The Listening Tube Welcomes Anita Kellogg

SPEAKER_01 0:00

Hey, the listening tube welcomes a guest.

SPEAKER_00 0:05

My guest today has a unique field of study. Dr. Anita Kellogg is an assistant professor at a very unique university where she puts her expertise to work examining the relationship between politics and minerals. Elements, the building blocks of all the stuff we use every day. It's a world with a lot of dynamics, and Anita has a podcast all about it called Kellogg's Global Politics. Like the listening tube, Kellogg's Global Politics has a globe in the logo. Great minds think alike. I'm interested in Anita's insight and opinion on the subject of the world mineral supply, not only because she's well versed in the subject, but also because it's topical. Companies, governments, and nations rely on the availability of certain minerals every day for all kinds of things many of us take for granted. The demand continues to grow, and major players are staking their claims. Now, Anita, I was interested in speaking with you because of your education in political science, as well as your focus on international trade and more specifically minerals. I guess the first thing I want to know is when you were studying political science, did you ever imagine that you would also be studying minerals?

SPEAKER_01 1:42

No, that definitely did not come up in my initial studies. And I only kind of landed on the subject because I was asked to teach a course on it. And it's a it's a pretty unique course where we get to talk to all kinds of people in industry and the government and see all sides from policy to what entrepreneurs are looking at. And that sort of really developed my interest and is part of my ongoing research now.

SPEAKER_00 2:07

Now they must teach some pretty unconventional yet consequential things at the National Defense University, where you are an assistant professor. Why do people go to that school specifically? It it sounds like a very interesting place.

SPEAKER_01 2:48

Probably military, lieutenant colonel sort of ranking officers. And then you have people from different government agencies at similar levels of responsibility and um some intern as international fellows and industry fellows. So people out there in industry, you want to know more about the government side of national security. And of course, that is the unifying theme.

SPEAKER_00 3:15

Okay, well, I promise I won't ask any more questions specifically about the school.

SPEAKER_01 3:22

Now try not to get in trouble.

SPEAKER_00 3:24

I don't want to get you in trouble. Has your focus, in addition to minerals, has has your focus extended to non-mineral substances like hydrocarbons?

SPEAKER_01 3:35

That's a good question. Uh I'm actually teaching a class this year that I'm just starting, which will combine energy and critical minerals as topics. So it is something that I am definitely interested in. I've done some research on just the impact of petrostates on international conflict. And I know a little bit about the oil industry as well.

SPEAKER_00 3:57

Okay, so well, uh sticking on the subject of hydrocarbons and international conflict, I think you might know where I'm going with this. Um what are the real world implications of the conflict with Iran and the reduced oil exports through the Strait of Hormuz?

SPEAKER_01 4:19

I think you're seeing it really hurt certain economies in Southeast Asia and even Japan has really struggled through the oil shock. Countries that rely very much on energy and food imports are really seeing the shots to their economic system and are having to try to find ways to adjust by giving uh energy relief to their citizens, but also facing higher interest rates as a result.

SPEAKER_00 4:46

Obviously, we all see the gas prices go up, and the the price of oil, I think, is around in the mid-80s this afternoon. But I also saw the president on television this morning saying, well, you know, people can't get their oil from Iran, so they're going to Texas, they're going to Louisiana, they're going to Alaska. Have we not been able to keep up with the demand? Or are these prices we're seeing right now more or less artificially inflated?

SPEAKER_01 5:17

No, I think you are not going to see a huge increase in supply because uh oil producers don't know how long the situation will last. You don't want to bring a whole bunch of pumps online and only to find out later that, you know, the amount of oil you actually the market can bear is much much less than that, you know, in six months. So it involves a lot of capital investment to bring a new pump online. And companies are not going to do that unless they see long-term demand uh being there. And something kind of artificial, such as the around war, is just not going to sustain that sort of investment in the meantime.

SPEAKER_00 6:00

So then would what you're telling me indicate that the oil companies do not see the Iran conflict lasting for an extended period of time, or else they would be willing to invest more capital into increasing the supply?

SPEAKER_01 6:18

I mean, I think it depends exactly how much time it takes to bring up a new pump. You know, the capital investment in that depends on whether they have fields ready or not, or if they need to expand, uh buy new oil fields or expand somehow. So that's all gonna factor into the fact of uh supply. I think there has been an increase in exports, but you're obviously not seeing dramatic numbers, and you're not likely to because of the uncertainty of the timeline of the Iran war.

SPEAKER_00 6:50

And and why I know we we're told that uh the the prices here in the United States are up, even though we really don't get very much oil from the Middle East anymore, because oil is a worldwide commodity. So i is the price of oil directly connected to the US dollar? And what would be the effect of charging a different price for exported oil and oil that gets used domestically?

SPEAKER_01 7:26

I think that's gonna be that's an interesting economic question, but I think it is uh problematic for markets when you try to charge two prices, one domestic and one for international exports. If the international export price is higher, then companies are incentivized to export more and provide less to the domestic market, and you can have shortages that way. Uh, yeah, I think the fact is, you know, you talk about the price of oil being in the 80s, that's that's the global uh number. So you're going to export or or sell it domestically at that at that price. And it is set uh by world markets. That said, we we do not bear the same brunt as Europe and much of Asia has, or uh because we do have our own supply of oil and we don't import very much. So as much as gas prices have gone up, they are not nearly as much as you've seen in Europe and Asia.

SPEAKER_00 8:29

Okay, well, kudos to the United States for that, then, I guess. That's that's a positive thing. Now, getting back to your area of expertise, are there valuable minerals that also traverse the Hormuz on a regular basis?

SPEAKER_01 8:46

That's a good question. Uh, because most of the critical mineral products that we actually use come from China and that don't go through the strait, you haven't seen a big impact of that.

SPEAKER_00 8:59

Okay, so not much then, I guess. Now it seems to me that about 10 years ago, people like me in the general population were made aware of so-called rare earth elements. It became a catchphrase. Now, the State Department, through the U.S. Geological Survey, has a list of the most valuable minerals, and the list is updated every two years. I'm sure you're well aware of this. Some of the elements on that list seem pretty common rather than rare. For example, lead. I have a couple pounds of that in my fishing vest. Should I hide it from Chinese spies? How does lead make that list?

SPEAKER_01 9:50

Yeah, so there are actually like three different lists. One's a security-based list from the Department of Defense, one is the USGS list that you reference, and I think the uh Department of Energy has their own list. Uh so rare earth minerals are only a subsection of critical minerals that you're talking about. And the critical mineral list is determined by how much we need of a particular material for our economic health and defense health compared to what the domestic supply, or if we're relying on an international supply, do we have alternatives, or if it's mainly coming from one supplier or one country like China? So if lead is on the list, I don't I don't remember that one actually being there, but if it's if it's on the list, as you say, then it's because we see that demand for lead is going to be very high and that we don't have a complete domestic supply chain that's going to meet that.

SPEAKER_00 10:53

Okay. Uh what is the most valuable mineral in the world right now? And does that list ever change?

SPEAKER_01 11:02

It's the most economic valuable. I come at from a more national security perspective. And one thing is we're investigating this in our class is you can't really name the most valuable one because there are several that are come only from China that China gets to set the prices on, and we we need it for everything. I mean, we need it for our defense systems, we need it usually for uh, you know, uh energy storage, we need it for copper, we need for the grid, electrical conduits. So it's it's really hard to define what is, you know, if you could name one mineral at the top.

SPEAKER_00 11:47

Okay. I just assumed you would say gold or platinum.

SPEAKER_01 11:53

Certainly, maybe in terms of pure monetary value, but that's those are definitely not on the critical minerals list and aren't things that we are concerned about society-wise running out of or not having enough supply of.

SPEAKER_00 12:08

Is there enough gold in the world? Because certainly you know, extreme measures are being taken to find and mine it. And certainly uh the applications for gold have grown with the advent of modern technology and computers and and now, of course, uh probably data centers. Is the value it I guess my question would be some some of the environmental impacts on the harvesting of gold seem to be detrimental? Are we really that dependent on gold? Like I I did a story one time on I forget exactly where it was, but there were just hundreds of acres of land were going to be destroyed in pursuit of basically what was a six-foot cube of gold. How do we assess that value and whether or not it it's even worth it for us to go after that that much gold or that little gold?

SPEAKER_01 13:12

Well, as I alluded to before, gold is not on the critical mineral list and is not something that we focus on in terms of national security. I think you hit on a point that extraction of any of these minerals uh is takes a toll on the environment and is one of the reasons why it is so hard to open new mines. And again, why China sort of dominates the mining process, although they only mine 60% of the minerals and process, 90%. So it's really in the processing stage that we're so dependent on China. But there's a lot of attention to mining in the United States because we have most of these minerals in the US. To what extent they can be mined economically is the question. But there's a lot of attention to whether the current restrictions are too onerous. I mean, it can take 30 years from the initial investment in a mine to actually see production. So there are a lot of people who on both sides of the aisle who are looking to see if there are ways to speed that up. How many of the minerals on this list are not mined in the United States Well, I think you see many of them, whether we we have the deposits or not, are not mined in the United States. Um cobalt comes to one. I'm not even sure we have um a cobalt that we could mine, but that's definitely dominated from the Republic of Congo, although there are other deposits that are being explored. Uh, one of the consequences of being so reliant on cobalt going through the DRC is the fact that they use child labor. And, you know, the fact that we sometimes want to avoid mining for environmental reasons, we still rely on those minerals. And so the environmental hazards can even be greater, moral hazards can be greater when they're being mined outside of the country. So it's just something if you're concerned about an environmental perspective that you have to keep in mind. Are you simply externalizing the environmental concerns to other poorer countries?

SPEAKER_00 15:20

Okay, so it's better to do it here than it is to do it there if we can, as far as an environmental concern is played out.

SPEAKER_01 15:29

There are a lot of reasons it's probably better to do it in the United States if you can. Certainly having less dependence on other countries and certainly countries that dominate a particular supply chain is in the US's uh interest, absolutely. Of course, the ability doesn't help if we are only extracting minerals and then sending them to China and dependent on China to process them into the type of materials that we need to actually use. So processing facilities, increasing those has to be part of the solution as well.

SPEAKER_00 16:04

Of the minerals that we do not or cannot mine here in the United States, what procedures are in place to ensure we have access to them?

SPEAKER_01 16:15

Send email to thelistening tube at outlook.com. Well, I mean, that's that's a good question. Uh, you've already seen China restrict certain rare earth minerals, particularly to defense-related companies, which have an effect on the ability to build new missile systems, for example. Now, so far we've been able to find alternative sources from our partners who may have easier access to China or other streams, but we don't have a guaranteed uh pipeline that can prevent one country, namely China, from having a chokehold and certainly threaten our ability to produce many of the goods that we rely on.

SPEAKER_00 16:58

Are there any of those minerals of which we speak that the United States has a chokehold?

SPEAKER_01 17:07

Unfortunately not. Uh, we do process some copper, a little bit of aluminum, but most of our processing uh has gone since the 90s, so there's actually very little of it in the United States. And so, no, we don't have a mineral that other other countries that we process that other countries are dependent on. Mostly right now, we're trying to just meet our own domestic market needs.

SPEAKER_00 17:33

Getting back uh a little bit to the um to the political science wing of what you do, how much does a country's capacity to supply the US with critically needed materials count when we consider the extent of our diplomacy?

SPEAKER_01 17:56

Well, I mean, I think it's interesting that last year the Department of State, um, with direct involvement from Rubio, did hold this uh very big ministerial amongst many, many countries on establishing a mutual agreement uh to be able to have access to minerals in these countries. So it is very a large part of our agenda. It definitely plays into our diplomacy, and we are very much trying to establish partnerships throughout the world to have access to minerals that we currently don't.

SPEAKER_00 18:32

From the other countries' point of view, does how how do they look at us when we all of a sudden say, hey, you have something we need, therefore we're going to start being nice to you now? Or does that not happen?

SPEAKER_01 18:51

I mean, I think that they are eager to have um some contribution and possible leverage in negotiations with the United States because the US is such a big economy that for a lot of smaller countries it's hard to have um your needs put priority in negotiations. So having this on the table doesn't totally shift the power, but it does make a little intention that can give you some benefit in negotiations.

SPEAKER_00 19:22

A lot of talk right now is about data centers. States are are putting them on hold. I know uh New York has done so, Pennsylvania has uh somewhat of a moratorium on them right now. But my question is about the minerals needed to build them. Do you have any estimate of how much these critical elements are needed for an average AI data center? And what kinds of demands should we anticipate? And are the necessary resources currently available?

SPEAKER_01 20:00

So I think, you know, currently they are available, uh sorry, they currently are available. Uh it it often depends on whether China decides to cut us off or not for most of them. They are very data, uh they are very energy intensive, and that also involves critical minerals. So you need a lot of copper and you need lithium for energy storage and batteries. You need dozens, if not more, of these minerals in all aspects uh that go into semiconductor strips and other forms of technology that are being utilized in these data centers. But I I don't know that anyone's done an estimate. Certainly not that I've seen is like this precise amount would go into a particular data center. It's mostly viewed from a national overall perspective, but data centers are definitely uh one element of showing that displays our needs for these minerals.

SPEAKER_00 21:05

Now I've never personally seen a data center myself, but I understand they're rather huge. So I can can it be safe to assume that we're talking about not pounds of elements here, but tons?

SPEAKER_01 21:20

I think for the most part, no, because you are actually using very small amounts of these minerals, uh, with the exception of possibly copper. I'm not sure how much copper goes into something like this. Uh it's not the part of it that I've studied, but uh, you know, you can look at an average missile, and you're talking about a very, very tiny bit of these critical minerals, but there's several of them, and they're absolutely crucial. And so if you cut off the supply of any of them, then it inhibits your ability to build new missiles, to build new copper wires, to build new semiconductor chips. So all of these are very critical, but they're actually small in amount of what you need.

SPEAKER_00 22:06

Is China our biggest competitor for critical minerals? And how's that competition unfolding from your point of view?

SPEAKER_01 22:15

Well, China dominates the market. As I've said a couple times, it provides 90%, 90% of processing of all critical minerals that are needed. So you have supply chains that are dependent on China that have nowhere else to go. There are just minerals that you can only buy through China. Sumerium is one of those that's been an impact on the defense industry because China's bandit to companies that do business with defense. And it's been causing, it's very hard. There are samarium rare earth magnets. And so being able to source it and still make those magnets has been difficult on companies. That's just one example of how China has affected our own industry through its monopoly on these critical minerals.

SPEAKER_00 23:06

So what you're saying then is China is not a competitor at all. It's basically our supplier.

SPEAKER_01 23:12

Yes. That is the case right now. Yep.

SPEAKER_00 23:16

That sounds a little bit ominous to me. Am I justified in in that feeling?

SPEAKER_01 23:24

Well, it is ominous to a certain extent because they've already shown a willingness to uh cut off certain rare earths in particular. So, you know, in response to Trump's tariffs on the previous April, that was as a kind of escalated out of control with China, but one way that China was able to push back was through banning rare earth minerals, not all of them, but some of them, which are on pause until October, and we'll need a new agreement to continue that pause. Uh, especially we'll see something when uh she comes to Washington in next month. So, so yeah, it's it's a not a great situation to be in, and it's why the government is spending billions of dollars to try to increase extraction of minerals in the United States, spill out some processing, and look to other nations where they can also increase extraction and get the minerals from there.

SPEAKER_00 24:25

Obviously, minerals are being exchanged throughout various countries around the world on a daily basis. It's a worldwide market. And you study it and you study it in relation to to the the political structure of it as well. So I guess what I'd what I'm interested in knowing is which do you find more interesting? The politics or the logistics?

SPEAKER_01 24:57

Oh, I definitely am a politics person, so I would say definitely the political side of it, but you have to understand the logistics in uh in order to understand the political ramifications when it comes to critical minerals.

SPEAKER_00 25:11

What would one need to understand?

SPEAKER_01 25:15

Well, I think just understanding supply chains and understanding what the impact is when you're dependent on one country to supply the goods that you need.

SPEAKER_00 25:24

And is there uh, I'm gonna, for lack of a better term, say a blindness or an ignorance of the general public when it comes to these dynamics and how much they affect us or and could affect our everyday lives?

SPEAKER_01 25:43

Yeah, I think it needs to be more in our public narrative. I think it has entered, as you said, like you know about rare earth minerals. One thing kind of to your statement, they're not rare. Anyone will tell you there's actually quite a few of them, but it's difficult to mine them in many cases to extract them. And so China has some of the biggest deposits where they're able to extract rare earth minerals, but the US has considerable deposits itself. And its main focus now is trying to, well, to extract more of these minerals, but also to figure out how to process them. And we've actually lost a lot of the know-how to do that. So you have some pilot, some interesting pilot programs going on to try to find a way to efficiently, efficiently process these materials that will go into batteries to uh other other final goods.

SPEAKER_00 26:33

Did you say we forgot how to mine?

SPEAKER_01 26:36

We didn't forget how to mine, but we forgot how to process these, right? So you in the mining part, you know, you you just have these chunks and rock, but you need to actually separate it from uh these elements from each other. Rare Earth is they're very similar to each other. So it's actually a very tricky process to separate them.

SPEAKER_00 26:56

What role does recycling have in the availability of critical minerals?

SPEAKER_01 27:03

It definitely has the potential to have a big impact, right? Uh if we could have 100% recycling, we probably wouldn't need very many uh additional minerals. But that's that's an extreme case that that won't happen. But there are definitely uh people in academia and other work places that are working on techniques that would improve recycling of these minerals and contribute to to the supply. I mean, there are dozens in an average iPhone, and and there are there's already attempts um to recycling from iPhones. I think you're seeing some progress on that, but throughout a lot more materials would be needed um in the recycling process to be useful.

SPEAKER_00 27:49

And are are there any minerals that simply cannot be recycled?

SPEAKER_01 27:54

It's a good question. I don't know of any, um, not to my knowledge.

SPEAKER_00 28:01

Okay, now you and I are both too young to remember when citizens were called upon to donate their pots and pans to provide metal for the war effort back in the 1940s. Is there a possibility we may be called upon again? And what minerals might we need to donate to support the goals of the government, whether in wartime or peacetime?

SPEAKER_01 28:31

Such an interesting question that I've never ever considered. Uh I think, yeah, this is an interesting thought experiment if we were at war with China and we were cut off of those minerals. I mean, I don't think there's a specific mineral, because you're only going to have like very tiny amounts in your products. But I mean, I guess theoretically you could hand in your iPhones and have recycling from that. But mostly I think because of the small amounts, consumer goods won't be asked to contribute in that way. I think I think it just will be put us in a very difficult situation.

SPEAKER_00 29:11

Well, that makes me feel a little bit helpless then that I I can't support my government in the time of need. Although I do have plenty of old cell phones lying around. I would love to find a way to a reason to get rid of them.

SPEAKER_01 29:24

Uh well, maybe that'll, you know, maybe that would happen. I have no idea. I'm just hoping we're not at war with China for sure.

SPEAKER_00 29:32

Well, yeah, and that's why I said, you know, at wartime or peacetime, you know, you you I guess we just never know. Uh we may not be at war, but we still may not have uh availability of uh the critical minerals we need for whatever future applications may come around the corner uh that we really can't anticipate right now. You're correct, it is an interesting thought exercise, and I just thought I'd I'd throw it out there as to see if you had if you had done that exercise at all before.

SPEAKER_01 30:02

Definitely not. Okay.

SPEAKER_00 30:06

Certainly uh you're very passionate about this subject. You study it, you have a podcast about it. Is there anything that I have not yet asked you about that you think is important for people to know?

SPEAKER_01 30:22

I think there's a couple things. So we've touched on the fact that China controls 90% of these minerals. That's huge. That's the most important fact. The second most important fact, I think, got brought up that we don't even know how to process a lot of these minerals. And again, I just can't emphasize enough, extraction is something we focus a lot on, but it's processing uh to get them into the forms that we need to make products is crucial. Because China also has this monopoly on rare earth, it is able to manufacture, it controls like 98% of all rare earth magnets, something that's critical in aviation and again in our defense industry. So that's another factor that that people should realize. But I think the difficult economics of it, and the reason why it's important is because the market itself is unlikely to solve these um problems on its own. Because if you let's say try to get into the processing business on your own to gather capital, well, the fact is that China is going to be able to undercut you in prices and you're simply not going to be able to compete for a profit. And so capital knows that and are not willing to invest in such an intensive enterprise. But awareness is important because they understand why the government government needs to be placing billions of dollars in setting up uh more extraction, but also more importantly, uh more processing, right? And you've seen some of these deals emerge, like uh with NP materials, where part of the loan that they gave NP materials was to uh begin processing and make their own rare earth minerals. And deals like that are extremely important. They involve a heavy public burden, though, because in that case, they're guaranteed a price that they would pay for those uh materials and fine on products. And that is not a popular thing to do because the government could end up spending a lot of money if those if if it's producing um above market rates.

SPEAKER_00 32:33

It would be it's kind of the antithesis of capitalism, is what you're saying.

SPEAKER_01 32:38

In essence, because capitalism is one of those problems that capitalism on its own can't solve. And when capitalism, when there's market failure in that way, then you need government intervention. Now we can't we can't afford to solve every single market failure, but we can look at the criticalness of this particular issue and say, oh, we definitely need to devote public resources. Uh, you know, how much is is a matter of determination of government with public consultation? But the fact that we need to be spending something and making a priority of this has to be supported uh by the people. Otherwise, you know, the the government doesn't have agency to act, at least theoretically.

SPEAKER_00 33:24

Well, uh uh based on the public's current opinion about data centers, I would say if that were to be attempted, it would be an uphill battle for sure.

SPEAKER_01 33:35

Well, I think then you just have to tell them how many are in their iPhones. Because we wouldn't have phones, we wouldn't have computers, we wouldn't have uh we wouldn't have enough electricity lines if we don't have enough copper. So I think that it affects everybody on such a intimate daily basis that it is more of a matter of awareness than um than anything else.

SPEAKER_00 33:59

All right. Well, thank you for helping us uh bring about some of that awareness.

SPEAKER_01 34:04

Well, my pleasure. Absolutely.

SPEAKER_00 34:06

I certainly do appreciate you spending some time with me today in the listening tube.

SPEAKER_01 34:11

I enjoyed this experiment experience, so thank you very much.

SPEAKER_00 34:15

I hope you enjoyed my conversation with Dr. Anita Kellogg as much as I did. Follow Anita's podcast at Kellogg's Global Politics.com. Thank you again to Anita Kellogg for spending some time with you and me in the listening tube. And thank you for putting your ear to the listening tube. Listen to Not the Headlines and This Week in History at thelisteningtube.com. I'm your host, Bob Woodley, for Thou ad Infinitum.