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Visit shopify.com to upgrade your selling today. Hey, we're back everybody. Welcome back to The Brian Kilmeade Show. Joshua Ballard joins us now, CEO of USA Rare Earth. And in case you have not been following all the semantics around the tariff deal, one thing is pretty clear. The Chinese know what hurts.
Pharmaceuticals, they make them all. They're threatening to hold them back. One thing they did almost immediately is say, hey guys, you need our magnets, you need our rare earth. We think we're going to hold off on them. How does that affect us? In every way. You talk about defense, you talk about computers, your iPhone, everything that we need in terms of AI.
They're holding it back. And the question is, why were we so reliant on them to begin with? And that's why I thought Joshua was the best guy to talk to about this.
Josh, welcome back. I know you wrote a column about that and you knew this was a problem. The last administration kind of took their eye off the ball after the pandemic. We started coming out of the pandemic. Obviously not a wise move.
I would agree, yeah. We certainly started talking about it in a much bigger way during the first Trump administration. And we really refocused on renewables and the electrification of the economy and took our eye off the ball on these rare earths.
And we left ourselves in a very tough position. The way I understand it, yeah, we do have some resources. But in order to set up a refinery, it takes like 20 years because of all the regulations and the environment. You got people, governors of Minnesota like Tim Walz say, we're not going to do any strip mining there. It's too dangerous.
In Nevada, the same situation. So we just buy it elsewhere. How has that cost us? It's cost us massively. I mean, you have to understand that the rare earths that China has focused on, these heavy rare earths and these magnets are underpinning our defense industry, our aerospace industry, our auto manufacturing industries.
And all of this is going to slowly come to a halt. We now have to go to China for permission to make our rockets, right? Or to put magnets in our drones.
What do you mean permission? These are export controls. We have to go and ask to allow these minerals out of China to use them. All of them come from China. They chose the minerals that they control 98% of globally. There are some rare earths that are made here in the US. If you think of rare earths as light and heavies, light rare earths are actually fairly abundant. And we make them here in the US, although much of it's still processed in China today, even what we make here in the US. But these heavies are totally controlled by China. They underpin much of our technologies, defense, aerospace, as well as in medical uses.
Gadolinium, which is one of the ones listed, is used in MRI machines. Millions of it every day. We use a few of these to attack cancers and so forth.
This is very targeted and very specific. Who else has the refinery capability? Really, today, nobody outside of China, especially the heavy rare earths. Most of that entirely is processed by China. We've been working on processing technologies for heavy rare earths here in the US. We have a deposit in West Texas, which is heavy and heavies, if you will.
It's very rich in heavies and heavy rare earths. But it takes a number of years. We've lost this processing technology. We gave it up to China over the last few decades, as you described, as we started this segment. And we have to rebuild that completely from scratch. And we have to rebuild that from scratch. And we're working pretty hard on it. Have they cut it off already? Yeah, they've cut it off.
They haven't said it. Right. But these export controls have frozen exports out of the country and there's no mechanism actually in place to allow them out. And of course, we knew this happened. This happened in Japan back in 2010. They cut off these critical minerals to Japan over some boating dispute that they had 15 years ago.
We really should have listened then. Right. And how did Japan respond? At that point, there was a black market on a lot of this stuff and they were able to kind of go with the mobsters and those mobsters got blown up by China. That's what you can do with that society. And they cleaned it all out. Now the government's in total control. Yeah, well, Japan was smart. I mean, they moved their their supply to Southeast Asia, Vietnam in particular. So they took action after that happened.
The rest of the world should have listened. Right. So so Japan is not is not capable of supplying some of these metals and these magnets. It's possible they have magnet production in China. They're one of the only countries that are making these these permanent rare earth magnets outside of China today.
So that is one source potentially that we can get them from. What I think we need to do is surge it here. We're building a three hundred ten thousand square foot facility in Oklahoma.
It's going to make hundreds of millions of these things. Let's just surge this thing. We can we can build up this this supply chain here in the U.S. on the magnet metal making side.
We can do it fairly quickly. And by that, I mean, over the next couple of years, we could really surge it if we want on the deposit side, though, that takes a few years. Even if you take out the permitting challenges and all of that, you still have to work.
There's still science. You have to go through an engineering to make sure you get this right. It's still a few years away, likely, especially on the heavy work. So do you think we're at the point of talking to Josh Ballard now from CEO of USA Rare Earth? Josh, do you think we're at the point where the president can all issue a Defense Production Act action and start massively making these things, bypassing some of the regulations that will have stopped us in the past? Absolutely. I think we should we should look at this, in my view, as the Marshall Plan for rare supply chain in the U.S. or what we did for auto manufacturers during the 2008 financial crisis.
Right. Come in, build this thing, remove the barriers. And the government can be a catalyst if we do this with private capital, which is what we're doing. We went public a month ago. We raised a lot of money. We're building our first line.
We can either do this with private capital over the next three to five years, or we can surge this, use the government as a catalyst so we can raise more money and do this over the next one or two. Still getting around to that fix on your car? You got this. On eBay, you'll find millions of parts guaranteed to fit. Doesn't matter if it's a major engine repair or your first time swapping your windshield wipers. eBay has that part you need ready to click perfectly into place for changes big and small, loud or quiet.
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Exclusion supply. A couple of weeks ago, the Congo came over and they said, we have an offer for you. Help us with the Civil War. We got these insurrectionists and we'll give you access to our rare earth.
And of course, we're not going to have children with spoons on the sides of a hill trying to dig out lithium. We would do it. We would demand, I hope, a little bit more values and ethics in doing it. You think we should do something like that? I think we should look internally. I mean, now we're going to be reliant on the Congo or we have enough internally.
Yeah, this is actually pretty prevalent, right? We have to do a big search. The light rare earths we can certainly do here internally.
Galleon, which was banned three months ago, critical of the Patriot missile system, for example, semiconductors. We have large deposits here. We have a large deposit. There's also a big deposit, I believe in Idaho, one of the largest in the world. And the heavy rare earths, we have a pretty large deposit. We have to look for more.
Brazil has a lot. I think that'd be a better place to go here initially. But a lot of, when you hear about these deposits, whether it's in the Congo or in Ukraine or Greenland, they're still a couple decades away. I mean, we need to look at what's closer at hand, such as our West Texas deposit. That's not decades away. If we remove the permitting challenges and all of that, that's more like a few years away.
It's a much closer event and it's here in the US. I think we really need to turn internally and create some self-sufficiency here. Well, I mean, do you think there's a desire in Texas? They're great at cutting red tape when they want to outside Austin.
Do you think they would do that? And if we're going to do a Defense Reproduction Act, what cities and towns should we be looking at that has the most in states? Texas is super supportive.
They've been great supporters of ours. We're on Texas land there in West Texas near El Paso. The GLO, the General Land Office in Texas has been a close partner. So I think Texas will be very supportive over the next few years. We're lucky we're on state land in a state like Texas. A lot of this is on federal land. So the moves that Trump has made to free up the permitting and to kind of open this up on federal lands is going to help a lot. We have reserves in Idaho and Wyoming in particular in Texas where we're at that are known reserves. I think we need to act on very quickly.
And then we just we need to serve geology. There's bound to be more. This stuff isn't absent. It's just we are absent and looking for it.
That's been the challenge. China has also been hoarding it, which I think is pretty, you know, that shows that the foresight. I think they have double the amount of the second nation who's in second place.
I think it's Japan. But double. So they have a lot. They refine a lot. And they knew this was going to be key to the future with AI and everything being run on computers and our defense being hinged on that and space. That's right. 30 years ago, this was the early 90s, a deputy premier in China said the Middle East has oil.
China has rare earths. That's how long China has been thinking and planning about this. This was very purposeful. It was it was it was a strategy they built over the last few decades. And now they're leveraging at a moment where they feel like they have a living.
And Josh, how much bigger can you get if the defense production came out? Would you want to be one of the contractors to get to the contract? Absolutely. I think on the magnet side, we could scale up that magnet facility within the next couple of years. We can move very quickly. There's some limitations.
You have to order and equipment. There's lead times, but we're already well on our way. And we could we could scale that up three or four years faster than we would have otherwise and go live with a much larger amount by 2027, I believe. And the deposit we could surge. We can't get everywhere we want to as quickly. But I think within this administration, we could have a producing mine with the right attention and removing the barriers that we need and partnering on the science with the government. Absolutely.
Well, good luck. Joshua Ballard, the CEO of the USA Rare Earth is something that's front and center as this trade war carries on. But even if there isn't a trade war, we have to be autonomous.
We could never trust the Chinese. Josh, thanks so much. It is time to take the quiz. It's five questions in less than five minutes. We ask people on the streets of New York City to play along. Let's see how you do. Take the quiz every day at the quiz dot Fox. Then come back here to see how you did. Thank you for taking the quiz.
