1315: Nicolas Niarchos | The Dirty Supply Chain Behind "Clean" Energy

23:49They are very aware of this. Okay, that's a relief, because it sure to a lot of us seems like we slept on this for 20, 30 years. And now it's, hey, this is going to be a problem. And everyone goes, whatever. That's the problem for the next administration. I don't know. So at least people in Washington are paying attention and care about this? Absolutely. People have been paying attention since the first Trump administration. And really, actually, Biden pushed this into top gear. Some of the solutions that they proposed were not particularly effective. The current administration is working very closely with and trusting the Congolese government.

24:28I have a question as to whether that is really a solution, because the Congolese government is ridden with corruption. It relies on falsified elections. And yet, at least they're doing something. I mean, the lack of knowledge on this subject was palpable when I started in 2018. I spoke to people who just didn't know anything about this. Now there is a significant team of people working on this. There's a brain bank that's starting to be developed. So at least that, now I don't know if I trust that they have all the solutions. So we shouldn't feel in any way we're out of the weeds. It was funny because two days ago, the Wall Street Journal reported that Virtus, which is a new U.S.

25:11company founded by sort of ex-CIA guys or something like that, has secured the lease for a big Congo cobalt processor called Shema. And it's a major win for the Trump administration in the Wall Street Journal headline. And somebody who was a sort of Republican person said, talk about a good play in the first inning, basically. Yeah, I see. Hey, look, I'll take any sort of win where we can, I suppose, because it really sounds like we don't have the minerals, okay? We don't have the capacity to refine the minerals, not good. We don't have the capacity to turn the minerals into batteries, not good.

25:45We don't have the capacity to manufacture the things that need the batteries and then ship them. That is not good, especially if we end up in a drone warfare situation where you need to make lots of small gadgets that have microprocessors and batteries in them because you need millions of them to fight a conflict. or especially if you're in a war with Iran where you are quickly depleting your stocks of Tomahawk missiles which are full of copper or you need to build a Virginia-class submarine which I forget how many rare earths it has in it. The dependence on China has increased thanks to this administration's wars.

26:21So it is a problem that is becoming worse and worse by the day. With every day that the war in Iran continues we are becoming more and more dependent. and I say we, I mean the US and Europe is becoming more and more dependent on China. You use the phrase Mephistophelian bargain. Did I get that right? Got it perfectly. Wow. Okay. That's heavy. I don't know what that means and I'm probably not alone. So I'm going to have to have you explain that. Mephistopheles was the demon with whom Dr. Faustus sold his soul away for riches and power and wealth and so on. So Mephistophelian, it's a pact with the devil.

26:58I see. So is the same thing as Faustian bargain? Faustian pact, exactly. I've never heard this version of it. Maybe that's more common in the UK. That's funny. You learn something new every day. I studied Faustian in college and that was in the States. So Mephistophelian was always, I like it as a word. Yeah, that's funny. You've been waiting years to use this. Like finally, I get to use Mephistophelian bargain and something non-academic. That's great. Okay. So what is the Faustian, because that's easier for me to say, bargain that we have made here? What are we trading? The bargain is about packing more and more power and having these magical almost batteries in our pockets and exporting the suffering and the pain and the environmental impacts to Africa, to Asia, to other places.

27:46And the other part of the Faustian bargain is that we have also handed the keys to China. China has all the cards on this one. It's not to say that we can't get it back, so we're not as screwed as Dr. Faustus, but we could certainly find ourselves in very difficult straits in not too long. Yeah, I did a show that was more in the weeds on the mining. It was with Siddharth Kara. That was episode 807. It was basically how the blood of Congo powers all of our devices. So rather than getting into the human cost of this and the environmental cost, which is horrifying, I'll let people go to that episode.

28:25I'll talk with you more about this system itself and the power that China has and how this could escalate into something quite serious geopolitically. So our whole system runs on batteries. How fragile is the system? I know that's kind of a strange word with supply chains, but it seems like China's got a pretty robust setup. It's just that there's a choke point in that they can say no more batteries for you. Exactly. I think the system is fragile in that things are being shipped all around the world. And when global shipping is limited or when fuel prices go up and so on, again, sorry to come back to the war, but it will push up prices and we will see probably prices for these minerals rise.

29:07What breaks first if supply chains get disrupted? I buy an iPhone once a year. If it costs$50,$100 more, I think some people will notice. Most people won't. They'll just assume Apple's getting greedy at the end. But what sort of problem does the everyman see on a daily basis if these supply chains get disrupted? Because there's batteries and things you don't even think about. It's not just your fancy once every two years purchase. I think you're completely right. The batteries and everything. So you'll see the price of many things go up. And I think what's very interesting about this as well is that going to Siddharth Kara's book, which is sort of expose of some of the artisanal mining, which again, reminding people it means exploitative hand mining.

29:51the large tech companies could invest in mining and invest in clean mining and invest in companies that do things the right way it would be a bit more expensive and maybe they would pass some of those costs on to the consumer but we're not talking about five hundred dollars more for an iphone we're not even really talking about a hundred dollars more we're talking about thirty dollars more or twenty dollars more in some cases that's depressing that is it's so cheap to just not have child slaves dying in horrific conditions, and yet we're not doing that. We're not doing that. And it's to do with inertia and laziness and greed at the end of the day.

30:33Again, Apple is using recycled metals now. Where did those metals come from in the first place? That's one question. What are the people left with who originally took out those metals? That's another question. But at the same time, I guess it is better than directly buying things, feeding the supply chain. The fact is that the cat is out of the bag, and there are so many other companies buying this stuff that don't really care about where it's coming from. And also, the other thing is that Apple has continued to put companies like Waiyur Cobalt, that we spoke about at the beginning of this show, into their supply chain.

31:06So they've taken them out when it's politically unpalatable, and then they slowly crept back in, and then they've been taken out and come back in. So it's a sort of whack-a-mole. You have to keep pointing it out. Not to mention, maybe Apple has a big spotlight on them because it's Apple and everybody has an iPhone in their pocket. But I don't know. I've got this thing here that vibrates. It's like an exercise thing. It's not a major brand. No one's going to know if that company uses sustainable batteries that were mined fairly, fair trade mining. Even the company that makes this vibrating device doesn't know where that battery comes from.

31:41They don't care. They just probably bought the cheapest ones that don't explode spontaneously so that they can legally sell them in the United States. It's amazing that you say that because, by the way, I had a conversation with a European electric bike manufacturer, and that is exactly what he told me. He said, we were looking for the cheapest batteries possible. I said, but did you even think about where the cobalt was going? Oh, no, no, we don't think about that. Yeah, of course. The Euros are supposed to be the ones that actually care about this stuff, right? It's us over here in the States are supposed to be the heartless bastards.

32:09Wow. And you're going to be able to compete on price. Look, if you're just looking for the cheapest batteries and you need a million of them and something costs you$10 ,000 or$15 ,000 more, but it's fair trade and sustainable, but no one is ever going to give you a pat on the back for that, you're just going to buy the cheaper one. You're just going to do that. The Europeans have started this thing called the battery passport, which is supposed to come in, I think, later this year or early next year. So you're going to be able to see where your battery came from. and it would be like a QR code on the back of your phone or something like that.

32:40That's amazing. Let's see how that works out. Again, there are questions around how things are traceable and can you rely on the data? But obviously it's a step forward. Agreed. Yeah, that is a step forward. People will try to counterfeit that stuff, but that's always been that way. This is probably a really tough one to answer because there might not be an answer. But are we more dependent now on batteries than we were in the oil era? No, I would say we're still very dependent on oil. Yeah, of course. I just wonder if we have a higher dependence on battery tech. No, battery tech changed the peak of the oil era, whenever that was, the 1980s, say.

33:18Battery tech completely changed. Those batteries were made, they were lead-acid batteries. They didn't have the supply chain issues. Nickel cadmium, as well, didn't have the same supply chain issues. And also, let's not forget, until the 1970s, there was a lot of mining in the US. There was a lot of mining in Europe. And that mining has, for very good reasons, because it was also being done in unsafe ways in many cases, was regulated. And the mining industry went through this period of contraction in the 90s and 2000s, because people understood that this was a very polluting industry, and it had to go through this.

33:56And I actually think that has been good for the mining industry in the end of the day. But now there needs to be a period of investment. There are very few people on the left or the right who are saying mining in Congo is better than doing mining at home. The U.S. has a small cobalt belt, actually a fairly large cobalt belt. It's never going to be able to replace Congo, but it will go some way towards making the U.S. less dependent on China. The problem is that that cobalt is very difficult to refine. It has a lot of arsenic in it. There's a big issue around the environmental effects of processing, and that's something that has to be resolved.

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38:07If you like this episode of the show, I invite you to do what other smart and considerate listeners do. Take a moment and support the amazing sponsors who make this show possible. All of the deals, discount codes, and ways to support the show are searchable and clickable on the website at jordanharbinger.com slash deals. If you can't remember the name of a sponsor, you can't find the code, please do email us jordan at jordanharbinger.com. Happy to surface codes for you. It really is that important that you support those who support the show. Now, back to Nicholas Niarchos. Back in, let's say, the 70s, you had OPEC, and they could just say, no, we're not giving you oil, or we're raising our prices, and it's just tough luck.

38:43That made us completely dependent on these oil-producing countries. Now we've got the shale revolution. We can refine at least some of our own oil. We get oil from Canada more. Now we produce domestic oil. But we can't do that with batteries. So I think instead of dependent, I'm asking more along the lines of, are there more dramatic choke points and levers that other countries have now with batteries than they did when we were dealing with oil. Completely. The Democratic Republic of the Congo has 70 % of the world's cobalt, which is a critical mineral. And at its height, OPEC had, I don't know, 40%, 45 % of global oil supplies.

39:23And this was when they were able to form cartels and so on. And we've seen this. We know the Congo has imposed export restrictions and that has already made the price of copper and cobalt shoot up. there's a lot of control that that country has by itself. Now, when you factor in Chinese processing and the fact that many of the mines are owned by China, not just in Congo, but also in Indonesia, the world's second largest producer of cobalt, you get to a point where you realize that there is one country that has enormous leverage over this industry, enormous leverage over critical minerals, enormous leverage over rare earths, rare earth magnets, which are important for everything from cars to weapons to planes, whatever it is.

40:04And that country is China. Yeah. Wow. And if you're scared of China or the rise of China, then that's bad news. And I think a lot of us are probably in that boat or at least nervous about it. I want to talk more about that in a little bit. I would like to touch a little bit on the human element here. You mentioned that these guys are waking up. Maybe they don't even get anything to eat during the day. I don't know. They walk to the mine. They climb in a hole. You said they're using a metal bar to pry some of the rocks and soil out. You've seen this with your own eyes. In fact, got arrested looking at it or trying to write about it.

40:36What's the air like? Does it smell? Are there burning things? Is it toxic? What do you notice immediately when you get there? Paint this for us. So you might have just had me clear my throat. I have an issue with my sinuses that I never had before I started this reporting. I always wonder whether it's... I had to have a surgery the other day. Really? Oh, so you get a little cobalt dust back there, maybe? I have no idea, but people complain about it all the time. They say they get sick during the dry season, which is when the cobalt dust has been blown off the roads. And it's not just cobalt, it's just dust from the mines.

41:08Some of it is mildly radioactive. Some of the studies of pregnant mothers and expectant fathers show the highest levels of heavy metal concentrations found anywhere in the world in their blood. It's pretty stark. Are they using mercury in the mining process, or is it just that, is the cobalt itself a heavy metal? I actually don't know what cobalt is. Is it a metal? It's not just cobalt. It's copper. It's other contaminants. It's plenty of other metals. One of the big contaminants is uranium. So it doesn't necessarily come from the refining. The refining basically leaks into water supplies like rivers, and sulfuric acid is used in the refining.

41:46So you imagine what happens to your drinking water supply when a mine next to your house and the water that you both bathe in, drink, and also wash your clothes and stuff in is suddenly flooded with sulfuric acid. And sulfuric acid into which copper and cobalt and whatever has been leached and has been disposed of incorrectly. You see what is known as sacrifice zones. And these are places that are being sacrificed for clean energy at home. It's depressing. It's shocking. And you look around and you look at places that are not next to mines, and it's actually an incredibly beautiful country. And you think, God, what are we doing in our scramble for clean energy?

42:26Have you seen these mining accidents and things like that? Have you been around the danger as well? I've been to the pits many times. I've been to people's houses where they have children who've fallen down the pits at night and things like that. I've seen people with injuries, the hospitals. But no, I've never been in a mine when it collapses because it's a sort of deadly moment. Surely, if you've been around a collapse, people start yelling and panicking and, I don't know, digging to try to get people out? You do not want to be there. But one of the anecdotes that I tell, I think toward the end of the book, is cabins is the English word.

43:02In French, they're called éboulement. And everybody starts saying éboulement, éboulement, this big éboulement. and we walk into the deputy mining minister's office in this region and we have an interview scheduled with him. He said, oh, two minutes, two minutes. And then he's sitting there, he's speaking in French with the governor and he's saying, oh, yes, you know, excellency, we don't have enough to pay the families, they've all died and there had just been a cave-in, an ébouement. And so he looks up and he said, oh, let's have this interview and I speak back to him in French and he realizes what he's done and he's sort of a bit sheepish about it.

43:36So you have a situation, again, in which these people are trying to cover up what's happening because it is just so brutal and so dangerous. It's not just a risky job. Any given day, you just might not come home from doing something like this. What does the dust do to your body? What kinds of illnesses are common? Look, for men, I think it's very bad for your sperm. I think for women, it's very bad if you're pregnant. There are lots of cases of congenital malformation, children with these kind of swollen heads and these horrible illnesses that many doctors there will say comes directly from exposure to dust and is most concentrated in places where there are mine sites next door and that dust gets blown into the homes.

44:22However, it's not just the doctors there who are saying it. There had been studies in The Lancet and other respectable scientific journals that have confirmed this issue. And these are obviously long-term damage. Do people who are working in this area, do they know any of this? Or is it just something they realize later? Because surely if you work in this area, maybe you just know a lot of sick people, but they don't have a choice. There's just a kind of fatalism, I guess, to living there and working there. And for most of these people, the only life that they know, yeah, they don't have a choice.

44:55This is almost a silly question after all that, but do they have any sort of protective equipment or is it really just bare hands, bare feet, using a stick, dig it out with your hands and throw it in a bucket? So the Congolese state, insofar as it exists, is supposed to formalize mining and inaugurate formalization projects. Since I've been away, they've made more and more noise about doing that with varying levels of success. so formalization includes getting protective equipment getting helmets getting pickaxes and what have you for the artisanal miners for the people who are mining by hand however in many many places and or even in the audits of places which have undergone formalization people regularly found people without shoes and washing minerals and in streams and doing all kinds of things that were just not safe at all.

45:46So yes, there is formalization, but it just hasn't gone very far. And there's kids there because it's the only income opportunity for the family. It's absolutely crazy to me. It's the only way they're going to go to school. They miss school in order to pay for their school. There's supposed to be free schooling in Congo, but the state has crumbled to such an extent that there is no free schooling. At least teachers don't get paid. So it's up to the families that send their kids to the school to pay teachers. And that is basically the situation that people are in. Can the West catch up at all? Or are we just too late?

46:18I mean, you mentioned they have a bunch of refiners. We have maybe one. They've invested a ton. We've underinvested. Is it too late now? Or is it like now we could have a rough 10 or 15 years? Or is it just not possible? It's never too late. And remember that it's not an all or nothing thing. In the end of the day, the US can build up a refining capacity. Europe can build up refining capacity. Congo could perhaps even build up refining capacity, and the burden could be shared. And in an ideal world, there would be a supply chain that was distinct for all different places. Now, of course, the people who are benefiting from the supply chain at the moment, the Chinese, will not want that to happen and have been able to manipulate in the past prices because they stockpile the metal, basically what will happen is that there's an investor who comes and say, we want to build this mine, assuming that prices for cobalt will remain steady at X over the next five years or whatever it is.

47:14And then suddenly they see the price of cobalt crash because Chinese have flooded the market with their stockpile or whatever it is and say, ah, well, actually it couldn't be profitable and they can't get the funding or the loans or whatever it is. So there has been a lot of manipulation behind the scenes. I see. Okay. Walk me through a modern mineral deal. So who's at the table? Congo, China, anyone else? Who's at the table for this? big multinational mining corporations or Chinese state-owned enterprises or smaller enterprises that are trying to basically find greenfield sites and develop them into mines.

47:52These are known as junior miners. And Mark Twain has a funny phrase for these people. It says a miner is defined as a liar standing next to a hole in the ground or something like that. That's basically the junior miners in this case. So these people will be cut in. And sometimes it's a combination of these people. So the big Chinese Congolese mining deals that were struck in the late 2000s, what was known as the deal of the century. Those deals were basically attended by Huayu, which at that time was a very small company. Basically, the huge Chinese mining company, state-owned mining company, and the Democratic Republic of the Congo's government and the Chinese government.

48:31So it's a lot of different actors, but the Chinese are very good at working in lockstep. And then also like weird Chinese businessmen who got in on the action, including this guy, Simon Kong, who's known as Mr. Briefcase. They always have weird nicknames like that. Isn't that a thing? I've got a lot of friends that do business in weird places like Sierra Leone or whatever, or they're in mineral mining, gold mining. They've always got stories of these Chinese businessmen. And I'm like, oh, does he work for a big company? So there's the big companies and they have their reps that come in from Beijing or Shanghai or whatever, Shenzhen.

49:01but then you have these sort of hangers-on that maybe they even grew up in Africa, their diaspora, or they're from China, depends, and they don't work for the company, they don't work for the state, they're not spies, but they got their like fixers, they got their hands in things. They always have nicknames like Mr. Briefcase or Polo because they only wear that. Their nickname will be something really sort of unoriginal like Laoban or basically loafers or something. And it's like always based on what they look like or how they're dressed or something like that or the brand of cigarettes that they smoke.

49:32And it's what does this guy do? Nobody in the whole deal actually understands what this person's job is other than showing up to every meeting and somehow having an idea or an input. It's something out of a movie. Yeah, he's called Mr. Briefcase for a very specific reason, because when he comes along to a deal, there is a briefcase full of cash that comes along with him. But the book has numerous characters like this. One of my favorite is this kind of Lebanese entrepreneur businessman character who goes beyond the realm of that. But his dad came over during the Lebanese civil war during the 1970s to Congo to work as a judo instructor in the South.

50:08And then he lost his job at the university or he left the university and became a cloth trader in the interior of Congo. And his sons were like geniuses. And they came and this was just about the time that people were starting to put cobwebs into cell phones. and they realized that they can make a lot of money off this. And they built these mines basically from scratch. And finally, he fell out with the president. He fled to Malta. And it was interesting following that guy. And I couldn't get in touch with him in the end. Then there's another character called Dan Gertler, who's an Israeli guy who came to Congo when he was like in his mid-20s, just finished military service, maybe even early 20s, he would say.

50:46It's like 23, 24. and Gatla arrives in the DRC. The civil war in which the dictator Mobutu Sestaseko has been unseated and suddenly this very rich country is basically open for the plunder has just ended. There is smoke rising over Kinshasa and this guy goes, I just fell in love with the country. I just, I love the people. He also got very rich because he basically became the go-to guy for the government to flick these mines and essentially he would sell the mines and then money would go back to the government and they would be able to fund their political campaigns or their palaces in Dubai or whatever it is.

51:25There's a very interesting history of that in Congo. Jeez, well, how directly are these minerals tied to, say, violence? Are people literally fighting over specific mines or how kind of directly can we draw this line? it's sometimes been drawn too directly by advocates because they want people to really care about this and i understand why they do it with cobalt it's slightly indirect there are some data points to suggest that third hand some money can get into the hands of some violent militias and whatever it is i think that's quite difficult to really draw that straight of a line And the connection with child abuse and child labor and human rights abuse is much clearer.

52:10It's much clearer. Now, when you get to a mineral like coltan, that's a whole different story because those mines, as we said earlier, have been used to fund a war. Now, they may not be the reason for the war, as some people will say, but the rent extracted from those mines has been used to fund the war. Yeah, I've got a buddy who was a coltan miner in Sierra Leone. I asked him how he got that job. He said, Oh, I'm friends with the president. First red flag. Well, actually, the first red flag was we were at a bar and he was limping. And I said, Did you injure yourself? And he said, No, I have$30 ,000 worth of gold strapped to my leg with an elastic band.

52:52And I said, Why? And he goes, I just flew in. And I always carry this with me at all times when I'm in Sierra Leone. and I asked why. And he's like, you never know when you're going to have to leave. And you definitely can't use paper money in a revolution. And I was like, this is crazy to me. So I made him show me the gold. It was definitely real and attached to his body. And then he showed me photos later because I was like, I got to know more about this. And it's just like him in a little grass hut looking thing on a hammock and a bunch of dudes with machine guns hanging out in a truck nearby.

53:25and then there's a bunch of people in the background in like waist high water. And he said the rest of the guys were in the mine. And so he was really doing this exact thing. And to this day, I mean, other than talking with people like you, I've never really heard it. I wouldn't believe him if I hadn't seen these photos of this exact thing. And of course the gold strapped to him was kind of a credibility builder, I guess you could say. The image he painted for me was that anything could pop off at any time and he would need men with machine guns to drive him somewhere in that truck, pay them and whatever border guards were keeping him in and not letting him out in actual gold and then be able to get home with the rest of it.

54:04I guess that's a strategy, isn't it? But you've always got to look for the gold for proof, don't you? That's right. Yeah. Are you limping? No, I have 30 grand worth of gold strapped to my leg and different coins. And there were like, some of it was just nuggets, like unprocessed nuggets. And I thought, okay, this is something you got from the ground. This is not something you bought anywhere. Dirty nugget of gold. You have to be very careful doing that because they look for minerals on you when you're leaving these places. I guess if you are friends with the president, it doesn't matter. And you probably don't go through whatever Sierra Leone and TSA on your way out of the place.

54:40Yeah. Yeah. I don't know about Sierra Leone, but I was always told don't take anything that looks like a rock because they're going to say this is a mineral and like you're stealing the national patrimony and I don't know what. Anything to get a bribe. Companies will tell you their supply chain is fully audited, which usually means they checked everything except the parts they didn't want to find. We'll be right back. This episode is sponsored in part by Dell. Dell PCs with Intel inside are built for the moments you plan. And the ones you don't. They're for those all-night study sessions, the moment you're working from a cafe and you realize every outlet's taken.

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55:42Don't forget you can join us on the Jordan Harbinger subreddit if you want to complain to me about me, about the show, or ideally get into discussions about show topics and guests. Gabriel and I are both in there over on the Jordan Harbinger subreddit. How organized is the violence in these areas? I've heard whispers that Wagner, the Russian paramilitary group, is operating in the area. Is that true or is that sort of like... No. So look, the Wagner connection is this. Basically what happened is that about four or five years ago, Wagner thought that Congo was a place that they could do business.

56:19They sent some emissaries, basically, to figure out situations on the ground. They were staying with Maronite Lebanese. And I think, to their credit, they both figured out that Congo was the type of place where their bills would not be paid. And also, the US embassy got wind of this. and because nothing in Congo stays secret for very long. And they went to the Congolese government and they were like, you can absolutely not have Wagner in this country and you're going to have a big problem. And the Congolese government listened to them at that point. But what they wanted in return was a mercenary company that would be of use to them.

56:58The solution was what was essentially a French company called Ajamira that used Romanian mercenaries under a guy called Horacio Potra, who was friends with, I don't know if you remember the Romanian election last year, this kind of strange Kremlin-supported figure. Yeah, I don't remember his name, but I know who you're talking about. Yeah, Potra was kind of the strange character. Ajimera were fairly effective in keeping the M23 rebels away from the main towns, places like Goma and Sake. And then the government was like, okay, well, we're just going to do what we do to everybody else. We're going to screw them.

57:31And they were like, okay, we're not going to pay you for this month. And then they didn't pay for the next month. and they didn't pay for the next month. And then at that point, the Romanian mercenaries withdrew. And that's when you saw the big moments of the M23 advances happening, culminating in January of 2024, in which the Romanian mercenaries were basically completely betrayed by the Congolese army. They were shot at by troops that they were supporting. And this has not been reported widely, actually. The troops that they were supporting wanted to prove to the Rwandan-backed rebels that they were also on their side.

58:07So they shot their own allies in the back. And at that point, Ajmeras had, f*** this, we are not doing this anymore. And there was a prisoner release and they were sent across the border to Rwanda. They were given a stern lecture and put on the plane and they left. Now, the replacement for that has been a combination of Israeli military trainers, Eric Prince's... Sorry, no longer Brackwater. Who knows what it's called? Eric Prince's guys. Yeah, Zay, Academy, Blackwater, whatever the name is now. Yeah, they were keen on getting involved. And actually, for the moment, they've been involved more in guarding the strategic assets in the South, things like cobalt mining.

58:48Again, I just want to emphasize that these cobalt mines are very far away from where the fighting with the M23 is happening. There is a separate slow boil rebellion that is happening in the South. You might have seen recently there were some park rangers who were killed in a national park called Opemba. But these are people who are quite old-fashioned. Most of them are armed with bows and arrows and not even proper guns. But it is a very strong tendency into the South to think we are the richest part of Congo and we should secede because we don't get any of the profits. Okay, understandable. So they had French Romanian mercenaries helping out to guard things.

59:26The government of Congo screwed them over. The government of Congo troops started shooting at them. They left. American mercenaries and Israeli trainers moved in to guard the assets. And I can't imagine that this is that much more stable than what they had before. It just sounds like a giant mess. And I'm sure there's a million details we just don't even have time to get into, but it's just a total cluster. Are we heading toward actual resource wars? Because what happens if demand doubles or more for batteries? Because it's not like we're going to use less of these things. We could be. The one big factor is that China has not shown any willingness to fight for these resources.

1:00:06They have always been a mercantile power in that sense. They have always wanted to do deals. And that's a great credit in many ways. Since the 1960s, they have not been arming nasty groups and horrid dictators and things like that. And the fact is that Europe and the West has been, the Russians have been as well. But look at Sudan, to some extent, it's a war over resources, it's a war over food, it's a war over gold. These things do exist. And I do think that if prices increase to such an extent, there is an incentive to attack and to take. and that is an incentive that is as old as time and has been very much the story of Katanga since pre-colonial days, Katanga being the southern part of the Democratic Republic of the Congo.

1:00:53If you look at the Luba kingdoms and the fights with the Yeke, who were these people who came from Tanzania in the 19th century, those wars were over resources. They were over copper. They were over slaves. They were over ivory and gold and so on. So there were definitely already wars happening even before the arrival of colonial powers. I want to talk about the Western companies that claim their supply chains are clean. Actually, what do these companies like Apple and Tesla, what do they actually claim and how much of it is true? How much of it is true is a really difficult thing to judge. Okay.

1:01:28You have a guess. Let's just take them at their word and say that what they're saying is true. Okay. They are claiming only recently that they're only using recycled materials, they being Apple in this case. Again, this does not account for all the materials that have gone into iPhones for the last 20 years. How long have iPhones been out? Since 2006 or something like that? Yeah, so, I don't know, 20 years? It doesn't account in Tesla's case. Tesla has a bit of a better argument. Tesla says we only buy from industrial mines. And they did this because they wanted long-term contracts. It does not account for the corruption around that.

1:02:07There are all kinds of questions around corruption. Now, does that mean that Tesla is responsible for the fact that the taxes paid on that mine are stolen by a government minister? Absolutely not. And I think it would be absurd to argue that. But at the same time, you have a situation in which these resources are being plundered. And the companies that buy them are saying, well, that's happening far away and very much down the supply chain. And it's not really our responsibility. So it's a kind of out of sight, out of mind type thing. And I wonder whether they even know. That's, to me, what's really interesting.

1:02:45I've spoken to people at different companies. Lots of people want to speak to me off the record, so I'm not going to say which companies. Some of them literally believe that they are clean. And then you ask them a couple of questions, for example, the European battery bicycle manufacturer. And they just say, yeah, we buy it off China and it's their problem. And you're like, that's the problem. Like we audit our supply chain, at least until it gets to Shenzhen. Before that, I don't know. What are we going to do? We don't know where our suppliers get their supplies. The other crazy thing, they say they audit.

1:03:17Apple has a great deal of look through it. They probably have the best supply chain audits. They're very accessible and so on. But I looked at the audits and on the audits were the companies where I had just seen child miners extracting these minerals. That's not a clean supply chain. That's just you noting down the companies and hoping that nobody looks into it more, I guess. Exactly. So how do these audits actually work? What does it mean to audit your supply chain? Because look, people listening to this right now, myself included, they think it's like sending a Nicholas Niarcho's out there and going, hey, man, I want you to go to the mine.

1:03:52I want you to see who's digging this out. I want you to take photos. I want you to see if they're old, if they have PPE, if they're too young, if they've got shoes on and hard hats, and then follow those minerals and get in a pickup truck and follow that other truck and go to the place where they ship it out. Then fly to China, go to the refinery, watch the minerals come off the boat and go into the refinery and see who's working in there. That's what we think an audit is. But the more you're talking, the more I'm thinking they just get a spreadsheet as an email attachment and they go, ah, this seems legit.

1:04:20All right. What's for lunch? That's kind of what the audit is now starting to sound like to me. I think there are some audits where they do that. The rationale for these audits is often and the way in which the process of these audits is not often made public. I managed to get some of these audit documents for a mine that I was looking at. and I realized very quickly that they had done an in-depth job and that they had said, look, guys, this is not a clean mine. There are children and there are people without shoes and whatever, there are people without helmets and the mines are too deep and so on.

1:04:56And there was no stop in production. There was no point at which that mine was made safer. And I had gone to it, I think a year after that audit had come through, a year or two after that audit had come through, and conditions were even worse than what they were talking about. It's also ignoring the audits. That's another big factor of this. So yes, I think there are plenty of different audits that pass the sniff test. But I do also think that there's a culture of, okay, what's next for lunch? What's to lunch? Yeah. Yeah. The question is, what are they incentivized to ignore? And I suppose the answer is anything inconvenient that might interrupt production.

1:05:35There was a moment where Elon said something like, hey, why don't we just install cameras to make sure that kids aren't working in the mines? And I'd love to hear why you think that, first of all, that's one of the most out-of-touch things I think anybody's said about any of this. But first of all, why can't we do that? And what does this reveal about how detached leadership is when it comes to these minerals? Well, if he'd been there, he'd understand that there are thousands upon thousands, if not tens of thousands, hundreds of thousands of holes at a lot of webcams. And people are very good about getting around things that I find very difficult to understand how that would work.

1:06:11And what's more, he didn't seem to understand Tesla's own supply chain, which comes from an industrial mine. So they don't have the issue of child labor directly in their later vehicles because they bought this long-term supply. Now, the system that keeps the industrial mines alive, and this is an argument they don't make in the book, is sustained by the fact that there are artisanal miners. This is a political decision by the government. They have said, you do not have access to the wealth of these 70 % to 80 % of industrial mines. These are the big mines in DRC. So you can have the scraps, which is the 20 % of artisanal mines.

1:06:53And this basically creates employment for that part of the citizenry because industrial mines comparatively employ very few people. There are millions of people who depend on that is in the mining and banning it straight off the bat is definitely not a good idea because if you did that, if you stopped it, you would have mass poverty, hunger, and so on. I wish I'd started with this particular question, but why is Congo so resource rich? Did they just win the geological lottery? Because it seems like they have everything there. Yeah. So Jules Cornet, who was a Belgian geologist in 1891 who led a series of expeditions, wrote back to the king and said, this is a geological scandal.

1:07:36Un scandale géologique. Yeah, they did win the lottery. I was having a conversation with another journalist who covers this the other day, and she turned around to me and said even if we manage to innovate away from cobalt and batteries which we have done to some extent chances are congo will have that thing that we're looking for it is just so rich in resources and it's to do with this ancient sea that was dried and these salts that were dried on this ancient sea and the way that the sea was compressed by different african plates banging into each other so yes they have an incredible amount of metals and resources including perhaps the world's largest deposit of lithium that's still not properly working at this point where does that leave us if we buy phones are we complicit is there any ethical option or is this just a systemic thing that we have to figure out you could buy a fair phone which buys from accredited mines and things like that that's an interesting project but that's not available to everybody i would say that this is not an argument to stop buying cell phones entirely or so on.

1:08:42I would say it's probably an argument to not buy a Tesla and then every three years replace it, which is the average for an American family. It is an argument to use your device as long as you can and to slow down your life. I know that my life is impossible to slow down, so I understand how hard that is for people. But it is an argument more to be politically engaged, to be involved, to write to a congressman if you have the wherewithal to go and lobby the companies to, if you're a shareholder in Apple, which many people are through their 401ks or whatever, to make them understand that this is something they care about.

1:09:20You can do this at shareholder meetings. You can raise questions and to shine the spotlight on this because I think that's the thing that engaged citizens can do in the US and in Europe and in countries where the batteries are being used. What would a real solution look like here? Is ethical mining scalable you think absolutely the real solution would look like us paying a little bit more for our devices and cars and ethical and clean mining being implemented and when you talk to mining people they want to do it as well that's the interesting thing about it even when they're totally off the record and they've had a couple of drinks or whatever it is they will tell you they're like we obviously there are other people who are just like them i don't care like i'm going to make my money.

1:10:06And unfortunately, those people can be very effective at some points. But most mining people don't want to be the bad guys. Most mining people see it as a way of providing to humanity in maybe not a noble way, but in definitely a useful way. Yeah, I kind of put miners up there like farmers, right? You've got many that grow food, they love the animals they take care of, at least they love providing a service to humanity. And then you have people that, I don't know, run essentially a human trafficking operation where they have slave laborers that are from Venezuela or something like that that are here illegally and they work them to the bone and they pinch every penny that they can.

1:10:42And there's a lot of in between. Right. But most farmers are not out there being sociopaths, just like most miners probably aren't. I'm surprised because it sounds like after everything you've seen, you sound a little bit optimistic. Am I misreading you here? I think I'm optimistic because this issue has gotten traction, not just through Siddharth Kara's book, although that was very important, but through social media, through Dua Lipa asking Tim Cook questions and buttonholing him on the issue. Sorry, I laugh about that, but it was an important moment actually in this stuff. Dua Lipa doing hardcore journalism for the rest of us.

1:11:23Exactly. She got that access and good on her. I think that the awareness of this issue in the halls of power. As I was saying, I was chatting with State Department people today, and it is front and center. Now, obviously, that is from an America first perspective, which is very different from a sort of purely altruistic humanitarian angle. But one thing that does come along with it, including in the agreements that were signed by Trump and the president of Congo, the president of Rwanda was they want to implement formalization and safety policies and so on. So help these countries. So at least the language is there.

1:12:04At least there is some sort of push toward that. I just hope that we have a situation in which this is taken seriously because if it's just window dressing, we are condemning yet another generation of people to incredibly crushing situation. Yeah. And handing China just much that much more leverage, I would assume. Absolutely. I don't know. Are you scared to go back to Congo? I mean, you did get arrested by the secret police last time you went and were held in the prison. Oh, I'm not allowed to go back. So this guy, let me get this straight. This guy thinks he's going to come hang out with you in New York, but you can't go back and visit him after that little prison term.

1:12:42Yeah, that's basically how it goes. How do they tell you you can't come back? Was he like, hey, man, never come back here, I'll call you when I'm in America? Or was it, do you get a letter? How do they notify you? No, no, no, no. I was interrogated by the head of the secret police. So imagine the head of the CIA twice, just shouting at me in front of the US consul, or like raising his voice at me, and then getting me to copy out this statement saying, I, Nicholas Niakos, will never approach the borders of the Democratic Republic of the Congo, nor will I write about the Democratic Republic of the Congo and so on.

1:13:16That did not work out for them. Obviously, that was completely unenforceable and insane as well. And I would just say that I don't think I'll be able to go back in this administration. Hopefully, when the next administration comes in, it will be more liberal, and it will be interested in not just stealing as much resource as possible, which is, I was looking into that, basically. That was one of the reasons that I was arrested. And I hope that they will be able to say, look, this guy wants to like, look at the supply chain and look at ways of making it better. Not, oh, this guy's going to cut into a bottom line for like our family.

1:13:55And I'm not going to do my kind of corrupt business, whatever it is. Nicholas Nearchos, thank you for coming on the show, man. Fascinating subject. Hope your lungs and sinuses end up being okay and stay safe out there. And thank you once again for coming on the show and telling us all about this. Absolutely crazy. Thank you so much for having me on, Jordan. It was a real pleasure. You're about to hear a preview of a story that sounds unbelievable, but Ava LaRue and her daughter Kaya lived it for 12 years. Dear Mr. Capucho, that's how they're addressed. Please pass this letter on to your wife who I would like to rape and kill and dismember.

1:14:33Love, Freddy Krueger. I mean, I knew at a certain age that it was bad, that it was, you know, rape, mutilation, killing, dismembering. I knew that in a general sense. At that point, you feel safe nowhere because it's this amorphous threat. It doesn't have a face or a name or it just feels like it's coming from everywhere. So my hair started falling out. I broke out in hives, like, for a month and a half, almost two months. I was like a shell. I didn't know how to protect my kid. I didn't know how to protect myself. It doesn't matter how much security you have at your house. For a while there, when CSI ended, I thought, oh, thank God, like, maybe he'll just be off of it.

1:15:10And for about six months, we were enjoying no letters at all. And then all of a sudden they started again, like, fast and furious. Because after 12 years, I just, I had stopped hoping that he'd ever be caught. Of all the women that were murdered in the United States last year, 86 % of them were stalked first. We will never not be hypervigilant. And he's out. So how do we just go, oh, he's fine now. I'm sure he's totally sane because people go from insane to sane. I'm sure it fades with time. And I don't know for us, as long as this guy is alive, I don't know that it'll really be able to fade for us.

1:15:46There is no before. There's only going to be an after. And I don't know what that looks like. To learn how they survived it and how the case was finally solved, check out episode 1283 of The Jordan Harbinger Show. So the next time your phone lights up, you're probably not going to think about where that energy came from. That's kind of the point. The system works because you don't have to see it. But now you've seen a little more of it. And once you see it, it's a lot harder to pretend that it's simple. We like to believe progress is inevitable. We like to believe it's good, but progress isn't free.

1:16:17It just sends the bill somewhere else. All things Nicholas Nearchos will be in the show notes at jordanharbinger.com. Advertisers, deals, discount codes, ways to support the show, all at jordanharbinger.com slash deals. Please consider supporting those who support the show. Don't forget about Six Minute Networking as well over at sixminutenetworking.com. It's our free course, no shenanigans. I'm at Jordan Harbinger on Twitter and Instagram. You can also connect with me on LinkedIn. And hey, the show has created in association with Podcast One. My team is Jen Harbinger, Jace Sanderson, Robert Fogerty, Tata Sidlowskis, Ian Baird, and Gabriel Mizrahi.

1:16:50Remember, we rise by lifting others. The fee for the show is you share it with friends when you find something useful or interesting. In fact, the greatest compliment you can give us is to share the show with those you care about. If you know somebody who's interested in clean energy, battery technology, global trade, geopolitics, or just a little bit of human rights in the supply chain, definitely share this episode with them. In the meantime, I hope you apply what you hear on the show so you can live what you learn. And we'll see you next time.

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