April 23, 2025 • 11 mins
ICYMI: Joshua Ballard, CEO of USA Rare Earth, discusses the challenges faces American companies interested in producing and refining the crucial raw materials that are used in the likes of missiles, electric vehicles, MRI machines and other advanced technologies - while China stands as their global dominant supplier.
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Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Business
Week with Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 2 (00:14):
Well, it is time for another edition of Bloomberg Plugged In.
It's your weekly look at evs, and today we're focusing
on so called rare earths. These are crucial raw materials
used in the likes of MRI machines, missiles, and yes evs.
Just last week we learned that MP Materials, it's a
US producer of rare earth's, stopped shipments to China after
Beijing placed export controls on similar materials crucial for defense
(00:38):
and tech manufacturing. This move follows Chinese restrictions announced earlier
this month that are expected to have broad impacts on
companies making optical lasers, radar devices, and high powered magnets
used in wind turbines, jet engine coding, so another advanced tech.
China is the world's dominant supplier of rare earths, while
the US produces and refines very little of its own.
(00:59):
We've got jobs to a Ballad CEO of USA rare Earth.
It's a roughly eight hundred and forty million dollar market cap.
Magnet manufacturing company. Joshua joins us from Oklahoma. Joshua, good
to have you with us. Kind of a long introduction
because we're at an interesting place right now where I
think a lot of people are really hearing about rare
earths for perhaps the first time in their lives and
(01:20):
really paying attention to this. I wonder how everything that
we're hearing from the US government and from China is
affecting your business.
Speaker 3 (01:29):
Well, it's affecting us in an interesting way. I mean,
we're just getting started, right We're building a large magnet
facility out here in Oklahoma where I am today, and
for us, what it means is a lot of customers
are calling, honestly, because there are few to none of
these type of magnet facilities in the US. We're going
to be the first and one of the largest domestic
magnet facilities here, so we'll get a lot of phone calls, honestly.
Speaker 4 (01:53):
So give us an idea of the time frame, like
when is it up and running? What?
Speaker 5 (01:58):
Yeah? Do you have anything to sell them right now?
Speaker 3 (02:00):
Yeah? No, Today, what we've done is we've commissioned a lab,
so we're prototyping for customers. There's always a qualification process
even in times like these. We're commissioning the plant, we're
targeting the first quarter of next year, so we're a
few months away, but we can at least start working
with the customers making the greater magnets that they need,
get them comfortable that we're capable, so we can hit
production hard as soon as we commission.
Speaker 4 (02:22):
What's going to be the output, like how much? I mean,
we talk about this rare earths and magnets and what
they go into and so on and so forth. So
give us an idea of what's needed in the US
market and what you guys can ultimately supply.
Speaker 3 (02:40):
So what's needed in the US market. If you think
about the global size of the magnet market today, it's
probably around two hundred and fifty thousand or maybe up
to three hundred thousand tons of magnets per year. In
the US outside of China, probably two thirds of that
is being used. And if you take the US the
twenty five to thirty percent, or maybe around fifty thousand
(03:00):
tons per magnets thirty to fifty thousand tons. Our facility itself,
at our peak will be building up to five thousand tons.
And to put that in perspective, five thousand tons is
hundreds of millions of magnets. It's a lot of magnets
going out the door for everything from auto supply to
eat manufacturing, to drones and defense, you know, everything across
the board.
Speaker 4 (03:20):
What will be the price of those magnets in comparison
to what folks have been getting out of China.
Speaker 3 (03:27):
Probably roughly double. So these tariffs are probably getting things
into the realm of what we can manufacture here in
the US. You have to realize.
Speaker 4 (03:35):
Especially, but pre tariff, you're saying that pre tariff it
would be double, about double of what it was. No,
I understand tariff's change the equation, but you're saying it'll
be double because why is it more expensive here?
Speaker 3 (03:49):
It's more expensive for a couple of reasons. One, it's
just more we have none of the supply chain here,
so everything has to come from overseas. You have a
lot of extra logistical costs and profit being built into
the supply chain it gets here. And also generally our
overheads and labor regulations and taxes are much higher here
than they are in China, for example. It's just like
(04:10):
it is with everything else, and all of that drives
up costs and we're just not as efficient. I mean,
we have a lot to learn. We've got to build
these factories and really make them efficient here in the
coming years so that we can start to really compete
in the future.
Speaker 5 (04:24):
Where are you sourcing the rare earths right now?
Speaker 3 (04:28):
Right now, we're sourcing with our partners and good friends,
Australia Strategic Minerals. They're working on a deposit in Australia
and they're sourcing out of Vietnam, Southeast Asia, and we
make the metals in South Korea in order to bring
them here to the US. We have no rare earth
metal making here in the US either, so we have
to do it all overseas until we build up here.
Speaker 2 (04:46):
Were you sourcing from China before the tensions earlier this year?
Speaker 3 (04:51):
No, we were not, So we did this. We did
this off take agreement with them a couple of years
ago and they've been our partner since.
Speaker 5 (05:00):
And what about when it comes to processing.
Speaker 3 (05:03):
So when we think about our deposit, but we're looking
to build the first fully domestic rare earth supply chain
here in the US. Processing in the US is mostly
sent over the China in order to process the minerals
that we're getting out of the rock. We've been working
on our own processing for our deposit over the last
few years. So our plan is to process here in
the US and Texas on site at our deposit at
(05:25):
Round Top Mountain, which is near al Paso in West Texas.
Speaker 4 (05:29):
Josh, forgive me if I sound you know, we're all
learning about rare earths, who, as we joke, not so rare,
but you know, you find them in small quantity, so
it takes a while to get them out and so
on and so forth. But when you say processing, is
that the same as mining of what you're going to
be doing or the processing that is currently in China
that actually makes it all usable.
Speaker 3 (05:50):
Yeah. The processing is the science to get the minerals
out of the rock. So rare earths are not like
coal where you go in you have a big vein
of coal that you just dig it out and use it.
Rare earths are actually they're in the rock, and they're
in maybe fifty parts per million or one hundred parts
per million or five hundred parts per million. You have
to actually use science and engineering to pull and leach
(06:12):
out those minerals from the rock. Itself in order to
process it to create the ore oxides that you use
to make metals. So there's an entire science, an engineering
outside of the mind itself, which is basically digging, breaking
up rock, crushing it, and leaching it in order to
get the mineral. So there's a whole science to it,
which right now China has controlled.
Speaker 2 (06:30):
You mentioned round top outside of El Paso. What is
the goal for getting this online? Because my understanding is
that in order to process here in the US, we're
still years away from seeing that.
Speaker 3 (06:44):
Yeah, and we're a few years away too. I mean,
our goal here at a USA Rare Earth is to
build our initial pilot plant over the next couple of years.
We're getting through the signs of it. We're pretty comfortable
on where we're headed. Like many of us, we had
dark corners into walls a few years ago, you know,
as you try to figure out the science around this processing.
We made a lot of great progress. So we're just
(07:05):
starting to push forward towards a pilot plant here over
the next couple of years, and from there we would
build the full mine and processing facilities in Texas. So
we're a few years away, but not as far as
if you look at a Greenland or a Ukraine that
we've been talking about a lot in the news in
the past months, they're decades away. We're talking about a
few years.
Speaker 4 (07:23):
So let me clarify. So the magnet facility that you
talked about in the first quarter of next year, that's
going to actually be providing product or not yet?
Speaker 3 (07:33):
It will absolutely, Yeah, the magnet facility will go online.
Speaker 4 (07:35):
Okay.
Speaker 3 (07:36):
Ultimately, ultimately we want our feedstock to come from that
deposit in West Texas, but as we start, we'll get
we're going to have to get feedstock from overseas, which
for US is going to be South Korea specifically working
with with ks and other partner.
Speaker 4 (07:48):
So the feedstock is what you're saying, is going to
take a couple of years to get to.
Speaker 3 (07:52):
Yeah, through our deposit. Yeah, can I to have that
fully integrated supply chain?
Speaker 4 (07:57):
Why haven't we done this in the US if this
was so important, and why hasn't this happened sooner rather
than later?
Speaker 3 (08:04):
Yeah, it's a great question and the reason why it hasn't.
If you go back thirty forty years early nineties, there
was a vice premiere in China who said the Middle
East has oil, China has rare earths. Right. They had
a strategy around this for years, and they've been very
successful at it, building a very strong supply chain in China,
which we gave up on. They did it more effectively,
they did it cheaper. We've known this for years. None
(08:26):
of what's happening today as a surprise to any of
us in the industry. This was bound to happen. We
had one choke point in China that you know, in
these heavy rare earth that they focused on this export control.
They control over ninety eight percent of it. I mean,
they chose these minerals for a specific reason, to say
nothing for the fact that they're used in industry such
as defense, where we really need them. And so we
walked away from it. We were addicted to low cost.
(08:49):
We heard from customers prior to all this as well
that well, you can't do as cheap as China. You know,
maybe maybe we won't do it. Now. Suddenly we're getting
phone calls again as people realize the value of the
risk and having a supply chain completely contingent on one
choke point.
Speaker 2 (09:03):
Yeah, it's interesting that the US is just realizing this,
given that this kind of happened to Japan, you know,
fifteen years ago or so with that territorial dispute with
I think fishing. So now Japan keeps like this one
year supply of some of these rare earths because they
didn't want to be at the whim of another country.
What do investors need to understand about your company? Because
correct me if I'm wrong, But my understanding is you
(09:24):
originally focused on rare earths in particular, but then you've
pivoted to becoming a magnet manufacturer. What's the distinction there?
Speaker 3 (09:33):
The distinction is magna manufacturing, first of all, is an
execution story. So we're building a plant. We know how
to build a plant, we know how to build magnets.
We just need to produce good quality product for our customers.
So it's all about execution. It's a near term event
that occur early next year, and then we're going to
scale up as quickly as we can after that up
to our five thousand tons per year. So it's a
(09:53):
near term story. The deposit, and I should say too
on the magnet facility is we're going to be the
the first really enlargest diversified facility to focus on the
broader market. So there are other magnet facilities in the
US today and our peers, but they've been bought by
auto manufacturers and are really bespoke for an auto manufacturer.
(10:15):
We're really looking to focus on the broader market, which
is unique today in the market, will be one of
the only ones in one of the first Josh.
Speaker 4 (10:23):
If tensions ease between the United States and China and
tariffs are not as onerous as we are seeing today,
what does that do to your mission? Does it back off,
especially if all of a sudden imports from China in
rare earths and magnets are less expensive.
Speaker 3 (10:42):
I know, I don't think it backs off. I think
the world has certainly woken up to the risk inherent
in the supply chain. We were already getting interest before this.
I think it's heightened now, obviously with tariffs and everything else.
So maybe the full supply chain wouldn't move over right away.
Don't need the full supply chain. I'd be happy with
ten percent or so. But there's still that risk has
(11:05):
been heightened. People understand it. There's a cost to that risk.
They have to diversify. They need to do domestically, and
the patriotic play is important today and I think companies
are going to want to talk about that. We had
our first announcement today with the great smaller customer, great
customer who wants it for the patriotic play right. They
were talking to us well before these tariffs came in.
Speaker 4 (11:25):
All right, going to leave with there. Hey, listen, thank
you so much, Really appreciate it. Joshua Ballard, he's CEO
of US Rare Earth. It's about an eight hundred and
forty million dollar market cap company, magnet manufacturing company. We
heard more of their mission
Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Business
Week with Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 2 (00:14):
Well, it is time for another edition of Bloomberg Plugged In.
It's your weekly look at evs, and today we're focusing
on so called rare earths. These are crucial raw materials
used in the likes of MRI machines, missiles, and yes evs.
Just last week we learned that MP Materials, it's a
US producer of rare earth's, stopped shipments to China after
Beijing placed export controls on similar materials crucial for defense
(00:38):
and tech manufacturing. This move follows Chinese restrictions announced earlier
this month that are expected to have broad impacts on
companies making optical lasers, radar devices, and high powered magnets
used in wind turbines, jet engine coding, so another advanced tech.
China is the world's dominant supplier of rare earths, while
the US produces and refines very little of its own.
(00:59):
We've got jobs to a Ballad CEO of USA rare Earth.
It's a roughly eight hundred and forty million dollar market cap.
Magnet manufacturing company. Joshua joins us from Oklahoma. Joshua, good
to have you with us. Kind of a long introduction
because we're at an interesting place right now where I
think a lot of people are really hearing about rare
earths for perhaps the first time in their lives and
(01:20):
really paying attention to this. I wonder how everything that
we're hearing from the US government and from China is
affecting your business.
Speaker 3 (01:29):
Well, it's affecting us in an interesting way. I mean,
we're just getting started, right We're building a large magnet
facility out here in Oklahoma where I am today, and
for us, what it means is a lot of customers
are calling, honestly, because there are few to none of
these type of magnet facilities in the US. We're going
to be the first and one of the largest domestic
magnet facilities here, so we'll get a lot of phone calls, honestly.
Speaker 4 (01:53):
So give us an idea of the time frame, like
when is it up and running? What?
Speaker 5 (01:58):
Yeah? Do you have anything to sell them right now?
Speaker 3 (02:00):
Yeah? No, Today, what we've done is we've commissioned a lab,
so we're prototyping for customers. There's always a qualification process
even in times like these. We're commissioning the plant, we're
targeting the first quarter of next year, so we're a
few months away, but we can at least start working
with the customers making the greater magnets that they need,
get them comfortable that we're capable, so we can hit
production hard as soon as we commission.
Speaker 4 (02:22):
What's going to be the output, like how much? I mean,
we talk about this rare earths and magnets and what
they go into and so on and so forth. So
give us an idea of what's needed in the US
market and what you guys can ultimately supply.
Speaker 3 (02:40):
So what's needed in the US market. If you think
about the global size of the magnet market today, it's
probably around two hundred and fifty thousand or maybe up
to three hundred thousand tons of magnets per year. In
the US outside of China, probably two thirds of that
is being used. And if you take the US the
twenty five to thirty percent, or maybe around fifty thousand
(03:00):
tons per magnets thirty to fifty thousand tons. Our facility itself,
at our peak will be building up to five thousand tons.
And to put that in perspective, five thousand tons is
hundreds of millions of magnets. It's a lot of magnets
going out the door for everything from auto supply to
eat manufacturing, to drones and defense, you know, everything across
the board.
Speaker 4 (03:20):
What will be the price of those magnets in comparison
to what folks have been getting out of China.
Speaker 3 (03:27):
Probably roughly double. So these tariffs are probably getting things
into the realm of what we can manufacture here in
the US. You have to realize.
Speaker 4 (03:35):
Especially, but pre tariff, you're saying that pre tariff it
would be double, about double of what it was. No,
I understand tariff's change the equation, but you're saying it'll
be double because why is it more expensive here?
Speaker 3 (03:49):
It's more expensive for a couple of reasons. One, it's
just more we have none of the supply chain here,
so everything has to come from overseas. You have a
lot of extra logistical costs and profit being built into
the supply chain it gets here. And also generally our
overheads and labor regulations and taxes are much higher here
than they are in China, for example. It's just like
(04:10):
it is with everything else, and all of that drives
up costs and we're just not as efficient. I mean,
we have a lot to learn. We've got to build
these factories and really make them efficient here in the
coming years so that we can start to really compete
in the future.
Speaker 5 (04:24):
Where are you sourcing the rare earths right now?
Speaker 3 (04:28):
Right now, we're sourcing with our partners and good friends,
Australia Strategic Minerals. They're working on a deposit in Australia
and they're sourcing out of Vietnam, Southeast Asia, and we
make the metals in South Korea in order to bring
them here to the US. We have no rare earth
metal making here in the US either, so we have
to do it all overseas until we build up here.
Speaker 2 (04:46):
Were you sourcing from China before the tensions earlier this year?
Speaker 3 (04:51):
No, we were not, So we did this. We did
this off take agreement with them a couple of years
ago and they've been our partner since.
Speaker 5 (05:00):
And what about when it comes to processing.
Speaker 3 (05:03):
So when we think about our deposit, but we're looking
to build the first fully domestic rare earth supply chain
here in the US. Processing in the US is mostly
sent over the China in order to process the minerals
that we're getting out of the rock. We've been working
on our own processing for our deposit over the last
few years. So our plan is to process here in
the US and Texas on site at our deposit at
(05:25):
Round Top Mountain, which is near al Paso in West Texas.
Speaker 4 (05:29):
Josh, forgive me if I sound you know, we're all
learning about rare earths, who, as we joke, not so rare,
but you know, you find them in small quantity, so
it takes a while to get them out and so
on and so forth. But when you say processing, is
that the same as mining of what you're going to
be doing or the processing that is currently in China
that actually makes it all usable.
Speaker 3 (05:50):
Yeah. The processing is the science to get the minerals
out of the rock. So rare earths are not like
coal where you go in you have a big vein
of coal that you just dig it out and use it.
Rare earths are actually they're in the rock, and they're
in maybe fifty parts per million or one hundred parts
per million or five hundred parts per million. You have
to actually use science and engineering to pull and leach
(06:12):
out those minerals from the rock. Itself in order to
process it to create the ore oxides that you use
to make metals. So there's an entire science, an engineering
outside of the mind itself, which is basically digging, breaking
up rock, crushing it, and leaching it in order to
get the mineral. So there's a whole science to it,
which right now China has controlled.
Speaker 2 (06:30):
You mentioned round top outside of El Paso. What is
the goal for getting this online? Because my understanding is
that in order to process here in the US, we're
still years away from seeing that.
Speaker 3 (06:44):
Yeah, and we're a few years away too. I mean,
our goal here at a USA Rare Earth is to
build our initial pilot plant over the next couple of years.
We're getting through the signs of it. We're pretty comfortable
on where we're headed. Like many of us, we had
dark corners into walls a few years ago, you know,
as you try to figure out the science around this processing.
We made a lot of great progress. So we're just
(07:05):
starting to push forward towards a pilot plant here over
the next couple of years, and from there we would
build the full mine and processing facilities in Texas. So
we're a few years away, but not as far as
if you look at a Greenland or a Ukraine that
we've been talking about a lot in the news in
the past months, they're decades away. We're talking about a
few years.
Speaker 4 (07:23):
So let me clarify. So the magnet facility that you
talked about in the first quarter of next year, that's
going to actually be providing product or not yet?
Speaker 3 (07:33):
It will absolutely, Yeah, the magnet facility will go online.
Speaker 4 (07:35):
Okay.
Speaker 3 (07:36):
Ultimately, ultimately we want our feedstock to come from that
deposit in West Texas, but as we start, we'll get
we're going to have to get feedstock from overseas, which
for US is going to be South Korea specifically working
with with ks and other partner.
Speaker 4 (07:48):
So the feedstock is what you're saying, is going to
take a couple of years to get to.
Speaker 3 (07:52):
Yeah, through our deposit. Yeah, can I to have that
fully integrated supply chain?
Speaker 4 (07:57):
Why haven't we done this in the US if this
was so important, and why hasn't this happened sooner rather
than later?
Speaker 3 (08:04):
Yeah, it's a great question and the reason why it hasn't.
If you go back thirty forty years early nineties, there
was a vice premiere in China who said the Middle
East has oil, China has rare earths. Right. They had
a strategy around this for years, and they've been very
successful at it, building a very strong supply chain in China,
which we gave up on. They did it more effectively,
they did it cheaper. We've known this for years. None
(08:26):
of what's happening today as a surprise to any of
us in the industry. This was bound to happen. We
had one choke point in China that you know, in
these heavy rare earth that they focused on this export control.
They control over ninety eight percent of it. I mean,
they chose these minerals for a specific reason, to say
nothing for the fact that they're used in industry such
as defense, where we really need them. And so we
walked away from it. We were addicted to low cost.
(08:49):
We heard from customers prior to all this as well
that well, you can't do as cheap as China. You know,
maybe maybe we won't do it. Now. Suddenly we're getting
phone calls again as people realize the value of the
risk and having a supply chain completely contingent on one
choke point.
Speaker 2 (09:03):
Yeah, it's interesting that the US is just realizing this,
given that this kind of happened to Japan, you know,
fifteen years ago or so with that territorial dispute with
I think fishing. So now Japan keeps like this one
year supply of some of these rare earths because they
didn't want to be at the whim of another country.
What do investors need to understand about your company? Because
correct me if I'm wrong, But my understanding is you
(09:24):
originally focused on rare earths in particular, but then you've
pivoted to becoming a magnet manufacturer. What's the distinction there?
Speaker 3 (09:33):
The distinction is magna manufacturing, first of all, is an
execution story. So we're building a plant. We know how
to build a plant, we know how to build magnets.
We just need to produce good quality product for our customers.
So it's all about execution. It's a near term event
that occur early next year, and then we're going to
scale up as quickly as we can after that up
to our five thousand tons per year. So it's a
(09:53):
near term story. The deposit, and I should say too
on the magnet facility is we're going to be the
the first really enlargest diversified facility to focus on the
broader market. So there are other magnet facilities in the
US today and our peers, but they've been bought by
auto manufacturers and are really bespoke for an auto manufacturer.
(10:15):
We're really looking to focus on the broader market, which
is unique today in the market, will be one of
the only ones in one of the first Josh.
Speaker 4 (10:23):
If tensions ease between the United States and China and
tariffs are not as onerous as we are seeing today,
what does that do to your mission? Does it back off,
especially if all of a sudden imports from China in
rare earths and magnets are less expensive.
Speaker 3 (10:42):
I know, I don't think it backs off. I think
the world has certainly woken up to the risk inherent
in the supply chain. We were already getting interest before this.
I think it's heightened now, obviously with tariffs and everything else.
So maybe the full supply chain wouldn't move over right away.
Don't need the full supply chain. I'd be happy with
ten percent or so. But there's still that risk has
(11:05):
been heightened. People understand it. There's a cost to that risk.
They have to diversify. They need to do domestically, and
the patriotic play is important today and I think companies
are going to want to talk about that. We had
our first announcement today with the great smaller customer, great
customer who wants it for the patriotic play right. They
were talking to us well before these tariffs came in.
Speaker 4 (11:25):
All right, going to leave with there. Hey, listen, thank
you so much, Really appreciate it. Joshua Ballard, he's CEO
of US Rare Earth. It's about an eight hundred and
forty million dollar market cap company, magnet manufacturing company. We
heard more of their mission
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Carol Massar
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