Speaker 1: Joining me now is Josh Ballard. He's CEO of USA
Speaker 1: Rare Earth. They're traded on NASDAK. They have a website
Speaker 1: as well. On NASDAK. They're symbol as USAAR on the web.
Speaker 1: You can find them at us AAR dot com. If
Speaker 1: I got that correct. If I didn't, Josh, you can
Speaker 1: correct me. And I want to talk to him because
Speaker 1: he's been on the forefront of this rare earth issue
Speaker 1: and that is really kind of at the forefront of
Speaker 1: what is going on in this trade dispute with China.
Speaker 1: We hold all the cards when it comes to tariffs
Speaker 1: and who's going to buy what from who, But there
Speaker 1: are other ways that they can strike back, and one
Speaker 1: of the things that they have done is to use
Speaker 1: their position of dominance in rare earth minerals to essentially
Speaker 1: shut down supply of critical things. So thank you so
Speaker 1: much for joining us, Josh. We've got a lot of
Speaker 1: questions about rare earth minerals. Thank you for joining us.
Speaker 2: Yeah, thank you for having me appreciate it.
Speaker 1: First of all, tell us a little bit about what
Speaker 1: rare earth minerals are. Why do we call them rare.
Speaker 3: Rare earth minerals. For the most part, actually aren't rare.
Speaker 3: They are pretty abundant. But what's difficult about them is
Speaker 3: you don't have a vein of them in the ground.
Speaker 3: So when you go get coal, you have a vein
Speaker 3: of coal, you can make it straight out. Rare earths
Speaker 3: are dispersed throughout the rock, so there's a lot of
Speaker 3: science that goes into pulling it out of the rock
Speaker 3: so that you can then separate out the minerals and
Speaker 3: ores that can be used in the metals and the
Speaker 3: magnets and so forth. So it's hard.
Speaker 2: Some are super rare, some are lot so rare.
Speaker 3: China, by the way, focused on the super rare ones,
Speaker 3: you know, to your point that they could really control,
Speaker 3: but they're critical to modern technology and they're critical to
Speaker 3: you know, really how we live today in surprising ways.
Speaker 1: Yeah, especially because we see a lot of these, you know,
Speaker 1: it's gotten to the point we have these super magnets
Speaker 1: that are very small. Of course, we use them all
Speaker 1: kinds of things. You can have it with an airbud,
Speaker 1: speaker or all that. It's just so many different things.
Speaker 1: And the fact that you can make very very small,
Speaker 1: very strong magnets, I think that's a large part of
Speaker 1: that and of course, with everything going electric magnets are
Speaker 1: absolutely essential to convert electricity into some kind of movement
Speaker 1: or some kind of transducer, whether it's moving a speaker
Speaker 1: or whether it's moving a car, you know, the motor
Speaker 1: or something like that. So it's really key to the
Speaker 1: kind of devices that we have. It's really key to
Speaker 1: a lot of consumer electronics, key to military things especially.
Speaker 1: How did China tell me you probably know more. I've
Speaker 1: thought it was somewhere around seventy percent of the minerals
Speaker 1: or they've got ConTroll of, but of the refinement, they've
Speaker 1: got like nearly ninety percent. Those are the figures I've seen.
Speaker 1: Is that correct or correct me?
Speaker 3: If that's correct? Yeah, that's correct. Now, then you have
Speaker 3: to separate into what rares. So well, I'll take one
Speaker 3: step back. The context of this is in the early
Speaker 3: nineties there was a vice premiere in China who said
Speaker 3: Middle East has oil, China has rarers.
Speaker 2: This has been their focus for over thirty years.
Speaker 3: Wow, And they've been very deliberate about it and built
Speaker 3: up a pretty strong supply chain.
Speaker 2: To your point, today it used to.
Speaker 3: Be over ninety percent mining as well, it's now about
Speaker 3: seventy percent mining. We have about fifteen percent of it
Speaker 3: here in the US of certain light rearers that are
Speaker 3: a little bit more abundant, but over ninety percent of
Speaker 3: the processing havespends in China. Not only ninety percent of
Speaker 3: the processing which is just to get the ore, but
Speaker 3: they also have over ninety percent of the metal making
Speaker 3: and they also have over ninety percent of the magnet
Speaker 3: making for all those magnets you were just describing, So
Speaker 3: they really control all of the supply chain. And then
Speaker 3: when you focus it into specific minerals. This export list
Speaker 3: for example that just occurred about two weeks ago that
Speaker 3: went into play. Those minerals they control for the most part,
Speaker 3: not everyone, but for the most part over ninety eight percent.
Speaker 3: And the critical ones gatollinium, dysprosium, terbium, those are over
Speaker 3: ninety eight percent for sure.
Speaker 1: Yeah, these are names that I never I don't know,
Speaker 1: I got alegrical engineering degree. I've never heard of these
Speaker 1: and they're.
Speaker 2: So critical to our lives.
Speaker 3: Gattolinium, way is the mineral that we use when you
Speaker 3: get an MRI scan. It's the mineral that creates the
Speaker 3: contrast around our organs. This is going to affect millions
Speaker 3: of MRI scans the country.
Speaker 2: It becomes personal. This isn't just political.
Speaker 3: Oh yeah, there's minerals in that list that are used
Speaker 3: to fight cancer. And then there's minerals like disprosium and
Speaker 3: terbium that are used they could handle a lot of
Speaker 3: heats that they're used in a rocket systems, they're used,
Speaker 3: they're used in in high performance magnets that you'd use
Speaker 3: in not only an EV but in high performance machinery
Speaker 3: and the defense or in drones.
Speaker 2: You know. So these are really important.
Speaker 3: Minerals and important magnets and technologies for our society today.
Speaker 1: Now they've been very strategic. One of the things that
Speaker 1: I've heard and you talked about the fact that they're
Speaker 1: not so much rare as they are difficult to get.
Speaker 1: I guess, you know, we could have if we could
Speaker 1: marvel at unobtainium. You know, we get one of those
Speaker 1: things there, but that's not a real one, but that's
Speaker 1: straight out of Marvel comics. But it is kind of
Speaker 1: like that. It's really hard to get this stuff. And
Speaker 1: one of the things that I've heard that China has
Speaker 1: done is you know, using very crude and dirty methods
Speaker 1: of extraction using slave labor and a lot of other places.
Speaker 1: That's helped them to get a monopoly on this as
Speaker 1: well as just the grigraphical location of this stuff. So
Speaker 1: from that standpoint, where do we stand in the United States,
Speaker 1: Because we also have voluntarily in the West, we have
Speaker 1: given China a huge advantage on energy costs, you know,
Speaker 1: we have that they can again do as cheap and
Speaker 1: dirty a coal as they wish. We're not allowed to
Speaker 1: even have clean coal plants and that type of thing.
Speaker 1: Many places in the West. Everybody's shutting down their their
Speaker 1: manufacturing facilities. So we have a real issue with this.
Speaker 1: And and so you know, how do we how do
Speaker 1: we get out of this situation, even if we've got
Speaker 1: fifteen percent of them? You know, what is that going
Speaker 1: to How is that going to affect our country if
Speaker 1: our costs of manufacturing what tribe because our energy costs
Speaker 1: are higher, If we are going to have a clean
Speaker 1: and responsible way to get to handle these things rather
Speaker 1: than just doing it and who cares what happens approach
Speaker 1: that the Chinese have had in other countries.
Speaker 3: Yeah, and I think that's a great question. And you know,
Speaker 3: as Americans, as humans, we want to do this as
Speaker 3: responsible as possible as we bring it back to the US,
Speaker 3: we can, there's ways to do it much cleaner. So
Speaker 3: for example, in rare earth mining, of course you're mining,
Speaker 3: you're taking things out of the ground.
Speaker 2: Maybe you can't avoid that for sure, But.
Speaker 3: What you can do is you can reduce dust levels.
Speaker 3: You can use a lot of acids and reagents within
Speaker 3: this process to get the minermals out of the rock
Speaker 3: and separate them. You can recycle those reagents. There's ways
Speaker 3: you can recycle the water that you're using within the plant.
Speaker 3: So there's things that we can do to be much
Speaker 3: more responsible about it than certainly they are in China
Speaker 3: and Sean not on. They are responsible, and then of
Speaker 3: course the government's also subsidizing it and just accelerating. And
Speaker 3: what we can do here in the US. It's one
Speaker 3: we've been more responsible, but then we have to create
Speaker 3: a moat.
Speaker 2: Though.
Speaker 3: We have to protect the industry that we're trying to
Speaker 3: build here now because we do need it. Domestically. You
Speaker 3: can argue in favor or not of the current TERFF regime.
Speaker 3: What I can tell you is when it comes to
Speaker 3: rare earth's rare earth magnets, not only rare but also
Speaker 3: to other critical minerals that have been in the news
Speaker 3: a lot lately.
Speaker 2: We do need to create a mote. We need to
Speaker 2: build this industry back here in the US.
Speaker 3: It's too important to our day to day lives, is
Speaker 3: too important to our defense, and to rely on one
Speaker 3: single choke point like China, it's just a mistake.
Speaker 2: Well you know, lover hate China that moment, there.
Speaker 3: Is a mistake that we need to fix and creating
Speaker 3: this moat, whether it's through support through the government, whether
Speaker 3: it's through a terif regien, whether it's through making it
Speaker 3: less onerous to build a mind for example, permitting and
Speaker 3: so forth. But while making sure we're still responsible humans.
Speaker 3: You know, we still need to be responsible, but we
Speaker 3: don't need to kill a business to be responsible, right,
Speaker 3: which is what we've been doing in the mining world
Speaker 3: for all these decades.
Speaker 1: Oh yeah, yeah, I guess my question is I look
Speaker 1: at it is how do we get from where we
Speaker 1: are right now to a position of you know, where
Speaker 1: we have some self sufficiency in this and you know
Speaker 1: that would apply to pretty much everything, but in the
Speaker 1: rare earth, the situation we you know, we look at
Speaker 1: this abrupt change that is here and you know being
Speaker 1: shut down right away by China. How do we get
Speaker 1: through this transition? What does the interim situation look like?
Speaker 1: You say, we've got fifteen percent supply here? How much
Speaker 1: is how much pain is that going to cause in
Speaker 1: the US during a transition period, because it's going to
Speaker 1: be a period of time that you've got to get
Speaker 1: your mining up and working and got to get manufacturing
Speaker 1: up and working. That's not going to happen overnight. So
Speaker 1: what happens in the interim? Are we going to see
Speaker 1: sky high prices in the interim?
Speaker 3: And it's that's fifteen percent of overall rare earth? But
Speaker 3: fortunately we have fifteen percent of the easiest the ones
Speaker 3: in the export percent this export list we have zero.
Speaker 2: Wow.
Speaker 3: So this is a challenge for US and it's going
Speaker 3: to affect us in the very short I mean, there's
Speaker 3: some some stock files right we have I wouldn't call
Speaker 3: it a stock bile. There's some inventories of these minerals
Speaker 3: and these metals here in the US, some.
Speaker 1: In friendly countries for instance, like Australia or whatever that
Speaker 1: I think aren't there some there they have the important ones?
Speaker 3: Or yeah, they don't have this export list. Necessarily there's
Speaker 3: some coming out of Brazil, but they get sent to
Speaker 3: get processed in China, and you know, all the processing
Speaker 3: goes through China. So we're going to have this period.
Speaker 3: I don't know what we're going to do. I mean,
Speaker 3: maybe we're going to work out ways to do it
Speaker 3: through intermediaris. Maybe we'll come to some kind of agreement
Speaker 3: so we can start to get some of these minerals
Speaker 3: back for a while. The short term is tough because
Speaker 3: there's no short term answers. And if you break apart
Speaker 3: this supply chain, and this is what we're working on
Speaker 3: as a company, is this entire supply chain trying to
Speaker 3: do it domestically. If you start, I'm going to start
Speaker 3: with metals and magnets those you know. What I've been
Speaker 3: talking to the government about is it's time for a
Speaker 3: Marshall Plan, Like we need to look at this as
Speaker 3: something that has to happen quick. We need to invest
Speaker 3: in it. We need to bring private investment. That has
Speaker 3: to be private public partnership. We need to make this
Speaker 3: happen as quickly as possible. And on the metals and
Speaker 3: magnet side, we can surge that and over the next
Speaker 3: year or two make a big difference, right, not solve
Speaker 3: the entire problem that we have, but we can make
Speaker 3: a big dent for sure over the next couple of years.
Speaker 2: Certainly we have.
Speaker 3: A plan that we could uplift this within a couple
Speaker 3: of years. We could build our whole magnet facility, which
Speaker 3: will make hundreds of millions of these magnets. We could
Speaker 3: build metal making here in the US. This can happen.
Speaker 3: We can be the first domestically, you know, the full
Speaker 3: domestic source of this here in the US. But on
Speaker 3: the deposit side, on the mining side, on the processing side,
Speaker 3: you can build a mine, you know that might not
Speaker 3: take so long to break up rock and grind it,
Speaker 3: but the processing of that rock to get out of
Speaker 3: the minerals. There's a science behind that that we've lost.
Speaker 3: We've been working on it for years. A couple of
Speaker 3: our peers been working on it the last few years.
Speaker 3: We've made progress, but there's still work to do, and
Speaker 3: that doesn't happen overnight. You know, even if you have
Speaker 3: a great depot, like our deposit in West Texas is
Speaker 3: an incredible deposit with all these rarers on this export list,
Speaker 3: that's what we're heavy we're heavy in the heavies is
Speaker 3: what I call. These are called heavy rare earths, fifty
Speaker 3: seventy heavy rare earths. But we have to we still
Speaker 3: have to work through the science of that. Then we
Speaker 3: have to build the processing techniques we're going to use.
Speaker 3: We are building it. We have to build that first
Speaker 3: demo plant and then build a mind.
Speaker 2: None of that.
Speaker 3: Happens over it, right, well, but we consurge it, we
Speaker 3: can get support from the government, we can shorten that cycle.
Speaker 3: It's not decades. I think it's over the next few years.
Speaker 3: We can build it. Let's go to take a little
Speaker 3: bit of time. So we got this period we got
Speaker 3: to figure out for sure.
Speaker 1: So what you're saying is even though we have some
Speaker 1: in Texas that we know of the minerals there, the
Speaker 1: whole processing, refinement, manufacturing process that's been we don't have that.
Speaker 1: We don't have that knowledge and we've got to discover that,
Speaker 1: right as well as build the factories.
Speaker 2: Is that correct? That's right, that's correct. And every deposit's
Speaker 2: different as well.
Speaker 3: Right, there's different mix of minerals, there's different impurities, there's
Speaker 3: different science. You have to be used to approach it.
Speaker 3: So it's a you know, it's a puzzles. You got
Speaker 3: on crack at every deposit, so it's just not an
Speaker 3: overnight thing.
Speaker 2: But we have to rebuild this in the US. There's
Speaker 2: absolutely we got figure out.
Speaker 1: Really caught us flat footed, didn't they. I mean, they
Speaker 1: thought strategically about this, and we've just been kind of
Speaker 1: taking the path at least resistance for quite some time,
Speaker 1: and all of a sudden because of trade dispute, it
Speaker 1: looks like it's going to be shut down, and you know,
Speaker 1: we it's going to take years for us to get
Speaker 1: this thing together. So your company is working on the
Speaker 1: entire supply chain then right from getting it out of
Speaker 1: the ground to processing and refining it and then manufacturing
Speaker 1: and to finish product maybe even into magnets.
Speaker 2: Is that correct, that's right?
Speaker 3: In fact, yeah, we're looking at taking out of the
Speaker 3: ground in West Texas, processing in West Texas, and then
Speaker 3: metal making and magnet making here.
Speaker 2: I'm in Oklahoma today. Out here in Oklahoma, we're building up.
Speaker 3: We're in the process of building a large three hundred
Speaker 3: thousand square foot facility, magna making facility and future metal
Speaker 3: making facility here in Oklahoma.
Speaker 2: It's gonna be the first.
Speaker 3: Large facility really to serve the entire magnet market here
Speaker 3: in the US. It's gonna make hundreds of millions of magnets.
Speaker 3: And we're commissioning our first line beginning of next year,
Speaker 3: and we're already making magnets. We have a big lab
Speaker 3: industrial lab that we're working through to start working with customers,
Speaker 3: and we commissioned last month. So we're moving pretty quickly.
Speaker 3: And the question is is now how quickly can we move?
Speaker 3: It's all about capital and execution, and we need to
Speaker 3: get the capital in government, private all together.
Speaker 2: Push this fast.
Speaker 3: We can build as fast as we can get capital
Speaker 3: and to build it, but will be a significant, significant
Speaker 3: asset here in the US here in the short.
Speaker 2: Term for sure.
Speaker 1: Yeah, of coach, I think back to World War Two,
Speaker 1: we got caught flat footed and a lot of critical
Speaker 1: things like rubber stuff like that, and you know, we
Speaker 1: lost the supply of those types of things that came
Speaker 1: up with synthetic rubbers and stuff like that. Is there
Speaker 1: any possibility that you know, these things can be replacious,
Speaker 1: likely replaced natural rubber with synthetic rubber, or is there
Speaker 1: any are you looking at alternatives to rare earth that
Speaker 1: might be substitutes that could get there.
Speaker 2: It's hard.
Speaker 3: You know what's special about rare earths are what if
Speaker 3: it's a metal alloy is the properties that they have.
Speaker 3: They have special properties that can withstand heat, that have
Speaker 3: super conductivity. We take a critical metal like gallium, which
Speaker 3: was also banned a few a few months ago. Also,
Speaker 3: we're very rich in gallium in our deposit. Gallium is
Speaker 3: used in the Patriot missile system for examples. This is
Speaker 3: why trying to target it. It's also used in semiconductors
Speaker 3: because of its conductivity and it's ability to stand heat.
Speaker 3: It helps miniaturize semiconductors and speed them up.
Speaker 2: So yeah, we can still make.
Speaker 1: Sem Yeah, I'm familiar with gallium. That's that's been used
Speaker 1: in semiconductors for quite some time. Yeah. Yeah, and we
Speaker 1: just never bothered to have a supply of it. That's
Speaker 1: pretty amazing.
Speaker 2: Yeah, And it's playing on the plane's day that we
Speaker 2: should have done this.
Speaker 3: So this is not a surprise to the industry at all,
Speaker 3: by the way, But when it comes to rare earth magnets,
Speaker 3: the key is in some areas you can replace them,
Speaker 3: but the key is are so powerful and so small.
Speaker 3: The power and how small they are. You know, it's
Speaker 3: like ten times smaller. And so when you think about
Speaker 3: a drone and the magnet it needs in a drone,
Speaker 3: like there's limitations because you can't put something too big.
Speaker 3: It makes it too heavy. If you think about a speaker,
Speaker 3: same problem. Right now, you can make a less a speaker.
Speaker 2: You can just make it.
Speaker 3: We didn't always use these magnets. You could just make
Speaker 3: it a less powerful speaker. You know, a permanent magnet.
Speaker 3: These rarest magnets and the speaker are super small. They
Speaker 3: create fifty percent more base and they're like a third
Speaker 3: the sign or tenth the size or something like it.
Speaker 3: There's a huge difference in power with these. If you
Speaker 3: think about a tesla, you put it in beast mode
Speaker 3: and you put on the accelerator and it feels like
Speaker 3: you're in a roller coaster. That's these these magnets, these
Speaker 3: permanent rarest magnets, turn that on and turn that drive. Oh,
Speaker 3: you're off right, and you can't do that. The weight
Speaker 3: and the size you're going to be too big. And
Speaker 3: so there's limitations in terms of how far we can
Speaker 3: take it. That's why these are important. I think we
Speaker 3: just need to figure it out here.
Speaker 2: That's domestic.
Speaker 1: It is amazing. I mean we're in I guess you
Speaker 1: say we're in a tight spot now with this stuff.
Speaker 1: Let me just ask you this is kind of a
Speaker 1: wild question, you know. I always looking at this Greenland
Speaker 1: stuff and everybody's like, there's a lot of stuff out
Speaker 1: there is But I also hear that it's extremely hard
Speaker 1: to get the stuff out of the frozen ground everything.
Speaker 1: I mean, that's not going to factor in anything, is
Speaker 1: it or is that a factor anything?
Speaker 3: No, I think it's I think it's great marketing. But
Speaker 3: the reality is Ukraine Greenland.
Speaker 2: They do have a lot.
Speaker 3: Greenland has a lot, right Ukraine doesn't have anywhere much
Speaker 3: in What they do have is.
Speaker 2: In Russian controlled territory. Yeah, but all those countries they're
Speaker 2: decades away. So what we need to do is work
Speaker 2: on what we have right here. We have it here.
Speaker 2: I mean we have when you.
Speaker 3: Break apart the light rare earths, which are syrium and
Speaker 3: lanthanum are using a lot of technologies and ceramics and
Speaker 3: these LCD screens we're looking at now, all sorts of
Speaker 3: places you use these Latham's also used in batteries, is
Speaker 3: very important. We have a ton of that stuff, and
Speaker 3: we make a lot of it here, we just don't
Speaker 3: process it here. Odymium, praisiodemia, the key minerals that go
Speaker 3: in or that goes into these magnets, we make some here.
Speaker 3: We have other deposits that we can develop that we
Speaker 3: know of, and then we have a heavy deposit like
Speaker 3: ours that we know we can develop. It's going to
Speaker 3: take two or three years or four years, but we
Speaker 3: can do it a lot faster than the decades away
Speaker 3: that will happen in a Greenland, Eura or Ukraine or
Speaker 3: choose your other country. There's lots of known deposits, not
Speaker 3: many of them are close.
Speaker 2: Yeah, you here, let's go for it.
Speaker 1: Well, it's good to hear you verify that. And that's
Speaker 1: what I reported too. I's had a lot of sources said,
Speaker 1: you know, there's not that much in Ukraine, and what's
Speaker 1: there is not in the territory that's controlled by the
Speaker 1: Ukrainian government, and so yeah, there is a There seems
Speaker 1: to be a real disconnect with reality in many cases
Speaker 1: as we look at this stuff. But the reality is
Speaker 1: is that it's going to be a difficult position, and
Speaker 1: they've really got a strategic advantage in this, and they're
Speaker 1: willing to use that as as leverage and so and
Speaker 1: we have given them not only have we walked away
Speaker 1: from these things like a gallleon for example, that is
Speaker 1: something that we have been used for decades in semiconductors,
Speaker 1: and yet we didn't bother to secure a supply of it.
Speaker 1: And it's amazing that we let ourselves get into this
Speaker 1: kind of a situation. And it's going to be very difficult,
Speaker 1: especially just going cold Turkey, and that's really what's happening now.
Speaker 1: It's going to be cold Turkey to do this and
Speaker 1: to create an entire supply chain. Again, your company iss
Speaker 1: a R dot com. It's where people can find you
Speaker 1: as us A Rare Earth and so it's us A
Speaker 1: R is in rare earth dot com and on Nasdaq.
Speaker 1: You were there at us AR. Is there anything else
Speaker 1: that you would like to tell us about this as
Speaker 1: we look at this monumental task in front of us.
Speaker 3: Yeah, I just like to tell EBN and we're working
Speaker 3: hard to solve this. We want a domestic supply chain.
Speaker 3: We want to be the first to have a fully
Speaker 3: domestic supply chain. We're very serious about it and we're
Speaker 3: going to execute on it, and it's it's an exciting
Speaker 3: time for us.
Speaker 2: For sure.
Speaker 3: It's been very interesting, but we're going to deliver on
Speaker 3: for the American people and for our shareholders.
Speaker 2: So that's great, good time. We're going to make it
Speaker 2: that well.
Speaker 1: As I say, you know, the Chinese curses that maybe
Speaker 1: you live in interesting times, and I guess that Chinese
Speaker 1: are cursing us by giving us some real interesting times
Speaker 1: to try to adapt to things on the spare of
Speaker 1: the moment without any preparation or forethought. It seems to
Speaker 1: be where we are right now. But I thank you.
Speaker 1: I hope you're successful. I hope you get this through
Speaker 1: very quickly. Thank you so much for joining us again
Speaker 1: U s a r E as in USA Rare Earth
Speaker 1: U s a r E dot com and on Nasdaq
Speaker 1: at U s A R. Thank you so much, Josh.
Speaker 1: I appreciate it.
Speaker 2: Thank you for having med appreciate it.
Speaker 1: Great best of luck to you. Thank you,