--:-- Erik Torenberg: 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.
--:-- Erik Torenberg: There's not that many massive markets left that have been largely untapped by technology, and mining sort of 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 is working in sort of dirty spaces, willing to go out in the field. So now's 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.
--:-- Erik Torenberg: 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.
--:-- Erik Torenberg: Today, we're joined by Turner Caldwell, founder of Mariana Minerals, along with American Dynamism general partner Aaron Pricewright 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 and software first, designed to meet the demand our industrial future requires.
--:-- Erik Torenberg: 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.
--:-- Erik Torenberg: 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.
--:-- Erik Torenberg: 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?
--:-- Turner Caldwell: 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, the massive growth in AI that's happened in the last 12, 18, 24 months, and defense, obviously. But it's also everything that we use every day. It's in your phone, in your AirPods, your screens, your laptops. And so it really crosses everything that we use.
--:-- Turner Caldwell: But where they're produced and how they're refined and how they're mined, that all happens in the background. And so it's something that really does need to be brought to the foreground, something that we need to support more and more of. And it's a long chain to go from digging something up to go all the way through to something that can actually be deployed in an end product. So excited to talk about that.
--:-- Erik Torenberg: Well, I want to get into how do we turn rocks into batteries or magnets, and why is that so important?
--:-- Turner Caldwell: Yeah, so it starts with mining, obviously. Well, it actually starts with exploration.
--:-- Erik Torenberg: You've got to find the rocks in the first place.
--:-- Turner Caldwell: 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 is something that is not as trivial as people might expect.
--:-- Turner Caldwell: And then you go through a concentration step. So the ores will come to the surface, they'll be less than 1%, definitely less than 5% concentration unless you have this world-class deposit. And you'll typically go through a concentrating step. So that can be mechanical, it can be thermal, it can be chemical. And that gives you an intermediate product. And those intermediate products kind of move all over the world and typically go to refining assets.
--:-- Turner Caldwell: The refining operation effectively goes from anything that is like a 10% concentrate to a 50% intermediate product and turns into a high-purity 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.
--:-- Turner Caldwell: 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 into a pack, and then you'll go into a car or go into a stationary storage product.
--:-- Turner Caldwell: And on the magnet side of things, similarly you'll get to a refined rare earth product, and it's a long list of rare earths. They often get bundled into one group, but it's important to break them out. And then the common way of making magnets is a few flow sheets, but you'll slurry it, you'll get the right blend of the different rare earths 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.
--:-- Erik Torenberg: How specific is it for a given site, given concentration and other sort of waste products? How dynamic is it? Is one rare earth mine going to be a similar process to another, or is there going to be a very bespoke setup?
--:-- Turner Caldwell: It's very bespoke, and it's actually part of the problem and what makes the minerals industry so complicated. 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, obviously, of the target metal is different.
--:-- Turner Caldwell: And there's like a library of metallurgical unit operations that are kind of 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 human impact on what that flow sheet ultimately looks like.
--:-- Erik Torenberg: And I imagine very hard to change as the nature of the ore changes as you mine a site.
--:-- Turner Caldwell: 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 of those things are custom-built for a specific asset.
--:-- Erik Torenberg: One more question on this. What are the types of job titles, like backgrounds of people working in this space? I imagine for the supply chain you just described, it's very different types of people, very different backgrounds, but they all have to ultimately work together. But can you talk a little bit about that?
--:-- Turner Caldwell: Yeah, that's one of the big hard parts. You have geologists, you have geophysicists, 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.
--:-- Erik Torenberg: Plus the long tail of workers on site who are moving things from point A to point B.
--:-- Turner Caldwell: 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.
--:-- Erik Torenberg: Did you always love rocks? Did you always know that you were going to start a mining company?
--:-- Turner Caldwell: Yeah, so kind of a funny story. The day that I graduated from college, the 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. And I started out working on factory design, factory construction, and actually slowly over that nine plus year period worked my way upstream in the value chain.
--:-- Turner Caldwell: So I worked on factory design and construction, then started 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.
--:-- Turner Caldwell: 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.
--:-- Turner Caldwell: 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.
--:-- Turner Caldwell: Ultimately, this was just following cost. 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, I realized that the expensive part of making cells is the stuff that goes inside the cells. And then 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.
--:-- Turner Caldwell: And so I started digging much deeper into why metals are so expensive. What you kind of run into is that there's this interesting incentive misalignment that exists between the customer and the producer of metals. 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. Because it's a constrained supply.
--:-- Turner Caldwell: The pricing dynamics are totally different than manufacturing companies where higher volume means lower cost. And as you are scaling up and capturing economies of scale, you're starting to drive down the cost that you can then transfer to your customers. And that expectation doesn't really exist in the mining industry. If you want more of it, it's going to cost more. There are no economies of scale.
--:-- Erik Torenberg: There are economies of scale on the operations side of things.
--:-- Turner Caldwell: Got it.
--:-- Erik Torenberg: There are not economies of scale as the customer.
--:-- Turner Caldwell: Got it. 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 the customers.
--:-- Turner Caldwell: That incentive misalignment was a big one that jumped out, and that only really starts to come to the surface when you start to actually engage with the mining companies.
--:-- Turner Caldwell: 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 get it to 100% purity. That fundamentally starts at the atoms. And then you have to take a process that you develop that starts at micron scale and then deploy kilometer scale infrastructure. And going back to the thing that was exciting, which is scale, that opportunity to work across those scales is exciting.
--:-- Erik Torenberg: Something I found 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 and 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 support for that industry?
--:-- Turner Caldwell: Yeah, I think in the battery cell world, the precision at which you need to manufacture the product, the tolerances on the final battery cell, require a level of rigor and attention to detail that does have a cultural aspect to it.
--:-- Erik Torenberg: Like semiconductors.
--:-- Turner Caldwell: Yeah, exactly. And so that was a big one. But also, it's a long-term investment. In Japanese, it's Kaizen, 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.
--:-- Erik Torenberg: 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 what did working at Tesla teach you about vertical integration and why it matters?
--:-- Turner Caldwell: Yeah, I think as we started to scope more and more vertical integration, even outside of 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 yourself and a partner.
--:-- Turner Caldwell: 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 subcomponents that were required. So ultimately Tesla had to vertically integrate from day one.
--:-- Turner Caldwell: And then the things that pushed increasing amounts of vertical integration ultimately was the incentive structure misalignment where suppliers and partners weren't incentivized to invest in scale at the rate that we wanted them to invest in scale. They weren't incentivized to innovate at the pace that we wanted them to innovate. And so you end up insourcing a lot of that development that enables you to get to the product specs or the component specs that you want.
--:-- Turner Caldwell: And then it takes a lot of guts. Because at the end of the day, when you vertically integrate, you are transferring the risk profile of your partner into your new expanded risk profile. And so you need to be really confident, or at least believe that you are in a better position to take on and manage that risk profile.
--:-- Erik Torenberg: When you were at Tesla and looking at and developing relationships with all these global mining companies, as Tesla was scaling and looking for suppliers, what were some of the key issues that you noticed from a market perspective? And then what ultimately led to Tesla pursuing further vertical integration?
--:-- Turner Caldwell: Yeah, I think the incentive misalignment piece between the industries, between a commodity industry or the mining industry and the manufacturing industry, was the big misalignment that existed.
--:-- Turner Caldwell: The degree to which automation was absent was pretty interesting. There's a long period of time where mines make no money. A lot of capital goes into the exploration 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 or drilling a shaft to get to the ore deposit. And so 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.
--:-- Turner Caldwell: 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. And we're at this interesting inflection point now where those people are less and less available. The mining industry has been taking it on the head for a long time. It's not been a sexy industry that everyone wants to go into. And so the labor pool is contracting, it's shrinking, and it's both the trades and the engineering skill sets. 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.
--:-- Erik Torenberg: 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?
--:-- Turner Caldwell: Yeah, of course. Indonesia, Australia, China.
--:-- Erik Torenberg: What is it actually like? People see pictures. What is actually going on?
--:-- Turner Caldwell: 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. And that's in Australia and in Canada. It's not this buzzing atmosphere.
--:-- Turner Caldwell: In developing countries, it's a little different. There's definitely a different degree of automation. Obviously, we've come a long way from people with picks and shovels. And so when I say automation is absent, it doesn't mean there aren't heavy haul machinery driving around the sites. But there's a lot more people activity when you go to operations that are in Indonesia or in Africa. But yeah, been to most continents.
--:-- Erik Torenberg: Why did you leave Tesla to build Mariana?
--:-- Turner Caldwell: I spent a long time building businesses within Tesla. It was early on the cell manufacturing side, early on the cathode manufacturing side, early on the refining side of things. And what really excited me was always pushing further and further upstream.
--:-- Turner Caldwell: 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. The alpha go moment was in 2015, 2016, and people were using reinforcement learning. There's a paper from 2008 on reinforcement learning for helicopter control. But we're at this point where the compute and machine learning, reinforcement learning really do enable you to go beyond humans in the loop and how a lot of these plants are controlled.
--:-- Turner Caldwell: And as you build more of that large scale infrastructure and see the problems that humans have to solve on a daily basis, it becomes pretty obvious that these are problems that humans aren't best positioned to solve. These are large multivariable optimization problems that RL is perfectly poised to solve.
--:-- Turner Caldwell: And then on the construction side, that is 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.
--:-- Turner Caldwell: And so the opportunity to build 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.
--:-- Erik Torenberg: Just to level set, what is the status quo in the industry today? What does the BHP and the Rios of the world do? For some of the stuff you're talking about, from a software perspective, internally.
--:-- Turner Caldwell: They have digital innovation arms.
--:-- Erik Torenberg: They do have digital innovation arms.
--:-- Turner Caldwell: 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 will look at the large data sets and they'll provide recommendations. Some percentage of those recommendations, oftentimes sub-50%, are taken.
--:-- Turner Caldwell: And what's interesting about what you want from the ML models or the RL models is that you actually want them to tell you to do things that are counterintuitive because humans are naturally going to find a local optimal operating condition. And it's very risky to take shots outside of something that is currently working where there's a 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.
--:-- Turner Caldwell: I think on the construction side, when they build new projects, they're building five, $10 billion projects. And so they are always bringing in an EPC and throwing that over the fence to the EPC. In the mining industry where it is a bespoke plant, it is custom and you need to think about the refinery and the mine and the processing facility as the product. And when you outsource that, you lose a lot of control of what you eventually are going to inherit and operate.
--:-- Turner Caldwell: And then EPCs, that model has shifted away a little bit from a turnkey, "we'll deliver you a project." It's kind of moved towards selling hours and selling man hours and selling reports, especially in the mining industry where they'll do a pre-feasibility study, they'll do a feasibility study. And so there's a lot of over the fence and outsourcing that happens in the large companies.
--:-- Turner Caldwell: 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 even if they are able to hire the best-in-class machine learning engineers and the best-in-class software engineers, they're not going to stay. They're going to run into the wall of bureaucracy 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 an outsourcing of a lot of the things that should be core today.
--:-- Erik Torenberg: I mean, we've seen this from the investor side. There are 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, 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? How do you get them to adopt them quickly?
--:-- Erik Torenberg: If you're a young startup, you're sort of at the beck and 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.
--:-- Turner Caldwell: Calcified is a good word. I think the way that construction companies and mining companies, and really a lot of big companies, identify and evaluate risk is fixing the status quo or making a step change improvement in the status quo kind of requires doing 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 multi-million dollar event. And so you're really not incentivized to change things. Even small changes could result in multi-million dollars of loss.
--:-- Turner Caldwell: And you need to approach it of, 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 spot technical solutions are challenging to sell into the mining industry. And they'll do pilots. They'll definitely do a pilot. There's no skin off their back to do a pilot. But you'll end up doing a lot of pilots.
--:-- Turner Caldwell: And because they don't build enough plants sequentially, 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 your pilot plant was five years before the commercial scale plant was planned for, you're not going to be in that one. So you'll be in the next one, which is five years later.
--:-- Turner Caldwell: And so the pace at which the industry moves in terms of deploying commercial scale infrastructure means that there just isn't a lot of opportunity to get new tech into commercial scale applications. And so there's a lot of folks that are doing SaaS products, which is kind of the lowest cost way to generate uplift in a mining project or a minerals refinery. And the barrier there is ultimately how do you get the operators to trust the SaaS tool from this small company that is trying to 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.
--:-- Erik Torenberg: Just to step back a little bit on the geopolitical context, the stuff you're describing, I think very obviously true with 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?
--:-- Turner Caldwell: Yeah, I mean, I think that there's a lot of top-down and early recognition that critical minerals were going to be critical and needed to be supported. And so everything around policy and everything around supporting companies to go and deploy both infrastructure domestically and infrastructure internationally to secure critical minerals, build infrastructure that secures a position. That has definitely happened.
--:-- Turner Caldwell: But I think that what people often don't talk about enough is that the talent pool is insane. It is not just a large talent pool. It is a large, skilled, experienced talent pool. I was in Indonesia in February and was visiting one of the recent Chinese nickel refining operations. 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 U.S., which we did, it's hard to mobilize a tenth of that realistically.
--:-- Turner Caldwell: 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 labor pool.
--:-- Erik Torenberg: 15 years ago or 20 years ago, would the same companies that were big now have been big then? Where is the evolution of the space?
--:-- Erik Torenberg: Yeah, I think that there's been a clear splintering on who does the exploration and who does the development. Right now, the industry is set up where junior mining companies, which don't mine, they explore. Sometimes they'll get a resource from a major mining company that's been held in their portfolio for a long time. But it's a different risk-reward profile than what the mining majors are ultimately looking for.
--:-- Erik Torenberg: So you have this junior mining ecosystem that sometimes is well-funded and sometimes is competing for capital with the cannabis industry in Canada. They're taking shots in the dark. There's a lot of work going into trying to make that exploration activity more intelligent, streamline it, drill fewer exploration holes while still being able to interpolate what is between those drill holes. But you're going out in the middle of nowhere—the Arctic Circle, the Yukon, Africa, Southeast Asia, or South America. Those folks have one job: define a resource and pump up its value sufficiently to flip it to a major.
--:-- Erik Torenberg: A lot of companies aren't able to discover a resource that is large enough. The big mining companies want to deploy large amounts of capital—multi-billion dollar investments. They won't look at projects that don't have the scale to underwrite their own inefficiency. They want to build really large infrastructure to capture economies of scale. So there's a long tail of mining projects that don't have that scale to justify getting acquired at a major premium. They go into what's called an "orphan period" in the industry. It's hard for them to break out of that.
--:-- Erik Torenberg: That's where we see our ability to step in as a more efficient builder and operator. We take these subscale assets—the industry calls them subscale—but we see metal there. We bring them into production as we build the platform and eventually scale to the same level the big mining companies operate at.
--:-- Turner Caldwell: Your thesis being that you can get the metal out and process it into a sellable product more efficiently than the major, such that it's economically viable to offset the scale advantage.
--:-- Erik Torenberg: Yeah. I think this might be a good opportunity to talk a little more about what Mariana's product is. You said a few minutes ago you're not a SaaS product. What does it mean to be a diversified metal and minerals company, a technology-enabled mining company? Give us a little more detail.
--:-- Turner Caldwell: We're a vertically integrated, software-first minerals project developer and operator. We focus on the back end of the minerals value chain: doing the detailed engineering, getting through permitting, building the asset, commissioning it, and then operating it. Going back to what we were talking about around the labor pool—those shortages exist in construction and in mining. They're felt very intensely.
--:-- Turner Caldwell: Our fundamental thesis is that with a contracting labor pool, you have to start with an awesome team. The table stakes is building 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 parent company side? That comes from leveraging recent advances in LLMs to automate workflows in construction, engineering, and procurement—which take an insane amount of time. You make a lot of lists and you fat-finger a lot of data between databases. It's all about reducing churn in construction.
--:-- Turner Caldwell: Churn and latency. Latency is something people sometimes don't appreciate from status quo construction on large-scale megaprojects. What's happening in the field and what the back office or executive team sees—there's a three-week lag generally. You're trying to aggregate data from all the different contractors and parts of the facility into a consolidated integrated schedule to make decisions. In between those three weeks, people stand in circles every morning and say, "What are you doing today?" They go off and do the thing, send a brief progress report, and it takes a long time to measure progress so you can reevaluate priorities.
--:-- Turner Caldwell: We're really trying to accelerate and democratize access to data fundamentally, and run construction projects like manufacturing facilities. That's where it starts. The reason construction and mining are so integrated—and some people might disagree—is that a mining project is a big civil construction project. It just never ends. It's more like a deconstruction project.
--:-- Erik Torenberg: Yeah, that's fair. You have to construct piles. You're building piles.
--:-- Turner Caldwell: But there are a lot of similarities in just moving dirt for site prep. The same software stack that enables you to get feedback from the field live is the same thing the mining industry struggles with. Mining companies will lose equipment, especially in underground mines that are like deep mazes. The industry is getting better at location sensing, but losing equipment in a mine used to be super common.
--:-- Turner Caldwell: We start with construction, then we get into the second core software stack, which we're calling PlantOS. The construction stack is Capital Project OS. PlantOS is really aimed at removing humans from the loop in deciding how the chemical processing and refining operations work. Big refineries are effectively big robots. You have sensing and telemetry, you have actuators to control how the plant operates. Imagine teleoperating humanoid robots forever—that's what the refining and processing industry has been.
--:-- Turner Caldwell: There are PID control loops that maintain set points, so you can maintain temperature and 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. The industry manages that today by blending the feedstock to minimize variability going into the processing facilities, which minimizes the amount of change that has to happen.
--:-- Turner Caldwell: We're trying to flip that. 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? It's first aimed at reducing reagent consumption and energy consumption. Google proved this. They bought DeepMind in 2016 or 2017. One of the first things they did was throw the DeepMind team at automating and optimizing the data center thermal systems: air handlers, chillers, cooling towers. That's not a super complex system. You have weather as a factor, loads within the building as a factor. But you ultimately have nine control variables—airflow rate, supply temperature, cooling water temperatures and flow rates. In that relatively simple system, they were able to reduce energy consumption by 30 to 40 percent.
--:-- Erik Torenberg: Yeah, it was like 40 percent.
--:-- Turner Caldwell: Yeah. And it happened relatively quickly. That's the opportunity when you remove humans from making decisions on how these process systems operate. When we look at 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. Every atom you lose in the processing facility is another atom you have to mine. Recovery in the refinery is actually the biggest lever when it comes to cost.
--:-- Turner Caldwell: What that means is that the upstream unit operations—think of a refinery as 20 unit operations all in series in a relatively simple refinery—the upstream operations obviously impact the downstream operations. If you're changing process conditions upstream, that changes what the downstream operation is seeing. But the downstream operations will recycle the reject stream back into the upstream operations. It's this big interconnected web with high latency. If you make a change in one part of the circuit, you may not see that change cascade for another 24 or 48 hours.
--:-- Turner Caldwell: When we're commissioning refineries, that latency ends up being a major driver of the time it takes to bring a refining operation to spec and eventually ramp it to throughput. There are some refineries built recently that are still not commissioned—built like three years ago. Chinese companies are doing it in six months. A lot of Western companies take two to four years. That stacks up when we need to build an insane number of mines and refineries. If you're four or five times longer every time you build a refinery...
--:-- Erik Torenberg: At every step of the process.
--:-- Turner Caldwell: Yeah. So we're trying to bring down the time it takes to bring the refinery to spec—throughput and hitting the output requirements of the product you're making. Ultimately, you start this historically very long haul of gradually bringing down cost over time. That's something we think reinforcement learning is going to do much faster, in line with what Google demonstrated with thermal systems in data centers—achieving global optimal operating conditions on an order of magnitude faster timescale.
--:-- Erik Torenberg: How do you think about building a company that mines and refines a product? There's a lot of tech you can interject at every step of that process. How are you deciding what to build, where to partner? What are you developing in-house versus going to market?
--:-- Turner Caldwell: At the beginning, we're focused on taking commercially demonstrated unit operations and being a better integrator and operator of that integrated circuit. We focus on the software systems that enable you to control the plant more optimally. That's generally what project-level financing parties want to see. 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. As we're entering the market, the right place to start is taking commercially demonstrated individual unit operations that operate globally and going after the uplift available just by being a better integrated operator.
--:-- Turner Caldwell: There are a whole bunch of bottlenecks in building these facilities that we'll need to solve. The industrial supply base for manufacturing tanks is broken.
--:-- Erik Torenberg: That's a new one.
--:-- Turner Caldwell: Things we take for granted just take a really long time if you don't want to go to China for sourcing that equipment. That has a big impact on the operating side too. The supply chain for a new pump in Australia could take 30 weeks. Getting that exact same pump from a mine in China shows up in a week or three days. That entire industrial equipment supply base we're going to have to look at some point. That's obviously a much bigger bite—commodity equipment manufacturing.
--:-- Erik Torenberg: You're not going to vertically integrate to be a mining equipment manufacturing company, are you?
--:-- Turner Caldwell: Mining equipment manufacturing company? I don't think so. I hope not. You'll let me know.
--:-- Erik Torenberg: That's right. Well, this is about the incentive structure of partners and suppliers, and whether it's required or not.
--:-- Turner Caldwell: There are a whole bunch of companies working on awesome novel process technologies that haven't 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 with deploying new processing technologies—other than all the headwinds from the industry being conservative and process-driven—is that humans have actually never operated that process chemistry at scale before. You learn a bunch of things at pilot scale, but pilot doesn't really tell you what's happening at commercial scale. You have to train people to operate it. New environmental things might come up depending on the chemical you're using. That scale jump is something we think RL will enable with a pretty meaningful pace adjustment, because you don't need the humans to fine-tune the process conditions around a new process chemistry—the PlantOS is doing it.
--:-- Erik Torenberg: Ryan and Erin, how did we approach this industry? Is this a space we spent a lot of time thinking about? How did we approach it?
--:-- Erin Price-Wright: We wanted to do a mining investment for a long time. When you think about venture capital, we care about massive markets. There aren't that many massive markets left that have been largely untapped by technology. Mining is one of the largest markets in the world with very little adoption of technology. Over many cycles, we've gone out and spent a lot of time meeting companies. 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.
--:-- Erin Price-Wright: 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. We actually 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. To actually capture the gains and efficiency and build a feasible business, you really have to own the entire process end to end.
--:-- Ryan McEntush: The only thing I'd add is that this is the intersection of geopolitical urgency and tech. To what Turner's been talking about, now we have technology that can actually go and disrupt this. But also, as a talent base, people coming from companies like Tesla, SpaceX, Anduril, other hard tech companies working in dirty spaces are willing to go out in the fields.
--:-- Erik Torenberg: Roll up their sleeves.
--:-- Ryan McEntush: Yeah, roll up their sleeves, go out in the middle of the desert and work on this stuff. So now's the time to build this company. And the political tailwinds are there. Even my conservationist mother—I think if 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 U.S. 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. That means investing in mining in the U.S. again.
--:-- Erik Torenberg: You mentioned rare earths, lithium, and things like that. But there are many different critical minerals. You talked a little about it in the very beginning. Specifically, what are the interesting ones for you? How does that map to what people see on the headlines and where the business opportunities are?
--:-- Turner Caldwell: When we look at what needs to happen in the next 10 years and forecasted demand—which will only materialize if the supply is there, so we'll see—the metals that need to grow the most by mass flow rate are the big metals. We need a lot of aluminum. We need an insane amount of copper. We need more iron. We need more zinc.
--:-- Erik Torenberg: What are some of the things these metals are in?
--:-- Turner Caldwell: Sure. Iron goes in everything that is infrastructure. We're good with iron. Zinc is one people sleep on because you have to galvanize a lot of that steel. Zinc pops up every once in a while as something we really need to continue to focus on. Copper is the workhorse of this push to electrify everything and grow the grid to supply AI, enable accelerated renewable penetration, and EV penetration—you're going to need a lot of copper.
--:-- Turner Caldwell: Aluminum is one I think is underestimated. It's actually the number one most consumed metal in defense applications. People talk a lot about copper, but there are a lot of aluminum conductors in transmission lines critical to growing grid capacity. In automotive, aluminum is big. Magnesium has a whole bunch of defense applications and could potentially get more into automotive for lightweight metals. Lithium needs to 4x in production capacity in the next 10 years roughly for the batteries we want to build.
--:-- Erik Torenberg: Well, we're all about batteries.
--:-- Turner Caldwell: Right, right, right. And then nickel is a big one. 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 percent of global nickel comes out of Indonesia. A lot of that was on the back of meaningful investment from China to expand production capacity in Indonesia and do more downstream processing there. Nickel goes into everything that is specialty alloys—anything that needs high temperature or corrosion resistance—and it's the unsung hero of high energy batteries, where these lithiated transition metal oxides are high nickel.
--:-- Turner Caldwell: Manganese is important. It goes into a lot of alloys and also into batteries. Uranium—if fission is going to continue to grow and we're going to deploy more nuclear capacity in the U.S.—then uranium is going to be needed. It's a long list. The rare earths are important, obviously. They are omnipresent in everything we use, but they show up as a relatively small volume when you look at the stack of metals we need to mine. We need a ton of process innovation in how rare earths are refined. Solvent extraction circuits are the status quo, the chemical intensity is high, the recoveries are relatively low, and the know-how is highly concentrated in China. But it's a little bit of a frothy market right now. Being a diversified minerals company enables us to pick our spots in areas where it makes sense. These things move on commodity cycles. You actually want to be building infrastructure at the bottom of commodity cycles, not at the top.
--:-- Erik Torenberg: It's the Warren Buffett quote: invest when there's blood in the water.
--:-- Turner Caldwell: You want to be coming into metals when they are at a trough where no one is investing in them, but they still have a macro long-term critical point. Lithium is exactly in this position right now, and that's why we're focused on lithium. Copper just has this macro trend that is pretty hard to ignore. We're going to need an insane amount of copper. Copper grades are going down globally, which means our ability to extract copper from those ores is going to get harder. That's where the PlantOS 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 extract copper from these lower-grade ores without seeing meaningful cost increases.
--:-- Erik Torenberg: Everyone knows 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?
--:-- Turner Caldwell: One thing folks don't always see is the permitting requirements for exploration. If you are exploring on federal land over more than a five-acre parcel, you have to submit a 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. Bringing down the permitting thresholds and burden associated with exploring—that is why we have such a relatively small rare earth resource. It's not because there isn't—the U.S. has tons of natural resources. The USGS estimate for the U.S. reserve on rare earths is tied to lack of exploration activity, not fundamentally a lack of geological presence.
--:-- Erik Torenberg: We haven't looked for it.
--:-- Turner Caldwell: Yeah. It's hard to find in high concentrations that are mineable, which we're trying to drop the percentage requirement that makes something economical. But there's also a lot of permitting burden to actually deploy drill rigs and explore. The government currently is doing a good job of highlighting the importance of the minerals industry. You're definitely seeing a tone shift over the last 20 years that is much more supportive. There are way more tailwinds when it comes to making mining be viewed in a more positive and critical light. That will help solve the talent pool problem. Awesome people want to go build things. They don't want to work on a project that sits around for five years and maybe gets permitted and maybe doesn't. They want to work on hard problems where they can see the impact of their work. If we're getting in the way of enabling projects to get built, that is a major deterrent for talent because they won't actually see the output of their work.
--:-- Turner Caldwell: Then 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 and the back and forth between field offices and state offices from the BLM, just focusing on the federal side. The way projects get permitted right now is you throw your environmental assessment over the table, they divvy it up between a bunch of experts or consultants they bring in to review the permit, and they get back to you eventually. There isn't a lot of visibility into how they are progressing with reviewing the permit applications. Discussions are getting more bilateral. There's been 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. 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.
--:-- Erik Torenberg: What else? Aside from 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 U.S. mining industry, what would be your top three?
--:-- Turner Caldwell: Supporting the demand side is probably the biggest lever. If you want to mobilize private capital into the sector, having some level of support on the demand side is major. That's offtake agreements with floor pricing. They did this just now with MP Materials. Ideally, that provides some stability on the revenue side so that investors—there are trillions of dollars of dry powder sitting around waiting to be deployed—have historically avoided the mining industry because of market price uncertainty. As soon as you provide—it's a commodity cycle, and what if you're building at the wrong time? Infrastructure funds are not the ones here to play intelligently about the commodity price cycle. They're looking for annuity-type returns. Those folks would mobilize if there were more demand-side support from the government, either providing price floors or fixed pricing for critical minerals you're trying to incentivize more production of in the U.S.
--:-- Turner Caldwell: Participating in the capital stack is important. Lowering the hooks or the extra burden that comes with receiving government funds is important. Some government agencies probably have more leeway to do that. The DOD, again, just did this big deal with MP Materials and went all the way to participating in the cap table as an equity holder. But when you receive federal funds from the DOE or from the debt side from XM, it comes with some 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. That's the NEPA process, which wouldn't be as burdensome if there was more efficiency on the permitting side.
--:-- Erik Torenberg: Mineral deposits don't obey borders. Is there a broader international strategy here? I would love to think we can mine and refine everything in the United States, but obviously there's a lot in Australia, Canada, Latin America. Curious about Africa, underwater, seafloor. What is the overall strategy in your mind?
--:-- Turner Caldwell: We're starting in the U.S. because it's closer to home and we're focused on developing a platform we can scale off of. But at no point have we told ourselves that the U.S. is the sole focus. You have to be able to bolster the company to operate internationally if you want to scale beyond the resource base the U.S. has available today. More exploration will happen in the U.S. We'll probably discover more resources, and that pool will grow over time of projects we can build in the U.S. But yes, we are absolutely going to expand overseas and underwater maybe.
--:-- Erik Torenberg: When we look back a decade from now, what's the single clearest indicator that Mariana has achieved what it set out to do?
--:-- Turner Caldwell: We won't be as worried about our ability to secure the critical minerals we want to secure because we will have rebuilt and established an entity that is able to go across borders and build these projects cost-effectively, time-effectively, and responsibly. The reason we are so panicked about it right now is because we have fundamentally lost the ability to build large-scale infrastructure and operate complex minerals plants. That's what we have lost, and we need to build that back.
--:-- Turner Caldwell: 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.
--:-- Erik Torenberg: Thanks for listening to the a16z podcast. If you enjoyed the episode, let us know by leaving a review at ratethispodcast.com slash a16z. We've got more great conversations coming your way. See you next time.
