Who's Making Money pt4 - Mineral Licensing and Brokerages

💡What’s New: Brokering mineral rights in today’s critical minerals super cycle.

🤔 Opinion: The 2024 stage is set for unprecedented value in geospatial tech.

🛠️ Tools & Data: Opensource solutions that will fascinate and please.

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💡What’s new

Last time I discussed Processing within the mining and mineral value chain. This week I tackle Licensing, which seems to be one of the most opaque but also very lucrative for those who can manage relationships and bring in customers.

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Licensing

This group of organizations is focused on brokering and administering mineral rights, which are legal rights. (Note: the legal aspect is complex and changes from country to country and from one municipality to another. In the US, the Bureau of Land Management is the primary agency responsible for managing claims on public lands.)

Example Startups and Business Models

• LandGate - hosts a web-based platform to bring commercial real estate and energy professionals together to transact various land rights. They allow land owners to create a free “report” (marketing literature) on their property that they can then post in the LandGate platform. LandGate makes money by charging monthly and annual subscriptions for access to their geospatial data platform, LandApp.

• US Mineral Exchange (USME) - provides a similar platform and services to buyers and sellers of mineral rights. Whereas LandGate encompasses many legal rights (water, surface, etc), USME deals exclusively in minerals. Their value is to bring a large number of market participants together to perform the key function of price discovery. (A side benefit might be market speed.) USME makes money by taking sales commissions. While listing your property is free, their contract requires that you cannot list anywhere else. They also seem to offer a lot of educational materials to both buyers and sellers.

Why they matter:

There are relatively few brokerages for mineral rights (i.e., not oil). Many brokerages require you to be an accredited investor to participate because of the value and risk profile of the assets. To my knowledge, mineral rights are not securitized and sold on public open markets–or if they are, you would not invest in them directly but in a holding company of some kind instead.

As such, these platforms perform several import functions. First, they shed light on an opaque industry, providing location, pricing, and other important data that are meaningful for investors. Second, they set the stage for bringing mineral rights investment opportunities to a larger audience. If there is to be an exponential growth in the demand for minerals over the coming decades, then mineral rights could become an interesting area for developing securitized investment products. As such, these platforms could provide a relevant funding source to encourage the development of mineral resources domestically.

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Related News Highlights

• Keep track of proposed mining law changes in the US Senate and House

• A fascinating study on how to accurately detect sand mining using opensource satellite data.

• Countries eager to cash in on minerals will do what’s in their power to encourage development of AI tech.

• A Future Minerals Forum hosted by Saudi Arabia to discuss that region’s mineral supply is scheduled for early January. A similar forum on digitalizing mining in Latin America is coming next November.

• National Geographic published a worthwhile synopsis on environmental challenges to electric energy transformation.

• US domestic rare earth mineral production is ramping up.

🤔 Opinion

If there was ever a year to be in geospatial technologies, it’s 2024.

Last year there were fantastic strides in open-sourced multimodal AI for image and text processing. Simultaneously, many companies and governments have been making satellite data generally available and “process-able” at low cost. These changes set the stage for a dramatic transformation in real-time global monitoring of any asset, for any company, at any time.

See what I mean:

• Segment objects in any satellite image.

• Locate and identify things in any satellite image.

• Chat with images (including satellite images) to understand what’s happening in them.

These capabilities are available in platforms that provide both historical data (going back to the 1970s) and real-time satellite / drone feeds. How many satellites? Here’s a count of launches.

When you match old data with new sources like space lidar, hyperspectral and high-resolution gravity measurement, you can find specific mineral types, both above and below ground. If that’s not enough, you can even snap photos of any place on earth in about 15 min by tasking a BlackSky satellite.

It’s happening .. right now!

Some noteworthy data platforms include Skyfi, Satellogic, Privateer, Up42 (Airbus), Microsoft Planetary Computer, GoogleEarthEngine, and BlackShark.

We’re living in an era of the most amazing innovations that will allow us to observe and make predictions at superhuman scale.

In the background of this development is the global challenge to move to cleaner energy. No nation can transition away from fossil fuel sources without new mineral supplies. The most powerful nations are hastily developing self-sufficiency of critical minerals for making computer chips, solar panels, airplane engines, and just about every other device that makes modernity enjoyable.

There is tremendous opportunity in the ensuing competition.

I’m not saying it’s a foregone conclusion that this market will do great things this year. Just that the ingredients are there to transform entire industries and fortunes. I for one will be placing bets. I think 2024 is going to be one of the greatest yet and one to remember for all time.

🛠️ Tools and Data

Opensource tools to build new value into your existing work.

Thanks for reading! Want me to look into a particular topic? Email your suggestions and and I will dig.

David