# Rare Earths: Independent REE Magnet Value Chain Solutions by Jim Kennedy of Caldera & ThREE

## Метаданные

- **Канал:** gordonmcdowell
- **YouTube:** https://www.youtube.com/watch?v=jd8ZUTN8e2k
- **Дата:** 24.03.2025
- **Длительность:** 20:01
- **Просмотры:** 2,877
- **Источник:** https://ekstraktznaniy.ru/video/48728

## Описание

USA has no future in the modern economy if it cannot establish itself as a viable producer of the full rare earth value chain.  Persistent flaws affecting all U.S. Projects:
1. China's Structural Advantages & Subsidies Make Western Competition Impractical. These Disparities Can Be Offset If The Resource Producer Transfers REEs Below Market Price, But China Can Simply Move REE Concentrate Prices Lower.
2. Without An Uninterruptible Domestic Source Of Tb, Dy & Ho All Efforts Remain Futile.
3. The Current Rare Earth Production Tax Credit Bill Is Fundamentally Flawed. Amendments Must Be Made To Prevent Windfall Profits For The Production Of Low-Grade Magnets Caldera Is Offering A Solution To All Of The Above Through Integration Of The Value Chain & Prospective Amendments To The REE Magnet Production Tax Credit Bill.

China's Advantages in 4 Parts:
1) Massive overcapacity in the mid and downstream for rare earths materials processing (concentration, separation, metals & magnets) - built on 

## Транскрипт

### Segment 1 (00:00 - 05:00) []

This should be enlightening for some and painful for others. We're just going to go through what it really takes to make something work in the United States, if you want a value chain you are dealing with massive structural advantages in China, without uninterruptible supplies of heavy rare earths, you're wasting your time. there is a rare earth production tax bill that exists. It's been passed in the House, it's in the Senate, but it is fatally flawed, and we'll talk about that. And then, of course, we're trying to offer a solution for all of this. I've got a paper that was written with 16 other authors. the bottom line is China has built massive overcapacity, you don't want to be a Chinese manager running an underutilized facility. So, they scour the world for materials, and they're willing to operate on margins that you'll see are quite shocking. China also is an environment where they have state run coordination. There was a time when there were hundreds rare earth mines, then there was the Big 12, then the Big 6, then the Big 4, and we're probably going to go the Big 2. Behind all of that is a tremendous amount of state-sponsored support in terms of research, in terms of R&D in terms of basic science. The United States doesn't have any of those, don't kid yourself. It doesn't exist. And then another one which people are finally starting to become aware of, China has a VAT tax which is legal under WTO, there is a tremendous penalty for exporting pre-metallics. And the reason they do that is because at separation is the linchpin of their entire monopoly. This is from, I would say, probably the only non-Chinese person who would be a legitimate source for this kind of information, because he ran a company that did all of these activities inside and outside of China. this is concentrates mined material and concentrates. That's a really high number. Why? Because China wants to encourage everyone to mine materials and ship them to China. and of course that number is subject to wherever China sets the price. This is pretty much the high end of margins and the only person in the value chain getting anything close to 10% are the people actually making the magnets. These are real numbers. This on the high side. It can get a lot worse than that. So, ask yourself, who in their right mind is going to go in for any of these things? Quite frankly, who in their right mind is going to risk all the capital for that? Right? And then you have to support that. deal with this guy over here saying, "I want as much as I can get. " So it is stacked against success, and it's on purpose. It's managed that way. If you want to sell separated oxides outside of China, your VAT penalty is going to exceed all of your margins. So they don't. They just don't. You can get them but you're going to pay for them. So what that leaves is an even worse desert of death and despair in here, for this is the maximum margin. I mean there's points where it gets higher than that but basically that's what it comes down to. And by the way, nobody is selling the concentrates or the cracked, right? I mean nobody's going to sell that. How do you get around this in theory? if you were determined to make this work, this is the best you can do. This guy is going to sacrifice his margins into the center so that this guy has a stable value chain. But the problem with that is that assumes everything's stable. You're not getting Western people to do this work for these margins. So this guy has to sacrifice margins here to push these margins up to a point where it makes sense. If everybody sacrificed and did their part, you would break even and then China would simply lower the price and blow the whole thing up. The solution being discussed in Congress is a tax credit and this will be a production tax credit. Then how do you make this work and make it viable is of under a uniform JV ceiling, way the law works, the tax credit comes into the magnet maker, and then the magnet maker through his JV relationships would distribute those back and kind of level out the margin field. Right? So problems with the current bill is, unless you've got a JV structure like that, the magnet guy takes everything. These guys are all screwed and the whole thing goes to shit anyway. that's problem one. Problem two, the way is written, I can make samarium iron boron magnets that have a thermal stabilit somewhere around 50 degrees C. They're just junk magnets. They're for toys. They're for novelty items. And I can say I made a US rare earth magnet and under the current bill, the

### Segment 2 (05:00 - 10:00) [5:00]

government would write me a check for the maximum benefit. Put that in my pocket and I have to sell those magnets to Mexico and Bangladesh and China because they're n grade magnets and really nobody wants them and there's no money in them anyway. So we have proposed and what has been received very, very well the bill needs to be linked proportionally to thermal stability and that nobody in the private sector gets any of those tax credits until they start making graded magnets, M or higher. If you make an M grade magnet, that's really good. You can make earbuds with that. That doesn't save America. That doesn't defend America. But your kid now got a better reason not to listen to you. So part of the mission is achieved, but you're nowhere near this end of the mission where you've got F-35s and actuators. So how do you do that? It's proportional. So you go from getting 50 cents for making that to probably around $45 for making that. Those are just one set of advantages. This is the one we focus on because we're really strong here. There are 16 commercial rare earths. I think you guys all know that promethium exists in Greek legends, but it doesn't really exist in the earth's crust. This shocks people, that only five of them represent 95% of all value of all rare earths on the planet. And then when you take those oxides, those powders, you always see pictures of those. they're not really good for an F-35 and they're not good for baking until you turn them into something like metals or garnets. They're still useless. When you take them all the way to a metal, this is very strange. And I think you should consider, think about this. You go from 90% of all value to 95%. Going back to the margins, you remember that tiny, tiny margin, 1. 5%? That's how China manages the entire thing. They've stripped all the margins out of the middle and that's why we can't compete. NDPR is great. That's your baseline for a magnet. But without these other three, that magnet has very, very limited use and we'll get to that. The miracle of the NDFEB, 35 times stronger than a, standard ferrite magnet. So on weight and size ratios, this is really a miracle. It's a fantastic magnet. But the problem is, over 80 degrees Celsius, it starts to degrade. And if it gets hot enough, it'll lose all of its magnetic properties permanently. if you're driving your Tesla and it's not treated with heavy rare earths, about your third stop sign, your magnets are going to start failing, as you increase the thermal stability as the temperature rises, you need more and more of the terbium, dysprosium, and homeum. Without any terbium, dysprosium, or homeum, you're making magnets for toys. That's all they are. These are n-grade magnets. The world's flooded with them. over half the rare earth magnets produced in the world are n-grade. they have no significant technology applications. As you go from m-grade between half a percent, two percent, these numbers have all changed a little bit. But this is your first one where you go from 80 to 100 degrees Celsius stability and its uses increase. Well, this is where you have electric vehicles. start having military grade. And this is, military grade, aerospace. Really expensive, expensive magnets. Their rare earth content is very, very high. The problem is, no one in the United States can produce any terbium, dysprosium or homeum. Production capacity in the U. S. is zero. It's a fact. Problem one, China currently possesses 100 percent of the world's commercial scale virgin NDPR, our TBDY, HO separation. Why do they do that? You remember the margins? And then problem number two, MP has zero TBDY, HO, and Linus has too little. Linus can produce it. They're currently relying on China to separate it. They say they're getting close to being able to separate them. But still, relative to the NDPR they produce, It doesn't really work. So what's the solution? Hey, I'm here! Thank you. All right. Ba-bing! Caldera is fully permitted project in Missouri. Phase one of the project, you're essentially just mining 40 years of accumulated tails. There are 3 mineral products in the tailings lake. One is a fluoroapatite that contains all 16 rare earths. Plus the phosphate, which is worth a tremendous

### Segment 3 (10:00 - 15:00) [10:00]

amount of money, plus a surprisingly large amount of gallium. The second mineral that we go after is pyrite, and that's nickel, cobalt, moly, copper, and tellurium. And then the third one is super high chemical grade magnetite, which in all of these come out very simply. You just simply use gravity, magnetics, flotation, and you get 3 products. So let's take the fluoroapatite course. That is subject to cracking, digestion and cracking. And then from there, send that through a series of SX processes. And in the very front, you're going to pull out all of your phosphate. And that phosphate over 20% of the economic value of this project. And China's not going to influence the value of phosphate, so it's a stabilizer. The gallium comes that's a very valuable product. We're also going to pull out the fluorine, which is surprisingly valuable too. By the way, gallium and fluorine are both on export control list in China. So going back to this, we recently completed 43. 101. We are economic at the worst price levels we have recently seen. It's a multi-commodity producer, so you look at all of the non-rare earth commodities, that's probably more than half of our total net income. And these are very stable products-- chemical grade iron ore, phosphates, cobalt, nickel, all these other things. So what happens is we can build a very stable rare earth value chain highly insulated from China's manipulation of pricing. And we also have high levels of terbium, dysprosium, and homeum, and they tend to be more buoyant. a downstream partner for separation. receiving in 30 or 45 days engineering package for commercial scale separation with performance guarantees. And that includes metallics if we want to take on their metallic technology. So we're a US resource can do all the way to some metallics, 100% on the same campus, by the way. Nothing's left the campus. So in terms of it's pretty straightforward. You can watch this pull us out of the ground, and you can watch it come out as a separated product or a metal. we stop right there, we're going to sell into markets that are small and potentially unstable, or it's going to find its way to China or else inside area of influence of China. Because right now, no domestic market fabrication of magnets. It really doesn't exist. Of course, everybody's going to set up a popsicle stand or whatever, but we're not there yet. So our real goal is to use the leverage of resources, of our heavy rare earth resources that are 100% US and conforming and find an off taker to force a very mature and proven magnet fabricator to come to the US and then complete the cycle, provide stability. Mission statement, fully domestic, fully integrated, uninterruptible production of high operating temperature magnets to meet economic and national security needs. Here is what is interesting about us. here's Linus's NDPR ratio. not what's important anymore because NDPR is becoming commoditized very, very quickly. As the world for more, terbium, dysprosium and homeum, they get the natural ratio of 10 to 1. So every time they get one more kilogram of stuff, getting 10 kilograms of this stuff. And we're getting to the point, the tipping point right now where there's too much of this stuff are going flat and will go negative. So these may end up being commodities and loss leaders. have 18% heavies of those about 3% of terbium, dysprosium and homeum. And that may not sound like a lot, but actually start applying that with ratios into fabricated magnets, that middle, that sweet spot for EVs, it's really quite significant. this is an M grade magnet, lowest grade magnet. This is the sweet spot and this is for the F-35. This thing is really expensive. it's a single resource producer. They've got nothing else. There's no other income streams and they don't even match that. Here is Linus. Linus has some terbium, dysprosium and homeum, but they cannot, they can match this, but they certainly can't match the middle, which means TB, DY, HO will rapidly be consumed before you produce that many magnets. We actually have the opposite problem. phase one, if we were just going to make M grade magnets, we run out of NDPR so quick that we have really low

### Segment 4 (15:00 - 20:00) [15:00]

numbers. But if we go onto the market and we buy NDPR from Linus, or anybody else who's a qualified supplier, in phase one, we can make about 40,000 tons of M grade magnets and nobody needs that many we don't want to make them. This is where we want to be. And so in phase one, their own materials, we can produce about 7,000 tons a year. That's nice. That's actually super significant. If we can go out and buy other people's NDPR, it goes up. And then these are the phases, phase one, phase two, phase three. This is the middle. are from the DOE. But when you're talking about drones and other, let's say, low kinetic weapons, can do that. Can we do this? Yes, we can do this. Is this significant? Yes. But this is also more than the Department of Defense needs. This is completed. The resource stuff is completed. The concentration, separation, metallics, that's all completed. We are in the process right now of talking to, considering, and seeking And the two partners we need are we're looking for motor or an OEM fabricator to come in and partner with us. We'll give them a really, really good deal they're guaranteed pricing and stability. And in exchange, they're going to use their buying power to force magnet fabricator to step in and build a facility here in the US. So if we were just going to throw out great big, important automaker, and we give them a really good deal, literally everything they're asking for, and we tell them to go call up Shinitsu and tell Shinitsu to build a plant has a minimum of their needs, and then we've just solved the entire problem. It's all stable. And if we get the changes to Earth Production Tax Credit bill, we'll be able to push tax credits backwards and bring up margins for all of these guys. In theory, we're going to be this guy, and this guy, could bring these margins up. we get the tax credit, on offer is we're actually willing reduce this for a small portion of our production, level up everybody here, boost them, and if the tax credit comes in and it gets distributed equally, all of these guys in the middle are going to be making what this guy makes. He's twice as much, and we're going to be back to exactly where we started. are we doing that? Because we're committed to solving the problem sustainable way, in a way that no matter what happens, there's no mechanism in which China can attack us and undermine the stability of the enterprise, because that's what they have to do. And everybody chewing one off or one part of the value chain, they're all going to be subject to this. But we're proposing ends that, solves the problem, provides stability. primary customer initially may be EV autos, but that is the economic platform on which we build everything else, and then we can turn to the DOD and say, give you everything you want with stability, and we can demonstrate that we're not at risk any time in the near future. I love this photograph. I have 24 million tons of this. are layers of hematite, magnetite, pyrite, appetite. It goes down 118 feet. It's 180 acres. It's 24 million tons, and we're essentially just pulling out elements just like Mother Nature separated them right here. We do the same thing. The iron goes here. The pyrite goes here. The appetite goes here. And then we break those all out. what that provides us is very broad, basket of commercial commodities, actually produce 22 or 23 critical materials. has been demonstrated all the way through to scale for of the individual elements and the production of the concentrates. And then our partner, who is thoroughly qualified, has produced the homogenous concentrate on 96, concentrate. And then that concentrate will go into a traditional standard, very boring 1947 technology SX system where we'll cut it into all the pieces. going to build on that old platform because that platform can be financed. people have things appear to be much more efficient. But for the moment, that's how we plan on approaching it. Questions?