What happens when rare earth elements become the new global currency? This week, we’re diving deep into China’s calculated expansion, Ukraine’s questionable mineral claims, and the West’s increasingly frantic attempts to break free from Beijing’s rare earth chokehold.
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Dustin Olsen (00:01.791)
Hi everyone, welcome back to the Rare Earth Exchanges podcast. I’m Dustin, I’m here with my co-host Daniel, and this week we’re gonna be talking about some articles that came out over the week, things that stood out to us, things that we think are gonna be impactful as we move forward in this industry. And Daniel, tell us what’s up. You were in DC this last week.
Daniel OConnor (00:24.12)
Yeah, I was in Washington DC, Dustin. That was a really interesting trip. I met some interesting people and ultimately we’re, as you know, trying to reach out to some folks in the government about what we’re doing. We think we’re onto something. We’ve got some big plans. As you know, we’ve got our website, rareearthexchanges.com, the podcast obviously.
A lot of people come to the website, it’s in the thousands now, we’ve done no marketing, so something’s going on. We’ve got the directory, so you know, where we’re now loading up rare earth or critical mineral projects. And you know, obviously we’re working on a much bigger set of capabilities technologically.
Dustin Olsen (01:12.383)
Yeah, yeah. And so speaking of the directory, so it’s projects, right? We’re trying to highlight projects from around the world that are going on. And it’s in its infancy, of course. know, there’s a lot of due diligence that has to go on of checking its accuracy, its true status. But hopefully it’ll be a resource for people to come and see what’s going on and even just have, you know,
a way to contact people to see what’s going on. It will be work in progress but that’s our latest addition to the website.
Daniel OConnor (01:48.046)
It’s evolving nicely, so thanks to you, great work.
Dustin Olsen (01:52.343)
Thanks. So, good, I’m glad you had a great time in DC. Hopefully some good conversations, but yeah, when you think about what happened over the last week that we published on the site, what stands out to you the most? Maybe we can start there.
Daniel OConnor (02:10.382)
Well yeah, there’s obviously a lot going on. And one big matter is the discussions with Ukraine and how the US under President Trump has identified rare earths and critical minerals. They’re just calling them mostly rare earths or rare earth minerals. again, rare earth elements and critical minerals are different.
all fall under a general same category, but they’re different. know, Russia, Zelensky, the Ukraine’s president has rejected an offer. I think that he felt it wasn’t sufficient enough. And Trump has basically said, I want half a billion of your rare earths. Now, you know, there’s a lot, let’s just talk about Ukraine and…
rare earths and critical minerals for a minute. There’s a lot of talk about, wow, there could be $16 trillion worth of rare earth and critical minerals in Ukraine, but that doesn’t mean anything. Based on our review and articles that we have done recently, there’s the hype and then there’s the reality. the reality is that we don’t know how much
rare earths are really in Ukraine. There is definitely resources in the ground and there are critical minerals. A majority of the valuable rare earths and critical minerals are in the eastern parts of the country that are held by the Russians. I think Zelensky knows that. I think what he’s trying to do is get the Americans to try to go in.
and get that part of the land back for him and for Ukraine. So they know they’re valuable, those rare earths. President Trump calls them those rare earths, you know, those rare earths, right? So he knows those rare earths are valuable, but he’s holding out for an unrealistic deal. Zelensky has already rejected a U.S. proposal that would have given American companies 50 % control.
Dustin Olsen (04:04.747)
Mmm.
Daniel OConnor (04:29.76)
as I mentioned, over this sector. And they’re demanding national security packages to help them. But in a lot of ways, Ukraine doesn’t have an easy way to go mine them, to separate them, to process them. There isn’t the infrastructure. They don’t have the money.
And even if they had the money, probably that wouldn’t happen now with the war going on. I mean, we’re just, you know, even if there are precious, rare earths in Ukraine, we’re years away, years. Okay. And so all of this talk is really more just that. It’s more the kabuki of the moment versus, you
the reality of what’s on the ground. So for now.
Dustin Olsen (05:31.575)
So it sounds like what you’re saying is the US government undercut probably what Ukraine’s asking for. And Ukraine’s probably just hoping for funding to fund the war or to restore damage by the war because you just said they don’t have the resources to mine or do anything. So what would we be spending money on?
Daniel OConnor (05:59.182)
Well, okay, what no what the US is saying is we want 50 % of your rare earths and $500 billion worth and the Ukraine is pushing back and saying, no, we need something more fair. And Trump is saying,
No, it’s your fault that the war happened, even though the Republicans are the one that invaded. So it’s getting a little crazy. It’s, you know, it’s President Trump. He does these wild things to kind of throw everybody off. The reality is what we said in our article, Dustin, you know, we concluded as for China, which controls 80, 90 % of the processing of rare earths worldwide.
China remains firmly in control, unfazed by the geopolitical chatter of the United States and Ukraine. And for that matter, for now at least, Ukraine’s rare earths, however valuable they are, will remain buried treasure, likely to stay that way for quite a while.
Dustin Olsen (07:13.271)
That’s true.
Dustin Olsen (07:18.881)
So what’s the likelihood? let’s say that deal actually went through 50 % of whatever they have in the ground. By the time we get out of the ground, do we just have to send to China? Because we can’t do anything with it.
Daniel OConnor (07:31.586)
Yeah. Yeah. Very astute. Yes. Actually, right now, literally, if we could just separate it and pull it out of the ground, you know, to get oxide to what have you, we’d probably have to ship it to China anyway. Okay. Because to build the processing and refining capability in the Ukraine is a decade away. So, you know, what does this all mean?
I don’t know, but I do know not much is going to happen. It’s sort of like Greenland. Yeah, we could talk about Greenland. We can talk about having the Greenlanders decide they want to reject Denmark and come over to our side. We can put a lot of money in there. And there’s a lot of great minerals there. There’s critical minerals and there’s rare earths in Greenland. There’s some prominent mines that actually the Chinese have tried to access before.
At the end of the day, we don’t have the processing, refining, the magnet production. We’re years away. And as we’ve been saying in our articles, it’s not enough just to throw a little money around, have some startups or some more mines. We need industrial policy that concentrates on critical minerals and by extension, rare earths. Critical minerals being a much bigger economic sphere.
frankly than just rare earths.
Dustin Olsen (09:02.455)
Yeah, it’s crazy. Okay, so what else stood out to you this week? Well, I’ll tell you one that stood out to me that I was reading. In the next five years, we’re gonna see a 700 % increase in demand for lithium. Like, 700%, like, where is that demand coming from? Because I feel like, EVs are probably driving that.
Daniel OConnor (09:04.845)
Yeah.
Daniel OConnor (09:08.524)
Yeah, please.
Daniel OConnor (09:23.128)
Yeah.
Dustin Olsen (09:31.499)
that demand, but they’re expensive here. Like people aren’t buying cars like they were like.
Daniel OConnor (09:31.886)
I’m.
Daniel OConnor (09:36.62)
I mean, yeah, mean, EVs are, but again, let’s talk about that for a minute. know, President Trump has canceled our Paris agreement participation. He’s thrown out the Green New Deal. Right? So, you know, is that going to change the market? We’ve talked about this. You know, it’s hard to say. You know, it’s really hard to say.
what’s going to happen? I the rest of the, a lot of the world is looking at green, quote unquote, green energy. Again, you know, all electric vehicles, solar, wind, what have you. And, but you know, what Trump is doing is said, no, we’re gonna go, we’re gonna be totally contrarian. We’re gonna go back to hydrocarbons, drill, baby, drill.
Dustin Olsen (10:21.431)
Good.
Daniel OConnor (10:35.244)
So, know, electric vehicles are a primary driver of lithium, okay? And there’s gonna be more deposits. There’s a huge lithium deposit, by the way, right? Not far from where we’re at, relatively speaking, north of Winnemucca, Nevada, there’s a huge deposit. So, you know, I think we’re, it’s gonna be interesting. It’s gonna be very, very interesting what happens over the next, you know, couple years, for sure.
I had one I wanted to speak about if you’re ready for it.
Dustin Olsen (11:07.861)
Yeah, let’s, yeah. That’s what we got.
Daniel OConnor (11:09.742)
One article, know, China is starting to ratchet up more the controls over their rare earths and their critical minerals. Okay.
Dustin Olsen (11:22.199)
Okay. So to clarify, are they ratching it up because of Trump and his tariffs, or is this part of their 40 year game plan?
Daniel OConnor (11:35.918)
You know, that’s a really good question. I think it’s both. mean, they’re definitely, you know, we went and translated their proposed rules as the ministry. It’s an internal ministry. I have to find the exact name of, it’s the Ministry of Industry and Information Technology. So what they did is they’re seeking, they put it out in Chinese, of course, they’re seeking input on
two new regulations to control rare earth mining and improve supply chain tracking. This gets really interesting. Proposed measures include one is total production quotas dusted. So, you know, they want to control even more what goes out of the country, how much they produce, how much goes out. And two, a comprehensive traceability system. So,
for rare earth products from mine to magnet. They wanna track every step along the way with software systems, okay? So again, the measures are drafted by the Ministry of Industry and Information. And just to give you a little bit more on this, the regulation aims at to strictly limit the total allowable.
Dustin Olsen (12:45.781)
Okay.
Daniel OConnor (13:02.54)
mining and refining of rare earth elements in China. So again, there’s these controls in place and that’s going to have a direct impact on the United States and every other country. Second is a policy designed to prevent over extraction, safeguard environmental sustainability. they’re infusing environmentalism in these and ensure quote unquote long-term resource security. And that’s a very important term.
long-term resource security. Finally, this move, if it’s passed, again, it’s in a commenting period in China, aligns with their broader strategy of protecting their strategic mineral reserves while maintaining, this is very important, leverage over global supply chains. I’d like to go into the system a little bit, it dovetails with something we’re talking about, but…
Any questions so far?
Dustin Olsen (14:03.671)
Um, maybe I don’t know if it’s a question so much as the environmental stuff to me, sounds like a bit of a farce because China never seemed to be one to care about the environment. Um, from Marine to land, they’ll rake it over until there’s nothing left, um, regardless of the consequence. So what’s the, is this, is this just a fancy language to appeal to others to say?
Eh, we’re restricting it because of the environment. We don’t care about it, but you do, so that’s what we’re doing.
Daniel OConnor (14:39.65)
Well, I think we have to agree to disagree here. I I think that they actually do have lots of environmental policies that they put forth. Now, it’s true, like you said, that they’ve done a lot of damage to the earth in these areas. There’s the inner Mongolia, there’s a large mining complex, it’s the biggest one. There’s a lot of problems there, no question.
separation and refining is pretty environmentally damaging. Now, the dark little secret is that they have this other area in Myanmar where they also are getting rare earths and there’s a civil war there. So the rebels that are fighting against the government there have usurped some of that and are trying to figure out what to do with
the rare earths, but there’s an environmental catastrophe over there, I’ve heard. I haven’t seen it personally. So to your point, I mean, look, the Chinese, they’ve become rich. They’re the second richest economy in the world. They care about the environment too. It’s not just us in Utah that like to go skiing or hiking the slot pannions.
you know, or rock climbing. I mean, they like to do that in China too. So I’m gonna, you know, I’m gonna say that I do think they have serious environmental policies and they’re trying to become cleaner about how they do this, okay? And there’s a lot of research we’ve reported on studies and such, but I’ll stop for a minute.
Dustin Olsen (16:19.991)
Okay.
Dustin Olsen (16:24.245)
Okay, I that makes, I accept your rebuttal, know, like maybe as a nation as a whole they’ve done maybe not a great job, which we could probably say that of our country too, but okay. All right, so we’re gonna see restrictions for environmental reasons for a good reason, a legitimate reason.
Daniel OConnor (16:45.324)
Well, I think in defense of what you’re saying, I mean, I think we, I mean, we can’t do anything. We’re so over-regulated. You can’t even get, it’s like an act of Congress to get a permit in some places. So, I mean, I think you’re, you know, I mean, obviously, you know, I think that there’s some truth to what you’re saying as well. Now, I want to just talk about the implications of all this just for a minute. So these rules are going to make it harder for the West.
Dustin Olsen (16:57.376)
So true.
Dustin Olsen (17:07.819)
Yeah, go ahead.
Daniel OConnor (17:15.246)
to get rare earth elements, which are vital as you know. They call them the vitamins of the high tech industry, okay? They’re key inputs. So the regulatory proposals highlighted will continue to consolidate Chinese control over the rare earth sector, which already again dominates 80 to 90 % of the world. So by enforcing these stricter,
quotas Dustin and their supply chain tracking. Remember I want to talk just a little bit about that. They can strategically regulate exports even more potentially impacting Western supply chains for critical industry from defense, renewable energy, high tech, manufacturing, you name it. Now the traceability requirement also is very interesting because
You know, they’re really going to get precise about every step of the rare earth product value chain again, from the mind to the magnets or other outputs that come from, you know, these, these inputs, these commodities. So, it’s going to be really interesting. They’re definitely, China is gearing up. They know that in the West they’re talking about resilience and
becoming less dependent on the Chinese. So the Chinese are gearing up in a big, big way for a major trade war. And I’m not too sure that we’re in the better position, to be honest with you.
Dustin Olsen (18:51.467)
picking a fight, know, what’s that phrase? Bringing a knife to a gunfight.
Daniel OConnor (18:57.122)
Yeah, yeah, I just think we have to think carefully.
Dustin Olsen (19:02.295)
Yeah. So why now do you think that China is trying to track every step of the process from mining to production, fabrication of rare earths? Like why now? I mean, I feel like they could have done that. That could have been in the works years ago, but it just seems.
Coincidental that, you know, Trump’s throwing out some fighting words and they’re like, okay, well, we’re gonna figure out just how many magnets you actually need and we’re gonna say you get half as many.
Daniel OConnor (19:47.724)
I think you’re onto it. think it’s, first of all, I think it’s control. Remember all the main players in China that are rare earth mining companies, process refineries, they’re owned by, at least partially by the state. The government owns these companies. In fact, these companies, and we have another article we can go into that sort of is a nice.
organic addition to this topic. These companies are controlled by the Communist Party. So there it’s all about control Dustin. They’re gearing up to track everything, to know where every item is, to be able to be more efficient, to be able to be more effective, to be able to lower the price. Remember they like to have these control these levers because they can control them.
that can lower the price point. as US mines come online, we start to learn refining again, because we used to know it at one point. You know, what is China doing? Communist party, lower the prices. Isn’t it ironic? What would Mao Zedong say knowing that his communist revolution is being led by a bunch of capitalists using capitalistic markets and
Marxist ideology to control free markets. I mean you can’t make this stuff up
Dustin Olsen (21:21.781)
You really can’t. Yeah. It’s interesting. It feels like they’re beating us at our own game.
Daniel OConnor (21:34.254)
You know, I have to say that it feels that way. So another article briefly I want to speak about, and then I want to end on a good note in the United States, is some of the companies, Northern China Baogang Group and Northern China have, I just need to move my, bear with me one second.
Dustin Olsen (21:38.359)
Mm-hmm.
Daniel OConnor (22:04.93)
The Baogang group owns Northern China, which is one of the rare earth conglomerates. So this Baogang group is partially owned by the state. And when I say state, mean like the national government. they again, with the changing rules I just mentioned to you, they’re now having internal groups that are working on
cracking down on what they call anti-corruption efforts. So it’s coming from Beijing and Beijing seeks, of course, the underlying drivers, they seek to dominate rare earth supply chains ongoing, right? And so in this effort, they use what’s called anti-corruption initiatives or crackdown and
For example, at these meetings, party secretary and chairman, for example, Meng Fenying, who is representative of Baoking, aligned with Xi, know, Xi Chinese leader, last directives on what we call rooting out corruption in state-owned enterprises. So rooting out corruption in state-owned enterprises. I they’ve been doing this. I mean, these enterprises have been corrupt for a long time.
And it’s just interesting, they constantly have these anti-corruption purges. So what does that really mean? Well, it’s another way of control. We’ve been told from people in China, okay, directly from people in China, that the state is getting more and more controlling over rare earths. It’s happening. Political discipline, they call it, governance reform, and ensuring absolute commonness.
Chinese Communist Party control over the operations of companies like Baogang and China Northern. So in the past, know, these rare earth mining companies were known as sort of the Wild West. There was corruption. There were a lot of violations of the rules that they have over there. But you know, what we argue is that these companies have been under state control for some years now.
Daniel OConnor (24:29.294)
Okay. You know, are they really that bad given they’re already controlled by the state? Is there that much corruption? I mean, I’m sure there’s some, but what this really is is a cover, Dustin. It’s a cover to go in and provide more oversight, more control. The Communist Party are embedding themselves deeper into the corporate leadership. This is what’s going on. And they use the term strict discipline. They will enforce strict discipline.
and remove any weak links. This isn’t us making this up. We’re just reading what they’re telling their own people. And people better wake up over here. We’re up here on these adventures about Ukraine where they don’t even have anything we can use in short run.
Dustin Olsen (25:16.855)
Daniel OConnor (25:20.398)
I’ll stop, step back for a minute. Please help me here.
Dustin Olsen (25:25.335)
I can’t help you. I’m shocked that there’s such an effort to embed government into corporate levels, all levels of what’s going on. It’s probably just hard to fathom because we don’t really have that here. I think there’s government oversight and overstep with
Daniel OConnor (25:27.526)
Thank
Dustin Olsen (25:53.931)
Controlling what companies can and cannot do. I mean we see that with Europe and They’re trying to control big tech, you know, just like you can’t do that but I’m but that to me that’s different than having the government actually be a part of the company So I’m just my mind is having a hard time Seeing what that looks like and how terrible it must I mean their glass door writing must be going through the floor
Daniel OConnor (26:11.182)
Yeah.
Daniel OConnor (26:21.742)
Does Baogang group have a glass door rating? I don’t know. I doubt it, but they probably have something similar in China. But the problem in China is everything’s controlled. And when it’s not controlled, when it’s a little bit more free flowing, they bring out the anti-corruption purge, perjury groups, or to purge out any creative energy so that they just can, you know.
Dustin Olsen (26:23.827)
You
Dustin Olsen (26:27.575)
You
Daniel OConnor (26:51.16)
have the level of control they need because right now what we’ve been told is that the government’s paranoid over there. The rare earths, remember the three phase plan. Phase one was control the rare earths, which they’ve done. Done a good job. Phase two are these value added production, like the electric vehicles, BYD. just across different sectors, they want to monetize.
that monopoly with continuous innovation in manufacturing. That’s phase two. Phase three is control over the digital currency. Phase three, they arrive as the number one superpower and America is subordinated. And that’s in their worldview. That is their destiny. They’re a civilization that goes back, you know, three, four, 5,000 years.
And they’re just sort of coming to where they belong in the first place. That’s in their view, that’s how they see it. And rumor, they wanna do this, at least this is what they say, they write, they wanna do all of this without firing a shot. That doesn’t mean that they don’t have oppressive tactics and measures. And we saw that with Tiananmen Square, but it’s very different reality than the United States.
Dustin Olsen (28:20.727)
Very, very different.
Daniel OConnor (28:23.79)
So I want to, know, if you don’t have any questions, there’s another article I wanted to touch on before we call it a day here today.
Dustin Olsen (28:33.035)
Yeah, let’s, yeah, just one more. What’s the good news you got for the United States you mentioned?
Daniel OConnor (28:38.574)
Yeah, so I wanted to talk about MP materials. Give me a second, because I have it. We published this the other day. And it was the article, A National Treasure Trove in the California Desert in Fort Worth, Texas. Does Trump really understand the severity of the situation? So we want to call attention to
MP materials. mean, this is the Mountain Pass mine in Southern California near the in the Mojave Desert near the Nevada border. And this company is starting to produce rare earth magnets, the NDF-EB magnets, the deunium. It’s the Mountain Pass operation achieves according to press releases 45,000 metric.
metric tons of rare earth oxide production in 2024, full scale magnet production estimated to be or expected by 2025, by late 2025. And the company seeks to create a fully integrated US rare earth supply chain. And they’re supported, they have a partnership with General Motors. So General Motors is looking to procure through this US based rare earth.
supply chain. So, you know, we obviously have an interest in this with what we’re doing, both with the news conferences, the directory and the marketplace that we want to enable that we’re working on. you know, I think MP Materials is a really important company. You know, I don’t think it’s perfect. It has its issues. There’s been litigation. There’s been this, there’s been that. But, you know, it was a rare earth mine. was
went out of business for many, many years. It got reactivated with some investors. I’ve been told by some real experts that some of these investors and some of the operators are top-notch. So I think I’m excited about MP materials. think we have a rare earth mine. They’re moving to make investments so that they can be fully integrated supply chain. It’s taking time, but it’s the start and it’s exciting.
Dustin Olsen (30:58.923)
Yeah, that is exciting. It’s probably a good signal that we’ve got investors, big ones like General Motors that want to see this mine thrive, which you layer that on top of the production facility that’s getting some traction and will come online in the next few years here in the United States. I think there’s a lot of hope, but that’s probably all we have is hope right now.
yeah just domestic rarer supply chain
Daniel OConnor (31:37.262)
Well, it’s exciting. I mean, they’re talking about producing a thousand metric tons of rare earth magnets annually. I mean, that’s where they want to go starting either end of this year or next year. And look, I think this is, you know, this isn’t the sexiest of topics. We’re talking about elements and minerals and dirt. And this is what built America. And this is what built
markets as we know it. These are the building blocks for all, just about every type of product, whether, know, that, that is in high tech sectors that we know drive our economy. So it’s a big, big deal. And I’m really proud that we’re doing this podcast, that we’re doing the new site. It’s important. And I want to just tell everybody, Dustin, right, we’re starting to get a lot of traffic. I mean, there’s
Lots and lots of people come to the website. We don’t do any marketing. So it’s pretty exciting.
Dustin Olsen (32:40.011)
Yeah, it is exciting and it’ll be exciting to see what happens. with Trump in office for only a month so far, a lot has happened. So I think we’re gonna see even more come through. all very exciting and yeah. So any final words, Daniel? Otherwise we can wrap it up for another week.
Daniel OConnor (33:06.702)
I want say, yeah, it’s been a month I was in Washington. I want to just tell everybody that visits this YouTube. It’s an unprecedented time. you know, on the one hand, I think that, you know, Trump is probably doing things, you know, in ways that, you know, are hurtful, painful. People are losing their jobs, you know. On the other hand, you know, with the debt and a lot of the
bureaucratic entrenchment. I think he’s doing what he has to do. I think he’s making the call to do it. It’s almost revolutionary to be honest with you. I think the great chasm from our standpoint, just based on our biased view because of the topic, they don’t get rare earth elements and really what’s going on, Dustin. Very few people get it. So we sort of have to be on a mission.
to work with key experts out there and try to get to in front of people in Washington to convey just how serious this is. It’s just not a matter of, it’s just not like getting some mines in Ukraine and it solves a problem. It’s a much deeper problem.
Dustin Olsen (34:25.687)
It is a much deeper problem and it is unprecedented. That’ll probably be the word that we hear for months and years to come, honestly. We were hearing it even before 2025 started. It’s just unprecedented what we’ve seen so far and it’s just ramping up. We’re here for the ride, hopefully everyone else is too.
Daniel OConnor (34:36.898)
years.
Dustin Olsen (34:52.927)
With that, I think we’ll sign off. We’ll come back next week to talk about other events that happened throughout the week that stood out to us, the importance, the implications, and go from there. So thanks for joining us and we’ll see you guys later.
Daniel OConnor (35:08.856)
Thank you.