thank you welcome to a scrap life a podcast solely focus on the hustlers Grinders operators and business owners who live and breathe the scrap metal industry every day we are the original recyclers no suits required just guts and hard work here is your host Brett Eckhart what’s going on everybody another uh scrap live episode episode 999 I don’t really don’t know I don’t really care um best thing I love about this podcast is I get to talk to people that I want to talk to and that I find interesting I feel like they’re the information that they’re putting out is valuable whether it’s they’re putting out on some sort of social platform or whether they’re just here to talk and and explain something they know a lot about and uh I’ve had this guy on before for Matt Watson from uh he is the president of precious metals commodity Management LLC and uh he is I mean and it’s just a short quick form he is super knowledgeable about most Commodities that Us in the recycling commit the communities are dealing with every day so I love his input I loved get his

you know his two cents on the markets where they’re at today where he thinks they’ll be at six months a year or whatever and the cool thing is is Matt’s almost to a place in his life where he can start you know getting this information out there regularly to guys like myself um and kind of let us know his two cents and research he’s doing so welcome to the show again Matt I appreciate it I I like talking to you I like talking with recyclers I spend a lot of time within the inner International precious metals um arena with AutoCAD guys uh scrap collectors and and the whole recovery Network a lot of the E-Waste collection folks as well so um I kind of live and swim in this uh in this pool if you will so um you you live and swim in the swamp with the rest of us sometimes right yeah so I’m based actually in the close to the Silicon Valley uh here in beautiful California so uh you know Electronics guy and an industrial statistician is my background but um have evolved into this precious metals and now

a critical Metals um analyst um I I serve like I said the AutoCAD Industries recycle Industries some of the major producers of precious metals um yeah so I’m and more and more I’m branching out into critical minerals as it relates to these clean energy transition topics whether it be EVs and the batteries whether it be soap or when the critical Metals what when you say critical Metals for those people out there they’re like so okay what’s up what do you deem as you know the metals that are critical Metals right now sure so the iea the International Energy agency um you know they’re looking at these road maps for clean energy they’re being proposed by by groups like Arena the international renewable energy office Irena wants to see by 2050 they want to see x amount of solar deployed 14 terawatts We have basically one terawatt installed globally so they want to grow up by a factor of 14. and that number will climb over time um you know what does it take to do that well um um for solar I’m very worried about silver uh as it ends up even though Silver’s

in the 24 troy ounce range um the they’re already consuming close to 15 of the global supply of silver just for solar PD and they’re going to grow that how many more times over four more times over three more times over where’s the silver you know can the silver keep paste and what does that do to the outlet for silver and um so silver I think in my mind is one of those critical minerals the battery Metals the lithium the Cobalt the nickel the manganese uh graphite uh whether it be a mine graphite or synthetic man-made graphite all those are minerals that are going to be under huge pressure to meet the ramp as they try to Electrify and do all these EVS uh copper one of your famous Metals uh copper and and yeah yeah they’re the two most conductive metals on the periodic table um Silver’s number one copper is a close second and then it just drops way off and you get down to where you’ve got to use aluminum well lo and behold uh automakers are being forced to use more and more aluminum as an alternative to Copper

even though copper is preferred why there’s going to be a limit on copper um it’s it’s interesting when you talk copper you look at the demand between now and 2050 you know analysts views on different metals or can be all over the map but on copper analyst views are actually quite narrow everybody sees an Outlook we’re going to need to basically more than double by 2050 you’re gonna need about 50 million tons per year even in the most modest case you know of demand um we’re not going to get there we’re going to miss terribly um there’s just not enough copper deposits on the planet that are mapped out where you have you know Junior mining projects where they have a plan to extract and process and and sell that at a profit um we’re not going to be able to to keep up one of the problems that’s happening with all these critical minerals is it has to do with the mining completely it’s it’s the timelines even with funding to develop the project get it released get it into production and serving the market so what is the average what is the

average and I’ll probably interrupt you 100 times Matt because I got questions that used to say something that’ll trigger some of my mind but what is the average I know I think you’ve said this before and I’ve read it but I’m curious what your what your thoughts are from mine to actually start a mine let’s say let’s say conference open pit line right fairly shallow you’re able to determine it’s an actual digging dirt right and let’s say your deposits these days are about one percent copper or grade right yeah you got to go mine 100 you know 100 times more than you need just to go get what you need process all that um those projects used to take on average about five years from concept that having the project up and running and going that timeline has doubled it’s now closer to ten years yeah so that’s the number that rang true in my mind was 10 years from start time because all these they have these whole set of new ESG requirements environmental and social responsibility um you’ve got to talk and interview the all the indigenous people you got to do

this on scrap you got to look at all your water usage you’ve got to look at all your power consumption where is it going to come from you have more and more hurdles that you have to jump through and I think some of the hurdles are warranted and actually quite good but it’s doubling the timeline nonetheless um what do you think that does to investors so if you’re a mining investor and you invest in mine after mine after mine and you’re getting your payback starting in five years now you don’t get paid back until 10 years yeah I think people are lining up to invest in mining anymore no that’s part of the problem and so when you add up our composite requirements for all these critical Metals copper and silver and the pgms everything included you need to ideally more than double most of these critical medals and yet again it’s the investment’s just not happening and this is where if you follow Elon Musk and and some of his tweets and I’m a big Elon fan I must admit he you know he he put out a tweet the other day that

was actually quite controversial he said I don’t understand why lithium prices are so high it’s now up north of 70 000 in metric ton for lithium uh just a couple two years ago it was as low as ten thousand dollars on Metric down so it’s gone seven axons gee that’s kind of impacting his battery prices right they use a lot of lithium and guess what it’s going to go higher still we’re not done yet it’s going to go higher still so it’s the one so I don’t go ahead are you finished I’m just saying that uh so these Commodities you really have to have an understanding of these commodity markets and where these Metals come from what their source is going to be yes we’re going to have to lean on Recycle more and more in the future than we ever have before from everything from of course copper and silver um but even the lithium batteries as you know there’s a lot of groups that are starting up doing battery recycling right yeah um governments in Europe by the way you know there’s a lot of new green New Deal funding from the

EU where the throwing money um to help get these groups off the ground the problem is Regulators again don’t know what they’re doing they they’ve started too much capacity battery recycling capacity in Europe ends up they’re not going to have enough weight to keep the shops loaded up I think you’re going to have a lot of these new companies are going to die in their first five years of life they’re just not going to have enough business enough that was my concern here in the United U.S I mean you you see these big projects and people discussing it and then it feels like the hot new thing okay we’re gonna have you know we’re gonna start recycling batteries we do this like there’s a lot of infrastructure needed required to really actually get to that to get through that process from start to finish and there just isn’t enough the volume out there to support some of these humongous projects that I see getting put into place and that’s just here in the United States let alone you know other countries Europe Europe’s gone twice as crazy as we have so just to

give you a picture and so Yuma core has been very honest unicor the biggest recycler on the planet of all metals right they’re the Beast they they have very openly discussed hey about two-thirds of your volume in the first decade on batteries has to be process grabbed from the battery makers themselves if you don’t have access to strap intermediates and you know the lithium the Nickels the Cobalts you know and all the the scrap tailings from their manufacturing process you’re not going to be able to keep your shop busy yeah and so I think some of the bigger name brands that are attached to Tesla are attached to different oems they stand a chance but when you hear about some of these Independents hey I’ve got a little you know small thing I’m starting up in wherever you know British Columbia I think those guys are going to be challenged their business pro you know situations can be really tough they’re just not going to have enough weight early and so in relating to say as somebody in the scrap Industries terms that’s like basically a steel mill taking all their cutoffs and

basically taking the material back or having some sort of Scrap Processing Company that then prepares that gets it back ready for the Melt so that they can which is a big portion of you know there’s I mean there’s companies out there that that’s all they do is just basically handle process steel mill cut off seconds and scrap you can get it basically cut to size ready for them to rebelt again and that’s a big portion of you know a lot of scrap scrap motorcycling companies uh volume so that only I never thought about that but 100 that makes sense that you’ve got to have access to that in a developing industry you know versus say a mature one on the steel side or even aluminum side you know do you have have access to that those tailings to to work into your you know flow of the recycling flow to actually just get enough volume to to make a go of it right right now on a product like copper or commodity like copper you don’t you don’t necessarily have to do that but I think some of the battery Metals yes you do

you absolutely do yeah so when I think about your your very first statement you to go from say one terawatt to 14 terawatts right um a battery capacity a battery capacity is that a is that it I mean honestly speaking is that an absolute Pie in the Sky dream or is it I mean is there is it is it possible if you go add up all the different countries that are making these zero emission mandates on the vehicles they’re making these declarations and a lot of them are centered around 2035. that by 2035 we want to be 100 EVS they say both on light duty and heavy duty and you’re right for light duty with the countries that have called out this this desire mostly Europe the U.S and a few other countries you need about 14 or 15 terawatts of battery capacity just for light duty and another two or so for heavy duty can we get there yeah we can get there can we get there by 2035 oh no way not a chance zero chance so win Regulators like AOC trumps up but we’re going to do this by 2035.

you say you’re going to do this but no you’re not going to do this Automotive groups know this most notably Toyota gets bashed a lot if you read a lot of these Ed magazines they get Bachelorette why hasn’t Toyota signed up for a whole product portfolio of you know 100 EVS instead they’re still pushing hydrogen fuel cell vehicles instead they’re even doing hydrogen combustion engines there’s an alternative to fuel cells where you just burn the hydrogen like a gas zero emissions they’re looking at the batteries and of course they’re the biggest maker of hybrids hybrids I love hybrids use smaller batteries about one-tenth the size of a Tesla battery a Tesla battery is roughly 1200 pounds of battery yeah buried in the four Boards of your car they’re coming out with a Hummer you know how big the battery and the Hummer is going to be it’s gonna be gigantic yeah by the way American Appetite for cars are going to be bigger SUVs and bigger Suburbans and cars coming out that are electrified these are going to be two to three thousand pound batteries these vehicles by the way present a risk

your Collision fatality rates are higher in these why because you’ve got more Suburban sized Vehicles out there competing with little Toyota Priuses yeah right yeah basically just big tanks I mean if you’re adding that much weight which then goes back to what you’re saying with the aluminum that’s why they’re being forced to use more aluminum just to keep the vehicle weight manageable weight and just you know out of Alternatives there’s going to be a lot of design work on working on what alternatives can we do if we can’t get copper what else can we do power transmission is the big part of what copper does as you know about 75 of the global copper goes into wiring at one form or another Automotive guys all the big oems they’re freaking out on these EDS the amount of wiring triples in EDS there’s so much Electronics you have more sensors you’ve got and so you’re just running harnessing and you’re harnessing of all the wires is getting bigger and bigger um they’re having troubles just managing that aspect of the vehicle bill right and it’s astonishing you know and of course wiring goes into all

the industrial and the electrical equipment um of course capex of any form for any tooling there’s wiring everywhere and that’s what largely what you’re harvesting in your scrap business um so it’s gonna be a challenge as we run short on copper well what else can they use one of the one of the clean energy transitions that’s going on is um they want to put these wind and solar Farms like in Europe you know putting a a solar farm in Norway will only get you so far yes you know that that Latitude so far north you you’re not going to harvest it may be better for wind in those regions than solar so what they’re talking about doing is putting big solar and wind farms in North Africa basically the Sahara desert not so consistent winds coming off the Atlantic and the med great irradiation solar patterns right you get your maximum solar output then your problem becomes the extension cord how do I plug that renewable form in North Africa into Norway into UK into Germany well they have to run these cables not just any cables mostly cabling that we run by the

way across C4 beds is communication it’s fiber optics and now suddenly you want to transmit a power line well the power line size the diameter is a direct function of how much current you’re trying to transmit so the UK has a 10.5 gigawatt solar and wind form they want to build and they’ve determined that they need a cable an extension cord that can transmit 3.6 terawatts at a time when I was calculating the amount of copper needed to do that it’s a 2 600 mile long cable nice long extension cord yeah they’re going to break it they’re going to break it into four different cables they’re going to do subsea cables which is a really expensive process of laying these cables they have little trenching tools and they you know on the seabed and with robotics tied into a big specialty ship with big spools of these things wound up as they unfurl them into the ocean and they meld them together my God it’s it’s 80. how in the hell is that more efficient or more or or better for the environment for I mean I this that process you explained

and I didn’t and I cut you off before you go through it like you started thinking about it and oh yeah it seems it seems bananas to me and that is a 20 billion dollars of wind of solar 20 billion dollars for the extension cord oh choke that’s kind of expensive yeah by the way in terms of geopolitical stability if you go to war with Russia how hard is it to snip your power cord pretty darn easy they just blew up the pipe the Nordstrom too the other day right a couple pipelines they were able to do that easily yeah it’s very very low capex and low technology to go blow this so you’d be putting your energy Grid at risk by doing this in Broad scale by the way another big topic which they’re already having issues in the United States with people trying to attack the energy grid with these substations so imagine imagine having to protect now all these you know solar wind and all these other you know potential substations that are in foreign countries and running these big cables yeah it’s I I have a major problems I have

major problems on all these clean energy transitions most of them are just too mineral intensive and frankly they’re not going to work EVS I’m fairly negative on um because they don’t move the CO2 needle enough all the mining that you have to do is so dirty for nickel and Cobalt that particular very dirty and we’re polluting our ecosystems I mean they’re raping the country of Indonesia they’re raping Islands to go get the nickel that they need and there’s all sorts of nickel runoff into the oceans in a region called the coral triangle yeah with pretty high rates of biodiversity and I mean we’re just damaging our planet and of course environmentalists you know one of the first question I asked in environment also you’re in favor of all the solar and wind oh so that means you’re in favor of mining that’s great to hear and of course they’ll respond oh no hell no I’m not well you can’t be one of the you can’t it’s they go together you realize this and they don’t realize they do not realize the size of the mineral requirements that they’re asking for to do what they’re

asking for they have no clue um and then I I you know I have some other bets on the clean energy front real quick while you’re on the while we’re on the EV topic and you’ve you’ve self-admitted that you’re a fan of Elon Musk and and I and I assume not you you said you’re a fan of Elon Musk and and but you’re not a fan of the EV transition um the reason I’m a fan of Elon Musk is he is the one adult in the room see what you like about the guy you know obviously he’s controversial to many but when it comes to this Nickel in the Cobalt he was very upfront out of all the battery producers and oems on the EV front he says I’m not going to play with these dirty Metals we’re going to do it right we’re going to mine them responsibly and he’s refusing to go into regions like Indonesia where they’re dumping mine tailings directly into the ocean yeah refuses to play that game and so God bless them for that right that without being told without government on his throat he’s trying to

manage it the correct way so God bless him I also think he’s very um his team is very ingenious they they’re doing things at the big Auto oems like vws and Fords aren’t doing um they’re much smarter on all that cable harnessing I’m talking about the Teslas have bigger better computers much more centralized CPUs they use fewer CPUs where most cars today have like 12 or 15 CPUs in them okay Tesla is very centralized and so they do things from a design perspective that are much smarter uh they have some of the world’s now biggest Automotive casting tools where they could do the whole body with basically a progressive you know punch press thing or a guy that forms the the vehicle reducing the number of Parts dramatically I was just looking at this infographic the average profit margin on a Tesla’s over nine thousand dollars a car where VW everybody else in the world is a thousand dollars I saw that that’s a that’s a that’s an interesting just in the in and of itself like that Dynamic it gives him so much more or pricing power you know in the market because

he has the ability to to lower his price significantly if he wants to or as a company they can if they want to Elon is more of an he’s more of an engineer automotive manufacturer in my opinion and he’s very focused I think the one area though that he and others in this clean energy movement have missed again is the materials he went in you know a decade ago when nickel was cheap the copper was cheap all these components were cheap well they now have all gone up at least two reps if not seven just in the last two years uh like I said lithium has gone very much higher they are altering the design of their batteries trying to not use the nickel and Cobalt just to lower the cost to have basically lithium only with cheap iron and cheap phosphates by the way on the recycle front the most popular flavor called an lfp uh a lithium iron phosphate battery they’re underwater economically you can recycle and recover the lithium but your treatment charges for recycled are more expensive than the metals that you get out of the end of the pipe

meaning somebody has to subsidize the recycle to recover that lithium and we just this is a similar that’s a similar statement to the last time we discussed um with silver you talked about the amount of silver that actually goes to the landfill because the cost of recovery of the silver on their low-grade electronic items is does it match up with the value at the end of the day of what the Commodities were today right you you had some E-Waste business and you know this I mean a lot of these Metals you know gold included are adding you know one two three percent of the composite matched up printed circuit board weight right there’s golden yeah the gold is absolutely economically worth going to extract in fact that’s what E-Waste does they focus on the gold but meanwhile you know 24 and troy ounce silver yeah it’s their you know one two percent low grade silver but again your treatment charges on the silver you pay more in refining than what you get out of the end of the pilot so therefore they leave it a lot of it goes by right

unrecovered 100 we can’t we can’t do that on silver back to the periodic table and conductive metals silver is more than most metals a limited supply all the cheap and easy deposits have been harvested and so the ore grains you got to go deeper you’re they’re um they’re doing more nickel byproduct mining to get the the silver um we’re we’re running out of silver yeah maybe 60 60 to 80 years worth of Supply remaining um so no you can’t just keep throwing it in landfills at some point you’re going to need to recover it because so I don’t think the price reflects the true commodity limitations and that’s is that because people are short-term thinkers you know like we you know everybody wants to know like what’s odium and Palladium going to be next week you know but they don’t want to talk about volume and so what’s it gonna be you know like five years from now because most people have already bought and sold Platinum cladium rhodium gold silver copper aluminum you name it right they’ve already bought it and sold it a zillion times over in the last five years

so it takes people I think to help wrap their mind especially people in legislative type positions to understand the big picture while us business operators you know we’re looking at it on a daily charting you know we’re trying to figure pricing buy versus sell what’s it cost us to to get a a to get a commodity from a scrap form to a smelter form and you know and what’s that what’s that look like financially versus whoever you have put in place to to regulate and create these laws that are taking a mind startup from five year to a ten year process um and trying to understand both sides of the equation right I think the way to attack this and it’s becoming more clear to me and like I was telling you before we started recording it I’m going to start doing some some reports that will serve the scrap and recycle industry people like yourselves more and more in the future but um I think the best way to handle this is whenever you recycle a metal like your copper you’re the purity of your copper going into recycle it’s got to be

80 plus percent pretty much across the board right to go to a student smelter yeah yeah I mean so the energy you have spent expand in the smelting and concentrating steps where you generate emissions is a lot less on a recycle strain then on a primary mainstream you know if you’re in Chile you’re mining copper it’s you know one percent or grade you’ve got it it takes a lot to work through to get to that one percent right um where your screens are much more pure and therefore you have a much lower footprint and so I think they’ve got to approach the recycle from an emissions perspective simply put I think all recycled metals should get a premium price premium I think that should be built into the market somehow whether even even if it’s legislated it the best way to encourage recycle and sustainability have a premium for it and in the bottle bill right if you’re if you’re a producer of something and you’re worried about the footprint of whatever it is that you build you’re going to use clean metals and be willing to pay a one or two percent premium

for clean metals if it was just as simple as a one or two percent premium I think that would change a lot of behaviors quickly yeah right and I and it would help the recycle the world especially in these metals that are marginal whether or not it’s economic to recycle them yet or not so at um lithium today I think it’s 73 000 or 78 000 a ton it won’t become profitable to recycle in these batteries until it gets closer to a hundred thousand dollars a ton but if you gave some sort of Premium maybe you’d close that Gap and help help perhaps you know get that processed so we’re coaching we’re putting too much pressure on having to go back and get new stuff you can’t just keep going back and getting new stuff without just massive you know expansions in your mining so sticking with the the EV conversation and moreover just kind of moving it to because we do have a lobular are in the recycling industry to listen to this podcast you know let’s let’s get to um Platinum Palladium and rhodium a because I’m personally investing interested B just

because I know that that’s a that’s a topic of you know of interest and you know obviously Platinum had a you know a decent run here this this earlier and towards the end of the middle of January and January got up to pushing 1100 you know Palladium has been getting kicked in the teeth you know since probably I don’t know uh October of last year and rhodium has just been kind of beat all the way back down into the you know I think it’s 11 5 yesterday today somewhere in that range what do you anticipate what’s driving these pricing you know positively negatively what do you what are you looking at um that’s that’s moving these Metals these markets let’s start with the rhodium so I think it’s it’s north of 90 of rhodium now goes into autocats when it goes into catalytic converters um and in particular these light duty it’s a light duty thing not not you won’t find it in your heavy duty Class A trucks but only in your light duty vehicles essential for these knocks when they when you hear about Knox emissions nitrous oxides rhodium is the magic

element that is converts and makes that knocks up benign materials that you know you deal with the emissions um it’s very dependent on gasoline vehicle production uh right now macro economically Auto Sales are not what people had hoped for right macro economically even China is below on its aggregate vehicle demands and so we’re just not building enough light duty gas vehicles to to keep that propped up um could it climb yes if you know uh right now if you look at dealers across the U.S they’re starting to repopulate the the dealer Lots with new inventory um yeah which by the way is a risk yeah um because the demand singles are weak right and yet they’re still building more right they’re catching up there was a Civic they’re catching up on all the semiconductor chips they’re able to build all the different varieties that they want they love building the high-end vehicles with all the all the gadgets in the car with all the electronics um and they’re putting them on the Lots but they’re not they’re not moving the inventory quick enough their prices are going to have to come down

one of the big problems that I see in the automotive Market is the price of cars yeah we’re north of forty seven thousand dollars a passenger vehicle now in the U.S 47 it’s climbed so fast um do all these seven thousand five hundred dollars per vehicle subsidies have a role in those prices going up probably but I I just think we’re making our cars too fancy too complex yeah and you know 40 47 grand for a young couple that’s a lot of money right and especially with interest rates going from zero all of a sudden they’re jumping up and you’re going to be paying a six percent you know nine percent on your car loan yeah that’s a big deal suddenly you’re 800 a month in payment and and so clearly the prices of the vehicles are slowing up car sales so so rhodium on it rhodium is going to be really touchy on if it climbs or goes down um and it’s all macroeconomic how how many vehicles do we build when how does that how does the macro economics of where the actual rhodium comes from I.E South Africa and

Russia I just think helpful the economy right so we have the tech sectors already announced over a hundred thousand head count reductions layoffs right so the tech sector is kind of leading the way and the fear is is that you’re going to see other businesses start to cut headcount um in yeah so I just think the the GDP we’re going to slow up right and so disposable income there’s not going to be as much money to buy the stuff that you want including Vehicles so that’s really the risk meanwhile on the production front Supply Mine Supply as you’ve read South Africa which is responsible for over 90 of the rhodium production is really teetering they’ve got an energy crisis of their own they can’t keep their coal fire plants up to do all the mineral processing you can mine it but you can’t process it and so all the PGM producers are getting hamstrung big time the numbers are down in South Africa on their outs and they’re going to remain a trouble in 2023 this is going to be one of the worst years ever because of the energy crisis and some you

know geopolitical it’s some some social instability in South Africa the place is going nuts it’s coming apart at the scenes lots of strengths crying syndicates there’s all sorts of things working against the power companies there and them being able to keep the power grids up and so they’re doing rolling brownouts beyond what California would even imagine what you’re implying though is that the only reason that rhodium priced act today is is because mind Supply is down production’s down on the front end but the only thing that’s keeping that lid on that bottle is that the actual volume of vehicle production is also the demand of new vehicles if it was screaming right now that price would be the roof right exactly if we were pre-covered type of patterns it would be a thirty thousand dollar no yes no doubt about it that’s how tight rhodium is other other things that use rhodium got away from it because it got so expensive it’s used in glass production so all the flat panels and glass products um but they’re getting rid of the rhodium they’re just using more and more platinum as an alternative um

so but it’s pretty much now just to automotives being the key pool for rhodium so yeah Car Sales would dictate and so with all that said unfortunately from an analyst like it’s a pretty broad range on Outlook yeah for rhodium and where this thing can be and I know you need to hedge on rhodium the next one let’s talk Platinum okay so Platinum people are very positive on Platinum long term as you look at it from a 20-year and 30-year perspective everything to do with the hydrogen economy uses platinum and we’re not going to have anywhere near enough think about it this way and catalytic converters if you take your rhodium your Palladium and your platinum and you put it you’re going to use somewhere between 13 to 14 million troy ounces a year globally for auto catalyst the hydrogen economy they’re talking about using a little three and a half millions of platinum and a few minor pgms um there’s not gonna be enough and they’re going to be stunned at how limited the hydrogen economy how much it could penetrate just because there’s not enough Platinum yeah I’m a big

Advocate if governments getting involved in helping sponsor the Platinum PGM mining we should be helping South Africa that’s a strategic medal that we should government should go after and help get more of it has a bigger CO2 reduction impact it’s there’s it’s a better play in a lot of what they’re doing um is it rhodium a byproduct of mining platinum and Palladium isn’t it isn’t it kind of just they’re not necessarily South African South Africa when you when you go mine Platinum you’re mining Platinum Group Metals it’s a six-pack you get platinum your Palladium you get rhodium you get this little known iridium you get ruthenium and even lesser known osmium there’s six of them total okay so you get the six pack um they come together at whatever ratio depending on mines have slightly different ratios of what that mix is okay get them all together um Platinum now only about a third of the global Platinum goes into catalytic converters today so there’s a lot of other demands for it it’s a much more complex set of Demands but long-term Outlook is we’re going to be into a shortage so

people like China are over buying Platinum there’s a lot there’s more investment early going on getting getting Platinum like you said up to its current number the outlet through the rest of the decade through 2030 there’s no reason why Platinum won’t double in price by the time we get to the end of the decade so yeah platinum’s a good one that’s going to keep climbing not overnight it’ll be slow to steady just climbing up this isn’t next week’s trade guys this is the 20 30 trillion here comes the bummer Palladium what in the hell is going on with Palladium it was three thousand dollars for troians and now we’re sitting here at what 17 18 right now right yeah um so a Palladium that’s the Lion’s Share of what goes into catalytic converters about 80 of Palladium goes into catalytic converters uh again it’s vehicle sales but the problem is um the recycle your auto cat recycle like what you do there is so many vehicles on the road that have very heavy Palladium loadings it’s built into the vehicle fleets that are on the road it’s what I call the world’s biggest pool

account you’re going to get so much Palladium coming back through recycle plus the ongoing mining you’re gonna have too much of it the the recycle is going to be so effective you’re basically going to have an oversupply Palladium market and yeah Palladium will go down now I if macroeconomically we can get going here in the next couple years I think there’s plenty of room for it to get back to 22 2500 troy ounce but then somewhere around 2029 it’s gonna basically just start sliding off the face of the Earth Palladium will drop it’ll become a couple hundred dollars a troy ounce metal the biggest producers and miners of Palladium are the Russians um they have the world’s biggest nickel mine and a byproduct nickel is hey we’ve got this Palladium here too they’re fully aware that Palladium long term is in in trouble out of the whole periodic table this is the one metal I could point to that we’re going to have just a massive Surplus off by 2050. okay um so what do we do with it and so the Russians are hot on they’re even we’re sponsoring contests before the Ukraine

war broke out they were sponsoring contest trying to create r d interest in Palladium realizing there’s going to be the surplus of this what what else can we use it for makes sense that next Generation used has yet to be devised it’s it’s not clear what is going to be the next Generation used but it will drop in price and when I say drop it’ll get down to a couple hundred bucks a troy ounce and that’s sad for people like you well that’s bad if you catalytic a bid on it for 10 years eight years and you will ride it all the way down I mean it’s still a it’s still a valuable commodity to produce and process and trade if you if you can make the numbers work right yeah yeah but from a recycling perspective one of the one of the bummers is the I I talk about the smelting in the recycle process you may know this the smelting is the most expensive Capital tooling right yeah build a smelter takes billions of dollars they need to double their smelting capacity for auto Catalyst alone based on all the 1.5

billion gas vehicles on the road that have all this Palladium sitting there waiting to be recycled the problem is are you going to go invest in that Capital if the Palladium price is going to drop off the face of the Earth yeah you’re going to be willing to set up with all this expansion of PGM recycling and so again that’s where people hire my services they’re looking at this you know what is what is the precise trajectories on this look like will Platinum go up enough to make up for the Palladium downfall question mark um lots of questions about this um and it’s not very clear but uh yeah Palladium just your recycle you guys are doing such a great job you’re going to flood the market over time with more and more Palladium that’s the problem so in the hydrogen economy there’s three Platinum Group metals that take over so Platinum is important but then you hear about this thing called iridium and ruthenium these are called PGM miners these are like oh by the way afterthoughts they’re little small slivers of populations compared to platinum this is what I’m looking forward to

because you talk about these two metals I’ve heard you I’ve heard you talk about them and I’ve seen you a couple posts that you’ve put on these two channels and you you feel like I’m gonna let you do it let’s let’s hear it I just I I think people again are misjudging how much Metals we’re going to need and so I’ve been screaming for about four years now on design thrifting we’ve got to get all over design thrifting the use of iridium now all the places we use it we have to use less because it’s become such an important metal iridium’s the key when you hear about these green hydrogen electrolyzers where you can generate hydrogen without using fossil fuels and it’s basically a zero emissions making of a fuel that you then can burn with fuel cells or even in a combustion engine to replace fossil fuels and indeed have a zero emission output so it’s it’s a very attractive thing if they can get the cost structures in line to work they’re pretty close actually on fuel cell Vehicles I’m actually more Pro fuel cell Vehicles being economical far better than EV

so I think they’ll be cheaper very quick but again the problem is they’re not going to have enough Platinum they can only go so far they’re going to do like maybe eight million fuel cell Vehicles a year Well we make 90 plus million Vehicles a year 8 million only doesn’t get you very far right you need more on it you need a whole lot more of it and again this is why I think governments should be behind some of the investment in the mining and I know this is a big number roughly a trillion or trillion and a half dollars you can solve this well they’re spending three or four trillion dollars a year on Green New Deal around the globe it’s just how do you spend it where do you put it I think putting it into these EVS forcing just huge multiples of mining that are fairly dirty and ecologically that I just don’t think that’s the right path I think it’s uh it’s dirtier than people realize and um I think the hydrogen Vehicles will make a lot more sense hydrogen has a place too there’s going to be things they’re

doing with the power grid that they don’t realize they’re pushing so much solar in Wind those are variable Renewables they’re not on all the time solar only works throughout the daytime one’s your Peak energy demand well there and you tell your Peak energy demands at dusk when everybody goes home turns on the TVs plugs in their iPhones and everything to recharge plugs in their EV that’s your Peak energy is all the way to about 11 pm when it’s dark well solar doesn’t help you there so how do you balance the power grid they don’t want to just sort of use solar and wind they want to make it a dominating piece of our power grid sounds great everybody oh it sounds wonderful there’s no emission but it doesn’t work around the clock how are we going to do this you need to have an energy storage technology ready to go the hydrogen economy was created mostly out of that thought that that could be the energy storage take your excess solar during the day generate hydrogen and then you convert hydrogen back to energy to generate electricity at night when you need it at

the peak that was always the vision of how to use the hydrogen and I think that’s there’s going to be pressure on that variable Renewables that it’s going to create even again is almost going to demand that we have that iridium available to make this green hydrogen electrolyzers so I’m working with I’m working with Northeast Green Hedge and electrolyzer guys and the oems um they’re just massive design thrifting work underway um they’re thinking through what I’m doing conferences here in just a couple weeks this will be a theme of one of the conferences we’re at um there’ll be a lot more talks on the recycle you know eventually I’m sure you’ll get into fuel cell vehicle recycling right yeah I’m just you know what I I at some point for us I mean it’s it’s like I said I’m more of an opportunist than I am like I know I I’m no futurist right like I I just kind of go where the opportunities present themselves that’s probably like if I had to you know name my specialty it’s not necessarily trying to seeing the future it’s just saying okay what what presents the

most opportunity for you know the assets and the people and Facilities we have in place and I think that’s why I love having the conversation with you you look at it from say a 10 000 foot view from a commodity standpoint and then I can just kind of take that information and plug it into my day-to-day and say okay obviously the price of copper in 2030 is a gonna be of interest to me but I need I’m curious what’s the price going to be next week or next month because I have you know loads of copyright interactive hedge or trade or whatever and I but but also I think the advantage because you’re so plugged in and so tuned in and this is what I really want to make sure we discussed is you know because you are looking at it from ten thousand feet here pretty soon you’re gonna have the ability and you’re gonna produce you know the the five and the 1000 and the 500 view for people in our industry to really dial that in and I and I that’s what I’m probably the most you know excited

about is like people being able to get your information sorry for other scrap collectors like yourself so you’ve done E-Waste you’ve done uh you know the cat quality converters and you’re doing a lot of copper and Industrial Metals waste think about the complexity and the the capex that you need to get your copper recycling business going is pretty easy I mean most your copper you’re doing bulk copper I see the pictures of your trucks that you post on LinkedIn I’m sure you get a lot of wiring and harness wiring and you bought fairly cheap and fairly small footprint chippers that take the insulation off and you get to 99 pure buckets of copper with very little work very small footprint tooling right so from a recyclability perspective copper is the easiest of that E-Waste more complex autocats yeah a little bit more complex on decanning and managing and all the trading and the duration to get your refined weight back copper is a slam dunk right and so I advocate for scrap collectors copper if you’re not doing copper already why not right let’s start with that everything you can it’s it’s

you know how to trade whether it’s pgms or copper the trading functions are largely the same go get the copper that’s the easy slam dunk and copper prices can only climb the amount of copper we need I love telling people this so in the past 1500 years all the copper that we mined in the past 1500 years forget about it you need to more than double it but in the next 30. well I mean that’s a big that’s a big number I say if you take anything away from this this podcast today is you know if you’re not let’s say you’re just a ferris guy or you’re you know aluminum and and iron like you should and you have the footprint capacity the the ability to to be a player you know you may not start out as a big cop or buyer a big cop or whatever you know uh you know resale reseller recycler but essentially what Matt’s telling you is you know you there’s a lot of potential because that price and that that commodity is going to be strong in the short near Mid long term future all the above

so I mean is it going to get its dips its ups and downs and you know of course just like you know any commodity you’re gonna you’re gonna see the but I mean if you’re looking at if you’re looking at Palladium doing this and you’re looking at you know rhodium it’s still kind of up in the air platinum’s got the potential to do this Copper’s got the same thing I mean where are you going to invest your money in the long run of your company you know and I think that’s I think that’s you know take away that’s the takeaway from this podcast that I hear is you know take a hard look at Copper take a hard look at you know maybe some of these other you know battery metals that if you have the the ability I would say Africa where I think your pgms and your autocats are the right or the right play I think you know there’s going to be years of stability and auto chat um with the exception of the Palladium prices are going to drop but you know the weights will be there and even at

even if Palladium are at 200 to try out so you could still recover it at a profit right it’s not a problem getting that metal back yeah um so I I think it doesn’t make the converter more affordable to buy I mean like as on a scrap depending on the price of rhodium with the price of rhodium is 30 000 then I guess then that that plays a role but I mean generally speaking hey and do me a favor um on your AutoCAD site we heard about in this past quarter or six months this um DG Auto yes write this um theft ring um right that was responsible I mean they turned enough weight to generate a half billion dollars worth of PGM revenue from all these stolen catalytic converters they had networks in California Phoenix East Coast one of the biggest networks they took it down in the you know 40 some odd people arrested um and it all comes down to knowing your customer you know you how do you protect yourself from dealing with you know organized crime and and these crime rings that are presenting these stolen converters these this

way from DG Auto went to a premier Japanese name in the recycle industry they were their number one account for a decade and they didn’t even know who they were and who their customers were yeah that’s a sin they should be shot I know these people I did with my conference was I’m gonna go like them up at this next conference I you think I’m gonna pull any punches I’m the independent I just don’t give a crap I know you I know you Matt won’t pull punches so for all of you AutoCAD collectors know your customers how hard is it to interview them to really know get a sense with their customers where are they getting the weight from where are they getting cured or something do they have ties into scrap yards or are they buying from the scrap yards if you don’t understand their business model you’re not trying yeah especially for somebody that you’re turning a half billion dollars worth of weight from right 100 I mean there’s yeah that it’s that dude goes all the way to the top in my opinion I think that’s where we you know as

a as a converter buyer converter recycler you can get lumped in with a group like that just because converters in your name or that’s what you do but the reality of it is that even for us and I I heard this listening to the ipmi guys which I know you’re a big part of the ipmi and they in ibmi discussed this in detail of know your customer and not just know your customer as a smelter but know your customer as a converter buyer so he took it all the way down to the individual level and we created basically a know your customer form for every single converter we buy whether we buy a one at a time or 10 at a time a 50 or 100 at a time to the detail of we have to know our Customer because when I contact these smelters and and I say hey I’ve got XYZ amount of Auto Catalyst I want to sell or whatever I want them to know that if you’re buying catalysts from converter reclaim is our company then we’ve done our due diligence and all the stuff we’re selling you is we’ve

came across legitimately and I think it has to go all the way down to the to the granular single level and then work its way back up those PGM smelters that you’re selling into they should be interviewing you and convincing themselves that yep you’ve got this you know this know your customer process down solid you’re doing your absolute best to protect against these stolen converters getting in the mix es you know this world better than I and it was explained to me and and I want I just just we’ll kind of end on this but you just to give everybody a little bit of insight on that whole DG Auto thing the way this melter was working and and it was kind of in the FBI statements or you know whatever um but essentially the way it was working if there’s certain converters out there that have higher concentrations of Palladium and rhodium which is like your Honda Prius and some of your higher value converters um by the way Toyota Toyota hates that information being out there right yeah I’m sorry a Toyota Prius not the Honda but the Toyota Prius and uh

your Honda CRV um and so those converters have very high loadings what they call you know of these pgms so when these they were specifically targeting those converters on the purchase side so that’s why the theft Rings were actually allowed to operate because they were specifically targeting these high value converters because they could then blend these together get a higher percentage because when you sell to a um smelter you get a certain percentage of the recovery the smelter keeps whatever percent you agreed on in the contract you keep the remaining percentage and that’s basically like their smelt fee minus whatever the other fee they want to put on it whether you’ve had or don’t hedge or whatever but if you can if you can provide a certain high grade of material it’s like providing 99.9 copper versus 89 Point whatever copper they got to take all the impurities out that that takes more time more effort more energy more smoking cost so they were that’s why the theft ring part was so important is they were targeting and buying specific units at a higher price than the average person could because they were

getting a higher value return on their material correct absolutely right you got it yeah you got it so the auto companies like Toyota you know going to these conferences we talked about the loading going into new vehicle builds and hybrids um and plug-in hybrids have the highest loading so some 15 higher than it’s just a standard gasoline engine why is that ends up the most stressful part in your emissions is what they call cold start literally in the driveway in the morning with a cold vehicle that first start that’s when the emissions take the most well the only thing you can do to make that worse is have a partial hybrid or EV plug-in hybrid where you start on electric you get on the freeway then you’re doing 55 then it starts that’s even more stressful yeah and so that kind of drove these loadings to be higher now Toyota’s so pissed that it’s being targeted now um that they are really working hard to make its loadings on par with a typical car they want they want to get off the top 10 theft list basically right yeah that’s their motivation

but unfortunately on average these cars have 1200 worth of metal in them per car now right yeah these emission control systems and um so they’re working to make the the parity with the hybrids better since there will be more hybrids in the future but um so last one last question rank them and rank them and rank them in importance in your mind in the uh in the in the next couple years or the Commodities medals that you think you know are going to be real ones to watch and as a recycling company or you know in our industry mining potential mining interests and like what do you see in from from number one being the most important commodity to say the top five Platinum number one I think lithium number two copper number three um we can get into nickels and other metals but you know those are top three I’d say I’ll start with that so Scotland’s going to continue to climb over time it’s going to become more important from a recycle perspective a lot of your platinum and the auto cats by the way are in the heavy duty on the

trucking side not necessarily in the light duty side remember in AutoCAD 75 of the Platinum is in diesel heavy duty and Diesel light duty both right so that’s yeah um so lithium then the lithium batteries again it’s climbed from you know under ten thousand dollars a metric ton it’s over 70 000 and will continue to climb with all these batteries that we’re making um and then I I think the um you know popper is just so fundamental to the electrification of everything that’s that’s on my top three I think Silver’s on that list as well Silver’s tough to recover often it’s low grade and it’s not economical to recover at 24 or troy ounce you got to get higher prices to make it more economical legislation is going to have to take that one on um rumors I think are hugely important rare earth metals when you see a rare earth just keep it simple magnets um and magnets go into the EV Motors they go into the wind turbines uh they go into pretty much every iPhone and iPad there’s rarest everywhere that one’s hugely important to recover virtually no recycling on that

today that’s got to change we’re gonna we need to grow our Rare Earth by a factor of four yeah we better damn well start recycling these things a lot more effectively so so magnets wherever they occur they’re going to occur in windshield wiper any Motors of any sort you often have magnets in them uh one place or another so rarest I think we make the list as well so I want to end this I want to end this podcast and I want you to tell everybody you know I know that it’s common you and I’ve discussed this before we actually hit record that you are actually working on you know like a newsletter type you know scenario where you can basically help you know give give your two cents all the research and every day that you’re putting in what’s the best way for people to find you to reach out to you and get on the potential list or whatever I mean what’s the best way for them to find you Matt well I think I think as you know I do a for free uh newsletter weekly anybody can sign up for

that go to my website precious metalscommoditymanagement.com and you will you can log on and get your name in there and I’ll get you on my weekly mailer and I break it down by precious metals and I even talked about the battery Metals markets and what’s going on that’s a freebie but what I’m going to start doing I’m going to start doing a subscription report I’m trying to determine if it’s going to be monthly or quarterly but for scrap collectors like you to help them on hedging Outlook so for copper you need a couple week Outlook um you know do you hedge or not so I’m going to give you near-term outlooks on on copper nickel Cobalt cop um and then the pgms as well on pgms though you’re refined Loops are longer as you know especially on rhodium which is nine months to 12 months depending on who you’re dealing with that is one of the more complex hedging tricks is what to do with rhodium and as I just got done telling you rhodium is a bit of a trick right now right it can go either way it can soften

a little bit more or if the macroeconomic picks up and we start selling more cars it can it certainly has the room to climb much higher again the loadings on the on the rhodium is getting insane that these next generation of mission standards that are coming out both in Europe and California driving emission standards are going to drive a whole lot more rhodium and not just sort of a little bit more a lot more The Knocks The the remaining meat on the emissions bone is going to be taking the knocks down that means more rhodium and so it just all comes down to vehicle vehicle build quantities and yeah rhodium can easily be a 20 000 metal again um with the right Auto demand going again I love it so that one’s gonna be tricky that one’s gonna be tricky to gauge you know and I’m gonna have to really be paying attention to the macroeconomic so I’ll do these reports start selling them to scrap collectors I have a number of them already lined up begging me to get it going yeah you know me I’m like come on man let’s go by

March I’m going to a March conference I’m going to have my lead example of my report for the March um so by March I’m going to be off and running again through my website you’ll be able to you know if you want to now that’ll be a subscription um and um I’ll sell those on a per basis to scrap yards and scrap collectors like yourself to help them with their hedging all right look them up guys if you don’t know who he is man I’m telling you um I try and find I try and find the best of the best just to give you guys you know who somebody to listen to is lost smarter than me so go look up Matt he’s all over LinkedIn and go look up his website and uh and get on the list have a great rest of your uh week month whenever you’re listening to this and uh thank you Matt appreciate you all right God bless take care yep