The sheer amount of material that's out there in the world, and that we need to start taking advantage of that. Because all of our resources are limited, and if we keep thinking we could pull from the ground, well that's a fool's errand, and we need to be looking at alternatives and ways to move into places that we can reuse the, materials that we already have. Good morning, good afternoon, or good evening, wherever you are in the world. Welcome to episode 67 of the Sustainable Supply Chain Podcast, the number one show focusing exclusively on the intersection of sustainability and supply chains. I'm your host, Tom Raftery, and I'm delighted to have you today, and a huge thank you goes out to this podcasts, amazing supporters. You make this podcast possible. If you're not a supporter and you'd like to join this community support starts at just three euros or dollars a month, which is less than the price of a cup of coffee. You can find the link in the show notes of this or any episode or at tiny url.com/ssc pod. Now you know how everyone's talking about circular economy these days, but it often feels like more theory than practice? Well, today's guest is actually doing it at scale. Don Weatherbee runs a company called Regenx that's tackling one of the dirtiest supply chain gaps you've probably never thought about, platinum and palladium. Right now, most of these critical minerals come from mining in places like South Africa and Russia. High cost, high risk, and high emissions. But Don's team is recovering them from old diesel catalytic converters using a process that's extremely low in energy. And here's the kicker. Millions of these converters are scrapped every year, and most of them are not recycled, which is a huge missed opportunity. So if you're serious about building circularity into your supply chain, this is a conversation you'll want to hear. But before we get to that, in the next few weeks, I'll be chatting with. Danny He, who's the CEO of soapbox, Jim McCullen, who's CTO of Century, Gary Loh, who's CEO of DiMuto, and Pierre Lapree, who's CPO of spend hq. But now back to today's episode, and as I mentioned, my special guest today is Don. Don, welcome to the podcast. Would you like to introduce yourself? Sure thing. My name's Don Weatherbee. I am the CEO of Regenx. Regenx is a tech company that specialises in recycling the platinum and palladium from spent catalytic converters, especially in the diesel sector. And what was your route to Regenx? So my route is through mining, actually, and an accounting background. Accounting finance type thing. And so I worked for a coal mining company out of university, and then then an oil sands mining company and then left those. And I joined what I thought was going to be a junior explorer that we had some properties in Spain and thought, you know, just continuing the mining, but they had just before I started, they had sold a property had cash and was deciding on okay, what's the future and looking around and looking, saying, you know, drilling holes in the ground just isn't giving the bang for the buck that it used to. And it isn't sort of the place to be. And at that point in time, a technology company, a material processing company came across our radar. And so we bought that to move ourselves into more of the tech side and that then morphed as anything happens when you start doing something in tech, people say, can you do this? Can you do that? It morphed into looking at e-waste then while we were in e-waste, we had the ask about processing catalytic converters. So a little bit of a winding road, we've went from drilling holes in the ground to becoming an urban mining. Okay. And what has surprised you most in your journey from being a miner to now being a mining preventer? So, well, it's just the sheer amount of material that's out there in the world, and that we need to start taking advantage of that. Because all of our resources are limited, and if we keep thinking we could pull from the ground, well that's a fool's errand, and we need to be looking at alternatives and ways to move into places that we can reuse the, materials that we already have. Talk to me a little bit about what it is you guys are doing because we've skirted that quite early on. You're taking catalytic converters from diesel vehicles doing what with them? A) why diesel in particular and b), what is it you're doing then with those catalytic converters? Sure. I'll start with why diesels. So, recycling catalytic converters has been a long standing part of the industry. But they're more focused on the gasoline, and that's because how it's been traditionally done. Traditionally, recycling is done by large smelters. So really putting them in large furnaces and melting them down. Diesels are slightly different. A gasoline catalytic converter, the honeycomb, the substructure, was built of a, fundamentally a ceramic type thing, which was fairly easy to melt down. Diesels, on the other hand, because diesel engines run much hotter, needed a more hardy substructure. And so they were built on silicon carbide, and silicon carbide doesn't melt the same way as a ceramic does. And it causes operational inefficiency issues for the smelting furnaces. So they haven't wanted to recycle those. So there's this market of pieces of things that weren't going into the traditional recycling stream. And so, also, it's a growing segment of the market. And that's why we were reproached saying, I have this stuff, but I don't have a home for it. Could you guys, extract the platinum and palladium? So there is platinum and palladium in the catalytic converters of all diesel vehicles. Is that correct? Yes. So it's sort of probably easiest to explain on just a, on a high level how the catalytic converter works. Catalytic converters came around in the 70s. And they were there to reduce smog. People of our age and that sort of understand back in the eighties and that, you know, traveling around cities, it was on its way to being a hellscape type thing with just the sheer amount of smog in some days. You can still see old pictures of LA with that haze, just that sat above it as the day went on. So catalytic converters were mandated. To try to reduce that smog and what they do is they take the harmful smog gases and as you flow them through the catalytic converter. The precious metals, your PGMs, oxidize these smog gases, and break them down and convert them into less harmful CO2. So that's the fundamental and so that needs to have those precious metals on them to create that reaction, that chemical reaction. And so what they're built around is why I said a honeycomb is that they want the air to touch as many surfaces as quickly as possible. So, as the air is coming through this muffler shaped piece, it flows over all these surfaces and makes these chemical reactions as it goes along. That's why the structure is a honeycomb. That's why it has to be plated in these precious metals, so that all these interactions work together. And PGM for people listening is platinum group metals, right? So it's like platinum, palladium, rhodium. Is it Iridium, always forget the other one. Couple more, more of your exotics, but your major ones are platinum and palladium. Okay. And so you're not smelting them. How are you extracting the platinum and palladium from these catalytic converters? The big term is hydrometallurgical. Fundamentally we're doing a chemical leaching. We get the honeycomb and grind it down into a fine powder. And that fine powder we mix with, in a chemical solution, then separates. the platinum and palladium from substructure. So now we have platinum and palladium in a liquid form, sitting in this, what we call a pregnant leach solution. And so we have to take that liquid and separate it from all the remaining solids, your silicon carbide. Then once we have that liquid, we now have to get the precious metals back out of liquid. We use another chemical process that binds to the platinum and palladium and drops it into a solid form, which is what we call our black powder, a dirty concentrate. And that dirty concentrate we send to a refinery that just upgrades it to pure metal. Okay. And the smelting process is obviously, well, a), it doesn't work for diesel anyway, but it's obviously quite energy intensive. What is like the energy intensity of your process for taking these platinum and palladium out of the catalytic converters? We're negligible. We're, we're very small amount because most of our stuff is done by a chemical process. All's we have is we have to heat it up to get the reaction to start, but we're just, we're not even heating it to a boiling point. If you think the energy used to heat up your kettle, we're in that sort of range on a, on a little bit larger scale. Okay. Okay. And what's the scale of this? Are you the only organisation in the world able to recycle these diesel catalytic converters? How many of them are we talking about? How much platinum and palladium are you generating as a consequence of this every, let's say, year? So we're starting up our first module of our plant right now, and it's designed right now to do 4,000 pounds of feedstock a day. And so that feedstock, we never can definitively say how much we're going to produce, because it's all dependent on the feedstocks. And every catalytic converter manufactured has a different amount of Platinum and Palladium in them. It all depends on it's size, it's shapes, it's, like, every different model has a different loading, as they call it, of PGMs. So, we're dependent on what the feedstock is, on what the backend goes. And it ranges from, you know, a couple hundred parts per million to 2,000 parts per million is a range of typical products that we have. We're just going to be a small dent into what it is. But it's also a growing market because catalytic converters have always followed regulation. And regulation started with your gasolines, your automobiles, because they were the simplest. And they were going to be the biggest bang for the buck. You put it on cars, that's the majority of the vehicles on the, on the road. But as time has gone along, the regulations have gotten stricter and stricter and broader. So now every sort of internal combustion engine has to have catalytic converter emission controls systems on it. And it's moved from just Europe and the Americas to China and all the different factors of, of it spread out across the world. So, diesels were the last group. Your heavy industrial were the last group. So, for the longest time, there wasn't a lot of that product in the mix, but it's growing because of the increased regulation. And to put it on the other side is, we also have to wait about 10 to 15 years after regulation. Because we're seeing them on the back end of the life. So, once a regulation comes in, you know, there's a 10 year, 15 year leg, before those products start coming through our door. Of course. And you said 4,000 pounds, so that's about nearly 2,000 kilos. How many roughly catalytic converters is in that 2,000 kilos? Again, same thing as the loading. It's the, it's the same, they're all different shapes and sizes. Some of the general things, it's about 2 kilograms for a catalytic converter. Okay, so about a thousand catalytic converters per day is what you're aiming at starting off with. Yes. And just as a thumbnail, it includes them all. But there's about 27 million catalytic converters that are scrapped a year. Okay, well, and what happens to them? Because you said you're just starting out. What happens to them now? So, just go to landfill? About 30 currently are recycled through the smelting process. And that 27 includes a lot of the gasoline one. So about 30 is recycled. And then the rest is, yeah, unfortunately just lost in the process because a lot of them they will get crushed down for the steel that's in the canister and all that, just as part of the recycling of a car, but the honeycomb and that is just lost as they're moving it through the system. What would you say then are the biggest environmental and economic trade offs? You know, why, why isn't recycling already the dominant source of, of PGM? Well, are a couple pieces of, of why it's not is, is one, the supply chain for mining has always been there and it's a simple one to go through. The second is, always been a capital intensive recycling, building a smelter is not an easy thing to do and not just on on doing the capital for a smelter, but where you can put a smelter. I mean, it's not like people want these big smokestacks in their backyard. The additions of extra smelting capacity has always been a social issue. The part where, where we've come at it is like, I talked about our history, about how we were a processing technology. The chemistry is fairly simple, and it's been known for a while that you could do the X or Y, Z, different things, different chemicals would get you this but you have to be able to marry the chemistry, and the processing, because like I talked about, you're changing states, you're having it from solid to liquid to, to separating out liquids, and we're dealing in an acidic environment when we're doing this. All those things on wear and, and being able to maintain, were all stuff that are the hardest part of doing this. So that's where some of our expertise came in, is that we fundamentally looked at it from the process side first, and then how do we add the chemistry to the process. And so that's where our niche has been, is that we've looked at it a little bit differently. And what is the market these days for platinum and palladium? Obviously, platinum is used in jewelry, as we know, and also, as we now know, in diesel catalytic converters. Where else is platinum and palladium used? What's the market for the output from your process? Yeah. So, palladium first. The majority of palladium is used in catalytic converters, with a small amount in industrial side. And some of the industrial is, again, into your catalytic converter type things, because even the smokestacks on the factories have had to put emission controls. And these emission controls use the same PGMs. So there's that industrial base. But the majority is reused in automobile catalytic converters. Platinum is the same but there is a little bit more of, there's an investment segment and the, jewelry segment along with the industrial and the catalytic converters. There is a future piece that is starting. Hydrogen fuel cells, hydrogen fuel cells, they need anoids in them to create the electric reaction that creates the, the hydrogen and the water type thing. So those are made from PGM. So the growth of hydrogen fuel cells is going to facilitate the growth in use of PGM metals. Okay. I wouldn't be holding my breath on that one. I don't see hydrogen fuel cells really taking off. Certainly not in the transportation sector anyway, but not, in transportation, but, but it's just, there is some of these new electric pieces fundamentally based the, the energy sector is a future market of PGMs is more where I was hitting on that. Okay. Okay. Good. Good. And currently. I mean, PGMs, palladium, platinum in particular, they're mostly mined in either South Africa or Russia. I've driven past several big platinum mines in South Africa. Russia obviously is a terrorist state, one we want to be doing business with. South Africa, it's more stable, but it then becomes a single supply source. Well, that and the biggest issue with South Africa is their infrastructure is that they, they have a lot of issues with electric generation. If you're going to do mining, a stable electricity is a, is an absolute requirement. So to count on them to be able to increase supply, is an infrastructure issue with the, with that part of the world. Yeah. So you're hoping that obviously you'll help the market out by not requiring South Africa to increase its mining, but rather look to yourselves as you step up and scale up your processes to start supplying more and more of the market with platinum and palladium. Yeah, and it's already required. Sort of, there's some statistics out there that there's been an average shortfall of 259,000 ounces of platinum and palladium combined. You know, over the last eight years, Roughly. 80,000 kilos, Yeah, that's the current shortfall and that's been made up through stockpiles or that sort of thing, but There's already an undersupply compared to the demand of the world. Okay. And what's the supply of catalytic converters like? Like we talked about before, there's about 27 million that are scrapped every year. And so, as the cars come in and out, there is a large supply available. Especially since only about 30 percent currently make it through to the recycling supply chain. Where we look at, where we think one of the opportunities is, is to go completely circular and it's to work in conjunction with manufacturers because a lot of the auto business, especially on the parts, there's already a structured system of cores, where, you do an engine, send back the engine core, you get a credit type things. So there's already an infrastructure that a lot of these manufacturers. Are collecting supply of used. And so, especially when things are in short supply, you know, if you have your own circular supply chain of recapturing some of the precious metals you need to produce your materials, that becomes a whole competitive advantage that we are discussing with some potential partners. And obviously this 2000 kilos per day, we need to scale that up. Why hasn't there been more investment in this space to date? Why is it only now that this is starting to come on stream through yourselves? Well, what I also said is that it was a small niche that's growing. Where we've looked at is that because for the longest time gasoline was the dominant. And there wasn't need on diesel. You have to look back again, we talk about this 10, 15 year time delay. It was a very small section of the market and that it, you know, wasn't worth chasing, but with the regulations increasing, it's becoming a more and more of an issue and it's coming more and more of a part of the larger supply of what is coming into the collectors. I saw recently data showing that the global sales of internal combustion engine vehicles peaked in 2018 and have started now their long, slow decline as EVs start to increase their share of the market. That means the supply of these catalytic converters cause obviously, EVs don't have a catalytic converter. So the supply of these catalytic converters is going to start to ramp down. Now I get there's a 10 to 15 year lag, but 2018, 10 to 15 years, 2033, we'll start to see the peak of catalytic converters appear on the market. So, are you guys thinking forward to what happens after 2033? Two parts to that story, is again, where the peak happened, is in your gasoline auto. That's the first section that's being replaced by EVs. So there's very little right now. The EV replacement of your diesel sector isn't as robust and hasn't started to come in. So, in our business model our peak is still a ways out from where, where we're going to be. We're still on the upswing of diesel catalytic converters growing, especially on the scrap market type thing. So we do have a delay on that. And we also believe that that segment of the market is going to be much harder to quickly replace. EVs are great and are going to replace most of the city cars. Your shorter distance, your less use, you know, when you can shut them down for 10 hours at night and have them plugged in into the grid overnight where the grid is, is less used. All those factors around limited use are great and will be replaced by the EVs. But when you start talking into heavy duty and you start talking about a trucker who's doing long hauls, well their biggest things are, the economics are determined by weight and by time. And so if they have to shut down the vehicle for an extended period of time for charging or they're reducing what they can haul because of the extra weight for batteries, well that's going to be a much harder conversion. In the marketplace. And so, those are the factors we're looking at at what our niche is, but we also know that that is happening and we're looking at saying, okay, because our process will work for this, what are the next pieces that we could be adding to our portfolio? And that's where the, concept I threw back about is urban mining. So we started in one niche of the urban mining, but there's lots of other applications where there's potential for it. We just picked the simplest readiest fruit to, to go after as a beginning for what we're doing. And if you're at the moment looking at 2000 a day and there's, was it, how many million a year did you say are scrapped 27 million, 27 million. a year. if you did 2000 a day, it'd be a long time before you get to 27 million. Yeah, and Even then it's only 30 percent of them that are recycled. So the 70 percent that you can tap into market wise as well. So you could increase your market very easily that way, or your market, your supply, I should say very easily that way. So, yeah, no, I can see it scaling quite well, quite nicely. And obviously there is a market for the output as well. So this all looks rosy right now. And it, as you say, it will take a while for the diesel market to be supplanted by EVs in terms of just, I'll push back a little on that sure. the heavy duty trucking the new. Megawatt charging standard for trucks was rolled out last year, so it should be the case that truckers can charge, recharge their trucks in 30 minutes to an hour max. So, if truckers are driving anyway, they will have mandated stops. once, once you combine the mandated stops with the megawatt charging standard, then it becomes a non issue. The biggest, the biggest right now issue with heavy duty trucking and EVs shifting heavy duty trucking to EVs is the rollout of the megawatt chargers. So, they haven't been rolled out in force, yet. It's the infrastructure and especially that's where I came back to, the city stuff is easy, because it's easy to put the things. You look at the US trans cross, pieces it's the infrastructure issue is going to be what's the, what's the slowest piece when you're talking longer distance and rural communities and all those pieces, it's not that the technology isn't there. It's the rollout of who's paying for infrastructure. What, what do you think, taking a broader view of things, what do you think are the biggest bottlenecks in making metal recovery a mainstream solution in the supply chain now? Fundamentally, if you step back for one second, it's a mindset. We've done things the easiest way always, and the easiest way, and the supply chains were all built around mining and which is just saying I collect from one big area and I can process it down and, I don't have to worry about collection. I just have to worry about getting stuff from an area and then moving it through my supply chain. When you look at the urban mining side, it becomes a collection issue. It becomes that you have to go out and incentivise the collection of materials to bring it into areas that can then effectively convert it. And all those conversion processes are fairly simple, just, people have always not wanted to do the extra work of adding new infrastructure to do the collection side. That makes sense. You mentioned as well that nobody really wants a smelter in their backyard. So where smelting plants are positioned is obviously challenging to find a suitable spot for them. The implication then was that you wouldn't have the same issues, like, is that fair? That's fair. We can set up in any industrial park because we have no, no emissions really. We're all indoors, we're in a warehouse type facility, We're just like any sort of industrial user. So we can set up in, in multiple locations and multiple areas to best reflect what the supply is. Okay. And what's the scale up plan? Because you said the first plant will, as we mentioned, do the 2000 kilos per day. But that's a long way off the 27 million that we need to scale up to. Are you planning on scaling up internally by opening plants yourselves or licensing the technology to others or a combination or has that been decided yet? Yeah, a combination. Our first part is getting module one and then we look at internally expanding that. We've talked and we've talked in the marketplace about going to a four module type baseline in the, in our current facility, which then would sort of have a great location. Then sort of saying, okay, we're on the east coast of the US. A west coast baseline would be, and from that baseline, we'd then say, okay, on an international basis, we'd most likely go down the licensing partner type route, because anytime you try to jump in to a new regulatory, new legal, new language type area it's fraught with challenges, especially when you don't have that expertise. So joining with somebody else who has that expertise is probably our best way to look at the world. And What kind of regulatory changes would you say should be made or could be made that would supercharge the shift towards circularity in the PGM sector? Well, the recycling side of the business is not really given any of the advantages that your traditional minings have, whether it be rebates, regulations, increased infrastructure, you know, all those pieces that local governments, national governments throw at historically throughout mining things. Well, the mines didn't have to pay for roads or electricity up to their mine. So, there's a lot of infrastructure that's been provided to those historical type suppliers that, secondary source people have all had to go out and do it on their own. So, there is a regulatory type thing of evening the playing field, potentially that would look at benefitting the world there. If you could give one piece of advice to supply chain executives looking to integrate circular economy principles into their operations, what would it be? Well, it's about finding partners and it's nurturing partners. What we've found a little bit as a, as a startup is most people are saying, Oh yeah, yeah. You know, when you're up fully production and all that, I'd like to, we think there might be something there. But if you really want to integrate, you're going to have to find new ways of doing it and you're going to have to look at being able to support some of these startups and help them move from step to step because there are so many hurdles put to a startup to get to where it can be that there's a lot of groups who talk the good talk about wanting to integrate, but only want it when it's easy and only want it when it's when it becomes convenient typs type thing. So where I look at it is saying, you can't just talk the game. You got to be looking at saying, what are you going to do to support the game? Because if you do that little bit of support, you're probably going to end up with a better and cheaper product than you had historically. Makes sense. Okay. if you had unlimited resources and zero constraints, what's the dream innovation you'd build? Well we're building what we want to build and we wouldn't have built bigger because we needed to learn as we went along. We were building a first of a kind and a lot of the things we talked to people about challenging is there's a lot of things that work in a lab that don't work when you go up to scale. And a lot of it has to do is that not that the stuff doesn't work, is that the process doesn't work because things that you can, you can account for in the lab to give the examples pumping. Pumping on small scale, never not works. It will always brute force because you can never make the pump small that enough that will be applicable to your full scale operation. And so,once you get into full scale, movement of material is a whole other ballgame. It is a whole other piece. And you don't know it, until you're at full scale because theoretical won't tell you anything, until you're doing it. And we've had those challenges as we've gone along. We went with the things that were industry norm. For example, we used a glass line reactor, but silicon carbide is a lot more abrasive than most materials. And it sort of just wore the glass really quickly, because the glass line's only a couple millimeters thick. And so we were up and running, and then we started running full batches on a more consistent basis. Well, the wear just exponentially increased and there was no way to know it because again, you're talking on scale. You never have something as thin in your lab as the glass that you're actually working with at scale. And you couldn't tell it's going to wear off this glass that quickly until you were running multiple batches in a day. And, oh That was an unexpected setback but we learned and we've, we've adjusted and that. So back to your original is if I had unlimited, would we have done a lot of things different? Well, not really because we did what we thought was best practices. Only to learn, the real world sometimes will want to punch you in the nose. Fair enough, okay, a left field question for you, Don, if you could have any person or character, alive or dead, real or fictional, as a spokesperson for circularity of PGM, who would it be and why? That is left field. Do you know, here's a left field one for you is Kroger. It's the McDonald's guy. And because he saw something that was unique. And he saw something that was a process. And he was able then to turn that into a phenomenal worldwide franchise of McDonald's. And how it took that simple piece of these automated hamburger process and did it, and that's the same zeal and logic that would push circularity out there because it is a process and it is a different process and then having someone with that vision to see how that process could be, exploded would be amazing. Nice. I like it. Very good. Okay. Don, we're coming towards the end of the podcast now. Is there any question I did not ask that you wish I had or any aspect of this we haven't touched on that you think it's important for people to think about? We've hit a lot and, and I was glad that we could, we could go through it. We're a small piece and we're looking to grow. We're still in the startup stage. But we believe that there is phenomenal opportunity. We know that there is challenges with the future, but we also believe that future is a long time out. If you know you have an issue with the future, you can build around that. But what we have gives us a solid platform to be able to get to the future is where we look at sometimes. And so if people are looking or more interested in our story, they can go to our website, Regenx. tech, or follow us we're a publicly traded company. So we're traded in Canada as RGX and in the US as RGXTF. Okay, Don, if people would like to know more, I think we've maybe covered that, but just in case, if people would like to know more about yourself or any of the things we discussed in the podcast, where would you have me direct them? I'd have them direct to our website or LinkedIn. Again, it's a Regenx. tech is our website. Perfect. Okay, Don, that's been fascinating. Thanks a million for coming on the podcast today. Thank you very much for having me. Okay. Thank you all for tuning into this episode of the Sustainable Supply Chain Podcast with me, Tom Raftery. Each week, thousands of supply chain professionals listen to this show. If you or your organization want to connect with this dedicated audience, consider becoming a sponsor. You can opt for exclusive episode branding where you choose the guests or a personalized 30 second ad roll. It's a unique opportunity to reach industry experts and influencers. For more details, hit me up on Twitter or LinkedIn, or drop me an email to tomraftery at outlook. com. Together, let's shape the future of sustainable supply chains. Thanks. Catch you all next time.