CHPS Podcast Episode 3: Unlocking America's Mineral Potential

Join host Chris White in the latest episode of CHPS of Insight as he converses with Nicole Rogers, Senior Director at Clark Hill Public Strategies and President of the Alliance for Mineral Security. Dive into the intricate world of critical minerals policy, the importance of rare earth elements to modern technology and national security, and the implications of recent executive orders aimed at boosting American mineral production. Learn about the challenges of the current supply chain, the dominance of foreign powers in mineral processing, and the importance of reshoring manufacturing capabilities. This episode provides a comprehensive look at the policies shaping the future of critical minerals and their impact on the U.S. economy and infrastructure.

This podcast is intended for general informational purposes only and does not constitute legal or financial advice or a solicitation to provide legal services. The information in this podcast is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Listeners should not act upon this information without seeking professional legal counsel. The views and opinions expressed in the podcast represent those of the individual speaker only and are not necessarily the views of Clark Hill PLC.

Transcript

 Hello everyone. This is Chris White and welcome to CHPS of Insight, where we bring policy to practice. We try to present current perspectives on the policies that are affecting your lives and your business.

From the professionals at Clark Hill Public Strategies, I'm your host, Chris White, and today it's my honor to be speaking with Nicole Rogers.

Nicole, why don't you give the people a little bit of background about who you are and what we're going to be discussing today? Sure. Thanks Chris. Nicole Rogers. I am senior director of Clark Hill Public Strategies, also the president of the Alliance for Mineral Security. And we are here to talk about critical minerals policy, the president's recent executive orders on enhancing and expanding American mineral production.

And through the congressional policies we might see following that. Awesome. Seems like that's been in the news quite a bit lately. I know it's something I'm starting to get a little smarter on and I'm sure a lot of people out there have a variety of knowledge. So what are critical earth minerals and why do they matter to matter to us as people and why do they matter to the US so much?

Sure. So. Probably hear the term critical minerals and rare earth elements interchanged. Quite often I kind of like to use the technique when teaching shapes to my kids. A square is a rectangle, but a rectangle is not a square. And critical minerals are a broad list of minerals and elements often.

Deemed essential for material metals components for critical industries. Rare earth elements are a sub tier of the periodic table. It's that bottom two lines on the periodic table that everyone was told to ignore in chemistry class, but are actually very, very important to our modern economy, our national security, and our innovative competitiveness.

But they are a subset of critical minerals, not interchangeable. So critical minerals are everything from. Lithium and cobalt to neodymium and odium and dys bros to half and rhodium, and a variety of other elements and minerals that make up the key components to our modern society, which are batteries, magnets, semiconductor chips, defense, metals, and munitions.

So if you think about those five key components to our society, and you think about the first three are really ubiquitous to every electrified system. So when you think about it, the semiconductor chip actually is like the brain. It tells the system what to do. The battery is like the heart. It powers, it provides the energy and the permanent magnet.

The rare earth magnets are like the spine. They convert electricity into motion, so anything that has vibration, torque, motion rotation, has a permanent magnet in it. And so when you think about those three key components that are part of everything from making your Airbus and your cell phone vibrate and operate to our nuclear subs and our fighter jets.

Drones weapons systems, the equipment to manufacture semiconductors, every hard disc, drive every data center, every ev, every piece of equipment in our energy transition, they all rely on critical minerals and rare earth elements and those key components. Wow. No, that covers obviously a lot of, lot of modern technology.

Just what we do every day. So I think, I think that makes me think back to, you know, COVID with the supply chain issues where mm-hmm. Cost of cars were going up et cetera. And so I'd imagine that was based on presumably where we get most of those minerals to do the production we need.

And is it, do we do a lot of that production in the US or do we, do we get already produced items in the US or, you know, I guess where does it come from in, in, in general? Thanks, Chris. That's a great question. So thinking back to the vehicle shortage during Covid, that actually was largely related to a semiconductor chip shortage.

That was a result of our dependence on China for a lot of these key minerals, the processing and refining of these minerals and elements and the manufacturing of these key components. So currently China dominates. About 90 to 95% of the processing or refining across the spectrum of critical minerals and rare earths, they dominate a strong majority, if not in the case of, for example, permanent magnets, 95% of all permanent magnet production.

So we are entirely dependent on. An adversarial nation right now for the key components for our national security. The key components for our expansion in AI and data centers, the key components for our energy security and energy transition. These can, that dependence has to be stopped and no, we do not currently process or refine most of these minerals and metals in the United States.

We are working towards that. That has been a goal of the Trump administration. The first go round. It was a priority In the last administration though, with different directives and remains a priority, and at this executive order that was issued on March 20th, really, really puts a finer point on the need to really focus on not just the sourcing of the minerals, which we absolutely must be doing more of that at home.

We have. Most, if not all, of these critical resources in the United States. But we also must reduce and remove the chokehold that China has on processing, refining, and component manufacturing of these minerals and elements so that we can ensure that we can feed our national defense and our American competitiveness.

Definitely. No, that's, that's crazy. 90 plus percent is an insane number. It's an extreme dependence. And yeah, supply chain diversification is good for everybody. It levels out pricing. It ensures that we don't have vulnerabilities, whether they be due to war, due to weather, emergencies due to pandemics.

And it ensures that we can always. Protect our American war fighter and protect the American economy. Most definitely. So it's 90 plus percent from China. What, what are the other largest producers we tend to get them from? Are they, is it, does it come internal then, or do we go to other, other countries?

It depends on the mineral and resource. So some of the processing, refining of some of the critical minerals. Is done in Allied Nations, some is done in other adversarial nations such as Russia. Some is done in proxy nations that really are aligned with those adversaries. Sure. So that, that 10, you know, about 10%, that's not China quickly dwindles down even smaller and smaller.

That's, you know, even an allied nation, but in a. Time of strife. You know, you, you can't even rely upon shipping being, you know, easily done. Whether it is due to influence asserted over an ally or, you know threats and seaways or in, you know, an airspace trying to, trying to get stuff to us. That's certainly something that I can see why it's a focus.

Absolutely. And that's why reshoring at least some capacity across the entire critical mineral supply chain and industrial base is at. The utmost imperative for the United States. We don't have a choice but to ensure that we can process refined manufacture and mine here in the United States, and that requires real investment.

It requires real commitment to review and reshaping some of the policies of our country. And that is the reason behind, I think the President's executive order was very well structured in. Creating a thesis statement for what that those policy adjustments and those funding priority realignments should look like.

That now, you know, the devil's in the details. Now it is up to the agencies to put forth their recommendations for how that can look within the confines of the executive order, and then it is up to the United States Congress to codify those priorities also legislatively. Definitely. So with that executive order, is that a significant deviation from previous, the previous administration or even Trump 1.0?

Or how are things changing under this executive order? I think it's the first time we've really seen processing and refining and component manufacturing at the forefront of the discussion. Previous administration gave lip service to the importance of mining, though quite frankly did not actually permit any new mines during their tenure.

But was very focused on end component through end product in largely a single sector, which was the electric vehicle sector as the, as being a demand driver for reassuring domestic. Production for critical mineral supply chains. But unfortunately they did so in a notion of sort of a silo. So we all all have heard of the CHIPS Act, which was housed under the Department of Commerce and focused on semiconductors and ensuring that we could resource and manufacturing capacity.

And that supply chain part of the IRA and the BIL so the inflation reduction Act and. The build back better bipartisan infrastructure, law bills that were focused heavily on electric vehicles and battery manufacturing here in the United States. And those two laws were provided some direction, but they really focused on the bookend.

Lips, you know, some conversations about mining and then a lot of focus on end product manufacturing, but not a lot of focus on how we were going to bridge the gap and the choke hold that China holds in processing, refining, and sort of the core component, metal and manufacturing. And so this executive order is really the first time we've seen a real clear directive to focus in that midstream and unlock, unleash American innovation and American capability and American industriousness and bring back an industrial base for the United States.

Sure. And I would imagine that having all the. Refining and production capability doesn't do you much good if you can't get the the basic element into the, into the country to begin with. Or if someone's able to control what that that supply cost is, then it can make it so that it's cost prohibitive to produce in the us or not make it non-competitive to produce in the us.

So effectively shuts down that industry, you know, and, and hurts, hurts American industry that way as well. Absolutely Chris. So that's why, you know, ultimately unlocking mining production in the United States. But also the more we diversify these supply chains, the more we are able to control and divert feedstock from mines globally to the United States and process and refine those products here and in Allied nations and divert that feedstock away from China.

The more we're able to, diminish their capability of controlling and manipulating the price either on either end. You know, quite frankly, the it has been well documented that the CCP and through its state ownership of most of those supply chains has. Very readily levered price manipulation as a tool to try and keep the west out of the supply chains by either stockpiling and driving price down or and flooding the market or pulling back and driving price up when it is detrimental to western industry.

So making it either cost prohibitive or not economic, no doubt. And does, does the US have deposits of these minerals that we're already aware of or we, we do an exploration, or where do we sit for that? Both, quite frankly. We have resources that are, you know, have permits, app, you know, and applications already in process and are eager to be un locked and unleashed for American processing and refining as it comes online.

We have resources that have been identified that need to get through the. Land management process and then the permitting process to get into production. And then quite frankly, we've only geo mapped about 20 to 25% of the United States from a geological ST standpoint. And so there's certainty that there's a lot more available to us if we really do a lot of the innovative work to geo map the rest of the United States.

And quite frankly, the. Time is now because there's been a lot of innovation using AI that allows that geomapping to be done in a very non-invasive way. So we can really lever technology and a lot of American ingenuity to do a lot of this mining and mind mapping without disturbing our ecosystems.

No, that's, that's crazy. Only 15%. I mean, I know obviously we have a lot of, a lot of space out there, especially when you bump up into Alaska and even in the, you know, the Midwest and the mountain areas. But still, that's such a, such a small number. So based on this, these executive orders are, I guess the executive order.

Do you see changes coming in the way these, you know, mapping, mining, production products are gonna be funded or, you know, increase in funds or just releasing funds or what do you see changing with that? One of the great things I think was seen in the threads through the executive order is the desire to create greater coordination across the different funding mechanisms and tools and agencies.

That have resources for mine all the way through processing, refining, and component manufacturing. So the Department of Defense has multiple different resource tools. We have the Development Finance Corporation, we have the Export Import Bank as well as. As of this time funds within the Department of Energy that all are intended to be part of the solution from mine all the way through to component manufacturing.

And the challenge has been that when you have, you know, 10, 20, 30, 40 different funding tools at different stages or for different types of project projects with different types of. Requirements, different types of applications. It can be onerous and near impossible to navigate for small companies, for new companies, for startups to really invest the time and the resources into navigating how to get these funds and what to do first.

And so it's been heartening to see that the executive order stipulated that those various agencies with funds. Work together to coordinate how those funds can best be deployed. Because that, I think, will really create a greater level of strategy and coordination to ensure that we're threading the full supply chain.

You know, we can't, it's scattershot to fund a mine in one commodity, a processing facility, and another commodity and a manufacturing. Facility that has nothing to do with either that mine or that processing. We need to be thinking of the supply chain all the way through and ensuring that we're levering all of the funding tools that we can across that supply chain in a strategic and valuable way to be efficient, to be economic with the US taxpayers dollars and to ensure success.

Definitely, but it's almost like you're saying the government should try to be efficient and have a, a, a, a plan in concert or, you know be, be focused on a coordination across multiple levels. You know, I think there's a lot of use of the word efficiency right now, and we have a president who has run companies and run supply chains and.

Several people within the administration who have also done the same. And I think we're starting to see the ability to look at these challenges from a more commercial and less political standpoint, more economics and strategic viewpoint. And is that where this national Energy Dominance Council comes into play?

Or how does that interact? With what? With either funding or exploration or, I, I guess what, what does it do? The national Energy Dominance Council is a opportunity to coordinate across multiple agencies and have a strategic imperative for us in that case, particularly US energy dominance, energy independence.

With an all of the above approach. So it provides the opportunity for the Department of Interior, the Department of Energy, various White House Councils, department of Defense, department of Commerce, to all coordinate in tandem and be sure that they are not, we are not

miscommunicating or. Failing. Failing to communicate. For example there's an example of a US mine that had received Department of Defense funding and yet its permit application languished at the Department of Interior for 22 months, I believe before the congressman for that. Particular mining asset called over and said, what are you doing?

The Department of Defense funded the, you know, granted funding almost two years ago, and I said, we had no idea. So, you know, the shouldn't shock anybody that there's lack of coordination across agencies in these kinds of situations, but it should. Be an expectation as we're trying to sort of reshape and realign what government efficiency looks like, that that is going to be an expectation and that these councils are being utilized to ensure that that communication is actually happening at the highest level.

Definitely. So that council sounds like applies directly to what you were saying of making sure the mines we're promoting or the mines we're interested in aligned with the production facilities that we're funding aligns with the projects that. Whomever needs, whether it's DOD or whether it's some other agency or just the US in general or an industry, it's making it so that that council can have the broad picture to make sure we are doing those things in concert.

I do think the, that council will be a big piece of that. I think the there, national Security Council has a significant role. So does the National Economic Council especially as we look at this from a, national security and American competitiveness perspective and a global perspective. So there's a priority in ensuring that US projects spread across and US priorities spread across the country in our domestic focus, but also that they align with our efforts both economically, diplomatically, and geopolitically in a global perspective.

There's, you know, we've seen a lot of talk about minerals. From a geopolitical standpoint in a couple of countries, Greenland and the Ukraine being sort of the most talked about right now for good or for bad. I think there's, you know, a lot of opportunity to lever relationships and critical mineral partnerships with.

Friends and allies and re reset some alliances globally that would be at the benefit of the United States as well as the benefit of our friends and allies. Yeah. I actually, as you were talking, that was the next question popped into my head was thoughts on Greenland or Ukraine. You know, where, where do you see, where do you see a priority coming?

I know things are. In the news specifically about Greenland with, you know vice President Vance talking about going there with his wife and different, you know, different thoughts back from obviously the government about that visit. But from a, from a mid mineral perspective yeah.

Between Greenland and Ukraine, do you think one's more likely than the other? Do you think either will happen? So I think well, critical minerals, I'll take 'em wherever we can get 'em and in whatever partnerships we can secure as long as they are timely economic and competitive. I think there are a lot of very big strategic reasons behind the engagements in Greenland and the Ukraine.

I think there are some other countries that are, further up on my priority list as it comes to mineral resources and engagement from the perspective of supporting our supply chain diversification. You know, the biggest thing that I think gets forgotten as we talk about critical minerals and rare earth elements is it becomes an amorphous single thing as opposed to understanding that this is.

A wide swath of minerals and elements that have varied priority. There's probably about 15 that I would say are most important from a defense and national security and economic competitiveness, you know, innovation perspective, and. When you look at those and then you look at the, you start to dig deeper into quality and grade and mine life and where the producing assets are.

We have a wide number of countries that we should be engaging in to be competitive against China. That's definitely true. You know, and you said it, as you were saying to divide it. The maybe geopolitical presence of Greenland, part of us, not part of us versus possible strategic partner you know, for the, for those minerals.

And similarly with Ukraine you know, separate from the Russia, Ukraine conflict and negotiations for, for peace, even though it's obviously intrinsically intertwined, but recognizing that that's, that's just a, an opportunity that should be explored and, and needs to be, needs to be explored. One, one last thing I saw when I actually, this morning an article about McDermott Caldera and a large lithium deposit there.

I don't know, have you, have you read anything about that or any thoughts on whether or not we'll, we'll dive into that ancient Caldera or not? I saw that announcement yesterday. I saw a couple of big announcements yesterday. I need to do more digging on, no pun intended on the details of the asset before I'd give a particular opinion on anyone's potential mine asset.

But I think any opportunity to identify new resources is tremendous. And again, like I said, the biggest question always comes down to quality and grade of the asset. Viability of extracting the asset economics and then life of mine. So how long will that mine actually be able to produce for us and produce economically?

And so, you know, again, while I wanna make sure that we are tapping the resources appropriately in the United States, I wanna make sure we're also. Leveraging our opportunities to partner and secure mining resource, mining resources globally with friends and allies. Just because again, diversified supplies.

No, for sure. I wasn't trying to get you to predictor, give anyone thoughts on where they should start investing in in different mines or mining companies. I, it just stood out to me since it was the headline I saw was $1.5 trillion worth of Lithium. I have no idea. You know, I know lithium's valuable.

I honestly have no idea that's big or small, but it sounds big to me. So that one, that one stuck out in my mind, but I'm sure there are many, many such deposits. And at 15% of the US mapped, for all we know, that's a, a relatively small deposit we could be sitting on rather than a relatively large one.

I think it, you know, potentially a relatively large one. The challenge, like I said, yeah, every deposit is different. It has different characteristics. There are different techniques for extraction and different, and so, you know, in lithium it's parts per million and there's a varying grade of parts per million from, you know, we have assets in the United States that have been discussed and reviewed for exploration at anywhere from 20 to 40 parts per million.

Then you look at some of the highest rate assets in Chile, and they're in the range of, you know, 1200 to 2000 parts per million. Wow. So as you see, you know, the economics can be very different depending on how efficiently those resources can be extracted. No doubt. No, that, that's, that's quite the variance.

That's that's good to know. Anything else that comes to mind from from your perspective that you think people should, should know about this or be on the lookout for? I think couple of things be on the lookout for, you know, I think there'll be a lot of work done to figure out how we can leverage both our Department of Defense assets, resources, and tools.

To unlock processing and refining. And I think that's gonna be an essential piece of the puzzle. In terms of infrastructure, I think workforce development is gonna be a priority. As we try to re industrialize this nation, we're going to have to build a new industrial base workforce. And we have, we have the people, we have the.

Schools. We just need to deploy them effectively and we need to bring people into skilled trades. We need to bring people into engineering. We need to bring people into mine. We need to make these fields appealing and attractive. And we need to understand that we can mine in the United States, we can process in the United States, we can refine in the United States, and we can manufacture in the United States.

And in fact, we can do so. In the most responsible, ethical and economic manner, if we are allowed to do so. Yeah, no, I, I think that that certainly is a, is a great takeaway that, you know, it's, it's easy to become America first and allow America to be leading, leading the trend, leading the standards, and and, you know, leaving the world as a you know, power for good, including with these rare.

Absolutely. And we have to remember that what is done environmentally or economically or socially, quite frankly, around the world, has a direct impact on us. It's not, just because it's happening halfway across the world doesn't mean it's not impacting our environment or our social or ethical responsibilities.

And so bringing it home, bringing it to Allied Nations is an important piece of. Securing the supply chain and improving both Americans' lives as well as our global economy and environment. Absolutely. Thank you, Nicole. This was certainly informative for me. I'm sure other people feel the same way.

I just let people know to be on lookout for future updates here as well as we'll be tracking and Nicole especially will be tracking and and we'll provide any, any emerging updates as they come across, as well as possibly future thought leadership. So thank you again, Nicole. Thanks so much, Chris.

 Of course. Have a great day. You too.