00:00Grayson, good to have you with us. I'm just curious about your view on what China did. What is your
00:05read on this?
00:07You know, what China is really doing is reminding us that it has the ability to flex its muscles and
00:12it can impact our supply chains.
00:15In a way, there has been a sense of normalcy that people have felt, although not real, that, hey, you
00:19know, China's paused restrictions.
00:21And what they're really showing us, especially following tightening G7 cooperations, following significant investments from the U.S. government, is,
00:31hey, we still have control.
00:32Is it going to have an immediate impact on a company like MP Materials? Probably not, because they've really worked
00:37to create that ex-China supply chain end-to-end.
00:41So, I mean, does it, it's interesting. I feel like this battle that's going on, Graceland, and I'm just increasingly,
00:50like I think about last week, more broadly,
00:52you saw the group of seven countries have agreed that no single country should supply more than 60% of
00:57their imports of rare earths by 2030 in an effort to reduce their reliance on China.
01:01Is the world kind of pushing back and saying, as a group, folks, we've got to diversify this.
01:07We've got to make sure that the rest of the world has access to these critical minerals or these rare
01:12earths.
01:13It's really a major pushback against China, and rightfully so.
01:18Critical minerals have become the linchpin over the last year and a half of multilateral cooperation.
01:23And what we saw after last year's rare earth export restrictions was that every country was impacted by it.
01:29So it became a natural point of collaboration.
01:32Now, of course, this is a really ambitious goal.
01:34Like, to contextualize this, Japan was first impacted by rare earth export restrictions in 2010,
01:41and they have invested intensely into their diversification journey.
01:45But 16 years on, they still haven't achieved reliance.
01:49So it's certainly an ambitious goal.
01:52Where is the U.S. right now in achieving its goal?
01:57The U.S. is early.
01:58I mean, what the U.S. has done is unprecedented in terms of the billions and billions of dollars
02:02it is allocated to rare earth mining, processing, and permanent magnet manufacturing.
02:08However, it's no secret that the industry is very, very long term.
02:12So it takes decades to build those mines.
02:14It's still looking at about five years before you're into ramped up separation.
02:20And then, again, a lot of this technology when it comes to permanent magnets is very early stage.
02:24USA Rare Earths received funding for a pilot from Department of Energy in May 2026.
02:31So it's early and it's a long term undertaking.
02:34So while we're on the right track, we're not going to be at self-sufficiency in the next two years.
02:39Is the government still all in on this?
02:42The government is all in.
02:44And we've seen funding and investments coming out of various government agencies,
02:51Development Finance Corporation, Export-Import Bank, Department of Energy, Department of War.
02:55If you've seen a whole of government approach, it's really been on rare earths and permanent magnets.
03:01There's something interesting going on between rare earths companies that I'd love to get your view on.
03:06Our own Jacob Lawrence yesterday reporting that USA Rare Earths is pushing back against allegations by MP Materials,
03:13calling a lawsuit filed by its rival in an attempt to hinder the company's growth.
03:16If you haven't been following this, everybody, the company refuted MP's claim that USA Rare Earth
03:21improperly obtained and used confidential information from a former MP employee.
03:25USA Rare Earths said in a filing in the 8th District of the Texas Business Court on Monday
03:29that it will deny each and every allegation made by MP.
03:32Now, normally, I wouldn't ask you about two companies going after each other,
03:36but these are two companies at the center of trying to build up a supply chain here in the U
03:42.S. of critical minerals.
03:43I'm curious if this is something we should take seriously or if it's a bit of a sideshow
03:48when it comes to the domestic buildout of the rare earth supply chain.
03:52Look, I mean, the first thing that this underscores is how technologically advanced this industry is.
03:58And what we have to remember is that a company like MP Materials has spent years and years building these
04:04capabilities.
04:04They've invested billions into developing kind of proprietary technologies.
04:09So their competitive edge is coming from this innovation investment.
04:14To now, you know, undermine that, you have two competing interests.
04:17You have the national security element, which is saying, OK, the country needs more rare earths,
04:22but you also have the corporate level interest, which is we've invested billions into proprietary technology
04:27and companies taking that is not, you know, it's not positive.
04:32So you're seeing that tension exists.
04:33So what it underscores, again, is that it's technologically complex
04:37and that there are going to be companies that operate within the United States
04:41who feel a really enormous tension.
04:44And we shouldn't undermine how much money they've invested into building these capabilities.
04:48You know, one of the things going back, Gracelyn, if we can, to China,
04:52that we've seen it in industries before where they have dominated it
04:57and then just cut prices to make sure they have a domination of a market,
05:00whether it's been steel or textiles or solar panels.
05:05And I just wonder when it comes to this move by the G7,
05:09do we need to see some kind of, you know, export controls or price controls
05:13or some kind of pushback against China in order to make sure that other nations can build up
05:21critical minerals and rare earths, that they can actually build up that supply chain?
05:28Ronald Reagan once said, if you want more of something, subsidize it.
05:31If you want less of something, tax it.
05:33And what we're doing is looking at both instruments, right?
05:36And I mean, if you look at it, doing the price floor with Linus for their Malaysia facility,
05:41doing a price floor with MP materials, doing concessional financing and equity
05:46is really in, is that subsidy to get more of it, right?
05:49We want to incentivize the development of these capabilities.
05:52At the same time, I mean, tariffs are a really important part of that equation
05:56to level the playing field.
05:57However, the complicated reality we sit with is that we are in an economic coercion structure,
06:03whereby if we increase our tariffs, China can retaliate and cut off access.
06:08So it's a delicate game, but it would be surprising to see tariffs leave the discussion
06:14between the two countries when it comes to rare earths and permanent magnets.
06:17So I'm just wondering, you're in Vegas, right?
06:20I am.
06:21Is it because you think you can win at the slot machines and you have a better chance of that
06:25versus your view on the U.S.?
06:27I'm having some fun with you, but the U.S. actually developing these supply chains.
06:32I mean, I'm just wondering, can it actually be done?
06:35Will it be done?
06:36So I don't gamble because I've never won.
06:38I've worked out that that's just not something for me because I always lose money.
06:42However, where I am is the Fast Markets Lithium Conference this week.
06:45And the price floor discussion continues.
06:47As we know, I mean, we have a dual challenge of trying to keep our Western companies online
06:53while also ensuring that they cut a profit, especially in an environment where demand is lagging.
06:58Ultimately, to get prices up in the long term, it's going to be increasing demand.
07:03Increasingly, what we're seeing, though, is that companies are willing to pay a security premium,
07:07whereby manufacturers are saying, OK, at the risk of having a disrupted supply chain,
07:12where I can't access my material, I would rather pay more up front.
07:17As we do that, we reduce the demand for Chinese minerals.
07:20So while it is complicated in a high-risk sector, obviously, of geopolitical risks, technology risks,
07:27traditional commodity risks, you are seeing companies play more proactively into investing in that security premium.
07:34How politically—you know, we're talking about the midterms because we're just a few months away,
07:38and there are primaries happening here in New York today.
07:40I'm just wondering how companies that are making these investments right now are sure that
07:47if there's a new presidential administration, these investments will still be supported by the government.
07:53It's fascinating because one of the challenges we continue to hear is that political durability
07:58is, you know, is one of the things that companies are wondering about.
08:02Look, the benefit is that neither party disagrees about critical minerals.
08:06I mean, it is the most bipartisan agenda in Washington, D.C.
08:10However, you're also realistically starting to see congressional inquiries into certain transactions.
08:18So, you know, it's not—it's very likely, especially with the way midterms are looking like they may shake out,
08:23that there will be pushback on certain transactions.
08:26However, what we don't see is that all, you know, of these deals are going to go up in pause.
