S1 E27 – In The News with Dustin & Daniel

Dustin Olsen (00:40)
Everyone welcome to the Rare Earth Exchanges podcast. You've got me Dustin and I'm joined by as always Daniel O'Connor, my co-host and business partner. Daniel, how have you been? It has been a while.

Daniel (00:53)
It's been a while and it's been very busy. You know, we have a lot going on. Things are moving fast and I feel like we're barely keeping up with things, but it's exhilarating.

Dustin Olsen (01:04)
Yes.

Yeah. Very exhilarating. So much going on. So, so here on the podcast, we've had a string of guest episodes. we've, had a group of people out of Pennsylvania. we had Paul Kim and, Samir. And after that, we had a bonus episode with CEO of Aerofura, which was a big deal. That was.

That was incredible to get that. And after that, we interviewed Harriet Hagman, a Congresswoman from Wyoming. And then just last week, our episode with Jenny Kuch from Texas A talking about recycling e-waste. Gosh, just so much. Great content, great people. We were thrilled to have him on the show. But anything that stands out to you from the last

four weeks, three weeks of episodes.

Daniel (01:51)
Well, there's

a lot going on. I would say, of course, that there's the large Department of Defense and MP materials deal where the federal government through the Department of Defense put several hundred million dollars into MP materials plus Goldman Sachs and JP Morgan, I believe, established over a billion dollars in loan potential for that organization to scale up.

a basically 10x magnet production, rare earth magnet producer to really provide the Department of Defense within three years, you know, high quality rare earth magnets. this is, you know, we, our mission, Dustin, has been to help accelerate the move towards the X China market, meaning, you know, a rare earth element market in the United States and in other places in Europe.

what have you, Australia. And it's happening. I mean, it's still in the very early days, but we've had some exciting guests. The importance of AeroFura, they're a major player, significant deposits and investment to mine and separate. Their CEO came on and provided a really good overview of this business.

That's our number one visited podcast at this point on YouTube. So I hope people can go over and look at that. Jenny Hu, she's working on state of the art recycling from e-waste, which is very important for ultimately moving off of the dependencies of China to China. other events unfolding, there's several deals happening that

that we can talk about. But is there anything else about the podcast that you want to mention before we move on?

Dustin Olsen (03:39)
No, I think those are some great takeaways that align with the things that we've seen going on. And yeah, we encourage anyone who hasn't gone to listen or watch them is go and take a listen. I think there's a lot of great little nuggets that we can take away just from not only what's happening in the industry holistically, but also the approach that these people are taking to solve problems.

do exactly as you were saying, just kind of promote that ex-China market, which we're at the very beginning of that. But I think for me, in talking with all these people, was I felt very encouraged and optimistic that we are doing things. Like everyone is trying to do something in their small part of the world. And I think it'll have a big impact, which is really great.

Daniel (04:25)
Yes. Well,

is early days. China still very much has a monopoly stranglehold on the rare earth element supply chain. We have to be realistic and candid about what the situation is. However, the fact that the US government through the Department of Defense is going to own 15 % of MP materials tells you something.

It means that we're the industrial policy that we've been talking about. Now, another piece of news I want to put out there is for right now, we know through our sources, the US government is looking for heavy rare earth element deposits. And we know this because of the function they have in defense. So our rankings

You can go to rare earth exchanges and we have the heavy and light rare earth rankings. We ranked the Myanmar rebels as number one, what's called the Cajun state. Reuters was in touch with us mentioning our ranking and the fact that there were rumblings that there were different groups representing Myanmar, which is Burma, used to be Burma.

to the Trump White House. So our rankings were mentioned. So I think we've brought awareness to that group. And in fact, that group joined our forum. We reached out to them. I think they're gonna wanna have an interview with us. So that's a pretty big deal, okay? So we're having an influence out there. know, some of the recent news just today, one is,

Dustin Olsen (05:46)
Okay.

Daniel (06:02)
The Philippines, now we've heard that the US government is starting to look at the Philippines as a source of potentially rare earth reserves. This growing interest in the Philippines, it represents an untapped rare earth mineral. We're not clear how much is really there, but only about 5 % of Philippines

the Philippines' critical minerals reserves have been explored. So it presents a strategic opportunity. It's still early days. The potential collaboration aims, of course, are that the US government is looking for longer-term diversification opportunity. Here's the important thing, Dustin. I will give President Trump this, that he is getting the government to move on this topic.

Do we have the level of industrial policy that I personally think we need to be, to in a more efficient, effective way, pull away from China? I'm not sure we're there yet. However, we do see numerous initiatives and we had a call with a major investment bank the other day and they told us that there are more deals likely coming down the pike that are similar to the MP materials deal.

So there's a lot going on. There's significant capital that's going to be invested. back to the Philippines, this news came through Asian press. It was South China Morning Post and a few other locations, a few other outlets. there are both neodymium and other critical minerals. Lanthanums are there.

and also Bastinocytes and a few others. So the Philippines could be an interesting location. We know Vietnam is as well. So that's one piece of news that we covered today. Another thing is, you know, we've been tracking India. India is now the fourth, according to some measures, the fourth biggest economy as measured by gross domestic product.

Listings still have them as fifth, but ⁓ it appears they're emerging as fourth. It's the most populous country. think they've passed China. India is moving on all fronts to try to find diversified sources of rare earth as well as invest in refining. And just recently, ⁓ today, we reported about Uttar Pradesh.

is a state in India, in northern India. It's the most populated state in India. There's probably 270 million people just in that state. And they're seeking Japanese, so India National Federal has initiatives, rare earth initiatives, somewhat of industrial policy, not quite what is needed, but

probably a little bit more than the United States at this point. But they're seeking Japanese partnerships in rare earths and EV technologies and even pharmaceutical innovation. so Japan is looking to diversify away from India, sorry, from China. And they're talking to the state, the government of Uttar Pradesh about potential…

rare earth sources and critical mineral sources. it's considered a quiet but potentially significant development where the Uttar Pradesh government is actively courting Japanese collaboration, again, across some of these areas I mentioned before.

Dustin Olsen (09:23)
Yeah, that's interesting. It's India partnering with Japan, is what you're saying, Greg. And I think that's pretty strategic by my estimations, right? Because in our Error Fear episode with Darryl Kizubo, he said that Japan is one of the only countries that have reduced the reliance on or diversified their supply chain away from China.

Daniel (09:28)
Yeah, yes, yeah.

Yes.

Dustin Olsen (09:47)
They're the only ones that have done it, probably because of what happened in 2012. And so I think by partnering with Japan on certain things and learning from them would probably be a great accelerator for what they're trying to do.

Daniel (10:02)
I think so. And I don't know if it was 2012 or 11 or 10, but you're right. At some point during that time or a little bit earlier, Japan and China had like a trade dispute. And I think it was over fishing rights at first. And then China decided to hold back their rare earths. So they couldn't produce anything.

Dustin Olsen (10:23)
Classic

move.

Daniel (10:24)
Yeah, I mean, you can see this, right? It's amazing. Now speaking of, well, Hyundai is Korean, I believe. Hyundai, they've come out and they have said that the latest Chinese export controls did not impact their production. So some automobile companies reported production.

Dustin Olsen (10:32)
Mm-hmm.

Daniel (10:48)
slowdowns or even a stoppage, right? So Ford in Chicago, have ⁓ a production line there that got halted for a little bit. but Hyundai came out today and said that they have adequate inventory and so they're okay for now. that, some companies report that they don't.

and some companies report that they do. We can't be certain unless we can look at their proprietary situation, but this is what they are reporting. Any comments on that?

Dustin Olsen (11:18)
Do you

believe that though? There's a part of me that are they just saying that to appease shareholders and to kind of keep their stock from tumbling because they didn't plan ahead? I can see that being viable, like actually true, but I don't know for sure, right?

Daniel (11:31)
It's a good, yeah.

It's a good question. It's hard to know for sure. It's hard to say. I hate to accuse any person or company of lying, I don't know. There was another Indian car company that said they didn't have any issues, and then there were some companies that said they did. So it's hard to know.

You know, some company culture seemed to be okay sharing this information and others, maybe they just for whatever set of reasons, they didn't have a shortage. I'm not too sure. You know, it's for us, it would be a good articles to investigate what can people do? What are best practices to protect yourself from another China export block?

or export control that slows things down. Might be interesting to just see if there's content that we can develop around that. ⁓

Dustin Olsen (12:21)
Right.

Yeah, I

think we should. think those downstream markets, obviously we predicted that the automotive industry would be probably the soonest compared to other consumer electronics, of course. But yeah, I think some more investigation down that line could be interesting.

Daniel (12:45)
For sure. And remember what we learned is that the auto companies are more sophisticated and defense companies, which you would think are the most organized together and resilient are the opposite.

Dustin Olsen (12:58)
Isn't that funny?

Daniel (13:00)
So our defense company contractors, Lockheed, or I don't want to say names, just these big companies, many of them are just clinging on. I mean, they need these rare earth elements as well for their production of high tech equipment, products, missiles, weapons, planes.

Dustin Olsen (13:19)
Yeah. Yeah. Which makes that NP-DIL all the more interesting and vital to that, to that end,

Daniel (13:26)
100%. Now another group that we announced earlier in the month is Quad. And that's Australia, India, Japan, United States. They've come together. And it's interesting because BRICS, is, know, Brazil, Russia, India, China, plus a dozen or even more countries. India is in this group called

quad or quad nations and this is a control a coordinated effort to challenge China's dominance in the rare element supply chain space. you know this is interesting right these countries have come together Australia, India, Japan and US and it's a coordinated effort. They're obviously trying to

disrupt the Chinese monopoly. Their mission is to break the monopoly. So we reported on that. That's something for investors to keep an eye out, the Quad initiative and how that's impacting this very nascent market in the United States. And remember, there is no market here yet, really. It's all done through contracts. There's no spot market. There's no futures exchange.

There's no way to have a standardized bearing of what's going on.

Dustin Olsen (14:41)
Which, yeah, it's important to everyone to realize, like, I think it's easy to talk about right now, right? Because we are being impacted slowly by this and I think people are becoming more aware, but calling out things to look out for is important for investors, those that are truly trying to understand where things are shifting and are possibly shifting in the rare earth industry.

Daniel (15:04)
Yeah, for sure, for sure. Another piece of news I'd like to throw out there is we track Chinese news and it was announced today ⁓ by China Northern Rare Earth, a big company, that China's permanent magnet drive breakthrough may reshape the heavy transport industry. this Chinese successfully deployed

the world's first commercial scale 10 kV high voltage permanent magnet direct electric drum motors. So this new motor technology increases conveying efficiency while reducing energy consumption up to 22%. The technology can cut the installation space by 70%.

And this is a strategic innovation positioning China as a potential global leader in advanced industrial motor technology and green logistics infrastructure. And again, there's a rare earth base to this. So remember what we talked about the two rare earth base China. China monopolized the rare earth processing and also the innovation in the downstream research and development.

And this is an example of that. Like this is happening all the time. We have news almost daily about these companies in China innovating because they are so far ahead in this space because they've just spent the last few decades there, right? We haven't been here. We haven't been in it, right?

Dustin Olsen (16:33)
Yeah, that's another, I think, important call out, right? Is we are trying to reduce our dependence, but there's this, as some of our other guests have called out, like there's a lack of skill, there's a lack of labor, there's a lack of this expertise to have these innovations, right? So even if we were able to build our own magnet motors, would they be as good?

Daniel (16:55)
I mean, I think.

That's a good question. We know that the talent that you need for this business has to be cultivated, developed. There's probably a few hundred people in the United States that really know deeply the rare earth processing. Maybe a few hundred in Europe and it was, as we've been told in China, several thousand. So it's just, it's a order of magnitude difference, right?

You can't trivialize any of this stuff. So no, please. It's too hard. It's too hard. You know, a couple other things I wanted to go over just, you know, for this week was we did an article today called Cracking the Rare Earth Code Contracts, Pricing and the Battle for Market Clarity. Okay.

Dustin Olsen (17:23)
Do you me to try?

Daniel (17:42)
Now, I want to say at the onset here that there is no standardization in the rare earth sector X China. In the United States, it's all case by case basis, different contracts, different scenarios. It's as if you're almost reinventing the wheel every time to some extent. But what we've done in this article is we've gone out and gotten examples.

of real world contracts, real world pricing outside of China. Now they have, in the contracts, they point to a Chinese index. But the point is, this is an important read because non-Chinese rare earth contracts, this is ex-China now, these are mines that are selling off take to other groups that are outside of China. They rely on long-term bespoke

or custom agreements linking miners, refiners, and end users, again, in a market dominated by Chinese benchmark pricing. So these contracts include sophisticated risk mitigation strategies in addition to geopolitical uncertainty, for example, in addition to Western

governments and industries actively developing independent pricing mechanisms to reduce dependence on Chinese market dynamics. you know, these are going on. We know the government's looking for heavy rare earth elements. We've been told by a major investment bank again that there's going to be more big deals coming soon, probably, with rare earth related assets.

Yeah, there's a lot of activity. A lot of activity, Dustin. It's a…

Dustin Olsen (19:17)
So much

activity, yeah.

Daniel (19:19)
It's actually kind of mind blowing. I'll tell you this too, we reported on this yesterday. Major Chinese state-backed rare earth companies are meeting with banks. So China Min Metals met with the top state policy bank. So this is like a giant.

federal bank, would be a government bank here in the United States. And they're basically saying, we're going to make money available for you if there's another trade war.

So what they can do, Dustin, is they can shut us off. And then their banks are paying them so that their workers still get paid while we starve.

See what I mean? And here's another one for you. MinMetals also did a deal with a giant English bank.

Dustin Olsen (19:55)
Mm-hmm. Yeah.

Daniel (20:06)
So, Standard Chartered Bank, that's an English bank, an Anglo bank, but the China division of that bank met with China Men Metals, one of these big rare earth companies. And the goal here is cross-border financial infrastructure for mineral expansion.

Partnership opportunity accelerates China's rare earth and base metal supply chain control through strategic international financing. And this alliance represents part of China's broader Belt and Road Initiative. So they're hooking up not just with Chinese state banks, but Western big English banks. Think about that for their financing. Okay.

So that's something else to look at on rare earth exchanges. We're watching these very carefully. We're going to start reporting. We reported on some contracts. We're going to start reporting every month on how many deals happen, how many new off-take agreements, how many new financing. So we're going to more regularly produce this output, which is very valuable for investors and companies that are in this space.

to understand, banks, et cetera.

Dustin Olsen (21:15)
Yeah, that's great. Yeah. So definitely come, come to the website, subscribe to our newsletter, just a little shameless plug there. Cause we are seeing this news a lot every day, uh, highly on some of the more important news that was published in the last 24 hours. Um, but we couldn't emphasize enough for those who are looking to invest and kind of be at the forefront of what's going on. And so.

Yeah, come to rare earth exchanges.com, stay up to date with what's going on because while a lot of this sounds nice, a lot of it can sound sensationalized, like a good deal, you know, good thing to be a part of. It doesn't mean that it is ready for investors and you might, you might be too early and you don't want to be there either. So just, Streamers Plug, just be very vigilant with what's going on.

and rarewithexchanges.com is a great place to just be more aware. So anyways, Daniel, what else you got?

Daniel (22:17)
100%. ⁓ I would say that the Chinese are, you know, again, doing deals. So what's called Zimen Tungsten, they also have rare earth activity. They just did a partnership with a German company called SCW Eurodrive, a strategic cooperation agreement to enhance rare earth and tungsten product technologies. They're partnering to foster

collaborative research, co-development projects, and it expanded to new markets. And it represents a growing trend of strategic alignment of Chinese resource firms, like rare earth firms, and European manufacturers. So it's interesting, you know, there's some tension between China and the US. US and Europe just did their trade deal, you know, there's depends on, you know,

how good that is. I mean, it's a pretty good deal for the United States. But the other thing Rare Earth is doing is, Rare Earth exchanges, we're tracking these European manufacturers and what companies are working with. What is their Rare Earth supply chain look like? So you can see that, you know, having an ex-China marketplace is…

is no trivial task. mean, it's a huge undertaking. So we have an ambitious mission here, Dustin, an ambitious mission. Let's see, I'll give you give us a couple more. You know,

Again, we're talking a lot more about pricing and contracts in rare earth exchanges. So we don't profess to know everything we can't, but what we are doing is we're finding examples from the real world and we're extrapolating out to say, hey, you know, in this kind of scenario, here's an interesting contract. There's an off take agreement. We can see, you know, sort of the amounts and

you know, over time we want to start reporting on those fairly regularly. We want to aggregate by month, okay, and have nice clean reports. you know, recycling, there's a lot of news around there. I would just say it's still the early days as we discussed with Jenny from Texas A ⁓ It's huge upside because, you know, if you can figure out

economical and environmentally clean ways to recycle, you have the potential to not have to depend on the mines as much. Right? So that's a big deal. Right? That's a big deal. Anything on your end, any questions Dustin that you might have that I can answer or any perspective for me?

Dustin Olsen (24:46)
I think you summarized things really well as we were going through some of these highlights over the last few days in the news. And yeah, it's exciting. There's a lot going on, which can also make it feel overwhelming to kind of keep up with which way we're going. But like I said, the start, talking about the other guests that we've had on our show, I feel very encouraged.

with where things are going. It's not perfect. There's an incredibly long road ahead and it's not a flat road. We're climbing a mountain and we've got switchbacks and we've got like, it's going to be a long, arduous road ahead, but I feel optimistic that we'll be ready for the climb. So yeah, I think we're heading in the right direction.

Daniel (25:20)
yeah.

I agree. think, you know, again, the United States, if we're really going to play to win against China, free market solutions will not be enough.

Dustin Olsen (25:41)
Definitely not.

Daniel (25:41)
We need,

we need industrial policy. We're not quite there yet, but at least Trump is making the motions to get things going. So that's a start. And I think he's done more than anybody else in this space. So for that, he deserves credit. ⁓

Dustin Olsen (25:58)
He definitely

deserves credit and, and I hope that these efforts won't be in vain. hope that what he started can continue into the next presidency because the things that we're talking about here will not happen. They will not be resolved in the four years he had an office. Like there's just, there's no time, not enough time. There's, we're just not there. and so I hope, I hope the path is

Daniel (26:14)
Hmm.

Dustin Olsen (26:21)
be made a little clear, there's a few less hurdles or roadblocks in allowing the private companies, the private sector to come in and be encouraged that they can make these investments, they can start these projects and actually get some traction in less time than they've seen in the last years. Because if that's possible, then I feel like

to your comment of, you know, the free market isn't enough. maybe we might have a fighting chance if the government can kind of get out of its own way and allow the free market to actually prevail. But there is still the other side of that coin where you got China, the state funding. The operations, right? You just you called it out earlier is like they've secured capital.

Daniel (27:02)
Yeah, that's right.

Dustin Olsen (27:09)
to keep things running even if the United States isn't a part of it. ⁓ Like that's a level of government support that we're not seeing right now that will probably be required if we want to have that same level of traction.

Daniel (27:14)
That's right.

Well Dustin, how did we win World War II?

Dustin Olsen (27:28)
Man, we buckled down.

Daniel (27:30)
Did we

have industrial policy? Oh yeah, we did. Oh yeah, oh god, I mean, are you kidding me? I mean, we were producing some of these liberty ships, one a week or something. I mean, it was mass and you had to plan that. You had government funding, government bonds. You had to plan it. had, you know, it was a huge amount of industrial. This is how we beat Nazi Germany and Imperial Japan.

Dustin Olsen (27:33)
Yeah?

Daniel (27:56)
So the Manhattan Project was part of that, right? I so I'm not saying that this is the same thing. It's not, okay? But you know, it can be a problem if China decides to cut us off. What are we gonna do next time?

Dustin Olsen (28:10)
Yeah, what do we do? That is the question.

Daniel (28:15)
The answer is nothing. If you look especially at heavy rare earths, if you look at heavy rare earths and you look at the China controls 99 or 98 % of, there's nothing you can do.

Right? I mean, if they decide to lock everything down and they have access to this stuff and they refine it, you see what I mean. I mean, we're in a very vulnerable situation.

Dustin Olsen (28:24)
Yeah, I mean.

But given current events over the last six to nine months, you don't think that we would be better prepared for that?

Daniel (28:43)
Well, I mean, if they cut off heavy rare earths tomorrow, where are going to get them from?

Dustin Olsen (28:47)
Greenland.

Daniel (28:48)
Yeah, I mean, where are going to refine it?

Dustin Olsen (28:50)
Exactly. But that's my point though, right? So we're trying to diversify our reliance, right?

Do you not think that we would be just a tiny bit more prepared for an event like that? Or are we still just up a creek without a paddle?

Daniel (29:03)
What? What?

I think for heavy rare earths, we're up a creek without a paddle. mean, I don't see any, know, again, that's why the Reuters called us the other day. mean, we can produce minute amounts of this stuff. I mean, over the next three years, MP might be up in three years, you know, but that won't be heavies as much as it is light rare earth. So they have to find the deposit. They have to be economical to mine them out and there has to be money for that.

You know, it's, we're still early days and you know, I see comments on our LinkedIn where I've heard people say something, you guys are negative. You know, we could be up tomorrow. This is, you don't question our prowess when it comes to these matters.

Okay, we're just reporting the data.

Dustin Olsen (29:51)
Yeah, prove us wrong. Prove us wrong.

Daniel (29:52)
Yeah, yeah, we're just reporting the data.

I think that, I still think it's a very precarious situation. Very precarious. think, you know, Trump was right to call it a national emergency. If he would have just focused on this, he would have had enough, you know, for the judges to say, yeah, just go, go with it. You know, if they knew, understood, but very few people understand what the problem is.

Dustin Olsen (30:17)
They're learning though.

Daniel (30:18)
Yeah, and partially thanks to us.

Dustin Olsen (30:20)
Mm-hmm, absolutely. Well, Daniel, I think we should wrap it up. To those who are listening, if you found this episode helpful, give us a like. If you don't wanna miss a future episode, please subscribe to the channel wherever you're listening. And that way you will get an alert every time a new episode comes out. And join us next week. We have another guest who's gonna be on our show. It is…

Gasberry, they specialize in making magnet presses and they are ready to scale and make thousands, millions of magnets. So come learn what they're doing and we'll see you next time on Rare Earth Exchanges podcast.

Daniel (30:54)
Thanks Dustin.