Europe imports nickel from Indonesia, refines it, ships it, uses it, and then throws roughly half of it into a landfill without it ever doing a single day of work. Marco Bersani, CEO and Co-Founder of the Italian company Circular Materials (opens in a new tab), built a business on the other side of that sentence: manufacturers pay him to take their hazardous wastewater, and he sells the critical metals he pulls out of it. The European Commission named the technology a Strategic Project under the Critical Raw Materials Act, and REEx covered the EUR 11.8 million raise funding its next build. In this conversation with hosts Dustin Olsen and Daniel O'Connor, Bersani makes the case that the highest-grade critical metals resource in Europe is not in the ground at all.
A Resource Richer Than Almost Any Ore Body
The central claim of the episode is a grade comparison. Industrial wastewater from pickling, de-scaling, surface treatment, plating and pharmaceutical catalysis carries dissolved metal at concentrations that would be extraordinary in a mine.
- 10,000 to 100,000 ppm: the metal concentration in the streams Circular Materials treats, equal to 1 to 10 percent by mass.
- A fraction of a percent: what conventional ore bodies typically carry. As Bersani puts it, miners would dream of a 1 to 10 percent ore.
- 10 million tonnes a year: the size of the European industrial wastewater market, excluding iron and aluminium, which the company does not target.
- 12,000 to 15,000 tonnes: his low-end estimate of mixed critical metals lost across Europe annually, roughly 6,000 to 7,000 tonnes of nickel and chromium plus at least as much copper.
- Three to four times larger: his top-down read on the US market, implying 40,000 to 50,000 tonnes a year.
The catch is not grade but variability. Every company, every process and every product yields a different chemistry. The same 50,000 ppm of nickel might sit in a chloride matrix, a sulfide matrix, or a solution loaded with additives and organic solvent. In principle that demands a bespoke process per customer, which is exactly why the resource has been left alone.
How Supercritical Water Precipitation Works
Circular Materials solves the variability problem by acting on the solvent rather than on each metal. Its SWaP process, short for Supercritical Water Precipitation, takes water above its critical point and changes the dielectric constant of the medium.
- Metal agnostic by design: changing the properties of what surrounds the dissolved ion forces essentially any metal to crash out as a very fine powder.
- Better than 99.9 percent: the precipitation rate Bersani says the process consistently achieves.
- Built for something else first: the technology was originally developed to synthesise metallic powders. Applying it to waste solutions was, in his word, serendipitous.
- Portable: the equipment is neither site nor industry specific. Bersani says a site can be dropped anywhere, powered up, and start recovering whatever the local manufacturing base is discarding.
The Business Model: Paid to Take the Feedstock
This is where the company separates itself from the rest of the metals recycling sector, and it is the part Bersani most wants investors to understand.
- No payables: manufacturers pay Circular Materials hundreds of euros to accept 100 kilos of dissolved nickel. The company is not buying feedstock, it is being paid to handle a hazardous waste.
- Profitable on the service alone: if the company gave away every metal it recovered, it would still be profitable, if only slightly. The recovered metal is pure margin on top.
- Insulated from price swings: conventional recyclers are squeezed between what they pay for feedstock and what they can sell. If cobalt drops 30 percent, that window narrows. Because the process is metal agnostic, Circular Materials can shift focus to chromium or tin instead.
- CapEx intensive by choice: the company builds and operates recovery hubs inside industrial districts rather than licensing or renting equipment. Bersani describes SaaS-like margins on a critical metals business.
- Sold up the value chain: recovered metal can go out as scrap, as commodity, or as advanced materials. The goal is advanced materials wherever possible.
What Actually Gets Recovered Today
Asked how mature this corner of the market is, Bersani was blunt. The standard treatment route converts dissolved metals, legally classified as pollutants, into a hazardous sludge bound for landfill. That is the global default.
- Around 70 percent: effective recovery for non-gold precious metals, meaning roughly 30 percent of platinum group and other precious metals is still discarded.
- Well below 5 percent: recovery for non-precious metals. The exceptions are a few electrowinning operations on unusually stable, concentrated streams.
- Hundreds of kilos of palladium a year: what some of his customers were throwing away before working with him. Silver below 2,000 ppm, he notes, interests nobody.
- Europe and the US look alike: same markets, same technologies, same players. Asia is driven by different factors.
Why the Big Engineering Firms Do Not Do This
Daniel O'Connor raised the large US water engineering firms, Burns and McDonnell, Brown and Caldwell, Jacobs, as possible intermediaries. Bersani drew a sharp distinction: those firms reclaim water, for environmental compliance and discharge thresholds. None of them provide a service to recover the metal. Part of the reason is accounting. The discarded metal already sits on the balance sheet as a production cost, so nobody expects to get it back. He adds that all of those firms have approached Circular Materials about licensing, and that the company is not ready to license, partly because its own customers asked for the opposite: run it as a service, so a semiconductor manufacturer can stay focused on manufacturing semiconductors.
From a Saturated Padova Site to Ferrara and the United States
- Padova, operating and full: one fully authorised site outside Venice handling 500 to 1,000 tonnes of wastewater a year, already saturated.
- Ferrara, ten times larger: the site is secured. Target throughput is 20,000 tonnes of wastewater a year yielding 1,000 tonnes of mixed metals.
- Roughly EUR 20 million raised to date including the latest SAFE, plus about EUR 3 million in public grants. Half is in the bank for the Ferrara build, with more still to raise to complete it.
- Three or four US sites planned: Bersani is particularly interested in American semiconductor and electronics wastewater, because tighter quality control means more discarded metal.
- The metals mix: copper, nickel and chromium are the triad, with titanium, tin and effectively all the PGMs, plus an outsized share of the small ruthenium market. Pharmaceutical catalysts are a favourite feedstock.
Earning EU Strategic Project Status
Bersani frames the Critical Raw Materials Act designation as an intermediate step rather than a finish line. Circular Materials began working with European institutions in 2019, the year it was founded, well before critical minerals became a policy priority. That early advisory position gave the company a front-row view of how the Act took shape, so qualifying as a Strategic Project was a matter of already knowing what the Commission needed.
The argument he made to politicians is the one that gives the episode its title. Europe extracts a kilo of nickel from a thousand kilos of Indonesian rock, refines it, ships it across the world, uses it, and then throws half of it into a landfill. Half the nickel Europe processes never sees a single day of functional use. It goes from a mine in Indonesia to a hole in the ground in Europe. The Russia sanctions made the fragility of that arrangement impossible to ignore, and the Act followed.
He is candid that recycling is only part of the answer, since electrification volumes still require primary extraction. And he echoes a theme REEx has covered directly in S2 E80 on why America graduates only 200 mining engineers a year: Europe has very few remaining schools of mining, and the intellectual infrastructure lost over three or four decades cannot be rebuilt with money alone. New to critical minerals? Start with Rare Earths 101.
Key Takeaways
- The grade is the story: at 1 to 10 percent metal, industrial wastewater outclasses almost any ore body. The obstacle was never concentration, it was chemical variability.
- A metal agnostic process changes the economics: acting on the solvent rather than the metal removes the need for a bespoke process per customer, which is what had kept the resource stranded.
- Getting paid for feedstock inverts the recycling risk model: with disposal fees covering profitability, recovered metal is upside rather than the whole thesis, and commodity price swings do not threaten the business.
- Non-precious metal recovery is close to nonexistent: below 5 percent today, with no robust strategy anywhere in Europe or the US.
- Quality manufacturing generates the best waste: semiconductors and electronics discard more metal precisely because their standards are higher, which is why US expansion targets them.
- Policy followed the argument, not the reverse: six years of institutional engagement preceded the Strategic Project designation.
- This is critical metals recovery, not rare earths: the recovered basket is copper, nickel, chromium, ruthenium and other PGMs, plus titanium and tin. No lanthanides are involved.
Frequently Asked Questions
What is supercritical water precipitation?
Supercritical water precipitation, branded SWaP by Circular Materials, uses water above its critical point to change the dielectric constant of the medium. That shift alters the chemical environment around dissolved metal ions and forces essentially any metal to crash out of solution as a very fine powder. Marco Bersani says the process consistently achieves better than 99.9 percent metal precipitation, and because it acts on the solvent rather than on a specific metal chemistry it is metal agnostic, so the same equipment handles wildly different feedstocks without a bespoke process for each one.
How concentrated are the metals in industrial wastewater compared with mined ore?
Far more concentrated. Circular Materials works with streams running 10,000 to 100,000 ppm of dissolved metal, or 1 to 10 percent by mass. Conventional ore bodies typically carry a fraction of a percent, and Bersani notes that miners would dream of having ores with 1 to 10 percent metal content. The trade-off is that the resource is a chemically variable liquid rather than a predictable solid rock, which is precisely why the industry has left it alone.
Which metals does Circular Materials recover?
The core triad is copper, nickel and chromium, driven by the Italian manufacturing base it serves: surface treatment, plating, valves and pipework, plus defense and pharmaceutical customers. It also recovers titanium, tin and effectively all of the platinum group metals, and holds a notably large share of the small ruthenium market. It deliberately does not target iron or aluminium, which are less valuable. Note that Circular Materials recovers critical, base and platinum group metals, not rare earth elements.
How much critical metal does Europe lose through industrial wastewater every year?
By the low-end estimate Bersani gives, Europe processes roughly 10 million tonnes of industrial wastewater a year and loses about 6,000 to 7,000 tonnes of nickel and chromium plus at least as much copper, or 12,000 to 15,000 tonnes of mixed critical metals. On a top-down basis he estimates the US market at three to four times that, roughly 40,000 to 50,000 tonnes. Today the standard route converts these metals into a hazardous sludge destined for landfill, and effective recovery sits at about 70 percent for non-gold precious metals and well below 5 percent for non-precious metals.
What does Strategic Project status under the EU Critical Raw Materials Act mean?
The Critical Raw Materials Act is the European Union framework for securing supply of the metals its industry depends on, and Strategic Project designation marks a specific project as material to that goal, bringing institutional visibility and easier access to public and sovereign funding. Bersani describes it as an intermediate milestone rather than an endpoint. Circular Materials began working with EU institutions in 2019, well before critical minerals became a policy priority, and that early advisory role gave it a front-row view of how the Act took shape.
Transcript
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Dustin Olsen (00:00)
What if the next critical minerals mine in Europe isn't a mine at all? It's a pipe. Companies don't sell nickel and copper to our next guest, they pay him to take it. Because buried in industrial wastewater is a resource so concentrated it puts conventional mining to shame: one to ten percent metal content, compared to the fraction of a percent most ore bodies dream of. The EU has already backed him with millions and named his technology a strategic project under the Critical Raw Materials Act. Today, Marco Bersani tells us how you mine a sewer, and why Europe's landfills are quietly full of palladium, ruthenium, and copper nobody bothered to recover. Let's dive into it.
Dustin Olsen (00:54)
Our guest today is Marco Bersani from Italy, and he is the CEO and co-founder of Circular Materials. Marco, welcome to the show. How are you doing?
Marco Bersani (01:06)
Doing great. Thank you, guys. It's awesome having the chance of talking to you. Hi Dustin. Hi Daniel. I'm looking forward to whatever you're throwing at us.
Dustin Olsen (01:15)
So Marco, to start the discussion off, your company is focused on recycling and essentially pulling metals out of industrial wastewater, which is almost like a hidden domestic mine of sorts. I'd be curious to get your take on how you found this resource throughout Europe.
Marco Bersani (01:44)
It's an absolutely incredible opportunity we got here, scouting opportunities for recovering a whole bunch of critical metals in industrial wastewaters. The premise is that any manufacturing process has a certain rate of elements and metals and things it processes that gets discarded.
We're all familiar with metal scrap from steel manufacturing or copper manufacturing, and that is kind of straightforward. The very same loss happens whenever you process metals in water, in aqueous solutions. And this happens for a gigantic set of industrial processes: pickling, de-scaling, surface treatment. There's a bunch of processes where a lot of metal ends up in water, and all this metal gets lost because there's no available technology to recover it in a straightforward fashion. This is precisely the gap that we discovered, and that we built a technology around, precisely to go after all these metals.
Dustin Olsen (02:49)
And how do you pull metals out of the water, and what is your recovery rate?
Marco Bersani (02:57)
The problem with these wastewaters, and the real reason why nobody is really after them, is that every company, every process, every product produces a wastewater with a very variable chemical composition. So you might always have 50,000 ppm of nickel, but this can be in a chloride matrix, in a sulfide matrix, with a lot of additives, with a bit of organic solvent. The chemical variability of these feedstocks is extremely variable. And this poses a big obstacle to whoever is after this wastewater, because in principle you have to design a dedicated process for each type of wastewater, each manufacturer, each process, and on and on. Nobody is taking the burden of doing so.
We got lucky, because we had developed the process which is called supercritical water precipitation. Supercritical water precipitation is a very metal-agnostic metal precipitation technology that exploits the properties of supercritical water. What happens when you use supercritical water is that you trigger the precipitation of any metal by essentially changing the dielectric constant of the medium. So you change the properties of whatever is sitting around the metal in a way that any metal will crash out of the wastewater and form a very fine powder.
This is what we developed originally to do synthesis, to manufacture metallic powders. At some point we realized that such a nice and thorough precipitation technology, which yields consistently better than 99.9 percent metal precipitation rates, could be used also to target dissolved metals in non-synthetic, waste solutions.
We started playing with feeding our equipment, feeding our machines, all sorts of industrial waste. And we got consistently very nice precipitation rates. At some point we discovered that it was absolutely not straightforward to get these metals out of these very complicated chemistries. And that was the seed after which we built the company. It was a very serendipitous discovery, but nonetheless very exciting.
Dustin Olsen (05:19)
That's awesome to hear, that there's this opportunity to find a use for wastewater rather than disposing of it somehow. Can you help us understand the scale of the operation? You said that you could open a market worth a million tons of wastewater a year in Italy alone. But how concentrated are the metals in that water compared to a conventional ore body, and does the math actually work?
Marco Bersani (05:47)
Absolutely. Let me frame the numbers all over Europe. If we exclude aluminium and iron, which we are not targeting because they are less valuable than nickel and copper, we can technically do iron and aluminium and all sorts of metals, but we're focusing on higher-value metals. The European market is, give or take, 10 million tons of wastewaters.
These 10 million tons now go through the conventional treatment route, which basically says: I'll convert all the pollutants, including our very valuable metals, into a sludge, a hazardous sludge, because of the heavy metal content. And the hazardous sludge will end up in a hazardous waste landfill. That's the global standard. So the heavy metals are considered pollutants, the pollutants go in a sludge, the sludge goes in the landfill.
There are a lot of grey areas around this. A lot of heavy metals get diluted down into surface waters, get diluted down in a lot of grey handling of this type of waste. But essentially all these metals get lost.
Quantifying the amount of metal is very challenging, because of course you need to track down every single ton of waste to know how much metal there is inside. But our low-end estimate for the European market is, give or take, 6,000 to 7,000 tons just of nickel and chromium, and at least as much of copper. So we're talking about 12 to 15 thousand tons of mixed critical metals.
Our first look at the US market, which made us really excited about it, is that the US market on a top-down estimate is three to four times larger than the European market. So you do the math, we're talking something around 40 to 50 thousand tons of metals, which are currently lost to surface waters and landfills through industrial wastewaters, through industrial process waters.
This number is huge, because we are dealing with waste streams that now contain 1 to 10 percent. If we think in terms of mining ore, we have 10,000 to 100,000 ppm of heavy metals, which translates into a 1 to 10 percent metal content. And 1 to 10 percent makes for a very exciting ore, no matter what the metal is. We would dream of having ores with 1 to 10 percent metal content.
The problem here is that it's a very variable feedstock. It's in water, it's not in a solid rock. And there are challenges. But in terms of price value per pound, the numbers are just outstanding.
And the beauty of our business model is that we get paid by industrial manufacturers to take their feedstock. We get paid to take their waste, to take the metals. So I have companies that are paying me hundreds of euros to take 100 kilos of nickel dissolved in a very complex aqueous matrix. So we're not talking payables here. I'm not purchasing my feedstock, as other recycling businesses have to do, I'm getting paid to handle a hazardous waste, which happens to have very nice amounts of critical metals inside.
That's why we have the opportunity and the urge to deploy as fast as possible in as many geographies as possible. Because the opportunity is there, and every minute that we're not operating and recovering these metals, these metals are constantly ending up in landfills and in surface waters. Once they're in a landfill, or once they are diluted down to 100 ppb, recovering them becomes much, much, much harder than taking them from the source when they are at 10,000 or 100,000 ppm concentration.
Daniel O'Connor (09:50)
Marco, I think it's very exciting. It fits into this notion of the circular economy and the ability to be more efficient and cleaner at the same time, which is extremely compelling. Before we get into some more detailed questions, at a macro level: how mature is the wastewater-to-critical-metal reclamation business? Are you one of just a few companies worldwide? Are there other companies doing this? What does this look like at a macro level? And out of all the wastewater today, what percentage of it is being reclaimed and recycled for critical minerals? I would imagine it's less than probably two percent, one percent, but just at a high level, for the investors that view this show.
Marco Bersani (10:49)
Guys, just to be upfront: we're working with companies that are throwing away hundreds of kilos of palladium each year. And when a company is disposing of palladium, of ruthenium, of silver, if silver is below 2,000 ppm, nobody's after silver below 2,000 ppm.
So the effective recovery rate today for non-gold precious metals is probably around 70 percent, which means we are throwing away 30 percent of non-gold PGMs and other precious metals. For non-precious, it's well below 5 percent. The only small fractions of non-precious metals in wastewaters that get recovered now are some electrowinning processes in very stable and highly concentrated streams, but they make up a very small fraction.
This is true both for Europe and the United States alike. There's no significant difference between the European and US markets. There are some differences with the Asian markets, which are dominated by other drivers, but as for Europe and the US, the markets are very similar, technologies are very similar, players are very similar, and non-precious metals essentially get thrown in the bin. There's no robust recovery strategy for non-precious metals.
Daniel O'Connor (12:20)
That's sort of what I would have expected, given what we know about recycling and reclamation today generally. So a question I have: if you look at what's in your portfolio of critical minerals, what's the priority? What top three critical metals are highest on the priority, maybe due to value, to market demand, to a productive way to extract them? What are those top metals that you're looking at now?
Marco Bersani (12:55)
When you're a recycling company, you do what the market gives you.
The pool of metals that we're actively treating and recovering depends on the industrial manufacturing market that makes up the base of our customers, which is the Italian market. In the Italian market, we used to have a lot of automotive; we have luxury, we have fashion, we have mechanical components, so you think of surface treatment of valves, of pipework, and this type of thing. And we have the defense sector: one of our main customers is one of the largest defense contractors in Europe. So the metals we see are mostly connected with surface treatment and these types of processes.
Our triad is copper, nickel and chromium. We do some titanium, we do some tin, we do basically all of the PGMs. We are a very, very big player in a very small market, which is ruthenium, and ruthenium is as strategic as you can get among the PGMs. We have a very nice recovery process for ruthenium. But I would say that the top three metals that we're dealing with in Italy are copper, chromium and nickel.
The other big market for us in Italy is the pharmaceutical sector. They have a lot of homogeneous catalysts and some heterogeneous catalysts. We love the pharmaceutical sector, super nice, clean metals, and these are the best business partners you can get in critical metals.
We don't have a lot of semiconductors and electronics in Italy, which for us is a very valuable customer base, because the general principle is, the higher the quality of the product, the more waste you're going to be generating. You have higher quality control, higher quality standards, so you have a worse metal turnover than if you are chromium-plating a shower head or some low-value consumer product. And Italy is not as big a market as Europe for semiconductors. So one of the things we're really looking forward to when we land in the United States is working with the semiconductor and electronics business, because they are very, very nice customers for us.
Daniel O'Connor (15:13)
That's very helpful. So basically the critical metals that you're able to reclaim and recycle are contingent upon the type of manufacturing and associated wastewater processes, there's a template based on the industry, it sounds like. And where are you at in the process? Are you actively pulling this tonnage out and selling it back into the market?
Marco Bersani (15:47)
Yeah, absolutely. We have one site which is fully authorized, up and running. It's in Padova, Italy, in the northeast of Italy, right outside of Venice. And the only problem with the site is that it's fully saturated already. It's a small site, we can do 500 to 1,000 tons of wastewater per year. It's not a big footprint.
So what we're doing now, we're fundraising to build a 10 times larger site nearby in Ferrara. With that site, our expectation is to serve the high-end value market for Italian manufacturing companies. That is going to be 20,000 tons per year of wastewater, 1,000 tons of mixed metals, and that is where we are really expecting to drive the growth of the company.
We already secured the site, so now we are completing our fundraise to purchase the equipment and these very straightforward components. And then we're going to be replicating this larger site across all sorts of geographies, the United States included. The technology we use is not site-specific, is not industry-specific, all our equipment is metal-agnostic. So the very same site we have in Padova, or the one we will have in Ferrara, I can drop off in any location in the world, plug the power in, and I can start operating the next day, recovering whatever bunch of metals is currently thrown away in wastewaters by the local manufacturing industry. So we are absolutely global in terms of value proposition.
Daniel O'Connor (17:31)
That makes a lot of sense. It also makes sense that you're ready for the next round of financing, because you figured out how to execute and monetize this process.
Marco Bersani (17:40)
Absolutely. We are selling metals, we are working exactly in our business model. We get paid to treat the wastewater, and then we sell the metals out.
Once we have recovered the metals, our sovereignty and environmental mission is already solved. We've prevented those metals from ending up in the landfill, and we are introducing those metals into the local supply chain, the local value chain and manufacturing processes. And our goal, of course, is to sell the metals we recover at the highest possible value. We can sell the metals as a scrap, or we can sell the metals as a commodity, or we can sell the metals as advanced materials. And the goal for us is to sell the metals as much as possible as advanced materials.
Daniel O'Connor (18:35)
Right, obviously you can be more profitable that way. So a question on that: it's really exciting if you really think about it. You're really killing two birds with one stone in a way. As you're going out to the market now, are investors understanding the opportunity here? How's that coming along so far?
Marco Bersani (18:38)
In Europe, we just ran out of all the hype and drive from the battery recycling business and out of the climate thing. And now we're getting into the resource tech investment trend.
Most European Union member states are dedicating sovereign funds to critical metals. These dedicated funds are dripping into the venture investor base and are coming to the companies. I think next year is going to be a very good year to fundraise in the critical metals sector in Europe.
The US has been through this process with at least two or three years advantage with respect to Europe, because already with the previous government, the Inflation Reduction Act showed the way into how critical metals are absolutely strategic for the US industry. And now the Trump administration doubled down on keeping the metals within the US borders. All in all, the execution, beside the understanding of critical and strategic metal value, the execution, as often happens, has been much faster in the US than it's been in Europe.
But everybody's aware, also among investors, of how critical the critical metals are. I'm currently speaking to quite a few very competent EU investors. We haven't started yet scouting US investors, but that's in our agenda, and we'd really like to engage with investors who are knowledgeable about the space, who've been there, done that before, and who can help us grow the company. Every founder looks for value beyond the money, that's a common saying, but in this sector you really need value beyond the money, because of the different ramifications and industry access and institutional access that the business gives you.
Daniel O'Connor (20:51)
So on this, and I know we had a list of questions and I always have a hard time sticking to those, because my mind runs here. But in the United States, Marco, I believe, and you correct me if I'm wrong, there is an intermediary step, because there are several or a handful of engineering firms that work with manufacturers to reclaim wastewater. I pulled up Burns and McDonnell, Brown and Caldwell, Jacobs. So do they become your intermediary? If you have a situation in the United States where you're expanding to semiconductors and they're working with some big engineering firm to reclaim that wastewater, do you work with the engineering firm? Is that how you sell to them, to convince them that your technology can help?
Marco Bersani (21:44)
In Europe, our customers are a very fragmented market. We are dealing with everything from a large defense contractor to a mom-and-pop surface treatment shop that is a sub-sub-subcontractor to some fashion house or whatever. Our customers go from one ton a year of waste to 2,000 tons a year of wastewaters, and everything in between. All sorts of metals, so it's a very variable market.
We have very few single large manufacturing sites where the intervention of one of the major engineering firms is justified. We don't have big semiconductor facilities in Europe. Even the defense contractor companies are scattered across multiple sites, and each site works out its own strategy to deal with the wastewaters.
But you correctly said a word which is critical: they are focused on reclaiming water. And you reclaim water for environmental compliance, you want to discharge water which is compatible with environmental thresholds. None of these major companies are providing services to recover the metals.
This has many reasons. It's because it's always been like this; because the metal you're throwing away, in your balance sheet, is already a cost, it's a production cost. So it's something that you've already accounted for and you're not really expecting to recover, and on and on and on.
We've been approached by all of the companies you mentioned and beyond, to work with licensing the technology to these companies so that our technology becomes an asset for their value proposition. We're not ready yet to license the technology out. I'm not sure we will do it for the European market, certainly not. Maybe for the US market, but we need to find the right framework of operations.
And the problem is, we started by deploying the technology at customers. But each of our customers begged us: please do it as a service. My focus is manufacturing X, Y and Z. I don't want to have to care about another process if I don't have to. That's why we started offering our technology as a service, because if you're manufacturing semiconductors, you want to focus on manufacturing semiconductors. You don't want to deal with another piece of technology in your stack just to take care of the byproducts of your waste.
So you have to push really hard to convince me that any manufacturing company wants to have a new piece of technology now. And as we can, in a very agile way, deploy our sites, our service sites, next to our manufacturing areas, industrial districts, we think that's the way to go forward. And the industry asks us to do that.
Dustin Olsen (24:49)
So Marco, I'd like to talk a little about how the European Commission designated your work as a strategic project under the Critical Raw Materials Act, and how that's going to help you sixfold your capacity. But the question really is: what did it actually take to earn that level of institutional backing?
Marco Bersani (25:02)
The Critical Raw Materials Act strategic project recognition is, as always, a very intermediate step of some work we started doing before critical and strategic metals became a cool thing.
We started working with European institutions the day we were founded, so in 2019. We started working and lobbying hard with some of the main European institutions, wanting to frame everybody's attention on how fragile the supply chain of these metals was, how stupid it was, without having ongoing mining operations in Europe, to throw away an insane amount of critical raw materials.
And the paradoxical thing I kept pushing to the politicians is: for you it's absolutely okay that we take one kilo of nickel out in Indonesia, one kilo of nickel out of a thousand kilos of ore and rock that I have to process to get that kilo of nickel. We refine it, we move it across the world, we use it locally, we throw away 50 percent of the nickel we bring in, and we dump that nickel in the landfill behind our backyard. So we're moving nickel from the soil in Indonesia to the soil in Europe, and 50 percent of the nickel we're processing hasn't seen a single day of functional use. It went from the mine to the landfill without ever being used.
This became evident when the Ukraine and Russia war broke out. Because when sanctions were applied to Russia, Russia represented one of the critical alternatives to Chinese supply of metals. And if you cut off Russia from your supply chain, from your vendor list, then you're in deep trouble, because for a lot of stuff you become hostage of a single supplier. And that's precisely where we cornered ourselves into right now. It's not too different for the US and the rest of the world.
When that broke out, the EU rushed to get this Critical Raw Materials Act together. And as we were already advising and already in conversation with different directorates within the EU Commission about these critical metal things, we had a front-row seat looking at the evolution of this very fundamental Act. Becoming a strategic project was just the next step, because we kind of knew what the Commission was looking for, what was needed, what was absolutely critical. And we basically thought we were one of the answers for the need of strategic metals, at least from the point of view of recovery, of recycling.
This doesn't, of course, recycling is just a part of the solution, because you need primary extraction. In the energy transition framework you need primary extraction to cater for the volumes that are needed for electrification, and on and on. But recycling, we think, is a very good stepping stone to build the rest of the value chain on.
But it's a marathon, not a sprint race. It takes effort, it takes continuity in effort. In Europe we are lacking, there are very few mining classes at university, there are very few schools of mining. So there's a lot of fundamental know-how that has been dissipated through the last 30 or 40 years, and so we need to rebuild the whole infrastructure, especially the intellectual infrastructure that comes with critical metals.
Daniel O'Connor (28:57)
I would just chime in. We address that a lot, Marco, it's the same in the United States. We just learned that, for example, on mining engineers, the US generates about two hundred a year and China generates about ten thousand a year. So the gap is staggering.
Marco Bersani (29:18)
It's staggering. It's insane. And it's nothing you can build overnight. That's the problem, it's nothing you can build overnight. It's not a matter of money. You can put as much money as you want into the business, but these things take time. To rebuild a generation of technicians, engineers, scientists just takes time. And we have a big gap to fill.
Daniel O'Connor (29:43)
That's right. We speak about, or we write about, political timelines, where money's being allocated and there's a lot of press releases and then ribbon cutting; and industrial timelines, where you're actually producing product and you're scaling. Back to more of a micro level: what's the hardest part of your model? Where is the most cost? Is it in the infrastructure, the CapEx to set it up? Is the OpEx pretty efficient once you have it set up? Just at a high level, not sharing any company secrets, explain to viewers who may be investors that are thinking about this.
Marco Bersani (30:20)
We are a CapEx-intensive business, the way we decided to run the business. We build sites, build an infrastructure that serves large industrial districts and large pools of manufacturing companies, where we localize our service site, our metal recovery hub, in the middle of industrial districts. That is a CapEx-intensive business. We're not licensing, we're not installing pieces of equipment at customers, we're not renting out equipment.
Now, our numbers in terms of value generation, in terms of pure margin, are really, really nice. Really, really nice. We have SaaS numbers running a critical metal business, because we have a dual revenue model. We are profitable just with the disposal service business. So if we just give the metals we recover away for free, we're already profitable. Slightly profitable, we're not sensational. And so the metals for us are just sugar on top of whatever we're doing. The metals recovery we sell is pure margin.
This, I think, is a key message we need to pass through to investors, because in all the other metal recycling businesses you are squeezed in between the payable that you pay for your feedstock and the value that you're able to recover. And once you're squeezed in that window, which can be tight, the problem is that if next month cobalt drops 30 percent, then proportionally drops the size of the window where you can make profit. So it becomes very liable to metal volatility.
And here I'm telling you, we are metal-agnostic. So cobalt drops, we will focus on chromium or on tin. We have a large pool of wastewaters, we can pick the metal we want to focus on. So we are robust towards metal volatility. And even in the direst scenario, where all metal value drops to nothing, we are still profitable, because we're giving a disposal service. So we have a very robust model.
Daniel O'Connor (32:36)
It really sounds that way. It sounds like a very exciting opportunity for investors, this company. And correct me if I'm wrong, so far you've raised about, I think, fifteen to twenty million? Does that sound about right?
Marco Bersani (32:52)
We raised, with the latest SAFE, we raised 20 millions, plus I think we are at 3-something in public grants.
So we built a company and one fully authorized and working site with this money. Half of it is in the bank, and this is what we're going to be using to kick off our next largest site. But we still need to raise some fresh money to complete that site. And then we're going to be rolling and copy-pasting that site across multiple geographies, and at least three or four are going to be in the United States. We already have visited some of your chambers of commerce, and we had a very nice reception. And I'm excited, because you are throwing away some very cool metals in the US. So looking forward to be operating there.
Daniel O'Connor (33:44)
I think there's a lot of money to be made over here. I think it's very compelling. And in this journey, I guess you're at what would be the equivalent of a Series A. Are you going to, is this next one a Series B? Is that how you would kind of look at it?
Marco Bersani (33:51)
We have one fully authorized and functioning site which is turning out some revenues within our expected business model and with the expected unit economics. So I'm not sure whether the raise we're doing to build the next site is a Series B or Series A or whatever, or it's a growth fund. I'm not too keen on these labels.
Daniel O'Connor (34:32)
It doesn't really matter, right?
Marco Bersani (34:34)
No, it doesn't. But you're more than welcome to take a few days in Venice and come and visit us. We're like half an hour out of Venice Airport, come and visit us and see how we work.
Daniel O'Connor (34:43)
It's an incredible place. I've been to that part of Italy, and Venice is incredible. But on that: are you public? Do you see an IPO as a trajectory in the next three to five years?
Marco Bersani (35:04)
Recently there's been an IPO, a SPAC operation, in the sector in the US, on a company that has some similarity with us. IPOs for venture-backed companies go in cycles. There are some years where they are the way to go, some years where they're not.
As a founder, my goal is to have an impact through the deployment of the technology. So I really want to finish building our next very large site. We are holding our breath, building that site. Once the site is up and running, we'll take a look around and see where we are standing, and what's the opportunity to replicate fast, and what's the fastest way to get the money and replicate.
We've already been contacted by a large pool of infra funds, because CapEx intensive, nice revenues, robust revenue streams, and the ability to replicate multiple times is of certain attraction for infrastructure funds. But we've also been in talks with large advanced materials and critical metals corporations. So we're keeping all the typical three main exits for a venture-backed company, which are IPO, strategic acquisition, and private equity. We are keeping all three doors open.
I'm really curious to see if there's going to be IPOs in the sector in the coming future, because that would be a very rapid way to raise a significant amount of money and replicate the technology fast. So that's certainly an option.
Daniel O'Connor (36:45)
Yes. Plus you'd be one of the next super-rich people that we can call our friend. So, Dustin, please.
Dustin Olsen (36:57)
This has been a great conversation, and honestly quite encouraging to hear of the amount of success that you've seen in recovering from wastewater, which, as we said earlier in the show, is kind of solving two problems at once. We wish you absolute success as you continue to move forward in scaling and growing this operation, because I think it'll be a great piece of the industry that will go a long way.
Daniel O'Connor (37:29)
Marco, how do people find you? Let's just say investors are interested, how do they find you?
Marco Bersani (37:35)
I'm all over the place. You can easily find me on LinkedIn, and I'm happy to connect with US investors. That's really a door we want to open soon. And if an investor is listening to this podcast, he's certainly one of the good ones, he's already passed level one in our funnel of selecting good investors. Eager to hear back from any of you guys who are listening.
Dustin Olsen (38:02)
Well Marco, thanks for taking the time to be with us and share not only about your company, but also the technology and the work that you're doing to help the critical minerals and rare earths industry.
Marco Bersani (38:16)
Guys, it's been my pleasure. It's been an honor to be on your podcast, and looking forward to your next episodes.
Dustin Olsen (38:25)
Before you go, we have one quick thing we want to ask. If you found this episode helpful, please give us a thumbs up wherever you are listening or watching this podcast. It really helps the show. If you don't want to miss a future episode, go ahead and subscribe so you get a notification every week a new episode comes out. And we have an exciting announcement: we are going to be at the Critical Minerals North American Expo at the end of October in Atlanta. We hope to see you there.
