WEBVTT - Inside the stealth startup making zero-emission steel with Sandeep Nijhawan 0:00:00.480 --> 0:00:05.840 Welcome to zero. I am Akshatrati. This week steel stealth 0:00:06.040 --> 0:00:22.239 and flattening the carbon curve. This summer, I spent three 0:00:22.280 --> 0:00:26.439 weeks traveling around the US visiting climate startups. Today, I'm 0:00:26.440 --> 0:00:29.000 going to tell you the story of one of them, 0:00:29.040 --> 0:00:33.040 a secretive company called Electra that operates out of a 0:00:33.080 --> 0:00:38.400 suburban office park in Colorado. Electra is taking on a massive, 0:00:38.800 --> 0:00:45.360 often unrecognized problem, decarbonizing steel, an industry worth nearly one 0:00:45.400 --> 0:00:49.440 trillion dollars that accounts for seven percent of global greenhouse 0:00:49.479 --> 0:00:53.479 gas emissions. The vast majority of those emissions come from 0:00:53.479 --> 0:00:57.320 the first step in the process of making steel, converting 0:00:57.480 --> 0:01:02.440 iron ore to iron. What a pitch to him is like, 0:01:02.840 --> 0:01:04.960 I had four ideas. Actually, to be honest with you, 0:01:05.120 --> 0:01:07.880 the first idea I was explaining to him was around 0:01:07.880 --> 0:01:11.479 iron steel of electrification at low temperature. And he said, 0:01:11.560 --> 0:01:14.600 let me stop you right there, I'm already sold. That's 0:01:14.640 --> 0:01:19.040 Sundeep Nichhaven, co founder of Electra, describing a conversation with 0:01:19.080 --> 0:01:22.680 his first investor, who was sold on the radical simplicity 0:01:22.800 --> 0:01:27.839 of Whatsonde was proposing zero carbon steel using iron produced 0:01:28.000 --> 0:01:32.320 at low temperature. Since that initial pitch Electra has gone 0:01:32.360 --> 0:01:36.199 on to raise eighty five million dollars. What attracts people 0:01:36.240 --> 0:01:39.160 to Electra is the fact that not only can zero 0:01:39.200 --> 0:01:42.759 carbon steels solve a climate problem, but that it also 0:01:42.840 --> 0:01:46.080 has the potential to make a lot of money. That's 0:01:46.080 --> 0:01:49.000 one reason why Electra has been in stealth mode for 0:01:49.040 --> 0:01:51.360 the last two years. It did not want any of 0:01:51.400 --> 0:01:56.440 its ideas stolen. Now the company is finally talking because 0:01:56.480 --> 0:01:59.520 its idea has gone from a PowerPoint presentation to working 0:01:59.520 --> 0:02:04.040 at lab scale. What's the innovation. Coal plays a big 0:02:04.040 --> 0:02:06.920 part of making steel today. It is used to melt 0:02:06.960 --> 0:02:10.200 iron ore in a furnace and also to extract unwanted 0:02:10.200 --> 0:02:14.240 oxygen atoms. Coal provides both the fuel for heat and 0:02:14.400 --> 0:02:19.000 the carbon for extracting oxygen in the process, forming huge 0:02:19.040 --> 0:02:23.760 amounts of carbon dioxide. Electros technology gets rid of both 0:02:23.800 --> 0:02:27.519 the furnace and the coal. Instead, it uses only renewable 0:02:27.520 --> 0:02:32.000 electricity and completes the reaction of making iron from iron 0:02:32.000 --> 0:02:37.280 ore at temperatures cooler than sixty degrees celsius, no molten metal, 0:02:37.639 --> 0:02:42.120 no carbon emissions, and nothing hotter than your coffee. Crazy 0:02:42.240 --> 0:02:44.760 huh I talked to some leap about how he came 0:02:44.840 --> 0:02:47.200 up with this idea, built a team in the middle 0:02:47.200 --> 0:02:49.840 of the pandemic and what the steel town of the 0:02:49.840 --> 0:03:03.800 future will look for Sunny, Welcome to the show. Thanks 0:03:03.800 --> 0:03:07.320 such please, we're here now. You're trying to solve a 0:03:07.360 --> 0:03:10.360 problem that most people don't think about, but it is 0:03:10.480 --> 0:03:14.080 a massive problem for the climate, and that is how 0:03:14.160 --> 0:03:18.720 to make steel without having emissions. Let's start with stating 0:03:18.720 --> 0:03:21.919 out the problem though. Why is it that steel is 0:03:21.960 --> 0:03:24.920 such a big problem for climate change? Sure, steel is 0:03:25.400 --> 0:03:28.280 the backbone of modern society. Steel is one of the 0:03:28.320 --> 0:03:33.720 hardest to abate sectors, and we produce about one point 0:03:33.800 --> 0:03:38.080 nine billion tons of steel each year. Why is there 0:03:38.120 --> 0:03:41.080 a CEO two problem at all? There is no COO 0:03:41.080 --> 0:03:43.560 two coming in this process. As far as most people 0:03:43.600 --> 0:03:47.920 would understand, the process, steel is actually ninety eight percent ron. 0:03:48.680 --> 0:03:53.560 The way the steel is made today is through a 0:03:53.680 --> 0:03:59.400 pyrometallergy process that uses coal energy. We first melt the 0:03:59.520 --> 0:04:04.280 iron or at about sixteen hundred degrees celsius using coal 0:04:04.720 --> 0:04:08.960 as a source of energy, and that carbon is also 0:04:09.200 --> 0:04:15.760 used to then refine or reduce or transform iron ore 0:04:16.040 --> 0:04:19.240 into pure iron. And that's because iron ore is mostly 0:04:19.240 --> 0:04:22.960 iron and oxygen combined. Whereas what you want for steelmaking, 0:04:23.040 --> 0:04:28.039 it's pure iron or iron mixed with some small other elements. 0:04:28.440 --> 0:04:31.840 That's correct. So from a problem streatment perspective, what this 0:04:31.920 --> 0:04:38.080 translates to is ninety percent of steels emission come from 0:04:38.760 --> 0:04:44.360 refining the iron ore into iron to mix steel. Now, 0:04:44.400 --> 0:04:48.400 it's intuitive that if you use coal to remove the 0:04:48.440 --> 0:04:51.560 oxygen from iron ore, and that coal then ends up 0:04:51.560 --> 0:04:54.839 into CO two emissions, we don't want to use coal. 0:04:55.680 --> 0:04:58.600 There are being solutions that have been put forward where 0:04:58.640 --> 0:05:02.039 people use hydrogen stead because hydrogen can also do the 0:05:02.080 --> 0:05:07.239 same job and convert the hydrogen and oxygen mixture into water, 0:05:07.680 --> 0:05:12.360 which does not contribute to climate change. So if we 0:05:12.440 --> 0:05:15.760 have that solution, why try something else? First of all, 0:05:15.839 --> 0:05:20.440 I mean steel is a two billion ton market one dollars, 0:05:20.520 --> 0:05:23.960 So I think what leads multiple solutions to come to 0:05:24.040 --> 0:05:26.880 a resolution or transformation or how are we going to 0:05:26.960 --> 0:05:29.400 do that? Having said that, a hydrogen As we know, 0:05:30.120 --> 0:05:33.960 one of the challenges with hydrogen is it's availability and cost. 0:05:34.920 --> 0:05:37.800 So to get to zero green premium steel, you need 0:05:37.920 --> 0:05:41.080 hydrogen add a dollar a quilo when itself. When you 0:05:41.279 --> 0:05:44.200 say zero green premium, you're basically saying at the same 0:05:44.240 --> 0:05:47.560 cost as steel that can be made using coal correct 0:05:47.680 --> 0:05:51.120 without any carbon subsidy. You need dollar akuilo hydrogen to 0:05:51.279 --> 0:05:57.320 do that. But even more important, the issue of transforming 0:05:57.520 --> 0:06:01.440 our global steel production to an hydrogen based process comes 0:06:01.440 --> 0:06:04.720 down to the availability of ores that are needed to 0:06:04.760 --> 0:06:09.080 make hydrogen based steel green steel. And the reason that 0:06:09.480 --> 0:06:13.240 becomes a problem is that hydrogen risk process needs the 0:06:13.320 --> 0:06:17.080 highest grade of iron content available in the ores to 0:06:17.320 --> 0:06:22.000 make that happen, and the world is running out of 0:06:22.440 --> 0:06:26.159 high grade ores that are available for steelmaking. At the 0:06:26.200 --> 0:06:29.599 same time, it's not that the world doesn't have iron ore. 0:06:29.920 --> 0:06:32.320 I mean, our planet is made of iron and there's 0:06:32.360 --> 0:06:35.159 plenty of iron ore. It's that it has certain grades 0:06:35.200 --> 0:06:38.279 of ore that cannot be economically processed, which is that 0:06:38.279 --> 0:06:40.479 there are a lot of impurities, a lot of impurities, 0:06:40.520 --> 0:06:44.760 and impurities are like phosphorous, impurities are hy silica, high alumina. 0:06:44.960 --> 0:06:48.200 For example. There is eight billion tons of reserves of 0:06:48.480 --> 0:06:52.240 high fast containing ores in just one country like Australia, 0:06:52.560 --> 0:06:56.359 but that is worldwide. You will find these kinds of ores. Okay, 0:06:56.360 --> 0:07:00.640 so you're not using hydrogen to make your carbon free steel. 0:07:01.400 --> 0:07:05.120 What is your solution that has got investors giving you 0:07:05.160 --> 0:07:07.960 eighty million dollars to solve it. What we have is 0:07:08.520 --> 0:07:12.800 what's starting with a clean sheet design a process to 0:07:13.000 --> 0:07:19.680 electrify iron making using widely available lower grade ores and 0:07:20.040 --> 0:07:27.120 radically shifting the operating temperature of the process from sixteen 0:07:27.200 --> 0:07:34.560 hundred degrees to sixty degrees celsius and thereby displacing the 0:07:34.640 --> 0:07:41.360 carbon intensive coal energy with renewable energy to make pure iron. 0:07:41.760 --> 0:07:44.480 And your process has no fire attached to it, all green. 0:07:44.640 --> 0:07:47.400 It is low temperature. In fact, you could touch it, 0:07:47.680 --> 0:07:52.200 and I mean it is as benign from a temperature 0:07:52.240 --> 0:07:55.200 perspective you can get. Yeah, your coffee is brewed at 0:07:55.240 --> 0:07:58.560 higher temperature. Coffee is brewed at eye temperature. Absolutely. So 0:07:58.680 --> 0:08:02.000 you go from the process as it exists today, where 0:08:02.000 --> 0:08:06.320 you take iron or burn coal heated to sixteen hundred 0:08:06.360 --> 0:08:10.880 degree celsius create iron, and in the process even steel. 0:08:11.120 --> 0:08:14.120 It's a one place process. Iron or comes into a plant, 0:08:14.120 --> 0:08:16.640 it goes through a series of steps and outcomes steel. 0:08:17.080 --> 0:08:19.960 You're splitting that process into two steps. You're making only 0:08:20.000 --> 0:08:23.160 iron first and then somebody else will make the steal. 0:08:23.600 --> 0:08:26.440 But because iron making is ninety percent of emissions, that's 0:08:26.440 --> 0:08:29.360 the step you want to attack with your solution. That's correct, 0:08:29.600 --> 0:08:32.280 That's where the problem is. Where it is how do 0:08:32.320 --> 0:08:35.679 we get to pure iron without having emissions? Okay, so 0:08:35.720 --> 0:08:38.040 you're not using hydrogen. You're not going to heat this 0:08:38.120 --> 0:08:40.640 to sixteen hundred degrees celsius, but keep it at sixty 0:08:40.640 --> 0:08:44.559 two celsius. You're going to use electricity. Whereas that electricity 0:08:44.600 --> 0:08:48.720 coming from because most electricity generation even today has carbon 0:08:48.760 --> 0:08:52.000 dioxide emissions attached to it. Yeah. What we bring you 0:08:52.080 --> 0:08:56.600 forth is our ability to use intermittent renewable electricity, which 0:08:56.679 --> 0:09:00.839 is of course now increasably available at Kale. So this 0:09:01.040 --> 0:09:03.520 is solar and wind. Correct needs a solar and wind. 0:09:03.520 --> 0:09:06.000 If hydro is available, we'll use hydro as well. But 0:09:07.040 --> 0:09:09.680 what is the cheapest form of zero carbon electricity is 0:09:09.800 --> 0:09:14.439 intermittent solar and wind today. Period. Let's talk about how 0:09:14.520 --> 0:09:18.239 you arrived at this solution in the first place, because 0:09:18.880 --> 0:09:22.199 you weren't making steel before this. Your previous companies had 0:09:22.240 --> 0:09:28.720 to do with hydrogen production and energy storage, So why 0:09:29.320 --> 0:09:32.480 go down the route of making steel? Yeah. So my 0:09:32.520 --> 0:09:36.520 background is in electrochemical conversion systems. So one of those 0:09:36.520 --> 0:09:39.840 batteries storage companies that I had was developing an iron 0:09:39.880 --> 0:09:44.800 based battery storage. It was actually specifically nickel iron. So 0:09:44.840 --> 0:09:48.880 that's Edison's chemistry under de year sold highly robust chemistry, 0:09:48.880 --> 0:09:52.400 but iron is the means in which you're storing the energy. 0:09:52.559 --> 0:09:54.760 So I know a few things, not half, but a 0:09:54.800 --> 0:09:58.880 few things about iron, I would say, And my career 0:09:59.040 --> 0:10:02.319 of other doing energy storage or hydrogen, we're all tied 0:10:02.360 --> 0:10:06.920 towards decarbonization as a professional goal, and that being the 0:10:07.000 --> 0:10:11.800 north star of my career. And Electra is really continuation 0:10:11.880 --> 0:10:14.600 of the journey in terms of picking one of the 0:10:14.679 --> 0:10:20.040 hardest to abate sectors and then if there is a 0:10:20.040 --> 0:10:23.160 solution to be had, then making a big impact with it. 0:10:23.880 --> 0:10:26.960 And so you come to this point where you're like, Okay, 0:10:27.320 --> 0:10:30.280 this is a big problem. I need to solve this. Yeah. 0:10:30.400 --> 0:10:33.240 So I started thinking about this at the peak of 0:10:33.240 --> 0:10:36.959 the pandemic in March twenty twenty. So you remember, how 0:10:37.000 --> 0:10:39.920 can we flatten the curve? Remember flattening the curve? We 0:10:39.960 --> 0:10:41.600 feel like, if we can get America to all pitch 0:10:41.679 --> 0:10:44.800 in for the next fifteen days, we can flatten the curve, 0:10:44.840 --> 0:10:46.320 which is a term that you've been hearing a lot, 0:10:46.440 --> 0:10:49.560 not overwhelm our healthcare systems. And I was basically Okay, 0:10:49.640 --> 0:10:52.400 that's great. I'm not a biologist. I can really impact 0:10:52.400 --> 0:10:56.000 the thing. What can I do to flatten the global 0:10:56.200 --> 0:10:59.240 temperature that has been rising and is expected to go 0:10:59.280 --> 0:11:01.320 to two degrees cells? And that's where I said, well, 0:11:01.400 --> 0:11:04.120 let's pick the problem like steel, which can have a 0:11:04.200 --> 0:11:06.960 huge impact. I remember in Match twenty twenty, I was 0:11:07.040 --> 0:11:09.079 just worried that we may not be able to find 0:11:09.120 --> 0:11:11.440 a vaccine. You know, I am a climate journalist. I 0:11:11.440 --> 0:11:13.960 was thinking about climate change, but I wasn't thinking about 0:11:14.160 --> 0:11:16.800 starting a company that would transolve a climate problem rather 0:11:16.840 --> 0:11:21.840 than a vaccine problem. While you know, pandemic was not 0:11:22.760 --> 0:11:25.760 the place I would wish to have again ever, but 0:11:25.880 --> 0:11:29.040 I was through a transition of my previous companies. There 0:11:29.080 --> 0:11:30.319 was not a whole lot. You can go on a 0:11:30.360 --> 0:11:33.720 vacation or set on a beach and do a whole 0:11:33.720 --> 0:11:36.000 lot of things. So there was plenty of time to 0:11:36.080 --> 0:11:40.720 sort of think and sort of refine my thinking of 0:11:40.720 --> 0:11:43.880 what can be done here. And I don't have a 0:11:43.880 --> 0:11:46.480 background in steelmaking, but as an entrepreneur, I'm a very 0:11:46.480 --> 0:11:49.600 fast learner. And so you thought about it, You thought 0:11:49.640 --> 0:11:52.800 about the problem, and you made a PowerPoint presentation. That's correct. 0:11:52.840 --> 0:11:55.760 There were seven slides in it, and it was actually 0:11:55.800 --> 0:11:59.760 a five minute conversation with our lead investor, which is 0:12:00.040 --> 0:12:03.320 Bill Gates founded Breakthrough and Energy Ventures in particular Dave 0:12:03.400 --> 0:12:06.920 Danians in there. And what I pitched to him is 0:12:07.000 --> 0:12:10.280 like I had four ideas. Actually, to be honest with you, 0:12:10.360 --> 0:12:12.760 steel was one of them, and I said, I need 0:12:12.800 --> 0:12:14.920 thirty minutes to walk you through some of these ideas 0:12:14.960 --> 0:12:18.440 I have. First idea I was explaining to him was 0:12:18.480 --> 0:12:22.040 around iron and steel of electrification at low temperature. And 0:12:22.080 --> 0:12:24.200 he said, let me stop you right there, and he said, 0:12:24.200 --> 0:12:26.040 you don't have to go any further than that. I'm 0:12:26.080 --> 0:12:29.160 already sold. If you could do this thing, that's what 0:12:29.200 --> 0:12:30.680 I want to do. I don't want to hear the 0:12:30.760 --> 0:12:35.320 next three ideas. And that was a journey we started 0:12:35.400 --> 0:12:42.360 on in March thirteen, twenty twenty, the day before California 0:12:42.400 --> 0:12:45.600 shut down, right, okay, And that was my first and 0:12:45.679 --> 0:12:49.040 only investor meeting, phase to phase I ever had for 0:12:49.120 --> 0:12:52.480 the next two years. Okay. And so how big a 0:12:52.600 --> 0:12:55.199 check did he get? Our first check at the seed 0:12:55.840 --> 0:12:59.360 was two point two five million, not just from Breakthrough 0:12:59.440 --> 0:13:03.800 but number of investors, and my pitch to all of 0:13:03.840 --> 0:13:06.240 them was look, I don't know if this can be done. 0:13:06.400 --> 0:13:10.240 I've thought through the problem and ask the experts. I 0:13:10.280 --> 0:13:14.120 think there's a feasibility path. But all I need is 0:13:14.800 --> 0:13:17.559 less than ten people, maybe a year, year and a 0:13:17.679 --> 0:13:20.840 half to run this thing to ground, to prove to 0:13:20.960 --> 0:13:23.920 myself first can this be done? Because if this cannot 0:13:23.960 --> 0:13:26.880 be done, I have idea number two, three, and four 0:13:27.280 --> 0:13:30.720 to work on and they're also big problems to solve. 0:13:30.880 --> 0:13:34.000 And we had the money in the bank by end 0:13:34.000 --> 0:13:37.920 of June. Essentially it took us three and a half 0:13:37.960 --> 0:13:41.720 months to close that round. And then what did you 0:13:41.760 --> 0:13:44.200 do next? Because you needed more people, you needed some science. 0:13:44.800 --> 0:13:47.760 The success of any thing, at the end of the 0:13:47.840 --> 0:13:50.320 day comes to the team, right, So we need people 0:13:50.360 --> 0:13:53.840 who can essentially think through a problem, picked on a 0:13:53.880 --> 0:13:59.480 problem like this, find the fatalities and solve them in 0:13:59.520 --> 0:14:02.960 the right sequence. Because you don't have time or the 0:14:03.000 --> 0:14:05.600 money to boil the ocean, so you have to really 0:14:05.640 --> 0:14:09.560 think through what needs to happen, what has to be 0:14:09.720 --> 0:14:12.520 met to move forward. Okay, that there is a path 0:14:12.559 --> 0:14:16.000 forward here. Of course, we started in a garage. No, 0:14:16.200 --> 0:14:18.959 it really was a garage. I mean that's a Silicon 0:14:19.000 --> 0:14:21.600 valley stereotype. It is not a stereotype. It is the 0:14:21.640 --> 0:14:26.640 real answer because it's one of our employees that later 0:14:26.720 --> 0:14:29.480 joined as employee. He was started as a consultant, and 0:14:29.600 --> 0:14:33.280 of course some of these folks started without getting paid 0:14:33.480 --> 0:14:36.800 because we didn't have money to pay them. And the 0:14:36.880 --> 0:14:39.320 idea was if he could raise the money, you know, 0:14:39.400 --> 0:14:41.280 you will have an opportunity to think about you want 0:14:41.280 --> 0:14:42.920 to join full timent on because it's a very high 0:14:43.000 --> 0:14:45.640 risk project. Some of them had full time jobs and 0:14:45.680 --> 0:14:49.560 this is pandemic, you know. I remember people are losing jobs, 0:14:49.800 --> 0:14:53.040 a lot of instability in the economy, and people were 0:14:53.080 --> 0:14:57.400 hunkering down in terms of keeping their head about the water. Right. 0:14:58.400 --> 0:15:01.160 So it was one of the employees that we have 0:15:01.280 --> 0:15:07.160 today his garage and he's also has a machine shop 0:15:07.200 --> 0:15:09.800 there that he makes parts with on its free time. 0:15:09.920 --> 0:15:14.160 He makes drones actually at a hobby. So it was 0:15:14.280 --> 0:15:17.600 very convenient garage where we can build parts and we 0:15:17.640 --> 0:15:23.080 can start making our test equipment and sells. Of course, 0:15:24.440 --> 0:15:27.000 we cannot do certain things in the garage from safety perspective, 0:15:27.080 --> 0:15:29.160 so we had to wait to get to a real 0:15:29.840 --> 0:15:34.160 laboratory where we can run experiments. So beyond the PowerPoint 0:15:34.200 --> 0:15:36.160 did you really have a plan for how you would 0:15:36.200 --> 0:15:40.640 solve the problem? Look, I did have a starting point, right, 0:15:40.680 --> 0:15:43.600 So it was in this case almost ignorance was a bliss. 0:15:44.160 --> 0:15:46.880 What you don't know, you don't know. But what you're 0:15:46.920 --> 0:15:50.200 promising to the investor is luck. We will run this 0:15:50.280 --> 0:15:53.320 thing to ground. We will figure out every possible plan 0:15:53.400 --> 0:15:57.120 of attack. And I knew exactly when I started who 0:15:57.120 --> 0:15:59.800 the best person would be that could do it. That 0:16:00.200 --> 0:16:03.280 person was Quak Pham, who we met on our tour 0:16:03.360 --> 0:16:05.840 of the company. Do I need to introduce myself? Yeah, 0:16:05.880 --> 0:16:08.040 so you're name for me, I'm quick Fam. I'm a 0:16:08.120 --> 0:16:12.120 chief technology officer and co founder of electrac So welcome. 0:16:13.920 --> 0:16:16.360 Quak was at another company that I actually had a 0:16:16.400 --> 0:16:19.480 non solicit I actually could not go to Quak and 0:16:19.600 --> 0:16:22.280 bring him and say, Quak com please join me. That 0:16:22.320 --> 0:16:25.440 would be violation of my contract. It was actually around 0:16:25.680 --> 0:16:29.000 early August that Quak called me, but not me calling him. 0:16:29.120 --> 0:16:32.000 Quak called him like, Okay, I'm done. I want to 0:16:32.040 --> 0:16:35.320 do something different, and I said, well, timing is perfect, 0:16:35.760 --> 0:16:38.920 and here's what I am thinking. What Sunnips thinking was 0:16:39.000 --> 0:16:42.320 maybe they could make iron the way other metals are made, 0:16:42.600 --> 0:16:47.200 like zinc, aluminum, and copper. They're all made using electricity. 0:16:47.280 --> 0:16:50.760 But when you come to iron, this becomes really a 0:16:50.840 --> 0:16:55.240 mess because iron does not behave like the other metals. Remember, 0:16:55.320 --> 0:16:58.480 iron ore is made of iron and oxygen. To get 0:16:58.480 --> 0:17:00.800 the pure iron that you need to make the steel, 0:17:01.320 --> 0:17:05.040 you have to separate iron from oxygen. That can be 0:17:05.080 --> 0:17:10.200 accomplished with electricity, which is the promise Sunday made two investors. 0:17:10.240 --> 0:17:14.600 But you cannot pass electricity through solid iron ore. You 0:17:14.640 --> 0:17:18.320 need to dissolve iron ore in a liquid, first, an acid. 0:17:18.400 --> 0:17:21.560 In this case. Figuring out how to dissolve iron ore 0:17:21.640 --> 0:17:25.240 in acid was Quak's first job the moment we get 0:17:25.240 --> 0:17:28.440 the lab space. The very first experiment that I rank 0:17:28.640 --> 0:17:31.399 in the lab was to verify can we even dissolve 0:17:31.520 --> 0:17:35.159 I know and not too much. To my surprise, we 0:17:35.200 --> 0:17:39.280 could not, And so I remember going to Sunday's office 0:17:39.520 --> 0:17:42.320 and I told him, Hey, I have a bad news 0:17:42.320 --> 0:17:45.400 for you. Need to sit down. We cannot dissolve iron 0:17:45.560 --> 0:17:48.760 or so, which means that forget about what we plan 0:17:48.840 --> 0:17:51.320 to do, because that's the very first step. It doesn't 0:17:51.320 --> 0:17:54.480 happen in a story. So I joke with him that 0:17:54.600 --> 0:17:59.120 could have been my shortest thought up life ever, but 0:18:00.040 --> 0:18:02.800 upting the fact that it doesn't dissolve, accepting that I 0:18:02.880 --> 0:18:06.239 may have a short job opportunity. Here, let's see if 0:18:06.359 --> 0:18:09.400 I can tone a situation around. And he did turn 0:18:09.440 --> 0:18:12.280 the situation around. In a few months, Electra had the 0:18:12.320 --> 0:18:15.879 whole process from iron ore to iron made with only 0:18:15.880 --> 0:18:20.080 electricity working on a lab bench. Now Electro does not 0:18:20.200 --> 0:18:22.560 want to share the secret sauce of how they made 0:18:22.560 --> 0:18:25.560 it happen, but I spoke to experts who reviewed parts 0:18:25.560 --> 0:18:29.760 of the technology and confirmed it is feasible. And the 0:18:29.800 --> 0:18:32.760 proof is in the pudding. When electricity is used for 0:18:32.760 --> 0:18:36.240 this process, the iron oxide is broken into oxygen, which 0:18:36.320 --> 0:18:39.760 is released as a gas, and iron which is plated 0:18:39.840 --> 0:18:45.160 onto an electrode. I got to see those plates. Yeah 0:18:45.240 --> 0:18:50.000 please with the silvery gray metal on them. Yeah, I 0:18:50.000 --> 0:18:52.560 don't think I have a helpier and in this form 0:18:52.560 --> 0:18:56.560 of first small ones the size of business cards, and 0:18:56.600 --> 0:18:59.600 then large ones the size of office paper. I even 0:18:59.640 --> 0:19:02.879 held them in my hands and surprise, surprise, it's heavy. 0:19:03.320 --> 0:19:07.240 They were heavy. Before it can be commercial, those plates 0:19:07.280 --> 0:19:10.600 will have to be much larger, something like three feet 0:19:10.640 --> 0:19:13.800 by three feet. After the break, I talked to us 0:19:13.800 --> 0:19:16.200 and Leap about how all this goes from the lap 0:19:16.200 --> 0:19:34.520 bench to a factory in a town near you. And 0:19:34.680 --> 0:19:36.760 each of those steps that you had to solve those 0:19:36.800 --> 0:19:40.000 were known science. It's just that the combination of those 0:19:40.080 --> 0:19:43.560 known science steps done in the specific way that you 0:19:43.640 --> 0:19:47.960 have done, is what is the core innovation of electra. 0:19:48.520 --> 0:19:51.199 That's correct. We are not inventing new science. We are 0:19:51.200 --> 0:19:53.760 not inventing new catalysts, we are not inventing new on 0:19:53.840 --> 0:19:58.600 optanium material. Every aspect of science, all the material systems 0:19:58.640 --> 0:20:01.960 that we are needed to make this innovation happen is 0:20:02.000 --> 0:20:07.320 readily available. Parts of it are used in different processes, 0:20:07.760 --> 0:20:11.240 and our real innovation is bringing this all together to 0:20:11.280 --> 0:20:15.240 solve the problem. Iron and steel especially is a very 0:20:15.320 --> 0:20:17.760 cheap commodity. Yes, it has a climate problem, and it's 0:20:17.760 --> 0:20:19.960 a cheap commodity because we have to use it at 0:20:20.040 --> 0:20:23.520 such a scale. So you had to use every step 0:20:23.560 --> 0:20:26.280 to be such a cheap, easy to do step that 0:20:26.400 --> 0:20:28.600 you could replicate the cost of steel as you can 0:20:28.640 --> 0:20:31.400 buy it from the market today. That is absolutely correct. 0:20:31.480 --> 0:20:33.760 And in addition to that, what I will also add 0:20:33.800 --> 0:20:36.600 less not forget our heads only money for a year, 0:20:37.680 --> 0:20:42.320 so time pressure do or die in a startup is real. 0:20:43.280 --> 0:20:46.879 You don't have ten years to develop the science to 0:20:47.240 --> 0:20:50.480 create a new catalyst, to create a new material. It 0:20:50.640 --> 0:20:55.359 had to be solved or we move on from a 0:20:55.400 --> 0:20:58.600 fatality perspective. That was very important. You have to be 0:20:58.680 --> 0:21:01.120 in that pressure cooker to be on with you rather 0:21:01.240 --> 0:21:06.040 than having in finite time available and resources available to 0:21:06.119 --> 0:21:08.879 see what can be done in a different way. So 0:21:09.320 --> 0:21:11.440 twenty twenty one you found a way to try and 0:21:11.640 --> 0:21:15.000 make these different steps work. What have you been doing 0:21:15.080 --> 0:21:18.320 for the last eighteen months. Yeah, So in early twenty 0:21:18.320 --> 0:21:20.920 two Q one or twenty twenty one, we had on 0:21:21.000 --> 0:21:23.639 a bench top the entire process now going all the 0:21:23.720 --> 0:21:28.359 way from or into pure Iland already on place, using 0:21:28.440 --> 0:21:31.440 that process and showing that it can be economically done 0:21:31.560 --> 0:21:35.000 at a price point that the world needs. We then 0:21:35.640 --> 0:21:39.520 went and raised additional capital and we raise twenty eight 0:21:39.600 --> 0:21:43.920 million by June of twenty twenty one, and we brought 0:21:44.000 --> 0:21:49.040 in other investors co investors into our syndicate. So now 0:21:49.119 --> 0:21:52.240 we have total raise eighty two million dollars. Since talking 0:21:52.280 --> 0:21:54.639 to sleep in August, the number has gone up to 0:21:54.800 --> 0:21:58.119 eighty five million dollars. And one of your investors is 0:21:58.240 --> 0:22:02.720 a mining company called BHP. Why is BHP interested in this? 0:22:03.520 --> 0:22:07.440 To be honest, bringing strategic investors very early in the 0:22:07.520 --> 0:22:11.560 startup is not what a typical venture capital community will 0:22:11.560 --> 0:22:16.880 advise you to do. That and I overrule that largely 0:22:17.040 --> 0:22:20.040 knowing or having a gut reaction that ores are going 0:22:20.119 --> 0:22:21.800 to be a big part of the story. So the 0:22:21.920 --> 0:22:26.360 goal of that strategic partnership was to explore what can 0:22:26.440 --> 0:22:29.920 be done from the ore side, and how expansive is 0:22:29.920 --> 0:22:33.280 our process in dealing with impurities, and what kind of 0:22:33.320 --> 0:22:35.879 ores can be used to make green steel. So, if 0:22:35.920 --> 0:22:39.640 I'm hearing you right, your solutions are you use as 0:22:39.800 --> 0:22:43.639 much energy or less energy than the conventional process. That 0:22:43.880 --> 0:22:47.399 energy is electricity that can be intermittent and renewable, so 0:22:47.520 --> 0:22:50.320 it has no carbon attached to it. And you can 0:22:50.520 --> 0:22:53.520 use lower grade iron ore, which is cheaper to get. 0:22:53.680 --> 0:22:55.879 So if you combine that and you scale it up, 0:22:56.280 --> 0:22:59.879 you'll have presented a carbon free, cheaper way to make iron. 0:23:00.800 --> 0:23:02.919 But then you have to make steel, right, that's correct, 0:23:03.000 --> 0:23:05.040 and then the next step is just really mixing it 0:23:05.160 --> 0:23:07.159 in the right order. And the next step is to 0:23:07.240 --> 0:23:09.520 take the iron and again smelt it or melt it 0:23:10.200 --> 0:23:13.160 and then adding other constituents to it to give steel 0:23:13.160 --> 0:23:17.320 its strength. But melting something is a very small amount 0:23:17.320 --> 0:23:21.040 of energy that is needed to make steel. It's very 0:23:21.080 --> 0:23:24.240 counterintuitive to most people. I would think, when you look 0:23:24.280 --> 0:23:26.960 at a hot piece of metal that's been melted, you go, 0:23:27.040 --> 0:23:29.119 oh my god, that would have taken a lot of energy. 0:23:29.640 --> 0:23:31.560 But when you look at iron ore and then you 0:23:31.640 --> 0:23:35.879 look at iron metal, you don't think energy. That's correct 0:23:36.040 --> 0:23:39.800 because what we are not seeing is that the energy 0:23:39.960 --> 0:23:48.359 is predominantly used to split oxygen that is bonded to iron, 0:23:48.560 --> 0:23:51.720 and that's where the bulk of the energy goes to 0:23:52.160 --> 0:23:54.520 get the oxygen out. Now, if you use carbon, it 0:23:54.640 --> 0:23:57.520 makes COO two. If you use electrons, you do not 0:23:57.600 --> 0:24:00.600 produce any COO two, and you can get to pure iron, 0:24:00.760 --> 0:24:02.960 which is again the goal of all of these processes 0:24:03.119 --> 0:24:08.040 is before you can get to steal, when will you 0:24:08.240 --> 0:24:12.639 have your first factory making this carbon free iron and 0:24:12.800 --> 0:24:18.520 hopefully steal after that. We are working on building a pilot, 0:24:20.359 --> 0:24:22.880 and we should have this pilot working in twenty twenty three. 0:24:23.359 --> 0:24:27.080 This will be an industrial scale pilot. And what I 0:24:27.200 --> 0:24:30.040 mean by that I need to clarify is that it 0:24:30.160 --> 0:24:36.159 will have iron plates that are being produced a low 0:24:36.200 --> 0:24:41.440 temperature process, which are meter square type of area, and 0:24:42.680 --> 0:24:46.080 the goal of that pilot is to stress test the 0:24:47.359 --> 0:24:51.200 design of the commercial plant we're actually doing at this point. 0:24:51.560 --> 0:24:53.840 So we need a place where we can stress test 0:24:54.359 --> 0:24:57.160 all the design in terms of what works, what doesn't work, 0:24:57.200 --> 0:24:59.480 and how do we scale that up to a full 0:24:59.520 --> 0:25:02.679