EUROPEAN BUSINESS: Rolf, please tell us more about MetalNRG and your investment criteria and strategy. And how you create value for investors?
MetalNRG invests in projects that it controls directly and those that it takes a minority position in. Over the last 12 months our focus has been on waste to energy.
MNRG today has investments in Gold, in uranium in Oil & Gas and in an energy project in Italy. In fact we have invested in a plant in Italy that takes agricultural waste and via a gasification process produces electricity. Going forward we will seek to develop all of our interest however our focus will be on waste to energy projects, as there are currently enormous opportunities in this area.
We seek projects that are close to delivering revenues, ideally 12 to 18 months from the point of our investment. The projects have usually had some sort of set back and need to be refurbished or redeveloped. The plant in Italy, for example, was taken out of administration, but had legacy premium tariffs that we could still benefit from and made the economics of the project interesting.
Our interest is in projects that have the land, the permits and the buildings in place, we do not start with a blank sheet of paper. The idea is a little like buying a house that needs to be refurbished and can then be re-financed and rented out or sold. We don’t want to buy the land get the permits and build the house from scratch. The value is created by investing is orphaned and low valued projects and taking them forward into production. We tend to invest via a combination of equity and shareholder loans, when a project is stabilized in terms of revenue, profits and operations we seek to re finance the loans while still benefiting from any distribution in profits from the project as our equity position will not have changed.
EUROPEAN BUSINESS: We know your focus at MetalNRG is green energy, sustainable energy and waste to energy investing, please tell us about how do you view the opportunities in these sectors?
The opportunities are enormous, there is so much “new technology” there are so many projects and there are so many people with ideas. One of the biggest issues is making sure you select the right people, projects and technology. In terms of technology we tend to focus on validated technology that has proof of concept, so a plant than can be visited and has operational data available to evaluated it. We review opportunities all the time and there are too many projects that look extremely interesting at face value, but when you start looking into the detail you find that the technology has only been proven in a controlled testing environment and that conceptually the plans look good but the risks of putting the project into practice are too onerous.
The other big issue is that there are many projects that do not have the green credentials that they claim to have, so detailed end to end understanding of the project is essential.
We have seen a few general trends which might be specific to our circumstances, but there appears a lot of effort going into waste to energy with a focus on plastics to energy. Plastic pollution is a huge problem worldwide, we are getting to a point where microplastics are ending up in our oceans and entering into our food supplies.
The recycling of plastics is often done at high temperatures thus creating additional pollution, and a large % of plastics is just not recycled; we have 8 billion tons of waste plastic and 400 million tons of new waste plastic created annually, so this is an area that deserves our attention. The trick is finding technologies that recycle plastics at low temperatures without emissions, we are currently looking at some interesting possibilities that might actually be a positive solution to this problem.
The other area that offers huge opportunities is looking at buildings, building produce 40% of total CO2 emissions in the world and finding technologies that address this will be vital going forward.
The requirements are enormous however funds are limited and governments need to focus on putting the right incentives in place, which is not always a given.
EUROPEAN BUSINESS: In Europe, we are facing several challenges (inflation, energy and war in Ukraine), what is the potential impact on your business? Challenges or opportunities?
Europe is looking for new supply chains especially in gas and this will be a huge challenge. They will seek alternative solutions which need to be built and that will take time. Some of the supplies will be sourced from far away countries which will have an impact on shipping and transport demand and costs. Ports need to be ready to receive goods and in some cases that will be the bottleneck, just look at what happened in Spain last month.
The overall approach will need to be flexible and I am not convinced that European systems are as flexible as they need to be.
EUROPEAN BUSINESS: Some countries are restarting the coal power projects due to the energy crisis, what impact will this have on the energy market and the global decarbonization strategy?
Unfortunately coal is being used and in some cases we are falling back on coal because there is no alternative. The agreement signed between Indonesia Japan and the USA to help shift Indonesia away from coal is encouraging and a good start. However countries need energy and they will take it from the suppliers that offer it. Countries falling back on coal will in the short term normalize prices which will make it harder for investment to flow towards green sustainable projects. The impact on pollution will the problem.
EUROPEAN BUSINESS: Rolf, please tell us about yourself, your personal experience or lessons. What inspires you about being in this energy and resource industry? What’s the best piece of advice you can give to young leaders that you wish someone had told you earlier in your career?
I am Dutch, left the Netherlands early due to my father’s work and lived in, Syria, Iran, India, Italy, Ireland and the UK, visited the world and worked in Europe, Asia, African, the Middle East, South America and the US so a diverse and interesting background. I have been exposed to many different situation and have come to realize that we are all interested in sustainable energy, but we don’t have a common approach or even a common standard, no one can tell you what good looks like. I read an article the other day that was complaining about helicopters being used to de-ice the blades on wind farms, so we have a green solution but use polluting tools to maintain the wind mills!
Unfortunately there is a lot of green washing, there is a general perception that the west have the only answers because they have the money and tend to impose their will and this is often the wrong way to go.
My advice is to work out the impact of the decisions you make before you make them.
I will tell you a short story to illustrate my point. Wind turbines have used wood to make blades, the wood used is in part sourced from South America where the particular wood used grows very quickly and trees that are cut down regrow rapidly, so it appears to be a sustainable solution. However the farmers that have been asked, by the Western companies, to cut down the trees have never earned the kind of money the western companies are willing to pay. Some of the villages now have huge social issues. People suddenly have a much larger disposable income that they use it to buy alcohol. This has resulted in a very high increase in home violence and hospitalization of women who are beaten up by their drunken husbands when they come home after they have collected their wages and spent it on drink. This is clearly not sustainable and some one should have considered the impact and maybe offered social solutions which would have helped the transition.