Business Innovators Radio - Interview with Louis O’Connor, Founder of Strategic Metals Invest

Episode Date: June 18, 2025

Louis O’Connor is the founder of Strategic Metals Invest, where we offer private investors the opportunity to own the upstream raw materials that contribute to trillions of dollars in downstream GDP. SMI has created a marketplace for rare earth metals and technology metals right as the world pivots from oil and gas to metals. Rare Earths have become more important than oil and gas and are the new frontline in geopolitical decisions.Learn more: http://www.strategicmetalsinvest.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-louis-oconnor-founder-of-strategic-metals-invest

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of Influential Entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have with us, Louis O'Connor, who's the founder of Strategic Metals Invest. Louis, welcome to the program. Mike, thank you very much. I'm happy to be here. Hey, you're welcome.

I always love talking with people and learning about what their entrepreneurial journey was and what they do and the problems that they solve for their market. So I'm excited to learn from you, but get it started a little bit with what inspired you to start strategic metals invest. Well, I suppose it's like anything, it was just discovery. I'd heard about a company in Germany who at that time didn't work with private investors, which is what I do now, but their core business is they're a supplier of strategic metals. I'll just give you a quick definition of what strategic metals are. I know I'll use North America as a sort of an example, Mike. So the US Geological Survey has a list of about 45, 50 metals that are considered strategic.

So, you know, critical to economic prosperity and, of course, military capabilities. And we offer them, our core business is we buy and sell them. And we sell them to manufacturers. We're sort of a tier one supplier to, you know, a lot of quite a few blue chip companies. But that's not what we'll be talking about today. But if we didn't, if that, if we didn't have that core business, it wouldn't be safe to do what we do and have this little, what you guys in America might call a side hustle. and invite private investors. And so out of that 45 metals, Mike, there's only about eight or 10 that are relevant as physical assets,

meaning that I'll explain a bit more as we go along, but those of the eight or 10 will be talking about, the ones that are sort of a subdivision of the strategic metals. You know, I love that hint at what we're going to get to because it sounds to me like you dove into one, one business model, but then as you were assessing and reassessing, something else emerged that you can serve a different section of the target market with that. So I want to dive into that when you're ready and let us know what that it did. But before you even got to that part of your business, what was the gap that you saw in the investment landscape that wasn't being addressed that made you even move forward to start strategic metals invest.

Okay, good question, Mike. You know, I'd love to take all the credit for it. But actually, it was, we were guided and instructed and directed by our own clients, if you will. So just explain that for you. So as I said, our core business on a date, we've an office, 45, 50 people in the office in Frankfurt. We're based in Europe, by the way.

You can tell from the accent. I'm not from the US, but I'm in Tipperary. in Ireland, but our main offices in Frankfurt, Germany, we have about 45, 50 people. And 80% of our business activities there are buying and selling metals from, we buy them from producers. We sell them to, we've over 4,000 clients in 74 different countries. We're in business since 1999, and about 2010, what we realized is there was going to be shortages of these metals. And it's funny were speaking today because just this week, the US

and China are in talks in London and they were talking about where earths, these are the metals we're talking about, but we realized about 15 years ago there was going to be shortages and the most important thing we would need to have is inventory and fair and fair prices of course.

And so we set about we bought what was a bunker in World War II. It's in the banking district in Frankfurt. Two levels below ground. We built a level above with you know two and a half meter or three and a half a meter walls and doors. And at that time, our only plan was to build an inventory for when there were shortages. China has an unrivaled position in rare earths.

You might know that was in the news all this week. And we realized it would be scarcity driven, to be times when the metals would be scarce, and the most important thing would be to have inventory. So initially, we just wanted to build our own inventory for when to a scarcity. And then some of our industry clients started to say, well, look, let's give you an example, a small manufacturer north of Frankfurt in Geeson. They make thermometers, factory maybe 200 people, but they need rare earths for their thermometers

all the time. And they said, look, is there any times we could buy when the prices are low, we can buy more and we can store, would you provide storage? And that's when the idea came. Listen, if we can offer our manufacturing clients storage, we could also invite private investors to safely enter and exit the supply chain. And the only reason we can do that is because we're embedded in the industry. We know, you know, for example, Indian, you can swipe your phone because of Indian. We know the purity levels Apple will buy of Indian, gallium, germanium. So we know the industry.

We know the quality levels needed. We have a storage facility for storage. And then we also have a practice of mediating a sale. If a private investor is ready to sell, they can do so if they want on their own resources. but we have a practice of also repurchasing and either keeping it in our inventory or reselling it to one of our industry buyers. So it was actually we were we were instructed by our client. They gave us the idea. They did, but I want to pause there and recognize that in the busyness of our day professionally, many times, opportunities like that just fly right by and the business does not know.

notice it or take advantage of it. So yes, your clients brought that to your attention and it became obvious, but that's because you were being aware, you were listening, you were watching for ways to improve and being constantly a never-ending improvement mode. So I think that just is spectacular. So once you notice that, it started kind of building out that as an opportunity for storage and investment opportunities, what are some of those, um, opportunities that you're bringing to the market. Okay, so I'll give you an example. I'll use gallium germanium,

a couple of these metals as a case study. So as I said, there's 45, maybe 50 on the US geological survey that they say these metals are critical to our nation's economic prosperity and military capabilities. Now, not all of them are rare, but what we do is we focus on the ones

in terms of private investment, there's four characteristics that determine how we would deem them relevant as a physical asset. And they would either have one or all of these four. And the very first one is diversification. So gallium, for an example, is in all modern technology. It's also on semiconductors.

Somebody in Europe recently said, and it's sort of true, which is there's a sort of a trade, war, technology war, going on since about 2018, mostly, obviously between the US and China, but other parts of the world as well. And what he said was that we're already in it, what we call it, a Cold War 2.0, except it's not an arms race. It's a semiconductor race.

So these are the backbone of manufacturing in the 21st century. They're basically the upstream raw materials that will become trillions of dollars in downstream GDP. So the raw materials, Tesla need, Apple need, Ford Motor Company, BMW, medical devices, aviation, space technology, you name it. They are the backbone. They're technology metals we live into technology age. So we look for the metals that will offer our clients the most diversification, which really equates to which raw material is needed in most products. So that's the first thing. The second one is which ones are the most in demand?

like right at the moment, the next big demand surge is going to be energy transition. So electric cars, solar wind, but also artificial intelligence and robotics. So artificial intelligence, of course, it runs on data, but it relies on rare earths, you know, for the computer chips, for the magnets, for the sensors that go into the servers. So that would be a very, very high demand coming in that area. And then we also look at which ones are the least produced. Haphanium, I'll give you an example. One thing I should add, Mike, as well, these metals are always a byproduct of another raw material.

So they don't actually occur naturally in the earth's crust. So one example is hafnium. It's a byproduct of zirconium. So for every 50 tons of zirconium, you only get one ton of hafnium. So there's only 70 to 90 tons of hafnium produced every year, which you can actually fit on the back of it. big truck. However, hafnium is a super alloy in jet engines in rods for nuclear reactors. And as the

space exploration becomes a fully fledged space industry, also, you know, it's needed in rocket engines. So the point on sort of making is there's very little hafnium around and when demand increases, there's an inflexibility, sort of inelasticity to supply because it's a byproduct of zirconium mining. And then the last characteristic is where is there heavy localized or sort of a supply concentration risk? Gallium, 98% of the world's gallium is coming from China. More than 90% of the world's rare earths come from China. And that's why the Trump administration and even the Biden administration before that and the Trump administration before that all agreed on one thing is that we, you know, North America, Europe as well. I'm just using North America for an example tonight, but Europe is no different.

We need to wean our dependence off China. And that's going to take some time. So we look specifically at where there will be shortages and we offer those assets to private investors. You know, it's interesting because I think a lot of people here, you know, like rare earth metals or they think of gold or things like that. You're talking about this is a subset of that. So it makes me wonder, is there a. supply, is there any issue with supply given once people hear that there's an investment opportunity, what if everyone or many people jumped on that?

Will the supply ever get to the point where it is limited? And then, of course, that makes the prices, you know, very, very increase. Well, believe it or not, we're the only industry supplier in the world. I can say this with certainty at the moment that offer these raw materials to private investors. And, you know, the only one of the main reasons we do it is they help us build an inventory. I'll give you an example actually at the moment since China restricted the export of two rare earths in April and there's shortages. That's, you know, make no mistake when President Trump's talking about critical minerals in Ukraine and, you know, what's in Greenland is also resources. is the reason they had these talks in London this week

was that if they didn't solve the rare earth situation, that manufacturers in the US and Europe and elsewhere would run out in three to four months. So you're looking at car factory shutting. In fact, Suzuki in Japan, they have to stop production of the Suzuki Swift because of this shortage. In retaliation for the tariffs, China said, okay, we're not going to send the rare earth.

China have a sort of an understanding, rivaled position here at the moment. We will only offer a certain amount to private investors. The most important thing is our core business. So we always will need to be able to take care of our industry clients. But what's beginning to happen both with nation states and with large, large corporations, is strategic stockpiling. So we think, you know, and the other thing as well, Mike,

Despite the name, some rare earths are not all that rare. It's not all of them that are, there's a sort of supply concentration. So there's plenty of rare earths in America. In fact, there's a mine in California, MP minerals, which is Mountain Pass in California. The issue is, though, that the technology, the human expertise doesn't exist in Europe or US at the moment. because as I said, they're a byproduct of another raw material, so they have to be extracted, they have to be separated, and they have to be, it's a metallurgical process where they're remetalized.

And at the moment, that place in California says most of their oars to China because they have no choice. They don't have the expertise. Now, haven't said that, that same company is going to build a processing facility in Texas. It's already being built. But from what I understand, and I'm open to correction, but I think I heard the CEO say that when that's ready, that will only represent about 1% of the demand in North America. So there's still a long, long way to go.

Yeah. So what type of investor is best suited for this asset class? Would it be high net worth individuals or institutions or everyday retail investors? Everyday retail. Actually, these assets have been largely ignored or maybe off the radar of institutional money. I don't know if that's going to change. But the reason for that, Mike, is they sort of have a small economic visibility. I mean, the market cap, I mean, it's 15 to 20 billion, but, you know, gold is 15 or 17 trillion.

So they've largely been ignored by institutional money. So when we first began to offer to private investors, you know, our minimum investment is $10,000. It's still the same today. And we have people that, you know, we recommend, we suggest, we invite people, to sort of get into that information gathering first and really learn from us exactly what this is and what this isn't and get to know as much as you can and then start small and build a position over time. Look, the good news is which we haven't spoken about, these metals, people who own are making gains. They've been outperforming gold and silver and most major stock indexes.

So there's a real story here. There's a real, you know, for the discerning investor, there's a bit of knowledge, there's due diligence to do, but people are profiting from owning them. Yeah. Are there any trends that you're watching that could either disrupt or accelerate the strategic metals industry? Yeah, yeah, both. I mean, for example, you know, I mentioned Indium. you can swipe your phone and use a mouse because of Indian. So somebody could come up with a better technology for that.

You know, it could be replaced. So you might have substitution, so demand will sort of drop off. You have geopolitical risks. Like as we pivot from oil to metals, where it sort of have become the frontline in geopolitical decisions. I mean, President Trump demonstrated actually there were that important. that he would use them as leverage to end the war in Ukraine and Russia. Now, it hasn't happened yet, but they did sign a minerals deal.

So they're very, very important. In fact, the EU considers, and probably US as well, that rare earths are now as important as oil and gas and will become more important. The Saudis are interested. Everybody's interested. So, yeah, there can be geopolitical security situation. Myanmar, for example, China imports a lot of raw material from the, there, there was an earthquake or there's a security situation. So yeah, there can, you know,

anything can affect them actually. Yeah, I mean, it's really interesting when you start hearing those kind of things. It's so different than the things that can affect the U.S. stock market. You know, you hear earnings or you hear inflation data that affects that. Well, your industry, much different things impact that. So that's a very interesting to hear. So let's wrap up with this, Louis. What is your long-term vision for the company? and how are you hoping to maybe reshape how people are thinking about this alternative asset? I think I honestly believe people will be, you know, it'll go maybe a bit more mainstream. But, you know, I can't take very, I don't think very little credit because the industry side of the business was there long before me and the company built a great reputation for themselves.

They're a globally recognized brand, even though they're based. in Europe, they would sell to a lot of US companies as well. And like what I always say, people ask me, how come I don't, how come I, I never heard about this? And the only obstacle really to people profiting from owning these, these rare earths, they just don't know they can. So I do think it would grow. But, but, you know, as you sort of mentioned as well, you know, chain of custody is very,

very important. It's not, it's not, it's a very complicated process. For example, you know, if, if these. He's, I think, 900 pounds of rare earths in one F-35 fighter jet. So you think they're going to, they could end up in a nuclear submarine, aircraft carrier. So people, you know, would be very wary of who they buy from. So it's almost a little bit of exclusivity to it. So thank God we're embedded in the industry.

And, you know, we just, we just wanted to grow now over the next few years. That sounds so exciting. And I'll just wrap up with this, Louis. the best way that anyone that would be interested in learning more about the industry and working with you guys, what's the best way they can reach out and connect with you? Yeah, if they just go to the website, Mike, www. www. Strategic Metalsinvest.com. They download a brochure, then we'll get their sort of name and email, and they'll be on

our list. We'll start to educate them right away. And if they want to reach out to me, it's Louis L-O-U-I-S at Strategic Metalsinvest.com. If they mention Mike Saunders, I'll make sure they get to. get a very good welcome. Excellent. Well, thank you so much for coming on. It's really been a pleasure talking with you today, Louis. Thank you very much, Mike.

You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, visit www.com.