Did You Just Throw Away a Chunk of Precious Metal?

No image of Washington, D.C. is complete without its most famous, most iconic feature: the Washington Monument.

Each year, millions of tourists flock to the U.S. capital to see the world’s tallest stone structure and, occasionally, take the 550-foot trip to the cramped observatory at the top for a once-in-a-lifetime view of the city.

Very few of those tourists, however — and in fact, very few Washingtonians — know what’s at the very top of the granite obelisk, capping its end like the warhead of a missile.

The tip of the monument, which comes to a point 554 feet and 7 inches above its foundation, is made of solid metal and carries an inscription documenting the beginning and end dates of the monument’s construction.

In its time, the metal from which the cap was made was one of the rarest, most valuable metals known to man.

Costing $1 an ounce when the monument was capped in the 1880s (about a day’s wage for a laborer working on the monument), this metal was more expensive than silver.

Since those days, however, the price and the way we view this metal has changed dramatically.

From the Vault to the Vending Machine

Today, aluminum, which is what sits at the top of the nation’s most recognizable monument to its first president, is anything but expensive and anything but rare.

That transformation took place at the start of the 20th century thanks to a method known as the “Hall-Héroult process,” named for its two pioneers, Paul Héroult and Charles Martin Hall, future founder of aluminum giant Alcoa (NYSE: AA).

By passing a current through a bath of aluminum oxide dissolved in a mineral called cryolite, the Hall-Héroult process reduced the price of refined aluminum by a factor of 200.

Today, thanks to that process and the nearly infinite applications of this highly versatile, highly abundant metal, aluminum is the most produced non-ferrous metal in the world.

That single innovation made possible everything from cheap food packaging all the way to affordable mass air travel, and it stands as one of the most important industrial breakthroughs of the modern age.

Anybody who invested in the Hall-Héroult process during its early days walked away rich… which is actually the main point of this article.

Now that you have some of the backstory as to how aluminum went from precious metal to one of the cheapest metals there is, I want to tell you about how history is in the process of repeating itself.

There is a new process for the production of specialized alloys that is emerging today as the 21st century equivalent of the aluminum story.

Revolutionizing Metal, One Molecule at a Time

This story doesn’t involve a single metal, but rather a whole family of highly versatile, extremely strong, corrosion-resistant alloys.

And the novelty isn’t the alloys themselves but the process by which they’re produced.

You see, these metals aren’t being smelted in the way normal metals are or even created through more complex chemical processes like aluminum itself.

Instead, they’re literally being grown with the help of modern nanotechnology.

Right now, a Seattle-based start-up is making breakthroughs in a new method for creating metal — a method that one day will probably be no less influential on the future of industry than the introduction of cheap aluminum was more than a century ago.

Called Modumetal, this 7-year-old company already has its product on oil rigs off the African and Australian coasts.

The main benefit of using its alloys is highly increased resistance to corrosion, without loss of strength and rigidity.

The company’s metals are up to eight times more resistant to ocean water, making them optimal for a wide spectrum of high-stress industrial applications.

A Material and a Technology

The process and the resulting metals have been so promising that Modumetal has already sealed up a major round of financing led by famed Silicon Valley investor Peter Thiel.

With past hits like SpaceX, Airbnb, data giant Palantir, and perhaps the biggest grand slam of all, Facebook (NASDAQ: FB), the likes of Thiel and his cronies onboard with this still relatively small, privately held operation is sure to raise its chances of seriously disrupting the specialty metals industry.

Like the rest of Mr. Thiel’s investments, however, Modumetal is more of a technology company than a metals company.

And the key lies in the nanotech manipulation of matter at the molecular level.

Modumetal’s process allows for the micromanagement of the conditions and substances through which electroplating occurs.

According to Modumetal’s CEO and co-founder Christina Lomasney, a physicist who’s spent years working on electrochemistry and advanced materials, the process is similar to the way that “Mother Nature has evolved [growing things] over eons.”

By varying very specific conditions within the electroplating pools, pictured below, Modumetal has been able to change extremely specific characteristics of its metals, depending on the intended application. 

Dr. Lomasney compares the “growth” of this metal to the growth of a tree, with environmental conditions affecting the nature and molecular makeup of the final product.

“It’s similar to how nature controls the environment related to a tree’s growth — sunlight, soil, location, temperature — and then creates a tree that is a product those conditions.”

The industry calls this layered metal “metal laminate” — or metal plywood. The idea isn’t entirely new, with alloy layering being used for military and civilian applications for years.

From Lab to Mass Production

Using nanotechnology to create highly specialized pieces of the material in large quantities and at an affordable price is where the game begins changing.

Remember the story about aluminum and how it went from precious to common thanks to a single technological leap?

Well, that technological leap has already taken place with these high-performance alloy laminates thanks to Modumetal’s proprietary methods.

There is no question as to their applicability and usefulness.

In fact, the biggest and perhaps only real barrier between Modumetal and full industrial disruption of the metals sector is basic entrenchment.

Heavy industries like metal makers, car companies, and aircraft manufacturers are known to be slow in adopting major changes — usually following the trend rather than making it.

Moreover, with the potential of this technology now clear, it’s only a matter of time before the really big names — perhaps even Alcoa itself — will start to play catch up.

To combat that and break through the emotional barriers of switching to this fresh new production method, Modumetal will need to create partnerships — which it’s already begun with a joint venture with Steel Dynamics (NASDAQ: STLD) — and stick to its guns in the courtrooms, as patent infringements are sure to crop up sooner or later.

As we’ve already seen with 3D printing and composites, the future of materials isn’t just in their chemical composition or unique physical properties; it’s in the way the material itself is created.

Processes on a molecular level are slowly becoming the norm, leaving the days of giant smelting facilities and soot-covered workers to the history books.

As I mentioned before, Modumetal is still private — but if its plans move forward and its product starts showing up in buildings, ships, airplanes, and industrial production facilities, this investment story will advance to a whole new level.

Keep an eye out for it.

Fortune favors the bold,

Alex Koyfman

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