a16z Podcast - Critical Minerals: Mining for the Industrial Future

Episode Date: July 23, 2025

It can take more than 15 years to permit and build a new mine in the United States - yet nearly every modern technology we rely on, from smartphones to fighter jets to AI data centers, depends on a steady supply of critical minerals.In this episode, Erik Torenberg is joined in the studio by Turner Caldwell, founder of Mariana Minerals, along with American Dynamism general partner Erin Price-Wright and partner Ryan McEntush.Turner spent nearly a decade at Tesla, working his way upstream from factory design to battery materials and mining. Now, he’s building a new kind of mining and refining company - vertically integrated and software-first- designed to meet the demands of our industrial future.We get into why the industry is so broken, what it actually takes to turn rocks into usable materials, and how the U.S. can rebuild its capacity to mine, refine, and manufacture the things that matter most. Timecodes: 00:00 Introduction to Critical Minerals00:45 The Importance of Mining in Modern Technology00:58 Meet Turner Caldwell and Marianna Minerals03:02 The Mining and Refining Process05:10 Challenges in the Mining Industry07:11 Turner's Journey from Tesla to Marianna15:31 The Role of AI and ML in Mining22:00 Geopolitical and Talent Pool Dynamics23:46 Challenges in Junior Mining Exploration25:30 Mariana's Product and Approach25:47 Leveraging Technology in Mining and Construction28:29 Optimizing Refining Processes with AI37:31 The Importance of Critical Minerals41:18 Permitting and Regulatory Challenges46:08 Future Strategies and International Expansion46:53 Conclusion and Future Outlook Resources: Find Turner on X :https://x.com/tbc415Find Erin on X: https://x.com/espricewrightFind Ryan on X: https://x.com/rmcentush Stay Updated: Let us know what you think: https://ratethispodcast.com/a16zFind a16z on Twitter: https://twitter.com/a16zFind a16z on LinkedIn: https://www.linkedin.com/company/a16zSubscribe on your favorite podcast app: https://a16z.simplecast.com/Follow our host: https://x.com/eriktorenbergPlease note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures.

Critical minerals fundamentally underpin everything that we do every day. It's in your phone, in your AirPods, your screens, your laptops, everything that we use. How they're refined and how they're mined, that all happens in the background. There's not that many massive markets left that have been largely untapped by technology. And mining screams one of the largest markets in the world. This is the intersection of geopolitical urgency and tech. Now we have technology that can actually go and disrupt this. But also as a talent-based, hard-tech company working in sort of dirty spaces, willing to go out in the field.

So now is the time to build this company. It's a huge problem. We have to figure out how to address it. And that means investing in mining in the U.S. again. It can take more than 15 years to permit and build a new mining in the US again. It can take more than 15 years to permit and build a new mine in the United States. And yet nearly every modern technology we rely on from smartphones to fighter jets to AI data centers depends on a steady supply of critical materials. Today, we're joined by Turner Caldwell, founder of Mariana Minerals, along with American Dynamism general partner, Aaron Price Wright Wright and partner Ryan McIntosh.

Turner spent nearly a decade at Tesla, working his way upstream from factory design to battery materials and mining. Now he's building a new kind of mining and refining company, vertically integrated in software first designed to meet the demand our industrial future requires. We get into why this industry is so broken, what it actually takes to turn rocks into usable materials, and how the U.S. can rebuild its capacity to mine, refine, and manufacture the things that matter most. Let's get into it. As a reminder, the content here is for informational purposes only, should not be taken as legal

business, tax, or investment advice, or be used to evaluate any investment or security and is not directed at any investors or potential investors in any A16Z fund. Please note that A16Z and its affiliates may also maintain investments in the companies discussed in this podcast. For more details, including a link to our investments, please see a16z.com forward slash disclosures. So Turner, you're coming out of stealth with $85 million raised. Why don't we get into what are critical minerals and why do they matter?

Critical minerals fundamentally underpin everything that we do every day. And that's why we're personally really excited about it. But it's not just aerospace, energy, renewable energy, battery, energy storage systems. every day. And so it really crosses everything that we use. How do we turn rocks into batteries or magnets and why is that so important? Yeah, so it starts with mining, obviously. Well, it actually starts with exploration. Yeah, you've got to find the rocks in the first place.

That's right, you've got to find the rocks in the first place, which is hard to do. And there's a lot of awesome companies that are working on trying to condense that timeline. But once you do find them, you have to get that asset or that resource permitted to extract. You develop a mining plan, you have to mine it. And when those rocks come to the surface, you have to separate ore from waste, which that asset or that resource permitted to extract. You develop a mining plan, you have to mine it. And when those rocks come to the surface, you have to separate ore from waste, which is something that is not as trivial as people might expect. And then you go through a concentrating step.

metal. And then you go into a specialty chemical, and so that's this intermediate product where you go through another chemical process to either make a metal sulfate or a metal hydroxide salt. And then you will convert that into an engineered material, which is the next step, and that in electrochemical systems and batteries, you'll have cathode materials, you'll have anode materials, and there the morphology and the electrochemical performance in the system is really important. And then you're ready to deploy into a battery cell, and then you'll go into a module, and then you'll go and electrochemical performance in the system is really important. And the common way of making magnets, there's a few flow sheets, but you'll slurry it, you'll get the right blend of the different rarests that you're trying to put in. You'll cast that, you'll center it, and then you'll go through a fairly intricate and high precision machining process to get the geometry that you want

with the tolerances that you need before you can deploy that into magnets and eventually into motors. How specific is it for a given site, given concentration and other sort of waste products, how dynamic is it? Is one rare earthbine going to be a similar process to another, given concentration and other sort of waste products, is one rare earth line going to be a similar process to another? It's very bespoke. It's actually part of the problem and what makes the minerals industry so complicated is that the flow sheet, which is ultimately how you go from the ore all the way through to the refined metal, is designed for that specific asset. You will have concentrations of impurities that you have to manage.

The concentration of the target metal is different. There's a library of metallurgical unit operations that are all stitched together to build a refining operation or a processing operation. But how those are stitched together, that's bespoke for the individual unit operation and tied to the kind of chemical metallurgist process engineer that designed the circuit in the first place. So there's a lot of like human impact on what that flow sheet ultimately looks like, but yes. And I imagine very hard to change as the nature of the ore changes as you mine a site. That's right. And so part of what we're working on and what we'll talk about a little bit later, I'm sure, is how do you design circuits that have a little bit more flexibility to be able to process ore as it changes over time as you mine through the ore body.

Because one mine does not actually have consistent ore coming out of it. The earth is heterogeneous, the ore grades are changing, the impurity concentrations are changing, there are different ore zones that have different properties in how they are floated or how they're concentrated, how they perform in a leaching circuit, and all those things are custom built for a specific asset. One more question on this. What are the types of job titles, backgrounds of people working in this space? and all of those things are custom built for a specific asset. One more question on this.

I imagine at the supply chain you just described very different types of people, very different backgrounds, but they all have to ultimately work together. Yeah, that's one of the big hard parts. physicists, you'll have mining engineers, you'll have geotechnical engineers, you'll have process engineers, chemical engineers, chemists, metallurgists, mechanical engineers, structural engineers, civil engineers. It's the whole gambit. Plus the long tail of workers on site who are moving things from point A to point B. That's right, which also have a super diverse skill set because you need everything from the mining engineers and the chemical engineers and the geologists that sit around to operate

the asset in addition to the folks that have to kind of manage the back office, which is something that often gets overlooked when we're thinking about successfully building and operating a complex circuit. Did you always love rocks? Did you always know that you were going to start a mining company? Yeah, so kind of a funny story. The day that I graduated from college, the like urge that I had was to just move to Australia and try to find a job in a mine. I did not act on that urge and instead started at Tesla roughly 10 years ago now. like, urge that I had was to just move to Australia

working on battery cell manufacturing. I spent a lot of time in Japan with Panasonic, who's our primary battery cell manufacturing partner, working on incremental improvements to their legacy battery cell manufacturing systems. The pull has always been big things for me, like large-scale infrastructure that has a large impact on the world. If you want to have a big impact on the world, you have to build things at scale. That's how you get to impact. But yeah, so I was working on battery cell manufacturing.

Because I was spending a lot of time in Asia, I started to explore the supply chain. I was building some of the early techno-economic models of how cathode materials are made, how anode materials are made, and the balance of the components that go into a battery cell. And ultimately this was just following cost. It was when I was working on factory design and construction, the most expensive thing was actually the equipment that goes inside the factory. Then when we started working on cell manufacturing,

kind of realized that the expensive part of making cells is the stuff that goes inside the cells. And as you start getting further and further upstream, you realize that the primary driver of cost is the metals that are going into the engineered materials that then go into the cells and then eventually go into the battery. And so started kind of digging much deeper into why metals are so expensive. And what you kind of run into is that there's this interesting incentive misalignment that exists between the customer and the producer of metals.

Like in the mining industry, more demand, this is totally different than manufacturing, more demand if you have a higher volume, the expectation is that the price goes up. There are economies of scale on the operations side of things. They're not economies of scale as the customer, which is kind of an interesting dynamic and is completely contrary to how manufacturers are used to pricing their cost of goods, like their input materials, where if you are buying more and you are scaling up, you expect your suppliers to also capture economies of scale that then translate into lower pricing, which then enables you to price lower for when you sell to customers. And so that incentive misalignment was a big one that jumped out and that only really kind of starts to come to the surface when you start to actually engage

with the mining companies. But what fascinated me about the mining industry is that you are effectively solving problems at micron scale to start. You have to figure out how you extract, you have an ore that has 1% of a target metal, and you are trying to figure out how do you extract that 1% and 1% of a target metal. And you are trying to figure out how do you extract that 1%

and get it to 100% purity. And that fundamentally starts at the atoms. And then you have to take a process that you develop that starts at work across those scales, which is exciting. So I always found it interesting about Tesla, especially early days working with Panasonic, that a lot of the know-how, the process knowledge came from Asia. Spending a lot of time in Asia, just be curious culturally in just looking at scale as they sort of built out a lot of the early battery ecosystem and then farther upstream. What did you see there? Is it just more chemical engineers? Is it more more chemical engineers?

That was a big one. But also, it's a long-term investment. In Japanese, it's kaizen, right, where you're gradually improving over time. And in those super high precision, super high throughput industries, taking big swings where you make a radical change to one unit operation, that didn't really happen in those companies. It was much more of an iterative improvement to the systems

that fundamentally eventually enabled you to get costs down. But yeah, the labor pool is a big piece and I think some of it is definitely cultural. Your time at Tesla, like Tesla famously vertically integrated very early. You're building a vertically integrated mining company, which we'll get into more details about later. But like what did working at Tesla teach you about vertical integration and why it matters? Yeah, I think as we started to scope more and more vertical integration even like outside of like going further upstream in the supply chain, the thing that's really interesting about vertical integration is you fundamentally are thinking about the incentive structure

that exists between kind of yourself and a partner. And so Tesla had to vertically integrate early because people just weren't making the parts that were needed. It was a do or die. There was no incentive. There was no market for people to build the kind of like subcomponents that were needed. we wanted them to invest in scale. you expanded risk profile. sort of led to Tesla pursuing sort of like further vertical integration. Yeah, I think the incentive misalignment piece between the industries

and between kind of like a commodity industry or the mining industry and the manufacturing industry was the big misalignment that existed between the industries. The degree to which automation was absent was pretty interesting. There's a long period of time where mines make no money. And so a lot of capital goes into the expiration phase, it goes into the development phase. What a lot of people don't realize is that when you start the mine,

there's actually sometimes years where you are just getting through the waste any additional capital intensity associated with automation, oftentimes the capital starts to get tired. And that additional automation equipment kind of falls by the wayside, and if you have the people there that can drive the trucks or drive the excavators or run the drill rigs, you'll take that. The mining industry has kind of been taking it on the head for a long time. It's not been a tech industry that everyone wants to go into. And so the labor pool is contracting, it's shrinking, and it's both the trades and it's the engineering skill sets. And the first things that mining companies say now is that the labor pool

is one of the biggest challenges that they're trying to solve for. So that was apparent, and on top of that, these mines are not exactly in downtown Manhattan. They are in remote locations. Where have you gone? Have you been on site before? Yeah, of Manhattan. They are in remote locations. Where have you gone? Have you been on site before? Yeah, of course. Indonesia, Australia, China. What is it actually like? People see pictures.

What is actually going on? It's a lot calmer than you might expect. You're usually working a couple of faces, and you have excavators or front-end loaders that are picking up dirt. They're taking them to the unit operation, and it's not as rambunctious and crazy as you might expect a mine to be. that are picking up dirt, they're taking them to the unit operation, and it's not as rambunctious and crazy as you might expect a mine to be. And that's in Australia and in Canada.

It's not this buzzing atmosphere. In developing countries it's a lot more people activity when you go to operations that are in Indonesia or in Africa But yeah been to most continents. Why did you leave Tesla to build Mariana? I spent a long time kind of like building businesses within Tesla was early on the cell manufacturing side was early on the cathode manufacturing side was early on the ref manufacturing side, was early on the cathode manufacturing side, was early on the refining side of things. And what really excited me was always pushing further and further upstream. And I do think that we are at this critical inflection point where not only is the labor pool going in the opposite direction of demand

in the mining industry, but AI and ML are getting to the point where it hasn't been that long, right? Like the AlphaGo moment was kind of in 2015, 2016, But AI and ML are getting to the point where, it hasn't been that long, right? The AlphaGo moment was kind of in 2015, 2016, and people were using reinforcement learning until there's a paper from 2008 on reinforcement learning for helicopter control. enable you to go no humans in the loop And then on the construction side, that is like an entirely different story. I think construction, there's a lot of workflow,

automation opportunities, and there's also tons of menial tasks where people are fat fingering data between databases. The data systems are completely disaggregated, and LLMs are presenting this opportunity where we can start to, and again, this is like a two-year thing, really, and it's just going to get better. And so the opportunity to build kind of like from scratch, no legacy systems, and have some control over the destiny of the company that we're building, that's just an exciting opportunity.

Just to level set, what is the status quo in the industry today? What is the BHP and the Rios of the world do? For some of the stuff you're talking about, from a software perspective, internally. They have digital innovation arms. They do have digital innovation arms. I think that the Freeports and the Rio Tintos and the BHPs, they outsource a lot of that. I think that they've gradually started to hire more and more folks that can do more internal things,

but you have McKinsey, you have Palantir, that basically act as consultants. and they'll kind of provide recommendations. and it's very risky to take shots outside of something that is currently working where there's billion dollars on the line. And that culture of trusting the counterintuitive recommendation from the model is one that we want to try to build, and it's hard to build that within large companies. I think on the construction side, when they build new projects, they're building five, ten billion dollar projects. And so they are always bringing in an EPC and kind of like throwing that over the fence to the EPC. million projects. and operate. and outsourcing that happens in the large companies. And some of that comes from the talent acquisition challenge that the mining industry has faced over the last 20 years.

Again, the mining industry has not been this magnet for talent. And what that means is that, and they're going to have higher paying opportunities in ZAS, FinTech, AdTech, and they're going to go chase that. And so it's not just attracting talent, it's retaining talent that has been a big challenge in the mining industry, and that forces kind of like an outsourcing of a lot of the things that should be core today.

I mean, we've seen this from the investor side, like there are a lot of really exciting new technologies being developed for mining, and a lot of really exciting new technologies being developed for mining and a lot of incredibly impressive startups that are building for various pieces of the mining lifecycle journey, whether it's autonomous vehicles or drilling or other various software and hardware tools for mining. But the challenge seems to be, like, how do you get these kind of calcified large incumbents who operate in a very decentralized way,

have very low risk appetite and not a strong internal culture or affinity for tech. Like how do you get them to adopt them quickly? Like if you're a young startup, you're sort of at the back end call of this behemoth and you have very little control over your own destiny, which I think has made it really hard for tech to kind of penetrate this market up until now. That's at least what we've observed on the VC side. which I think has made it really hard for tech to kind of penetrate this market up until now. That's at least what we've observed on the VC side. Calcified is a good word. I think the way that there's construction companies and mining companies

and really a lot of big companies is that the way that they'll identify and evaluate risk is fixing the status quo or making like a step change improvement in the status quo kind of requires doing like a thousand things. But you'll evaluate risk on each individual thing of that thousand things. And the downside of each individual thousand things is that the plant goes down, which is a multimillion dollar event. And so you're really not incentivized to change things. Like even small changes could result

in multimillion dollars of loss. And you need to kind of approach it of like, how do I do the thousand things all at once so that I'm not stacking incremental returns on innovation with the same risk every single time. And that's where kind of like spot technical solutions are challenging to sell into the mining industry. And they'll do pilots, they'll definitely do a pilot.

Like there's no skin off their back to do kind of like a pilot, but you'll end up doing a lot of pilots. And because they don't build enough plants kind of sequentially, like they'll build one big mine every five years, if that. And there just aren't a lot of opportunities to get into a commercial scale application. And if you don't time it perfectly where like your pilot plant was five years before the commercial scale plant was planned for, like you're not going to be in that one, so you'll be in the next one, which is five years later.

And so the pace at which the industry moves in terms of deploying commercial scale infrastructure which is five years later. The barrier there is ultimately how do you get the operators to trust the SAS tool from this small company that is trying to kind of tell you how to run a plant. And the culture is typically don't touch my things, don't touch my cash register, and what do you all know about running a mine? And it does stack up. I've been calling it a death spiral for a lot of the folks that are trying to sell into the mining industry because it's hard. Just to like step back a little bit on the geopolitical context, the stuff you're describing I think very obviously obviously true of a lot of Western companies, but at the same time, a lot of Chinese companies that have sprouted over the last 20, 30 years

have grown rapidly. Curious, why do you think that is? Yeah, I mean, I think that there's like a lot of top-down and early recognition that critical minerals were going to be critical and needed to be supported. And so, like, you shouldn't kind of, like, the everything around policy and everything around kind of, like, supporting companies to go and deploy both infrastructure domestically and infrastructure internationally to kind of, like, secure critical minerals, build infrastructure that secures a position,

like, that has definitely happened. But I think that what people often don't talk about enough is that the talent pool is insane. Like, it is not just a large talent pool. it is a large, skilled, experienced talent pool. I was in Indonesia in February and was kind of visiting one of the recent Chinese nickel refining operations. And so they buy ore, they also have some mining operations, but they had 13,000 people on site during construction and commissioning. And if we were building a refinery in the US, which we did,

it's hard to mobilize a tenth of that realistically. And it's not just about the number of people. It's about being able to iterate on every individual work front as fast as humanly possible. And we just don't have that label. 15 years ago or 20 years ago, would the same companies that were big now have been big then? What is kind of the evolution of the space event?

Yeah, I think that there's been like a clear splintering on kind of who does the exploration and who does the development. Like right now, the industry is set up where junior mining companies, which don't mine, they explore, go and sometimes they'll get maybe a resource from a major mining company that's held in their portfolio for a long time. But it's like a different risk-reward profile than what the mining majors are ultimately looking for. And so you have this junior mining ecosystem that sometimes is well-funded

and sometimes is competing for capital with the cannabis industry in Canada. And they're taking shots in the dark. And there's a lot of work that's going into trying to make that exploration activity more intelligent, streamline it, drill less exploration holes while still being able to interpolate or extrapolate what is in between those drill holes. streamline it, drill less exploration holes to flip it to a major. one job, which is to define a resource that kind of enable them to underwrite their own inefficiency. Like they want to build really large infrastructure that enables them to capture the economies of scale.

And so there's actually a really long tail of mining projects that don't have the scale that would justify getting acquired at a major premium. And so they'll go into this kind of orphan period, is what it's called in the industry. And it's hard for them to break out of that orphan period. And that's kind of where we see our ability to kind of step in as a more efficient builder and operator that's kind of where we see our ability to kind of step in as a more efficient builder and operator is kind of take these, what the industry calls subscale assets,

but we see metal there, and come in and bring those into production as we kind of are building the platform and then eventually scale into the same scale that the big mining companies are operating at. Your thesis being that you can get the metal out and process it into a product that you can sell more efficiently than the

majors such that it's economically viable. To offset the scale advantage. Yeah. Yeah. I think this might be a good opportunity then to talk a little bit more about what is Mariana's product. You said a few minutes ago you're not a SaaS product. What does it mean to be a diversified metal and minerals company, technology-enabled mining company.

Give us a little bit more detail. So we're a vertically integrated software-first minerals project developer and operator. And so we focus on the backend of the minerals value chain, which is actually doing the detailed engineering, getting through the permitting, building the asset, commissioning the asset, and then operating the asset. And going back to some of what we were talking about around the labor pool,

like those labor pool shortages exist in construction and they exist in mining. Like they're felt very, very intensely. And so our fundamental thesis is that with a contracting labor pool, you have to start with an awesome team. The table stakes is that you build an awesome team. But how do you enable 200 people

to do what 10,000 people are needed to do today, at least on the like parent-co side of things? And that comes from leveraging the recent advances in LLMs to automate workflows in the construction side of things, in the engineering side of things, in the procurement side of things, which take an insane amount of time. You make a lot of lists and you fat finger a lot of data between databases. And that is all about reducing churn in construction. Churn and latency. Latency is one thing that I think people

sometimes don't appreciate from like status quo construction like large scale mega projects is that what's happening in the field and what the back office kind of sees or what the executive team sees or what the project director sees, there's a three week lag generally for like really large construction projects where you are trying to aggregate data

from all the different contractors and all the different parts of the facility into a consolidated, integrated schedule, which you can then make decisions off of, like, how do I prioritize what I'm doing today? And the way you run, like, in between those three weeks is people stand in circles every morning and they say, what are you doing today,

what are you doing today, what are you doing today? And they go off and they do the thing, and'll send like a very brief kind of progress report back. And it takes a long time to then take those progress reports and actually measure progress so that you can reevaluate priorities and understand kind of like how the project is trending. And so we're really trying to accelerate and democratize access to data fundamentally

and run construction projects like manufacturing facilities. And it starts there. And the reason construction and mining are so kind of integrated, and some people might disagree with me, but like a mining project is a big civil construction project. It just never ends. And you hope it never... It's more like a deconstruction project.

Yeah, that's fair. Well, you do, when you're... I guess you have to make, you have to construct piles. And you're building piles. Okay. But there's actually a lot of similarities in kind of like just moving the dirt for like site prep. and you have to construct piles. But there's actually a lot of similarities in just moving the dirt for site prep. The same software stack that is enabling you to get feedback from the field live

is the same thing that the mining industry struggles with. underground mines that are like these like deep mazes and the industry is getting better at having like actual location sensing on like where the equipment is. But losing equipment in the mine is like it used to be a super common thing. But you know we start with construction and then we start to get into the second core software stack is what we're calling plant OS. The construction stack is capital project OS and plant OS is really aimed at removing humans from the loop and deciding how the chemical processing operations and the refining operations work. aimed at removing humans from the loop and deciding how the chemical processing operations and the refining operations work. And big refineries are effectively big robots. You have the sensing and telemetry,

you have the actuators to control how the plant operates. And imagine like tele-operating humanoid robots like forever. That is what the refining industry and the processing industry has been. And there's obviously PID control loops that kind of maintain set points. So you can maintain temperature automatically, maintain pH automatically. But the thing that really matters is that the feed material to the processing facilities is constantly changing,

because the ore body is changing over time. And so the way that the industry manages that today is they will blend the feedstock to minimize variability that's going into the processing facilities, and that enables them to minimize the amount of change that has to happen on the processing facilities, and that enables them to minimize the amount of change that has to happen on the processing facility. So we're trying to flip that and say, okay, if we build a hyper-dynamic and highly flexible refining circuit, ideally without adding a whole bunch of cost,

what does that do to optimizing the global operation from the mine to the refinery? But it's first aimed at reducing reagent consumption, reducing energy consumption. within the building, which is a factor, but you ultimately have nine control variables between airflow rate, supplier temperature, the cooling water temperatures and flow rates both in the chiller system and in the cooling tower system. And just in that relatively simple system,

they were able to reduce energy consumption by 30, 40%. And it happened relatively quickly. And so that's the opportunity when you remove humans from making the decisions on how kind of like these process systems operate That's the opportunity and then when we look at kind of refining and processing facilities that's like a thousand control variables and It's no longer single pass because what's really interesting about minerals refining is that you never want to lose the metal, right? Every atom that you lose kind of in the processing facility is another item that you have to mine So recovery in the refinery is actually like the biggest

lever when it comes to cost. And so what that means is that the upstream unit operations think of a refinery as like 20 unit operations kind of all in series and as in a relatively simple refinery. The upstream operations obviously impact the downstream operations because if you're changing the process conditions

in the upstream operation, that changes what the downstream operation is seeing. But the downstream operations will recycle the reject stream back into the upstream operations. And so it's this big interconnected web, and it's a high latency web also, where if you make a change in one part of the circuit, you may not see that change cascade for another 24 or 48 hours.

And when we're commissioning refineries like the World, that latency ends up being a major driver of kind of the time 24 or 48 hours. six months. And a lot of Western companies, it takes two to four years. And that stacks up where we need to build like an insane number of mines and refineries. And if you are kind of four times longer or five times longer every time you build a refinery. And every step of the process. Yeah. And so we're trying to bring down the time that it takes to bring the refinery to spec basically through put and hitting the kind of like output requirements of the product that you're making. And then ultimately you start this historically very long hall of gradually bringing down the cost over time.

And that's something that we think that reinforcement learning is gonna do quickly, much, much faster, kind of like in line with what Google demonstrated with the thermal systems and data centers is achieve global optimal operating conditions on an order of magnitude faster time scale. So how do you think about like you're building a company that mines and refines a product? There's a lot of tech that you can interject at essentially every step of that process.

Like how are you deciding what to build, where to partner, what are you developing in-house versus where are you going to market? Yeah, I think at the beginning we're focused on how do we take kind of commercially demonstrated unit operations and be a better integrator and a better like operator of that integrated circuit. And so focus on the software systems that enable you to kind of control the plant more optimally. And that's generally what project level financing parties want to see also. Like it's hard to get project finance on a first-of-a-kind facility

where you're demonstrating a new unit operation for the first time. And so we think that as we're kind of entering the market, the right place to start is take commercially demonstrated individual unit operations that operate globally and go after the uplift that's available just by being a better integrated operator. There's a whole bunch of bottlenecks

in building these facilities that we will need to solve. I mean, the industrial supply base just for manufacturing tanks is broken. Like, there's specialty. Oh, no. That's a new one. Like, things that we kind of take for granted just take a really long time if you want to not go to China for sourcing that equipment. And that has a big impact on the operating side of things too, where the supply chain for a new pump in Australia could take 30 weeks and getting that exact same pump but with a mine

in China it shows up in a week or three days. And so that entire industrial like equipment supply base, we're going to have to look at some point and that's obviously a much bigger bite to go after like commodity equipment manufacturing. You're not going to vertically integrate to be a mining equipment manufacturing company. I don't think so. I hope not. You'll let me know. You're not going to vertically integrate to be a mining equipment manufacturing company. I don't think so. I hope not. That's right. Well, this is the kind of what is the incentive structure of the partners and the suppliers and is it required or not?

I think that there's a whole bunch of companies that are working on awesome novel process technologies that have not quite gotten over the hump trying to sell to the big mining companies. We want to be the customer that helps accelerate commercial deployment and the partner that helps accelerate commercial deployment. One of the big issues that comes up when you're deploying new processing technologies is that part of the reason why it takes a long time for it to get to the point where it's commercially viable, other than all the headwinds from the industry being conservative and process driven and all those things, is that humans have actually never operated

that process chemistry at scale before. And so you'll learn a bunch of things at pilot scale, but pilot doesn't really tell you what's happening at commercial scale. And you have to train people. You have to train the people to operate it. It's like new environmental things that might come up depending on the chemical that you're using. And that like scale jump is actually something that we think that RL will enable with a pretty meaningful pace adjustment where you don't need the humans to kind of like fine tune

the process conditions around a new process chemistry because the plant OS is doing it. Ryan and Erin, how did we approach this industry? Is this a space that we spent a lot of time thinking about or thinking about opportunities in the space or how did we approach it? We wanted to do a mining investment for a long time. When you think about venture capital, we care about massive markets, and there's not that

many massive markets left that have been sort of like largely untapped by technology, and mining sort of screams one of the largest markets in the world, very little adoption of technology. So, over many cycles, we've gone out and spent a lot of time meeting companies. And as I mentioned before, the challenge is, how do you sell a point solution or a point piece of technology into this industry that has very little incentive to adopt it and also has a very complicated geopolitical dynamic where you have a very large global

player with their hand on the scale. We put out a piece a couple weeks ago around our thesis in mining and why we think a vertical mining company is the answer because we actually do believe you have to control every single piece of the entire journey, the entire life cycle of an atom of metal end-to-end to actually be able to build a tech company here This is not about a point solution for one particular part of the process in order to actually capture the gains and efficiency and build a feasible Business you really have to own the entire process end-to-end The only thing I'd add there is that this is the intersection of geopolitical urgency in tech

Like to what Seth Turner's been talking about is like now we have technology that can actually go and disrupt this Like, to what Steph Turner's been talking about is, like, now we have technology that can actually go and disrupt this. But also, there's a talent base, people coming from companies like Tesla, SpaceX, Andrel, other sort of hard tech companies working in sort of dirty spaces, willing to go out in the fields. Roll up their sleeves. Yeah, roll up their sleeves, go out in the middle of the desert and work on this stuff. So now is the time to build this company.

And the political tailwinds are there. Even my conservationist mother, who I think if like we had this conversation five years ago, she would have clutched her pearls. She doesn't wear pearls, but she would have clutched her pearls at the idea of domestic US onshore mining. I think broadly speaking, the American public and certainly the government has come around to the idea that metals are in every single thing we use as consumers. Our supply chains are highly reliant on China. It's a huge problem. We have to figure out how to address it. And that means investing in mining in the US again.

You mentioned rare earths, you mentioned lithium and things like that, but there are many different critical minerals. You talked a little about it in the very beginning, but specifically, what are the interesting ones for you? How does that map to what people see on the headlines and what the business opportunities are? Yeah, I mean when we look at what needs to happen in the next 10 years and forecasted demand will only materialize if the supply is there

So we'll see if that forecasted demand materializes The metals that actually need to grow the most by like mass flow rate are like the big metals like we need a lot of Aluminum we need an insane amount of copper. We need more iron, we need more zinc. What are some of the things that these metals are in? Iron goes in everything that is infrastructure. Zinc is one that people sleep on because you actually have to galvanize a lot of that steel. And so zinc oftentimes kind of pops up every once in a while as being something that we really do need to continue to focus on.

Copper is the workhorse of this push to electrify everything and to just grow the grid to be able to supply AI, to be able to enable accelerated renewable penetration. For EV penetration to happen, like, you're going to need a lot of copper. Aluminum is one that I think is underestimated. People underestimate kind of its importance. It's actually like the number one most consumed metal in defense applications. Like, the grid is, people talk a lot about copper,

but there's a lot of aluminum like conductors in the transmission lines that are critical to actually growing the grid capacity. And in automotive obviously aluminum is big. Magnesium has a whole bunch of defense applications, potentially could get more into automotive applications and like for lightweight metals. Lithium needs to 4X in terms of production capacity

in the next 10 years roughly in order for the batteries that we want to build to be built. Well, we're all about batteries. Right, right, right, right. And then nickel is a big one. I think that what has happened in nickel in the last five years is Indonesian production capacity has scaled to the point where it's now something like 70% of global nickel comes out of Indonesia. And a lot of that was on the back of like meaningful investment from China

to be able to kind of expand production capacity in Indonesia and then also do more of the downstream processing in Indonesia. And nickel goes in everything that is specialty alloys, anything that needs high temperature or corrosion resistance, and also is like kind of the unsung hero of high energy batteries, where these lithiated transition metal oxides, which are high nickel. Manganese is important. Manganese goes into a lot of alloys and also goes into batteries.

The uranium, if fission is going to continue to grow and we're going to continue to like deploy more nuclear capacity in the US, then uranium is going to be needed. It's a long list. And the rare earths, they're important, obviously. They are omnipresent in like everything that we use. But they show up as a relatively small on a volume basis when you look at kind of the stack in everything that we use. But they show up as a relatively small on a volume basis

when you look at the stack of metals that we need to mine. Definitely we need a ton of process innovation in how rare's are refined. Solvent extraction circuits are and the know-how is kind of like highly concentrated in China. But it is a little bit of a frothy market right now, and so being a diversified minerals company kind of enables us to pick our spots in areas where it makes sense. Like these things still do move on commodity cycles, and you actually want to be building infrastructure at the bottom of commodity cycles, not at the top of commodity cycles.

That's the Warren Buffett quote of invest when there's blood in the water. Like you want to be coming into metals when they are at this trough really where no one is investing in them. They still have a macro long-term critical point. Lithium is like exactly in this position right now. And that's why we're focused on lithium. Copper just has this like macro trend that is like pretty hard to ignore.

We're just gonna need an insane amount of copper. Copper grids are going down globally, which means that our ability to extract copper from those ores is gonna get harder and harder to extract copper from those ores. And that's where the plant OS side of things we have a high degree of confidence that we'll be able to step in and optimize the refining circuits to still be able to extract copper from these lower grade ores without seeing meaningful kind of cost increases. So everyone knows people here, it takes forever to get a mine started. I don't know how many new greenfield mines we've developed in the United States in the last decade. Not many. I know Australia and Canada have been able to do this faster,

which is interesting. You don't know Canada for moving quickly. What are some of the bottlenecks there? What does America need to do to accelerate this? As one of these companies trying to not only mine, but also refine in the United States, what needs to be done? One thing that folks don't always see is actually the permitting requirements for exploration.

So if you are exploring over, on federal land, if you're exploring over more than a five acre parcel, you have to submit like a plan of record or plan of operations that needs to be approved by the BLM before you can start to expand and explore over a larger piece of land. And so bringing down the permitting thresholds and the permitting burden associated with exploring, that is why we have such a relatively small rare earth resource.

It's not because there isn't, like the US has tons of natural resources. And the kind of like USGS estimate for the US reserve on rare earth is just picking on that. That is tied to lack of exploration activity, not necessarily fundamentally like a lack of kind of geologic presence. And we haven't looked for it. Yeah, we haven't looked for it. It's kind of hard to find. Yeah, it's hard to find in like high concentrations that are mineable, which we're trying to drop the percentage requirement that makes something economical.

But it's also there's just a lot of kind of like permitting burden to be able to actually go and deploy drill rigs to go and actually explore. And then the government currently is doing a good job of kind of highlighting the importance of the minerals industry. And you're definitely seeing a little bit of a tone shift over the last 20 years that is much more supportive. There's way more tailwinds when it comes to kind of like making mining be viewed in a more positive light and a critical light.

And that will help to solve some of the talent pool problem where people that are awesome, they want to go build things. They don't want to go and work on a project that sits around for five years and maybe gets permitted and maybe doesn't. They want to go work on hard problems where they can see the impact of the work that they're doing. And so if we're getting in the way of enabling projects to get built,

that is actually a major deterrent for talent because they won't actually see the output of their work. And then I think the permitting requirements broadly for going from a discovery to an operating asset, there should be a big focus on efficiency in reviewing environmental permits. There should be a big focus on streamlining those workflows in the

back and forth between field offices and state offices from the BLM, just focusing on the federal side of things. Because the way that projects get permitted right now is you'll throw like your environmental assessment over the table, and then they'll go and they'll because the way that projects get permitted right now bilateral. And again, there's been definitely a change with the new administration where there's a little more accountability on the permitting offices. But there's tons of room for making those reviews more efficient. And again, LLMs will make it more efficient. We just need to penetrate that side of the federal bureaucracy and enable people to review things

faster. What else? Aside from kind of permitting efficiency, what are other things that if you could send a list of recommendations to the government for what they should do to support the US mining industry, what would be your top three? Yeah, I think supporting the demand side is probably like the biggest lever. And if you want to mobilize kind of private capital

into the sector, having some level of support on the demand side is major. And so that's offtake agreements with floor pricing. And they did this just now with MP materials and that ideally provide some stability on the revenue side of things so that investors like there's trillions of dollars of capital kind of like dry powder just sitting around waiting to be deployed. It has historically kind of avoided the mining industry because of the market price uncertainty.

And so as soon as you provide it's a commodity cycle and what if you're building at the wrong time and the infrastructure funds are not the ones that are here to play like be intelligent about the commodity price cycle, like they're looking for annuity type returns. And so those folks would mobilize if there were more demand side support from the government, either providing price floors or fixed pricing for critical minerals that you're trying to incentivize

more production of in the US. Participating in the capital stack is important. I think lowering the hooks or the extra burden that comes in with receiving government funds is important. And like some government agencies probably have more leeway to do that. Like the DOD obviously again just did this big deal with MP materials and actually went all the way to participating in the cap table or as an equity holder. But when you receive federal funds from the DOE or if you receive federal funds funds from, like, on the debt side of things, from Ex-Im,

it comes with some, like, additional burden sometimes. If you are building on state land and you just need a state permit and then you bring in federal funds, you now bump your permitting requirement to a federal-level permit. And that's the NEPA process, which, again, the NEPA process wouldn't be as burdensome if there was some more efficiency on the permitting side of things. Mineral deposits, specifically, like, high-grade mineral deposits, don't obey borders. So again, the new process wouldn't be as burdensome if there was some more efficiency on the permitting side of things.

Mineral deposits, specifically like high-grade mineral deposits, don't obey borders. Is there a broader international strategy here? I mean, I would love to think we can mine and refine everything in the United States, but obviously there's a lot, Australia, Canada, Latin America, Africa, underwater, seafloor. What is the overall strategy in your mind? We're starting in the US because it's closer to home and we're focused on developing a platform that we can scale off of.

But at no point have we told ourselves that the US is the sole focus. Like you have to be able to bolster the company to be able to operate internationally if you want to be able to scale beyond kind of like the resource base that the US has like available today. And so more exploration is going to happen in the US, we'll probably discover more resources and that pool will grow over time of projects that we can build in the US. But yes, we are absolutely going to expand overseas

and underwater maybe. When we look back a decade from now, what's the single clearest indicator that Marianas achieved when it set out to do? We won't be as worried about our ability to secure the critical minerals that we want to secure. Because we will have kind of rebuilt and established like an entity, ideally, that is able to go across borders to your point and build these projects cost-effectively, time-effectively,

and responsibly, ultimately. And the reason that we are so panicked about it right now is because we have fundamentally lost the ability to build large-scale infrastructure, and we have lost the ability to, like, operate complex minerals plants. That's what we have lost. And we need to build that back. We want to build 10 projects in 10 years.

Those projects will be an increasing scale over time, but the work will not be done in 10 years. What I think will have demonstrated that the 10-year mission will have been accomplished, other than building those 10 plants, is that we will no longer be as worried about our fundamental capability to go and build this complex infrastructure. We will have unlocked it. Thanks for listening to the A16Z Podcast. If you enjoyed the episode, let us know by leaving a review at ratethispodcast.com slash A16Z.

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