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Kitco mining special coverage of the Mines and Money Miami is brought to you by Snowline Gold. The carbon credit markets could grow to a one trillion dollar value by 2037, that according to a Bloomberg NE F research report. How do you capitalize on that opportunity? And with Christian Milo, he is the former CEO of Equinox Gold. He is now the co-founder of Blue Dot Carbon. And you've also co-founded that, I believe, with Nolan Watson, with Sandstorm Gold, correct?
It's absolutely right. Yeah, Nolan started making a real look and transition into looking at sort of transitionally transitioning metals, as well as sort of carbon, which kind of fits in that space. And we put our heads together and we thought, you know what, we can use the model that Sandstorm has adopted in terms of precious metal streaming and actually go into the carbon markets and be one of the earlier players. And we can talk a bit more about what the value proposition is later, but it's a real opportunity to get going in a market that's forming. And as you said, a trillion-dollar market ain't small. And when I looked at the gold market, it's a 200 billion dollar a year annual revenue, and I was like, it could be four or five times the size of that.
Whoa, that's interesting. Let's, uh, step back for first. Uh, what are the carbon credit markets?
Yeah, the carbon credit markets are new, in a way. Um, and I think of it, and I can use some mining analogy to a certain degree. It's going to work with companies that are actually trying to create a low-carbon environment in the world. They're actually investing capital in projects, whether it be reforestation, conservation, change of fuel sources, cook stoves, etc. In Africa, biochars, actually using waste rock for mines to sequester carbon. But they're, they need capital and money to actually do these projects, and there really isn't a financing sector for that. And then they create these carbon credits, and then the big corporates of the world and banks, etc., are the actual end markets right now. And they're looking to buy these credits to offset their footprints or to do some good in terms of the ESG environment, uh, to creating a lower carbon environment. And the goal is to basically hit 2050 and be carbon neutral in the world. Now, is that possible? I don't know. I don't think so. And Kurt trajectory or under, but carbon credits were part of actually offsetting some of the carbon outputs going into 2050 and beyond.
Now, there's the two market sets. It's the regulatory markets, I think, like the California, Europe's have. And then there's also the voluntary markets, which is also starting to take off.
Yeah, and that's true. That's a very good point. Right now, you've got particularly the EU, which makes up the vast majority of the trading of the compliance markets, as we say. And they're quite established, and it's very closed. So they do some caps and trading, and they've got a carbon price that's almost set in that market at close to 100 euros a ton. And then you have the voluntary markets where companies like a Microsoft or a Shell or someone is sort of out there to offset their footprint, to do some good, etc. And they're actually investing in projects or buying carbon credits. And that market is, you know, a billion dollars plus. So it's completely small compared to the compliance market, which is multiples higher.
What's the opportunity then that Blue Dot sees, Christian?
You know, it was for me, it was a really hard decision to leave Equinox Gold. I was one of the founders there with Ross Beatty and Greg Smith and others, and I love that Equinox. A lot of those people are people that are my close friends. And that, but I spent a lot of time on carbon over the last few years on how are we going to change our business? And we were changing energy sources, we would have to change our fleets eventually, and that'll take a long time to do and a lot of capital. And then we'll need some offsets and things like carbon credit projects eventually to offset it. And I kind of made the decision that I want to make an impact, be a key part of that, invest in it. And I've got some experience in the space, and it's very, very adaptable into that. And so Nolan and I put our heads together, and we thought we can go out, raise the capital, develop these carbon credit projects with a partner who's actually going to do the work on the ground, and apply that model that's been used so effectively by Sandstorm in Franco-Nevada in our space, and actually develop a market that eventually we think will be multiples bigger than the gold market.
It's interesting with Ross Beatty, because he's really had a foot in, how would you say, energy transition, geothermal projects in the past, outside of what he's been doing in mining, which is substantial. I don't know if I want to give him credit or whether he'd appreciate that or not, but he helped almost turned me to look at the carbon markets. We had a very big ESG focus at Equinox, and he actually gave me Mark Carney's book. He said, "You've got to read this one day." And he wrote me a long email, and I started reading it, and I was also talking to some others who are in the space, and I just said, this makes a ton of sense. It will be a huge commodity. Even if you can't touch carbon in the air, per se, it's going to be a huge commodity of the future. And if we want to hit those targets by 2050 of net zero, it's going to be a key part of that. But it's only a small part of that solution. Actually, companies are reducing their carbon footprints. I was talking to, take Unilever, for example, in Europe, huge consumer goods group. They said, "We will be net neutral, net zero by 2039, and we're going to reduce 95% of our footprint." They're going to go to Ben & Jerry's ice creams, going all vegan. I thought, oh, that might not taste as good. But, you know what, that's a big commitment. All vegan. They're going to take all those little meat cubes that are in their soups out. They're going to be all vegan eventually. I mean, that's changing their business fundamentally, taking a big risk on that. And then they said, "We're going to be buying carbon credits for the last five or ten percent." And right now, those credits are trading for $20 a ton. We're going to be buying them for $200 a ton within 10 years. I mean, for one of the biggest consumer goods companies in the world to say that to me, it was just mind-blowing. And then I could give you a whole bunch more anecdotes about other companies too.
What's the other side though? I mean, what can you, what are the types of projects that you see for actually offsetting carbon?
Yeah, I mean, right now, you see a lot in the particularly conservation of forest, be it the Amazon, where I spent a lot of time working in Brazil, other parts of Africa, reforestation. You see biochars. I'm actually looking at a project in the western U.S. right now that I think BHP and Rio might be involved in, where there's waste rock, and I think it comes from the quarries as well. You can put it on a farmer's fields, it actually sequesters carbon by exposed to the environment, and it releases some phosphorus effectively into the fields. It improves yields, apparently. And they're able to sell these credits to Microsoft, Stripe, and all these huge corporations for hundreds of dollars a ton. And so you're seeing those types of projects. And then you get to the really extreme end of the technology, where direct air capture, where Bill Gates and Microsoft, etc., I'm sure are investing in these huge machines, spend, you know, three to $700 a ton to capture a ton of carbon out of the atmosphere. Where we're looking more at that five to ten, maybe 15 or $20 a ton, the sort of low-cost, scalable projects globally.
What is, you know, it's, there's a lot of entrants that are coming into this right now. That we were talking, uh, before the show, right? Uh, talking before the show. What are the regulations or what is, you know, in terms of actually, like, when you're buying an offset, for instance, that is going to be something that is, uh, you know, it's really going to deliver? It's something that is actually going to keep carbon out of the air.
Yeah, and that's one of the critical things. There isn't yet enough standardization. Um, there's a couple of new exchanges that have formed. Um, there's Air Carbon in Singapore. Um, there's another one in the U.S. A Blackstone just put $400 million in. There's also, I heard NASDAQ might be coming with a carbon exchange that'll help with transparency and probably regulation. You've also got the non-profit organizations, obviously, like Verra and that, that are verifying these credits. They're under a bit of scrutiny with things like the conservation right now, and you see some bad press on that. So I think we've got to weed out some of those people are taking advantage of this early stage of the sector. Continue to strengthen the standardization, the transparency, the traceability, and the rigor behind these projects. And I do think moving more and more towards removals, like in other words, sequestering carbon out of the atmosphere, is going to be important in the long term. And we see more countries and more companies saying, "I'll pay a premium for that because I know it's been removed from the atmosphere." Where conservation, you have to prove that by cutting down the Amazon, you were going to, you know, have 23% less forest, and that would cause more carbon to be in the environment because you weren't sequestering it. It's a little harder to prove. It's a little more judgmental, if you want to call it that. So I think we're moving more and more towards removals, which can be technology, it could be reforestation, it can be through the rocks and the geology, all different ways of actually pulling carbon to the atmosphere. Applied value, but transparency and, uh, and that over the long term can be really important. And Nolan Watson, who's our chairman, has said, look, I'd love to build something that's like the equivalent of the World Gold Council, but the World Carbon Credit Council, that will bring all these interested parties together to create some standardization, maybe some technology, some understanding, some some information, and help the the industry mature.
You had the recent operating experience, heading off Equinox Gold. How does that compare to the business that you're building at Blue Dot? I mean, what are the challenges right now? Is it challenges finding customers? Is it challenges in terms of, uh, getting awareness and getting scale? Is it a challenge actually finding projects right now where you can actually put the carbon?
Yeah, I mean, I always say it's got a lot of similarities in a way. When you're in mining, you're doing things in local communities, in the Amazon or wherever that you might be mining, and usually you're actually cleaning up the environment, you're trying to do good things, build infrastructure, create an industry. It's so similar to what we're doing, except, I guess, our end product is actually sequestering the carbon through a forest or or some technology or change in fuel source locally. So maybe more to the pure good end of things. But it's still the same thing as dealing with governments, dealing with communities, you know, a bit of infrastructure. The infrastructure is much simpler. So we're looking at parties that are going to spend $15 million, maybe building nurseries and logistics infrastructure in a country, and they can scale that massively versus having a plant that maybe you're spending hundreds of millions in mining to build, and you get no value back until it works. Where with reforestation, as soon as you start planting one tree, it will sequester carbon over time. So it's kind of less risky in that sense that you can build things on a smaller scale and scale them, and you're going to get value from it right from, not quite day one, but after you actually implement the project. But it's the same sort of thing. And my experience has probably been on the bigger scale, where I've been doing projects up to a billion dollars plus. Right now, in our space, the projects are $10, $20, maybe $50 to $100 million. They're a lot that are much larger than that right now. They will be one day, I think. But finding projects, it's unbelievable. I get calls every second day. I got a call from a project developer, "Oh, hey, I heard about you. We need some money. Really like the streaming royalty model. You've got experience in this part of the world. Will you join my board? Will you give us money?" Like, it's been unbelievable. We've got a billion dollars of projects in our pipeline now. We need to go find the money to do that. So I'd say it's the opposite of almost precious metal streaming, where it's hard to find the projects and it's probably a little easier to find the money. We're coming from the other direction. We're finding lots of projects. Finding skilled workforce is probably a tough thing at the moment because carbon is such high demand. Finding customers is absolutely no problem. They're just desperate for the for the actual offsets, whether it be in the compliance markets or in the voluntary markets. So it's really kind of scaling this industry, finding the money to scale it. And a lot of that money is looking at the industry, they're just not sure how to invest yet.
Lastly, Christian, milestones for the next 12 months?
Yeah, for us, really, uh, we built up, like I said, almost a billion-dollar pipeline. So we want to start executing on that. So hopefully, in the second half of this year, we can actually start putting money in the ground with our developers in Africa, maybe in the Caribbean, maybe in Asia or Brazil. And really, so the goal is to raise some money so we can start doing that. And I tell you, we're also looking at the business model. Should we also be creating a fund structure, which is more equivalent of a Brookfield or certain other big managers, maybe even a BlackRock, where we have our core business, we're investing in these projects, but maybe we set up a fund because certain corporates and companies are saying, "We need those credits. We don't want to just make money and a return on, you know, invested capital or dividend. We actually want the credit." So maybe we can help find those because we can find the projects. They're coming to us right now. We can structure these funds, raise the money from corporates and other institutions that actually then want to just get the credits out. So I think it's just to continue to evolve with this market, to start executing, putting money in the ground, so raising that money and then putting it in the ground with our key project developers. And then I think in a couple of years, you get to that stage where you're cash flowing and you're getting to a scale that becomes much more interesting to the big pensions and institutions of this world.
Christian, good luck with that. All, thank you very much. Yes, Christian Milo, he is CEO of Blue Dot Carbon. My name is Michael McRae with Kitco Mining. Here at Mines and Money in Miami. Kitco mining special coverage of the Mines and Money Miami is brought to you by Snowline Gold. Thank you.