From Policy to Execution: Securing Critical Mineral Markets with Arnab Datta

Show Summary: This podcast examines the transformation of the global critical minerals supply chain, from mineral extraction and refinement, to government action and private sector innovation, each episode will bring you closer to the people and ideas shaping the future of resource security.

Episode Summary: In the 1st episode of Season 2, Alberto Rosende sits down with Arnab Datta to unpack how the U.S. can move from critical mineral policy announcements to real market execution. Drawing on current initiatives like the MP Materials deal, Project Vault, and Project Forge, Arnab explains that the real vulnerability isn’t just processing dominance, it’s the lack of Western market infrastructure, including exchanges, benchmarks, liquidity, and financing tools. The episode explains that true supply chain resilience will come from pairing smart government tools—price floors, loans, equity, and permitting reform—with private-sector participation, to build diversified, liquid critical mineral markets at scale.

Guest: Arnab Datta is the Managing Director of Policy Implementation at Employ America, where he leads the integration of policy and legal strategy across the organization’s advocacy efforts, and the Director of Policy Implementation at the Institute for Progress. His work focuses on translating complex ideas into actionable policy, including drafting legislative frameworks for initiatives. Datta has served in the Office of Senator Michael Bennet & clerked for the Senate Judiciary Committee. He holds a Bachelor of Commerce from the University of Calgary, an MS from Georgetown University, and a Juris Doctor from George Washington University, where he was a George Washington Scholar. His writing has appeared in major outlets including the NY Times, Financial Times, and Washington Post.

Host: Alberto Rosende is the President and CEO of Mi Global, Inc., a company dedicated to strengthening global resilience through the development of secure, transparent, and sustainable critical mineral supply chains. With experience leading in the public and private sectors, Rosende brings a unique combination of strategic vision, operational discipline, and global perspective to the forefront of the minerals and energy sectors. Under his leadership, M2i Global has advanced initiatives and forged partnerships that align industry innovation with national security priorities.

Transcript: https://jumpshare.com/share/4DEU0THspF8MH1qQRMBw

Relevant Links: https://jumpshare.com/share/37qUXXjuJeZfJNtSSh4A

Disclaimer: The views and opinions expressed in The Minerals and Metals Initiative podcast are solely those of the hosts and guests. They are provided for discussion and informational purposes only and do not represent the official policy, position, or recommendations of M2i Global, Inc. Any statements made should be understood as personal opinions, not factual claims, and should not be relied upon as investment, legal, or professional advice. While efforts are made to ensure accuracy, M2i Global makes no guarantees regarding completeness or reliability of the content.

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Transcript

SPEAKER_01 0:00

You know, one of the first priorities is the need to develop diversified liquid free markets, essentially, for critical minerals.

SPEAKER_00 0:09

Hello everyone, I'm Alberto Rossendi, your host and CEO of M2I Global, a critical minerals supply chain company. And welcome back to the Minerals Metals Initiative, a podcast exploring the transformation of the critical minerals supply chain as we race for global resilience. From mineral extraction and refinement to policy and innovation. Each episode, we will examine a different aspect of the urgent push to modernize, diversify, and de-risk the world's critical minerals supply chain. This is our first episode of season two, where we will focus on the theme of execution. And what better way to begin a season about execution than with today's guest, Arnab Data. Arnab is the managing director of policy implementation at Employ America, where he leads the integration of policy and legal strategy across the organization's advocacy efforts. He is also the director of policy implementation at the Institute for Progress, a nonpartisan think tank focused on innovation policy. His work focuses on translating complex ideas into actionable policy, including drafting legislative frameworks for initiatives like a strategic resilience reserve. Arnapp previously served in the office of Senator Michael Bennett, clerked for the Senate Judiciary Committee and worked at Crowell and Mooring LLP. And his writing has appeared in major outlets, including the New York Times, Financial Times, Washington Post, and Business Insider. Arnap, welcome to the podcast.

SPEAKER_01 2:07

Thanks again. Thanks so much for having me. It's great to be here.

SPEAKER_00 2:10

And I know that you come to us from uh by way of two organizations that you're involved with. So why don't you go ahead and give me a little background on yourself and then the two organizations that you're affiliated with, and then we'll get started.

SPEAKER_01 2:22

Yeah, so I work at two organizations. The first, Employ America, is a macroeconomic policy focused organization. We do a lot of research in advocacy. Our North Star is full employment, but we really take a macro lens. So we do a lot of work in the advocacy space on the market side. We do a lot of work on the Federal Reserve as well. But particularly as it relates to our conversation today, we spend a lot of time thinking about commodity market stabilization. So everything from crude oil, which is very timely in this moment, but then also, you know, a growing effort of work in critical minerals just because they're becoming more and more important throughout the economy. And then I also work in an organization called IFP, where we're really focused on advancing scientific, technological, and industrial progress. And I uh currently I work, I lead the policy implementation at uh IFP, which is um, you know, I cut across a number of different teams, but I previously led the infrastructure policy team where we um did a lot of work on next generation technology, um, but also in the permitting context, which I think will be relevant to our conversation as well today. So um, yeah, I, you know, touch a lot of different areas uh close to the energy and um commodity sector and excited to talk to you today.

SPEAKER_00 3:43

No, absolutely. And and I mean you you know the areas that you cover fall really square into what I believe is probably the most important topic uh uh of the day, uh, and it will be for for quite some time. So I I I really appreciate uh again your time and and to kind of get started, I I I figured that you know, we we can talk about a lot of what's going on today with in within the current administration and just prior to the the administration coming into power, uh looking at critical minerals and looking at the policies that were involved in trying to move the sector forward and secure those supply chains. Uh so where do you believe would be a good point of departure for our dialogue when you look at the you know the last uh couple of years, if you will, in terms of the critical mineral supply chain?

SPEAKER_01 4:29

Yeah, look, I think um I you know I think to me the uh the thing that is striking is that there's actually quite a bit of consensus that we need to have a lot more intervention in the sector. Um if you go back to the Biden administration, um, in the you know, one of the signature achievements of the administration was the Inflation Reduction Act, which had uh you know tremendous amount of um resources that were committed to the critical minerals sector, both in the context of the production tax credits, 45X, um dedicated programs at the loan programs office for mining, processing projects for you know next next generation clean tech. Um, you know, I think, and then the 30D uh vehicle tax, electric vehicle tax credit, which has you know now been um taken away. But you know, across these um areas, you saw a great deal of resources dedicated to that. Um, and that even though some of those things have been pulled back, some of them changed, um, this administration, the Trump administration, is also dedicating, you know, quite a great deal of effort. Um, you see this in an individual deal context where they're cutting these deals with specific companies, MP Materials, Vulcan. Um, and then there's also you know, some more sectoral initiatives. So there's Project Vault, which is the commercial stockpile that Exxum is setting up. Um, and then also there's uh the initiatives out of the Strait State Department and the US trade representative in the form of the plurilateral um and and project uh Project Forge, I believe it's called. And then um also you know branching into the AI emerging tech space with Pax Silica. So there is certainly a lot of um you know continuity. I think we can go back to, you know, we can go back really decades when this has been a notable issue, you know, even in the Obama administration, there were reports and discussions of our vulnerabilities here when China first clamped down um on Japan in wake of the Senkaku Islands dispute. And so, you know, now I think you're starting to see this continuity take form of intervention in the private sector in a more direct way by the government.

SPEAKER_00 6:39

Thanks for that overview. And I think it is important to kind of understand that that this has been ongoing for quite some time, uh, not just uh in the last year or two or three, but it goes back to Obama and and maybe even earlier with with a focus on supply chains. Um I I wanted to get your take on uh looking at the current policy efforts, but I really wanted to take a look at everything that that the current administration has done, uh, and what are the key pillars that we can currently look at as foundational to the efforts going forward that will help us kind of describe the effects that those policies and executive orders uh have done uh to take shape, if you will, in the market.

SPEAKER_01 7:23

I'm not sure when this will air, but if it's any time kind of in the next couple weeks, I think this should stay um current. So the the Trump administration has signed a number of um letters. Largely a lot of the deals that have been signed are letters of intent. And so it's important to understand that these are um, you know, they are announcements. There are um there's an executive order, there's actually, I think, been multiple executive orders on critical minerals that direct different agencies to take um a number of different actions. Executive orders are useful as directing actions for agencies, but you know, on their own, they rarely have kind of any direct impact, right? They need to be implemented by various agencies. And so I think you can um I I would say probably aside from the executive orders, the first real big action um that drew a lot of attention was the deal in August that was signed between, uh sorry, that was agreed to between the Trump administration and MP materials. So this is a pretty comprehensive deal across the value chain that essentially takes MP materials, you know, which owns the Mountain Pass mine and had been, you know, starting to invest in the processing uh sector as part, you know, part of the chain as well, and basically takes them and supercharges them into uh the nation's premier vertically integrated rare earth magnet manufacturer. So they have um in that deal alone, you know, it's a multi-billion dollar deal. There's a $400 uh million dollar equity investment, there's a price floor for endmined NDPR that's kind of uh you know pulled out of the mine there. Um there's a guaranteed EBITDA, there's a loan, there's a guaranteed off-take agreement for finished magnets. And so, you know, that's quite a comprehensive deal uh for this single company. That is probably the most uh, you know, the deal that has the most kind of clarity to it. Um that deal is contingent on future appropriations uh coming into the Defense Production Act office. So another good example of this is um Project Vault, which is this commercial stockpile that has been set up at Exxum. Um they've identified a number of partners, uh original equipment manufacturers who will be kind of the ones uh participating in this kind of in procurement from this commercial stockpile that is being set up with Exxum capital, lending cap lend capital. Um and then they have uh they've identified three intermediaries, Hartree, Traxis, and Mercuria, who will be kind of doing the actual operation of the reserve essentially. Um and so, you know, I think that's like where again, there it takes time to stand these things up, but there's a lot of momentum. Um, and I would say one thing that I um I think you can characterize accurately with with the Trump administration's activities so far is even where I kind of disagree with the structure of what it's done, they are deploying a pretty robust toolkit. You're seeing the use of equity investments, you've seen a price floor. Um, these are not things that are typically typically done by the federal government. And so I would say that's like something that's um you know can characterize a lot of their activities. Even in the Project Vault deal, um, you know, that's that's a loan uh or a loan guarantee that um is you know being provided by EXIM, and uh they're using that capital for a commercial stock file, essentially. It's a pretty creative use of the authority.

SPEAKER_00 10:56

Arnab, I I think that you know, when it comes to Project Vault, you know, it's the $12 billion they talk about, where $10 billion is a loan uh that will come from Exxim, and then almost $2 billion, it's like $1.7 billion, will be private funding, which I think is an interesting aspect to talk about. Because you talk about some of the uh the uh Treasury Secretary's call for a project, uh kind of a warp speed project for the critical supply chain. You you also kind of delve into a little bit of how uh the Chinese became so dominant. And in those, you talk about some of the financial structures that are missing on our side. And I think that it's important to see how maybe the the current actions by the administration, whether it's the executive orders, the deal with MP materials, or some of the other deals and some of the levers that they're using, um, and and how they're attributed directly to those EOs or policies that they're implementing, that maybe still needs to be funded through appropriation. We understand that. But if you can take us, kind of walk us through how that turns into real execution to resolve some of those uh plumbing issues that you kind of referred to that were missing from the financial structure within the US as compared to China, because I think those are some of the actionable levers that we really need to see on an ongoing basis. If you could walk us through those, I think that would be important.

SPEAKER_01 12:26

Yeah, absolutely. So, you know, I think it's important to step back and and really understand. Um everyone kind of knows how China dominates the critical mineral space. You hear all these different statistics, you know, they control 70% of processing of this and 90% of processing of that, and everyone kind of understands and you know they control this many assets. Um, but it's really important to understand how comprehensive China's strategy here was. It was really built on three prongs. The first is robust industrial policy in the critical minerals sector. And so you saw this targeted at the processing sector specifically. Um, in the context of rare earths, they built they started the rare earths office in the mid-70s, um, started to kind of ramp up uh processing capacity, and then really in the 90s, you saw that take off, you know, with kind of like a uh almost like an exponential curve. And that's really when they started to control a lot of the um processing capacity in rare earths. Um and then there was a second piece of it, which you hear a lot about too, which is an international asset acquisition strategy. So they essentially uh went out, they purchased mines, you know, they purchased all over South America, Latin America, Africa, so that they could have secure access for the processing that they had built. Um but there's a third piece of this where really goes underemphasized, and this is what we've kind of described as the market infrastructure problem. And, you know, if you look at modern commodity markets, by they're they're underpinned in the in the metals and minerals context, particularly for ones that are more kind of deep, liquid, mature markets, they're underpinned by market infrastructure. This is essentially the benchmark contracts, the exchanges, um, the intermediaries, the logistics networks that underpins and intermediates risk in a modern commodity market. Now, the most you know liquid example of this is the crude oil market, where you know, even though we've had a massive disruption right now in the Strait of Hormuz uh and lost, you know, 15, 10 to 15 million barrels a day, we still see that like there's some resilience built into the market because you know there's storage in different places and reserves, and this is true in metals markets too, but it it is not as uh uh mature in the critical minerals sector. And so China really explicitly set up some of these newer market infrastructure uh pieces. So, you know, as an example, they set up the Baoto Rare Earths Exchange, which is with which was done with the explicit purpose of controlling more of the pricing uh of the um rare earth sector. Um, you know, this also coming out of the global financial crisis, you saw a lot of Western commodity um banks and and other financial sectors close their desks. So you just saw this huge loss of liquidity in the market, which is really necessary for intermediating the risk. And that's you know one major factor why we don't build a lot of this stuff here. It also drives volatility because when it's all in China um or you know, indexed to the Chinese market, it's their supply and demand that can really, really drive what's happening all across the world. And so just to give you kind of one example of how this can play out, um, when all that market infrastructure is in China, you know, let's say you've got the Tesla gigafactory in Texas, you know, it's purchasing spodjamin uh lithium precursor for its batteries and it's purchasing it from Quebec. Well, they have to use a price index. This is like standard practice uh for purchasing, you know, any of these commodities, and that price index is entirely going to be based on the Chinese market. And so if there's oversupply in the Chinese market, even though that transaction does not touch China in any way, the value of that contract is now going down for that mine in Quebec or you know, North Carolina, wherever it is, and they're now losing revenue. And so this is really how this kind of uh translates into the economy, how these prices are discovered. And so, you know, in the context of current policy, I think um this is still one gap. It's a very difficult thing to solve because you need private actors to really take this up. Um, but I will say that you know the Trump administration um has signed uh a number of bilateral deals with you know prime ministers of Australia, Japan. Um, this is also in the language at the plurilateral meeting at the State Department a couple of weeks ago, where you know, one of the first priorities is the need to develop diversified liquid free markets, essentially, for critical minerals. And so I think they've recognized that. Um it's very difficult to do, you know, they signed the MP materials deal, as I said, um, but that deal is still indexed to an Asian market benchmark. And so that's you know, vulnerability right there that in that deal, if the Asian market goes down, you know, it's gonna cost DOD quite a bit more. You can't solve that problem immediately necessarily, but it's you know, I think it shows that we need to really build this long-term market infrastructure if we're gonna have a more sustainable corrective path going forward.

SPEAKER_00 17:38

So it I guess just to go back on the last point that you made, when you look at the deal between uh the DPA3 DOD within the MP materials deal, you've basically transferred the risk to the DoD and the people of the United States so that MP material can stay solvent and meet that 10-year uh uh offtake agreement.

SPEAKER_01 18:01

Exactly. So essentially, you know, if you're if you're MP materials, you've got this price floor on NDPR, it's you know $110 um per kilogram. And the um, you know, if the market price is $70, it means DOD is filling in that $40. If it's you know $90, they're filling in $20. But that, you know, what the price is, I'm using quote unquote for audio listeners, what that price is is measured by a China, you know, an Asian metals market index. You know, that's in the SEC filings. And so if China floods the market with NDPR, it means that that price that was you know now maybe $100 or $90 could go down to $70. And so for every kilogram, instead of spending $10, DOD is now spending $50. Right. So it's a considerable amount of exposure that might be necessary in this context. Like we want to keep this mind online. Um, I think you know, I've I wrote a long uh piece with a colleague Peter Harrell in in Bloomberg where we kind of evaluated the MP materials deal. And I think that this is an unfortunate piece of its structure. But you know, there are really difficult trade-offs here, and sometimes you might have to make these choices. Um, but I think it also demonstrates why we need to, you know, have something long-term in place in terms of a policy to support, you know, new benchmarks that are not so indexed entirely to the Chinese market.

SPEAKER_00 19:26

When we talk about, you know, the Chinese dominance of the market and the monopolization by the Chinese, everybody sees, oh, they're just producing so much, or they control all of the processing. Because, but the thing is that we have to take those steps back to understand, well, all of the processing that used to exist elsewhere has gone by the wayside because of the manipulation and the cost. If it's less volatile to go process elsewhere and still get the material, they're going to be fine with it. And and I I do that with their quotes because nobody's fine with anything, just that and as a matter of fact.

SPEAKER_01 20:04

We talk a lot about the price issue. Um, you hear Western producers talking about it a lot, um, but the policy conversation just does not focus enough on how prices are discovered through the economy. And that's really a function of the market and the market infrastructure that I describe. I will say just like one quick thing is I think there's growing recognition here. Um, we've been working on a bill with um Representative Rob Whitman on the House uh and Chris Pappas and um uh senators Gene Shaheen and Todd Young in the Senate. We've now got 10 sponsors on the Senate side, and you know, I don't know how many on the House, but many. It's a bipartisan bicameral bill called the Secure Minerals Act. And addressing this market infrastructure problem is an explicit purpose of that act, and it's set up intentionally to do that. And so, you know, I think that you're starting to see more and more recognition of this issue.

SPEAKER_00 20:57

I think that it's important to understand that the government needs to kind of create the rails uh for this to kind of move forward, but really it's the private sector actors that have to step forward. So, in the act that uh now is gathering steam, uh could you take us and walk us through what the act will do and then what will be the expectation from the private sector to move forward and what incentives are created for them to do so? Because at the end of the day, private sector works on incentives, right?

SPEAKER_01 21:29

The bill establishes a government corporation called the Strategic Resilience Reserve Corporation of the US. So this is an idea that uh I had proposed with a colleague Daleep Singh a couple of years ago. And you know, it's a government corporation, it has reserve in the name. There are, you know, is a reserve aspect to it where it would build physical stockpiles where necessary. But the focus of it really and where um its tools are oriented are on building that private market ex China and really encouraging private sectors. Or actors to do so, whether it's you know, miners, processors, um benchmark, uh sorry, exchange, you know, exchanges, whether it's CME or new companies like ABAC, um, and intermediaries, to all play their part in building up that market. And so there's a couple of things that I think are important about its structure. One, it's an independent corporation. You know, when you're thinking on the timeline and horizon of what a market needs, you need long-term durable policy. I think, you know, over the past couple of presidential cycles, whether it's, you know, the LNG pause uh in the Biden administration or you know, some of the stuff that's happening right now with wind and solar, or, you know, you need more continuity than presidential cycle election cycles can afford. And so this would be an independent government corporation that would be empowered to kind of do long-term, enact long-term policy. It's got a very diverse toolkit. So a lot of the things that we've talked about today in the toolkit, it can deploy, but with the purpose of incentivizing more market activity. So, like, just to give you one example, I mentioned earlier how um after the global financial crisis and because of the capacity overhang, you saw a lot of uh Western financing institutions close their you know commodities desks essentially. So, what you saw is there's this huge uh lack of this huge like liquidity vacuum. It just left the market. And so this uh corporation would be empowered to lend to authorized intermediaries. So we're talking about companies like Traxis, like Mercuria, like Hartree. And what it does is, you know, if you take a market, let's say like Lithium, you know, now lithium's in a bit of a bull run, but a couple of years ago things were really bad. You know, the price was uh a thousand bucks a ton for a spodjamin. And um, you know, one challenge you had there was, you know, I I talked to a lot of people at that time who are like, why is nobody buying the dip? Why is nobody buying the dip? Well, the reason is because if you're a Traxxas or a TRAF, you have to, you can't you can't get lending for that, you can't get a loan. Um, and so you have to purchase on a cash basis. And for you to get, you know, an IRR comparable to iron or or you know, coal or one of these more mature markets, uh, you have to get that price down to 700 before you're willing to buy. But when you introduce leverage into that conversation, then they can go and buy at a higher price at a thousand bucks, eleven hundred bucks. And then a mine doesn't need to go on care and maintenance. And so what happens in that, you know, you get essentially a natural price floor. Like the market is serving a, you know, it's creating a price floor of its own. So part of this, you know, is intended to provide leverage so you can get more liquidity into the market. Um, but you could also see, you know, equity investments, other kinds of contracts where they can support, you know, uh exchanges who are setting up some of these newer products. So CME, for example, is interested in a rare earths contract. It would be great to you know see more capital potentially provided by this to be a market maker in that contract as you know, help help kind of reduce some of the startup costs. So that's uh really how that bill is structured and what we're kind of intending to do.

SPEAKER_00 25:15

I I think that that's such an important dialogue to continue to move forward. Uh and there's an awful lot of dialogue in this space from all parties involved. There should be an awful lot of push to help get it across the line. What do you think is missing? And what if if it were to be enacted, how long, what's the timeline do you think before it could get to the level of maturity where it really starts to have some uh effect?

SPEAKER_01 25:42

Uh, you know, I think it's it's set up to be quick acting. This is an urgent issue. There's bipartisan support, and so we would like to see it. I think, you know, I I would love to see kind of a year-long timeline to really start getting it done. I think one aspect of it um that I didn't mention is that it's equipped to, you know, it looks kind of like the Federal Reserve in that it has uh multiple divisions where it can kind of retain private sector talent, whether it's in the deal making context and investment context that I mentioned, or also in the market analysis. So there's a, you know, there's divisions of risk assessments essentially, so that these uh, you know, technocrats can essentially do the analysis necessary, understand the market vulnerabilities, where resilience is lacking, and they can provide that information to the board, who can then hopefully make decisions and prioritize, allocate resources accordingly. And so, you know, doing that is a it's a constant process. Um, I think you know, right now we're looking at disruptions um coming out of the Hormuz crisis. And so you could imagine some level of you know ex post-risk uh alleviation uh in crises like these, but also uh some ex-anti-risk mitigation more proactive.

SPEAKER_00 26:58

Yep, absolutely. You talked a little bit about you know the issues on the petroleum market that are uh you know occurring because of what's going on in Iran right now in the Strait of Ormuz and uh the inability to have petroleum actually flow out uh and so forth. Um and so when we start looking at energy, energy is extremely significant in the space that we're talking about. And critical minerals obviously contribute uh to the distribution of that energy and ultimately uh to power manufacturing innovation. Um and so can can you link uh the critical mineral and the secure supply chain through uh the different uh uh policies and and actions that have been enacted, and what would happen if we don't have that secure supply chain so that we can really leverage the activity that's ongoing now in the administration?

SPEAKER_01 27:49

Yeah, you know, I there's certainly there, um, you know, I think um the the the administration released an AI action plan um that was uh you know written partly by by a friend of mine, Dean Paul, um, when he was in the administration. And there's you know, there's a number of positive things uh in there. Um and so I think that they are trying to think you know creatively about how we can build this uh data center infrastructure for AI here. Um I think an important thing that Congress really needs to act on, and uh, you know, I think the administration also needs to um reconsider some of its kind of actions in the solar and wind space is passing permitting reform. We really, really need to fundamentally fix our permitting system in um this country. It is just something that for too long, it's too easy to block projects, there's too many costs uh added to it, it takes too long to build transmission infrastructure. And if we're really going to get that kind of flywheel of innovation going that you're referring to, we need to pass permitting reform. It's a it's incredibly important in the data center context because of how much energy generation, distribution, and transmission uh we need to build out. Um, but then also in the critical minerals context, where it's important for both mining, but also on the processing side, um, to the extent that we're you know using CAV federal dollars to build processing facilities.

SPEAKER_00 29:16

I think it's this constant uh opportunity to litigate and stall and litigate and stall and just kind of you know weight out the ability of an initiative to move forward because funding dries up. And so when when you look at permitting reform, can you talk a little bit more granular to that aspect of it? And what are the recommendations? And has the current administration actually enacted any of those reforms that helps kind of shield a project once it's gone through the wickets, if you will, to move forward and not continually be, you know, have have another you know boundary set up that needs to be breached in order to move through from a litigation perspective?

SPEAKER_01 29:57

Yeah, so I think the um you know the thing we've focused on the most, um, which I think is probably, you know, I think substantive environmental standards should be very high. We live in a rich country, um, we should be able to have very strong health, air, quality, uh, water quality standards, um, and companies should pay to um enact those and and build things safely. The problem is that so much of our permitting system is not about substantive standards, it's about procedural compliance. And where that ends up is, you know, you have laws like the National Environmental Policy Act, which, you know, ostensibly was intended to be a review of environmental impacts that could inform agency decision makers in granting permits, has now become essentially a litigation hook for every single project that the federal government supports or you know has some action uh related to, whether it's granting a permit, you know, on cross-jurisdictional uh issues, or whether it's a loan or loan guarantee. And the problem with that is that um, you know, it's very, very difficult to predict the judicial system. Um, you know, you can't what I think uh, you know, potentially a lot of your audience will understand that uh in a judicial uh injunction can just blow out the NPV of a project, right? It's not something you can account for. Um, it's not the same as substantive compliance, where you can, you know, it might cost you money, but you know what those costs are. This is not the same. And so we've really tried to focus in on uh judicial certainty. Um, it is a place where, look, I think with the administration's actions, it's very difficult for an executive branch to do much in this space. I think they've um done some work on, you know, issuing categorical exclusions and trying to find other ways to build on public uh on federal land, where at least you know, directing agencies through executive orders and other things, um, where at least you can have one jurisdiction, um, but it still kind of runs into some of these challenges. And ultimately we need Congress to fix this. Um Congress created, established the National Environmental Policy Act. There's only so much you can do in the executive branch to address this issue. We really need Congress to enact better standards.

SPEAKER_00 32:14

Okay, so that's that's a pretty tall order uh the way that things are going. Um but uh as long as uh the act continues to pick up steam and and get additional sign uh folks to sign on to the act, I think that that that that hopefully bodes well to getting it in place. Now you you talked about uh the the the uh resilience reserve. Um uh and and I'm just curious because I know that there's an awful lot of talk where people bring up the fact that a national defense stockpile already exists. But really the focus and purpose of the national defense stockpile is so narrow when it comes to when it would come into play. Um it's such a small subset of the overall demand because it doesn't satisfy uh regular manufacturing within the uh defense industrial base. It really is only uh to provide for recovery from a particular event. And if you could compare that to the current project vault, uh just to kind of get an understanding of those three individual efforts, you know, you have the national defense stockpile, very small subset, you have the SRR, and and and then you have Project Vault.

SPEAKER_01 33:32

Yeah, so that's exactly right. I think you nailed it with the uh with the national defense stockpile, which is this is limited purpose. Um, it is for uh you know building kind of a defense level of readiness in a pretty narrow context. I think when you think about um, you know, when we've had real conflict, um, you need more than what is going to be in the national defense stockpile if it's an extended conflict, right? And I think what resilience means to me in this security context, but also in an economic resilience context, is that we have enough capacity in the economy that is dedicated where it can be diverted towards some of these strategic needs when necessary. And a national defense stockpile can just like not solve that problem. Um, it's one reason why, you know, you look at really resilient defense bases, um, they have a robust private industrial base for these things. It's one reason why, you know, the electric vehicles uh is is of import because it helps you keep a level of capacity in the critical mineral sector that can be diverted towards defense needs if it ever comes to it. Um the data center uh piece of this could serve this function now because we're you know going to have a lot more energy storage and battery storage potentially. And so I think of that as a really important piece of it. And the strategic resilience reserve is really intended to serve that purpose. Um, it's really about the commercial sector as much as the net, you know, it's it is uh certainly fulfilling a national security need, but it really is about our broader economy. I think if you look at Vault and you look at the Strategic Resilience Reserve, um, Vault is really like what I would see as a good example of what the Strategic Resilience Reserve would be able to do at scale. Um, you know, it's a limited amount of capital that Vault will have, it's good, but it's not enough to hit, you know, the 60 odd elements that we need to secure on the periodic table. Um and so ideally the Strategic Resilience Reserve can build on things like Vault as a model. Um, I will also say that uh I think that Project Vault is serving more as a commercial stockpile, like a physical stockpile for the OEMs that are involved. Whereas it doesn't, I don't think that they're gonna be taking part as much in that market infrastructure problem where you know this Project Vault will be doing liquid trading in a in a way that kind of builds more uh sustain you know liquidity in the market that can then you know build a more sustainable market infrastructure. And so that's kind of where I think the strategic resilience reserve uh fits in. And you know, there's also an innovation component to this. You know, I use that kind of leverage example where you can, you know, where if a um if an intermediator can take leverage, they can go and procure some some supply. A good example of this is Traxis recently signed um you know a 10-year uh, I think 50,000 ton off-take agreement with Lilac Solutions, which is a you know company doing pretty cutting-edge direct lithium extraction. And so they're you know able to deploy that capital to serve as an off-take agreement that can help Lilac now generate more investment. Um if Traxxas had access to even cheaper capital, they could potentially make that even bigger, um, or they could do more versions of this. And that's kind of what we want to encourage more of.

SPEAKER_00 36:59

Great, great. Now, I know that we talked a little bit about um how we build some of the plumbing, if you will. And we we we also talked about looking across, or at least you've written about looking across our partner network, if you will, or our allies. And that brings me to Project Forge. We really haven't talked a lot about Project Forge. Uh, could you give us an understanding of Project Forge and how it will contribute uh to this uh marketplace, if you will, uh amongst uh the partners?

SPEAKER_01 37:32

Yeah, so I you know I think Project Forge is really um, you know, it is a it is a forum amongst countries to build this critical mineral uh partnerships, this like market that we talked about ex China. So it's building on some of the agreements that I mentioned with Japan and Australia, where they've set out a number of goals. And what Forge is trying to do is really create that um that kind of forum for um our allied countries to come together and and kind of troubleshoot and create solutions to building that market. I think it kind of it it is part and parcel with the effort out of the US trade representative that came out of this kind of plurilateral um meeting and effort they had at the State Department where they're looking for ways to actually operationalize this in trade agreements, um, potentially with tariffs and other means to use um to establish like a price floor in this kind of market ex-China. So I think it's really um, you know, encouraging that we're getting the right kind of language out of these investments, that there is a focus on diversified liquid markets. Um, and I think there's a lot to build on there.

SPEAKER_00 38:43

Super. So you know, if if you look at all of the things that we've talked about, the the policies and the executive orders that have kind of laid uh a very clear understanding that we need to move in the direction of securing our uh critical mineral supply chain. Uh, there are some fundamental actions that are being taken as LOIs at this point, right? Letters of intent. We still have to see how those are actually executed, hopefully in the short term or the near term anyway. And and then look forward. What would your recommendations be at this point so that we can continue to see actionable steps moving forward to secure that critical mineral supply chain ex China? And and then kind of uh where where would the uh the Secure Act come into play and how that would push that further forward with real actionable executable activities?

SPEAKER_01 39:38

Yeah, so I think with um, you know, if we're talking about um, given that we're still in kind of LOI stage, that they're still kind of working through implementation details, I think one thing I would like to see um, I think they are doing this, but see kind of a more um strategic effort is bringing in some of these exchanges, companies you know, like CME, um, ABACS, and then more of these intermediaries to really talk about what it would take to bring more liquidity to these markets. Um, what what is the right sequencing of us, you know, what kind of support do they need to build new benchmark contracts and other types of, you know, it's not always going to be benchmark contracts, you know. Some of these aren't, you know, I don't think there's gonna be a a very robust futures market for Scandium. Um, but you know, there are versions of this that you can do to bring more price transparency to the market. Um, you know, uh Metals Hub is a company that has set up a monthly auction uh for lithium um that's serving quite well and kind of serving well as an alternative price benchmark to to the Chinese uh you know GFEX version of it. So I'd like to see more kind of engagement uh with that as part of these um uh efforts. Um, but look, I think, you know, I think that it's really good that we're getting um a creative use of the toolkit. I would like to see a bit more focus on competition. Um, a lot of these are individual deals with companies, um, which isn't, you know, sometimes that can be necessary, but I think there's a way to structure some of this uh to be a bit more market uh, you know, company agnostic and more market sector. Actually, in that sense, Vault is probably the better version of it, where it's you know, it it doesn't seem like they're putting their thumb on the scale of an individual company. Um, so I I'd like to see kind of more of that. And I think that fits in quite well with the Secure Minerals Act, where we, you know, we would establish a strategic resilience reserve. We could take these efforts and really supercharge them at scale, um, but put a more put them on a more durable, sustainable path.

SPEAKER_00 41:41

Awesome. Well, I I know that I've taken up an awful lot of your time, but before we go, I'd like to find out what's on your to-do list right now, what's on your desktop as far as where your efforts are going to go in the short term.

SPEAKER_01 41:53

Yeah, I mean, I think the big thing is the Secure Minerals Act. Um, I really want to see that uh push forward. We've got um two potential vehicles to pass that under this year. Um the you know, the lead champion of it, Senator Shaheen on the Senate side, is retiring this year. I think it would be great for her legacy as a you know a stalwart of the Senate for us to pass this. Um Todd Young is you know one of the best uh senators on these issues as well. Um so it'd be great to see that. We have you know either a national defense authorization that this could be very much part of, um, or the re the reauthorization of the export import bank, um, which would be another vehicle. Um so that's a big thing. And then I think really just trying to like amplify some of these um uh initiatives and and how this can be useful uh more. So certainly with everything happening um in the Strait of Hormuz and the um, you know, the uh uh the the war with Iran, um, there are kind of um vulnerabilities that are arising and supply chain issues, and I think um demonstrating how something like this can be useful in these situations is definitely going to be uh an important part of this.

SPEAKER_00 43:01

Well, thanks again, Arnab. I really appreciate your time, your thoughts, and your insight into what's going on. I also agree with uh the direction that uh we're moving in and some of those things that are pending, and hopefully those things will get enacted on uh very, very soon. So appreciate your time again, and and thanks again, Arnap. Thank you so much for having me.

SPEAKER_01 43:21

Real pleasure.

SPEAKER_00 43:23

And to everyone who listened or watched this episode, thank you for joining us. Be sure to follow us on Spotify and Apple Podcasts to keep enjoying the Minerals and Metals Initiative.