Saturday, June 17, 2023

More On The Andreessen/Bezos/Gates Backed Company Using AI To Search For Cobalt

In yesterday's "Cobalt Blue" post I made a reference to the company, KoBold Metals without explaining further. Here's the rest of the story from the brainiacs at IEEE Spectrum. For what it's worth, we've been dubious. So far (five years) machine learning doesn't seem to add muh more than incremental advantage to minerals prospecting.

April 29, 2023:

This AI Hunts for Hidden Hoards of Battery Metals
KoBold Metals’ technology maps likely deposits of minerals for EV batteries

In June 2022, six Boeing 737s—fully loaded with tents, food, satellite Internet equipment, drones, geophysical survey gear, drilling equipment, and a team of experienced geologists—flew to a remote airstrip in northern Quebec. The geologists were hunting for major deposits of the minerals needed to power a clean-energy future. Given the mix of cutting-edge scientific computing and old-school bravado, it was as though they were channeling Alan Turing and Indiana Jones simultaneously.

Our startup, KoBold Metals, acquired an 800-square-kilometer mineral claim in the region based in part on predictions from our artificial intelligence systems. According to the AI, there was good reason to believe we’d find valuable deposits of nickel and cobalt buried below the surface. Summer snowmelts in this near-arctic region created a brief window to bring in a small village’s worth of equipment and personnel to test our predictions.

We cofounded KoBold in 2018 with backing from Bill Gates’s Breakthrough Energy Ventures and Silicon Valley venture capital firm Andreessen Horowitz. Our goal is to develop ways to discover major new deposits of vital metals needed for electric vehicle (EV) batteries—for which there is an enormous and growing need.

We’re trying to transform mineral exploration from a manual, judgment-guided, trial-and-error process into a data-driven and scalable science. It’s the mother of all needle-in-a-haystack problems: Find the significant minable deposits of cobalt, copper, lithium, and nickel resting anywhere from 100 to 2,000 meters deep in the Earth’s surface. 

The world needs a lot more metal
Preventing the most catastrophic impacts of climate change requires achieving net-zero greenhouse gas emissions by 2050, which includes, among many other things, replacing all fossil-fuel-powered light cars and trucks with electric vehicles. That, in turn, will require manufacturing billions of EV batteries. Even today’s demand for the metals outstrips supply—as evidenced by nickel prices doubling and lithium prices quintupling over the last year. To realize a global transition to electric vehicles, we’ll need to discover and mine an additional US $15 trillion worth of cobalt, copper, lithium, and nickel by midcentury. (We’re currently on target to mine about $3.6 trillion worth of these metals by 2050).

World leaders are well aware of the need. In the United States, for example, President Biden invoked the Cold War–era Defense Production Act in March 2022 to use presidential powers it grants to encourage domestic production of the minerals required in EV batteries. The Inflation Reduction Act, signed into law in August 2022, included billions of dollars to subsidize the development and operation of metals mines, both in the United States and globally.

Investors are aware of the supply challenge as well. In February 2022, KoBold raised $192.5 million in Series B financing, which has gone toward securing more than 50 exploration sites in Australia, Canada, Greenland, sub-Saharan Africa, and the United States. We plan to use AI to streamline the largely scattershot process of discovering new ore deposits. Once they’re discovered, we plan to partner with mining companies for the actual mining operations and advise them on efficient extraction, again using our AI tools....


In what looks like an acknowledgement (without public acknowledgement) of  the failure-to-date of the technique to find metals, the company took a bunch of their loot and invested in a previously discovered copper-cobalt resource. From Reuters, December 14, 2022:

Billionaire-backed KoBold Metals to invest in Zambia copper mine

California-based exploration firm KoBold Metals, which uses artificial intelligence and machine learning to identify battery metal deposits, is investing $150 million to develop a copper mine in Zambia, the company announced at the U.S.-Africa Leaders Summit in Washington, D.C.... 

This is a variation on a trick Mr. Andreessen used to save something, anything, from an an overfunded ($116 million) crypto sinkhole a16z portfolio company:

Andreessen Horowitz Investee Coinbase May Buy Andreessen Horowitz Investee (né
That's one way to exit. was not mentioned in April 4's "Crypto M&A: "Three Startups Coinbase May Have Its Eye On"" because it's such a Tesla/SolarCity-cousins-shouldn't-marry type of deal.

Yet here we are....

When Coinbase came public, the limited partner investors (and Mr. Andreessen) in were able to salvage their investment, even though added nothing, zilch, nada to Coinbase. And was never heard from again.

We've been tracking KoBold since just after it was formed. Here's a March 2022 post:

"Mining firm backed by Bezos and Gates to begin Greenland drilling"
We'll see if KoBold is everything it is touted to be or just hype....
....One of the reasons for the dubiosity is the fact the company has been talking about doing something for years. Here's a post from March 2019:

Cobalt: Bill Gates, Bezos, Dalio Are On the Hunt for New Underground Supply

And May 2019
Bezos, Andreessen and Gates Looking For Cobalt In Canada

Not them personally, can you imagine? Tramping around northern Saskatchewan?

Jeff: Bill, does this rock look blue to you?
Bill: I can't see it, let me get my glasses.
Marc: Guys, have I told you all the things I've wanted to tweet since I quit Twitter?
Jeff and Bill: Oh Gawd
No, it's a company they're invested in....
On the other hand the company has shown the political wherewithal to get a concession when others were shut out by the indigenous government. 

And November 2021:
"Greenland bans uranium mining, blocking vast rare earths project"
The ban seems to be aimed at just the radioactive stuff so shouldn't shut down Bill Gates' exploration for cobalt.*