Unearthing Opportunity
The messy future of electrification and how we can minimize environmental impact on our path toward a greener future
We take a thematic approach to investing at Supercruise, going deep in a few areas to understand the market before deciding to pursue companies or not. We don’t like wasting founders’ time before knowing we like the market.
Recently, we’ve explored an area with a personal backstory and we’re sharing some of our condensed thoughts.
My grandfather was the oldest of five brothers. All served in WWII and were proud Americans and Californians. Each was unique and their closeness kept my extended family close, even to this day. But one of the brothers, John Livermore, always fascinated me. He was a geologist. He lived in Reno. He was a staunch environmentalist. Yet spent his entire life searching for gold deposits - a true Californian. Skipping the full biography, he discovered the Carlin Mine in Nevada. Carlin–type gold deposits are characterized by extremely fine-grained gold — gold that cannot be seen by the naked eye, nor concentrated by panning. Many didn’t believe it even existed, but his knowledge convinced him it was there. He partnered with a chemist to unlock this invisible gold. This technological breakthrough made this type of gold discovery and mining possible - physically and economically. To date, the mine has produced over 70m ounces of gold in total - sadly, owned by a company, not by him.
Yet he was always conflicted between his excitement and the environmental ramifications of the mine. I see similarities with the electrification movement happening now - it’s exciting and the end state makes sense, yet the need to unearth more rare earth minerals to make that future a reality poses a real environmental danger. Drawing on his experience, we believe technology will be the key to ensuring this growing trend has only a limited impact on the environment, mirroring the capabilities that made the Carlin mine - and Carlin-type gold - viable.
The rising global demand for rare earth minerals like cobalt, lithium, and yes, gold, driven by the shift towards electric vehicles and renewable energy, presents a lucrative investment opportunity for those willing to do the dirty work. This will happen. And while that industry should grow, we believe surrounding industries, like mining-related software will as well. We estimate the current market for mining software today at ~$9 billion and expect it to grow to +$18 billion by 2031. Innovations in AI, IoT, and autonomous systems enhance the safety, efficiency, and environmental footprint of mining operations, aligning with ESG standards and making them potentially attractive investment targets.
Geopolitical factors further highlight the importance of securing a stable supply of these minerals. With China dominating the supply chain, Western economies are motivated to develop domestic sources, presenting opportunities for ventures utilizing advanced geospatial and AI-driven exploration tools. It’s hard to see a world where the U.S. and others don’t open up their natural resources, assuming the addition of environmentally supportive technologies to limit the impact and reporting tools to ensure compliance.
Supportive regulatory frameworks, such as those enforced by the EPA and MSHA in the U.S., promote sustainable mining practices, mitigating risks, and enhancing the marketability of ESG-compliant enterprises. We don’t invest in mining operations, though someone will and will make a lot of money. But if companies are going to mine for resources, we believe in the technologies helping them do their work more effectively and sustainably.
Many of these companies will be overlooked simply due to the end market, similar to how Anduril was in its early days. However, the intersection of increasing mineral demand, technological innovation, and strong ESG frameworks offers significant investment potential in sustainable mining. Focusing on companies that drive these advancements ensures substantial returns and contributes to global environmental stewardship.
Here’s to the clean, green techno future.
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