (16:38)
for blockchain And there are things where you can get away with not having to put stuff on a blockchain

Anya (16:45)
Right,

well I think it’s also a mindset switch. For example, there are countries that operate on blockchain like Estonia, Georgia. It’s very good for contracts.

and everything like that but at same time it became like a like we were doing blockchain like in 2018 like that’s what but then I for me I just remember like a client came and it was like we want blockchain like why why do you need like it became like a buzzword it’s kind of like what like in 2008 was like nanotechnology that was like the buzzword like everything should be nanotechnology so you’re saying currently

Brian (17:09)
Mm-hmm.

Anya (17:29)
kind of like more used in the diamond area but not in gold like not in

Brian (17:37)
High value and I’m sure there are some producers out there using it for gold I couldn’t point to them

Anya (17:42)
Mm-hmm.

Brian (17:43)
off the bat because When you’re dealing with tin tail and tungsten and gold From the Congo you got to have a traceability system, but I haven’t really been involved in that space kind of kind of As I kind of moved away from the blockchain because I couldn’t get traction and it doesn’t mean that it’s the people don’t have traction they do the other

Anya (17:49)
Mm-hmm.

Yeah.

Brian (18:06)
The other issue was, you know, back in the early days, there were a number of different blockchains. So Intel had, IBM had one, they were what five-ish, kind of what you might call more mainstream, plus, you know, plus the blockchain behind Bitcoin, plus Ethereum, plus et cetera. And so the question becomes, what’s, you know, what platform

Anya (18:13)
Yeah.

Yep.

What platform?

Brian (18:35)
Will these platforms talk to each other? Which one’s gonna win? Because they wanna let everybody fight it out to determine who’s gonna win and then go with whoever wins, whether it’s better or not. So you have that issue, then you’ve got transaction costs.

Anya (18:38)
Yeah.

Brian (18:52)
you know, we were developing on IBM’s and, Intel’s blockchain, and it was essentially free for us to develop and, and, and do that. we then, did some work on, on, on Ethereum and it was expensive to develop a blockchain because you had to pay all these transaction fees while you were your project.

Anya (19:10)
I am.

Yeah.

Brian (19:16)
think there are certain places

a blockchain. The question becomes from a traceability. This even gets into batteries, right? So the minerals that go into batteries, where are they coming from? And we want to make sure that they’re not coming from someplace of a high risk and that’s making a bad guy rich.

Anya (19:41)
Yeah.

Brian (19:41)
Right, and then you’ll able to trace all these things. Well, how do you trace all this stuff through the system? A relatively easy way to do it is with a blockchain. You just have to set it up and do it. And it’s just when you transfer something, you click a button and away you go. It’s not that

difficult.

Anya (20:02)
But who will make a decision? CEOs of the company or those who are on the supply chain?

Brian (20:10)
Yeah, it’s probably the supply chain supply chain people and they have to be technology adopters Then they’ve also be willing to I guess push The envelope a little bit because there’s a lot of headwind in a big corporation

Anya (20:26)
Yeah.

Brian (20:28)
and you have to be a relatively strong personality to push something through the system and you almost could argue that maybe those systems are designed to be that way. So if you don’t have the champion to go do something, it’s not going to get done. Therefore, it’s not worthwhile to spend your time doing it.

Anya (20:48)
And so now you’re working in electric metals and it focuses on high purity manganese products. If we talk about just electrification and decarbonization, what role manganese plays in this process, I guess.

Brian (21:07)
sure that that’s in the batteries. you know, pretty much electric batteries

the moment, broadly speaking, their lithium ion, which would be nickel, nickel manganese, cobalt, and MC or other parts of the world. It’s NCM, nickel, cobalt manganese, and then LFP lithium iron phosphate. And

They’re looking to put manganese into lithium iron phosphate batteries. If you look at China, 60 % of the electric vehicles there use a lithium iron phosphate battery. It’s less expensive. It doesn’t have the range, et cetera. Here in the United States, in North America, we’ve got range anxiety and the battery of choice is an NMC battery, nickel manganese cobalt.

because it’s got longer range, it’s also more expensive. And so the, I’ll say the early adopters of the electric vehicles are people who have relatively good disposable income. Unless you really, really have to have what is typically people with disposable income, because they’re not cheap.

Anya (22:17)
Mm.

Brian (22:28)
You know, I’ve got some friends that have gone out and bought some Rivians. They’re 100, 120,000 bucks a pop. know, testos can go from 60 to 100 something thousand dollars,

Anya (22:36)
Yeah.

Brian (22:40)
so they’re not cheap.

Anya (22:41)
Yeah,

well they’re on making it more affordable I think.

Brian (22:46)
Yeah, I think the industry’s decided that they need to come up with a vehicle that’s $30,000 and a 300 mile range. That’s kind of the target. And there’s a combination of NNC battery chemistries and LFP chemistries and putting manganese in, and it’s a different kind of manganese that goes into the NNC battery.

Anya (22:57)
Yeah.

Brian (23:13)
But here in the US it’s probably more than flipped. There’s probably 10-15 % of the LFPs that are going into batteries. Although that will start rising because people want a lower cost car. Maybe they’re not as concerned about range as much.

Anya (23:38)
Well, guess it just depends. It depends what type of people work in class, does care about range, right? It’s kind of like correlate to the high income people or like medium or low income people because usually high income people or even medium, they can just go to the office, right? Or like they don’t really need long range vehicles unless you think

go

to a road trip for example. But if you’re a trucker, know, if you are like or if you just live in on the countryside you kind of like need long-range vehicles.

Brian (24:20)
Mm-hmm.

Yeah, and that’s the range anxiety, right? It’s not like you’re…

Anya (24:26)
Because you can’t

recharge, like you have a, let’s say, logging, right, and you can’t recharge in the middle.

Brian (24:37)
well, one of my stories, I lived in I lived in Scottsdale and we were in Telluride for winter skiing

I bumped into a gentleman and he had a Tesla. I was like, wow, that’s an interesting car, etc, etc. Got to talking and he said, yeah, it’s really nice. It’s a great car. But it took me 15 hours to get here because I had to drive where the charging stations were in order.

Anya (25:03)
Yeah.

Brian (25:05)
So

Anya (25:07)
It’s a fun car to have on a road trip because it has like now especially like safe driving, self driving but you know it’s now I think this network of chargers is more dense than it was before but let’s say it doesn’t perform good let’s say in cold conditions and like a range you think that you have 200 miles but you don’t really

Brian (25:07)
If that was part

Anya (25:37)
like you have like maybe 150 and stuff like that.

Brian (25:41)
Well, yeah, it’s both. It’s cold and hot. Because I rented a

Anya (25:43)
Yeah.

Brian (25:47)
when I was in Phoenix. And when it’s hot, you’re using the air conditioner. And so you’re draining the battery as opposed to when you’re in Minnesota, maybe. And it’s cold, the battery has a little harder time. So yeah, it’ll take.

Anya (25:49)
Mm-hmm.

you

Brian (26:08)
It’ll take having chargers on every corner, like a Starbucks or a 7-Eleven, you know, traditional gas stations. But there’s a market, well, generally, the electrification ship has sailed. It’s out there and it’s not coming back. Scooters are electrified, motorcycles are being electrified, cars are electrified.

Anya (26:13)
Yeah.

Yeah.

Brian (26:36)
Trucks are being electrified. Buses are being electrified. Helicopters are being electrified. Yep, they’re called, there’s a company that produces an EVTOL, electric vertical takeoff and landing. It’s a helicopter, two passenger helicopter run on a battery. There are aircraft companies looking to develop.

Anya (26:42)
Helicopters.

That’s very cool.

Brian (27:06)
battery powered airplanes. Now I think step one is going to be a hybrid because you use an enormous amount of power taking off and landing, but once you’re up in the air you could probably run off of the battery. The other thing needs to happen is the, I’ll say the power per kilogram of battery you increase as well. And I think for the airplane it may be pushing, what is it, a thousand

Anya (27:27)
Yeah.

Brian (27:36)
kilowatt hours per

or whatever that metric is.

Anya (27:40)
Yeah, that’s what I was thinking too. For an airplane you will need like a huge batteries. least at current because Teslas are like very heavy. They never flip really. Or you need to have some type of innovation that actually can include bigger range, longer range and with a current. Yeah, exactly.

Brian (28:05)
It’s all higher density, higher density industries, right?

That’s where the driver goes to hide. And I was at a benchmark minerals conference last week. One of the tours was to an aircraft company that was developing a hybrid airplane. So it’s happening now. That’s why I say, Trump came out and said, get rid of EV mandates.

Anya (28:23)
Yeah.

Brian (28:30)
Then Ms. Harris came out and said, I’ll get rid of the EV mandates. And the realities of life are the EV mandates don’t matter anymore. Don’t need EV mandates because people want to disrupt the disruptors. so you now have, know, Tesla was the leader.

Anya (28:38)
Yeah.

Brian (28:53)
And now everybody wants to disrupt Tesla. Everybody wants to put Tesla out of business by building their next car that’s supposed to be better than Tesla or whoever, right? So.

Anya (28:56)
Yeah.

Yeah, but I feel like it doesn’t work like that. think in that area, same as like in AI, think the earlier you are engaged, you’re too far. Unless they just disclose all of their advancement that they did.

Brian (29:22)
Well, the other thing you’ve got is people have to spend money to build a battery plant

they’re not cheap. And so when you decide that you’re going to produce a vehicle and you’re going to spend $3 billion on a battery plant that happens to be an NMC technology, you’re not going to come in

Anya (29:31)
Yeah.

Brian (29:48)
next year or next five years or maybe even next 10 years and change it. It’ll be a slow transition

a different kind of battery chemistry even though there are all these people out there trying to disrupt the battery system. Sodium ion batteries, trying to get rid of lithium ion batteries.

Anya (30:11)
What industries or markets you will see like the most significant impact from like advancement of like high purity manganese products? Besides electrical vehicles, I guess

Brian (30:24)
well, it’s electrical vehicles and it’s energy storage.

So you’ve got wind and solar or other what you might call intermittent power generation. You need to be able to store it somewhere. And that’s another that’s another place where batteries comes in, come in. You know, they’re

I call them container-sized batteries. And you can have one to a hundred or more of these batteries collecting the energy that’s being created by a windmill or a solar plant charging all these batteries. And then

the wind stops blowing or the sun stops shining, you basically drain all those big batteries. So that’s a big market for…

NMC as well as other battery chemistries.

Anya (31:22)
You think, so obviously there is different clusters of early adopters to electrical vehicles. There is a Western cluster and there is also China, right? But there are also other bunch of countries that still operate on gasoline and don’t really want to adapt.

You did work, for example, in Russia and Kazakhstan before. What do you think, and obviously, especially for Russia, mean, Russia has a lot of minerals, but oil and gas is one of the biggest resources. What do you think will take for those regions to adapt and kind of include the trend? Because, for example, Ukraine, I know that they have a bunch of electrical vehicles. A long time when I was there, before the war,

Brian (32:13)
Mm-hmm.

Anya (32:14)
were a lot of like Ubers that are operating on electrical vehicles. In Russia not so much like there is no I mean there is a question of chargers like let’s say in Moscow because when you operate in the city it’s harder to charge you know because you don’t have a house you have an apartment so but I didn’t really see except electric bus we call them trolley bus before they were kind of like this you know like they had like this antennas

Brian (32:41)
Mm-hmm.

Anya (32:46)
But now they’re like electro bus. So what do you think will take those like regions to adapt to this new trend of like electrical vehicles?

Brian (32:59)
Well, with regard to Russia, would be Mr. Putin stopped spending money on bombs and start spending money on charging points.

Anya (33:10)
But why? would he do that? know, that’s the point. not even like bombs aside, right? Bombs aside. Why would he do that?

Brian (33:17)
Thank

brand brand consciousness because

everybody everybody wants to be driving the latest and greatest no matter where you are. I can remember being being in Kazakhstan 25 years ago and everybody wanted the Mercedes G-Wagon. They didn’t care how much it cost and it was a status symbol to have a G-Wagon and so what winds up happening is

it becomes a status symbol to be driving an electric car to start. And so it will be that status that starts to drive the demand.

Somebody’s going to show up.

Anya (34:01)
those regions

are big on status, especially like Russia, they want to…

Brian (34:04)
Yeah, exactly. so, you know, so someone’s going to be the first one to have that, whichever car, and then and then the next

is going to go, I need to show how much status I’ve got. then the next thing you know, instead of the roads being full of Mercedes, they’re going to be full of electric vehicles. And then that’s going to some.

government official who wants to have the status is going to wind up getting an electric vehicle. And then he’s going to want to know where he’s going to charge it. And all of a sudden, you’re going to have chargers being built because the government officials want to charge their vehicle.

So that’s what it’ll be. It’s status symbol that’s going to drive

in those regions.

Anya (34:51)
Speaking of those regions, you did work there, you did work in Amur region, if I’m not mistaken, in Russia, right? In Amur? In Khabarovsk, yes. And in Kazakhstan.

Those regions are not very big on environmental concerns, like in terms of the regulations, but in terms of, guess, can you share any insights of how you kind of like balance this economic development and the environmental impact?

those regions where you worked, if it’s even taken into consideration and if it’s like is it up to just a project owner to decide it if you know he will actually make extra effort in terms of the compliance and like make the least impact he possibly can.

Brian (35:52)
Mm-hmm.

Yeah, I would say that they actually do have environmental requirements

Russia and in Kazakhstan and pretty much almost everywhere. But as a, I’ll say as a foreign country, meaning that you’re not a Kazakh or Russian company, but a foreign company, we used to say Western, but let’s include everybody.

You’re held to a higher standard because you’re a foreign entity and let’s say that you’re listed on an international exchange, you’re going to be held to a higher standard. Whether there’s a standard in the country or not, you have to meet the international practice. So from our perspective, when you go into a country, no matter what their standards are, you’re going to use best industry practices when it comes to environmental work.

And if you don’t, you just won’t get any funding. And that kind of starts to drag.

Anya (36:54)
You’re about, especially when you submit this mineral resource estimation, like this SK1300 reports, like PFS reports. Yeah.

Brian (37:04)
Yeah, yeah, because

if unless you’re funding it out of your back pocket, you’re going out and raising money from institutional investors through stock exchange, you know, fund managers, et cetera. And those and those people are going to are going to basically force you into complying with best industry standards, or they’re not going to put their money into you because they don’t want to have.

They don’t want have reputational damage for investing in a company that doesn’t take environmental and social governance seriously. So you have to be best international practices. And one of my contemporaries, I’ll call it, in grad school wrote her PhD dissertation on the fact that if you actually

comply with or exceed environmental regulations, it actually saves you money because you don’t wind up battling with all the agencies coming after you for polluting the environment and loss of revenue or investment from other people. So, you know, that was back a long time ago that meeting, you know, best industry standards was a requirement.

it kind of goes back to the 1960s when the activists came out and said, we want clean water and clean air. And companies of all kinds, not just mining companies, chemical companies, everybody, we want you to comply with environmental standards. And before that, use of the environment was not being charged by society. So it was a free disposal. Then all of sudden people came around and went, wait a minute.

you want to charge for that and the mining company, I’ll say all companies, were pushing back because of the increased cost. Eventually what happened was they all found out that you could actually do things to best standards and lower your costs at the same time. So it’s just the same, you know, it’s the same thing as they keep pushing you to move further and further. You keep trying to try to get as close to that.

Anya (39:02)
Yeah.

Brian (39:24)
ultimate target, is 100%, which you might not ever get there, but it’s a goal that everybody wants to try to get to.

Anya (39:34)
Why do you think then there are so many objects, I mean now I’m thinking that I don’t think that if they owned by foreign companies, but there are so many objects in Russia and Kazakhstan that don’t comply, like they don’t comply with environmental standards, know, people like dying from cancer and stuff, so.

Brian (39:51)
We’re through.

Yeah, know, they’re unfortunately, they’re not just in Russia and Kazakhstan.

They’re everywhere. I’m sure that there are places here in the good old US of A where companies are doing things that they shouldn’t be doing. And they’re not getting caught yet.

Anya (39:59)
Yeah.

Brian (40:16)
But you hear stories all the time about…

Anya (40:19)
they can be just complied on paper but they’re not.

Brian (40:23)
They could be complying on

they could be pulling the wool over the regulators, they could be hiring their lawyers to keep the regulators and other people at bay. mean, you hear stories all the time from the past where XYZ company was dumping something in the ward, people were getting sick and no one cared about it. And then it took somebody to push harder

Anya (40:42)
Yeah.

Brian (40:48)
in order to fix it. yeah, it’s…

Anya (40:49)
Usually media, usually

media as long as media and reporting it’s…

Brian (40:55)
Yeah, it’s an issue. It’s an issue everywhere. How do you do things best practices and still be able to make money? That’s the balance of being able to make money and to produce things that I’ll call the general economy, the global economy wants.

Anya (41:19)
Any memorable experiences in terms of negotiating deals in Russia and Kazakhstan that you can share?

Brian (41:30)
well, you

know, it, it, it, it’s always, it’s always a challenge. I, I like to, to consider myself a student of comparative corruptology and the basic, so the, basic premise of that is every, every system is corrupt and it’s not just country. It’s every system is corrupt. Company.

Anya (41:46)
Okay.

Brian (41:58)
government organization, whatever. They’re all corrupt because they involve humans. The other way putting it is there’s a set of rules everywhere as to how you operate. And there’s the legal framework, there’s the legal system, the legal way, and then there’s kind what I call the operating realities of how things actually happen. And they’re not always the same. And so in order to be successful working in a country,

Anya (42:10)
you

Brian (42:28)
especially as an American where you’re subject to the Foreign Corrupt Practices Act and you go to jail or I should say I go to jail if I pay somebody to go do something that they wouldn’t normally do, which I’m not going to do. But I’m also subject to the, you know, the UK Bribery Act and almost every bribery act that’s out there. So you have to understand

Anya (42:39)
Thank

Brian (42:57)
what the system is, how it works. And then you have to be able to work within that system to do things that may, that if you do them one way, it’s an illegal thing, but if you do it another way, it’s not. For example, mayor comes to you and says, give me, pick the number, $1,000 because I’m gonna go paint the local school. Well, you know,

Anya (43:11)
Thank

Brian (43:25)
that if you give the guy a thousand bucks, maybe a hundred of it goes to paint the school and the school gets maybe one room painted. And you go, well, I can’t give you the thousand bucks, but I can go paint the school. And so you kind of, he gets almost what he wants, because he wants money in his pocket, but he also wants the school painted.

Anya (43:34)
Mm-hmm.

Brian (43:49)
And so in this case, he didn’t necessarily get the money in his pocket, but he gets the school paid in and people are happy. So that I call it, that’s how you have to understand things. And working in this country is different working in that country. And a friend of mine always said that, Brian, the first year.

in any country, you’re a fresh fool. And the question becomes, do you remain a fool after that first year or do you learn? And so you need to learn about how things operate because the way they operate in New York City is going to be different than how they operate in Kazakhstan or Russia. And it’s going to be different than how they might operate in Chicago or Denver.

Anya (44:27)
All right.

So do you have any type of kind of key points that you point out in terms of the risk management in high risk countries where you operate that you can recommend like people, okay, you know, definitely do X, Y,

Brian (45:01)
Well, yeah, yeah, well, that’s an interesting one.

Kazakhstan, I had come just out of being a banker and I remember we were closing a financing and, typically you get all the documentation done and then you sign them. And I can remember being in with like the vice chairman of the bank. I got called in there like nine o’clock on a Friday and he just signed them.

I was like, well, we really haven’t finished the goji. He’s like, that’s okay. We’ll get it done later. But you know, things work differently and you have to be, you’ve got to be a little bit nimble on how things work. But from a risk perspective, that’s an interesting question because if you’re a big company, they’ll tell you that I need to spend a billion dollars in order to make it.

makes sense for me to take a risk in this high risk country. And you could almost argue the exact opposite, that if it’s a high risk country, why don’t you start out with a smaller investment, figure out how things work, and then move your way up to get that organized. But from a risk perspective, yeah, I wound up working in some interesting countries.

the Congo, Ukraine, Kazakhstan, Russia, Guinea, etc. Number one, you have to understand the laws. So if they have a mining code, it’s probably a good thing to read it because that’s how they apply it.

Anya (46:47)
Okay.

Brian (46:49)
my kind of first as an investment banker going into Kazakhstan, the first thing I did was asked for the mining code and I read it. Because there were some questions about certain companies were having licenses taken away and people were thinking, know, it’s the government’s doing these bad things. And here I was an investment banker, I read the mining code and I went.

These guys obviously didn’t read it because the reason they’re getting away with it is because they didn’t do this. So rule number one is go read the law and work within their law, not your law because those are two different things. And you’ve got to have relationships.

Anya (47:19)
you

Brian (47:39)
at all levels. You got to have them at the very high level, the mid level. I call it the working level bureaucracy. The guys who actually have to draft the papers and work on the things and make sure that they’re meeting whatever regulations they’re meeting. And kind of lower level guys because they all have their place in getting a project done.

Anya (48:03)
and managing it in the US, it’s not the same way.

Brian (48:09)
same, same here, you know.

Anya (48:14)
What is the difference, I guess.

Brian (48:19)
Well, you know, the question becomes, you what do you consider a higher risk country? People always say, well,

know, they change their government all the time or they could change their government all the time. Well, you we change, you could argue we change our government every two years. We change our president every four. They can stay a maximum of eight. So, you know, how do you account for changes in political environment?

you kind of have to figure out which way the winds are blowing and manage that depending on where you, you know, how you think the long term of your project is going to work.

Anya (49:02)
So any cool stories?

Brian (49:10)
well, let’s see. so maybe, maybe my Congo project, back in 2010, I spent the entire, most of, most of 2010, I was trying to do a joint venture with the state of Manganese company. The railroad hadn’t been completely built by the Chinese. and, and our strategy was we have a pretty good idea that railroad’s going to be built.

to the border by 2013 back then. And it’s gonna take us a couple years to go through all the feasibility study work so that by the time the railroad’s there, we’ll be done, we’ll be ready to go. Unfortunately, kind of in December of 2010, they decided to do a deal with somebody else. Actually, their former joint venture partner was a guy named Dan Gertler.

And I said, well, probably not much is going to happen on those assets. Nothing did. And then I saw in 2018, they had made a shipment of manganese out of the Kosengi project. And there we go. Kind of missed that one. And then I swear it was like six months later, Mr. Gertler gets on the US sanctions list.

Anya (50:22)
Mm-hmm.

No.

Brian (50:35)
and bad behavior in the Congo. When we found out on the sanctions, and he’s still on the sanctions list for bad behavior in the Congo. But, you know, I’ll say regimes change. There was a new president that came in. And so we decided to go back after to do a joint venture with the Kisengi. And it just took a long time and a lot of patience, I think.

Anya (50:37)
Ha

Brian (51:05)
I think the reason that we got it where others failed was number one, we offered them the best proposal of any of the peers or competitors, you might say. And we were very patient working through the system. And that’s one of the reasons that it took so long. And I had some of my colleagues telling me that

Anya (51:16)
Hmm.

Brian (51:35)
certain people were telling them to tell me that I need to understand how things work in the Congo. And I said, I know how things work in the Congo and that’s why I’m not doing it. So you kind of have to stay in your ground when it comes to certain things. And we eventually wound up getting that joint venture signed quite frankly because

it was the best deal that anybody’s ever offered them to let them participate, to potentially participate in taking that company public so that they could participate in the upside of taking that company public. Whereas in the past, if you look at the transactions that were done,

The government may own 20 % at the local level. XYZ companies then they take it public and they turn it into a billion dollar company and the government’s still sitting there with nothing.

Anya (52:36)
As an early adopter as far as electric metals, since you said that you did this shift in 2010, you see how the industry developing. Where do see it in 10, 20 years?

Brian (52:50)
Mm-hmm.

Anya (53:05)
Usually people understand what’s going to happen by 2030, but where do you think it’s going to be in 2050?

Brian (53:14)
Well, there’ll be more electrification for sure. There’ll be more electric cars. There’ll be the broad range of electric cars from more, I’ll say less expensive to the very expensive. Just like we have gasoline powered cars now. You can spend less money on a gasoline car or a few.

Anya (53:39)
Do you think it’s going to be

some significant advancement in terms of the density of batteries and the actual vehicles will be able to do long range?

Brian (53:54)
think there’ll be more LFPs and there’ll be more manganese in the LFPs. I think one of the issues that I’m hearing from the in LFP batteries is the manganese tends to deteriorate over time. And so at a certain point that manganese may not be there. And so how do you keep the manganese in that battery chemistry for the longer term? I think the other

The other thing that we’ll have a lot more of is recycling of vehicle batteries because we’ll be out 15, 20 years and those batteries will have long reached their useful life and they’ll start coming back into the recycle economy. There’ll be a whole lot more of that. Right now.

I’ll say over the past five to 10 years, the research has been, let’s get a battery that we can put in a car. We’re not worried about recycling. Now people are worried about the circular economy and how do we create a battery? How do we design a battery for being recycled? Because you’ve got all these different, I’ll call them chemicals and metals in these batteries.

Anya (54:51)
Yeah.

Brian (55:12)
how do you design that battery to begin with so that it’s much easier to recycle those materials. So I’ll say the recycling portion of the business will be much more advanced than it is at the

Anya (55:25)
And in terms of the energy transition, I remember you were saying that transition is happening. It doesn’t matter, it’s already happening. The question is when will it be finished? But do you think that the way people call green energy, like solar, wind turbines, now nuclear is coming back?

Do you think…

I guess what would be the end point of this transition? Because this green energy, example, like wind turbines, for example, they can’t really be recycled, to your point that you were saying before. Do you think that people would think about those green energy devices in terms of the recycling or we will have to switch to something?

completely different like nuclear.

Brian (56:31)
Well,

be a range of different, I’ll call them technologies for producing power. You’ll have hydrocarbons, you’ll have nuclear, you’ll have solar, you’ll have wind. There may be other things that we don’t know about. I can remember listening to this radio show back when I was an undergraduate student and this…

This person came on the radio and was talking about imagine if we could we could generate electricity from granite All the energy that it took to create granite think of how we could release that so You know, we’re kind of in what i’ll call you’re not old enough but The dick tracy jetsons era of when I was a kid there was all this futuristic stuff like a watch that you could talk to was dick tracy

Anya (57:28)
Yeah.

Brian (57:29)
Jetsons, all this kind of, and it’s happening now. Yeah, so, you know, the, so the future, I think nuclear is going to make a bigger comeback, especially because there are these smaller nuclear.

Anya (57:32)
For me it’s Red Bradbury.

Brian (57:52)
what’s the word I’m looking for?

pieces of equipment that could power a specific project. Not just a big nuclear plant like a power plant that’s going to power a whole area, but just specific use. And I remember talking to the guys at the National Nuclear Center in Kazakhstan back in the late 90s and they said, yeah, we have these little mini nuclear power plants that we could use.

they’ve been on the drawing board for a long time and they’re now kind of coming into existence. So you probably see more nuclear. I think you’ll see a lot more solar for sure. Like here in Denver, Arizona, it’s almost no

that people shouldn’t have solar. It’s driving the cost down to

Anya (58:45)
But aren’t they

bad for environment when they’re at end of their life?

Brian (58:53)
Yeah, it all comes down to the circularity and the recyclability of all this stuff.

Anya (58:58)
Yeah, they

just bury them, I think. Once the solar battery is done, they just bury them and they actually poison the soil. So it’s like green until that moment.

Brian (59:11)
Yeah, and you know, that’s what.

Well, yeah, exactly and you know, you could argue that that’s what chemical companies did but they’re

all these chemicals that are used for useful things in life But the areas around the chemical plants are not so good So how do you how do you start designing? Recyclability into all of these things if they really want the so-called Circular economy circular energy

and green transition, how do you have it? It’s got to be a mix of all these power generation items because in order to have an economy and a manufacturing economy, you need to have cheap energy. And right now cheap energy is hydrocarbon and nuclear and hydro. It’d be nice to have lots of hydro power, but you you need a big river and you have to have, willing to.

building a wall up in front of that river and flood certain parts of it. So it’s a combination of all of the above that’s going

have to happen.

Anya (1:00:25)
And do you think, how do you think mining industry would adjust to this demands to energy transition and how do you see it? Let’s say the point was reached. know, how do you see it? The transition is completed, for example. Do you think the exploration and mining, how do you think it’s adapting to this new energy?

Brian (1:00:53)
Well, I would say it’s created

a big rebirth in the mining business to go get all these so-called critical minerals that are needed for the green energy transition. think maybe that’s the law of unintended consequences that the people that were pushing to get rid of hydrocarbons and to push everybody into wind and solar didn’t realize that, my goodness, in order to produce

windmills and the solar panels, we actually need all these metals and minerals that we don’t have. And so yeah, we’ll probably see a whole lot more autonomous vehicles in the mines. know, carbon reduction is something we haven’t touched on too much. That’s also another big thing, you know, trying to reduce carbon emissions. You know, cement.

is needed for an economy and it’s I think produces like about 10 % ish of the carbon emissions. So we need to get back. The cement sector was using ash from all these coal fired power plants as as a, as a pozzolin to help the hardness. What’s happened since all these coal fired power plants are shutting down.

there’s less and less amount of fly ash available. And so now they’re going back to what the Romans used for posin for that cement. It also reduces carbon emissions. so carbon will be another thing that starts pushing their way through the food chain. And I don’t know how much carbon you can really eliminate from steel because again, if you want an economy, steel’s a…

Steel is a big part of that economy because you got to build stuff. So how much carbon can you really squeeze out of the steel sector before that steel is not as I’ll say useful as strong.

Anya (1:03:08)
Brian, last question since we have a new president-elect. And I guess how do you envision his influence will affect mining industry, market, maybe projects that people have on US soil and abroad?

and if it can be actually comparable to his previous term.

Brian (1:03:40)
Yeah.

Anya (1:03:41)
considering especially Elon Musk being his, one of his biggest donors.

Brian (1:03:45)
Yeah,

I’ll take the last part of that first because maybe

a little easier. You know, comparing this new term to the last term, I think they’ll be different. I think Trump or anybody that winds up in that position probably learns a whole lot about how things actually work when you wind up in that place.

some of the things that he’s doing now, you look back on it and how many people that were really supporting a Trump philosophy and maybe they were part of some old Republican regimes and so they weren’t necessarily in lockstep with what he wanted to do. Maybe they’re actually more fighting against it. Now he’s learned and he’s probably…

maybe gained more relationships. So maybe the people that are working with him are more aligned with him. And so maybe that will help whatever policies that they want to push forward. From our perspective, if one of the things that they want to do is reduce regulations, hopefully that’s a good thing. You one of the things that people complain about almost everywhere is the permitting process.

and how do you streamline the permitting process while not eliminating the whole purpose of it, which is to have a clean environment, right? That’s why you permit stuff is to make sure you’re doing everything the way you should. So how do you streamline that so that we can start producing the things that we want to produce? I’ll take one step back and say Adam Smith had it right.

that whoever can produce something the cheapest should be producing it. So theoretically, China should be producing all these electric cars because they can make one for 15,000 bucks. That works until you put national security interests into it. And all of a sudden you go, well, we can’t let China produce everything because what happens if we get into a conflict, they’re going to cut us off. So that is the reason why we can’t let that happen.

I think that a couple of things with Trump may be more aggressive towards China than a Harris administration would have been. So from a national security perspective, that’s good for us because there are no manganese mines in the United States. And currently there is no hypergmanic self-heat monohydrate being produced in the United States.

Anya (1:06:25)
Right.

Brian (1:06:27)
I think he was also a little bit more, I’ll say, pro-mining than the Biden administration was. So I would hope that mining is promoted, especially since we have no manganese.

He wants to put tariffs on and that’s causing everybody lots of anxiety. And how do you keep a competitor from flooding your market with really cheap goods and destroying your industry? That’s a big question. One of the things that has to happen is costs have to come down here in order to create an equivalent product. That’s one thing.

Yeah, people will be concerned about what tariffs and when and how much, how they get phased in. Do proposed tax cuts help offset some of those tariffs? He’s talking about a 15 % tax rate. Can he get that through? People could argue, some people would argue that lower taxes create more revenue because there’s

People are more willing to pay a lower tax rate, number one, and not avoid the lower tax rate. So if you try to impose high taxes, number one, they always talk about how they want to tax the rich. Well, the rich have the money and the resources to go figure out how to not pay those taxes. So what really is the effect of raising tax rates?

Anya (1:08:05)
Yeah.

Brian (1:08:10)
The other thing that happened in the past was tax rates got 75, 80 % and the wealthy stopped giving money to charities. And so the charities started going crazy that universities weren’t getting money, charities weren’t getting money. And they figured out that if you’re going to tax me like that, I’m not giving it away. So less incentive to try to avoid paying taxes if they’re low. So maybe that helps the overall economy.

And we talked about kind of competition with China, national security. Hopefully that helps us with funding from the Department of Defense and Department of Energy to help accelerate and get this process moving faster.

So, you what’s the overall impact? think from our perspective, it should be positive because if you want manufacturing in the U.S., then in order to do that with U.S. goods and services, then they should be supporting a manganese mine in the United States. Then they should be supporting a hybrid manganese sulfate monohydrate plants using manganese from the United States.

Anya (1:09:25)
Well Brian, thank you so much. Thank you so much for your time. I hope we get to do it once again sometime in the future. But it was very interesting and I appreciate your insights.

Brian (1:09:36)
No, thank you very much. I had fun.