Molten Metal Technologies

Extended case study of an MIT-licensed startup (1989–1997) that used molten steel baths for toxic waste processing. Tom narrates: the technology origin (Chris Nagel, ex-US Steel); MIT's John Preston as licensing officer with conflicting financial interest; venture promotion through Vic Gatto, Al Gore, Maurice Strong, Michael Porter; the technical failures (refractory destruction by sodium/chlorine, phosgene formation, dioxin/furan production, bismuth/antimony steel contamination); MIT institutional conflicts of interest; bankruptcy in 1997; Preston's later fraud conviction.

So that's the news item. Let's talk about Molten Metals Technologies. In 1989, this is a true story, and I was actually involved in it. It took me about five hours to collect all this stuff with the references, and this will be on the website. 1989: Chris Nagel, a doctoral student in chemical engineering at MIT and a former employee of US Steel, founded a company to use molten steel as a method of converting toxic waste into useful products. Reportedly Nagel conceived the idea while employed at US Steel. He notified US Steel of his IP, and US Steel looked at it and said we're not interested, and they let him have it.

How are you going to raise your money unless you've got the best, right? I'll give you an example that really bugs me no end, because I'm a steel guy. There was a guy in chemical engineering who graduated from MIT, went to work for US Steel, and he learned that molten steel is a universal solvent, just like water is a universal solvent for lots of things. Molten iron is a wonderful high-temperature universal solvent. So he decided he was going to throw a lot of environmental waste into steel, and it would just dissolve, and then we could sell the steel. He gave this idea to US Steel, and the people at US Steel were not stupid. They looked at it and said, if you want it, you can have the patent.

Tom's central conflict-of-interest case. Chemical engineer at US Steel research proposes using molten iron as a universal high-temperature solvent for environmental waste; US Steel declines to patent. Founder partners with John Preston (head of MIT TLO) to start Molten Metal Technology; both worth $30M each before building a plant. Fall River, MA induction-melting facility. Claims to make radioactive waste non-radioactive (Wall Street Journal front page). Al Gore presidential-campaign technology roundtable at Kresge, organized by Preston, who included his own 30%-owned company without disclosure. MIT VPR informed of the conflict; declined to act. Preston eventually resigns from TLO in disgrace following Justice Department interest.

There's one that's not up here we could talk about: Molten Metal Technologies. So Molten Metal Technologies, back in the early 90s — there was a guy who was a graduate of chemical engineering, and he was hired by US Steel research. When he went to US Steel research, he learned that liquid iron is a high temperature universal solvent, just like water is a universal solvent at room temperature for all kinds of things. You go to high temperatures, iron will dissolve almost anything. So he had this great idea when he was at US Steel — he was going to take the steel furnace and throw all the environmental crap into the furnace. US Steel knows something about steel — they know how to melt steel — and they looked at his idea, they said no, we don't want to patent it. He says, well why not? They remembered: if you throw crap in your steel pot, you're going to end up with crap steel out, and you won't be able to make steel. The people at US Steel thought they wanted to stay in the steel business rather than just make big paperweights.