Transcription
Hello everybody. Welcome into Commodity Culture where our goal is to make you a better investor in the commodities sector. My name is Jesse Day.
Before we dive in, nothing here is investment advice. Do your own due diligence. Today is December 9th, 2025, and my guest is the CEO of Life Zone Metals, a company committed to delivering cleaner and more responsible metals production and recycling through the application of their hydrometallurgical technology. We're going to be diving into the company as well as the nickel market, which is the main metal that Life Zone is involved with. It's Chris Shaalter. Great to have you on the show.
>> Great Jesse, real pleasure to be here. So, thanks for your time.
>> Absolutely. Let's kick things off with an overview of the nickel market from a kind of 30,000-foot view. Why is the nickel market an area that investors in the commodity space should be paying attention to right now in your view?
>> Sure. So I think just to start, uh, nickel is notoriously one of the most volatile base metals, and I think what you're seeing right now is you have a whole bunch of different, uh, commodities going in different directions. You're seeing, um, you know, precious metals, gold, silver, go on really historic runs. You're seeing nickel kind of, uh, hit, you know, relatively not all-time lows, but really, um, being dramatically impacted by the control from Indonesian China. So, so what you're seeing right now from our standpoint is you, you're seeing gold and silver in a run that, um, we're starting to see people starting to look for, okay, what's the next commodity that's kind of been bottoming out, going through its kind of supply demand structural, kind of, um, you know, uh, fix. I mean, you've seen that in platinum. I think a good example is platinum and palladium where you've seen a lot of mine shut down. We've seen closures due to prices falling off, and it's kind of worked through that cycle, and you're seeing a lot of that in nickel right now. Now, however, nickel is very, very tightly controlled by Indonesia and the Chinese. So, roughly, um, I think this year it's around 62% of the market share is controlled on the production side by Indonesia, which is really controlled by the Chinese, and that is looking to hit upwards of 70% next year. So you're seeing an increasingly tightly controlled market share, and I think rare earths gets a lot of attention right now, and that's getting a lot of focus of how tightly that, that whole entire supply chain has been controlled. And what's very important for people to understand is it's not just the, it's not just the mining side. You know, these are, these are, um, processes that involve smelting, concentrating, um, refining. So it's a combination of all those sequence of events. And so really, the downstream processing and refining is where you find the strongest chokehold. So really, um, rare earth is a great example of where you've seen a massive concentration of that downstream processing within one country, and the nickel market, you're seeing a replication of that as well. So nickel is becoming just as acute, it already is, of a concentration risk for western markets in terms of mineral supply chain security. So that's something where, um, Life Zone Metals, our flagship asset is the world-famous Kabanga nickel project, which is really the largest potential nickel sulfide deposit that's really development-ready. And so we've been working very hard getting it to the, you know, really production, um, well, we're kicking into, uh, the FID phase and construction. So this is the next really big source of nickel that's poised to come online that would be outside of the sphere of influence of Indonesia and China. So we become a really strategically important deposit, and that's where, that's where we're getting a lot of attention right now. But that's, that's, that's really how we fit into the, you know, the dynamics right now in the nickel market.
>> Great overview, and I want to dive into both Indonesia's dominance of the nickel market as well as Life Zone Metals in a moment. But first, I want to go back to March of 2022, where nickel surged in a single day over 250%. The single most extreme single-day move in commodity history, leading the LME to suspend nickel trading for over a week. Since then, as you mentioned, the price has fallen and it's been in a sideways consolidation for around a year now. What are your thoughts on that price spike? Was that a reflection of where nickel prices could ultimately end up? And do you think we're potentially tremendously undervalued at at these levels right now, if not at least moderately undervalued?
>> Yeah, I mean, I'd love if that was reflective of future nickel prices. I mean, that price on, you know, really the, uh, on that day, I think it hit almost $100,000 per ton. Um, I think that was a unique kind of black swan event, what we saw, and I think there's been a really good kind of triaging of the, you know, looking back at what actually happened. And, and that was a factor of, um, you had the Ukraine-Russian war really spooking commodity prices, and what you had was you had a massive concentration of short positions from one of the largest, uh, Chinese, um, nickel players, Tsingshan. So you, you add that in, and you add in the fact that a lot of the, the way that LME works, it's, it works best when you do a lot of the clearing through the, you know, the LME clearing process. Um, a lot of the short, uh, positions that were put on by Tsingshan were done, uh, over-the-counter, so the OTC market. So they weren't, you couldn't track them as readily, and so people were caught off guard. And what really resulted was, um, just a, a catalyzing, you know, short squeeze where margin calls were just being automatically triggered. If you have all these OTC positions with various, uh, third-party banks, they're not acting in concert. They're all scrambling to cover those margins, those margin calls. And so you just saw a self-fulfilling event that just sent the, the price skyrocketing, and there's not the depth of liquidity in the LME, especially for a single commodity like nickel, that can, can contain that if the clearing isn't all done centrally. So you really saw a fragmented, um, scenario where people were just caught off guard. And I think that's also, look, the LME has been criticized quite a bit, but that, that's something that was a very unique event and shows the concentration risk of having that much of a position put on when it's not understood and controlled within that specific, uh, platform.
>> Well, let's dive a little bit deeper into Indonesia's dominance of the of the nickel market, over 50% of the world's production, um, and they have implemented an export ban on raw nickel since January 2020. Maybe dive a little bit deeper in terms of the impact that has on the nickel market and why it highlights the importance of bringing other sources of production online.
>> Yeah. So, as I indicated, it's actually higher than 50%. It's, it's, it's really, it's about just over 60% this year. And what's interesting is the, the actual, you have the production and the market share that Indonesia controls, which is around 61%, poised to go to 70% next year, but you have the consumption being dominated by China as well, and that's almost 80%. Um, right now, you have, it's around 65% of the global demand for nickel is still stainless steel, only about 15% is, uh, battery technology right now, but that is growing at a much higher rate. So you're still seeing the predominant growth in nickel, um, really being driven by, um, stainless steel. So I think when you look at the, the production overall, um, most of the, well, most of the growth will come from electric vehicles on a, um, on a year-over-year growth basis. And you're seeing most of that demand come out of China. So right now, you're seeing, um, electric vehicle sales in the US, really in the back of the, um, the IRA tariffs, um, expiring. So a little bit of a spike in EV sales as people want to take advantage of the expiration of those credits, um, knowing prices go up. So you've seen really a fall-off in the US in terms of EV sales, but you're still seeing very strong growth year-over-year in Europe and China. So you're really seeing a, a bifurcation of where the demand is really coming from. And I think what's matching up is Indonesia's been able to really dominate the sourcing of, of nickel to satisfy those, those, those batteries. Um, and I mean, Indonesia, they, you know, they went on a very, very concerted policy, um, effort to, to, to increase supply, and so it was a, it was a very successful, um, policy because they have really decided that they wanted to incubate and control that nickel industry. Um, they brought in all the incentives to incur investment coming into the country, and they made some very, very strong decisions to, to force local beneficiation, which was pretty hectic. Uh, I mean, they, you know, they shut the borders pretty rapidly. Um, but it has resulted in the evolution of the, um, you know, high-pressure acid leaching being a, a phenomenally successful, um, development in the nickel industry, and this caught everyone by surprise, uh, especially the majors. So what you saw was the really, the high-cost producers in Western Australia, they've all, I mean, I think there's only probably one or two mines still still open. Um, so you saw the high-cost producers of nickel, the nickel mines in Western Australia, just get absolutely bludgeoned by the advent and increase in supply so rapidly out of Indonesia. So, so Indonesia now, it comes with a very, very high environmental cost. Um, there are not environmental controls on the mining of, uh, in the methodology in Indonesia. We can talk about that some more as well, but it's, it's probably the dirtiest methodology for mining and processing, um, in the, in the mining space right now.
>> Very interesting. I want to talk as well about the US administration's push for more critical minerals production that is from either friendly allies domestically sourced because they're starting to wake up to what you've been talking about, this concentration of commodities production, particularly in China when it comes to obviously, as you mentioned, rare earths is what's in the headline these days, but a variety of critical minerals. Um, talk to us about how you view that. We've also got, um, the EU view, which is talking about critical raw material tariffs. It seems like countries around the world are starting to realize just how valuable it is to produce commodities, which is interesting because we've lived in this financialized world where hard assets have been very out of favor, and now the tables seem to be turning, and people seem to be waking up. What, what are your thoughts on that and how it could impact, um, both your project and the nickel market as well?
>> Yeah, it's been fascinating to watch it kind of evolve because what we've seen in the previous administration, you saw the advent of the Mineral Security Partnership. You saw a collaborative effort by the West to, to align themselves, uh, and look at supply chain security through, kind of a collaborative, and that still is the case. But fast-forwarding to this administration, they've taken a very, um, unilateral approach and been very, very aggressive in some of their the rollout of their policies. So they've established, you know, really, um, very specific supply chain security, um, individuals within the government, and you're seeing, uh, an example of several of the transactions that have been, you know, really announced recently. Uh, MP Materials was obviously one of the big highlight ones that was a, probably a one-off because of the, the really urgent strategic importance of securing a rare earths project, uh, really the only major one within the US, uh, borders. And so that, that was unique. But what that demonstrated in my view is that you're seeing a, a much more creative, much more, um, fast-moving, uh, reactionary capability within the US government. There's various buckets of capital, whether it's from, um, the Department of War, whether it's from, um, Department of Energy, um, Commerce. So you're seeing a number of different buckets that are all being availed to go after some of these supply chain, um, you know, high-risk commodities. And so, so what the US has done is they, they've expanded the list of critical metals and really methodically, what I've seen is they're going through them one by one and trying to determine where can we back certain projects that will ensure that we are solving the supply chain risk for that specific commodity. And I think importantly for nickel, where we kind of sit in this whole entire, uh, story, um, as an international project, we fall really within the US Development Finance Corporation is kind of our, one of our key, um, partners right now within the US government. So we, uh, and this is public, we've engaged them on project financing for the Kabanga project, and then also, uh, more immediate is the political risk insurance application we have in with the US Development Finance Corporation. Uh, that's outstanding, and, and that should hopefully be going, you know, before end of this year to the, you know, to the board for a decision. Now, what that does is that evidences that potentially we have the US government coming in to, um, really show a strong endorsement by underwriting, um, an international project. And what they're going to require, all these buckets of capital coming from the US will require offtake being directed to US and allied, um, what they call approved partners. So, so in one sense, to your question, you have the Europeans, you know, looking to craft their own policy, and whether it's the battery passport, or it's, um, what we're really seeing is, you're seeing collaboration in some areas, but you're also seeing each country unilaterally looking to go after their own domestic, uh, supply chain security, whereas the US is pretty much at the most aggressive, uh, stage of that. Um, we also have an MOU with the Japanese, um, with JOGMEC, which is really the government parastatal that's been around for quite some time to facilitate the inputs for all the domestic Japanese industrial, um, manufacturers, and they have a very similar mandate where they're looking to secure supply chain, looking to secure minerals, uh, for the Japanese economy, and, and they provide liquidity and equity financing and returns. So, so very similar. So it's, it's, it's a, it's a dynamic, it's a fast-changing, um, landscape right now, but there, there is a lot of aggression out of the US to support projects like Kabanga, not only just a domestic agenda anymore. They're looking to identify these strategic projects that are overseas with countries like Tanzania that can be allied in a bilateral engagement. I think we're, we're, we're very much in a very positive pathway to see that come to fruition.
>> Well, let's talk about Life Zone Metals and the Kabanga project. Um, could you start by giving us an overview of the company and maybe dive deeper into the Kabanga project and discuss, you know, infrastructure in place, milestones achieved, and plans to advance the project moving forward?
>> So Life Zone Metals, we're a combination of our flagship Kabanga nickel project, which we've been discussing, which is really the, you know, the hallmark nickel sulfide project globally that's poised to go into production, um, the quickest. And then combined with that, really our background and where we came from was our founders had a, um, really a hydrometallurgical background developing processes and flowsheets to crack certain difficult processing, um, situations on typically on sulfidic or refractory, uh, ore bodies. And so what that means, it's, it's really, it's an alternative to the pyrometallurgical smelting and burning. Um, hydrometallurgical processes are used within the mining industry. But what our team has done is come up with a novel approach, uh, specifically in PGMs. Um, that's really where we did a lot of our initial R&D. But what Life Zone's really positioned and what we're looking to focus on right now strategically is identifying where we can apply our hydro expertise to generate a competitive advantage for some of these projects that have not been developed or that would benefit from a different processing route or engineering design. And so, so we're a combination of a technology company and a mining company, I guess, is a very good way to put it. Um, the big project, Kabanga, it's based in Tanzania. We finished up a DFS in July of this year. And so what we've been able to really display to the market is outside of collapsed nickel prices and the firm control of Indonesian China, we've been able to put forward a $1.6 billion NPV project with a 23% IRR. And this comes at just about a billion dollar, uh, capex buildout. And, and these are numbers and economics that demonstrate that we are firmly in a position to compete against the, the tight control of the Indonesian market. And that's, that's, that's absolutely where you have to be positioned if you're going to compete and bring a new nickel mine online, because as I said, the nickel mines in Australia are much higher up on the cost curve. The North American nickel mines primarily are lower grade, and Kabanga benefits from being very large, very high grade, and that puts us right there at the very bottom of the cost curve. And when you look at, um, you know, the, I mean, uh, we could use copper equivalent. So that's a good, good metric people like to talk about. Kabanga, in terms of its grade, I mean, we're 2% nickel, but on a copper equivalent basis, you, you add in our byproducts, copper, cobalt, we're at about a 4.1% copper equivalent. So that puts us higher than Kimmoto, that puts us higher than Resolution, that's at about 2.5%. So, really, it's a superior grade of the Kabanga project that's so valuable. And that's why we've gotten so much interest from other strategic partners, um, investors, and, and really, you know, the good thing is as well, we have a very strong relationship with the Tanzanian government. And so this is a project that's really blessed by the Tanzanians at the highest level. They want to see this move forward. They support it. And so we, we truly benefit from a, a partnership with the host government, and then strong support from the West, specifically because this is a very strategic, important source of nickel, copper, and cobalt, um, for this supply chain world that we're living in.
>> Well, a lot of people will hear Tanzania and think geopolitical risk, fairly or unfairly. It's a common reaction to projects in Africa. Of course, we saw the coup in Niger not too long ago, another coup in Benin recently. Um, so people tend to get a little nervous when mining projects are brought up in and around Africa. Could, could you maybe dive a little deeper into that relationship you have with the local government, relationship with the local community, and are there any risks you see to operating in that part of the world?
>> Uh, to start, I think the, the way the world's going and the, the high demand we're going to see for critical metals going forward in this whole entire broader energy transition, whether it's electric vehicles or battery storage or other new, um, uses that are still to be discovered, there, the, we're going to have to go find deposits, new deposits, and unlock some of these existing deposits in more difficult places. A lot of the biggest, easiest deposits have been discovered. So, so naturally, um, Africa, with its mineral endowment, is going to be one of the, you know, prime areas where you're going to see some of the newer, larger deposits, not only explored and identified, but also a lot of existing deposits that are there that have been known about, like Kabanga, that have not had the infrastructure to, to really exploit the deposit as yet. But we're also seeing, um, really, that the time has come for, for countries like Tanzania. Now, to your question on, you know, kind of the risk in an African jurisdiction, is definitely a risk, especially for, I would say, North American investors who are not as, you know, not as used to taking on Africa risk. But that's where this application we have in with the US Development Finance Corporation is, is, is critically, critically important because what this shows is, is the US government saying, hey, this is a product where we can come in and underwrite the sovereign risk of this project. And by them stepping in and providing that risk product, that risk wrapper on the Kabanga nickel project, what that does is that underwrites the equity risk for institutional investors and, and private investors. So, so that's a de-risking element that a, a government like the US can step in and provide that does unlock some of the risk factors. And, and so that is a, a big endorsement, a big commitment. Uh, and that's going to be something that we, you know, we're, as I said, we're going to, to the board with that application, and hopefully we'll have some good news in the coming weeks.
>> Well, let's discuss the company's cash position. You closed a $60 million bridge loan in September and a $15 million underwritten registered direct offering last month. How much cash do you now have in total? How do you plan to put that cash to work? And how much runway does it give you?
>> So when we announced DFS in July, uh, we made a, a very important decision that we wanted to, um, we had exited BHP at that point in time. So we bought back, uh, 17% shareholding from BHP. And so what we decided to do is we were working with our, um, some some colleagues of ours over at Taurus Funds, and we, uh, did a $60 million bridge facility. And what that bridge facility, in terms of the liquidity, does, that's really allocated to the project level, and that gives us sufficient capital to do a lot of the execution readiness, the pre-FID work, um, and really bridge that period from the defined feasibility study and exiting BHP and getting us to that next FID step. So, so that was very important. So between DFS and FID, for the project to progress on time and in budget and on budget, we have that facility in place specifically for that. Uh, the smaller capital raise up at Life Zone is to focus on, um, really because that $60 million was focused on the project, and that's us doing kind of an annual capital raise at Life Zone to cover our working capital requirements and needs, and also we have some other, uh, projects including, uh, recycling in North America for auto catalytic converters that we're in partnership with Glencore. It's another application of our hydrometallurgical process. Um, so in, in parallel to this, uh, in terms of capital raising and liquidity, we're running a process with Standard Chartered to bring in another strategic, um, investor or investors or consortium into the Kabanga nickel project at the, at the asset level. So that's roughly that equity, if we go to the DFS, we're going to be looking at roughly a $1.3 billion capital raise, 500, just over 500 or so of that's going to be equity with the balance project financing. So, we're in a very advanced stage with Standard Chartered Bank, who are our investment bankers. Um, and we have made public announcements that we're kind of in the final stages of that. So, we're going to have a very large liquidity, um, event at the Kabanga level. Um, the bridge facility gets us from DFS to when we do we close those funds, and then we have Standard Chartered on the project finance side appointed for the project financing, and that's, um, gone very, very well. So, um, there's going to be a lot of interest just given the high cash flow that Kabanga generates. We're able to, um, to quite comfortably, uh, put in a project financing, a debt piece, uh, for the project. So, so these are big announcements that are coming. I think when you look at Life Zone as a story, we, we've got these big catalysts on the horizon. Um, we've got the liquidity in place right now to bridge us to FID. Um, we've been conservative in terms of all the economic assumptions in the Kabanga project, and, and I think what's, you know, what investors and, and what your listeners should be looking at is, you know, a story with a tier-one asset. We've got a very big catalyst on the horizon. Um, and this is a strategic asset that's going to be, you know, very strongly supported by the West. And, and so that's a great story. And I think, um, you know, tier-one assets at the bottom of a cycle, where nickel is going to be correcting in the coming years, you want to be building a mine at this point in time. You don't want to be selling nickel right now. So I think we, timing-wise, I think we'll benefit from when nickel corrects, um, if you read some of the, you know, the research from, uh, as even, you know, Jim Lennon over at Macquarie, um, you know, in terms of 2028, he would forecast nickel gets back up to around $19,000 per ton. And that works for us because of where we are in the cost curve. We're about $7,800 per ton all-in sustaining costs. So even at $15,000 nickel, you know, we're profitable, and we're below the cost curve of where the Indonesians are. And at $15,000 per ton, about 40% of them are operating at a loss. So we're kind of bouncing around the bottom here. Um, so I think we're in a great position. So, so yeah, in terms of liquidity, financing, we're firmly in place. In terms of the two capital raises we just did, and we'll have big announcements coming on really the funding partners we'll have at the project, and that's going to be the biggest catalyst that we'll be announcing, uh, um, towards end of this year and early next year.
>> Great. Well, I'll end by opening the floor to you. Is there anything we haven't yet discussed or anything you think it's important to emphasize that potential shareholders of Life Zone Metals should be focused on?
>> I think I did cover the big one. I think we are, you know, if, um, you know, if I'm an investor right now, you're looking for distress plays, um, where value is not properly factored into, you know, the stock price. And I think we, you know, we, we trade a material discount to the NPV of the Kabanga project from the, from the DFS. So I think if you combine that substantial discount, people can take a view of whether or not, you know, we're in a position to then bring in the funding. And I think people can, you know, I think they can take a view just based on some of the announcements, the strategic partnerships we've, we've, we've identified, uh, the applications and support we have from the US government. So you can kind of see we're going in a certain direction. So I think we're, you know, with, I can't really say much more than that right now, but I think people can take a very strong, educated, um, view that we're probably at a point now where it's a, you know, very attractive time, uh, to get into nickel at the bottom of the cycle. And you always want to get in in these tier-one assets. And that's one of the things that, uh, you know, one of our early investors, Rick Rule, um, who I think everyone knows quite well. I mean, Rick was very clear. He's like, "Look, I've known Kabanga. I visited the site 20 years ago. It's one of the best deposits on the planet. It's the bottom of the cycle, and this is a tier-one asset." So his investment decision was, you know, didn't take very long. But tier-one assets at the bottom of the cycle, those are really hard to time. And I think we're providing investors right now an entry point, um, exactly on that formula. So I think that's, that's probably the last thing to kind of touch on. I think we're in a really, really good position.
>> Well, I'll put a link in the description below to Life Zone Metals website as well as social media so people can follow along with the company. Chris, this has been a fantastic conversation. Thank you so much for coming on the show.
>> Thanks Jesse. Really appreciate it. Look forward to coming back again.
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