 Jack Lifton is a senior editor at Investor Intel and Jack, you certainly don't need any introduction to our audience but welcome via Skype to the Investor Intel studios here You're going to be in Toronto soon for the Mines and Money show. It's September the 28th The exact dates are the 26th to the 28th and What are you going to be talking about? I'm going to be talking about Recycling automotive components particularly batteries, but also anything that can be recycled containing technology metals and materials That's stuff you've been writing about for some time. Yes Do you want to give us some themes that you're going to be talking about in that? Yes, I'm Very surprised that we have there's been so little Talk and action in North America about recycling lithium-ion batteries For vehicle use of very large batteries when in fact the governments of both Canada and the US mandate that cradle-to-grade management of these materials in other words they consider these batteries to be Safety hazard if they're outside of the car just handled so they want to know when the car is returned Where does that battery go and right now it goes to the junkyard and where is it going? So there's sort of a crackdown happening in the US and and I'm hearing from people Well, you know, this is very early on there isn't much material There are thousands of tons of these of these batteries already heading for scrap the the largest individual maker of Electric vehicles in the world is Nissan and the best-selling Electric vehicle in the world is the Nissan leap which is made in Smyrna, Tennessee. Not not somewhere in Japan so those cars Along with Tesla's and various other Japanese and makes are on the road They do have long lives, but they've been around long enough. There's enough of them Typical battery on one of these cars can weigh half a ton so it doesn't take very many of them to create material and and again People are saying to me. Well, you know lithium is so cheap. Why would you bother? Well? Lithium may be cheap, but where's it coming from? we don't produce enough of these lithium cobalt and Was called spherical graphite in this country or in Canada. I'm in the US We don't produce enough in North America to make all even a fraction of the vehicles that Mr Musk is planning tells us he's gonna be making just in the year 2018 and I've got big news for everybody watching There are at least 20 or 25 Electric vehicle electrically directly electric powered vehicles and hybrids coming onto the market the next five or six years They're coming from Europe the US Japan and China and Korea So it's gonna be lots of these things around and right now Uh as some people like to say we seem to have our thumb up in the wrong place. Nobody's doing anything They're just talking about it. I'm very familiar with this in my lifetime in commodity materials People talk about it and it feels so good when they're done talking, but they don't do a damn thing about what they're talking about well, this can't go on and I'm saying that I've been looking at recycling and Recycling conserves something even more important than metals conserves energy Why are we gonna use the amount of energy used to produce a new commodity metal and material from the ground? Is is isn't should be the highest amount of energy ever expended for that material? That's why the US steel industry today is is majority dependent on scrap as a feedstock Why spend all the energy to to to bring new iron into production into production when you've got plenty of material left? That can be produced at much lower energy and I decided to make it as a theme Peak energy. It's not that we we can't produce more energy We can light off atom bombs or in the whole world. We get a lot of heat that way. That's not the point. It's We are saying in our culture. We don't want coal. We don't want oil. We don't want this. We don't want that. Okay We need a certain amount of energy. I call it the base load of energy for commodity materials production That is coming today from coal and oil and some from nuclear Solar fields wind farms cannot produce enough electricity for example to run an aluminum foundry Which is a huge either of electricity. So More and more electricity is being consumed in air conditioning. I'm not saying that's a bad thing Some in some African countries 20% of their total energy purchase for air conditioning in the US Is just a miserable 6 to 10 percent imagine that all the electricity produced that much goes for air conditioning Which we can't live without correct even though the American Secretary of State says we shouldn't use that except on his yacht Or his bet me I guess but we're not supposed to do that so we're gonna keep doing that and if we reduce the amount of energy we're producing how are we going to Prioritize our use well the environmentalists say well just stop mining great, okay Well, then where are they going to get the metal to make you know, they're the trailers they live in or whatever over they survive We're reaching a problem point here. I mean that we're energy distribution Prioritization is becoming people are ignoring this I I I cannot think of anything offensive perhaps heating ourselves Uses more electrical energy you've got light heat and Metal refining people forget about that electric art furnace steel is what we is what we do is the United States Aluminum is entirely produced by by electrolytic reduction of materials and Smelters are run Plasma art furnace smelters for recycling lead those are Electric no if we're going to reduce the our amount of energy What are we gonna address the base load issue in how much energy must we have to maintain our society now? That's for you younger guys to worry about not me But what I'm saying is I'm gonna tell you a way to do it Let's recycle every place we can and please don't talk to me about the price of a kilogram of metal You have to capitalize the environmental the energy savings all of these things and the social value Then you can tell me what the actual cost is so those people who think that digging up Uranium the middle of Kazakhstan is a great idea. It may be but not for the Kazakhs We have to conserve by the way. We we could we could also recycle nuclear fuel We don't do that instead in the United States We have a hundred and fourteen Depositories at each one in each nuclear planet where we bury this stuff and forget about it while our politicians say well You could have an earthquake in a million years in Nevada so that we can't store it down There why in the year one million AD it could spill into Las Vegas I mean the stupidity of this is beyond belief so Recycling is to me The topic of our time we have this Every time I go to China that they they say to me why do Americans waste so much of their resources I haven't got an answer for that Well, I can tell you that the public is not well informed on this the days of Easy flow of metals and materials is is over. We have to conserve When I say conserve energy, I don't mean turn off your air conditioner. I mean Use less energy to produce the basic wrong shows you need End of speech well speaking of producing the materials you follow the technologies that yes mining industry. What's what's new there? Well, I'm watching the the evolution of process technology and in mining and metallurgy And the theme there is less energy use for example As we know in the rare earth serve three new technologies There's there's much better solve an extraction technology that's been developed There's molecular recognition technology and there's continuous iron exchange technology What do they all have in common? They use a lot less energy than the traditional methods of refining metals And this is going across the board of just the other day. I saw that The scientists of MIT the man who invented what's called the magnetic liquid magnesium battery this is a device that has about 20 tons of liquid magnesium in it and Even though most of us recoil and terror and something like that Because the magnesium hits the air really does burn quite nice and you can't put it out with water Hawaii has commissioned two of these monsters To to smooth out their wind and solar to actually a storage the now These are not going to be used in cars or homes anytime soon But this gentleman Professor Satterway of MIT. I shared a stage with him earlier this year in Japan He just he admits and publicly he discovered by accident a new way of refining technology metals as he was I Would say playing around as he was research His smelting operation to purify the magnesium He discovered that some of his processes were producing high purity metals as a byproduct And then he realized that he's got it He's got a new low energy way of producing metals like antimony business with things that aren't so commonly known But this is this will announce the last few days and it's a dramatic Improvement in in the in the production of high purity metals of that type So things are happening all of the time, but as you know friend The path from the discovery in the laboratory bench to be able to buy it in the local Tim Hortons Takes a while Like by the lifetime or two, but it's underway and I don't know why But North America is just shining in this area innovation and mining and metallurgy is is just Going at light speed in Canada in the US and I'm following half a dozen companies that have really good Technologies, what are they fighting? You go to a mining company and they say gee We've invested a billion dollars in refining platinum this way You're telling us we should just shut that down and use your stuff But you see the only cost we've got is maintenance and Occasionally changing a part on this stuff because we don't have to do it But we'd have to spend a lot of money to put your stuff in so I'm I've said this until I'm blue in the face a New venture for any technology metal Look at the new Process technology do not cost it out with the giant smelters or the inefficient solvent extraction plants Those are the past you can do much much better and you'll find a lot of projects with that We wrote off in the last ten years Are economical when you look at state-of-the-art technology and yes, somebody's got to be a guinea pig But isn't that always the case? Jack you talked eloquently about our need to do more recycling Yes, is the recycling status at the moment and who are the big players? Well, the problem is I'm talking about recycling technology metals And if we call the platinum group metals technology metals, and they certainly are for catalyst That's the most recycled material there is I I suspect that if you take platinum palladium erodium Every bit of it that we can recover from from the end of the end of life is is recycled steel recycled You could recycle any more still okay lead today about 85 percent of the lead We use is recycled from batteries actually America's the biggest user of lead one of the smallest miners and people say how can that be that's because we recycle all of that stuff So the what I'm getting at is with the exception of the platinum group metals, which are rare technology metals The base metals are recycled very efficiently This is capitalism working has nothing to do with anybody wanting to do anything good for it for society in the firm It's about making money and saving money now We are not recycling germanium gallium rare earths Tolerium and we need these things, but they're not very sexy and the public isn't aware of them They're just words, but in the in the mass production consumer goods. They're critical and and I think That we could no longer pretend that we live in a globalized world And that all you have to do is pick up the phone order some stuff from China Prometers it'll be delivered that doesn't work anymore. I What I see every word I've been all over the world this year and everywhere I see local development of supply chains total supply chains I was in Brazil and all they were talking about is they're already mining rare earths. They mine Uranium they have a lot of things there iron obviously there the whole country's made out of iron and They are talking about vertical integration Okay, the Japanese and the Japanese for example have no as you know They have no raw materials who is that less than the Japanese? They're all over the world not just buying mines, but developing mines Integrating them into refineries and then in and use products and manufacturing Japanese do this up for survival the Koreans do it for survival What do we do? We say I will get it from them. Well, you know As those parts Japan is a well-developed consumer society They're probably not gonna have any more demand except for wheelchairs and things like that, but China Wow, are they gonna have some consumer demand and India is sitting there waiting to explode and quite frankly Africa may happen before India Africa has a billion people on a continent India has a billion people in a place size of Canada These are markets that are ready to go and when and Our technology materials come from those regions of the world because we don't bother produce them here from Newly When those people start using their own material they're gonna give us the high sign and say you can have what's left over and There isn't going to be anything if we don't start recycling We're gonna have to decide who gets a television set and who gets a car there You may think I'm nuts most people do but I'm telling you that is exactly what's gonna happen There's no way out of it. We have to recycle to make up Our law what we don't produce new new new material now led as we do steel We do that copper. We do that come out in fine Why don't we do it with technology metals because the volumes are small and and if you're just Processing them as part of like the copper supply chain it if you stop producing copper You stop producing technology metals very simple, but now with new process technology There are cheap ways to do this stuff especially from recycling even or Residues or concentrates things where all these things have been sitting for years. They can be processed with these new technologies. I Think that Institutional investors, I know that the ones I've talked to don't even want to talk about anything unless it involves technology They don't want to talk about mining. They want to talk about vertical integration. They want to know What how is somebody going to produce something you can sell to the public from this day? They're not just sitting a hole in the ground or a green field with a grab sample. That's over They want to know what do you know about the supply chain and where do you plan to enter it? And how are you going to do it? We have we haven't one or two people In the last ten years in the railroad service who said things like mine to magnet that was silly Making man. This is very complicated So it's even the best geologist doesn't know how to make a magnet nor is the best magnet maker know how to find any minerals These require a lot of people a lot of techniques a lot of married technologies You can do it, but you don't do it just by announcing you're going to do it Lately we've had some of our junior miners say they're going to go into exotic things like Specialty alloys and I'm looking at a greenfield site and saying so from this you're going to go to aircraft components and Rocket motors on yeah, yeah, okay great. I don't believe that either. I'm looking I'm looking for companies that will produce Where they to where they can make a profit if you want to virtually integrate you better join up With other companies that know how to do with you what you need done. You can't just have a One-stop shop that doesn't work in high-tech and we've been pretending for the last ten years that if if there's rare earth in that mountain Then I've got a magnet, you know, that's ridiculous What we need to examine the business models and the plans of these companies say so, you know You're so you're going to produce this material this could use to make magnets So where are you going to sell it? Who are you going to sell it to and is that profitable at that point? Do you sell mix concentrate? That's not profitable. You're going to separate it. Okay, there's some profit there You make metals as for alloys magnets Motors, I mean who in your company knows anything about this. Oh, oh, you read about it and what I love 43 101 you had a marketing study signed off by a qualified person. Okay, and now you know how to do it This is nuts I mean I can say this guy an old guy don't give a damn who criticized me But for God's sake, how can how can a financier hold his head up when he listens to that baloney and says, oh, yeah That's that's a great idea. It is not a great idea. You need we we have left out The important part of this of this thing sure commodities Technology metals remember that's a great business But where do you make a profit not getting out of the ground? Let's go old That's about it. The rest of it. It has to go downstream You need to either hire a lot of people bring in technology and then is my final thing I want to say something you produce a product. Let's say it's a magnet Well, let's see General Motors takes three years to approve a new magnet and then they also want to approve your factory Look at your finance make sure they don't have to lend you money to stay in business and that takes so much between the time you You know, you you locate a mineral on the ground and you're selling something to General Motors about a decade So stop pretending that you know the price of your shares changes by the day if you're lucky if it changes by the year and We need all these things are people who actually use these rare materials don't know where they come from Okay, so we do need to have mining refining, etc. But it has to be profitable and I'm saying and I've been saying this from the first thing Why not start to be in the rare business or the platinum business or the cobalt business by recycling? Now you've got a product that somebody wants now You can add to it with new production and pretty soon You would be a valued supplier because you you'd be able to deliver an amount of every 30 days Where problem with recycling is who the hell knows how much you're gonna have on a given day. So add that to a mine You can't just have one thing You have you have to think of who you're gonna sell it to and what you're going to sell So I'm waiting to hear the first, you know Junior venture tell me this but I haven't heard it yet Jack always provoking But thank you very much you're giving us lots to think of it. Thank you for it