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Ryan Morfin:

Welcome to season two of Non-Beta Alpha. I’m Ryan Morfin. On today’s episode, we have Josh Bridges, CEO and founder of Good Dudes Coffee, teaching us what it means to be a good dude, and what an excellent cup of coffee looks like. This is Non-Beta Alpha. Josh, welcome to the show. Thanks for coming on.

Josh Bridges:

Hey, thanks for having me. I really appreciate it. Excited to be on.

Ryan Morfin:

You’re the founder of Good Dudes Coffee. If you could, just give us a little bit of background of who you are and where you’re coming from. We’d love to jump into your product and what’s going on in the coffee industry.

Josh Bridges:

Yeah. I am Josh Bridges. I’m a former Navy SEAL. I am a six time CrossFit games athlete, father of two boys and proud owner of Good Dudes Coffee. That’s basically my little backstory.

Ryan Morfin:

Yeah. Where are you from? Where’d you grow up?

Josh Bridges:

I grew up in St. Louis, Missouri, just outside of St. Louis in the suburbs of St. Charles, Missouri. I was there until I joined the Navy in 2007, and then been in San Diego ever since.

Ryan Morfin:

Got it. Your time in the Navy, I’m sure you met some good dudes. Maybe tell me a little bit about your experience during your time at Naval special warfare.

Josh Bridges:

Yeah. I was at SEAL team three for two platoons. I ended up actually getting to do three deployments. The first one was directly out of SEAL training, which is SQT, SEAL Qualification Training, the second phase of becoming a Navy SEAL. I got to go on a deployment directly after I graduated. Chris Kyle was actually my first LPO, so that was really cool, and then did two more deployments. First two deployments were to Iraq, and my third and final deployment was to Afghanistan. After that deployment, I went on and I became an instructor for three years at the training detachment before I got out.

Ryan Morfin:

Got it. You’re into these ultra marathons and these high end performance races. Where did you pick that up, and how did you get into that?

Josh Bridges:

Well, I wouldn’t say I’m into ultra marathons or anything like that. CrossFit’s a little different. It’s more functional fitness style working out. You can do ultra races if you need to, but it’s not something I particularly do. I just got… [crosstalk 00:03:07]

Ryan Morfin:

Got it. You do a lot of CrossFit and you’ve actually sponsored by Nike. Tell me a little bit about that.

Josh Bridges:

Yeah. I got into CrossFit in 2005 a long time ago just to basically get in shape for becoming a Navy SEAL. A buddy of mine told me. He’s like, “Hey, I’m going to go try to be a Navy SEAL and this is what some of these guys do to get in shape for it. It’s called CrossFit.” I was like, “Oh, that sounds pretty cool.” I gave it a shot. I wrestled in college, and so basically after college I stopped working out, got a little out of shape. I was a loan officer in the mortgage industry for a few years, and so this guy was like, “Hey, I’m going to go do this. You want to give it a shot with me?” and I said, “Sure.”

Josh Bridges:

CrossFit’s really changed my life to be honest. The transition from wrestling into CrossFit was really simple or really easy, because it’s short intervals and it has a competitive nature to it because it’s always do this workout as fast as you can or do as many reps as you can at a certain amount of time. I fell in love with it, I loved it and then used it to train to get ready for my military training. Then at a certain point while I was in the military, they started a sport out of it, the sport of CrossFit, and I just felt like I was competitive enough and I had time where I could participate in some of the competitions while I was in. It’s been a crazy ride ever since. I took second in the worldwide games which is basically our super bowl in my first year in 2011, and picked up some great sponsors. Nike’s one of them, Rogue Fitness, a lot of great sponsors that have treated me well and just catapulted my life in a different direction than I ever thought it would be.

Ryan Morfin:

Quick question then. Who works out harder? Is it Jocko or David Goggins? Do you have any opinion on that? Or is it you?

Josh Bridges:

I would say me, but no, I don’t know. I don’t know David very well. I’ve never met him. I know Jocko. Jocko puts out. Jocko’s awesome. I love that guy.

Ryan Morfin:

Yeah. A lot of our viewers follow him on Instagram. Hopefully, he’ll be following you too. I didn’t know you were a wrestler in college. Where’d you wrestle?

Josh Bridges:

I wrestled at a small NAI school in St. Charles, Missouri, Lindenwood University.

Ryan Morfin:

That’s a great sport. Do you think that prepared you properly for SEAL training?

Josh Bridges:

I tell people this all the time, that I thought college wrestling was more physically demanding to me personally… more physically demanding than buds or basic underwater demolition SEAL training, the SEAL training. It might have been the mindset that I would have though. When you’re going right out of high school into college, you’re not prepared and you think you know everything. You just have a different mindset. So it might’ve been, but college wrestling was one of the hardest things physically I’ve ever done. The practices were grueling. I definitely think that that had a lot to do with how it changed my mindset and prepared myself mentally for what the military had to throw at me.

Ryan Morfin:

Is there anything that you do specially for getting ready for a CrossFit competition, like drink a lot of coffee or anything like that?

Josh Bridges:

I drink coffee before my events. I don’t drink a lot of it. I do drink some. I try to hydrate. I definitely clean up my nutrition, eat a little cleaner. I try to stay away from sugary foods, keep anything that causes inflammation out. That’s what I try to do. I do a lot of stuff for recovery. I was a big proponent of recovery, and I think that was why. One of the main reasons why I lasted so long in the sport of CrossFit is because I just took recovery really serious.

Ryan Morfin:

Well, so you spent your time, and thank you for your service to our country, you spent your time in the teams and you got out. Tell me a little bit about the founding of Good Dudes Coffee.

Josh Bridges:

Yeah. Good Dudes Coffee, it was me and two buddies. We were in a barn really. We’d just finished working out, and we started talking about doing these training camps. We were basically going to go around, and we were going to train with people and let people come train with us, which we did for a little bit, and then we had this brand, we called it Good Dudes. What the meaning behind Good Dudes is, in the military, you want to be a good dude. You don’t want to be a nice guy. Most people are nice guys, right? Nice guy is your neighbor, but a good dude is someone you want to go to war with. So we came up with the name Good Dudes and just ran with it.

Josh Bridges:

I had always had a passion for coffee. I’ve always wanted to start a coffee company, and so I thought the name was great, I loved the brand, and so that was really where Good Dudes Coffee really came from. The funny thing was how I got into coffee was, I thought there was this coffee sore and I was buying all these specialty coffees from different websites in Iraq. I’m in Iraq on my second deployment and I’m ordering some coffee to be sent out. I go to this website and I order a couple of hundred dollars worth of coffee beans. When it showed up, it was unroasted. I didn’t realize that when it said green next to the name of the coffee that I was buying, it meant unroasted coffee. When you get unroasted coffee beans, it has a greenish tint to it.

Josh Bridges:

I had $200 worth of unroasted coffee beans, and I decided… what do you do with it? So I went and bought a roaster and had it sent out to Iraq, and started roasting coffee in Iraq. That was really where the passion started.

Ryan Morfin:

The Iraqis don’t do too much coffee. They’re more tea drinkers, I think. Did you have any supplies? There were no coffee roasters and Amazon there, so did you guys just make your own equipment to roast the coffee out of access equipment you had in the base?

Josh Bridges:

No. I ordered one offline. I found a company that shipped out. It took a few weeks to get there. It basically looked like a popcorn popper. It was an air roaster. Very small, very generic, very at home type of roaster. You can only do very small amounts like quarter pounds at a time, but it was fun. I enjoyed it. Just playing around and messing with it, and trying different routes, how long to roast it and all that kind of stuff. I had to look up how to do it, how long to roast it, because I had no idea how to do any of that stuff, so I started watching YouTube videos like everyone else.

Ryan Morfin:

How long does it take to roast coffee? Does it depend on the type of coffee?

Josh Bridges:

Well, it depends on the type of coffee that you want. It depends on the roaster that you have. On the sample roaster I use now, it takes about six seven minutes total to roast about 50 grams of coffee. When you’re going into more of a big style, five to 10 to 15 pound roaster, it’s going to take more upwards of about 20 minutes probably. Maybe 15 to 20 minutes to roast that amount of coffee at a time. It just all depends. Then it depends on if you want to go darker roast, lighter roast, all that kind of stuff plays into it.

Ryan Morfin:

Obviously, lighter’s less time in the roaster, darker’s more.

Josh Bridges:

Exactly. What you want to realize is a lot of people… one of the questions that you always get asked or I always ask, what kind of coffee do you like? It’s always, “I like strong coffee.” Strong is that famous where everyone wants to use strong, and I understand it. But for me, when you say strong coffee, you have to clarify what you mean by that. Do you like strong flavor or do you like high amounts of caffeine in your coffee? A lot of people don’t realize this, but dark roasted coffee has less caffeine content than a light roasted coffee, because you’re actually roasting out the caffeine as you roast it longer.

Ryan Morfin:

Interesting. Literally the lighter roasted coffees, if you’re looking for that pop in the morning, will give you more caffeine.

Josh Bridges:

Exactly. That’s going to give you that caffeine uptick that you’re looking for.

Ryan Morfin:

Pretty much everybody that I know and do business with are avid consumers of coffee. A lot of people still go to that mermaid place where they pick up all sorts of public health diseases. Question for you is, what can consumers do? Go online and go do a sampling of different bags of coffee? What would your advice be to consumers today in the Corona virus environment to research or experiment with new coffees?

Josh Bridges:

Yeah, for sure. There’s so many different coffee brands out there, and I obviously love our coffee at Good Dudes Coffee. I personally had selected all of them and approved them. They’re coffees that I would drink, but there’s a lot of different coffees out there. There’s actually some really cool websites that will… you don’t even know what coffee you’re going to get. They’ll go around to other coffee companies and send you different brands from out the country. I have no affiliation with this company whatsoever, I just think it’s a really cool idea. It’s called Trade Coffee. I think there’s a few of them out there. That’s just the first one that I’ve found. Go out there experiment. Try light roast, try dark roast, try different country origins.

Josh Bridges:

The thing that you want to stay away from is blends. Typically, when you’re getting blends, what you’re getting is a bunch of really crappy coffee with a little bit of good coffee sprinkled in. Why that is, is because obviously your margins are better so people can make more money with it. When you go with single origins, you might pay a little higher price for that coffee, but it’s because the flavor is going to be a lot better. Then once you find certain types of coffee, you realize, “Okay, maybe you like the Ethiopian’s or the Kenyan’s, or maybe you like South American style coffees. The coffees from Brazil, or Columbia, or Peru, there’s Panama’s out there.

Josh Bridges:

Then you have to look at processes. This is a lot of information and probably more than people need to know, but there’s a different way that the coffee cherry is processed once it’s picked off the tree called washed and then natural. If you like really bright, acidic, you’re going to get almost fruity flavors, you want to go with those natural processes. What they do is they pick the cherry, they let that coffee bean dry with the cherry still attached to the bean which is going to change the flavor profile of that bean, and then they remove the cherry from it, and get you that unroasted coffee bean and then the companies roast them from there. You can get some wild flavors out of natural process coffee beans. Play with that too.

Ryan Morfin:

Is all coffee organic. It seems to me that it would be, but can they put preservatives in there to screw it up?

Josh Bridges:

Yeah, not all coffee is organic. If you want to go that route, go that route. I don’t think you have to, to be honest. I do some organic coffees, but not all of the coffees. We offer one organic coffee bean for people who are very strict with that kind of thing. Fair trade is really good. That means you’re dealing with people who are directly dealing with the coffee farmers. A lot of times the farmers are the ones who actually get the least amount of money out of this process. What’s happening now is you’re seeing a lot of coffee roasters going directly to coffee farmers. Those typically direct to farm fair trade style coffee beans. That means that, basically, those farmers are out there and they’re actually making the money that they deserve to make, because they’re the ones that are producing the coffee beans.

Ryan Morfin:

Are there any domestic production of coffee in the United States?

Josh Bridges:

There’s one. Well, there’s two technically. You got Hawaii. Hawaii is the one and only, really, in domestic, but then you have, as of recently, they’re trying to produce coffee in Southern California. One farm did it. It’s actually Jason Mraz. You know the singer Jason Mraz?

Ryan Morfin:

Oh yeah. Mm-hmm (affirmative).

Josh Bridges:

It’s his family’s coffee farm. That was last year, they actually had a little harvest and a small batch. That was actually really cool to see. I think at some point they’ll figure it out, and it’ll be better. Yeah, so that’s the only two.

Ryan Morfin:

Interesting. Is it so hard because of the climate, or is there the soil?

Josh Bridges:

Yeah, exactly. It’s all of the above. The soil, the altitude, the weather has got to be perfect. Basically, there’s a coffee belt that wraps around the equator, and that’s where the coffee can grow. If you look on a map it’s however many degrees above and however many degrees below, there’s this belt that wraps around where all the coffee comes from in the world.

Ryan Morfin:

What are your two favorite countries of origin for coffee?

Josh Bridges:

I’ll give you three because I…

Ryan Morfin:

You can’t pick a favorite child.

Josh Bridges:

Yeah right. I can’t pick two out of these three. Ethiopians’ are my favorite. If I walk into a coffee shop, I typically go with an Ethiopian, and then you have Panama, is really coming out with some amazing coffees. Then my last one is Brandeis. They can be really good if they’re good, but they can also be really bad if they’re not good. I always tend to try them if I see them in a store, because they’re not carried very often.

Ryan Morfin:

You buy your beans and you get them roasted here in the United States?

Josh Bridges:

Yes. We roast them up in Connecticut as of right now.

Ryan Morfin:

Very good. Once you roast them, you get your different flavors, if you will, different types, you package them. A lot of our viewers are also business people, so tell me a little bit about your go to market approach. How is that? Is it online? Is it retail? Is it both?

Josh Bridges:

As of right now, we’re pretty much all online. We’re only a little over a year. We’re basically 13 months old. The cool part is that the three of us… Excuse me. The three of us already came in with a platform. We all have a following from our CrossFit days and plus my military background, and so we had this platform. That was what we started with. Our marketing was just us marketing it as ourselves like, “Hey, this is our coffee. Come try it.” Now, we’re trying to reach broader audiences other than just the CrossFit world. The marketing’s huge. It’s big. The thing about marketing is you can sell it just because people want to be associated with the brand. That’s really been eye opening for me is, you’ll see people’s coffee companies that are doing really well and you’re like, “Man, I’ve had that coffee. It’s not very good,” but people just want to be associated with certain brands that do good things.

Josh Bridges:

That really isn’t one of the reasons why we do this, but we like to give back. I personally love to give back to military services, and so we do a lot of work where all of our bags are named after someone that we think is a good dude. We have the Roosevelt, the Reagan, the Washington, the Lincoln, the Sampson. The Sampson’s actually a really cool story. The bag is actually named after a woman, Deborah… Sorry, excuse me. Deborah Sampson. She was in the civil war, and she dressed a man to fight for… Oh, I’m sorry, the revolutionary war. I said, civil. The revolutionary war where she disguised as a man so she could fight in the war. The only reason she got found out is because she got shot in the hip and as she was getting taken care of medically, they found out she was a woman. It was really… [crosstalk 00:20:23]

Ryan Morfin:

Imagine the doctor’s surprise.

Josh Bridges:

Yeah, exactly. You’re right.

Ryan Morfin:

Deborah seems like a good dude to me.

Josh Bridges:

Yeah, exactly. We do a lot of stuff where we name… We worked with the Pat Tillman Foundation where we give a hundred percent of not only the proceeds, but everything. A hundred percent of sales to those foundations just to give back. The military has given me so much and what it’s done for our country and what it’s done for everyone in the country has been a blessing for us. We have a lot of veterans out there that are struggling mentally. There’s so many great foundations that we can help perpetuate with our brand, and so it’s been a really cool thing for us to do that.

Ryan Morfin:

To go a little deeper down the coffee rabbit hole with you, do you prefer a drip coffee or pour over? Any thoughts on the benefits of each?

Josh Bridges:

Yeah. I personally love a pour over, and I love espresso. I think that’s all comes down to taste. That was actually the other thing I wanted to talk about earlier was the methods of brewing. For me drip, there are good drip machines out there, they’re a little pricier than your Mister coffees, but…

Ryan Morfin:

Well, I’m going to ask you to name some names on this one. What would be a great drip machine that you think would blow people’s socks off? I think a lot of people, they don’t realize. They just make the coffee in the morning, go in the office and don’t think about it. I think you said it earlier, if you’re going to do something, be excellent at it. If we want to get the gear to be excellent at coffee, what’s the gear you’d recommend people go after?

Josh Bridges:

On the drip, I’m not very good at that. I can’t remember the name of the machine. I’m going to try to think of it before we get off here. I’ll try to think of it. If I was going to start, I would start with a pour over. It’s really simple. You get a Hario V60. That’s super simple. You got to get filters for that, and then you have to basically just get a kettle. Having a temperature kettle that shows you what the water temperature is, is big, because if you boil water and then pour it on your grounds, that water will actually burn the grinds. If you don’t have a kettle that has temperature gauge on it, you want to basically brew 195 to 205, is typically where you want to stay degrees Fahrenheit. If you don’t have that, boil your water and then let it rest for about a minute. That should bring that water temp back down to where it wants to be.

Josh Bridges:

You don’t want to pour boiling hot water on your coffee grounds. It’s going to ruin the flavor of the coffee. That’s really it. It’s really simple for a pour over. There’s another great process… Oh, go ahead. Sorry.

Ryan Morfin:

No, I’ll just say any cuisine or type of kettle. It doesn’t matter really, just get it hot.

Josh Bridges:

Yeah. The gooseneck kettles can help with… it’s called blooming the grounds and dispersing it. This is getting really into the weeds here with it. You don’t have to have a gooseneck kettle, but if you can, it’s not a bad idea. It just helps you evenly distribute the water over the grounds. Then you have an AeroPress. An AeroPress is another process. It makes a really concentrated cup of coffee, so it’s a little thicker or a little more flavor for people who like that heavy flavored coffee. You’re going to pull your grounds in it. It’s a plastic tube, and it’s really cheap. They’re like 20 bucks. They’re not expensive. They’re great to travel with because when you’re traveling, you’re stuck getting hotel coffee or whatever.

Ryan Morfin:

That mermaid place. Ugh, yeah.

Josh Bridges:

I travel with my coffee, and I typically travel with my AeroPress. It’s a really easy process. You get little filters on there as well. Just go to www.aeropress.com or look it up on Amazon. It’s all on there. It’s simple. Same thing, you’re going to want to maybe even have a scale because what you want to have is consistency. You want to have the same number of grounds to the same number of water that you pour through the grounds. When you’re doing a pour over, you’re going to go one to 15, one to 16, one to 14 ratio. That is coffee grounds to water ratio. If I put in 20 grams of coffee, I’m going to pour 320 grams of water on that. Having a scale just helps make it consistent so that you always get that same great flavor that you want.

Ryan Morfin:

Got it.

Josh Bridges:

[crosstalk 00:25:13] Or you can go with the French press.

Ryan Morfin:

Talk to me about French press. Does that just get too oily, do you think? What are your thoughts on that?

Josh Bridges:

Yeah, I’m not a big fan of French press. For me it does. It gets really oily. It’s a really dirty… dirty is probably the best word to describe it because you’ll see that layer of oil on top of the coffee. It has that distinct flavor. Sometimes you’ll even get some of the grinds into your cup of coffee, so I’m not a huge fan of that. Some people are. Again, it’s all up to you. You’re the captain of your own cup of coffee. Whatever you want to drink.

Ryan Morfin:

Well, you would hope so because if you’re not, then you got to start making choices for yourself. Become an adult here. Tell me about your choice of espresso makers. Maybe let’s talk about entry-level and let’s talk about, “Hey, I’m an adult. I can afford a nice coffee espresso maker for my office.”

Josh Bridges:

Yeah. For your home, you got a couple of different options. You have some manual ones. There’s a great one called Flair Espresso. It’s a manual press that really makes… if you dial that thing in, you can make a phenomenal cup of coffee. It’s like 300 bucks. It’s not bad at all. I would not buy anything cheaper than $300 other than something that’s manual. Breville doesn’t make a bad… it’s not a bad cup of coffee. I don’t think it holds the right amount of pressure that you need to make a great espresso, but it’s not bad. It’s definitely drinkable. Once you get into the big boys, you’re going to start upwards of a thousand, $2000 or $5,000.

Josh Bridges:

You can start with a Rocket Espresso. It’s a decent espresso maker. I think that starts at a thousand to $2,000. Then you have La Marzocco Linea Mini, which is what I have. Now you’re looking at spending… it took me a few years to pull the trigger on it. I was like, “I don’t know, but then I really love it.” [inaudible 00:27:18] like $5,000, so that could go into an office for sure. Something like that. There’s a lot of different options out there, but those are probably your basic tiers.

Ryan Morfin:

When you’re looking at espresso grinds, do the prepackaged pellets or do you think you still need the powder and measure it out? What are your thoughts on that?

Josh Bridges:

I would never use a packet. I would never use that in espresso. It’s not good coffee.

Ryan Morfin:

Coffee blasphemy.

Josh Bridges:

The moment you grind coffee, you have about 20 minutes before it actually starts to go stale. If you buy ground coffee at a supermarket, that coffee has been stale for a while because there’s no way that they just grounded.

Ryan Morfin:

I’ve never bought espresso beans, but you can go order espresso beans online.

Josh Bridges:

To be honest, there are traditional espresso style beans which is going to be a darker because espresso comes from Italy. The traditional style of Italian espressos are really dark. It’s a really dark roast. Nowadays though, to be honest, I actually use our lightest roast in my espresso beans. I use our Reagan, and it really brings out some crazy flavors in your espresso. Again, no one tells you exactly how you have to do this stuff. That’s what’s so cool about coffee. There are some guidelines that are created to help you so that you don’t ruin coffee and waste it, but you can play and do and try different things and try different ratios, and you never know, maybe you’ll make a great cup of coffee by accident. I try lighter roast on my espresso. You don’t have to buy espresso beans to make an espresso.

Ryan Morfin:

When you get the beans, what gear do you need to get them grounded up properly?

Josh Bridges:

For espresso, you’ve got to go really super fine, so you have to have a good grinder and it can’t be a blade grinder. A blade grinder chops the bean up. It’s basically going to give you an uneven extraction, which is going to give you bad flavor. You need to get a burr grinder, B-U-R-R, and that’s a type of grinder. It’s not a model of grinder or anything. There’s a burr. It looks like a screw in the machine, and that’s how it grinds up your coffee beans. It’s going to grind it up very evenly and can grind it very fine. Any burr grinder out there, as long as it’s decent, should be able to get you down into that finer grinder. The more expensive you probably pay for a grinder, the better it’s going to perform.

Josh Bridges:

There’s actually a hand grinder that does a really good job. It’s called the Comandante. That’s like the Cadillac of hand grinders. It’s a beautiful thing. It’s a little pricier. It’s 250 bucks or whatever, but it’s worth it because it does very coarse grind, and then it can go all the way down to very fine grounds. You just have to dial it in.

Ryan Morfin:

What about electric grinders? Any names on that front?

Josh Bridges:

La Marzocco makes a great one for a very… if you’re going top end espresso maker, you might as well get a top end espresso grinder. La Marzocco, the espresso machine, they also make their grinder too. That’s what I have.

Ryan Morfin:

Got it. We’ll have to check that out. This is going to be a very expensive episode for me. As it relates to any other gear that people need to think about if they want to make a really serious, wow cup of coffee?

Josh Bridges:

Those are some of your main ones. There’s things called the siphon. Siphon’s a really cool way to make coffee. It’s a little bit more of a mess. It has a lot more cleanup than your pour overs or your AeroPress because basically what it is is, you’re going to put your grounds in the top. It looks almost like an hour glass. You’ll put grounds at the top and then you’re going to have water underneath, and then as you heat the water up on the stove, the water actually goes up and percolates up into the top, sits with the water, and then when you take it off the heat, it comes back down. Now you have to clean out the whole glass process, but it does make a really good cup of coffee. Again, if you want to get really crazy and start trying a bunch of different stuff, the siphon is actually a really cool way to make coffee as well.

Ryan Morfin:

Have you ever looked at or grabbed coffee from the Clover press that Starbucks has?

Josh Bridges:

Yeah. It’s kind of a total immersion coffee where the coffee, and the water and the grind sit together for a little bit, and then you basically sit it on top of your coffee mug and it drains through. It’s like a AeroPress a little bit, except for it’s a combination of an AeroPress and a pour over at the same time. I have used that. Again, it’s going to give you just a little… you’re going to get some more of that oil in there because it’s sitting with the coffee instead of just draining through like a pour over does.

Ryan Morfin:

This has been phenomenal. How do you take your coffee? You take it cream and sugar, or just black?

Josh Bridges:

Just black. A buddy of mine, when I first started drinking coffee, was like, “We drink our coffee black,” and I was like, “Fair enough.” I never got a taste for putting cream, or sugar, or anything like that in my coffee. I’ve always gone black. I think once you start to and you start to drink good coffees, you don’t really need that stuff. It’s a lot of sugar, it’s a lot of fat, it’s… black coffee really has three calories, and so it’s great. Even if you’re doing fasting, you can drink coffee technically without ruining your fast. Yeah, I go black with my coffee.

Ryan Morfin:

Tell me any health benefits that any coffee production associations have sponsored? What are the benefits of drinking coffee? I think it just keeps me on my game and wakes me up in the morning, but what are your thoughts about drinking a cup of coffee?

Josh Bridges:

There’s a lot of different thoughts on that, I guess, on health benefits, good, bad. I think everything in moderation is fine. I think caffeine is good for me. It helps me focus. Like you said, it gets me on my game and it helps me to let my brain not be so cloudy. Are there actual health benefits? I don’t know. I’m not a nutritionist, I’ve never studied it, so I don’t want to sit here and be like, “Oh, I’ve read this and this.” There’s a lot of different sayings on it, there’s a lot of different thoughts on it, so like I said, everything in moderation. But I don’t think it’s that bad for you. I think that if you have a lot of anxiety, maybe should you drink a little less coffee? Sure.

Ryan Morfin:

Is there such a thing as too much coffee? I don’t believe that, but do you think there is?

Josh Bridges:

I try not to drink coffee too late in the day, but that’s just me personally because I need my sleep. As an athlete, I know how important sleep is, and so for me, I try not to disrupt my sleep by drinking coffee after say 2:00 PM. A lot of people would say it should probably even be earlier than that, but I stick to 2:00 PM. I can have a cup of coffee up to 2:00 PM. After that, I cut myself off with caffeine.

Ryan Morfin:

As it relates to the industry, we’ll call it smaller producers and new brands that are emerging in the coffee industry, a lot of them have this double bottom line social impact component. How has the industry been since the pandemic? People aren’t going to Starbucks as much as they used to. Are you seeing sales start to blossom, and what are your thoughts about the industry for coffee going forward?

Josh Bridges:

Yeah, I think it’s a great [inaudible 00:35:34]. I think that this whole third wave coffee is doing great things. It’s bringing good coffee to everyone out there. A lot of people have grown up with drinking either Maxwell House or Yuban. Those old ken cups. Then Peet’s and Starbucks came in and those took over from the Maxwell Houses. Now you’re seeing a bunch of third wave coffee companies that are coming in bringing amazing coffee out there. That’s really huge, and I think that the industry is only going to go up because you’re getting more people involved, more people to change the processes and flavor profiles of different coffee beans, so it’s really exciting where coffee’s going. For us, yes, the pandemic has actually made our sales go up. It was very noticeable right off the bat.

Josh Bridges:

We do a subscription to where you can order. Say if you need two pounds every week, we’ll send you two pounds every week and it just shows up at your door. It’s an auto renew subscription. You don’t have to worry about running out of coffee and being like, “Man, crap. I got to put that order in,” and then still wait however many days it takes for the coffee to get to you. You always have your coffee coming to you, which is nice, right? You don’t have to go spend exactly $5 for a cup of coffee at that place down the street that nobody likes.

Ryan Morfin:

Yeah. That mermaid place. They’re ripping people off and people keep paying it because they need the fix. I think if you can make it easy for them to get access to it and educate them that it’s more of an art than a conformity, I think people will start to appreciate it. A question for you, who makes the best cup of coffee in the world? Is that Americans, Italians, Colombians, Turks, Australians? Who do you think has perfected the cup of coffee?

Josh Bridges:

I have a hard time going against the US right now. We have a lot of people who are getting really deep into the coffee business and going down these crazy paths with the processes and stuff like that, so it’s really cool to see. I haven’t traveled too much. I had a little bit of coffee in Europe, but I haven’t found the type of coffee that we have here, and so I’d have to stick with the US.

Ryan Morfin:

I would agree. Question for you as it relates to the coffee industry. You’re starting to see new competitors come in, like Ascension, and you’ve got Starbucks and then there’s this Chinese knockoff that looks exactly the same. Do you think the consumer eventually gets tired of these big brands and it will start to go niche. I guess that’s probably your hope, but what are the inflection points in your industry, the trends that you’re seeing for this niche coffee market?

Josh Bridges:

I think right now the convenience factor until… You have to educate people for people to understand how easy and how quick you can actually make really good cups of coffee at your house floor, and how much money you would actually save. People are paying for convenience right now. They’re going to those places that you just mentioned because it’s convenient. It’s right down the street, it doesn’t take that long, but they’re willing to spend the extra couple of dollars because of the convenience factor. If we can educate these people that how fast you can actually make a really good cup of coffee that really doesn’t take that long in the morning, not only are you going to save money, but you’re going to have better coffee in your cup, which is great for everyone. That’s two pluses.

Josh Bridges:

That’s what we’re trying to do with our marketing. We’re trying to teach people how quickly you can make an AeroPress, how quickly you can make a pour over in the morning. We’re doing videos and showing them and basically saying, “You don’t have all this fancy equipment, you don’t have a scale, that’s fine. All you need is a teaspoon. Basically, just be consistent with how much coffee ground you’re putting into it. I think education is the key. Once we get the word out there to the masses, then people can understand that it’s not that hard, it doesn’t take that much time, it’s just as convenient, and it’s cheaper and it’s better.

Ryan Morfin:

Run me through your product list. I know you’ve got the iced coffee and you’ve got the Reagan. Talk to me a little bit about your range of products.

Josh Bridges:

Yeah. Right now we’re offering a… it’s called Snap Chilled, and that’s a cold brew. I’m not a cold coffee type of guy, but a lot of people are. A lot of people like cold coffee, and it’s in a can so it’s convenient. Again, same thing, convenience is what a lot of people are looking for. How it’s brewed though, most cold coffee is brewed very slow, and it becomes very bitter and has a little flavor. I think it all tastes the same. Ours is actually brewed hot, snap chilled and then put in the cans so it keeps that flavor. It’s a really great convenient way to drink cold brew. Then we offer five different bags.

Josh Bridges:

We have the Reagan, which is a Panama. It’s our lightest roast. We have the Roosevelt, which is an Ethiopian. That is a light medium roast. It has some really good flavor notes in there. It’s a really great cup of coffee as well. Then you’re going to go into a little bit more of our medium darks. You have the Lincoln, that’s our organic fair trade coffee. That is a Peruvian. Then we have the Washington, which is a Guatemalan, another medium dark roast. Really smooth cups of coffee. They’re just not quite as bright as those lighter roasts.

Josh Bridges:

Then we have our Sampson, which is our darkest roast for people who have that taste for… what I like to say is, “Hey, do you like your coffee that tastes like coffee?” because that’s the only way to really describe it. It’s a very caramelized, smokey flavor, a little bitter because it’s roasted really long. People have that because they grew up with that flavor, so that’s what they want to taste. We have to have an option for them, and so that’s what we have the Sampson for. That’s from Columbia. They’re also all single origin coffees, no blends.

Ryan Morfin:

Fantastic. Well, I’m going to definitely get on Amazon and start ordering some equipment here just so I can save money and save time. That’ll be my excuse so I don’t have to wait in line. Eventually I’ll save money on this I’m sure. What are some things that leave you, I’ll say optimistic about today? As a veteran, as an entrepreneur, your insights as to where we are as a country, what are some silver linings you see?

Josh Bridges:

Yeah. Right now the country, if you look in the media, you’d think the country was burning down, but I’m an optimistic guy. I don’t like to read the news headlines sometimes. I think that people are trying to push certain agendas for certain reasons. If you go out and around and you actually talk to people, there’s a lot of great people out there doing a lot of great things. Our country, it’s not in a bad place. If you look at the stock market, the stock market’s up. Our economy is doing well. Yeah, the unemployment rate’s down because of this pandemic, but hopefully when the pandemic ends, things are going to come back around. I think they always will because we’re the United States and man, we don’t like to lose. I’m very optimistic about our country.

Ryan Morfin:

Back to back world war champions, yeah, we don’t like to lose. Do you think there’s any correlation between coffee consumption and GDP growth?

Josh Bridges:

Could be. Yeah, I think so.

Ryan Morfin:

If even if it is fake news, I like it. What are you doing to educate yourself as an entrepreneur, as a leader, what podcasts, what books, what are you doing to entertain yourself when you’re not in your business?

Josh Bridges:

Yeah, it’s hard. I try to educate myself as much as possible. Right now I’m spread a little thin, so my learning isn’t where it probably should be because I’m still training if I want to compete. I’m doing my own podcast. We’re doing a YouTube channel, so a lot of different things going on…[crosstalk 00:43:36]

Ryan Morfin:

What’s the name of the podcast?

Josh Bridges:

It’s Checkin’ In, The Josh Bridges Podcast. We’ve only released [crosstalk 00:43:43] four episodes. I’m talking to a lot of my ex military buddies, talking about… I have a lot of good friends who are doing a lot of great things with the mental health issue that a lot of our veterans are dealing with, and so we’re talking a lot about that kind of stuff. Talking about the CrossFit world, just talking about everything. It’s a very well rounded show. It doesn’t have a specific focus, just a good listen for people who want to be entertained and maybe hear some people’s thoughts on being mentally prepared for situations and things like that. I’m having a lot of fun with that. It’s been a really good time to just sit and chat with really intelligent people and listen to them and learn from them, so I’ve had a great time with it. It’s doing well right now.

Ryan Morfin:

Fantastic. Are you going to do any YouTube videos and commercials or movies?

Josh Bridges:

I’m not going to do any movies. I have a YouTube channel. Just type in my name, Josh Bridges, and you can find it. It’s a lot of me training and talking about mindset. Right now, I feel like we’re the state is with social media and people, I feel like depression is probably at an all time high because you’re constantly comparing yourself to other people on social media, things like that and how you can get away from that. How you can get away from having a sense of entitlement because it’s the worst thing anyone can have. You go out and you get what you earn. We talk a lot about that kind of stuff on that YouTube channel. I learned a lot, I had a lot of great mentors in my military time, a lot of great men who did a lot of great things and changed my perspective in a lot of way. It’s been a huge thing for me, and I just want to pass it along to anybody who wants to hear it.

Ryan Morfin:

What’s one or two songs that get you motivated when you’re doing your CrossFit competition? Are you able to listen to music while you’re doing it, or is it something that you just got to zone in?

Josh Bridges:

In training, I listen to music. The song I always love is Led Zeppelin, When the Levee Breaks. It’s a fantastic one. Another song, the AC DC Thunderstruck, always a great one. I’m a classic rock type of guy.

Ryan Morfin:

Fantastic. Well, Josh, thank you for your service, thank you for coming on the episode today, educating me and our viewers about what a good dude is and a good cup of coffee looks like. We’d love to have you back on in the future. We’ll definitely hyperlink all this and give people a way to follow you. Can you give everybody a quick shout out on what your website is so they can find you online?

Josh Bridges:

Yeah, for sure. Thank you so much. You can find the coffee at www.gooddudescoffee.com. Head over there, grab yourself some coffee, and go brew up a great cup of coffee. I appreciate it. Thank you so much for having me on. I really had a great time.

Ryan Morfin:

Absolutely. Thank you so much. Have a great day. Thanks for watching Non-Beta Alpha. Before we go, please remember to subscribe, like and follow us on our YouTube channel, Spotify podcast. This is Non-Beta Alpha, and now you know.

 

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Ryan Morfin: Welcome to Non-Beta Alpha. I'm Ryan Morfin. On today's episode, we have Pini Althaus, CEO of USA Rare Earth, talking to us about the supply chain glut in rare earth minerals. This is Non-Beta Alpha.

Ryan MorfinPini, Welcome to the show. Thank you for coming on today.

Pini AlthausThank you for having me, Ryan. Good to be here.

Ryan Morfin: So you're an investor and a miner in rare earth minerals. Can you share with our listener base, what are rare earth minerals? Why are they important and why is there a geopolitical race going on globally?

Pini AlthausYeah, I mean, rare earths are an extremely ubiquitous part of all advanced manufacturing or technology manufacturing today's day and age. Several years ago, I had not heard too much about rare earths myself. I was not that familiar with it and being involved in this sector, in this company, for the past few years has given me an education of course. And I mean, I was sad to hear that 50% of all imports into the United States contain are earth elements and it runs the gamut from consumer electronic devices that we use every day. Our cell phones, our laptops, most communication devices, medical equipment. So there's a tie with COVID, which we can touch on at your discretion. Electric vehicles, defense equipment. So pretty much anything or everything high tech today has a rare earth element or critical minerals contained within them.

Ryan MorfinAnd what are some of the names of some of the more important rare earth? I know there's lithium for batteries, but what else is considered in this category, critical?

Pini Althaus: Yeah, so lithium is a separate category to battery material. The rare earths are 17 rare earths. The four, let's call it, key rare earths that we're focused on at our company, the four rare earths that go into the permanent magnets. And these are the magnets that are found, there are a number of them in your back of your cell phone or an iPad. But if you look at an F35 striker jet, you've got about a ton of rare earth magnets in those. And we've got two heavy rare earths and two light rare earths is part of the permanent magnets. You've got dysprosium, ytterbium are the heavies, and then you've got neodymium, praseodymium as the two light rare earths. So those would be key rare earths that are the focus.

Ryan MorfinAnd you use these in, I guess, in military applications as well, but historically, where has the United States sourced the rare earth for supply chain?

Pini AlthausYeah. And that's the shocking part. We've been securing those materials from China. So China controls the rare earth sector and has done so for the past 30 years or so. And it was a significant misstep on the part of the United States, allowing China to have this control. And actually this wasn't a question of China coming in and doing anything nefarious as far as stealing IP or anything. The US government made a conscious decision about 30 years ago to allow China to come to the United States and acquire the processing capabilities for rare earths. So just as part of some background, you've got the rare earth materials containing various mining projects, but once you extract them, you have to then process them and they go through certain phases before they get to the magnet phase. And China, the thought process was let China do the mining, let China do the processing.

Pini AlthausWe don't need to do that here. And we'll buy the materials from China cheaply and the premier of China at the time, Deng Xiaoping made the comment, he said, "The Middle East has oil. China has rare earths." And unfortunately we weren't smart enough to understand what he was saying. And the Chinese understood that the future of manufacturing is going to revolve around control of the rare earth and critical mineral supply chain. So if you think about it today, Ryan, we cannot build... Forget about consumer electronics and medical equipment. We cannot build the equipment that the US Pentagon or the US armed forces require, whether it's F35 fighter jet, Tomahawk cruise missile, communications equipment, without going to China and obtaining those materials. And it's obvious to all that this should be extremely alarming. We've seen China use this as a weapon, if you will, as far as how it interacts with other countries back in 2010, when there was a dispute between China and Japan on the East China Sea.

Pini AlthausSo China cut off rare earth exports from Japan for 40 days. Japan obviously being a significant user of rare earth elements for their high-tech manufacturing sector, that was stopped after 40 days. But in fact, it was President Obama that first made the United States aware of this, formed a division within the Department of Defense to handle this issue, but not much has happened. And we continue to be relying on China for these materials. And what has been made about trade war with China and whether the trade war is really the impetus for China withholding rare earth exports. And that is a huge misnomer. Whilst China had been talking or implying that they would cut off rare earth exports, the truth of the matter is that China, under it's made in China, 2025 mandate, its belt and road initiatives and others. And you seem to control the critical minerals and rare earth supply chain so that it can continue its dominance as a manufacturer or a global supplier of these materials and finished products.

Pini Althaus: It's the backbone of its economy. And in fact, China has become a net importer of rare earths from different countries like Miramar and others. So with that, they are decreasing the exports to countries like the United States, Japan and others.

Ryan Morfin: And was it ever a risk that the Chinese were going to turn off the exports of rare earth to the US during the trade war? How close were we to that? And was that ever some saber rattling that went down during trade negotiations?

Pini AlthausYeah, I think it was saber rattling. I think it would be paramount to an act of war. I can't say with any authority that that would not happen, but it would be probably, aside from war itself, it would be one of the most significant acts of war cutting the United States off from the ability to procure rare earths. But that being said, I mean, if you look at, as an analogy, the oil and gas sector and the reliance of the United States had for many, many years on OPEC countries to supply us with the oil. And we had embargoes and we had price manipulation by OPEC. This is far more significant given the ubiquity of where these rare earths go. And yes, we're always under the threat that China can cut off exports under the guise of a trade war or for any other nefarious reasons.

Pini AlthausBut I think even more importantly, to just as the natural run of the course of things with regards to their business and their desire to maintain themselves as the global leader in manufacturing and exporting of goods, China is in a position now where it actually requires these materials for their own domestic consumption and can legitimately cut off rare earth exports by stating that they need it for manufacturing and that would actually be somewhat correct. So we're in an extremely dangerous position here with this reliance on China. And it wouldn't just be China. If it was another country, it would be similar issues, not to the same extent, but reliance on one country for these materials is dangerous.

Ryan Morfin: And it's been mentioned in the past that in 2010, China flooded the market to really kill all the competitors in the rare earth mining industry. Where was the World Trade Organization during this period? And how did that play out and how does that set the chess board for China to run the tables?

Pini Althaus:

Yeah. So the WTO stepped in when China cut off rare earth exports from Japan, I think it lasted for about 40 days because the US and Japan protested the WTO, and they stepped in and China resumed exports. While I'm not an expert on these trade matters, one thing that I am aware of is that one of the reasons why China had to resume the export of rare earths was it did not legitimately need all the rare earths for domestic consumption. So therefore it was a nefarious act, if you will, to cut off rare earth exports. Now that has changed, which means China have to cut off rare earth exports today, they have a legitimate case to say that they require these materials. There's a shortage of these materials and they require them for their own domestic purposes. It is the backbone of their economy and there's very little we could do about this today, which is why it's becoming an even more urgent issue.

Ryan Morfin:

And the US government started stockpiling some of these after that incident. Can you talk a little bit about what DOD and DOE has done to start making sure that there's not a critical supply shortage going forward, and is it enough?

Pini Althaus:

Yeah, again, there is a national defense stock pile, and there are materials still that the United States needs to procure in order to shore up its stockpile. There are magnets, the finished magnet products as well, the United States government needs to stockpile. Again, there's a limited amount that the United States government has. It requires approval from Congress, whether it's in the NDAA or other approvals from Congress, to allocate monies for the national defense stock pile of these materials. That being said, there's no endless supply of these materials. And unfortunately, the apparatus, the way it's set up right now with the US government, it's going to continue to require having a secure supply chain of those materials for many, many years to come. So it's not a question of stockpiling for 10 or 20 years, and then this complacency and saying, we'll kick the can down the road. But keep in mind as well, Ryan, that US government accounts for low single digits of overall rare earth imports into the United States.

Pini Althaus:

We're talking about defense contractors, we're talking about the manufacturing sector. The direct impact this has on the economy, jobs, the automotive sector, and others is significant. So it's not just limited to the United States government. If you look at over the past couple of weeks, the sanctions that China have put on Raytheon, Boeing, Lockheed, et cetera. I mean, the question is where are they going to get those materials? And if we go beyond that, you need rare earths for the 5G network. Now that Huawei has been banned from installing the network, not only in the US but other countries, we have to have the ability to get a secure supply of these materials as well. Which currently, again, trying to control the hundred percent. So it runs across the board, both for government, defense and manufacturing in this country.

Ryan Morfin:

Well, and so help me paint a picture for our audience. Does China have all the mines for rare earth, or they're the only ones who started mining it? Or are their mines globally dispersed and nobody's been doing the actual infrastructure to do the mining?

Pini Althaus:

Yeah. So finding rare earth projects or rare earth elements is not the difficult part. It's finding them in significant quantities that makes a project economically viable. And part of that consideration are the environmental rigors that companies in the West have to adhere to. And China, even by their own admission, have had a complete disregard for mining these materials and even for processing these materials. And in fact, just the last week or so, the BBC did an expose on this, 60 Minutes has done an expose on this. But the Chinese have not denied this and have talked about cleaning up their act, but it has an effect on the bottom line for what the costs of mining and processing are if you have no environmental standards to adhere to. So China have exploited those rare earth projects they have, primarily in inner Mongolia, and have brought a number of projects online and quite quickly, and in a significant way, with a complete disregard for the environment.

Pini Althaus:

So it was seen as an environmental no-no in the West for many years. Now, what's happened over the past few years is you're starting to see rare earth projects in different parts of the world sprout up. You've got the Mountain World project in Australia owned by Linus, which is a producer of Nd and Pr, neodymium and praseodymium. So two of the light rare earths. They may have some heavy rare earths coming online at some point in time. And you've got Arafura, which is another company in Australia that we're working with to assist them with their processing so they don't have to send the materials to China for processing. But really these are a drop in the bucket for what the requirements are for the United States. And certainly what the requirements are for allied countries, the EU, et cetera. So there is a race, if you will, worldwide to start bringing projects online. The Chinese are very active in trying to secure assets outside of China.

Pini Althaus:

So in Africa. They have ownership of a project in Greenland. So there is somewhat of a race. The Australian government has stepped in and has started limiting the ability for China to own, or have ownership in, or off takes for the Australian rare earth projects. And that's part of the strategic Alliance between Australia and the US. Canada, similar thing as well. There are a number of projects that are looking to come alive, but these projects are, for the most part, will take many, many years to come online. We have to expedite the process. We have to assist with a [inaudible 00:14:41] supply chain and the domestic rare earth sector, because previously investors have been scared off by things like China flooding the market, which is not a possibility at this point in time, given that China can't actually afford to flood the market. They are already very heavily subsidizing their mine to magnet supply chain there.

Pini Althaus:

This is more now a case of being able to get production from non-Chinese sources so that the United States and allies have a viable, secure supply chain of these materials. And it's a concern worldwide. We speak to governments all over the world, and we're all facing the same issue. Some more than others, especially countries like Japan, that don't have their own rare earth projects there and are reliant on Australia where they've made some investments there. And in the United States, they've made an investment recently in Africa. So there is this race, if you will. And I think we've got a five-year window here to at least stand up a few projects worldwide. Otherwise we've lost this race and we will be dependent on China for many, many years to come. And Ryan, it's a bit of a hypocrisy. If you look at it where you've got materials going through clean, green energy applications, like electric vehicles, wind turbines, et cetera.

Pini Althaus:

That we're sourcing these materials from China, where they've, again by their own admission, has been complete environmental devastation to water bodies around these mines and processing facilities, to the communities. People have been getting sick around these projects yet we're putting these materials into our electric vehicles or wind turbines. It makes no sense at all. And people are starting to wake up to this. And that's why the sector is starting to see a lot of support come out of Congress and bi-partisan support. And in fact, it's one of the only bi-partisan issues right now in Washington. And it's good to see that some things decided to move in the right direction.

Ryan Morfin:

And is there a special process? You talk about the expense, is it really difficult to mine these? You have to go through a special chemical process to extract and clean and purify. Is it a lot harder than, say, gold or silver or some of the other, we'll call, more traditional elements?

Pini Althaus:

Yeah. It's all about the processing to some extent. So if you look at MP Materials in California, which used to be Molycorp before they went through their bankruptcy. They are a miner of Cerium and Lanthanum, which are two of the light rare earths, the lower valued light rare earths. Given that they do not currently have processing technology, they are sending those materials to China for processing where China is tariffing those heavily. Linus is also, they're doing their processing work in Malaysia and elsewhere. So it's really about the processing at this stage. One of the things that we've done, after we put out our PDA last year with our upgraded resource, which now includes a significant amount of lithium. We make a decision that, based on the test work that we had done around our processing methodology, that we were not going to send our materials to China. That it's paramount for us to do this work in the United States and in a collaborative effort as well.

Pini Althaus:

We've been asked by some of our investors, "Well, why would you be looking to help other projects with their processing?" And the answer is simple. There's no one project or one company that's going to put China out of business or make a dent, or somehow be able to take care of the overall demand worldwide for rare earths and critical minerals. And it's very important for us to have processing capability in the West. So that was the impetus for us opening up our own rare earth and critical minerals processing facility earlier this year, which we did in Wheatridge, Colorado. And in fact, we've made some significant progress on the method that we're using for this. And we're starting to collaborate with Australian companies, Canadian companies. We're currently talking to a group over in Europe as well, because this has to be a collaborative effort.

Ryan Morfin:

How does Europe solve for these problems? Do they have this better under control than the US?

Pini Althaus:

No, they're in a far worse position than we are. The EU commission recently put out a report, I think, a couple of months ago that the requirement for rare earths is going to increase tenfold within a short period of time. Lithium 18 times. They don't really have rare earth projects. Again, there are the Greenland projects, which people have heard in the news recently. Those need to further development work so they don't have rare earth projects ready to come online there. There are a couple of lithium projects that are spread around Europe, but for the most part, Europe is in an even more precarious position. If you look at Germany with the auto manufacturers, you look at the big companies like ThyssenKrupp and others, all these countries and companies are looking for alternatives to China, because we've already seen in the news about China withholding or reducing exports of some of these rare earths that are required for these industries.

Ryan Morfin:

And you mentioned earlier the regulatory posture of the US makes it difficult to mine. Is it becoming a more bi-partisan issue that we need to maybe relax some regulation around the mining exercise, to incentivize private sector to come in and start producing this? Or is the Republican party versus the Democratic party on two separate pages of music?

Pini Althaus:

Yeah. Good question, Ryan. I mean traditionally the Republican party is obviously being more pro-mining and in favor of less regulation when it comes to these things. With regards to our project, we're on Texas state land. So we don't trigger federal environmental permitting at this point in time. And obviously Texas being Texas, a mining state and oil and gas state, things are a lot easier in Texas than they are on projects on federal land where the Bureau of Land Management controls the environmental process around that. But the thing is here, and I don't want to step into what other companies are doing, et cetera, but we do need to be reasonable about allowing projects to come online if they're adhering to environmental standards that are acceptable worldwide. And what we do know, is that China is destroying the environment and cities and water bodies around their mines and processing facilities.

Pini Althaus:

We have standards here in the United States, and I think what we need to do is make it easier for companies to mine, while at the same time protecting the environment. And there are ways to do that. And we're definitely seeing buy-in from Congress, from both sides, with regards to looking how we can stand up a secure supply chain. And, obviously under the Obama administration, they had very strict regulations when it comes to mining. And that's changed under the Trump administration. Hopefully what we start to see is some normal middle ground that'll allow other projects to come online.

Ryan Morfin:

And typically in these rare earth mines, is it amalgamation of different minerals that are all consolidated together and you have to separate them out? Or do you ever find pure play, Europium, I can't even pronounce some of these. Gadolinium, Cerium. I mean, are they all mixed together and you've got to filter and sift them through, or are they pure play mines?

Pini Althaus:

No, they're generally they have a mix. So they're polymetallic projects. They have a number of different materials. Some projects, you more to what we call the light rare earths like MP in California or Linus in Australia. Our project is actually on the opposite end of the spectrum. We have a very high concentration of heavy rare earths. That being said, we do have to go through a process of separating these materials. But the case of our project where we've got 30 materials. We're not going to produce 30 materials. We're not going to market 30 materials. So what we're doing is we're focusing on the key materials that are marketable, that we need for permanent magnets, lithium as well, and working on the separation and the optimization of those materials in particular. But we're all faced with the same processing challenges and that is something that can't be set.

Pini Althaus:

There's no easy way to do this. There are different technologies that have been used in different parts of the world. So predominantly there's a process called solvent extraction, but it's big, it's bulky, it's not benign. It's a bespoke solution for one particular project. So it doesn't work for feedstock from other projects. What we've done is we're using a processing technology that's actually been around since the 1940s. It was part of the Manhattan Project. It's called continuous ion exchange. In fact, the Chinese use it to increase the purities from 99.99 to four nines, five nines, and even six nines. So for some applications you require higher purity levels. It's a far easier processing method to scale up and to take feedstock from other projects. In fact, we've demonstrated for the Department of Energy that we can take coal waste from Pennsylvania and do high purity separation of rare earths using our processing methods. So it's not a step that can be skipped unless one needs to send it to China for processing, which is not going to help us with our objectives here.

Ryan Morfin:

How many other, we'll call it, going concerns on any other businesses that are doing this, that are trying to, I guess, start the development of these mines. Are you guys one of a few or are you one of many? And is it an international or just a US game? Who's leading the charge at going after this?

Pini Althaus:

Yeah, well, I'd say the Australians are leading it outside of China right now. You've got some really good projects in Australia. Again, more skewed toward the light rare earths. There's one more heavy rare earth project in Australia, which is not yet producing. The United States, you've got MP Materials, you've got Ucore in Alaska, you've got the Bear Lodge project in Wyoming, which is also another light rare earth project. So as far as a heavy rare earth project that looks like it will come online in the near term, that would be our project. In Canada there are a couple of projects there as well, and again, more skewed toward the light rare earths. But we really need to get as many of these projects online as possible. Because again, I don't see it as competition. We all have a problem doing supply agreements or offtake agreements for our materials.

Pini Althaus:

In fact, one of the things that we're going to have to consider is looking at potentially scaling up our production, based on the demand that we're already starting to see. And I think other companies would find that as well. So it's all about the economics of the project. You have projects that were economically viable back in 2012 or rare earth prices with 35% or so higher than they are today, and are not necessarily viable today. So that's the challenge as well, economically viable projects. And we've got to get as many of them online as possible. It takes many, many years. I mean, our project has had over $70 million put into it to get to where we are today, and we're close to getting to the production scenario. It all revolves around processing at this point in time.

Pini Althaus:

We'd be very happy to see another couple of projects come online, because this is extremely important for national security and for the economy as well. I mean, if you think about it, Ryan, if you've got a billion dollars of rare earth materials, that translates into a trillion dollars or I should say trillions of dollars of finished product. So you've got a magnet in your phone there that's worth a couple of dollars and the cell phone's a thousand dollars. And electric vehicles and defense applications even more.

Ryan Morfin:

Yeah, everyone has one of these iPhones now, and there's tremendous amounts of rare earth on the circuit boards here. And I think people take it for granted that that supply chain is not secure right now. So one question for you, there's talk of this maybe medium term to longterm, but there's talk about mining in space. Do you think that's a feasible option in the longterm, medium term? What are your thoughts on that?

Pini Althaus:

No, that's just ridiculous. I mean, we're trying to find ways to make mining on earth economically viable. I think the cost of going up to space would be more than what our capex will be bringing our entire project into production. I mean, we've got about a 350 to $400 million capex to bring 130 year mine life into production. I'm not an aerospace expert, but I think sending a rocket, building a rocket ship and sending it up, I think maybe on the fuel alone, you could bring a couple of projects into production. So unless we have a fortunate situation or an asteroid lands on earth, and fortunate if it lands somewhere where we don't care, I don't see how that happens. And if it's big enough, it's a problem as well. It's nonsense. And even, options aside of the deep sea mining for rare earths, I mean, you've got all sorts of environmental issues around that as well. I think we need to look at projects that we can bring online, that can be done so in an economic way, that can be done so in an environmentally responsible way.

Pini Althaus:

I mean, one of the things that we've done at our project is we've got in excess of 60% of the materials that have come out around top, will have a clean green energy applicability to them. So we're using the benign processing method. We're going to be using renewable energy on site. In fact, we will likely be putting a solar farm on site as well. We've talked to a couple of companies that have approached us about that, and we'll be a net producer of power for the surrounding area. So there are ways to do it which don't affect the environment. Obviously if there's a project that's situated on a sensitive area, that's a unique situation for that specific project. We've seen it with the Pebble project, which is not a rare earth project. The Pebble project in Alaska where their environmental concerns is we've been recognized by both Republicans and Democrats, but we have to be reasonable about the projects that don't have environmental concerns.

Ryan Morfin:

So Pini, in season two, we ask all of our guests a series of six questions. They're usually, yes, no questions, but trying to take a survey of our conversations. And if you want to add a little context to the yes or no, feel free, but here goes the first question. If there was a COVID vaccine available today, would you take it?

Pini Althaus:

Yes.

Ryan Morfin:

Who do you think is going to win the election?

Pini Althaus:

Which election?

Ryan Morfin:

The US election.

Pini Althaus:

Well, I think it looks like Joe Biden's going to win it, but I think what happens, if we go past January six from my understanding is that the house will vote on it and it's one vote per state. But I don't know if I see it getting there at this point in time. I really don't have a crystal ball.

Ryan Morfin:

Third question. What type of economic recovery are we in? What type of shape is it taking? A V-shape, W, U, L?

Pini Althaus:

Yeah, I think 2021 is going to be challenging. I think we've been, and rightly so. I mean, we've had no choice as of almost every other country. We've been printing money for the past year because of COVID. And I think we've got to brace ourselves that, at some point in time, the chickens come home to roost. It was a necessary step. People needed it on an individual level. Businesses needed it as well, but I think we've got to do whatever we can to stimulate the economy, give people confidence to go out and work again, employ people. So I think we've got to watch ourselves, especially in 2021. And I have some concerns, but long-term, I think the approach in the United States is a healthy one.

Ryan Morfin:

During lockdown this summer and quarantine, was there anything in particular that you accomplished that you're particularly proud of?

Pini Althaus:

Yeah. A great amount of family time, which, if you would've asked me a few years ago if I could sit at home and be at home for six months, I would have told you absolutely not. I wouldn't be able to do it for six days, but it has... I'm sure it's done this with a lot of families as well. It's brought families together. We had a baby actually last year on Thanksgiving. So I was doing a lot of travel at the time and thought I wouldn't get to see my daughter in her first year or couple of years too often. And being home with her every day is actually been just the most amazing experience. So thankful at least for some silver lining in COVID.

Ryan Morfin:

Are there any silver linings that you see in the economy going into 2021?

Pini Althaus:

Yeah, I think we've gone through an absolute beating and it looks like we've got the ability to come out of it. And I think that's a testament to how strong the economy was built up in the years preceding COVID. So overall I remain an optimist. I mean, we are a country built on opportunity and going out and making it happen. And we're not a socialist country sitting and waiting for people to send us paychecks or wealth distribution or anything like that. I think the American dream still lives on. I think if you go out and you're willing to work and put your head to it and heart in it, I think we do have the ability to climb out of it. So if we look at what the economy is doing over the past few weeks, it looks like it's starting to rebound. And to me, that's assuring because it could go completely one way as well.

Ryan Morfin:

And the last question is, is there anything that you're watching, or listening to, or reading today that has been impactful on your thinking that you'd like to share with our audience?

Pini Althaus:

Yeah, that's a good question. I think it's been more personal stories. The news, I sort of take that in context or with more than a grain of salt. In some cases stay off the news channels for a number of days at a time, it became quite repetitive. But I think on the personal side, talking to friends, my family's all back home in Australia, they've just come out of 110 day lockdown, which we can't relate to that. It's been very trying on them and seeing the fortitude that they've had to come out of that and stay intact. I think the mental health issues that will come out of COVID are going to have a far longer effect than the economic issues. I think we're going to have to focus on mental health issues in this country for a long time to come.

Pini Althaus:

The impact on kids has been significant with regards to lockdown or remote schooling, et cetera. But to see people come through it. I think it's a testament to people in general and to the country and other countries as well, to see got that fortitude and survival instinct to try to get through whatever adversity we can. So hearing the personal stories, the challenges that people have gone through, I think it's made me a lot more aware of things that I have to be thankful for and where we can help out other people as well. I think we have to be united going forward because there are things...

Pini Althaus:

I think one of the things that COVID has shown us is we can get into this complacency and life goes on and we go one day to the next. And all of a sudden we get hit by something that affects everybody equally. I mean, COVID, whilst there were groups of people, whether it was the elderly or people with underlying health conditions, that got hit the worst. I mean, we all got hit in some form or another. So really, this should be something that unites us, not divides us.

Ryan Morfin:

Well, Pini, I appreciate you coming on today to talk to us a little bit about the supply chain crimp on rare earth and we'll definitely keep an eye on it and would love to have you back in the future.

Pini Althaus:

Thank you, Ryan. Thanks for having me.

Ryan Morfin:

Absolutely. Thank you. Bye-bye. Thanks for watching Non-Beta Alpha. And before we go, please remember to like, and subscribe on Apple podcasts and our YouTube channel. This is Non-Beta Alpha, and now you know.

 

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