I just think that we've got a very special advantage here in the United States. Always be thinking about what the next step is in the evolution of the technology.
All right, we're gonna get straight into it. Congressman Torres, thank you for being here with us. You represent New York 15, the Bronx, many great exports. Justice Sotomayor, hip hop, JLo, not known for mining metals. What sparked your interest in this subject?
Well, look, there may be mining in the Bronx. I know. When you're a member of Congress, you not only represent your district, but you have to think about what's in the strategic interest of the United States. For me, the single greatest challenge that we confront is the strategic competition with China. We no longer live in a unipolar world where the United States is the sole superpower. We live increasingly in a bipolar world where the United States and China are competing superpowers. In that world, we no longer have the luxury of complacency. There needs to be a serious reckoning. We should ask ourselves, how do we become so complacent as to allow ourselves to live in a world where China controls almost all of the rare earth mining capacity and almost all of the critical mineral refining and processing capacity, and where almost all the advanced semiconductors are made in Taiwan, which is highly susceptible to an invasion from China? How do we allow that to happen? In the 1980s, the United States was a leading producer of critical minerals and rare earth elements and steel and aluminum. Since then, we've become dangerously complacent, allowing our manufacturing base to atrophy from neglect. Meanwhile, China adopted a 40-year strategy for creating a whole critical mineral supply chain. Our atrophy of our own industrial base has been a strategic failure, and China's supply chain dominance has been a strategic success. As a wise man once said, if you do the same thing over and over again and expect a different result, that's the definition of insanity. We have to break the cycle of insanity and critical mineral dependency on China.
I barely need to ask a question now of Jim Litinsky, the CEO of MP Materials. Just for a little bit of background, MP Materials is operating the only operational rare earth mine today in the United States. They actually produce double digits, maybe close to 15% of the global supply of rare earths. In that respect, they represent a really critical node in our own rare earth supply chains. You announced recently that you are going to stop shipping concentrate to China because your domestic supply chain for processing and actually manufacturing of magnets is happening now. It's not a future thing. You've achieved that, and now you can fully operate a domestic supply chain. What can Congressman Torres and people here on the Hill do to help make that happen even faster next time around?
Well, thank you, and thank you for having me here. I would echo what the congressman says about how we all came into this. I came into this by accident because a lot of those same thoughts happened with me a number of years ago when I was running a hedge fund. I remember when the predecessor of the assets that I bought, Molycorp, went public, and there was a lot of fanfare about onshoring our supply chain and electric vehicles and electrified motion. About a decade ago, I saw this thing headed into bankruptcy, and it quickly went into freefall. There was literally nobody there. Not a single financial or strategic buyer showed up for it. There was a belief that we just couldn't bring this supply chain back. As I dug in, what I realized is actually we could. There were a lot of mistakes made in the process flow there, but we could. You really had to have a long-term strategic plan the same way that the Chinese took it from us. You had to think about the supply chain in parts and do it methodically. We set about to do that. We took over this site. It was eight people in care and maintenance. We forward sold concentrate product to China to get the working capital to relaunch the business. Some folks criticized us, saying how could you sell to China? Well, it's a multi-billion dollar supply chain, and that's where the magnets are made and that's where the refining is. Over time, we relaunched the mine. We raised a lot of capital, we went public, we invested over a billion dollars completing the refining capacity, and then we built a magnet facility from a greenfield in Fort Worth, Texas. We've completed this full supply chain. To answer your question directly, the way we do this, we need to have a long-term strategy. I think historically, people hear the words rare earths and critical minerals, and there's this idea that it's an extraction issue. Politically, that feels very good because there are a lot of sites and a lot of ways to spread money. That's above my pay grade. I'm all for it if Congress wants to spread a lot of money, that's great. But the Chinese have taken a vertically integrated approach. We need to think about this as not just an extraction issue, but a refining and downstream magnetics issue. That was what we set out to do. Now we've proven that you can do it. The thing that concerns me though is that we're hearing a lot of the right things. I think there's strong interest from this administration. The conversations are great. But we really need to level the playing field and figure out how to stand up. As was discussed in some of the prior sessions, there needs to be proof of concept of an actual national champion. Then we can build an ecosystem from there.
That's great. On this point specifically, being able to do the extraction, do the mining. Rafe, you're the CEO of a company called Lilac, which is mining lithium here in the United States better, faster, cheaper than incumbent technologies. It's actually quite a sight to behold. You have a small demo facility operating on the Great Salt Lake in Utah where the water comes in, runs more or less autonomously through a series of pipes, and then the water minus lithium goes out. It's working today and it's economical. What is the potential for this technology and maybe even specifically the Great Salt Lake to be able to supply the domestic supply chain for lithium?
Yeah, thanks Clay. Look, I'm a big believer that you've got to focus on technological advantage. We believe we've got the next generation of direct lithium extraction technology. As Clay said, it runs cheaper, faster, and better to a point where we can extract lithium economically from very low concentrations like the Great Salt Lake. One of the things that interests me about our technology is if you think about all of the brine resources that are sitting here in the United States, if you have a technology like ours, you could be independent with your lithium production in a pretty short pace of time, which is pretty remarkable. If you put us on the cost curve versus the traditional hard rock approach, we're well below that. So very excited. All of this comes because we've got some very smart people working in our R&D center in Oakland, California. I think they're the smartest people in the world. We can rely on them to keep this technological advantage going. We need to maintain it, and that's how we beat the rest of the world or our adversaries like China.
Congressman Torres, I'm going to bring it back to you. You're on a working group now in the House focused on critical minerals and how we support a domestic supply chain and reinvigorate production. This is one of the issues that actually has support on both sides of the aisle, and there seems to be some room to do something. How optimistic should we be about the potential for new action in this Congress on this subject?
I'm cautiously optimistic because the China committee has been impressively bipartisan, and the critical minerals working group is one of the initiatives of the China committee. We've put forward a legislative package that is bipartisan, proposing legislation that would promote critical minerals cooperation with allies, invest in STEM and workforce development, or streamline visas and green cards for professionals who specialize in geoscience and mining engineering. There's a recognition that we have a talent gap that's only going to widen over time. I remember seeing statistics indicating that by 2029, half of the mining workforce in the United States is set to retire. We had to import 27% of the geoscience workforce. These are shortages that will only compound over time if we do nothing. China is far outpacing us when it comes to workforce development and education in these areas.
Yeah, they're doing a lot of the hard work, right? There's also been questions over time around some of the maybe dirtier tactics they're using to steer the market. This is sort of a full circle moment for me. I actually got my start thinking about critical minerals in 2010 when the director of the National Economic Council, Larry Summers, asked this question of us: 'Hey, Mountain Pass is supposed to come back online in a couple years, and until then it looks like all the market is in China. What happens if they cut off our supply?' That kind of put the trains in motion. Just for a little bit of history, Mountain Pass was operating and then shut down in 2002 originally because among other reasons, the global price of rare earths had plummeted and it was uneconomical to keep running. Then in 2012, it came back online only to shut down again in 2015. We should all be very grateful to Jim and his team who came in, really rescued the place, and have got it operating again. But we can't risk another decade-long hiatus in domestic rare earth production. What are the lessons that we should all be drawing about how to avoid this situation, and maybe specifically to defend against some of the non-market interventions that we see happening out of China?
