Episode summary
Inside the American Startups Trying to Break China's Mineral Chokehold
Wall Street Week
· · 12 min · Hosts: David Westin · Guests: Nick Myers, David Abraham, Heidi Crebo-Rediker, Nicholas Burns
Summary
Phoenix Tailings in Exeter, New Hampshire is trying to build a U.S.-based alternative to China’s grip on critical minerals by processing tailings into rare earth metals and alloys used in magnets, aerospace and defense. The host framed the issue as a supply-chain race in which China controls much of the midstream processing and much of the pricing power, leaving the U.S. dependent on imports for industrial and military inputs.
A guest argued that the U.S. missed the warning signs because the market had made the problem seem less urgent after a 2010 supply shock. He said China treated mining and processing as strategic industries while the U.S. focused on services and outsourced the “dirty” work. Another guest said traditional mining would take years or decades to catch up, so the better path is a second track built around innovation, including rare earth-free magnets and waste-based extraction.
Phoenix Tailings said it started with $7,000 in 2019 and has since raised $120 million, with backing from BMW and Sumitomo. Its CEO said the company aims to be cost competitive while producing metals free of emissions and discharge in the United States. A former U.S. ambassador said Washington will likely need targeted industrial policy and financial support for national champions if it wants to compete.
Key takeaways
- Phoenix Tailings says it can turn oxide into metal in New Hampshire, aiming to close a key gap in the rare earth supply chain.
- A guest said China dominates the midstream processing stage and U.S. competition is “extremely tough” without new strategy.
- Heidi Crebo-Rediker argued traditional mining is too slow, so the U.S. needs innovation to “leapfrog” China’s chokehold.
- Nick Burns said the U.S. may need industrial policy and direct financial support for rare earth companies to compete.
- The episode emphasized that the real issue is not just materials, but building downstream industries that depend on them.
Notable quotes
“-So Phoenix Tailings produces the final rare earth metal and metal alloys that are needed for magnets, for aerospace applications”
“-That midstream processing stage, they pretty much dominate entirely. So much so that it's extremely tough for the U.S. to compete in any way, shape or form”
“we can't out-extract, out-process or out-fund China. But we can actually have a separate track that looks to innovation”
“Now we've raised $120 million. We're backed by BMW, Sumitomo and many other players”
“The United States government needs to pick out our national champions in rare earths, there are very few of them, and support them financially”
How the episode opens
In Exeter, New Hampshire, inside this unassuming building, an international race is taking shape. Here at Phoenix Tailings, they're processing critical minerals, a key part of the global supply chain. -So Phoenix Tailings produces the final rare earth metal and metal alloys that are needed for magnets, for aerospace applications and for many different other types of applications.
Westin: But companies like Phoenix Tailings, led by co-founder and CEO Nick Myers, are up against a giant. There's been a lot of talk about critical minerals, rare earths and otherwise, and the disparity between China and the United States. How far behind is the United States right now?
-That midstream processing stage, they pretty much dominate entirely. So much so that it's extremely tough for the U.S. to compete in any way, shape or form.
Westin: The U.S. needs critical minerals for a range of military applications, but, even more, for many consumer products. -Defense is, functionally speaking, a pretty small market.
It's roughly about 500 tons per year is the need for metal for the Defense Department. And that's not that much, whereas the U.S. commercial needs are about 12,000 tons per year.
So pretty much all of our demand comes from automotive. Many people think that it's actually for electric vehicles. To be honest, not really.
Like, yes, electric vehicles use much more rare earths than other vehicles. However, internal combustion motor vehicles quite heavily use rare earths. Westin: China's dominance spans the entire supply chain, from extracting critical minerals to processing them and then turning them into magnets used in everything from cars to defense systems.
It all raises the question, with that level of control, what can be done and why wasn't more done sooner? David Abraham has spent years studying these issues, and they're the subject of his book, "The Elements of Power.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- china mineral supply chain
- critical minerals
- american startups
- geopolitical dependency
- supply chain innovation
Companies and tickers mentioned
- Phoenix Tailings
Watch the episode
Watch “Inside the American Startups Trying to Break China's Mineral Chokehold” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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