00:00What would actually need to happen at these conversations between President Trump and President Xi to be able to say
00:06that we had some sort of success when it comes to reestablishing relations, reconnecting and perhaps easing some of those
00:13tensions that we've seen around trade and supply chains?
00:18Yes, thank you so much for having me, Cherry. I think it's exactly right that these discussions are very much
00:27coming down to rare earths and more broadly critical minerals playing a pivotal role in trade negotiations.
00:38I think that's why we've seen many of the discussions pushed to Thursday's trade summit.
00:46What would need to happen in order to feel like we have some momentum and some success?
00:52Personally, I would love to see a real process around which those volumes could flow out of China with reliability.
01:02There have been reports, even though, you know, an export process was agreed to, that, you know, volumes are not
01:11necessarily showing up in the quantum and on the timeline, which was agreed.
01:17And so I think success would look like further defining that timeline, really where the guardrails are and how the
01:26materials can be used.
01:28So which industries?
01:31I mean, Ashley, you've argued that the U.S. cannot simply just replace those imports coming from China.
01:37What parts of the supply chain can America mitigate for and where are we seeing the biggest shortages?
01:46Yes. So I think we've seen some really strong progress out of the U.S. as well as its allies
01:54around deploying capital across that value chain.
01:59Unfortunately, there's there's not a silver bullet here.
02:02So it's not just, you know, fund one mine and and all of a sudden the rare earth problem or
02:07the critical mineral problem goes away.
02:10You know, particularly in regards to permanent magnets, you know, you need to fund mines, you need to fund separation
02:19capability, you need to fund metallization.
02:22And then you start on the very hard IP intensive kind of trade secret protected process of scaling magnet manufacturing.
02:33Importantly, Japan and Germany both have very strong magnet manufacturing capability.
02:41We have seen the recent transaction with vacuum schmelz coming into more of a vertically integrated structure within the U
02:51.S.
02:51And so, you know, very encouraged by these steps.
02:55However, I certainly would not call the supply chains secure at this juncture.
03:02There is additional investment that needs to be made.
03:05And certainly it's not something that's going to happen overnight.
03:10It's also not something that's going to happen in a silo.
03:15Actually, to your point, Prime Minister Takahichi of Japan speaking right now at the U.N. General Assembly, talking about
03:21some of those issues, including critical minerals and the importance of it and the importance of the international community to
03:27come together on that issue.
03:29But, Ashley, I got to say, I mean, this whole issue of critical minerals and some of those materials, especially
03:36that go into components around artificial intelligence, huge right now because we continue to see the boom, the infrastructure build
03:44out.
03:45What does the U.S. have to do in order to solve the critical minerals problem at a time when
03:51we also have just booming demand around the AI?
03:56Yes. So in regards to AI, it is actually more of a copper story than anything else, which is why
04:07oftentimes when people are talking about solving the critical minerals problem, it becomes very challenging.
04:15Because, you know, based on U.S. definitions, there are 60 different critical minerals.
04:21So if you're talking about permanent magnets, which are also very relevant to AI and data center processes, as well
04:28as electronics writ large, it is the rare earth suite of materials, which we have talked about kind of the
04:35steps in that value chain.
04:37In regards to supplying copper, you know, the U.S. has two active copper smelters.
04:45Again, I do not think you should look at the U.S. in a vacuum in regards to copper supply.
04:52However, there has been significant Chinese overcapacitization of copper smelters and refiners, such that merchant smelters globally have really been
05:05extremely economically challenged.
05:06And many have gone out of business, really concentrating that capacity in China.
05:12So getting access to refined copper will really be a governor on the ability to build out grids and data
05:21centers.
05:23When it comes to trying to support those industries, how much does it depend on deploying government funds and trying
05:31to make those commercial viable as well so private companies will get involved?
05:35Where is that fine balance?
05:36I know that you've also overseen some of these deployments.
05:40Yes.
05:42So there is no perfect answer here.
05:45I think when it comes to government capital, you want to try within each specific market, and again, there are
05:5460 different critical mineral markets, you want to try to identify where that fulcrum point is that allows government capital
06:03to have a multiplication effect and de-risk a project such that private capital can then crowd in.
06:11And that sounds really straightforward.
06:14It's not, particularly in regards to niche materials.
06:20So I describe niche materials as rare earths, as materials that go into things like semiconductors.
06:29So for example, gallium and germanium.
06:31These types of materials are extremely challenged from a unit economics perspective.
06:38And so just putting in place one government investment won't necessarily de-risk that project or that market.
06:47I like the approach that the U.S. government has taken recently around leveraging several different financing tools to best
06:57de-risk a project and allow it to have kind of a commercial lifespan and for private capital to crowd
07:04in.
07:04But no two deals will look alike.
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