Banker pays $2M for coal mine, discovers $37B rare Earth elements | Hacker News Reader

Banker pays $2M for coal mine, discovers $37B rare Earth elements

finance.yahoo.com

51 pointsthelastgallon32 comments

Cutting to the chase:

Randall W. Atkins has been active in mineral exploration, trading for some decades behind Ramaco Resources: https://www.marketscreener.com/business-leaders/Randall-Atki...

Ramaco has numerous prospects, one of them paid out when testing and proving: https://ramacoresources.com/critical-minerals-rees/

Various outlets have reported the basics, eg: https://www.businesswire.com/news/home/20230503005966/en/

and: https://www.mining-technology.com/news/ramaco-operations-bro...

and, for those that like the inside gritty details, there's a completed Technical Report: https://ramacoresources.com/wp-content/uploads/2023/05/Weir-... 78 pages from May 2023 (Ten minutes reading ... if you read a bunch of these things).

This is not an Economic Feasibility Study (which comes laterr) - it's a report on exploration results with estimates of amount and type of stuff in the ground.

An EF Study will go on from there and determine cost of extraction against market prices and projections and estimate processing costs via various means (third party or capital investment in processing plant).

These are useful resources for electrification and a renewable future .. the amount of waste by product with REE processing is pretty high and generally skated over .. it's everything you get from Coal Mining ("Do you know how much radaition from coal .. etc") and a whole bunch more.

Wyoming had uranium mining and processing facilities which used the same liquid-liquid extraction tech that REE extraction uses. They might actually have the regulations and infrastructure in place to support it (and the superfund sites to show for it).

Interesting that Ramaco Resources Inc has a current market cap of $1 billion, after recently doubling.

I’ll give the straightforward, zero-irony reply: hooray! We have a huge amount of exploitable natural resources that we didn’t know about until recently. This is good.

The thing about rare earth metals is that they are located all over the world - and they're not particularly rare. The problem is that refining them produces huge quantities of toxic waste. China has a near-monopoly on the trade not just because they have a lot of them (they do) but because they're willing to pay the huge environmental penalty associated with the refining. [1]

[1] https://www.bbc.com/future/article/20150402-the-worst-place-...

And by "we have" you mean a couple already wealthy soon to be disgusting rich dudes who have ended up with incredibly valuable mineral rights that the government sells for a small pittance?

(There is benefit to this being in my nation, and it's good for the world that this cache exists for us/humanity to benefit from. But a huge amount of that benefit will be captured by already very wealthy people. That makes me a bit mad and a bit sad, that something so amazing and game changing is so arbitrarily so cheaply sold off. It doesn't seem reasonable. It seems like this great nation is selling off key pieces of itself, is selling off body parts for spare change.)

I'll go one step further and offer the banker some advice.

Sell. Throw an auction, set a insanely low reserve price, and walk away with spending money now.

Sure, walking this through the regulatory minefield, forming a company to mine, process and exploit the resource would maximise value and make the bsnkrr stupendously rich. Or it might fail at some hurdle and consume his life.

In light of this valuation 10m might sound laughable. [1] but that's life-changing money, with time enough left to enjoy it. What use is a billion when you're 80?

There's a point where more money doesn't matter, but time ticks relentlessly away. Don't waste the time, take less money now.

I know, I know, I'm an old man. For someone in their 20s this looks like a lovely long-term career that'll make you stupid rich. And you will get rich. But you'll work hard for it. Time is more precious than money.

[1] granted he may already have this money - he dropped 2m on a coal mine - but pick a number and my point stands.

Then again, there are lots of mining companies so expect some bidding way past 10m. As long as 2 are involved it's not going to be "stolen".

I reckon a banker who makes 2m coal mine investments does not need advice on maximising financial value of an asset

Indeed. From his LinkedIn profile we can see he has 43 years experience in finance.

He is a old man as well and sat as the chairman of the National Coal Council.

I imagine he knows a little something about exploiting a mine.

Honestly it's weird that the title was written as if he's an amateur and not the CEO of a billion dollar company that specializes in mining.

Is there anyone here with relevant expertise about this valuation? I have seen a lot of claims about "rare earth elements" that suggest that rich veins of these elements are not that uncommon - in fact, that the elements themselves are not that uncommon, just difficult to mine economically and incredibly pollutive to process. Is this person's mine of a configuration that is conducive to mining? Is the Wyoming regulatory environment conducive to the mining and processing techniques necessary to exploit this vein?

These numbers always remind of the "street value" of drugs.

yes, they are not particularly rare on the planet, the rare means theres not much in the average bucket of earth.

For those unaware of the economics of physical mining:

It's not uncommon for exploration companies to find large deposits (or potentially large deposits). The issue is usually that the investment required to extract these minerals is large. Depending on the cost of capital and the risks involved this may or may not happen.

Since there is already an existing mine one would think it reduces the risk. But the article doesn't have enough details on the concentration or distribution to know for sure.

Looking at the stock price[1] you can see the jump when the discovery was announced from ~$11 to ~$18. A great increase, but you can see this isn't exactly a sure $37B pay-off.

[1] https://finance.yahoo.com/quote/METC/

> But the article doesn't have enough details on the concentration or distribution to know for sure.

I linked to the Technical Report (that has exactly that infomation) 80 minutes prior to your comment, you may have missed the link: https://ramacoresources.com/wp-content/uploads/2023/05/Weir-...

This kind of stuff happens, right? The "One Shot" mine in California was a played out mercury mine that a dabbler bought as a side project and it turned out to have billions in gold ore.

An important point that the article mostly glosses over: China has cornered the market on rare earths how much you have is entirely irrelevant if it isn't profitably extractable.

https://www.benzinga.com/general/23/12/36051788/wall-street-...

FWIW, original article source rather than the Yahoo mirror.

Interesting article, but does anyone else get the impression it was at least partly AI-written?

Yes. Mostly because the article strangely veered into a tangent of talking about rare earth elements instead of the story behind the title. Very little was expounded on about the banker, or the mine.

Listing some examples of rare earth metals in bullet form is classic LLM behavior.

Yeah that was definitely something I noticed.

https://archive.is/tGxY6

He won the lottery-lottery with a lottery win - sized ticket.

Who sold this for $2M ?

You can check the Wyoming BLM records for the past history of the Brook Mine, near Sheridan, plot parcels, or you could get an account or ask for a demo on something like:

https://www.spglobal.com/marketintelligence/en/campaigns/met...

that archives that stuff daily and has done so for five decades & more.

Me says this is a bullshit story similar to “Parallel Construction” in criminal investigations...

This guy should try doing VC

> At the time, he planned to make money selling coal from his mine to other plants.

What an upstanding citizen. :/

Considering coal is still 20% of American power, and it’s still legal to mine, sell, and consume, there is nothing wrong with his business other than opinions. Democracy has not banned it.

Personally I find working at Google and Meta distasteful because their revenue is generated through massive privacy violations at global scale. It’s more honorable to make money mining coal. At least people want energy.

People also want the insane amount of value Google and its myriad of free(!) services it provides. Most people, especially in the developing world couldn’t give two shits about Google collecting their data to serve them ads in return.

Coal is a necessary evil for now. It’s good its being viewed that way until it’s phased out over the next few decades.

People forget that there's a type of coal upon which steel production is dependent, it isn't always energy.

Most people don’t give two shits about children mining rare earth elements in Congo, so it’s surprising they love their electric cars but despise mining in the US.

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