the United States has fallen behind in
the production of critical rare earth
minerals used in everything from wind
turbines to television screens now he
joins us again on how a newly reopened
mine in California is helping America
take the edge back from China
Brian Jim this mine used to be bankrupt
the company Mali Corp you bought it out
of bankruptcy you're a chicago-based
hedge fund manager why get involved with
a rare earths mine really in the middle
of the California desert well Brian
we're contrarian investors and it's not
very often in life that you can buy a
world-class asset at a substantial
discount to replacement cost that also
happens to be levered to one of the
single greatest economic themes over the
next 20 years the electrification of the
global economy and at the same time also
geta do something great for the country
yeah all these elements that we forgot
from high school chemistry and geology
that we don't talk about much they are
so vital it's not the value of the
industry is it it is the fact that if
you want these magnets it's gonna have a
Tesla if you wanna have an iPad if you
didn't even have an MRI machine you need
the stuff that's in the ground
underneath absolutely it's it's not a
huge industry it's maybe only a few
billion but we power 700 billion in the
auto supply chain downstream and when
you add up
robots drones wind turbines all of the
advanced technologies of the future it
will be trillions of GDP all reliant on
these materials so this used to be the
global leader I mean this was this made
this mine made the u.s. the leader
effectively ever color TV screen in
America for 30 years was powered by the
elements here what happened well so we
used to lead in America for decades and
then ultimately the Chinese recognized
the importance of this material and they
utilized the cost of capital as a weapon
and they came into the industry and were
able to run it at a very low profit or
net losses to take over the industry and
so that's where we ended up and China
effectively controls eighty-five to
ninety percent of the world market but
they do it to your point with with
government subsidies they do it without
any concern for the environment a lot of
the ways they refine these elements is
environmentally unsound if not actually
dangerous for the human beings around it
so
how do how does how do you how does the
u.s. rare-earth industry compete with
that right well we we have to compete
effectively we have to be better and
it's actually worse than that because
today we lose nearly 40% of our revenue
in in Chinese tariffs and VAT by
shipping our product into China and so
ultimately we need to compete but it'd
be nice to have a level playing yeah you
and you do ship your stuff there to be
finely processed refined or whatever you
want to call it but this building behind
you is the largest one of the largest
refining processing facilities in the
world you hope to get that up with any
yeah by next year we expect in this
building behind you as you just said is
the largest and EPR separation facility
in the world so you sometimes hear if
people say that the US doesn't have the
capacity we do we have it we are 15
percent of the rare earth concentrate
market today and we will be making
separated products next year in this
building do you think that to wrap but
if you think the capital markets are
gonna see what you're doing here and
because if we want to build out this
rare earth business in America we need
money
we're probably gonna mean you know
permitting the government's got to be
involved with the private sector has to
be involved you think that you could set
some kind of a model here that this
might might be the launching point for
something bigger well absolutely I think
that we need we need to be economic we
need to out-compete
and so what we want is we want a level
playing field but then what we'd like to
do is we'd like to move downstream so
we'll make separated verus in this
building and then we will move further
down the line to ultimately make the
magnets and move down downstream because
that's so important for American
industry because if we don't you know 20
years ago there were there were few rare
earths in China and there were no
magnets and now they have the rare earth
industry and the magnet industry the
motors and the EVs are likely nuts and I
think that's when people will start to
care so we have to we have to figure
this out
you
you
