Why rare earth minerals are so crucial to US-China trade deal

Given China's dominance of the rare earth minerals market, the materials are a key component of trade negotiations between the US and China. Cirba Solutions CEO David Klanecky joins Catalysts with Brad Smith to discuss why rare earth minerals are so important to the deal.
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The US and China reached a deal this week, a tentative deal on trade, once again opening access to China's much-needed rare earth minerals for American companies. China dominates the global mining and production of crucial materials, uh, which means essentially that the US could once again face a shortage if Beijing cuts off access. Joining me now to dive deeper into this rare mineral supply chain, we've got David Klanaski, who is the CEO of Cirba Solutions, a lithium battery recycling company. Good to have you here with us today. So, first, David, just walk us into the significance of China's dominance with rare earths and and what a deal with the US would ultimately signal.
Yeah, good morning, Brad. Thanks for having me. Um, yeah, it's it's an interesting opportunity. I think that, obviously, the US and China have been working on trying to come up with some sort of trade deal there. As you mentioned, right, over over 70% of the rare earth minerals are are actually processed and produced in China, actually 90% of the rare earths in in the world that are used are processed in China, but China has access to a lot of those minerals. So having a deal with China, you know, I think it's a short-term solution that eases a little bit of the tension there on things where these critical minerals and rare earths are used are using just about everything. That's why they're called critical minerals. Um, but but longer term, you know, I think the country continues needs to continue to think about domestic supply chain, domestic manufacturing, and how to reduce our dependence on, you know, uh, other countries supplying us with these minerals.
How critical is this portion of the deal to the rest of a agreement between the US and China, knowing where there's so much of the technological purchases, knowing where there are other elements that in a multi-pronged approach, the two largest countries in the world by GDP would also like to have kind of a checklist struck in in this broader kind of whether it be a phase one or a larger phase two of a deal that comes forward.
Yeah. Yeah. I mean, this is a pretty major major accomplishment, I think, for the administration, at least to get some sort of agreement there. If you look at where critical minerals are used, the question is where aren't they used, right? Everything we touched almost every day has a critical mineral, whether it's something in, you know, again, a vehicle, could be something in our home, in our kitchen, but also, you know, a lot of our defense systems and defense industry relies on rare earth and critical minerals. So when you think about that at a broader picture, that has a massive impact on the lives of everybody in in the United States. And it's something that, I think, why it's getting a lot of attention is because it is a pretty big, it is a pretty big deal. And it's something that, you know, we need these critical minerals. We need access to them. Um, there's a lot of them that are in our country today that we obviously can recycle and recover. That's another critical thing. I think is as you think about it, and when I'm talking with the administration, that's something that's kind of, you know, front of mind with them is, how do we also make sure that once we have these minerals and and and rare earths in our country, how do we continue to recycle them and recover them? And that's a that's a huge play right now that that our, you know, Cirba Solutions is working on and other companies in the United States to try to domesticate and localize that supply chain for the country.
And so Bloomberg right now reporting that the administration, Trump administration, prioritizing rare earth projects. That is the plan. What is the typical timeline to get these projects up and running?
Yeah. I mean, I think it depends on the scale, obviously, um, but usually, you know, you're talking about an operation where you're recycling, recovering, or processing these minerals out of the ground, for example, you know, these timelines depend on where you're getting. If you're just recovering and recycling materials, it's a little bit easier because you don't have to get a permit for mining and things like that. You just actually have to build a facility. And typically, the build out of those facilities is between 18 months to two years. Um, so it does take a little bit of time because you got to you got to construct a manufacturing plan. If you're talking about mining things, obviously, the administration is really focused on streamlining that process of getting mining permits and things like that, which I think will help, but those could take a little bit longer. So, you know, my kind of, you know, my statement on a lot of this is, we've got a lot of these minerals in the road, on the road right now, or in our homes right now. Let's make sure we just recover them now and and put these plants in operation to use those critical minerals that are already in use and not in the ground to be to be recovered.
Where do these minerals typically go into further use? The kind of secondary market, if you will, for them?
Well, the nice thing is about these minerals, once you've recovered and recycled them, they're brand new again, right? So you're recovering them to a quality of like they just basically are start of life again. So, you know, when you think about electric vehicles, for example, you got things like nickel and cobalt, lithium. Once those materials are recovered out of a battery, or it could be a cell phone or laptop, whatever it might be, those minerals are recovered and basically put back to the original state of their purity, so they can go right back into another battery, another phone, another laptop, whatever it might be. But then there's other applications out there that they use these metals for piping and things like that. We got to build a lot of plants, a lot of manufacturing facilities. So you have the opportunity to use those in secondary applications as well.
David, thanks so much for taking the time here with us today.
Thanks, Brad. Appreciate the time.

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