CHINA CONTROLS AMERICAS ECONOMY BY DOMINATING RARE EARTH MINERALS! JOSHUA BALLARD

➡ Dave Hodges, host of the Common Sense Show, discusses the issue of rare earth minerals with Joshua Ballard, CEO of USA Rare Earth. They discuss the challenges of mining and processing these minerals, which are crucial for modern technology and some medical applications. The U.S. is heavily dependent on China for these minerals, and developing domestic production could take over a decade. The conversation highlights the need for a surge in production and collaboration with allies to reduce this dependency.
➡ The U.S. is behind China in terms of infrastructure and technology, particularly in the field of rare earth minerals, which are crucial for various industries including defense, medical, and automotive. This is due to a lack of investment and training in these areas. If China were to cut off the supply of these minerals, the U.S. would face immediate and significant impacts, including increased costs and slowed production in various sectors. However, the situation is solvable with time, investment, and a focus on education and training in these fields.
➡ The text discusses the importance of rare earth minerals in various industries, including automotive and medical. It highlights the need for the U.S. government to invest in companies that mine and process these minerals, as China currently dominates the global supply. The text also mentions the environmental impact of mining and suggests that the U.S. could mine more responsibly than China. Lastly, it touches on geopolitical issues, including China’s declining population and potential leadership changes.
➡ China is facing a labor problem due to its aging population and the younger generation’s lack of interest in joining the workforce. This issue is expected to impact China’s economy significantly. Meanwhile, a company in the U.S. is working on producing magnets for domestic use and exploring new technologies like quantum physics. Despite challenges, the company is optimistic about receiving government support and believes that the U.S. and China will find a balanced solution to their trade issues.
➡ The text discusses the importance of the U.S. investing in its own resources and industries to reduce dependence on China, especially in areas critical to defense and technology. It highlights the need for more education and training in fields like mining, process engineering, and metallurgy. The text also explores potential geopolitical strategies and implications, including China’s possible interest in Russia’s resources. Lastly, it suggests that this could be a pivotal moment for the U.S., similar to the Manhattan Project or the space race, to spur innovation and change.
➡ The company, traded as USAR on the NASDAQ, is building a major magnet facility to produce for a wide market, including defense, industrial, and consumer products. They aim to meet the domestic need for their product and become one of the first and biggest in their field. The company is confident in their ability to raise capital and produce quality products, despite potential challenges such as competition and cybersecurity. They are hopeful for government support and are working towards launching strong sales early next year.
➡ The speaker discusses the challenges of competing with state-run industries like China’s, especially in critical sectors like AI and robotics that rely on rare earth metals and other critical materials. They mention China’s ban on exporting gallium, a key metal used in semiconductors and the Patriot missile system, to the U.S. The speaker also talks about their company’s efforts to build a facility and produce products that the market needs, and their hopes for partnerships with universities like Oklahoma State and the University of Texas at El Paso.

Hello America. Dave Hodges here, host of the Common Sense Show. We are the show that is freeing America one in slave minds at a time. Thank you so much for joining us. Really, really good to be with you. We’re covering a topic today that I have talked to quite a bit about in the past. It’s a big concern for me and I don’t know that there’s any really quick answer. And we’ve got an expert on to talk about it. And that’s a rare earth minerals issue with Joshua Ballard. We’re going to get to Joshua in just a second.

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Well, Josh Ballard, our Guest is the CEO of USA Rare Earth is an accomplished leader with more than 20 years of experience as a senior level finance and operations executive and technology and manufacturing firms in the public service. Prior to joining USA Rare Earth in December of 24, he led the financial arm of Energy Recovery Inc. And it’s listed on the nasdaq. And I got to tell you, I’m looking at the background here. This is fantastic. And I don’t want to go through a whole lot of detail here because we have an expert. We want to maximize our time.

And you’ve heard me say this many, many times with the Chinese economy and the difficulty that they’re in right now and, and especially since we’re squeezing them on the tariff issue. Even though that’s been put off, we are in a very vulnerable position and Josh was here to break it down. Hey, thanks for joining us. First time guest on the Common Sense Show. Great to have you on. Thanks, Dave. Appreciate it. Good to be here. Well, let me just start with this one point. I covered a few months ago, the lithium deposits in northern Nevada that have been discovered and it looks like it’s just a relative gold mine, so to speak, of lithium, rare earth mineral that’s needed AI applications.

But I read also that that really developing this and Making it usable and bypassing the Chinese. That’s a difficult problem. And is that a standard problem across the board that we’re going to have? Yeah, rare earths are, what’s difficult about them is they’re actually not all that rare. You can, if you go out and stick your hand in the dirt, you’re probably going to pull up a bunch of rare earths in your fist. But the challenge with them when you’re mining and trying to process the rare earths is that they’re, they’re dispersed with, throughout the rock.

So it’s not like a, like you’re going down and finding a vein of coal and just shoveling it out. Essentially this stuff is in the parts per million in the rock. There’s a lot of science that goes into separating it out of the rock, a lot of costs that go into it and a lot of, just a lot of challenges to it that don’t make it easy and make it expensive. And that’s the challenge that we’re running into here in the US as we look to develop these, these projects. We kind of gave away this science decades ago to China and we’re playing a lot of catch up now.

How long did that start, that giveaway? It started, you know, 30, 40 years ago, really back in 1992, there was a vice premier in China who said the Middle east has oil, China has rare earths. And they’ve been focused on this for the last four decades. And as they’ve progressed, we’ve let it go and we let go of our last mine. I don’t know, I think it was about 15 years ago or so, which was Molly Corp. It’s now MP Materials. They brought it back to life. But it’s, you know, it was, it happened over quite a number of years and we’ve just let it go.

You know, I know that with the dam, the three gorgeous dam and all the flooding that’s going on and the danger there that if that dam went, not only would that be catastrophic for the Chinese people, but us getting needed supplies, like particularly in medical supplies, medicines, prescriptions that’d be in danger. Would that dam also affect our ability to get rare earth minerals from China? It’s a good question. Honestly, I don’t know where that water would go specifically, but if it’s, if any of the mines in China are within that, that range where they could be flooded.

The challenge for us is that over 90% of these critical, many of these critical minerals come from China and you know, it would just stop us and to your point, it’s, it’s technologies, they’re in every cell phone, they’re in cars, they’re in medical devices. They’re, you know, these things underpin modern technology all over the place. But also some of these critical minerals are used directly in medicine. For example, in the, in the Chinese export list that came out, what was it, two months ago? There’s gadolinium. Gadolinium is used we ingest when we do an MRI scan so that we can see our organs.

There’s atrium which actually helps we use to fight cancer. So some of these are very critical even in medicine. And if any of them are cut off, whether purposely as they have been slowed by China here recently, or through natural reasons, like, like a flood or other natural causes, we’re in real trouble. Do you have an estimate on if we decided to get really serious about domestic production to bypass China? When could we reach that critical point where we could survive without China? Do you have a time estimate? It’s well over a decade. Our challenge is, is it takes a long time to develop these mines.

And there’s a few challenges to it. There’s the, the permitting challenges, which the administration is actually trying to work on now and trying to solve. And then there’s the science challenge and just the time to build a mine. Every deposit in the US with the exception of one operating deposit, is going to take a few years to build. And then other deposits, like even our deposit, we’re pretty far along. But we still have science, we have to do so. We’re still a few years away and most deposits are further behind than we are. And there’s only one operating deposit.

And then there’s. There’s the challenge that there’s two kinds of rare earths. There’s light rare earths and there’s heavy rare earths. Light rare earths are more abundant. And so what we’re mining today in the US Are light rare earths. It’s rare earths like cerium and lanthanum. And the most important, which is neodymium, praseodymium, ndpr, which goes into these all important magnets that underpin a lot of our technology and are used a lot of metal alloys. We mine that here in the U.S. about 16% of the world’s, maybe even a bit more now of the world’s supply.

And we can bring that up a little bit sooner. And our allies are some in Australia, there’s Brazil and other places. But heavy rare earths, we do not have any of or Very little of. And right now they’re fully controlled by China. And that’s just going to take us many years to bring up and really bring online with the mine, we have a heavy rare earth deposit and we’re three, four, five years away from bringing that online. And we’re the probably the most advanced with heavy rare earths in the US today. So optimistically, five years, best case scenario to best case scenario, you have something coming online, but enough to fill that massive gap year.

A decade, 15 years away, even with a surge, you’re at least a decade away. But we need to surge it and we need to help our allies surge it as well so we can get there. Well, I’ve heard that South Korea and Australia have some of these rare earth minerals that we need. Is it enough to bypass the Chinese? No, it’s not enough. It certainly fills a hole, some of the gap. But the Chinese, when they’re making, well, on the light rare earth, they’re making about six. They’re making, When I say making, I mean they’re mining and process.

They’re mining about 60% of all these light rare earths. They’re processing over 90% of these light rare earths. And of the heavy rare earths, it’s over 98% of most of them. So we have a pretty big gap to fill. And so no, it is not enough right now. When I, when I look at problems that we have closing the gap on certain things, I look at things like do we have the educated people knowing how to pull it off and do we have the ability to construct infrastructure to do that? Do we have that? Are we that far behind the Chinese intellectually and technologically? Or is it we just haven’t bothered to do it? A lot of that.

We haven’t bothered to do it. It’s not rocket science. There’s hard science to it. There’s no reason why we can’t catch up. But we haven’t been training engineers, so we do have a lack of them. And the Chinese have been training thousands of them every year. Right. They’ve been supporting this entire industry. So we’re way behind and it just slows things down. It’s not that we won’t figure it out. There’s an iterative, you know, there’s an R D process you go through. We’ll figure it out, but it’s, it takes time. The Chinese have gotten very effective at it, so it’s much cheaper for them.

So when you think about the global economy and us competing, it’s going to take us a number of years to get on our feet and build effectively compete in the market. And it’s, you know, we have a lot of catch up to do. And this is true. On the processing side, you got to think about it as the actual processing where there’s science, the metal making, where there’s science that we’ve also given up as well as the magnet manufacturing. And we’re kind of. Our company is looking at that entire chain and trying to replicate at this time.

Then we really. It sounds like we should be investing in our post secondary education and graduate programs along this line. Absolutely. Yeah, we should be looking at this. This is the Manhattan Project moment for rare earths in America. Like we just have to make this happen and it just has to happen. It just has to. That’s, that’s absolutely amazing. And then, you know, I’m covering two stories today about Chinese spies in America, agro terrorism, the infiltration with New York state officials and so forth. So we know the Chinese really aren’t on our side. What keeps them, particularly in these talks about tariffs from just holding us hostage on this? Nothing keeps them from holding us hostage.

In fact, they are, I mean just Ford, when was it, a couple weeks ago was announcing they were shutting down some of their production lines because they didn’t have enough minerals. We’ve had to back off some of our tariff push. That’s right. Because they were holding this as a bat over us. Like this is a very effective tool and it’s no fault of the current administration. This has been building for decades. Right. That’s just going to take time to fix. But it’s a, it’s a very effective tool. You can’t just get around it easily. Probably the only fastest way you could theoretically do it is maybe through recycling.

You could recycle a lot of these magnets, but we don’t have any kind of supply chain for that. The science isn’t hard, but we have to build a supply chain for it that might be a little bit faster. That’s just otherwise just going to take time. It’s been decades in the making. If we, since we’re looking at least a decade to catch up. If we were to be totally cut off, when would we start to feel the effects and what would that look like? We would start to feel it pretty quick. It’s. It’s not like car manufacturers who try to work in a just in time environment.

Right. Bringing inventory in just as they need it to produce, have a lot of this hanging around. That’s why Ford is already running out. It’s. It’s going to take. This is from. I’m thinking about magnets here. Magnets would were already running out. They’ve started to allow some supply. But keep in mind that they’re only allowing supply to the industries that they want. So if it’s a defense industry, they’re still holding back. This is critical to a lot of our defense technologies as well. And if they were to totally cut us off, we would feel the effects very quickly.

Now we can build magnet. We’re building a magnet facility in Oklahoma today. We’ll have that up and running in roughly the first quarter. Next year we’ll be commissioning it to make product. Next year we could surge that and build our whole facility within a. Call it a year and a half or so. Others could do it within a couple of years or a little longer. Metal making can be surged so these things we can build a little faster. But you can’t hurry the mining and the processing. It just takes time and a lot of science to get there.

So we would feel it very quickly. Yeah, you know, I want to give a hook here to get the average person who may not be that familiar with this topic to say, hey, this is really important. So China decides, okay, total embargo. Plus they’re in trouble anyway with their supply chain, given their state of the economy. But I mean, they’re in big trouble. But if they were to cut us off, what would life look like for the average person? Well, a lot of we would have a supply chain crunch in the near term. For example, if you look at car manufacturing, you know, a lot of people talk about Rare Earths with EVs, which is true.

There’s a lot of rare earths used at EVs, but there’s also a lot of rare earths used throughout a typical internal combustion engine vehicle, if you will. It’s used for power steering, it’s used for safety, that’s used for actuators. It’s using the speakers in your cars. It’s used in all sorts of things throughout the car. Now, not every magnet if the. There’s magnets that use heavy rare earths. There’s magnets that don’t use heavy rare earths. It’s the heavy rare earth that’ll really come and bite us quickly. That will run out of almost immediately and you’ll start feeling it there.

Our defense sensor stre will be crippled fairly at least all new technologies will be crippled fairly quickly. But we’ll see effects throughout our medical industry. Robotics would be stalled. So on an everyday basis it’ll start to creep in and big ways things will become more expensive. They’ll have to revert to old technologies. Like it’ll have kind of a ripple down effect. It’s not like the entire economy will stop tomorrow by any means. Of course not. But we’re going to see slowdowns, more expensive products. It’ll affect things like the drone, drone manufacturing use these little itty bitty guys, you know, that go into drones.

It can have a pretty big effect in the short term. Now if we can get back to manufacturing metal, manufacturing up quick, you can solve a lot of it. But when you start looking at higher performance technologies, rockets, cars, anything where you have a lot of high heat, you know, there’s a lot of energy technologies that use these, these heavy rare earths, things like that, you would see an effect very quickly and a pretty massive slowdown. Is Europe in the same boat we are? They’re in a similar boat. I mean they’re not having quite the same spat we are with China.

But China, when they put in these, these, this export control list, they applied it to the whole world. So Europe is definitely feeling it for sure. And they’re no further ahead than we are in, in this. So we’re all behind. And I would imagine I’m looking at future geopolitical conflicts involving military. Russia could still be supplied by China. We have a decided advantage over the West. But you know, here’s I think the equalizer. If we were to take out the Three Gorges Dam, China’s economy would be devastated regardless of the rare earth minerals. So it’s kind of a win, win, lose, lose proposition.

Yeah, yeah. When we go to the extremes, there’s certainly ways we can retaliate without a doubt. But on a basic, in the near term it’s tough. It’s solvable. However, and I like to tell people that this is not unsolvable by any means. And the administration is on fire to figure it out. They’ve been very focused on it. I think now that they’re kind of getting their sea legs and things are starting to move. We’re going to see, we’re going to see some real decisions being made here in the coming months. I’m sure of it. We can surge this, a lot of this.

It won’t solve all of it. There’s deposits globally we can look at. There’s deposits here in the US like this is totally solvable. It’s just going to take some time. It’s going to Take a lot of will from, from our government as well as the American people. We’re going to have to allow mining back into the United States and we have to rebuild some of our manufacturing to support it. But it’s totally dual. Yeah. What we did with China in terms of trade was basically suicidal, I think done in the name of cheap labor, overseas labor.

But I was thinking, okay, with what you’re describing, I better take good care of my car. But I’m thinking spare parts technology is probably going to be impacted too. On it. Yeah, it could be. I mean if it’s, if it’s parts of the car that you replace, especially, I mean if you have a gas driven car, it’s a little easier. Of course evs will be affected because it controls. When you think of a Tesla and you put it in beast mode and it takes off really fast. These are magnets that are making this happen in an ev.

But in a car, you know, in a gas powered car, it’s in your powered steering, it’s in your, it’s in actuators, things like that. I mean, probably from a spare parts perspective, you might be a little better off. Those things don’t break so often, but you could have an issue. Yeah. And you know, those areas like USA Rare Earth, where we’re trying to get ahead of it and make sure we at least have supply, the basic supply we need of magnets and so forth for the auto industry and other industries and the defense industry would have first priority anyway.

Well, yeah, you would certainly think so. Yeah, yeah. I mean, we’d be crazy if we didn’t. If you were advising President Trump today, what would you tell him? I would tell him that the government needs to take some risks and invest in companies. You know, I look at it like the 2008 crisis when the government helped support the car industry and got its money back. Right. Like we should look at this and that. How can we be creative? So we’re standing up an entire industry from mining to processing to metal making to magnet manufacturing. It’s a huge effort.

We can’t do it without some kind of support. That support doesn’t have to be money giveaways, that support. But there’s going to be some risk involved to it and they need to look at a wide number of companies to take that risk, to really go for it and build this as fast as we possibly can and to support it in unique ways that maybe we’re not used to. But when you’re, you’re standing up an entire industry, you Know, this is, this is a. This is war footing, as I see it. Not literally, but metaphorically, it’s war footing.

We just have to make it happen. Absolutely. So I can see why Trump is pausing the tariffs as they continue to talk. Do you think at the heart of this is the rare earth minerals issue? I’m sure it’s part of it, yeah. There, there may be other considerations. Obviously, I’m not in the room, but I’m sure that that plays an important role. It cannot. You know, it’s interesting, you said something that I was totally unaware of. I have to confess my ignorance here. You were talking about rare earth minerals in terms of treatment of cancer. I was totally unaware of that.

How many other medical applications are there for rare earth minerals? I mean, there’s a few on the cancer side. It’s mostly, though, they’re used either in MRI machines as well as I described, or they’re used in medical devices. So you have to. Through magnets, and you have to think of, when you think of rare earth magnets, you have to think of them as the, they’re the, the key to. Or the, the key technology for when we’re translating electricity into motion. So if you’re anything, you could have a valve in your heart that is run off electricity, that has a little magnet that is opening and closing it.

You could have. There’s all sorts of things in your body you could have that way, and sensors and things like that. Medical devices, robotic arms all have these magnets. MRI machines have, like, I don’t know, literally a ton of them or two. They’re, they’re throughout the medical industry. Wherever this. This is occurring. Y. It’s definitely. We are in a mess with this. Yeah. You know, you know, going back to when Trump thought he was going to get a deal between Putin and Zelensky, the rebuild of Ukraine was predicated on us getting a fair share of their rare earth minerals.

But even with that, you’re still looking at more than a decade, aren’t you? Ukraine even longer. And unfortunately, Ukraine has a lot of key critical minerals, not so many rare earths themselves. And there’s often a misnomer like lithium, for example, that you started out with that actually isn’t a rare earth. Officially, it is a critical metal. However, Ukraine, the rarest it has are mostly in Eastern Europe or Eastern Ukraine, where Russia has already taken control, and they’re a couple decades away from unlocking those resources. Greenland as well. Greenland actually has quite a bit, but it’s, it’s locked in ice and it’s, it’s a couple of decades away.

I mean, listen, Dave, we have plenty of it here in the US there’s plenty in Canada. There’s plenty in Australia. There’s plenty with some of our allies, even in South America. It’s not that this isn’t out there. We just have to. We just have to do it. You know, I’m wondering if the Chinese don’t have another advantage and that comes back to international applications of climate change restrictions on things like mining. The Chinese don’t pay attention to that at all. That’s right. And we have been pretty religious in following that. Do you think Trump is going to continue that Biden mode? I would say he probably won’t.

I don’t think Trump has contained anything in the Biden mode. We probably agree on that. No, he’s not. He’s already announced. So they’re working on one of the biggest issues, permitting issues that have taken years, if not decades to get permitting done for a mine. Environmental reviews that take a decade to do. These are things that the administration is already focusing on. Now, it has to be, which is good, but it also has to be buttressed with law. Otherwise you leave companies open to legal ramifications later. But they’re taking the right first steps for sure within the administration.

And now it’s just what’s next. And that’s that support that comes behind it to really get these things moving. And then us as Americans, we’re going to have to accept, yeah, it’s a little dirty. We can do it a lot cleaner than China is, I can tell you that. I mean, they’ve got guys with hats on their back going up a hill and pouring chemicals into. Into the ground and then ruining the waterways around them. We could obviously do it much better than that. We’re good humans, good citizens here in the US but we’re going to have to, we’re going to have to accept it to some degree.

Yeah, there’s always going to be a little fallout that by that’s the climate change thing in the interaction with mining didn’t work well for us. I forget the amount. I think it was China was building 30 coal plants every year and we were diminishing ours. That’s just one example. Well, and not only that, though, Dave, is they’re also buying up rights to these, whether it’s to the mines themselves. Globally, they’ve been doing a huge push and it’s accelerated here over the last year. Or they’re buying the rights to the minerals so they can Process them and control them.

I mean even the only operating mine here in the US was sending all of their or most of their concentrate to China to be processed. The other major heavy rare earth deposit that is so critical as it’s in Brazil, have to send it to China to get processed. We don’t have the technology to do it. So they’re controlling not only they’re not only building mines in China, but they’re controlling the entire supply, trying to globally and to lock others out. Was that part of their belt and road? Oh yeah, absolutely. Yeah, yeah, I would imagine that’s true.

And they’ve been so effective at a. David, I mean you have to be impressed in some ways. We should learn from this. You know, how can we as America look forward and position ourselves so well? It’s impressive what they’ve done, but it hasn’t been so good for us, that’s for sure. Well, you know, there’s another element out there, kind of a free floating element and the Chinese leadership is going through real change. Like you, General Yuxia’s effectively replace Xi Jinping as the head of the military. I think Xi is on his way out totally. And this is what I keep hearing and I’m wondering is the new going to be more flexible with us and work with us? Are they going to be more hardline? Do you have a feel for that? I don’t.

You know what I’m really watching, Dave, is underneath it all, China, their population is declining. They have an aging population. It’s, it’s going to rapidly increase here in the 30s and 40s and 50s, which is going to be a massive challenge on their economy. They’re certainly annoying people globally, you know, in terms of the way they’re pushing and trying to take over resources and things. So I’m, I’m curious here over the next, especially over the next decade, whether or not they can remain as much as a force as they’ve tried to or if they’re really at their peak today.

I just, you know, that’s kind of what I’m watching. Well, there’s rumors, there’s strong rumors to suggest. Well, this is one thing we do know. Their older population is way too big for China in terms of labor market. And they’re younger people. There’s two problems. There’s not enough of them and then the ones who are there are disillusioned. They have this saying called let it rot and they’re becoming domestic engineers for their parents and not entering the labor force. That’s right. China has a manpower problem, don’t they? They have a huge manpower problem, and it’s only going to accelerate and it’s, it’s really going to affect their economy in the coming year.

That’s exactly what, what I’m talking about there. Of course, that’s why they’re, they’re pushing forward so hard into robotics and other areas. Right. Which we also need to watch. But I think they’re going to be under some pressure. I think, you know, I’m, they may be at their peak. We’ll see. I want to throw a Hail Mary into this discussion. Quantum physics has been one of my hobbies for 30 years, and I don’t seem to be an expert, but I know a little bit about it. But I’m wondering if there isn’t a technological workaround, at least for some of this, in the quantum model, or does the quantum model totally dependent on rare earth minerals and it doesn’t matter that we switch any? Yeah, I’m, I’m a physics geek as well.

I’m probably about as dangerous as you are because I’m a born finance guy, but. Yeah, we’ll see. I mean, that’s, that’s an area. As we look at how we’re going to evolve as a company, our first job is we’re standing up this factory. We’re going to build produce magnets for the domestic economy. We want to stand up our mine and our processing metal making here in the US and then as we evolve, it’s looking at that how can we actually evolve and look at these new technologies, whether it’s quantum or, or anything else that may be to help support these technologies as we, as we grow and evolve as a human race.

It’s a, it’s a fascinating project to be a part of. I absolutely love it. I think you’re referring to your Oklahoma facility, right? That’s, that’s right. Yeah. I want to go down that road here. I’ll tell you what, if I were advising Trump, I’d say, hey, public private partnership, if they’ll accept it. Tell me where that’s at. Are you getting any government assistance because of the urgency? Not yet. I mean, we’ve, you know, I joined about six months ago, maybe seven now, back in December, and we’ve been doing a big push, making ourselves known. You know, we, we had a new administration come in.

We were an unknown. We’ve really come in hard over the past few months. So we haven’t yet. I think we will. I think that. Honestly, I think the administration is going to Be very supportive. I think it’ll be supportive of this magnet facility and what we’re building in Oklahoma is a, it’s a 5,000 ton facility, annual production facility in Oklahoma. That’s roughly call it as of today, next year, roughly 10% of the, of the amount of magnets used in the US Today and various technologies far and away not enough, but will be the largest magnet facility here in the US Making these centered neodymium rare earth magnets that are so critical to so many technologies.

And then we’re, we’re going to bring metal making back here to the US and then we have our deposit in West Texas that we’re developing, really working on the processing technology. And I think we’re going to find ways to partner with the government. I think we’ll find ways to get funding, whether it’s grants, whether it’s loans, whether they get creative and do some kind of equity scheme. Like I literally have no idea. But I, I’m pretty sure that I feel very confident that the administration is going to be supportive here over time as we look, you know, in the coming months and certainly the next year.

Do you have any feeling on why it took Trump to come into office to start working towards solving this problem? Because I don’t think the Biden people were. Was it their obsession with other areas and they didn’t care about the rare earth? What do you think it is? I think so. It’s not that they didn’t care, they certainly talked about it, but they did have an obsession with renewables. They were really focused on renewables and unfortunately they just ignored this space. The first Trump administration started really looking at this space and you know, that’s where it began.

But as a nation, as you know, Dave, we’re just addicted to cheap stuff coming out of China and the industries, this is as much the fault of industries, you know, just hooked on getting this dirt cheap stuff from China and fighting the change that we know that needs to happen here. And they’re slowly coming around, obviously. I mean, when you see this kind of risk in your supply chain, there’s a value to that risk. And getting subsidized product from China is just too dangerous. And it’s literally subsidized. I mean, they’re getting metals for cheaper, they get tax kickbacks.

You know, all sorts of things are happening underneath the hood to keep these things cheap, to allow them to control the markets. You know, the, the magic solution, I think long term is what Trump does best in making deals. You got to make it beneficial for them to let. Since they will have a labor shortage shortly, they gotta import mining companies that know what they’re doing. Yeah. And you know, companies like yours and do you kind of anticipate Trump is working towards that end, say hey, we can both benefit here, I’m sure. And we can, I think there’s, there’s a.

I’m convinced we’ll get to a solution that’ll cover us here in the short term. It’s not really in China’s interest if they cut everybody out permanently. Okay, one use it for bad. Fine. But if you cut thing everybody out permanently, then all the work they’ve done over the last four decades will fall apart here in the coming. Exactly. That’s no good for China either. So we’re gonna have to find a balance and then I think that’ll, that’ll give us the time to really build things up and hopefully catch things up. But I’m confident that that will get there, the administration will get there at some point.

So you have a very calm approach to this because some people I’ve talked to, they’re flying off the edge. Hey, enjoy your cell phone. You’re not going to have it in a year. I mean that kind of thing. And, and I’m not hearing that from you. And I agree because this is, we’re on the same street with the Chinese. It’s in their interest to work with us as well. Of course. Otherwise things would have blown up a lot more. We wouldn’t have all backed off together a couple of months ago. It’s in all our interests. Yeah, I’m, you know, I think about it, obviously all of this that’s happening is somewhat good for our company.

Clearly, although it creates challenges for us. We have to source some of these rares that we can’t get here domestically, the heavy rare earths in particular. So there’s challenges for us. I think it’s solvable. I want you to help me do some detective work. I live north of metropolitan Phoenix in rural Maricopa County. But if I go east about 30 miles, there’s a huge chip plant that’s origin is. Is Taiwan. Right. I have never seen infrastructure built so quickly. They went from stakes in the ground to operational with high hundreds of cars in under a year.

I’ve never. And the roads around there, the infrastructure that we can’t get our roads paved where I’m at. Okay. But I’m seeing the infrastructure there like crazy. Is this related to that problem with Taiwan’s ability to manufacture chips? Oh yeah, it Absolutely is right. This is a. Well, here you go. Here’s a Manhattan Project moment, right. They’re doing it and one of tiny Taiwan’s invaded. It’s all over for us from a chip perspective. And so it had to get done. They built it. It’s just execution. You know, I’m a manufacturing guy. This is all about execution.

And we. It just what. What feeds execution money. And if we feed this and feed the right things, of course we can build it and we can execute on it fairly quickly. We could build a massive facility within a couple of years and we could probably fill up. We need about 50, 000 tons, 40, 50,000 tons of magnets here in the U.S. our facility be 10% of it. If we can build it quickly, you build 10 more of those. Of course you can. You know, this is just about execution. It’s about money and just doing it.

Well, they’re certainly making the inroads there because you drive by there, there are hundreds, if not a couple thousand cars. Yeah. That are in these parking lots. I’ve never seen a business grow to the level I’m seeing here. And then I found out to Taiwan chip factory. That’s right. Which to me they’re trying to. To me, they’re trying to lessen the damage if things go south. That’s exactly what they’re doing. And they got a lot of money in help as well. They’re also investing a lot of their own money and they were heavily encouraged by both administrations, I think, to, To.

To build that plant. So it’s absolutely. That’s an important investment for us, frankly. We need more of those here in the US we have a huge naval presence now in the South China Sea in that area. We’re helping the Australians, people in the Philippines, South Korea, Japan, and really we’re just kind of aligning against China. To, to me, is that necessary? Is this kind of like, okay, if you cut us off, you’re going to have a problem. But then I’m wondering about the defense implications, how soon they would show up and when would that force be rendered.

Less than what the Chinese have. Yeah, I mean it’s a, it’s a balancing act, isn’t it? Yeah, I absolutely think it’s necessary. I think we need to really be thinking about the future. China is. They’re very much thinking about it. But the question is, how do we balance that? We can’t lose control of these minerals, unfortunately, the position we’re in today. So again, to me it’s this. It’s this Manhattan Project moment. Like, how do we surge all this so that we can decouple ourselves from these critical areas? We want to buy Barbie dolls from China. Let’s buy Barbie dolls from China.

But if we want to support our defense industries and our critical technology industries here in the west and our allies, even in East Asia, then we need to build it and we need to surge it. And just, we just need to make this happen, Dave, here as quickly as we can. In terms of post secondary education and graduate programs, PhD programs, what would be the specific areas we need to beef up for education purposes? Great. I mean, mining, process engineering and mining, which is a lot of chemical engineering, a lot of magnet engineering, or metallurgy, these kind of chemistry, metallurgy, magnets, process engineering.

These, these engineering areas is really what we need A lot of interesting, because when Trump was having some issues with Harvard, he said, this money we’re giving you might be better off going into the trades. Could that be applied to your labor force for what you’re talking about? Oh, absolutely, yeah. And there’s, there’s definitely a gap that we have there. You know, what we’re doing, for example, at our magnet facilities, we’re putting together different, different trades to make it work. So ceramics manufacturing, which we have quite a bit of here in the US Is actually very close to magnet manufacturing.

So you bring in. We have great ceramics manufacturers running our facility. And then you tell, you bring in maybe some magnet engineers that maybe have never produced anything in their lives, but they understand the science, and you bring them together to, to really build and run the factory and begin to educate each other. So we’re stitching it together, but we, we’re really missing that within our educational system. We absolutely need it, and we need to be training folks who are going to stay here and not just go home and use it at home as well. Okay.

Satellites, over the horizon, radar. We are the masters on the planet. Still, to this day, we’re better. But how soon would those advantages disappear if China cut us off? Pretty quick, frankly. Pretty quick. I think it would. We would be slowed down, I’m sure within months, and we would, you know, this is America. We’d figure something out. Right? I mean, we didn’t. We used to make technologies without this. I’m sure we’d figure something out. And then we’d surge these things and we’d build mines and we would get the minerals that we need. But we would. It would.

For two, three, four, five years, it would, it would definitely slow things down, Dave. Pretty quick. And Importantly, it would slow us down in developing new defense technologies as well as, and allow others to catch up. So cutting us off would probably hasten military action on our part. It could. Yeah, I could see that. I could definitely see that happening. You know, here’s what I don’t understand, and I’m going to take you a little far field just for a second. I’m revisiting today the agroterrorism case out of the University of Michigan, because more stuff has come out from the court filings, and I’m thinking, okay, you’re China, you need the United States to be a good customer.

You’re trying to negotiate trade agreements that benefit you as much as the US Will tolerate. Why would you come in and do experiments that looks like they were looking at trying to destroy our food supply? And that’s the position of the FBI in this case. Isn’t that counterproductive to what they want to accomplish? I think so. I have to profess, Dave. I don’t, I don’t. You know, I’m not an expert in the agro business in the slightest, but I don’t know. But don’t we all, I mean, every country, at times out of hubris, do things that are, especially internationally, that may be somewhat not in our interest from time to time, because we think we can.

I think, I think every country’s been probably going to miss some mistakes there. You know, I think China might have already, even in the rare earth space, they might have already gone too far because now they freaked everybody out. And even if they pulled back tomorrow, the big, shining, flashing red lights of risk are already flashing, and we’re going to figure it out regardless of what they do tomorrow. So they might have already made. Gone too far with rare earths, even, Even if they’re backing off a bit, which is probably good. I think it’s, it’s reminded us that we need to take action.

Well, I know some people who were Pentagon types have told me China wants Siberia. It’s not Taiwan. That’s next. And they would have a vested interest in cutting Putin off, wouldn’t they then? Yeah, that would be interesting, wouldn’t it? Yeah. Well, the FSB leaked document said that Russia viewed China as their biggest enemy. They did. Yeah. Yeah, it’s. That would be interesting. I mean, come on. China, we know. I spent 10 years in Russia and Kazakhstan. I speak Russian fluently. I spent 20 years in the region in Ukraine. I was a Russian studies major. Like, this is.

This is an area. Yeah. And, and there’s no Way China is just doing this because they love Putin. Of course not. They’ve got some. They’ve got some hidden agendas behind here. Russia has incredible resources throughout Siberia, and that country is full of resources, isn’t it? Absolutely. Yeah. And then there’s military advantages, too, because if you ever wanted to cross the Bering Strait and invade North America, there’s your ticket, which is Siberia is your takeoff point. Yeah. So that, that, yeah, it’s never an easy issue. And I, I’m sure Trump, and this is why he wants Greenland, that’s a counter to what he knows the Chinese want to do militarily, because people never.

People don’t look at Greenland, where it’s at strategically in terms of countering Siberia. Yeah, it’s very strategic. It’s very strategic. Yeah. And. And believe me, I’m sure she wants a weakened Russia. Like, why. Why, of course they’re supporting Russia and Ukraine, because the longer Russia fights and gets weakened, the better it is for China. True. It’s not bad for us either. Right. So we’ll weaken Russia. So. Yeah, I’m sure there’s a strategy there. China always has a strategy. Well, I hope time is on President Trump’s side. You know, you said the Manhattan Project. I agree it’s an emergency, and, and we need to push this forward.

But I also thought this, since we brought up education, if you remember your history books, Sputnik, when the Russians launched Sputnik, it revolutionized education for a while. It did, yeah. Yeah. And. And it sounds like that’s what we need to be doing. Do you see universities making this move, or are they still kind of in the dark? Well, I would hope so. It. I’m sure they’re still in the dark. I mean, all this has happened pretty quick. I would hope it would change. I would hope it’s also. Universities respond to what we want as well. Right.

It’s also a. It’s a business. And I think we need Americans to want to go into engineering, want Americans to want to go into. To mining and processing and, you know, metallurgy. We need to market that. We need to certainly encourage our universities to do that. And to your point, this is where maybe this is a bright spot in all this. Sputnik’s a great example. Right. It spurred an entire space race. It spurred a lot of ingenuity on our side. We got to the moon. I mean, this started a whole push. Right. And these kind of critical moments in our history do that.

And, you know, I look at these critical moments as opportunities and I think this is our moment. You know, how does this spur now? Ingenuity and a changed view on how we operate as a country. I think this is a great opportunity for us. And I’m hopeful that seeing a country surpass us in something which we never like, nor should we, is going to spur us into action to really create something new and better. That’s, you know, I’m a pretty positive guy and I think, I think we’ll respond to it and it’s going to make us a better nation here over the next next decade.

Well, that’s our history. I would agree. It’s very much our history. Is your company on the nasdaq? We’re on the nasdaq. We’re traded as usar. We started trading back in March. And keep an eye on us. We’re building, we’re building this factory fast. We’re going to be producing. We’re talking to. We’re going to be the only major magnet facility producing for the wider market. There’s a couple other producers, but they’re. They’re just producing for EVs. We’re going to be producing for the wider market. We’re focused on defense and industrial and consumer products, you know, all the things that, that make this company, this country, great.

And we’re going to be coming out strong here early next year from a sales perspective, so we’re pushing hard. To me, I’m asking this question from a bias that I’m developing from talking to you. Excuse me, are you looking at the stock market and your company as you’re ready to explode because of the need that’s coming, and it’s going to attract investors across the, the whole domain of investing. Yeah, I certainly look at that way. That’s my hope. Yeah, for sure. I believe so. I think we can, we can sell this product as fast as we can build it.

You know, even if, assuming, you know, back to our earlier discussion, that we find a balance with China and so we continue to get product, they’re still thinking that there’s an incredible need here for domestic product and we’re going to be there to serve it. We’re going to be one of the first and biggest. So, yeah, I think, I think we’re in a great position as a company and we just have to show it, which we will as we proceed in next year. We’re good manufacturers. We’re going to make good quality product. I think we’re going to knock it out of the park.

See, I think that is really important because that’ll push development more than government assistance. Yeah, if you can get. I agree. If you get the public behind this. I agree. I mean, our fuel, you know, I was describing earlier, to build it’s capital. You know, we, we need to bring in the capital. We need to build this as quickly as we can. We brought in plenty to, to get us started. But now to really build it out and push it harder and maybe take it further than we originally planning, which is what I’d like to do.

You know, it just takes capital, takes trust. We have to build trust. You know, we’re in the public markets, we’re asking people to invest. We have to build that trust and show that we can make great product and run a great company. But, you know, I’m confident we’ll get there. You know, I don’t know if you can answer this question. If you can, I completely understand. But if I were involved with your company, I’d be worried about Chinese espionage. How far along are they? I’m being very serious when I say that. Yeah, yeah. I mean, I’m not worried about them stealing state secrets from us because frankly, we’re, we’re not using tech.

We’re not creating new technologies. We’re executing on what’s known today. Sabotage, maybe. You know, I’m not that worried about it right now, but we’re certainly thinking about it. I mean, believe me, cyber security is at the top of our list. When we talk as an executive team is something very important to us. Security at the plant, all that’s very important. Well, let me, let me, let me go to this term here. This is why I’d be worried about. And I got to go to the biological term here. Ferium oxysporum, which with these church Chinese people were doing that, are now under arrest and being tried for treason and espionage.

They develop something that not only causes crops to die, but if you ingest the crops into your diet, it affects your health as well. That’s pretty serious. That’s why I asked my question. Yeah, it sounds horrible. Yeah, I hope that’s, I hope that’s not true. Or if it is, we need to get out of it. That’s for sure. Well, there’s charges in federal district court in Michigan on this. I mean, I, I saw, I, I saw the filings. This is, I, I covered this once and I’m, and I’m going to recover it because stuff that came out in the filings I was unaware of.

This was intentional. They tried to make it look like it was something that could harm Crops, but not harm people. And, and so it was kind of like, well, it’s kind of bad, but it’s not as bad as we could have done. And they found what they were, could have done is what they were already doing. Yeah. And, and that’s why I asked the question about, you know, intelligence. See, if I was a government, I’d be very worried if we’re, if we’re going to go down this road now and develop our own industry. I’d be providing intelligence support to keep the Chinese out.

Yeah. And there’s, and, and providing that moat we need. You know, when you have a completely subsidized industry in China and tax kickbacks and everything else, we have to build a moat to allow us to get our sea legs and to build this industry. I think that’s really important for folks to understand. This isn’t about giveaways to an industry. It’s about. Yeah. Building that moat that we need to survive in a completely unfair and subsidized environment. China. That’s just the reality of it. And it’s, this is too important of an industry. Again, it’s not Barbies. Not that my, I love Barbies, my granddaughter loves Barbies.

I have two girls. But these are important technologies for our, for our, for our future and for our defense. So we have to build that mode. Well, this is a no option venture in my opinion, which is why I asked the stock market question. Because if your stock blew up, I’m asking kind of a silly question for the audience benefit who may not see the relationship. But if the stock blew up, wouldn’t that hasten the production timelines and the quantity that you could produce? Well, I mean, they’re not fully direct related. We have to raise money to do it.

When people buy stock, it’s not money that comes into our company unless we’re issuing new stock, of course. So it, it’s certainly a show of support for us. But you know, we’ve gotta, we have to, you know, we still have to show the business plan and the future that it’s going to bring in the money to support our growth. I believe we are showing that. I believe we’re going to continue to show that to raise the money that we need. I’m, I’m honestly not worried at all about our inability to raise money. I’m sure we will, but we already have, we’ve raised quite a bit in order to get started.

I want to raise it faster. To build faster would be my thing. Yeah. As fast as we can. As fast as we’ll build it. Are there others doing this, but not as far along as you, or are you kind of a standalone and the new kid on the block? There’s a couple others. There’s two other large, large ones. One is a company called MP Materials, another one is called Evac and they’re a German company actually owned by a company called Vacuum Schmilz. But they’ve both built facilities that are more or less run by, I mean GM invested in them.

They’re for GM essentially at least the initial production that’s coming out is all for GM and their EV manufacturing and motors. There’s nobody at our size coming out for the broader market, which is why we’re focused on it. Yeah, that’s, that’s. There’s some smaller players but. But nobody as large as we are and not as well funded. We’re by far the. After MPU is already operating. We’re probably, we’re the best funded by far. Well, I think I remember reading that you’re in Stillwater. Isn’t that Oklahoma State? Yep. Yeah, that’s where Oklahoma State University is. Yeah. Yeah, it’s a great little town.

Well, you think that they would be jumping on this like crazy with federal encouragement. Yeah, certainly the state of Oklahoma is super supportive. They’ve been fantastic. That’s why we’re there and now. Yeah, we’re. Believe me, I’m working hard. I was in D.C. a week or so ago. I’m in D.C. quite a bit these days, talking to folks, working with them, finding paths for us to find the funding we need. And again, I think the, I think the government’s going to be, it’s going to be supportive here in the coming months. We’ll see what that looks like.

I don’t know yet. They’re still figuring it out, but I think they’ll get there. If we’re fortunate enough to get to the point where we’re at least on an even par with the Chinese. I would think that the way that we manage business and it’s not state run, state owned, which is really inefficient. I would think the growth you would have compared to the Chinese, you’d leave them in the dust. Yeah, I mean capitalism better in socialism is what I’m saying. Yeah, yeah, yeah. And well, I’m a big, of course I’m a big capital. I believe firmly in the, in the framework we all live and we’re growing in.

But, but we have to figure out as a nation how to compete against nations such as China who are subsidizing these, these important industries. We got to figure that out, unlock it. And it’s the challenge with that for us. And it’s been like this for decades. Is it, it’s, it goes against our beliefs of capital. Right. Believe. Go out there and you compete and whoever comes out best is the winner. Which is great when it’s a fair, fair and transparent, you know, playing field. Which is. It’s just isn’t. It just isn’t. And so how we, how we respond to that and how we build those safeguards within our economy for this all important industry and there’s others.

We’re just one industry that’s feeling it now is. That’s. We got to figure that out as a nation. Yep. Yeah, that’s a really good comment. We have to figure this out as a nation. And, and two, with the quantum AI coming though, that’s totally dependent on rare earth, am I correct? AI itself, you certainly use it in servers, you use it in cooling, you use it in semiconductors in hard drives and areas like that. It’s super important in robotics. Like every joint in a robot. Yeah. Has these little magnets in it in the motors that move the joints.

So it’s, it’s critical for, for AI in terms of robotics and other areas. And it’s certainly critical. And there’s critical metals like gallium, which we’re also very rich in, in our deposit by the way, that underpin the semiconductor industry which drives all of this. Right. So yeah, rare earths, Gallium, which was banned by China. These magnets underpin a lot of this. What, what was banned in China? Gallium. It’s a, it’s a critical. They banned it about six months ago for export here to the U.S. it’s a critical metal used in the Patriot missile system. It’s used in semiconductors and the two critical areas, a lot of other areas.

It’s pretty key metal that is largely produced in China as well. Did China ban that because of our military application? I think so. It was in re. This was pretty, you know, before Trump, after the election. This was, I think it was in December or January. It was before all this tariff, all these tariff negotiations. And it was in, it was in, you know, they were reacting to something. It was probably semiconductors that we banned or something at the time. I forget exactly. Honestly. Wow, that’s, that’s amazing here. I don’t know if you know this or not because to me the idea of zero point energy comes up and I think it’s way down the Road, the conversion would be longer than what you’re dealing with.

But there’s this thing called. Have you ever come across this the Invention Secrecy act of 1951? No, I have not. Yeah, it’s a real, it’s a real thing. It’s a real thing. When Enron was taken down, I was acting as a consultant to one of the companies that was working with Enron. They were looking at zero point, and we think that’s what triggered the Feds to come down on them more so than any misdeeds they were involved in. And then that’s when I came across this Invention Secrecy Act. We had a lawyer tell us they can shut you down just because of this.

I, I, the government’s not going to shut you down. But I just wondered if you’d ever heard of that. No, I had. No, I know we’re not government shutting us down. They’re going to be supporting us. That’s, that’s what I think. Well, you know, one thing I’m going to do is I’m going to talk to my friend Bob Kudla, who’s a stock investor, very, very successful, and we’re gonna look into this because I think I, I think your stock is going to blow up. I really, I hope so. I hope so. I think we got a great company, I think we’re building a great facility, we’re gonna have great product and it’s obviously in a market that really needs it, so.

And we need as a nation, domestically. So I think we’re in a good space and I’m super excited about the future. Before we close, let me go back to Oklahoma State University. Have they jumped into this at all or where are they at with this? Yeah, I mean, we’re certainly talking with them. I mean, we’re just standing things up. So, you know, things aren’t going to change overnight. Oklahoma State, but we’re certainly talking with them. We want to partner with them to get the engineering that we need coming out of Oklahoma State. It’s a great university, they’ve got great state support.

So I think, I think we’re gonna have a great relationship with them going forward. Absolutely. If they don’t jump into this full force, I mean, they’re missing a golden opportunity with something like this in their backyard. And what President Trump is dealing with and the importance of this, they could jump to the head of the class in this area of technology very quickly. Absolutely. And in Texas, by the way, you know, our deposits in West Texas, just an hour, hour and a half east of El Paso. And so the University of Texas at El Paso are, are becoming good partners.

You know, we’re working with your Texas and Austin and absolutely some other universities there. So we’re certainly getting support and people are interested in the space. So I think, I think things will change. We got a lot of information in this hour. Joshua, is there any way people can follow the progress of what you’re doing? Yeah, I mean, I think follow us USAR on Nasdaq, follow us on LinkedIn or on Twitter, other areas. And you know, I’m out and about doing these kind of things quite a bit. So you guys might hear hear my voice again in other areas.

I think it’s an exciting time in the industry. I like to get the word out. I think we’re an important company and, and I think people should keep an eye on us. Yeah. I’m going to share this interview with some of my colleagues who do what I do and, and I would suspect you and Todd are going to hear from them. Hey, look, thanks for joining. It’s been very informative. I appreciate your concise and factual answers. You really opened up my eyes. So thanks for joining us and if things develop, feel free to come back. Yeah, I appreciate, Dave, it’s been a pleasure.

I enjoyed it. Take care.
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