S1 E28 – Gasbarre: We’re ready to start making millions of magnets.

Highlights

• Kalen Fitch has been with Gasbarre for three years, focusing on powder compaction solutions.
• Gasbarre is involved in the production of neodymium iron boron magnets.
• The U.S. is heavily reliant on China for magnet production and technology.
• There is a growing demand for domestically produced magnets due to supply chain risks.
• Gasbarre is working on scaling up production to meet increasing customer demands.
• The company faces challenges in developing larger and more efficient compaction presses.
• High-performance magnets are critical for defense and automotive applications.
• R&D efforts are essential for advancing magnet production technology.
• The market for magnets is expected to grow significantly in the coming years.
• Central Pennsylvania has the potential to become a center of excellence for magnet production.

---

In this episode of the Rare Earth Exchanges podcast, Kalen Fitch from Gasbarre discusses the evolution of magnet production, the challenges faced in scaling up operations, and the importance of high-performance magnets in various industries. He highlights the need for R&D support and the technical challenges involved in producing neodymium magnets. The conversation also touches on the pricing dynamics in the market and the future outlook for magnet production in the U.S.

Chapters

• 00:00 Introduction to Gasbarre and Kalen Fitch
• 03:16 The Shift in Magnet Production and Supply Chain Dynamics
• 06:59 Growing Demand for Domestic Magnet Production
• 09:10 Challenges in the U.S. Magnet Production Landscape
• 10:33 Performance Requirements in Magnet Production
• 12:04 Navigating Supply Chain Risks and Pricing Dynamics
• 17:44 The Need for R&D and Industrial Policy Support
• 24:47 Timeframes for Scaling Production
• 27:12 Future Predictions for the Magnet Market

Transcript

Dustin Olsen (00:01.632)
Everyone welcome back to the rare earth exchanges podcast. This week we've got another special guest, Callan Fitch from Gaz Berry. Perfect. Thanks for joining us. You guys are out of central Pennsylvania. We were introduced to you through our, another group that we interviewed with clearly ahead and the Penn State.

Kalen Fitch - Gasbarre (00:10.861)
Yes.

Daniel O'Connor (00:29.164)
University,

Dustin Olsen (00:30.85)
Yep. So, so we're super excited. So Kalen to kind of kick the conversation off, can you just share a bit of your background? How you got into this space and then what you're currently doing for Gasbarre.

Kalen Fitch - Gasbarre (00:43.223)
Yeah, thanks Dustin. So of course, my name is Kalen Fitch. I've been born and raised in central Pennsylvania, which has been a real pleasure. Most people don't know, but central Pennsylvania is, at least was the powdered metal capital of the world. And that's going to be important later in our conversation. That's also important how Gasbarre products started, which I'll touch on in a minute. so I was in engineering and operations in various different industries in our local area.

joined Gasbarre products about three years ago. I'm assigned to what is the Powder Compaction Solutions Division, where we focus on compaction presses and automation. Currently in a VP of Sales and Marketing role. But I share operational responsibility with our VP of Product Engineering. That would be John Jurosic. So the two of us kind of lead this division. Yeah, and it's a

For the past three years, we've been working on lots of different applications, but more recently became the subject matter expert for our company, would say, on centered neodymium iron boron magnet production.

Dustin Olsen (01:54.572)
Fantastic. So, Daniel, do you want to kick the rest of this off? Yes. Great.

Daniel O'Connor (02:00.5)
Yeah, sure. I'd like to just frame this, that this is a very important discussion for everybody that's visiting and we'll make sure we do articles on this as well. That the rare earth space, when people think about it, they think about mining. Much of what we see coming out of Washington is about mining, opening up Greenland or Ukraine or whatever. And the fundamental problem is not mining. I mean, you always need supply and that's important.

But what's important here also is we're processing, refining, much of that knowledge is locked up in China today, as well as magnet production. Again, much of that knowledge is locked up in China today. So this brings us to this topic today. And we're really down the supply chain into magnet production and the processes that go into that. know, Cal, this is a very important topic.

We'd appreciate if you could kind of share with us what's happening out there. Tell us a little bit about the company, how it got into this, and why things are heating up right now. This is the first point of this conversation.

Kalen Fitch - Gasbarre (03:11.415)
Yeah, so just touching on the company, like I said, powdered metal capital of the world 50 years ago, we started just building presses, furnaces, automation, ancillary equipment to support that industry.

As things have moved along, that business has shrunk a bit. It's really tied well to automotive, the number of cylinders reducing, the EV shift. So we've had to diversify. So we're focused now a lot on emerging technologies and materials. Basically anything that's powdered material that you can compact, we've compacted. That includes some crazy things, be honest with you. Like people's ashes, clay pigeons, those are the unique things.

Dustin Olsen (03:48.493)
you

Yes.

Kalen Fitch - Gasbarre (03:56.909)
But more importantly, sprockets and gears out of iron and steel. Maybe it's dental inserts out of ceramic like alumina.

relevant to what we're talking about today. It would maybe iron battery anodes, LFP, fuel cells, or centered neodymium iron boron magnets. We've been in that space for, or the magnetic space for a real long time. So ferrite magnets, samarium cobalt, alnico magnets, all of those, you know, soft magnetic composites, all pressed on compaction presses. And our presses are used in those industries. So,

Maybe not everybody knows, but over 90 to 95 % of the sintered neodymium magnets are produced in China today. So even more, if mining's 50 to 60 % out of China, the magnet technology is really locked up. And the last magnet production facility I think was the Hitachi Metals in the early 2000s here domestically.

Dustin Olsen (04:49.357)
you

Kalen Fitch - Gasbarre (05:03.385)
I don't have to tell you guys, 25 years ago, a lot of those folks that were real good at making magnets 25 years ago are closing in on retirement or have already retired. So there's a bit of a workforce challenge as well. But ultimately, we can't keep buying magnets from.

Dustin Olsen (05:03.821)
Okay.

Kalen Fitch - Gasbarre (05:21.881)
what I'll say enemy states. So Daniel, you've talked a lot in previous podcasts about industrial policy and the need to work with our allies. We 100 % agree. There's a lot of magnets that need to be produced centered neodymium magnets here. I think Josh Ballard from USA Rear Earth said 7,000 to 50,000 tons per annum of magnets. I mean, we're talking millions of magnets need to be produced domestically. And we're just trying to be part of that. So we've used, we thought

Dustin Olsen (05:27.469)
you

Okay.

Kalen Fitch - Gasbarre (05:51.787)
But we were a great fit for producing compaction presses to produce these magnets. Reason being is, and we'll talk a little bit about the technical aspect I'm sure in a minute, we have a thermal processing division where we build furnaces that need cover gas, whether that's nitrogen, argon, hydrogen, even endothermic gases. When you compact center neodymium iron boron magnets, you need to have a cover gas, generally nitrogen, sometimes argon. So we thought that would be

Dustin Olsen (06:13.452)
What?

Kalen Fitch - Gasbarre (06:21.721)
the hard part. Little did we know. There was a lot more fun to come with it. So we thought we'd be a great fit. We'd take our technology that we already have in compaction presses, translate the technology we have in our thermal processing equipment from our other division and we'd be well along our way. So that's how we got started 2020.

is when we first started getting into this space. And really, just to kind of put a bow on the powdered metal piece, the companies that we initially aligned with were companies that either the people came out of the powdered metal space or they were already in the powdered metal space and looking to transition into centered magnet space.

Daniel O'Connor (07:00.295)
That's very helpful and extremely important. So on that note, you started 2020. Can you talk about the changes you've seen in the last couple of years, how the demands are growing, and how you all are part of that supply chain fulfilling that demand? This is very important. Then we're going to get into more technical nuance and what types of support you all need.

which is gonna be very important.

Kalen Fitch - Gasbarre (07:30.745)
Sure, yeah, thanks Daniel. In 2020, we had customers coming to us that were just looking to start magnet production. They were looking for laboratory pilot type presses, not super focused on throughput, but focused on flexibility and trying to make the best possible magnet for the highest grade that their customers were asking for.

That's shifted significantly. And I'll say it shifted prior to the current administration and some of the trade policy that we've been working through. I think it's just a general recognition that we're too reliant from a supply chain perspective for magnets abroad, just loosely speaking. So we've seen, but really.

Dustin Olsen (07:54.509)
Okay.

Kalen Fitch - Gasbarre (08:17.261)
That was customers coming to us and saying, hey, we really like your 30 ton lab press. Can we make a little bit bigger magnet out of that? We're not super worried about throughput. We're not going to make all the world's magnets.

but ultimately we need to make some more magnets. That's changed more recently in the past month or two with the trade policy. Now we have customers coming to us asking for quantities of 10 to 20 presses that are three to five times the size of the presses that we currently build. They need to produce a lot of magnets and they need to produce them fast. And they're being encouraged, I think on the backend.

by various parties, whether that's an OEM or a government agency. It's just how fast can you get to your capacity as quickly as possible.

Daniel O'Connor (09:03.248)
And that makes, yeah, sorry, go ahead Dustin.

Dustin Olsen (09:05.183)
Let's just say, so that's interesting. So they're asking you to build things that you currently don't make. Is that a concern for you guys or are you just saying, Oh, we'll just create a new assembly line and we'll just.

Kalen Fitch - Gasbarre (09:17.197)
Yeah, no. So Dustin, in our space, capital equipment, that's not uncommon, actually, right? So what they're asking us to do is scale a current product to be larger in size or higher in throughput, which has challenges, but it's really a translation of technology, not starting from a blank sheet of paper.

Dustin Olsen (09:22.614)
Thanks.

Dustin Olsen (09:29.58)
Okay, great.

Dustin Olsen (09:37.004)
Very cool.

Daniel O'Connor (09:38.184)
And on that note, mean, based on what you do, mean, how many other companies in the United States are doing exactly what you do, just so we can kind of have an understanding of the landscape? No need to mention names, but just what's that landscape look like for specifically what you're doing and where you're scaling up to? How dynamic is that supplier market?

Kalen Fitch - Gasbarre (10:01.817)
Yeah, so domestically there are other compaction press equipment suppliers. I'll say less than five. Press suppliers that are producing compaction presses dedicated for centered neodymium magnet production are even capable, one, and that's Gasbarre products in the US. There's less than three in Europe able to produce.

Daniel O'Connor (10:20.507)
Wow, that's unbelievable.

Kalen Fitch - Gasbarre (10:28.621)
that type of equipment and China is a bit of an anomaly. They've had this need in technology for 20 some years now so they have a fairly mature supply network I would say and we don't know how many presses but there's multiple press manufacturers in China.

Daniel O'Connor (10:45.947)
Right, right. But that's critically important. mean, this is a fundamental service that goes into the magnet production. again, now there's a rule, 2027 rule about Department of Defense and defense contractors and procuring magnets ex-China by I think January 2027. Now I haven't seen anything lately about that rule. Do you and

only share what you can share publicly, but are you all getting orders from OEMs or groups that are working with defense? Okay, good. No, it's good to hear because I would imagine that's going to really have to change and grow domestically. And in terms of sectors, auto, energy, electronics, defense, are you diversified across all of those?

Kalen Fitch - Gasbarre (11:22.605)
Yes, of course.

Daniel O'Connor (11:44.038)
Do you see other similarities or are you seeing any differences or pretty much uniform?

Dustin Olsen (11:47.424)
Okay.

Kalen Fitch - Gasbarre (11:51.065)
That's a really great question, Daniel, because it enters a lot to it, actually. So just to step back, most people know, or maybe I shouldn't say most people, most people in this space know how a magnet is described. So it's based on the strength of the magnet, which would be your remnants or maybe your BH max and your coercivity, which is basically your resistance to demagnetization, generally associated with temperature.

The Department of Defense and automotive applications need very high performance magnets. We're talking N45, or something to that range. The N45 would be the remnants or the PH max. And then the would be your coercivity.

There's a lot of applications out there that don't need that high of performance and also don't need the high price tag that goes along with it. So there's some additional processing steps that you need to get into that high performance space, whether that's additional densification through maybe an isostatic press or heavier or content of heavy rare earths, which I'm sure you guys are very familiar with the terbium and dysprosium, and grain boundary diffusion. So we're playing in all those spaces. I should say

Dustin Olsen (12:59.787)
Okay.

Kalen Fitch - Gasbarre (13:05.465)
our customers are playing in all those spaces. The mid-grade magnets and then also the higher performance magnets. And we're working with our customers to try to be able to achieve those magnet performance grades, I'll say individually, and we don't have a standard product to get there necessarily. We have customized solutions that are helping each of those customers because they're developing their material system at the same time.

Daniel O'Connor (13:29.699)
Yes, no, it's very exciting. I will say this, you're helping America become resilient. You're literally doing it right now as we speak, unfolding in real time. question on this, and if you can't answer it, don't worry about it, but on the heavy, rare earth side, let's face it, we just did our rankings. I don't know if you see our project rankings. The Myanmar rebels, and by the way, they just joined our forum.

Kalen Fitch - Gasbarre (13:50.467)
Dead, yeah.

Kalen Fitch - Gasbarre (13:55.417)
great.

Daniel O'Connor (13:56.728)
It's unbelievable. They sent us a nice note. In any case, the supply of that is pretty much 99 % China. do you see, given the last few months and sort of the constraints that the Chinese government, did you see any, how can I say this? I want to be politically correct. Were there any changes in heavy rare earth magnets over the last three or four months?

Dustin Olsen (14:14.379)
Okay.

Daniel O'Connor (14:25.1)
is pretty much a standard behavior that you've been seeing.

Kalen Fitch - Gasbarre (14:28.953)
So Daniel, not a lot of people in the US are making centered magnets at this point. A lot of them are in pilot scale. All of them are very aware of their risk factor. At least I'll say all the folks that we're talking to, we're already very aware of the risk factor with the heavies. And each customer is approaching that a little bit differently, but each customer wants to reduce it as much as possible. I think is easiest way to say it. And I haven't seen a shift in strategy or policy related to

Daniel O'Connor (14:33.443)
Right. Yeah.

Kalen Fitch - Gasbarre (14:58.997)
export licensees and stuff like that. It's always been there frankly.

Dustin Olsen (15:01.073)
So

Daniel O'Connor (15:04.165)
Right, right, right. Now makes sense. And that's what's really exciting about what you're doing. If you look at, a question I do have is price. What we're learning about this business, and one of the things we know is that industry is price sensitive and traditionally, it's always a good feeling to be patriotic and to buy American.

But there's also the realities of a marketplace environment and cost pressures. Based on your analysis, as we scale up in the United States, and I know it's still early days, how far off are we on pricing compared to some of these Chinese companies? Can we catch up with their economic economy of scale sooner rather than later?

Kalen Fitch - Gasbarre (15:57.303)
I I'll answer that in two ways because I think your question is on the actual magnet, but if you don't mind I'll talk about the actual equipment to start. Quite frankly, we can't produce a compaction press for the price that some of the Chinese suppliers are selling them for.

Daniel O'Connor (16:05.048)
Please, yeah, yeah, no, please. Yeah, yeah, it's part of it, yeah.

Dustin Olsen (16:16.139)
So

Kalen Fitch - Gasbarre (16:21.143)
So if domestic suppliers are able to or willing to produce Chinese presses, quite frankly, it's going to be a tough sell for whether it's European or American press manufacturer.

Fortunately, there's a whole lot of risk that comes with purchasing one of those press. I'll just give an example. Imagine trying to have one of those presses serviced or imagine China decides for whatever reason that they didn't want to export that technology or knowledge anymore. Now you're sitting on a pretty expensive paperweight potentially. So we're not super worried about that. We think there's going to be a market in demand for our presses regardless. Now on the magnus side, it's interesting because

Daniel O'Connor (16:53.796)
100%.

Kalen Fitch - Gasbarre (17:05.187)
We talked a little about the automotive space and Department of Defense and maybe we'll call it industrial. Some people say the magnet in your blender that you make your smoothie in the morning, right? So I think in the automotive space, obviously they're gonna go after the cheapest price, but supply chain risk is such a huge thing now. And that's post COVID, whether it's chips or PLCs or…

whatever that would be, or rare earth magnets, the space we're playing in. So I think those types of cost-driven consumers or customers are always gonna be looking for a cheaper supply, but they're gonna need, maybe it's one additional supplier of rare earth magnets, or maybe it's multiple. Now,

Dustin Olsen (17:30.923)
Okay.

Kalen Fitch - Gasbarre (17:51.315)
the Department of Defense, of course you mentioned the 2027 Act that will almost force it to ex China. And quite frankly, the European supply versus the American supply are going to be, there's going be cost parity there and we'll never have cost parity with China unless China decides they want to have cost parity with the U.S.

Daniel O'Connor (17:57.667)
That's right.

Daniel O'Connor (18:09.08)
Right, right. And that makes sense. then there's other, mean, Dustin, you had a couple of questions about, you know, other benefits of working, you know, domestically, you know, from, you you mentioned some of them, it could become a paperweight. I mean, essentially you have more responsiveness, you have more security, you have flexibility. There's so many things that you guys can bring, right? Especially, we now know, I'll just take a step back, the Chinese pulled the trigger on their export controls.

And it's never going to go back to the way it was. And today, we know, we've heard directly from the horse's mouth, there are organ, you know, when you do access those rare earths, now you have to go through a process of sharing a bunch of information about everything that's going on. mean, they're doing industrial espionage right now. Okay. It's, an ongoing thing. now, if you look at, let's, let's look at the company and

how we can help you because I know you're growing, the sales are robust, but we need industrial policy. We need to be able to have companies like yours getting full support so that we can ramp up the ex-China market faster. Time is money and we need some acceleration here. talk about some of the areas where your company could

plug and play into ecosystems federally that can help accelerate, not just for your business, for the magnet makers, for the OEMs, but for everybody, for our society. So what are some of the things that you think would be helpful for your company?

Dustin Olsen (19:46.379)
Okay.

Kalen Fitch - Gasbarre (19:54.115)
Yeah, and I might get a little long winded here, so please just interrupt me if I get going.

Daniel O'Connor (19:58.625)
No please.

Kalen Fitch - Gasbarre (20:00.193)
So we're a small to mid-sized company, privately owned, and R &D is very difficult to fund R &D, I should say. We have 160 employees total. About 15 of those are engineers that are actively, so, sorry, 15 of the 80 that are associated with compaction presses are product engineers that are actively working on projects, customer orders that we have across all industries, right?

At the same time, we're trying to develop new compaction technology for centered neodymium magnets and other type products. So we don't have a lot of bandwidth to just do R &D. So we're trying to fit that in. We really need a team that can, if we want to accelerate.

and everybody wants to accelerate is the general message. We need a team that can dedicate themselves to developing that product that's gonna be able to increase the throughput at the rates that they're asking for. I'll say the market is they. centered neodymium magnet pressing is very difficult. So to start, I mentioned you need to do it in a cover gas. Two, we haven't talked about the actual how it's done, but you need to have electromagnetic coils.

or electromagnet coils in the general dye space. you can't use a compaction press that you would use for standard powdered metal because there's just not enough space. So you're putting these large coils that you're going to use to align the particles when you actually do the compaction. The powder is really unique. Three to five micron in size. Very, very fine. An example, you know, something similar might be if you took a handful of baby powder. So.

Dustin Olsen (21:36.938)
Okay.

Daniel O'Connor (21:49.333)
Wow, wow, yeah.

Kalen Fitch - Gasbarre (21:51.245)
The really neat thing about it, if you like fireworks, is it's pyrophoric in oxygen. So when it's exposed to oxygen, catches on fire. It starts to smolder and catches on fire. That's why it needs to always be under this nitrogen cover gas. Those are relatively easy things to cover. Can you imagine trying to flow?

Daniel O'Connor (22:00.01)
Blow.

Kalen Fitch - Gasbarre (22:11.001)
or pour baby powder into say a one by one inch die. It just doesn't want to flow into that die space, right? So all of these things need to be solved so that we can actually produce a press that makes magnets. And we've done it. So we've had these 30 ton presses that are out in the field today making magnets, making good magnets quite frankly. But what we found is our customers

Daniel O'Connor (22:19.091)
No, yeah, yeah.

Dustin Olsen (22:36.745)
Okay.

Kalen Fitch - Gasbarre (22:40.163)
They don't know how to make magnets either. And if you listen to some folks.

There's really, really intelligent people out there in this space, but they're learning the same time we are. Whether that's at the strip caster or the hydrogen decrep furnace or the jet mill, they're trying to apply all these resources at the same time we are. So we've been forced to really lean into the process. We would love to just sell a machine that has a 0.5 or one Tesla field between the two coils and say, ahead and make magnets because everybody else can. But our customers just aren't there yet.

We offer service and support where we're actually helping them work through their powder flow issues. We're trying to maximize the magnetic flux. You're really trying to get somewhere around two, two and a half Tesla maybe through your magnet while you're compacting. That requires some really unique tooling approaches. You can't use standard powder metal tooling. It's an optimization of permeabilities.

All this technical know-how needs to be developed. And you can translate some from existing knowledge, but it really requires an R &D effort. And if we want to speed up, we're going have to pay for that somehow. And right now, Gasbarre is footing the bill.

Daniel O'Connor (23:55.04)
Yeah, and that's a very important point. And I've heard exactly what you said and expressed in different terms to different stages of the supply chain for Rare Earth product generally. So this is where some form of industrial policy comes into being. Now, I can tell you the new bill that was just signed, you know, there are…

Fundings for stockpile and things like that not enough for what we're talking about here Although there's a substantial amount for loans that have to do with the process. So I think you know Now do you see let us say we could get interest with the federal government for funding R &D in this area Do you see this as a consortium like for example? yourselves You know other companies in the supply chain that come together

and some sort of pool things or do you see this as more coming out of your firm with grants where you can hire a team? Do you see this more as an external collaboration ideally or an internal effort where you can staff up five, 10, 15 people? How do you see this ideally?

Kalen Fitch - Gasbarre (25:11.673)
I would say, Daniel, that we're open to different ideas. Of course, there are programs out there that help. And I'll say the R &D tax credit program is one that we take advantage of. But I'm speaking from the perspective of compaction presses. But the real magic is the strip caster when you're making magnets. So we're aware of companies in the US that are starting to build capacity and the ability to produce that equipment.

domestically, they're in the same boat we are though. They're relatively small companies that are trying to develop a brand new product line to support a demand that's really driven by domestic need and really vulnerability we have from a defense perspective. So there's a of patriotism to it.

Daniel O'Connor (25:54.067)
where 100 % is it's no joke, it's very, very serious. Now on that note, mean, and again, you may not be able to answer this and that's okay, but what's the amount of capital, if you had to guess, just think about it in people. Imagine there is an R &D effort that was being funded. What would be, of course, this is, it's a hard question to answer, but like,

Dustin Olsen (26:05.769)
you

Daniel O'Connor (26:21.839)
what kind of scale do we need? Do you imagine we need 20, 30, 50 engineers looking into these things? Is it 100? Is it 1,000? Is it 5? To try to put some parameters around short to intermediate term, if we could get funding, what does this look like?

Kalen Fitch - Gasbarre (26:41.785)
Yeah, it's an interesting question because it depends on what the ultimate goal is. So to give you some perspective, low-end, I think we imported 7,000 tons of magnets last year.

A single 150 ton press is what we're currently working on right now for a couple of customers. It's going to produce 90 tons per annum. So just put that into perspective, how many 50 some 60 presses you're going to need just to produce the low end. If you want to do that full magnet production that we imported last year.

But of course, we're not going to import the same 20, 30, 20, 35. That number is almost exponential in terms of what we're going to need to produce. And maybe that's 50,000, maybe that's 30,000. So the effort's going to be, there's kind of two parts. One is developing the machine, but there's another part on how do we develop enough machines. The throughput that we have today on our fastest equipment is not going to be enough. The market's not going to support purchasing 60 presses.

Daniel O'Connor (27:45.31)
That's right.

Kalen Fitch - Gasbarre (27:45.881)
To give you some perspective, we supply maybe 10 to 15 presses per year across all industries.

Daniel O'Connor (27:53.074)
Right, yeah, no, this is very important points you're raising. Very, very important. Dustin, we have a few other questions I think that can flow from this. This is great, Kaelin, really incredible information. Dustin, do you wanna pick up on a question or two and then I can kind of start to help us wrap up?

Dustin Olsen (28:01.19)
Mm-hmm.

Dustin Olsen (28:08.433)
Yeah.

Dustin Olsen (28:12.358)
Yeah. So the kind of piggyback on the conversation right now is there's a certain level of complexity involved, right? And, money's required. And we've talked about this with other guests that we found on the show. Daniel and I have talked about it on our podcast here, but in terms of time, what did the runway look like just to deliver what your customers are asking for to even reach a level of production that's required?

for independence from other countries. And I'm asking this question because I think a lot of us, it is 2025, we're very fond of instant gratification. There's probably a misconception that some of this can just happen overnight or happen within a year. And we just don't think that's true. So can you give us an idea of what that looks like?

Kalen Fitch - Gasbarre (29:09.303)
Yeah, so generally for a new piece of equipment like this, it's going to require some engineering. It's going to be somewhere between eight and 12 months. then so we here at Gasbury products, we do all of our own production and fabrication machining of our components. So we have we're really very vertically integrated. What we can do is start stacking machines every two months from that point forward. So.

we're able to produce, let's call it six machines a year, if we had the orders to do it and we would be able to just keep spitting out six machines per year. Of course we could always increase capacity. It's a matter of just manpower and space to put those pieces of equipment while you're assembling them. So you could do two or three at a time. The R &D effort to get to scale the current systems that are available is,

I'll say relatively short, two to three months, three good engineers could probably put together a system and then you'd have to stack on some debug and testing on the backend of the assembly. The R &D effort to come up with a process that's gonna be able to produce a lot more throughput in this, know what mean? So instead of 90 tons per year, if you wanted to get to 200 or 500 tons per year, I think that's gonna take some…

re-engineering and back to first principles and that's going to be a lot tougher problem to solve. The short-term solution is, and Gatsby is going to do it regardless, we're just going to keep banging out presses and they're going to make good magnets. It just might not be optimal for the overall market when it gets to 30 to 50,000 tons per year.

Dustin Olsen (30:48.136)
That's great. And speaking of time, looking forward into the future, three to five years, where do you see things headed? What's your prediction on just this market expanding? Yeah, what are your thoughts there?

Kalen Fitch - Gasbarre (31:06.527)
Yeah, that's actually a good question. We know it's going to grow significantly and I haven't really dug deep into what all the levers are because there's so much momentum right now. I think there's going to have to be some probably consolidation. There's a lot of smaller players out there in the market today that are just getting into the space.

coupled with a handful of bigger ones and you guys know those names, which of course we've been working with those folks as well. So maybe you'll see some of that, I think the growth is going to happen, maybe not as fast. I do think our sensitivity to price is going to lead some customers or OEMs to continue to try to purchase from China if China allows that. And my general feeling from the Chinese perspective is that they really

want this industry because they want jobs. If you look at the 2035 directive, they don't want to cut us off and then cut themselves off from demand. America's still a big customer. Like you said, Daniel, industrial espionage and things like that, if they leverage those types of tactics, that's going to limit the demand for their products. But ultimately, growth. That's if I could summarize that one word, Dustin.

Daniel O'Connor (32:24.762)
Yeah, and I was just going to say, for China, they use market structures as tools for accumulation of capital and power. But it's a very different mindset, it's adversarial fundamentally. It is a zero-sum game in some ways. And right now, it's not looking good for us. We have to change it. I was going to say,

The typical way that, you know, collaboration happens, conferences, universities, you have partnerships, there's networks that form around R &D efforts. But ultimately, I feel like your company needs support to build a center of excellence right in the company and then, you know, help influence bringing that entrepreneurial ethos radiated out to others and then build a network. We need to try to help you.

build that R &D capacity and I hope I'm hoping that people that listen to better watching this or and we'll write about it as well in Washington Understand this because what you all are doing This is where the rubber hits the road ultimately the magnets right and there's other components and assemblies But this is where the rubber hits the road. So if we can't overcome this and we will you know, we're gonna we're gonna be in a big big trouble so I think we'll

as part of Rare Earth Exchanges, it's our mission to help accelerate the ex-China market. We happen to be in the United States, so we have an American-centric view of the world. So we'll definitely be in touch with you about how to help you build out R &D capacity organically.

Kalen Fitch - Gasbarre (34:11.043)
Daniel, if you allow me to plant one seed here on that center of excellence idea, and this is because I'm a little bit of a homer, but the technical know-how, the support industry to produce centered neodymium magnets exists all in central Pennsylvania. We have tool shops, we have powder metal folks. We talk about…

Dustin Olsen (34:17.607)
Thanks.

Kalen Fitch - Gasbarre (34:32.439)
density of green compacts at dinner with our kids. And we underestimate how important that is, you know, but really it's in our blood up here. So I'm surprised that more folks as the powdered metal industry consolidates and compacts and contracts, I should say, I'm surprised they're not trying to get into this space because

Dustin Olsen (34:35.527)
Okay.

Daniel O'Connor (34:37.019)
Yeah, yeah.

Kalen Fitch - Gasbarre (34:53.869)
We have the die setters for the compaction presses. We understand the thermal processes that are required. So there's no better place than Central Pennsylvania for a center of excellence.

Daniel O'Connor (35:03.035)
And by the way, it's not by accident that we sort of arrived in central Pennsylvania. So that's on our mind for sure. That's gonna be a cluster. That is gonna be a center of excellence within the United States. It looks very much like it could be. So let's make it happen, I would say. Let's go ahead and make it happen. We'll be part of the solution and we'll look back five years from now and say, look where we're at now.

surpassing the Chinese or approaching them.

Dustin Olsen (35:37.111)
Yeah, that's great. So, Kaylin, if you could, just to help summarize, everything into perspective or even possibly share what you're most excited about with the work that's happening now and where it's headed.

Daniel O'Connor (35:37.157)
Dustin?

Kalen Fitch - Gasbarre (35:49.977)
Yeah, I think the most exciting thing for me, Dustin, is we're getting through the pilot stage of magnet production in the US. There's lots of folks that have made a handful of good magnets, we'll say thousands of good magnets. We're ready to start making millions of them now.

Dustin Olsen (36:07.473)
That's awesome. And we're super excited and we're honestly, I'm stoked with the work you guys are doing and what it means for us as a nation and as a global community as well. with, yeah, go ahead.

Kalen Fitch - Gasbarre (36:23.841)
Yeah, that's I want to take an opportunity to thank both you and Daniel for what the work you're doing with Rare Earth Exchanges. Super interesting. I can't even keep up with all the press releases, but also thank you for giving us this platform to discuss the actual production of magnets.

Dustin Olsen (36:38.137)
Absolutely. Yeah. And we would love to have you on the show again in the future, just to get an update on where things are at and how things have grown and improved. but with that, I think we'll sign off here and thanks for joining us. We really appreciate it.

Kalen Fitch - Gasbarre (36:52.247)
Yeah, thank you guys.