00:00Joining us to talk about all of that is Randall Atkins. He's the CEO of Ramico Resources and former chairman
00:05of the National Coal Council at the U.S. Department of Energy.
00:10So it's great to have you on, Randall. Let me ask first about the earnings, because I'm having a hard
00:16time wrapping my head around revenue fell and you lost money.
00:21What's wrong in the Met Coal business?
00:24Well, the Met Coal business has been challenged for about a year and a half by China. Essentially, China has
00:30been dumping steel on the world markets.
00:32That's had a dramatic effect on price. It's also had a dramatic effect on other economies that have steel production
00:40having to cut back on feedstock costs like iron and Met Coal.
00:45So that's essentially what has been dragging the industry as a whole down really for about the last year and
00:51a half.
00:51And I think you're starting to see some signs of actually a contraction in supply, which may show itself in
00:58the back half of the year and hopefully strengthen prices somewhat.
01:02How does that contraction come about? I mean, dumping is the kind of thing that tariffs used to be made
01:08for.
01:09Is the administration doing something about that Chinese dumping?
01:13And what do you expect the back half of this year to look like in terms of Met Coal and
01:17really steel?
01:18Sure. So the dumping is obviously the steel being overproduced and put on the world markets.
01:24The tariffs have some modest impact. But at the moment, we sell about two thirds of our Met Coal overseas.
01:32So those are the markets that are really being impacted.
01:35And to the supply side, what's happened is that the the market has contracted so much over the last year
01:41or so that you're starting to see bankruptcies.
01:43Again, you're starting to see contraction in supply by mines being shut down.
01:49You saw a large sale of a Met Coal property today by one of the Australian groups.
01:54So I think some point in the next several months, you're going to start to see the supply and demand
02:00balance hopefully come into a little bit more of a sink.
02:02All right. Let's talk about the the Brook mine in Wyoming, I believe.
02:07I believe this is where all the hype is around critical minerals for for Ramaco is are you going to
02:15transition to that as a main business or is this just an option that you've got?
02:20Well, actually, we've got sort of two critical mineral businesses.
02:24We've got obviously our Met Coal business you've referred to and then an emerging rare earth business.
02:30And one of the things we're doing internally is kind of segregating ourselves into various internal divisions.
02:37So at the end of the day, we will have separate producing operations for both rare earth and critical minerals
02:43running sort of distinct from each other.
02:45So you but you have like half a billion dollars in liquidity.
02:51And so I was just wondering how much you put towards the rare earths side of the business and how
02:57much goes into Met Coal.
02:59I guess you've got that operation up and running so you don't really have to do much.
03:03Sure, that's correct. We have some mines that we could grow production on the eastern side of the United States.
03:08And a lot of that cash, as you mentioned, will go into rare earths.
03:12But there's more to come because, as you pointed out in that excellent article that was in your your print
03:20publication last week,
03:22the amount of capital that has to go into developing the United States rare earth industry, if you will, particularly
03:31in the processing side, is going to be immense.
03:32So although we've raised a lot of capital, there's still a lot more to go.
03:37Explain to investors what's happening with the stock, because you had just a tremendous spike last year.
03:46You've come off what looks like it was was was somewhat unsustainable this year.
03:52And even year to date, you're off about a fifth.
03:57So what's going on with with Ramico Resources stock?
04:01Sure. Well, the run up in the stock occurred last summer and early fall.
04:06If you remember, that was the period when the U.S. first started investing, if you will, in private rare
04:13earth operations.
04:14They did a deal with MP materials. There's others that followed.
04:18We were caught up in that exuberance, if you will.
04:22Our stock traded almost into the high 50s.
04:25And then in October, frankly, when Trump met with the Chinese, they came away with the notion that the the
04:33rare earth problem had been solved.
04:34And really, all companies that were touched by the rare earth dropped rather materially.
04:39That chart right there kind of demonstrates that we were trading somewhat in sync with some of the others.
04:45By the way, rare earths, I mean, the mining of them is one part of the process.
04:49But as far as I understand it, processing them, separating them is at least an equally difficult task.
04:59How do you plan on dealing with them once you get them out of the ground?
05:02Well, they have to be processed and refined.
05:05And as you point out, that's that is a very complicated effort is also a very expensive effort.
05:12It's probably the equivalent from the petroleum business about essentially taking the crude and then refining it in a large
05:20industrial plant complex.
05:21So that's that will be our next step.
05:24And because you're dealing with really my new parts, parts per million.
05:29And the picture behind me is of our mine out in Wyoming.
05:33Imagine, you know, mining millions of tons of coal and then having to find parts per million of rare earth
05:39inside that.
05:40So the separation and processing is indeed always a challenge.
05:45And do you partner with somebody, Randall, to do that?
05:49No, we're going to do it ourselves.
05:51We actually have brought on board some of the world's leading experts in processing.
05:55We've actually come up with some unique techniques that we can deploy for coal, because most rare earths are found,
06:02frankly, in hard rock minerals, which are radioactive.
06:06Ours are found in coal, which is soft and does not contain radioactive material.
06:11So we'll take a different tact on the processing.
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