BẢN CHÉP ÂM THANH 🔗
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Well, you having fun in Berlin?
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It's been an intense couple of days, admittedly. You know,
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a very well-attended conference.
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I don't know that I've ever seen this many people
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at an ITIA.
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I've been told that people were turned down. They wanted
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to pay the delegate fee and show up, but they
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were told that it was full. So for the first time,
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I feel.
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Yeah, sold out. It's like a Formula One race or
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a concert, right? You can't get in with the cool kids.
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Yeah, exactly. I mean, it's been the flavor of the year.
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Right, exactly. Yeah, not so much 10 years ago, but
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today everybody's wanting in. Well, Giannis, it's good to have
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you on an episode of Cliff's Notes podcast.
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Thank you, Cliff, for inviting me.
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Honor to have you here.
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The honor is mine.
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So we go back a little bit. We've kind of
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been in the industry for a little bit now. So
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tell me a little bit about how you got in tungsten.
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Yeah, so I started my career in the metals industry
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about 20 years ago. I worked as an analyst for...
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a publishing company that is today known as Fast Markets.
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So I started by writing monthly research reports on the
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metals industry and tin and zinc and steel. And then
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from there on, I joined a trading company to actually
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start trading. That was admittedly a long time ago, in 2007.
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And I moved to the south of France for that job.
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Okay.
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Yeah. And I did that for about eight years between
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the south of France and the Middle East. And in 2014,
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I was given the opportunity to join a growing division
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of a company, a commodities trader in Asia called Noble Group.
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Okay.
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That were setting up a 3D division. And they wanted
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someone with knowledge of a physical commodities trading business. So
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I joined them in Singapore and I moved to Singapore. Okay.
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And that's when I started trading tungsten. So it's been
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12 and a half years now.
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Okay. So I knew about half of that story. I
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did not know that you originally worked for the reporting company. Yeah.
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So did you go to school for that or was
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that just a job that you had interest in? Because
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I'm just curious how you landed there and then ended
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up as a trader.
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Yeah, so it was a great experience for me. It
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felt like going to uni for doing the business later.
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It was my first job out of uni. I graduated.
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I went to university in the UK. And then this
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was one of the first jobs that I found in London.
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And I very much enjoyed the traveling part, the speaking
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with people part, as well as the writing part. And
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that served me pretty well, I think, because it helped
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me make all the connections and learn about the markets
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and how they behave. So that when I then had
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the opportunity to join a trading desk, the fundamentals of
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supply and demand and how the best cure for high
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prices is high prices and the same thing for low prices,
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it became sort of second nature. And it helped me
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a lot with the actual trading.
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So that was your first job out of university.
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Right. The first office job, because I've done other jobs.
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Oh, yeah, yeah. We'll say that was your first step
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to career path, right? Correct, yeah. So I'm curious, were
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you covering all metals at that point or just like
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a select few?
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Just a select few monthly research publications. So I did
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some research reports on steel, steelmaking raw materials, and some... uh,
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tin and zinc base metals. And then, uh, from that, uh,
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I transitioned into some consultancy projects. And from there on, I, um, uh,
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left the publishing world and I went into trading.
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Yeah. So were you from London or no.
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I was born and raised in Greece. I'm a hundred
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Load full transcript
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percent Greek. Okay. And I just went to the UK
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to study.
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Okay.
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And I just stayed in London for work.
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What university did you go to?
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I went to Staffordshire university, which is in the West
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Midlands for my first degree. and to Brunel University in
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the west of London for my master's degree. Okay.
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Master's degree in?
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Finance. Okay. Not very relevant to tungsten, but yeah, it
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was mostly in numbers, econometrics, and very complex models, none
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of which I use today, by the way.
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Yeah. Do you think any of it has a little
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bit of intrinsic value in terms of your ability to
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calculate and think maybe outside the box a little bit
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when it comes to costing or.
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I think this goes with every discipline. You can go
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to uni and you can learn about any discipline and
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that teaches you some transferable skills. Sure. The very nature
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of what I was taught at uni, I'm not using today. Okay.
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So along your journey, you've landed at Traxxas.
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Yes.
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So what... What's Traxxas? What is their expertise? Pretty large company.
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Got a pretty significant footprint. So give me a little
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background on them.
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Very happy to have joined Traxxas. That was in 2021.
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Traxxas is a specialist in supply chain management with a
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focus on critical minerals and battery metals. We're not very
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big in coal or iron ore and these bulk materials,
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but we really are a specialist in some niche markets
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where we try to deploy balance sheet and become very
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relevant to our counterparties. So we are a big player
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in tin and tungsten, for example. We are a significant
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player in uranium. We are a significant player in rare
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earths and minor metals. And I think that's where the
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competitive edge of Traxxas comes, that we have a global presence.
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So unlike a lot of our competitors, we're not regional.
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We
have a global book, which in the tungsten world
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has served us quite well, I feel.
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Yeah. So just for like a little clarity, Tungco, for example,
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we only do tungsten really. I mean, there's some other
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things that we do like in the high speed world
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and whatnot, but let's just, just for simplicity, we do
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tungsten and we own the metal.
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Yeah.
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And we pretty much only do scrap. You and I
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have talked before about some YTO, BTO, some of those
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other things. So if we just talk tungsten for a minute,
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does Traxxas portfolio, do they cover all of the types
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or is there a narrow scope? And are you actually
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selling that metal or are you selling contracts?
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Right. So Traxxas has got the biggest footprint in tungsten concentrates.
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We have made a conscious decision to focus on the
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upstream part of the supply chain because we found that's
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where we could solve problems. customers pain points easier by
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deploying balance sheet and offering logistics, financing, and marketing services.
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We also solve the problem for the APT manufacturers in
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the world because tungsten is typically found in relatively difficult
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jurisdictions or the projects where tungsten is being produced as
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a mineral can be difficult to finance. So that's where
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we step in. Traxxas does trade intermediates and finished products
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including ferro tungsten and tungsten metal bar and tungsten powder
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we don't have the same size of market share as
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we do in the concentrate space and we don't really
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trade a lot of apt and oxides because we don't
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want to compete with our client base so we've taken
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a conscious decision we figured out that this is the
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best space for us to be in the market and
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we focused on it and you know after a lot
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of years after over a decade of hard work and
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a lot of trips to the mine sites, we have
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a pretty significant footprint in moving raw materials to the
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key direct consumers, which is the hydrometallurgical plants that turn
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it into APT and oxide, as well as quite a
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few oxide buyers that are in our customer base that
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are buying the concentrate from us for tall treatment into
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APT and BTO and YTO.
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So that is an option for somebody. Traxxas becomes an
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option for somebody other than having to, let's say, let's
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say I wanted concentrates. You would hear a lot of
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people say, okay, well, you would have an offtake with
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a mine. Right. So you have to have a certain
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level of commitment. Sounds like what you guys are doing
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is you're able to actually build a robust supply chain.
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You and I would maybe, if I'm, let's say I'm
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your customer.
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Yeah.
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You and I would have some kind of agreement as to, Giannis,
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I need this much per month or whatever. It's probably
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not a spot buy. But do you do spot buys
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or is it more long-term?
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The majority of our business is long-term contracts. By nature,
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when you're dealing with a minor... They will produce come
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rain or shine. Whether the market is good or whether
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the market is bad, they will produce. And they want
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liquidity and they want a path to cash. So that
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is what we provide. We buy typically at Mindgate and
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we pay at Mindgate. And then we manage the risks
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associated with moving the product from where it's being produced
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to where it's being consumed. Sometimes we have to change
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the form from concentrate to oxide by way of a
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tolling agreement, for instance. And we have to provide financing,
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either pre-financing to the mine or financing payment terms to
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the consumers. So we do a mix of that. depending
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on the customer requirements.
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So your supplier would be the mine and you stand
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between the mine and if I'm in need of that,
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I would have an agreement with you for... so many
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tons a month or a year or whatever.
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Exactly. And we would, if an APT manufacturer or a
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consumer of tungsten wanted security of supply, they could come
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to us and they could say, look, we want X
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tons of W03 per month. And we would qualify responsibly
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sourced concentrate from a variety of jurisdictions so that if
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there were hiccups in the supply chain, of which we
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have witnessed quite a few in the last few years,
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With COVID and with wars and with closed trades and
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the rest, we would make sure that the customer would
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receive the material on time and on spec from a
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variety of jurisdictions. And they wouldn't have to worry about
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whether they would get the material or not. You know
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better than most people that the last couple of years
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have been really difficult for suppliers to deliver against their
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contractual promises. Yep. we can claim that Traxxas hasn't had
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this issue by virtue of the diversified nature of our
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supply chains.
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So that is really key. If I'm your customer, you
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are making sure that supply chain is stable.
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Correct.
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And it's going to be there when I need it.
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And to achieve that, we might have to purchase material
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and keep it in stock at a location that is
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close to the customer and That doesn't just apply to tungsten.
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We do that across a wide variety of portfolios. Traxxas
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trades over 65 different elements of the periodic table.
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That's impressive. And really, there's, what, 60 critical raw materials?
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At least what the U.S. has listed is 60?
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Right.
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And so your main focus is within those categories.
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I think if you can put your finger on any
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element of the periodic table, chances are Traxxas is involved
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in that in some way, shape, or form.
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And is most of that, when we say upstream, we
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would have two options, either ore slash concentrates or scrap.
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Is most of that on the primary side that you're,
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no matter what, I know we've talked in tungsten, but.
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On tungsten, we tend to focus on the primary side.
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Yeah.
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We do some tungstate.
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Yeah.
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Which is coming from the secondary route.
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Sure.
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But it's still used as raw material in the APT
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manufacturing process. So we tend to focus mostly on the
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primary side. Yeah.
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And as far as when you mentioned conversion, if again,
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using me as an example, if I'm like, Hey, I,
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I need it in this form.
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Right.
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Um, you are doing that through another party or you
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guys actually have the capacity to turn it into something else.
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Then you and I will have to discuss what origin
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and what supplier do you want to convert? that primary
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raw material into an oxide or an APT, and then
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we can jointly visit them and strike an agreement where
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I supply the raw material, they supply the tolling services,
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and you get what you want.
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Right. So when you talk about responsibly sourcing, one of
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the concerns is that with a chain of custody, there's
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a lot of things where the customer has to know, okay,
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I got to know that it's not coming from these areas,
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whatever those areas are, And then I also can't have
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it even go through there for any kind of conversion, right?
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So that's where you're trying to build in not only
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the resiliency of the supply chain, but also transparency so
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that all parties are protected.
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This is absolutely core to the value proposition that we offer.
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We have been flying tungsten concentrate in recent months across
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the world. And of course, when Because tungsten is a
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conflict mineral by virtue of the Dodd-Frank Act, all the refiners,
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because they're not really smelters, this is a hydrometallurgical process,
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they require the full chain of custody documents and we
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provide all of them. And all the customers that we
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deliver product to are RMI conformant. And have all the
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documents to justify the origin and the provenance of each
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unit of W03 that we deliver to their premises.
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It's somewhat a complex operation to have.
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It's very capital intensive and very energy intensive. So my
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team and I, we travel around the world all the time.
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My wife will tell you that she misses me, but
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I travel at least two weeks per month on the
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road to make sure that supply chains remain intact and
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our flows remain conflict-free. Yeah.
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Well, I know that's a challenge to be away from home.
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Yeah.
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But we were laughing with somebody the other night. It's like,
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Sometimes when we're home too long, it's like.
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They want you out then.
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I thought you had a trip coming up.
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Yeah.
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And then you can tell on the phone when it's like, okay,
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you've been gone too long. Like, let's get back.
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Do you still travel a lot for work, Cliff?
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I do. I'm traveling a little. I'm probably traveling a
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little bit differently now. So like with Debbie being our
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chief operations officer. we split like the long, long distance
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travel where if we've got to be gone two, three
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weeks at a time, we're trying to reduce that. And
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then with our project 74, I'm spending a lot of
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time in DC. So I'm probably still traveling as much,
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but it doesn't feel like as much because it's intermittently
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and I'm not having to go for like here. I
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will have been here for almost two and a half
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weeks by the time I wrapped that up. And I
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think last year, I did two or I did the
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two and a half weekers probably seven times last year.
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That's a long, that's a long, that was a lot.
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So I just told her, I said, Hey, I don't
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think I can do that and stay at the mental
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mental game where I need to be. So we've tried
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to bust that up a little bit, but, and then
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being gone from your kids, you have one or two.
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I have one he's five, five and a half years old.
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But now that I moved to Dubai from Singapore, traveling
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has become a lot easier for me because Dubai is
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a single flight to pretty much anywhere, whereas Singapore was
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a lot more challenging from that perspective.
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Yeah, I could see where that would get quite interesting.
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On a lighter note, who's your favorite airline out of Dubai?
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Emirates, hands down. I used to love Singapore Airlines, but
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I think Emirates has won me over.
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I can go back and forth on those. But I
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think I would be in your camp. I think it's Emirates.
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It's fantastic.
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It's really good.
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And it's funny. My son and I, we actually came
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to Italy back in the summer to go to Beretta,
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the gun manufacturer.
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Yeah.
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And of all places, the one flight that you could
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get direct out of Newark or New York, I can't
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remember which one we went out of, into Europe with
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Emirates was Milan.
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Yeah.
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And I'm like, so strange, but that's just the route
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that that Emirates flight takes to wherever they're, I don't
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know if it was going on to Dubai or where
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the next stop was, but.
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It was definitely Dubai. I think they break the Dubai
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to New York flight, either in Athens or in Milan. Okay.
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And you were lucky to get the one in Milan. And,
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you know, I'm glad you experienced the hospitality of Emirates.
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It was nice. My son, he was, he got to
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fly business with me and he was like, dad.
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Yeah. So you see, you're going to spoil him. Yeah. Yeah.
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He didn't fly Emirates here. Well, let's talk tungsten headwinds
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maybe
just a little bit or even opportunities. I mean,
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there's probably, we could probably cover both ends, but a
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lot of really good news dropping while we've been at
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the conference this week. But how are you feeling about
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tungsten in general?
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I think tungsten is having his day in the sun.
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For the last two years, it's been in the spotlight.
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Its prices have witnessed a spectacular increase. As we have witnessed,
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the balance sheets of these companies have grown significantly. Valuations
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of companies involved in tungsten have grown significantly. That comes
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with both opportunities and challenges. The opportunity is obviously to
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get involved in the industry to grow and new projects
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to come online, both on the mining and the processing side.
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And the challenges associated with that come with the potential
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for a correction and the growing delta between the prices
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in China and the prices in the West that increase
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the risk of material substitution. So we're not talking about
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demand destruction because that Tungsten is fortunate enough to be
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used very sparingly in end products. So whether tungsten is
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$ 300 per MTU for APT or $ 3, 000, the impact on
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the price of a finished product is not really very substantial.
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But initially, in the initial phase... we've seen the risk
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of substitution predominantly because of the non-availability and you've seen
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that first hand yourself and now that the prices in
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the Chinese market are significantly below the prices in the
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US and Europe and you know Korea and Japan and
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the rest of the world we see that the non-critical applications,
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not related to defense and advanced manufacturing, but mining, construction,
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these Chinese tools are ending up costing a fraction of
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the cost as if they were produced from a Western manufacturer.
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So a lot of this demand is going to go
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to Chinese producers, whether we like it or not. And
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this demand substitution is going to be difficult to pull
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back in the future. So ultimately, my feeling is that
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the challenge facing the tungsten industry today is that for
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the whole ecosystem to coexist, the delta between Chinese and
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Western prices cannot be as large as it is today.
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But this is my own personal opinion.
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Yeah, I agree. In the scrap side, we are definitely
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seeing some of those categories that you're talking about, we're
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seeing the scrap supply drop off. And when we ask people,
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we're like, hey, are we missing? You know, you think
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maybe somebody else has picked up a little bit of
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business here or there. Maybe we missed it. And they're like, no,
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our availability is down because we stopped using tungsten in
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this area and we switched to high speed or whatever.
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So I'm with you. I think there is a lot
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of really good things going on. But I think we
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we don't need to fall asleep and just like ride
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the wave and be like, well, it's just going to
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be good.
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You know, nothing stays forever. Yeah.
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So I think we have to be very carefully watching that.
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Or we could wake up in a few years and
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some of our main, you know, for what 10 years
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ago was the main core business could have been eroded
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away to another location. So I think that's sound advice. Well, man,
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it's been good to have you on. Uh, we've, we've
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talked a lot and, uh, I think Traxxas is doing
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big things. Uh, look forward to hearing, uh, more and
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more good things with maybe the vault and a few other, uh,
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a few other opportunities.
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Excited for what lies ahead as well. And thank you
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for inviting me. And it's been great talking to you.
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All right, man. It's been an honor to have you on.
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That's another episode of Cliff's Notes podcast. Thanks for listening.
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Cliff's now.
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Cliff's now. Cliff's now.
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Cliff's now.