Episode 236: Jon Evans

Hi, it's Jolari. Welcome to another episode of the Global Lithium Podcast. Today is episode 236. My guest is John Evans, the CEO of Lithium Americas. I've done 236 episodes now and I believe this episode is at least in the top three all time. It was very enjoyable and I believe in formative conversation that you will benefit from. We cover a lot of different topics. This is one where you might want to stick around and listen to my comments after our discussion is done. Without further ado, John Evans. John Evans, welcome back to the podcast. Good, good to be back, Joe. Good to see you. You have been in this industry longer than most. Time flies. It's been I guess the better part of two decades now. But if you compare what's going on now in this industry, with what it was like when we were at FMC, what would you say are the two or three or however many you want to talk about biggest differences? I think, yeah, you're right. I feel old now talking about all this stuff. It took a six-year hate. It's never thought I'd come back here. I am. I can't get enough pain. Look, number one is size. You start talking about resources and plants that are being put together. Now, this average is 40,000 tons. When you and I are around, that would have been a third of the global demand. So the scale is number one. Number two is of volatility. We were in a world that was like, you want $5,000 ton carbonate. You want $10,000 ton hydroxid. And of course, we had all the goodies in between like Bulee and the other lithium salts that we made that were, that made the business interesting as well. But it was a nice little grocery store business, one amongst three companies in a business that we knew everybody. We knew everything. We probably talked too much, but I think the statute of limitations just up on that between discussions with me and stuff and Hobber or whoever else. It's just become this global thing that's gone way beyond, I mean, look, I'll say this, you and I knew this was going to grow, but never to the scale that it's grown over the last, I mean, when's the last time I got out of this industry, at the end of 2012, early 2013, it's been 13 years, and this industry is more than 10X. Well, what I left. And it's still growing now with now we're getting like, E.D.'s, it's got slower growth. And I think 28% of the cars I just read this morning, globally, or electric vehicles being sold. And now we have this data center, best power grid, which are even bigger batteries. I would have never thought that. I mean, you and I were jazved about the iPhone, you know, and portable electronics. So it's just scale, speed, volatility, and I think the other thing is cost. Our expansion at FMC was what, $50 million, that was like pulling teeth to try to get that kind of capital. Nowadays, that's a project like this. You're going to spend that month in CapEx with a scale that we're building. Well, as long as we're going down memory lane, from our time in FMC, the most interesting thing to me was when the management of FMC said hard rock was dead and didn't want to do a JV with talisman. Yeah, green bushes. Boy, they're there a year early. That would have been the deal of the century. But yeah, I digress. They're having their own problems right now. So we're in the third cycle in 10 years. It seems like this cycle is probably going to run to the upside for longer just based on some of the stuff we just talked about. What are your thoughts on that? I fully agree with you. I think I'm watching. There's people that post every day almost by the minute on what's happening in futures markets, which I think is funny. It's like you're watching the stock market. I don't think it's quite that volatile. There's a very tight supply and demand balance right now. I think tighter than people think. And then you've got this whole new theme around, I was just going to call it power, electricity, which came up a lot quicker than anybody would have expected. The demand is big because what's, I think people forget it's like, they're not buying right now for projects that are going in in the next three months. I mean, in some cases, these cells are for projects that are going to be put in in a year from now. But you can see in the United States alone, I think we put 10 gigawatt hours in last quarter. I mean, that's like, it's like 9,000 tons of lithium. It's big. And I think that is going to cause this to go longer. But then I'm also going to qualify it. I don't think you're going to see price do what it did the last time. That $80,000 or $70,000. You can see how it's managed. Now let's be honest. Some of this is self-managed. Like, oh, there's some inventory. Yeah, great. So now we're going to show paper trades that don't exist for inventory that's supposed to be out there. It's kind of like the gold and silver market, you know, physical versus paper. But even with that, you still see pricing hanging in there in an economy globally, which feels like the other shoe is going to drop any day now at 20 to $25,000 a ton. And I know you're seeing these brown fields looking to start up. But it's hard to get financed right now because or anything because people are looking not at $80,000 a ton. They look back at a year ago and say, "Well, we're about 10." So we're going to go back to 10. And we're not going to talk analysts or companies that do analysts. But you know a couple of I talked about. We're going to be an oversupply next year. We're going to be oversupply in the year after. This is just a blip. I don't believe that. Just given people were burned so bad over the last three years. And then in that time, because of this critical minerals politics that's come up, Africa is not easy anymore. Mali, Balaue, Congo, Zimbabwe, Nau Nigeria. They're all putting these restrictions. We don't have to go through them all. People know, but it's pushing the price up, the cost up rather. South America is already there. You know, Argentina is a little different. You've got local people want a piece. And then the government wants their export tax, Chile as their whole regime. Mexico is nationalized. It's a difficult world right now. And what that means is higher CapEx numbers. So I think that's going to get people paused before they start to flood the marketing. And this isn't 2022, where E.D.s and everything's going to blow up. And it's all great. It's more nuanced and balanced. But I think it's going to keep price more range bound. Good for, I think the industry, 20 to $30,000 a ton. But I think that'll prevent some of the part of my friendship bullshit that happened the last time. Yeah, I think the other factor. I don't know what number you guys use for the growth this year. But it's going to be between 300,000 and 400,000 tons. That was the whole market in 2020. Yeah, it's a massive number. I mean, back then you go back to the further, 2012, 2013. It's like 130,000, 150,000 tons. The whole market. These are big projects. And clearly what you see here too, I think you and I both know you've got a lot of conversion in China. China does not have good resources. We know that. And then when you want to go build something somewhere else, the magic test doesn't work everywhere. I'm not going to go into whose projects that are Chinese projects that aren't doing all that great, but I can think of a few that aren't performing, you know, like, "Oh, they'll come here and they know exactly what to do." Different kitchen, different recipe, different meal. It's really fascinating to me, like, reading any, we don't have the name names of the people that proper lithium factoids, but, you know, I read this week, pricing drops substantially because of this specter of restarts in WA. It's crazy when you think about how long it takes to do a restart. And if you look at the, just all the assets in WA, there isn't that much. No. There isn't a tipping point there. Or the Jiang Xiaowol mine, you know, every other month, it's going to start up again. That was a great move in 2023, but I don't think you can tip the market in the foreseeable future. I don't either. It's gotten too big. And then I think the other thing that we don't really talk about as much is that, look, the current environment right now has reestablished energy security in all the above. I think I read somewhere trying to do $20 billion worth of green energy technology exports last month. So you're seeing a flood of Chinese cars in Australia. It's an article on that today. Solar panels, batteries. Look, in the U.S., we can talk about coal plants. I'm not going to get political here. It about, you know, gas power plants. If you want to order a gas turbine today, I'm an XG alumni, you'll get it in 2030. That doesn't really help your proud out blackout problems. So they're installing batteries. I mean, next-air energy who wants to merge with Dominion is the largest renewable operator. I think in the world, they own fluoropower and light, and they're putting in battery storage and renewables because they're quick, like solar and just batteries in itself next to power plants, gas power plants does a lot. And that's a global phenomenon now. And I don't think people are going to forget. This is like, I remember vaguely, and you remember probably better than me. My dad's Vega in the 1970s during that. We had a Vega. Yeah, gas prices. It changed our behavior in the US forever. And this isn't going to go back to like normal tomorrow. Like, ah, we, you know, landman, we got tons of oil. Yeah, well, people don't, you know, now we're got food issues. Go try to find 20 weight motor oil. See how many bottles you'll see on the shelf. I saw two the other day because, you know, that those base oils are actually mostly come out of the Middle East, even for the United States. So there is a lot of issues that people are going to forget. And that's, I told people forget about climate change. Right now, it's a kitchen table issue. Keep the lights on. And I don't want to be tied to the Persian Gulf or Middle East oil or anything like that. I don't think things are going to change. So that's big enough to push the United States might be behind now, not really in everything. I think in batteries storage or not. But the rest of the world is running ahead. And I don't think it's going to go back. Well, that was the interesting thing. And I was shocked. I was sitting in a best seminar. And the United States was number two. Yes. Last year. It's grown like a weed. No one talks about it. And if you parse those projects, almost none of them were AI related. And if you lay around, what's going to come with AI, I said when we were both still at FM, well, actually, it was maybe before you got there that I believe that in 2025 batteries for solar and wind would be bigger than EVs. And of course, I was wrong. But that long ago, you were starting to see the first green shoots driving across Xinjiang province, seeing all the turbines. And yeah, now it's finally here. And the interesting thing is is that the story three years ago is always, well, EVs in North America are a mess. Nothing's happening. Well, that is not the story. It was energy storage systems. So it's a big deal. Now, and it's that you're right. I mean, Texas leads the way with California. Florida, every state is putting these in our own home state in New York is, I think, putting in like five gigawatt hours. They're easy. They're cheap and they're fast and they can deal with peak cutting and great optimization in lieu of building other power plants, especially a peak or plant, which are not economical at all. You run those plants for two hours or five hours at nighttime and then shut them down. It's giving people optionality, but you're right, the amount of, and then you have data centers on top of this, which you're right. I mean, Tesla's got with LG and they're making elephant cells and they're going to make batteries and Michigan for storage for Tesla. And Tesla is buying generators from caterpillar and the power that the data centers and say no problem, dude. I've got a dual fuel power generator that can do natural gas or whatever diesel fuel. And I got a battery bank. So I can feed DC power in. I've got power grid backup if my generator doesn't work. And I've got it's like a big gap in a pipeline. I got two hours of runtime if something happens so I don't interrupt all these calculations for whatever searches people are doing on AI at this point. That's a whole other deal right now. Well, you spend over the past several years, you spent a lot of time in Washington. I think soccer past may have been the only bipartisan activity in the last few years. You had support from both parties. But how have you seen the different stakeholders in Washington? How is there thinking about lithium critical metals where we need to be the midstream? How is that thinking evolved and what do you see in your discussions? I mean, in our area, it's about batteries. So, you know, kind of probably has got started. Next week I'm in DC and I'm in some larger meetings, but I'm also in some very small meetings around batteries in the U.S. and the battery supply chain is that it's not lost on the U.S. government, on this administration or the last that we need to have all these pieces here. And what's missing? Well, you and I both know Anode and cathode, especially cathode. We should be able to do that here. You know, some folks do partial of that here. I mean, they put them, you know, panasonic does these things. You can bring a lot of that stuff here quite easily. Anode's a little bit harder problem, but not really. But the government actually gets all that piece in the guys of batteries or strategic. So taking out the, I'm an EV person or whatever else, no, we're batteries supply chain people. That's not lost on the government. And that's both shared by, you know, the defense side of the house or the part where we're outside of the house, along with this part of energy side of the house. I think different agencies are focused on different things. I think the Department of War is very focused on rare earths, obviously, in magnets and things like Samarium and I don't know, antimony and sort of these minor metals that most people never have heard of. But I think collectively between DOE and the Department of War and the White House, they understand batteries are a big deal. Because you can hook batteries up to gas plant, coal plant, anything. And we have battery capacity in the U.S. and we have a lot of it actually, I think about 200 gigawatt hours, where that you can adapt same cells, bigger form factor, bigger module for, you know, for grid scale storage batteries. And you're seeing that with LG and with others in the U.S. now that are blue oil. They're going to do all with its forward energy now. I think GM has the energy as well. I know they're going to do this at Spring Hill. So I think it's good for the business. You know, you have this, it's like when we're in Lithia, we used to sell to the glass guys and the grease guys and we sold to the battery guys, it's, you know, they both run different and it stabilizes versus just trying to get people to adopt electric vehicles or having the infrastructure here. We have an infrastructure issue and actually the batteries sold it. So it's completely the opposite, almost the VDs and that, well, we have enough charging stations and I'm worried about range anxiety. This is when I go to Washington, this is like a kitchen table issue. People are worried about blackouts. So different dynamic. And I think that's what this administration is very focused at. Because I've never had anyone argue on either side of the table and you're right. Knowing the only people that were against us were the NGOs that wanted to sue us in Washington. Like, now you guys are good dudes. We need this. You know, how do we help you? But I think it's a much different dynamic and I think the government now looks at it very holistically as opposed to if you try to push this climate change, it doesn't work and it's really shouldn't because these are solving much bigger issues than just than that. It's that. But I think it's also confusing. We have, I don't know, pretty good minerals. We have like 70. They're all different. And even I both know that it's like each one has its own recipe and its own story. So I think rare earth is the number one just given the issues that we've had outside of China and restrictions and so forth. So I think that remains top of mind for the defense department. Whereas I think batteries shared by both, but the government's still got quite around that. But I think they view us as, you know, a bulwark and hopefully an example for other people too. So the days of going to Washington and people thinking lithium was a rare earth are over. It's stock market. They still think that. So I've talked to some people that own our shares and like, yeah, your critical mineral I'm like, yeah, I am. I'm not NP materials. You know, I'm not USA or they are very different as you and I both know, but I think that's lost. People just like to trade based on momentum right now. That's the other thing that's different. The stock market now is way different than it was 15 years ago where, you know, instant people are doing options and stuff. It's crazy stuff. Yeah, I am. The all time high of lack. Back when before the split, could charlie wasn't running yet and you weren't financed. But the stock price was much, much higher than the two combined entities are today, especially. Yeah, they were in 20 dollars a share right now, both of them. Yeah, we're pretty far away from that. What do you think happens as you go into production and if there's a sustained shortage, do you think that lack becomes a safe haven for lithium investment? Look, so if you look at our shareholder registry, we have started to increase the amount of institutional holders we have. So, you know, our number one shareholder actually is Vanack. GM is number two, but they're being closely caught up now by Columbia Threadneedle. You know, and then we have other, these are well-known sort of ETFs or mutual funds that are starting to put into us because I think they're like, well, these guys on the next guys, I think for us as we continue to advance and look after the first ton of lithium comes out, that's the whole thing because you'll ask me about that later about due diligence. I'm not worried about the process. It's actually, and that's very seems like a tripe thing to say, but I've done this a few times and so of you in the amount of money you've been to our lab and the scale of what we've done, it's massive. I mean, it's not a demo plant that we're making 10 tons a day, but the scale of what we went and did this and actually tested even at scale the beneficiation is well above that. Most people do this at a laboratory in Vancouver somewhere and have an engineering company right up or report. I can, you can walk in, we can watch this stuff go from in one end to one out the other and we've done it and we've run it continuous. Not worried. When that first ton comes out, then it's a different game because I think, oh, well, this stuff really does work and I think, you know, I've been asked, are you going to be a consolidator? I don't know. We have a big asset, like an ad a comma like asset. So it's kind of hard when you sort of balance, I go somewhere else and sort of greenfield all over again. The flip side, I've said this publicly, is people will be knocking on our door. I've had banks already called. You know, people are watching you because, you know, it's, it's, you de-risk and you've got a full team and you got an asset you can expand four times in the US, which is a market people like to be in. You're permitted, you've community stuff's all done. Somebody with a big balance sheet comes in. Yeah, I can see that happen too. 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The import stats for the US was like 10,000 tons last year. Well, look in the batteries contained. Cathodes contain coming in here from Korea, Japan and China mainly. Start adding that stuff up. Just look at the battery capacity of in the US. It's probably about 200 gigawatt hours. You can use whatever conversion you want. I usually use like 0.8. It's like 160,000 tons. We're not going to dent that. We're not going to be independent on Lithium in the next five years, probably not even 10 years. When do you think then the sentiment on financing some of these other projects changes? You still have standard. David's still trying to get his deals done. It's just taken a long time given. I think it takes a year because I think in you've seen this even longer than I have, there's still this belief that you're sending earlier. We're going to have a huge fun of supply that's going to come out at the end of the year. Look at NINREZ says that they're going to start up and they're going to be in production the first quarter next year and forget the I don't know, I know I know an album, "Meral are arguing," tend to believe the mine operator. In any case, I don't see it. I can think about, I'm not going to say I want to say to the NINREZ, the analyst and they're out of Australia, all this stuff is going to come on and we're going to be back down to $13,000 a ton. No one invested for three years outside of CATL, which we all know that was a money-losing operation, extraordinary. But I just don't see it. Because it's so difficult now, look at what Zimbabwe has done. Not only do you need to make sulfate here, now I want you to run all the facilities with all local people. Sure, we can do that tomorrow. It was hard enough for an Argentinian to hire people locally. It's probably even going to be harder with their plasticistics is expensive. I don't see it. But I also think that we was so bad the last three years that we were six months in from last year. Fourth quarter last year got a lot better by December, but what we were at, like $15,000 a ton in December, I think that the memories are really long. Just as it was so crazy back a couple of years ago that lithium's $80,000 a ton and you and I were saying, "No, this is really bad, man. You don't want this. You're going to have demand destruction now. I actually think we're in a good spot, but I just think no one's going to write a check now because it's too much of a recent memory. You need more time. By the end of the year, if we're still in the same situation, which I think we are, I think people are like, "Well, shit, we really need to add some capacity here. What are we going to do?" Well, this is actually good for you. Yeah, I'm not worried. Good for lack. Yeah. But I also don't count on crazy pricing out there either. I think if it stays 20 to 30,000, that's normal. I mean, I know the math through what I cost battery guys, that they're car guys or whatever else. That's a good number. It supports expansions of good projects or capital plus it leaves a margin enough for them because these are markets that are sensitive to pricing. So I think it stays in that range. But we need more time. We need more time. I was literally shocked when CAT I wanted to talk to me about helping them get supply a few months ago. We have people, I mean, look, you know Renee. I mean, Renee's had a commercial for the company and he's out. We will have all their off-take agreements. We had the ability to do that. We run this like a joint venture. We have no shortage of interest. I'm not going to talk about names on here. Yeah, no. Both know. But, you know, I added all up. I could sell the whole thing out, you know, for the first five years. And GM wouldn't have to take anything. So there's no shortage because I think people look at us. So well, you guys are actually going to be in production any year and a half versus someone that win you in production. Well, as soon as I get this done and I get all ramped up, it's going to take me two years and I'm in production. We can talk about that. This should take a lot longer than you think. And it's going to be more expensive than you think, especially now. Well, you've lived through it twice now. I mean, people forget that lack before they separate it was building Kachari with Gangtan and how long did that take and-- It can extra year. I mean, just look at how long the gestation period is of the new size of 40,000 tonne plants. And if you need up to 10 of new plants this year, just to deal with the growth, it's a better story than has ever been the case in the time we've been in this industry. Yeah, I actually feel like we're growing up. And you've got dual use now. It's all around batteries. You see, and I always knew the story, but you're right, this whole power data center piece isn't going to go away anytime soon. And I think this really helps the industry out in boost EVs, which over time you've got all these other markets still have to grow. But China was the biggest consumer level off of it because of the denominator. It was so big, but the other stuff's just getting started. When we've talked in the past about Thacker Pass and getting it built, it's always been a discussion involving partners. And you have-- you got the government, you got GM, you got Bechtold. But who are some of the other significant companies supporting what you guys are doing? We actually have a lot of fans. It's funny, we just brought a guy on our board who was a high level executive at Rio Tinto and I was talking to a met him and he's like, I've been watching you guys for years. I'm like, what? He's like, yeah, you're permitting and what you guys have done over there, whatever else. A lot of people have been watching your project and supporting wishing you success. I think that's one of the reasons why Orion has been involved with us for a while and came into this in a big way. And he's even offered support for Phase 2. And they don't write checks lightly. But we have good relationships with other firms in this space that are very supportive. We work behind the scenes through different organizations, whether they be sort of government policy focused organizations like SAFE or the National Mining Association or the Nevada Battery Coalition. There's a lot of-- at least some companies that have a serious plan with serious business people. And there's help in supporting each other. I mean, the relationship with GM is strong, but we also have relationships with a lot of their suppliers pre-existing. And that's helpful, too. We know what the qualification requirements are. We know what they're going to need and those that's just based on dialogues and all the process that we went through before for financing. So all the Japanese trading houses, I mean, the ones you and I both know them all, they're all still around. They still-- we still talk to them every couple of months. I mean, you guys got room for Phase 2. Could we still get in on Phase 1? So there's a whole universe of folks out there that have been supportive or helpful for us in addition to the named partners, which would be GM, the government, Orion, Bechtel, Aquatec, our vendors like Chicago, Bridget, and Iron, and so forth. They've all been good to us. But it's a broader community. I mean, Lithium's gotten way bigger than you and I were first started this. And let's not be-- we'll be honest. There's a lot of weirdos in this sector, too. I mean, to be honest, anything with rare earths or any with the critical minerals in general, but there are also a lot of good people out there that all-- that helped each other. Shit, I mean, Dan retired from Nanow. Good for you. We work together and we help each other out in Washington and so forth behind the scenes. There's a whole community out there that of like-minded folks that serious people help other serious people out because we all can win together here. There's plenty to go around. That's the difference, I think. I always at ThackerPass a couple of months ago. And I, on the prior visit, I think you had like one of the units that would become the workforce hub there. And the idea that you were going to-- the idea that you would house 2,000 people was very hard for me to appreciate from seeing like one unit. And I think, well, that's great, but well, I stayed in the-- the hotel factor pass. And I ate there, checked in on the app, checked out on the app. That was an amazing accomplishment. But you know, people don't tend to care, they care about lithium carbonate production. But there's a lot that you've had to do besides just get the plant built to move this thing along and you're in rural Nevada and not wanting to disrupt winemaka as much as you can do. So talk about the significance of that and basically running your own town. Yeah, I mean, look, we spent a lot of time in like it's no, there's no secret we, you know, we had folks that you're always going to have folks that don't like you. I mean, we spent a lot of time engaging with the community, the tribes to the north of us, the state government, county government in every project that's, I don't care if it's in the US or I mean, we had one of these in Argentina, a big one, we had two of them actually there. These are common issues that you don't think about, especially in the US or Canada, like, ah, you know, we'll figure it all out. There's a little town nearby. We'll be fine. They got a gas station and got some stuff to eat in a hotel. And you start to think about the impact of bringing all these people in and what it does. And it's a big strain on the community. At one point, the hotel's in winemaka before we open up the workforce of where we're $700 a night. And you've been to winemaka. It's certainly not the St. Regis, you know, in Boston or something like that. So you're seeing the same issues now with data centers. Right? No one, you're coming in here. You take all our water, you're using our electricity, you use all of our hotels. I mean, Tessa had this problem in sparks. The governor told me this. He's like, you guys are doing this right. Tessa said they were going to do this in sparks. They didn't do it in a jacked up the apartments and short term rental rates. And, you know, in sparks is right, that's at a Reno. So there's more capacity there. We can't do that in Hubble County. And that facility is the only one between Reno and Salt Lake. So we have now goal companies and other companies that are like, do you got space? Because there's nowhere to stay. Nevada goal minds is actually, I 80, all these companies are like, do you have space for us? I mean, or is there a room? If we can do it, yes, we will, because it's a facility where we can cover our costs that way. We've had the US government come out. We've had Northrop government come out because they have the same issues in rural communities around air force spaces. This is how you get deal with this stuff. It's part of the, it's part of the project. And anyone who doesn't like to, I don't worry about that. We're going to have no problem. I don't care what town you're in when a bunch of dude shows up with a bunch of RVs in a parking lot, has a campfire, starts drinking beers and driving around and people don't like it. It doesn't matter who's permitting you or what government agency it gets really local. And I don't care what flavor of politics you are. People don't like change. And you've got to bring everything with you. So what we've done, I think, is the right thing. It's more what you'd find in rural, you know, northern Canada or rural South America. But it's gone over really well. I mean, the mayor of Winnebuck is, I don't even know you guys are even here. Bosses leave, you know, the guys coming to town, they're spending money. It's great. We told the police anytime you want to come up on a free meal, come on up, you know, we're open for everybody. But that's just part of the engagement. And it's one of the things you got responsibly need to do. So I love it too. I stay there. I let my kids stay there. I think with the college, it's nice. Oh yeah, it's well. If you remember the quarters in Amray, Marito, yours are a little nicer. Yeah, and that's the other thing too. So I have all those crafts that you saw. We have like 1,600 people right now. They're coming from all over the country and you come in and you saw the setup like drop your stuff, you can go work out. You can, the kitchen's always open. But you know, outside of the meal, you can pre-order food, free lunch, free breakfast, laundry, all taking to town. We have a clinic. Now we have a, I think we have a store which has got plenty of zine and chewing tobacco. I see that's great. But it's, you know, it's a high quality where people are, it's part of their podium and makes it really easy for you. Talk to some of those people that were there from Texas, Arizona, Georgia, they're from all over the country. But it's it's, hey, look at this, I come here and stay here. It's high quality stuff and it's helped us get the labor we need. I really thought the the grab and go section was, it was impressive. We got all them in milk even. Come on for everybody. We got everything you need. A lot of good things have happened. You're, I won't say in the, the final stress, but you're close to it of getting this thing built. But it's been all, it's been a grind. It's, we've talked on and off over the years and it's taken a, taken a lot of work and a lot of energy. And, um, taking it to, how has this process changed you as a leader and even as a person? So you have to be really resilient. Like I never thought I'd be an entrepreneur. I just never, you know me for years. Like I'm a ex-military engineer, kind of a, you know, I don't know, nerdy guy or whatever else. And this is something you really have to believe, you know, I have it hanging in my office here. I'm looking across. I have the beliefs. I am from a banner from Ted Lasso in my office. That's the way you have to feel this. It's a heavy lift to get this done. It takes a big personal toll. I've lost 20 pounds. This is every day, you know, right, right behind me. I got to sign it says every damn day says behind me, that banner behind me. Because it's a game of, I think I'm one of the last guys out as around. And I can't believe it's been seven years or eight years. It's gone by so quickly. But you really have to believe number one, number two, it's become, and I'm 56 now. I'm going to be 57 this year. It's not about the money. And I could have stayed in private equity. I know our shareholders, that's not going to make a lot more money. Share it. I'm not going in the cookie jar. You know, we're not raising money to pay management or whatever else. We've hired a lot of people that have dropped and moved from all over the country. They have brought their spouses to Winamaka. They've set up. We have really good people that have come from very big companies for this vision. And I feel like a shepherd and a flock really do. I mean, it's at the end of the day, it's their project. This is going to be around longer than I'm alive. I'll be gone. You and I will be both long gone. This is a hundred year asset. I just want to get it done. You know, it's good. It's good for the county. It's good for the state. It's good for the country. It's good for the world. And I really believe in it. And that's not something that I've at 40, you know, it's like, what's my bonus this year? We're doing this. We're doing that. I don't give a shit about that anymore. I want to leave a legacy. That's a good one. And I care about our team. And I, we don't have politics in our in our company or culture. It's get the job done. And, I'm really proud of what we're doing here. And that's a, I don't know, I matured and evolved in my life now or it's about the mission. And it's not about me anymore. But you have to be really resilient. And you have to be ready to just fight every single day. It's exhausting. This is a really hard thing to do. Yeah. I can't say I fully appreciate it because I'm not in your shoes. But I've been watching closely. And I know what life was like when we were at FMC. And I know your life is a lot different now. Yeah. It's the kind of people too. So, you know, you've met my staff before. And look, I was in PE and I've worked for big PE companies. Primera, Jordan company, Aughtax. I would take these guys anywhere. They'll roll their sleeves up. These are very highly qualified professional people that have worked at really big, well-known firms. But they can operate like PE, which is like special forces. You do the pitch. You write the thing. You go do it. You make the phone call. It's not my staff and I'm going to sign purchase orders all day long. I would put my people up against anyone. They'll run circles around them. But it's a lot of work. That's that's the difference. Well, if we talk about that, your past, the question always comes up. It's never been done before. And the sedimentary risk factor. I pretty well know how you feel about all that. But if you could just briefly articulate why the risk isn't the risk people think many people think it is. Yeah. I mean, the process itself, you've seen it. You can appreciate it because you know what you're looking at. It's pretty simple. Right? I mean, it comes down to the war itself and the war quality. The difference. I mean, I know Spodg, you mean, well enough. I don't deal with cal signing. I don't deal with crushing grinding float, floatation, which is complicated stuff. And I get to lithium sulfate, which is what they do after all that stuff by basically just particle size separation, which we've done at scale with scale equipment. So I get that question. Well, you didn't allow. No, I actually had a production scale cyclone that we used for all of our testing. And once you get to lithium sulfate, I remember when we were contemplating building our tech center, we were going to build just pieces of it. And we were going to build a whole thing. And the guys said, now just build pieces because once you get to sulfate, it's just like, Spod, actually, the last part of the plant's just like both, Brian, you know, you're going to go to carbon. And then we said, no, we're going to build the entire thing. So it truly is taking stuff off the shelf. And I, I have enough experiences you do. It's like, because daily you get that question, well, does it really work sometimes? It worked at Humbery Merto. Does it work everywhere? Nope. You know, is it going to be the same cost everywhere? Nope. And it's just like Spod, I mean, you got high mica or high iron. You've got different problems than you have at cream bushes. But from just a conversion chemistry standpoint, it's really not that difficult. And we've proven it out. I mean, Jesus, we've been, I don't know, how many due diligence we've been through. Our data room is so full at one point when people were looking at us. We were recycling the same engineering companies because we ran out. And of course, their make and money because they don't want to share the results from what they did for the last person. But it was always the same, you know, then the government finally comes in and signs off on the whole thing. So, I said earlier in the, in we were talking, first time comes out, life's different. And look, I know the guys that are all in sedimentary are fans as well because I prove it out, which I think we will. If I'm 100% sure we will, then, you know, there, it just, it basically takes that damnically sore off of them as well. So, this episode is also brought to you by MLC. Are you looking for the highest purity calcium products to produce battery-grade chemicals? Look no further. MLC is your reliable partner. Check out line4lithium.com for more information about MLC's calcium solutions and expert support. That's l-i-m-e the number four l-i-t-h-i-u-m.com. Well, I know you don't pay attention very much to the social media and some of the snipers and the commentary, but with the straight of hormones being in the situation it's in and the sulfuric acid. I think maybe crisis is a fair word. People have asked me, I've read, you know, all the fact that passes in big trouble now because their costs will go up X because of the situation. 65% of the lithium industries in big trouble, I guess. Because so here's the difference. And I'll I'll say it by region, nothing I'm picking on any region, but in Australia, you've got astronomical diesel costs right now and then you have freight costs for Toronto because everyone's freight costs is up. I mean, even an Amazon, an Amazon, you got a freight surcharge now. China is not exporting sulfuric acid because they need an a fertilizer. So do you let people starve or whatever. So it's more expensive in China. No one can get it on the outside from them, at least in the types of forms that they would probably need or volumes. We make our own. So that's good, at least I'm buying because the sulfur we're going to buy is from the US and from Canada. And of course, our refining capacity. I don't think people really understand this. US and China's refining capacity is about equal. But we refine heavy and medium crude oils here, which have a lot of sulfur in them. You go out to western Canada, the oil stands, you'll see monuments of sulfur and blocks. So we've got plenty of it here. But also if you look at the lithium price, it's kind of reflecting where we're at a little bit too, where there is a floor to some debris because the primarily most stuff comes from hard rock. It's two thirds, maybe less than two thirds. So I think, and if this problem goes on for another year or two years, forget about lithium. We got problems with urea and we got problems with phosphates, which means we got problems with fertilizer and we got problems feeding people. So I think this issue will be rectify itself. Not that I'm saying that costs for sulfur are going to be back down to $200 a ton a year from now. They could. And now Fitch just came out and said we're going to be oversupply with oil in September. I don't know what the hell maybe they're assuming demand destruction. But I think we're going to be fine. And every other rare earth is even more impacted than we are because they do solve an extraction. Nickel copper, which you've got and unfortunately, it goes to another problem when you're doing projects, you have inflation everywhere. Everything. So and that's an environment that I don't think anyone was used to for a long time. Even me had inflation, but I don't know when this is going away. How much of an impact did you have on capital equipment from tariffs 80 to 120 million for the life of the project? So we've looked now in terms of what we expect elective receive. We paid some already as as we it's come in. And look, I didn't have that. And look, I went to the government as well. I'll be honest, I mean, it's government people listening here. I'm like, you got equity in the company. Now I got to pay you a tariff too. You know, I got a sheepish smile a little bit, but I mean look, MP materials is in the same situation. Anybody in the US is in the same situation that has equity or is working with the government. So, but that doesn't make it any easier. And then of course, as you know, lithium has no tariff coming in the United States, either it is rare earths. So, you know, your batteries do, but that doesn't make any easier for us either. But that's the cards we're dealt. We have to deal with it. So. Well, now that things are clearer than they were when you did a PFS and a DFS, where do you think you fit on the cost curve? Once we're running, and I don't think it's going to take us a year to line out either. I mean, that's what we put in our, what we folks tell folks, but this is a different kind of plant than brine. You'll know right away where you've got issues because it's 24 hours between when it goes in the front comes out the back roughly. Right now we're in the first half. However, the discussion we had earlier more capacities going to come online. Look, a lot of low hanging fruits gone. I know we thought I have another lithium discovering the appellations with the one in Maine we were talking about three years ago that, you know, that's just never coming out of the ground. And even in Africa and places like that, it's going to be more expensive and it's going to take years. I think we end up about a first quartel producer as you see some more of this demand coming out because it's going to be higher cost stuff. I've seen all kinds of crazy stuff. We've found a way to do spodgy mean without sulfuric acid. What are you going to use? A lot of electricity. Who's paying for that? I mean, it takes energy to change crystal structures on minerals. And even on DLE, I know certain kinds of DLE and you do as well, but those are different kind of brain resources. You know, there's no magic straw on the ground and it comes out and it's super cheap. It doesn't work that way. When you're talking to government people, investors, there seems to be a perception that DLE is somehow cheaper. And I would say both from a capital and op-ex, you're probably going to be in good stead versus many of the planned DLE projects. Yeah, I mean, look, I know really good Brian and so do you. I know the best Brian in the world been there, so you and I know the ones in Argentina very, very well. So I can look at the chemistry and so can you and sort of ascertain where you're going to be because we have benchmarks from our past. So I don't want to call folks out, but concentration, depth of your wells, amount of wells you have to drill, how much of those wells are going to cost because they cost a lot more in some countries versus others. Where are you going to get your water? Where you get your power? Your reagents. Yeah, there's no one's pumping at $2,500 a ton. It's like SQM in 19, what is this? 2008. Those days are long gone. So I mean, where I look at us, C1 at like 6,500 and all in with royalties and a staining cap X like 7,500. Yeah, I mean, good shape. I compete with a decent Brian in South America, and I'm cheaper than if I was trying to do something in Australia with good spodgeamy. So I think we're in a good spot. We're not the cheapest. We're definitely in the first 50% and then I think as the industry grows, it's going to go more towards the first quartile. But you know, some of these projects do. People have like subhundred parts per million. It pump a lot of Brian. A lot. And you need a lot of wells. And if the wells are deep, you know, it could be a couple million dollars of well. And then you start pissing your neighbors off. We'll talk about, you know, we'll talk about that earlier. They'll come out of the woodwork when you start doing stuff like that. You think everyone likes you until you impact somebody next door and that's going to happen. You don't know what's going on in underneath you. So we've always talked about the fact that there's a lot of battery capacity in the United States. Yeah, for sure. But there is not a cathode capacity in the US. So I mean, right now, if you were producing today, most of your product would have to leave the country to become cathode to come back. Yeah, it would go to Japan or Korea. It wouldn't be a surprise if it ended up in China through somebody. I think that problem is known by the government and something they want to work on. I know LG is supposedly a Michigan now is going to be making LFP in the US. And I know, you know, others are going down that path. There's no reason why we don't have that here. That's another thing too. I mean, look, you've been in a cathode facilities and I have this one. What the hell is so difficult here? It can be done here if you want it to it. And then I've heard the other, well, LFP is difficult. Only the Chinese know how to do it. Look, if you can make 811, you can make LFP. That's more difficult to make that LFP. Well, the plant that nanowon owns in Kandyak. If you go back 15 years or close to that, they they use an expensive process, but they made great cathode to a point where the Chinese got good enough at using the process they used that You know, that process was no longer economic, but what Nannos trying to do now and what everybody else here that is trying to do LFP is a less expensive process. It won't be as cheap as China just because some of the ancillary materials you need that aren't readily available as byproducts. But I think battery companies, it's tough. Like you and I both know, remember SLMP was a good idea. But to get them to change and adopt, I mean, that's like the nuclear bomb secrets for battery companies and they don't like change and they don't, I mean, a company like I love Dan and I love Nannos one, they have great tech. Somebody had to come in a license from them and well, it seems like kind of a risk. Well your option is you have nothing. These guys have proven it out. It uses local raw materials, but it's really tough. I mean, I've had the discussions with so of you with battery companies and like yeah, it seems like it's kind of a risk. Well, would you rather be with nothing? And frankly speaking, we are getting in a world where there are going to be pricing differences. And I think that's just going to be normal. The whole supply chain stuff that my first job coming out of the army into GE was offshoring. Now we're on shoring everything. And it makes sense why we're, you know, the world's becoming a much more difficult place. It's going to, I don't think that's going to change no matter the straight-home moves opens up tomorrow. We change administrations. This is going to forever change everybody's power around the world. We've kind of gone back, I think, I don't know, to the 60s maybe, 50s. Kind of feels like that in some other areas. I don't want to get into that, but I mean, it's a different time. Well, the other interesting thing is I admire China's rise and their investments, but when you look at what they do outside of China, it tends to look just about like everybody else. Yeah. And China's speed is not China's speed in Argentina or Africa. No. No. And you got to pay attention to the rules. And the long gone are the days where, you know, we're shipping lithium carbonate out of Argentina and saying it's an intermediate to make hydroxide, which is kind of true. But there's a lot more price discovery and industry knowledge than there was. And with that, you're seeing Africa now kind of looking at Chile and other places or Indonesia and saying, Hey, man, I want my piece of the pie here. You're digging a home, my yard. I want my rent. And China really can't do anything about that anymore. So I think structurally the costs are going to go up. It just, it has to at this point. The days are long gone as I find a really, look, you're going to talk about the A, B, Z and all these other projects that are out there. We were talking about A, B, Z in 2016. Yeah, exactly. And it's difficult. And some pop ways, really overnight. I mean, I thought maybe that there was going to be pressure put on them to relent. They just double down. Now they're even going even further. All right. It's been about an hour. So I'll, I'll wind this down. But if we're having this conversation in 10 years and I'm assuming you'll maybe be retired by then. Oh, geez, I better. My wife. What would it take for you to feel like all that effort was worth it and that could pass is a complete success? What does it look like in 2035, whether you're around involved or not? Hopefully I'll be, you know, at my, you have your, you go up to up to the Northeast and I, I'm trying to go back there more now with my, my place in New Hampshire of Vermont. And I see a new story come on about, you know, we're at the largest. Both the infecilyty in the United States and Northern Nevada. My name, I don't care. You know, it's not about posterity or egos. I don't care less about any of that stuff, but, you know, that it's, we put a mark on the ground here and that facility is, I don't know, it phase two or phase three. It's got local workers that are happy, you know, good safety record. It's putting out high quality product. It's partnered with GM and others serving, you know, battery and other applications could be really glass. All kinds of different stuff. And, you know, an operation that people look to that was like, hey, this is the anchor that was we put in here for critical minerals for lithium in the US. And then, hey, maybe we flip down, you know, another facility in Arkansas or Texas, but, you know, that it's, we were a trailblazer. It's been hard. We took a lot of arrows. I have pretty thick skin right now. But that facility is running that it's expanded and, you know, it's put not great product. I love to see that I had that vision sometimes. And CNBC does some special, I'm like, oh, shit, I was there, you know, you remember John Evans? No, we don't know who he is. And that's the best thing in life is to be anonymous. And that's, I don't want to be remembered or anything. I just want to make sure we get it there where hopefully I can see a picture of somebody that is young working there now as an engineer who's now the general manager running that place. That's, that would be success. Did I miss anything? No, just sorry about the sabers, though, man, I was really bummed out about that. Well, hey, it's, it's being a Buffalo fan. It, it transcends sports. I mean, look, I don't mind the haves that much, but boy, I was, I was really pulling for, for Buffalo and that one was a, that was a heartbreaker for me. So it's tough for me to be a bills fan all the way in because I'm a stealer. So I get we in our own problems. So. Well, as we always say this time of year, this is the year for the bills. I mean, I've been wrong 60 years in a row. So what's the New England still going to be good? So yes, they, yeah, they, yes, they are. They got a local boy playing quarterback. He's a Charlotte boy. Yeah. All right, John, thank you very much. Appreciate your time and wish you continued success. Awesome. Thanks, you always a pleasure. Those of you that have followed me for a while are aware that John Evans was my boss at FMC lithium and I write in lithium confidential that he was not only the best boss I ever had, and despite being much younger, a mentor, he was one of the first people to reach out to me when I left FMC and some of his advice was instrumental and me having the confidence to form global lithium and to continue in the industry. So I owe John a great debt of gratitude. I do not pretend to be unbiased when I talk about John. The lithium stocks all got hit on Friday and I was out buying thousands more shares of lithium-Americans. That is not investing advice, but I will tell you what I do and with a more than 10% drop and the prospects that the company had, I was again a buyer. If you are going to fast markets, I am working with them to do a book signing, assuming I can get book shipped, which looks like I can to the venue and Chris Berry will interview me about the book on Wednesday and they will set up something. But if you like a book, if you want to go on global lithium.net/contact and express your interest, I don't want to drag a bunch of books out there if people would prefer not to have to carry a book back home from Las Vegas. But I am going to ask something here. I have been doing this podcast since 2017. I have never even asked people to follow me or to like the podcast or to write a good review. I haven't gone on Patreon and charge, but I am asking you to buy this book. Because I think you will benefit from this book if you are interested in lithium. I have been in the industry for over 35 years. I saw the rise of Japan. I saw the rise of China. I have advised many Chinese companies. I have advised Korean companies, Japanese companies and a whole lot of other companies. I am focusing my attention now more on North America. I don't want to get my own horn, but I do have a unique experience and a unique perspective on the industry. You will be able to go on Amazon by the 20th of June. Right now, if you go on Amazon and write lithium confidential, it will show you that you can pre-order. But that is not through Amazon's publishing. It's from a secondary publisher who hasn't even sent me what their version of the printing of my book looks like. I would say, watch social media. I will tell you when it's up on Amazon for Amazon. printing and it will also at that time. If you see it on Kindle you will know that when you order it Amazon will deliver it. Right now what's up there says Amazon delivers it but it is from a different publisher who serves more libraries and bookstores than the public like Amazon does. So if you're a regular listener I'm asking you to buy the book. One of the core tenants my daughter wrote about in her books that have sold several hundred thousand copies over the years when she was young we taught her Andrew younger sister to ask for the order and I just asked for the order. Thanks again for listening.