General Matter CEO Scott Nolan on $900M DOE contract, Ex-Im Bank offtake deal for Japan and Korea, and nuclear enrichment bottleneck

whatever you built. And so, if I build up a bunch of stuff, then I sort of claimed it. And so, uh, there is a new space race a foot. Uh, but we will come back to that story later because we have Scott Nolan who is the founder and CEO of General Matter in the room. Let's bring Scott in. How are you doing?

Good. Thank you guys. Thanks for having me.

Good to see you. Thanks so much for taking the time on such a busy day. How is Hillen Valley going for you?

Hillen Valley is great. Seems like everyone's here. Um, great discussions, great event.

What is the latest and greatest from General Matter? Can you get us uh up to speed on the development? Every time we talk to you,

is the job finished?

Is the job finished?

Not yet. No, it's going to be a few years. As you guys know, we're aiming for production before the end of the decade, but it's there's a lot of work to do to get there. The latest updates on our end are really January we got a contract from the DOE. Um I think we've talked about that in the past. That's $900 million to build our capacity in Paduka, Kentucky.

Um

a week ago we actually announced a new deal with XM bank

um working together towards um financing of offtake in Japan and Korea. So that's going to be our first international markets and moving into there to provide enrich uranium to our allies so that they don't have to depend on our adversaries. So step one is really domestic.

Yeah.

Domestic production for needs at home and then overseas is the latest update.

Double click on offtake for me. What what exactly is happening because I know the uranium's in the ground. It gets refined. Eventually it goes into a nuclear reactor. There's a couple other steps. Uh what step is this?

Yeah, we should we should give the overall update again. But the the big picture is every reactor that you hear about needs needs fuel. Yeah.

And it needs one of two types of fuel. either low enrich or high higher enriched fuel to 20%. And to make fuel, there's five steps. It's really get it out of the ground, mine it, turn it into a gas, enrich it, turn it back into a solid, and then make your fuel pellets. That middle step is one that the US used to be the world leader in. 86% of worldwide production, and now we're less than 1%. Yeah.

And so we're trying to bring that back. Um doing that in Kentucky, all clean sheet engineering, just focus on cost and scalability. So

yeah,

that's what we're doing. The offtake is we have this you know, capacity to sell and to enrich. And so utilities work with us, you know, they'll contract with us for us to take their uranium and enrich it to the level they needed to operate in a reactor.

Okay. Yeah, that makes sense. Uh has the is the do you think the rateayer protection plan or or or a pledge is going to be overall bullish for the nuclear industry? it. I imagine that as we move towards more behind the meter uh energy production, people should be thinking more nuclear, but is that how the energy market will play out in the United States?

I think it's a genius move. So,

we were talking about concepts like this even before that announcement where,

you know, you started to see things where communities were starting to get concerned about data centers coming to their community, driving up electricity prices. It's this, you know, when you're when you're talking about how much you're spending in a data center, why not just produce a little bit more energy production capacity? Yeah. Maybe produce 110% of what you need. Yeah.

And internally, we nickname that bring your own energy. Yeah.

And so I think that's the way that you get data centers to be not just neutral, but highly beneficial to the communities that they're in.

Reduce rates for everybody. I don't think it's just rateayer protection. I think it's rateayer reduction.

Yeah.

Um and so that's that's how we should be getting to cheaper rates on the meter and how we should actually build out the grid again. So I think that's I think that's a genius move. Yeah. I think nuclear should be a big part of it. I think enrichment is going to be the bottleneck to scaling that which is why we're trying to solve enrichment.

Yeah. When whenever we talk about actually uh turning uranium into energy at some point we start talking about uh new reactor development. We talked to Doug Bernau from uh Radiant. We've talked to Isaiah from AR. Uh is there another side of the industry that's waking up? I are we going to be seeing new things from the Westing houses of the world, these old companies that maybe the capital markets are more receptive to regulations more receptive to and they have a unique product that can actually generate uh megawatt hundreds of megawatts. I I don't know how big the the the the biggest Westinghouse uh reactors are, but uh they the criticism has has not been for a while they don't work. it's been they take too long or they're too expensive and maybe something's changing in the economy or the the energy landscape.

Yep. I think it's, you know, just like people talk about all the above energy, I think it's all all the above reactors. So micro reactors might work in one area, but a gigawatt scale like AP-1000 reactor is going to work on the grid. And so that side of things has always been about how do we do faster, more affordable, more predictable construction projects for those gigawatt scale reactors. Everything else is about how do we build it in a in a factory? how do we bring down the cost of the reactor? And so the world really is divided into those two camps. Either, hey, we're committed to it being a construction project. Let's do that better. And there's companies working on doing that better. And then there's all the reactor companies that are focused on either like 1 megawatt, 10 to 50 megawatt, a little bit bigger than that for data centers and tiling those together. So I think there's a lot of people with different strategies and and all of them can make sense for their own and and markets. Uh curious to ask how how does how do nuclear energy providers respond to you know geopolitical events the last week where you have you know fluctuating energy prices and you know the LG markets. Is it is it possible for nuclear energy providers and let's say China to see rising fuel costs and react to that or are we more talking about they just are kind of steadily providing energy as they always do and it's less of a sector that can be kind of responsive to uh changes in in uh global fuel costs.

Yeah, I think it's it's just on the nuclear side it's just extremely stable. More of the same. Um I think you see the volatility in the fossil fuel markets and it I think that if anything is probably viewed as a tailwind for nuclear where hey nuclear is going to be here um you know you buy a reactor you buy a few years of inventory on fuel which can easily be stored and you're going to have predictability in your energy costs and for the really big reactors the fuel cost is not a major cost. So they haven't worried about it as as much really on their mind is how do we get diversification and a stable supply base on the advanced reactor side. The fuel cost is actually pretty meaningful and so that's why we're really focused on not just scalability and reliability but also cost structure. So nuclear in general I think the more volatility there is in the fossil fuel space the more the more obvious it is that that needs to be a huge part of the grid. And then the fuel for nuclear is, you know, we're trying to produce more of it and we're uh bringing the cost down so that the advanced reactor companies can at some point uh potentially beat fossil fuels as, you know, on a cost basis, not just on a safety and and you know, low carbon basis.

And and remind me about the actual mining landscape. Is this a scenario where America has enough deposits of of uh uranium and other fuels that uh we're we're purely limited on refining capabilities and manufacturing capabilities or uh or is there a world where America actually runs out of the raw material?

Uh no, it's really a limit on enrichment.

Wow.

And on reactor construction? Yeah. Now on on mining, the US doesn't have as good of deposits as like a Canada or Australia. The they're not as or rich. And so the price at which it makes sense to do mining in the US is a little bit higher than it would be in Canada. But it's still coming online at these prices. And we see producers in,

you know, Texas, Wyoming coming back online, bringing new mines online. You have still mining operations happening in Utah, Colorado. So,

and even those foreign countries are very geopolitically stable. They're allied countries. So, a lot less a lot less long-term risk. Um, you I mean, you've been you've been working in the nuclear industry for a number of years now since before Christopher Nolan's Oppenheimer movie. Was that movie educational? Did it make your job easier or or was the net effect like more fear around nuclear in your opinion?

I I thought maybe neither. Okay. When I went when I went to go see the movie, I was hoping it would be more inspirational in some way, get into more of the tech, like yes,

make it about about the work that they had to do. Um, you know, it was more of a character study in a lot of ways.

Totally.

And and so, yeah, I think it was neutral. I think the one scene from the movie that was relevant was

if you remember when he's in the I think in a classroom or in a a setting like that and he's filling up the bowls with marbles.

Yeah.

Um the big bowl of marbles was uranium enrichment. So, we we explained that to people, you know, we're we're making the marbles that go in Yeah. you know, in into the nuclear reactors.

Yeah.

Not into anything they were doing.

There's not nearly enough uh marbles in the bowl right now. Uh well, thank you so much for taking the time to come chat with us.

Great.

Have a fantastic rest of your time at Hill Valley and we'll see you soon.

Say hi to everyone.

We'll do have a goodbye.

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I want to teach you an Australian accent. And here's how you do it. You say this out loud exactly as it's written. Have Have you been to Spice lightly? Have you been to Spice lightly?

Have you been to Spice lightly? It really it re you have to read this because the the words wherever you are in the world you're in the middle of your

spice like cinnamon lightly as opposed to heavily but when you say have you been to spice lightly you sound Australian. It's crazy. It's like an optical illusion for your mouth I suppose. Um anyway

there's plenty of other news while we wait for our next guest uh to join. Um let's see what else is in the news. Have you heard speaking of manufacturing have can we pull up this video of this gentleman who runs a bowling alley because this is a fascinating case study in the American manufacturing and industrial uh societ uh capabilities. Listen to this video, Jordy. I don't think you've seen this.

People always ask me what's the hardest part about owning a bowling alley. It's not managing a bar or even the crazy property taxes on a building this big. It's actually these machines. These are Brunswick's A2 pin setters built in the 1960s running here for almost a decade. Each machine has over 2,000 moving parts. That's the problem. Just like anything their age, they start breaking down. And while the parts are becoming hard to find, the mechanics who grew up servicing these are even more rare. Which is why we're starting to see more and more houses convert to the string pin machine. But just like any industry, innovation is often met with skepticism. bowlers. Isn't this

crazy? So, they're going to potentially switch to pin setters that have strings, which bowlers don't like cuz the pins don't fly.

Much more fun to bowl on the crash and the freeall.

We don't know how to make bowling machines.

We actually don't know how to make bowling machines in this country anymore.

The only American dynamism category I care about.

Yeah. Move over.

Hypersonics. Sorry, hypersonics. General matters.

Yeah. Sorry, Andrew.

This needs This needs to come through.

We need the Boeing company of America. It's the only only only category that I that I approve of a new name.

Yes.

In that style.

But but it does it does tell a very interesting story because this the these niche longtail manufacturing organizations are very difficult. There's a whole bunch of, you know, bespoke gears and and switches and electronics and all sorts of different machinery in there that's been difficult to make. And it it is it is a a victim of uh the de-industrialization process