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#194 Ali Haji, CEO of ION Energy

Ali Haji is the CEO of ION Energy — a leader in the exploration and development of lithium salars within Mongolia and a strong pioneer in the third wave of the green energy revolution. Since 2019 the company has been aggressively growing its assets in its extensive growth strategy through acquiring new resources and sites.

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Bigger Than Us #194

This transcript has been lightly edited.

Host Raj Daniels 01:15

Ali, it’s a pleasure to have you on. And I’d like to start with what might sound like an unusual question. But it’s about time management. I had the opportunity to research you for this episode. And I see that you’re the CEO of two companies. How do you manage that?

Ali Haji 01:33

Very valid question. In terms of time management, something I’ve prided myself on is, for both myself and employees that I’ve had over the course of my career, is the ability to recognize priorities, and thus prioritize your tasks accordingly. Obviously, your typical two-by-two, which is impact versus effort, plays a big part in everything that I do on a day to day basis. But the two companies that I do lead are in the same jurisdiction — they have a joint venture agreement between them. They are working towards the common goal of providing battery metals to the broader world, or that part of the planet. And so they are very synergistically co-entwined, if you will. And so my time is managed equally on each of those companies. But obviously, priority drives where I drive most of my effort as well.

Host Raj Daniels 02:22

So do you schedule out certain times of your day to address one or the other, or just as it comes along?

Ali Haji 02:29

I wouldn’t schedule based on a planning sort of agenda, if you will. Each of those companies has an agenda that dictates specific news flow, catalysts, and milestones at a certain part of the year. And so my timing, or my time dedicated to each of those companies, will be very much dictated by that agenda and the planning actions that we take as a company or as the planning actions that we take on behalf of both companies.

Host Raj Daniels 02:58

And I know it might be digging details. But I’m just curious. From your morning perspective, how do you lay out your day?

Ali Haji 03:05

I’m up relatively early, around 5am. I’ve had the philosophy whereby, the previous days of having a Blackberry, the goal was always to ensure that you don’t walk into the office blindsided. So my morning starts with a coffee, I read through the news, do a bit of meditation, and then head off to a shower, get dressed and then ultimately sit around the house and wait for my daughter to wake up. Have some time with her and then start to review my emails. And the emails are generally that, to make sure you don’t walk into the office blindsided and that you are ready to tackle anything that you need to over the course of that day.

Host Raj Daniels 03:43

I appreciate you sharing that. Now, you mentioned precious metals. Can you give the audience an overview of ION energy and your role at the organization?

Ali Haji 03:51

Of course, and I think you know, they’re not really precious metals, but they are very much required. I’m the Chief Executive of ION energy, a company that trades on the Toronto Stock Exchange on the venture market under ticker ION. We are in the business of exploring for lithium brine in Mongolia. We currently hold 110,000 hectares of highly prospective brine licenses, and we went public in August 2020. Shortly thereafter, we commenced exploration on Baahvai Uul, which is our flagship license, and we’ve since acquired Urgakh Naran, which is our secondary license. The main exploration program at Urgakh Naran actually will commence when we are in-country in about a week’s time.

Host Raj Daniels 04:30

I think I heard you say 110,000 hectares. Can you give us a point of reference of how big that is?

Ali Haji 04:37

Yeah, sometimes that’s lost with with a lot of folks, and I’m glad you asked that question. So Baavhai Uul, I will which is 81,000 hectares, our flagship license in Sükhbaatar province. That’s about five times the size of the city of Vancouver. So it is a significant piece of land. And if you add on the Urgakh Naran license, you’re in and around five and a half to six times the size of the city of Vancouver. It’s pretty significant from a size perspective.

Host Raj Daniels 05:02

Now, I don’t know a lot about Mongolia, but I expect that those areas of land aren’t nearly as populated as Vancouver.

Ali Haji 05:12

Now, our CEO, Ben, had spent some time in Mongolia in his previous life and has talked about his experiences there, some of the harsh weather, living in yurts. What’s your experience been like? That’s precisely right. Mongolia is one and a half million square kilometers. So, for our Canadian listeners, about one and a half times the size of Ontario. It has a population of three and a half million people, of which close to 3 million are centered in and around Ulaanbaatar, the capital. There are multiple other small towns in the country that support either the mining projects or renewable energy projects, or even border crossings to help goods and services flow between China and Mongolia and China and Russia.

So you could drive for hours across Mongolia and the Mongolian landscape and not run into anybody at all. It’s been a combination of those. My first visit to Mongolia was during the summer months, in August. Very pleasant, lovely dry weather with highs of 26, 27 degrees, beautiful blue skies. The evenings will dip down to about 15 degrees Celsius or so. Some evenings were a bit colder than others.

But I landed in the capital, ended up meeting with our colleagues out there, went to dinner, very cosmopolitan in some degree. It does lend itself more to the European culture than it does the Asian culture. Very similar to what you would find in, perhaps, a small town in eastern Europe. But having driven out to Steppe Gold, which is a sister company that I was advising on my first visit to Mongolia around the same time that I co-founded ION energy, there were just that. Yurts and gers. So four yurts in the middle of the Mongolian steppe, beautiful landscape, the grass smelt like lavender, and we were out there looking at the the asset that would ultimately become a gold producer in-country.

So that was my very first experience in country. I’ve been there now about six additional times, each one slightly different than the last, not in a positive or negative way. But I think more importantly, I’ve been able to build relationships with Mongolian nationals who I now consider close friends of mine, and in some cases, mentors as well. Mongolia is a country with a vast history. When you look back to the days of Genghis Khan and the Mongolian empire, but also when it was part of the Soviet Union, being an ex-Soviet satellite, and what they’ve been able to accomplish since then. So Mongolia is a place that I hold very near and dear to my heart. And I would encourage those that haven’t been out there to definitely have a visit.

Host Raj Daniels 07:52

It definitely sounds like a fun adventure. Now, going back to ION energy, your lithium exploration. Can you perhaps share how you’re going about doing that?

Ali Haji 08:02

Of course. Lithium brine, in particular, is currently found in Latin America in what’s called the lithium triangle, which is Bolivia, Argentina, Chile, these are salars. Essentially, surface lakes very high in mineral content that include lithium in them. The situation or the geography in Mongolia is slightly different, where you have paleo-salars, which are ancient buried salars. So they’re not surface lakes like you would find in Latin America, but they are rich in mineral content as well.

So the first step of that exploration program would include looking at geological mapping to better understand the surface geology. You would then do what’s called a microseismic program to ultimately paint the picture of the layers below surface. Once that’s done, you would you would do some auger sampling, which is picking or digging up the ground to bring up samples that would be assayed, and then some reverse circulation, or RC drilling, to get through that stratigraphy and pull up the different brines as well as the evaporation phase that may exist. So, it is a multi-pronged process. It is not as intrusive as say, taking a massive bulldozer, a shovel to the ground. The holes are quite narrow, looking at about six inches wide at the most. And that really helps you paint the picture of the landscape and the ultimate mineral content in the ground.

Host Raj Daniels 09:36

So, in researching this conversation, I was able to watch some videos on YouTube, specifically around the Chile operations and looking at the lithium lakes. Are you saying that your process is different from those lithium lakes?

Ali Haji 09:49

The process is not, the geology is different. So the exploration process is different in that it includes a fair bit more drilling than it would be for collection of brines on the surface. But the geology in a sense, and the ultimate extraction methodologies that would be used, would also be a tad bit different as well.

In Chile, you’re looking at evaporation ponds, which, if our listeners are familiar with, can be quite water-intensive because the vast majority of the water that you pull out of the ground ends up in the atmosphere, and therefore it’s lost from that basin and the land will sink. Whereas if you look at what we’re looking to achieve in Mongolia, direct lithium extraction being the process of choice, you end up pumping back the vast majority of the water back into that water table, thereby unaffecting its structural capacity or integrity.

Host Raj Daniels 10:44

Now, in my understanding, even during direct lithium extraction, there are other minerals that you’re also able to extract.

Ali Haji 10:52

That’s correct. There are specific resins or filtration systems that will pull out different minerals. So you could have lithium as well as a number of different byproducts.

Host Raj Daniels 11:03

Now, how have recent lithium prices changed your business model?

Ali Haji 11:09

Well, they’ve made things that would never have been viable, viable, or assets that would have never been viable due to a very low concentration of lithium, now viable. Bringing those assets to production — your cost of production would still be profitable, so to speak. But you’re also seeing a rapid advancement in technology that would be utilized to ultimately extract the lithium from various different resource types.

Host Raj Daniels 11:38

And again, because of the pricing of lithium, the increased demand, how have you seen interest from partners and countries change over the last year?

Ali Haji 11:47

I think, if we’re talking about ION, they’ve changed tremendously as a result of our proximity to China, China being the largest consumer. If we’re talking about the global landscape, it’s very similar in a sense, where you’re seeing everybody through the supply chain take an interest in getting involved in lithium. And as recently as last week, Tesla has announced a need or a desire to become a lithium miner purely because of the pricing of lithium and its exponential growth over the last year and a half or so.

Host Raj Daniels 12:24

So I think Tesla did show interest recently in lithium mining, but let’s come back to iron for a moment. If Tesla were to start like ION, for example, how long is the process from the start to when you actually are able to get it into the supply chain into a battery manufacturer?

Ali Haji 12:42

The good old consultant answer will be used here. And that is, it depends. And the reason I say that is, you could have an asset that is fantastic that has 2000 ppm, that is located at a high elevation, that will have a very rapid evaporation cycle. But it won’t have the necessary infrastructure around it to to move that evaporate over to a refining plant, which will ultimately bring it to battery-grade lithium. From ION’s perspective, we do know that one of the largest wind farms in Asia is being built in Sukhbaatar Province, we expect to have an early resource indication on Baahval Uul before the end of this year.

On that basis, there would be additional funds that need to be raised in order to build out that production facility for a relative amount of concentrating. So you would have to bring your product about 9.99%. And then it would very likely end up on the back of a train car, heading into China or elsewhere, for that further refinement into 99.9 before it ends up in a battery. So the answer is it depends. And I think we’ll have to take it one day at a time. But the expectation is that on the back of that early resource indication, at the end of this year, we’ll be able to paint a better picture of when exactly we can start producing lithium outside.

Host Raj Daniels 14:09

Now I think I’ve heard you, in a previous interview, mention that you’re 20 kilometers from the China border. Is that correct?

Ali Haji 14:17

Yes, Baahvai Uul is 23 kilometers from the Chinese border.

Host Raj Daniels 14:20

And so the Belt and Road initiative would enable you to not only get your product to China, but to other parts of Asia and to Europe. Is that correct?

Ali Haji 14:29

That’s absolutely right. Unfortunately, with the events that are taking place in Russia today, going through that nation to serve the European market, we’d have to wait for those issues to abate. But ultimately, the One Belt One Road initiative, as you pointed out, will run from China through to Ulaanbaatar, the capital of Mongolia, and then all the way through to St. Petersburg, which borders Finland. So there is the potential there to serve both markets, but I think with the state of the world today, the primary consumer would be the Chinese market.

Host Raj Daniels 15:04

Now, I’ve also heard that we are, quote unquote, “short on lithium” for the EV goals for this decade. How short are we from a global perspective?

Ali Haji 15:14

If we look at the benchmark minerals numbers, the anticipation is that we need close to five times as much lithium than we currently have in the supply chain. And that’s why we’re seeing this massive increment in the pricing. Lithium is not a rare element, it is one that is actually very abundant in the Earth’s crust. The challenge with lithium is finding lithium with a good chemical makeup, to ensure that you can extract it at economically viable costs, but also that it has the longevity and the quality required to operate an electric vehicle battery for 100,000 to a million miles in mileage. And that’s where the challenges lie. So the shortage exists as far as the required quality of the lithium that needs to go into electric vehicles. But in terms of its abundance in the atmosphere, there’s plenty of it.

Host Raj Daniels 16:11

Understood. Now let’s double click on your story for a moment. You’re not an engineer, investment background. What moved you to get into the mining world, and then specifically lithium?

Ali Haji 16:23

Yeah, that’s a valid question. I’m of Indian heritage — I grew up in East Africa, in Nairobi, Kenya, I went to high school there, I did my GCSEs and my A levels. And then I came over to Canada and went to the University of Western Ontario, where I did a computer science major with a minor in software engineering. I then moved on to the asset management industry as a technology Asset Management Analyst. My goal there was to track the total cost of operation of a major investment company’s global technology assets. I found that to be not as challenging as I had hoped.

And I was moved over to a sort of procurement compliance background where I worked a number of risk management initiatives, moved over to the program management world where I worked in mergers and acquisitions for both companies in Asia as well as the US. And then I ended up in London, co-leading a center of excellence for investment operations. Throughout that sort of career and growth trajectory, I found that there has to be something more to our being and our existence, something a little more holistic, something that would sustain humanity for years to come. Having seen the temperatures rise in Kenya, even as early as the days that I was growing up there, and the droughts that occurred all through Sub-Saharan Africa, climate change has always been something that I’ve been sort of following quite closely.

And when I left my role at Invesco in London, and moved back to Toronto, where the vast majority of my family is, I was given the opportunity to visit Mongolia to look for resources and advise a company to go public. And I thought, what better opportunity for me than to look for lithium, an element that has been in the battery space for quite some time, can be charged using renewables, and can be stored without any major environmental implications, in a country that has only been explored for about 3% of its overall landmass? And so that prompted me to look for lithium in Mongolia. And ultimately, I have now fallen into the running a mining company role. So a bit of a trajectory, if you will, for our listeners, but I hope that explains why I’ve opted to look for lithium as opposed to carry down the path of investment banking and investment management.

Host Raj Daniels 18:54

It does, and an interesting point is that — so I’m here in Dallas, and my parents live very close to where I do, and they’re leaving for Nairobi tonight.

Ali Haji 19:02

Interesting. Yeah, I’m planning to go there with my family for the first time; well, my wife for the first time in July.

Host Raj Daniels 19:08

Very interesting. They’re going for about a five, six week holiday, and I grew up in London. So there you go.

Ali Haji 19:13

Fantastic.

Host Raj Daniels 19:14

So you’ve been on this journey for a few years now. What are some of the most valuable lessons you’ve learned about yourself?

Ali Haji 19:21

I think it’s that you surround yourself with good people, with knowledgeable people, but also learn from everybody. We talked about going to university and furthering our education, but I think education is best obtained from your interactions, experiences and travel. I’ve learned that you must be a good listener. You must be supportive when somebody is not feeling at their best. But ultimately, when it comes to my decision-making strategy or the way that I like to advise folks that I’ve either led from a professional or personal perspective, that is, go slowly with consensus. Ensure that consensus is achieved and then execute rapidly. There is no requirement for anybody to sort of just get in there, roll up their sleeves and get to work. While that might be something out of need, it will not be something that will allow you to succeed.

Host Raj Daniels 20:25

I like the idea of going slowly with consensus. Now, earlier, you mentioned taking a more holistic view, an idea of more. Where does that come from?

Ali Haji 20:36

That comes from very much my upbringing, I think. Growing up in Kenya, a developing nation, you’re really just enamored with the the natural beauty of the country, but also seeing happiness in the eyes of those that have very little. And that’s something that helps you park the material world and look at yourself more spiritually, and find, truly, what does make us happy? What is it that we should be appreciative of or grateful of? and that holistic view is exactly that, it’s, “let’s try and make the lives of those around us better.” But let’s do it in a way that allows us to understand ourselves better, take steps away from being drawn towards those material things, and let’s try and make a better future for us all.

Host Raj Daniels 21:25

How do you balance parking the material world while trying to provide returns to shareholders?

Ali Haji 21:32

It’s a chicken and egg situation. In order to achieve that holistic view and part of the material world, you do have to have funding, and that’s where the shareholders come in. And the only way that you make those shareholders happy is if you make them money. So it is a catch-22 In a paradoxical sort of environment that we live in today.

But ultimately, if you look at the vast majority of the philanthropical individuals on the planet today, they have made fortunes for themselves, and they then donate those fortunes to those various foundations that allow things to be better for multiple folks. Have they parked all of their material things? Perhaps not. But there is somebody that I draw inspiration from, and that is Azim Premji, the ex-chief executive, now chairman, of the Wipro group in India. He currently drives the old Corolla that he’s been driving for a number of years, continues to dress in a humble way and conducts himself very much like the man he was when he started that company. And so that’s what I hope to achieve one day, is that level of humility.

Host Raj Daniels 22:43

You know, I’ve heard it, perhaps fable or mythology. But I’ve heard that N. R. N., founder of Infosys, does the same thing.

Ali Haji 22:50

I’d have to look him up.

Host Raj Daniels 22:52

I think I read recently that he and his wife still fly economy, I believe.

Ali Haji 22:57

There you go. So it is possible, but it is a hard balance.

Host Raj Daniels 23:02

It is, it is. So jumping to the future. Let’s say it’s 2030. Pick your favorite publication: Forbes, Fast Company, Wall Street Journal. If they would write a headline, specifically about ION energy, what would you like it to read?

Ali Haji 23:18

That’s a fantastic question. If it’s just a headline, “Here’s the Impact ION Energy Has Had on the Mongolian People and Economy.” And it would be really followed by a chart where you’re seeing an increment in GDP, a level of infrastructure being built that would allow Mongolia to be a bigger exporter of finished products, as opposed to an importer of just about everything that they bring into the country today.

I understand that’s not a headline, but the philosophy or the messaging surrounding what I’m saying is that I’d like to see Mongolia come out of where they are today on the back of ION making Mongolia a battery manufacturer that plays a pivotal role on the global EV and electrification trend.

Host Raj Daniels 24:04

Now I could be reading between the lines here. In a previous interview, I heard you mentioning your relationship with the Mongolian government, both parties. Today you’re speaking about the potential or the hope that you can help Mongolia perhaps increase GDP manufacturing, I might be hearing there. What about the Mongolian people drew you so strongly towards them?

Ali Haji 24:28

It’s really just their demeanor, their welcomeness, the way they are open to visitors. They’re hardworking, they’re intelligent, they tend to spend the better amount of their time, trying to understand not only themselves, but things around them. And if you dig even deeper and go back further, you’ll find that the company that we did an RTO with, or reverse takeover, for ION to go public, was a capital pool corporation called Spirit Banner. And we’ve since, as a group, created a number of capital pool companies called Spirit Banner.

And the significance of Spirit Banner is the fact that when you drive through the Mongolian landscape, you see these these rock formations, kind of like what you would find in northern Canada that the Inuit would create, but they will have a pole that extends out of the ground, and would have the banners like you would expect to see in Nepal, and those banners would flicker in the wind, and you will see this big blue sky, and you will feel completely humble. And the spirit banner is really the Mongolian way of showing that they worship the sky, and they see themselves as these little entities that have no relevance in the material realm. And that I think, to us, and me, in particular, when we form a spirit banner, and the group of spirit banner companies, is what drew me to the Mongolian people. It is a country that essentially adores and worships the big blue sky.

Host Raj Daniels 26:07

That really is beautiful. And I guess the second part of the question is, do you have, perhaps, plans to help the Mongolian government set up manufacturing there locally?

Ali Haji 26:18

Yes, yes, absolutely. That’s the conversation we had back in 2017 with the University of Science and Technology and the government to look at lithium. That was spurned about by saying, “this is an opportunity for Mongolia to really put itself on the map.” When somebody buys Mongolian cashmere anywhere in the world, the wool is sent to China or any other textile mill and then shipped back to Mongolia before it’s exported around the world. That is not sustainable, nor is it increasing the industrialism or industrialist nature of a country.

And with ION, the hope and goal is that eventually, on the back of that big wind farm that I mentioned earlier being built in Sukhbaatar province, Mongolia can become a manufacturer of these batteries. And if fate will have it, perhaps they will be a manufacturer of electric vehicles one day, but I think one step at a time. Bringing a battery manufacturing plant to production would be a huge win for Mongolia and its people.

Host Raj Daniels 27:23

It’s a beautiful vision. Now, last question. We started with time management. You mentioned the meditation, you mentioned being able to prioritize, taking a holistic view. But the last question is, and this could be personal or professional, but if you could share some advice, recommendations, words of wisdom with the audience, what would it be,

Ali Haji 27:44

It would be what I said earlier. Continue to be a good listener, and ensure that you do go slowly with consensus, and then execute accordingly. So consensus and going at a pace that allows you to build that big picture view of the problem at hand, or even the path forward, is what I would urge you to do.

Host Raj Daniels 28:06

Well, Ali, I think being a good listener is a great place to end. I wish you best of luck with ION energy. And I look forward to catching up with you again soon.

Thank you for listening. If you like our show, please give us a rating and review on Apple Podcasts. And you can show your support by sharing our show with a friend or reach out to us on social media, where you’ll find us under our Nexus PMG handle. If there’s a subject or topic you’d like to hear about, send me an email at BTU@nexuspmg.com, or contact me via our website, nexuspmg.com. And while you’re there, you can sign up for our monthly newsletter where we share what we’re reading and thinking about in the cleantech, green tech sectors. Bigger than us is a Nexus PMG production.

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