Why Trump Needs Ukraine’s Critical Minerals (Uncut) 03-05-2025

‘Top priority’: Why Trump Needs Ukraine’s Critical Minerals | Ramon Barua

We’re talking about the future of rare-earths metals, critical minerals needed for every single person’s consumption of electronics, industrial goods, and the future of electrification, a very important component to the future of mankind, really. We’re joined today by the CEO of Aclara Resources, Ramon Badrua, who will be talking about not only his company but also the future of this very important sector. Welcome to the show, Ramon.

It’s good to see you. Good to see you, David. Thank you very much for inviting me to join your podcast.

Thank you for joining us. Ramon, let’s take a look at some recent news. This is from Ukraine.

Now, as you know, a few weeks ago, the US had asked Ukraine to provide them with their entire country’s stock of rare-earths minerals in the ground as back pay for all the money that they’ve given to Ukraine to fund the war. Zelensky initially said no. They’ve been going back and forth, and this is the most recent news.

Ukraine and the US are close to reaching a rare-earths agreement. So after the earthquake, the aftershocks, the seismic aftershocks shaking Ukraine and Europe at the unprecedented stage, it’s not likely to end soon. Three years after the large-scale invasion ordered by Putin, everything came crashing down in the space of a handful of days in mid-February.

So the US president was negotiating alone with his Russian counterpart, Putin, as you know, and like I said, they were asking for Ukraine to give all of their strategic and rare-earths metals. So Zelensky proposed a pact on US privileged access to rare-earths, critical raw materials, natural gas, and oil from Ukraine to Trump last September. And negotiations have become complicated in recent weeks due to the extreme demands of the US administration.

The first version was impractical for Kiev when the White House claims to receive $500 billion from the Ukrainian state covering compensation for aid. Now, you’ve been following this story, Ramon. Tell us about the development here in Ukraine and whether or not this is significant for the broader rare-earths sector.

Excellent, David, of course. Look, first of all, let me say that this recent news reflects the importance that rare-earths have to the current US administration. And not only to this one and not only to the Trump administration, but also during the Biden term, we also saw a significant emphasis from the US government in trying to secure critical materials like rare-earths.

This is clearly something that is top of mind and a top priority in the agenda. Going specifically to the case of Ukraine, first of all, let me say that I think President Trump has been using the term rare-earths to refer to several important and critical materials. However, the term rare-earths also reflect some very specific mineral elements, notably neodymium, praseodymium, dysprosium, and terbium, which are the ones who have magnetic properties.

Having said that, although there are several mineralized areas in Ukraine, there are no known deposits of rare-earths. And even further, I don’t think that there are any ionic clay deposits, which are the main source for the heavy rare-earths, which are certainly the more scarce and right now the more critical of all rare-earths elements. So my initial read to this, again, without being an expert on Ukraine, is that the president is referring to a variety of elements.

I don’t think that Ukraine is necessarily a source of rare-earths elements and much less of heavy rare-earths elements. Let’s take a look at this deal one more time, and then we can comment on why this may or may not be significant. The White House press secretary has told reporters on Wednesday, so just today, that the critical minerals deal and the rare-earths deal, as President Trump has said, is absolutely pivotal.

We’re very close to the finish line in getting that done. One of the Ukrainian officials said some technical details are still being worked out. However, the official said that the draft does not include a contentious administration proposal to give the US $500 billion worth of profits.

Okay, so if you say that the rare-earths in Ukraine are not really, as you would define them, rare-earths, then how would you define them? Which areas of the world would be more, I guess, strategically important for what the US is looking for? That’s a great question, because I think, again, that these critical elements are absolutely fundamental for the US to continue developing several technologies, including electric vehicles, wind turbines, the future of everything that is electric, including drones. Those drones today are toys, but eventually, drones will be carrying loads, they will be carrying people, and rare-earths elements are absolutely crucial to generate the torque in the motors that will be carrying those drones. We have seen also a significant increase in interest in robotics, namely humanoid robots.

Humanoids, you know, are very interesting for rare-earths. It’s estimated right now that every humanoid is going to be using between 20 to 35 different motors, which represent between two to four kilos of magnets that carry, of course, the rare-earths elements. And not to go also into industrial robots, which have already an application and that are getting better and better due to the application of artificial intelligence in the commands that control those robots.

So rare-earths are critically important. Right now, as we know, most of them are coming from China. China is a formidable competitor in all of these technologies.

So having an alternative source is a top priority for the U.S. and I would say all other Western countries as well. I would start by differentiating, David, between the heavy and the light rare-earths. I think the light rare-earths are relatively more abundant, and we have some notable mines already in the West, namely MP Materials with Mountain Pass.

In the West Coast, we have Linus with Mount Weld in Australia. However, when we look at the heavy rare-earths, those are much more difficult to find. However, you know, a company that I work for has found them in Chile and in Brazil via a type of deposit that is called an ionic clay.

And ionic clay is important because when you look at where China is obtaining the rare-earths, they are precisely obtaining them from these type of deposits that are present in the southern provinces of that country, you know, in China and also moving into Myanmar. So I think that the bottom line and the take out of this is we are prepared to offer the U.S. and again Europe, Japan, et cetera, the much coveted heavy rare-earths and provide them with alternatives that already have a metallurgical development, a significant advancement in the resources, and the technology also to process them and separate them into individual oxides, no? So here I stand with an invitation, you know, to the U.S. and its allies to look to the southern part of the continent because we have real economic solutions ready to deploy them into the U.S. technologies. Okay, we’ll come back to Eklera Resources in just a minute, but take a look at my screen one more time.

This is from your investor presentation dated November 2024. Heavy rare-earths estimated 2023 supply versus 2030 demand. So this is current supply.

This is future demand. Now, as we can see that the future demand has a big gap between that and the current supply. How does the industry plan on filling this gap? Yes, that is a great question.

Again, if you look at where China is obtaining their heavy rare-earths from, most of them are coming from ionic clays, and where we put there the unofficial production, that is really clays that are coming from different countries in Southeast Asia. I would say notably and by large coming from Myanmar, and they are processed in China. So a key takeaway from this chart is that heavy rare-earths, especially dysprosium and terbium, are to be found in ionic clays deposits.

The question is now, so how many ionic clay deposits do we know outside of that region? And the answer is that it’s very few. We have two owned by Eklera, one in Brazil called Carina and one in Chile called Penco. There is another ionic clay in Brazil called Meteoric.

However, that is a deposit that is much more weighted towards the light rare-earths. So right now, David, we don’t see many alternatives to filling that gap. It says here you have a 241 estimated production output by 2030, right, in tons.

By which year are you estimated, is Eklera Resources estimated to reach this level of production, 241 tons? Yes, we are estimating to have that production by the year 2028. And separately from that, we have also launched an initiative to separate those carbonates that are going to be produced in Chile and Brazil in the United States. That project is a separation project, has a starting date of 2029.

So right on target, you know, for the time when the world is going to be scrambling to find these rare-earths. Let’s talk about this here. This is a similar story, but just a different way of showing a global awareness of supply imbalance.

We’ve already talked about where the supply is coming from. China involved in Tier 1 REE operations and projects. So we have different companies, we have different countries.

Why do you think China is right now ahead in the production of rare-earths minerals compared to some other countries? Is it just a matter of geography or is there something else? No, look, China discovered their ionic clay deposits in the 1970s. So really, they have almost a 50-year head start. There are at least 40 universities in China which are offering right now careers specifically designed to develop rare-earth technologies.

Also, as an anecdote, President Deng Xiaoping in 1992 made a very famous quote. He said, Saudi Arabia has its oil, China has rare-earths. So that gives you an idea of the importance that rare-earths are given in that country.

And as we know, China is looking to compete and lead in all technologies associated with the energy transition. They have a very clear strategy to secure the materials for that. We believe that, again, given that they started mining in the 1970s and these are five-decade-old mines, they are probably already in decay and they are developing a strategy to secure materials outside of China as well.

The chart on the left, what it showed is that’s a chart developed by the Department of Energy in the U.S. which shows that in the short term, it’s dysprosium, the most critical of all critical elements. You see that dysprosium showing on the top right corner, even more critical than lithium, than uranium and other critical materials. So it is very evident that the world is approaching a significant imbalance between supply and demand of these elements, especially as technologies evolve and they require more and more of these materials.

Some recent developments coming out of China, as you’re aware, that China has placed restrictions on the export of critical minerals to U.S. as trade tensions escalate. This was as of December, so it’s not actually recent news, but it’s fairly recent. So let’s suppose, imagine that China were to stop exporting these rare-earths minerals.

What options does the West have then in that particular case? Look, right now, in terms of heavy rare-earths, David, I would say that the situation would be rather critical, because there is no supply and no processing capacity to address such shortfall. And that generates an urgency. That’s why I believe, you know, as we started this interview, President Trump is assigning such an importance to securing these critical materials.

When can we expect Aclara to reach higher levels of production than what is currently the situation? Sure. Look, we’re at Aclara. We have that sense of urgency.

We’re working as quickly as possible in the case of our deposit in Brazil. I’m glad to report that there is a very high level of coincidence between the project that we’re trying to develop and Brazilian authorities, especially in the state of Goiás. Their governor, Ronaldo Callado, and Aclara, we have signed an agreement to fast track this project as quickly as we can.

We have developed a PEA, which is a preliminary economic assessment. It’s published in the Toronto Stock Exchange. It’s a 43-101 report.

We’re right now working in a pre-feasibility study and a feasibility study that they are being led by Hatch, the engineering firm in Brazil. And we expect to have the pre-feasibility ready by September and the feasibility study very early next year. So the permitting and the engineering are working, are moving ahead in parallel, again, as fast as we can.

We recently hired a new general manager in Brazil, Murilo Nagato, who comes from Appian. Appian is a private equity firm with great success. So we’re bringing all his talents and ability to our project.

In the case of Chile, it’s the same. We started earlier in Chile. We’re right now in the middle of the permitting process.

We also expect to have an approval of that permit towards the end of this year. And in parallel, as I mentioned, we’re trying to build a separation facility. We have not fully defined where we want to locate it.

But I would say that a top priority will be to build it in the United States. We’re working very closely with Virginia Tech University. We intend to have a pilot plant up and running in the Q3 of this year to show that we have the technology together with the feed.

And that will make us a quite unique and important company, David, because ACLARA will be able to have, again, the processing technology in the U.S. together with feed coming from two friendly jurisdictions, namely Chile and Brazil. Hence, basically reflecting what China already has. And will allow the West to be competitive in the sourcing of these very critical materials.

And to give you an idea of orders of magnitude, I showed you there in the previous slide the official production from China, which amounts to around, if I remember correctly, 1,600 tons in the slide before. And ACLARA can produce around 241 tons. So based on the official production of China, we will be able to produce around 16 percent of heavy weavers.

And which industries do you think will be most critical for this production? Look, I think mostly for electric vehicles. No, I think we all have seen a Cybertruck accelerating faster than a Porsche, you know, by towing a Porsche. That performance is achieved not because of the battery, it’s achieved because of the motors and the permanent magnets in those motors.

So if Western companies really want to compete with formidable products like the one that BYD is currently offering, I think they are going to be needing, you know, these rare earth magnets in order to keep the acceleration, the efficiency of the battery, the range, et cetera, that are required from vehicles like these. Second, I think wind turbines. Here, the amount of energy that we can generate from wind can be multiplied if we have in the rotor, if we can have permanent magnets.

So basically with the same amount of wind, we can generate more revolutions in those turbines and generate more energy. And then we talked also a little bit before about the other applications of the electric economy that are coming. Again, I think e-trains, e-boats, e-planes are coming and it’s going to be absolutely crucial that they count with rare earths.

And very recently, for example, the Optimus humanoid that Tesla has launched has received a lot of attention. I believe that those technologies, for example, a robot will need to carry a weight. That weight that the robot is holding will depend on the energy that it can generate and also on the power of the magnets that are inside that robot in order to maintain that pressure and that hold.

So there is a very promising future for rare earths. And I believe, again, it’s unavoidable to generate sustainable supply chains to support this technological revolution. Well, speaking of EVs, this is as of December, Lithium Americas, which is a company primarily focused on lithium production, announces closing of Thacker Pass joint venture with General Motors.

So we have car companies now buying lithium mines and other rare earths deposits. Do you see that happening with a Clara, not particularly with GM, but a car company partnering with you? Is that something you would consider? Absolutely. Those those type of partnerships we’re considering actively, I would say we have relationship with several automakers at this point.

And we can offer something that is quite unique and that will provide a competitive advantage, because as you look to generate supply chains that are independent from your main competitor right now, all these automakers are competing directly with China and China has its own its own sources. So we are definitely seeing these automakers trying to replicate such strategy in order to ensure that they have, you know, reliable and sustainable supplies of these critical materials for their products. OK, so let’s talk about the ownership structure of a Clara.

So Hochschild, I believe another miner is involved with the company. Can you talk to us about how many shares or roughly the percentage of ownership that Hochschild is involved with and the share structure for the remaining shares outstanding? Absolutely. We did an IPO.

A Clara did an IPO in December 2021 where we should probably one hundred and sixty two million shares. At the time we that the leading investor of a Clara was Mr. Eduardo Hochschild. He’s our chairman.

He’s a very important businessman in Peru and in Latin America. He owns a very large cement company. He owns also a precious metals company listed in the London Stock Exchange.

He leads a nonprofit university focused on engineering and innovation in Peru. Eduardo is the third generation of a family that has been investing in Peru for more than 100 years already. Eduardo personally owns 37 percent of a Clara and Hochschild Mining, the company from where a Clara originally took form, owns another 20 percent.

Important to mention that we just announced last week, David, that we have closed a recent capital raise of twenty five million dollars. Both Eduardo and Hochschild Mining participated with their with their proportions. But all the rest of the transaction was purchased by CAP.

You can see there on the right on the slide a CAP SA. CAP is a very large iron ore producer in Chile. They operate five iron ore mines in country.

They have a water purification plant. They own ports and they used to own a steel mill in Chile. So a very powerful partner for a Clara.

And I think that is a very distinctive competitive advantage of our company. No people that see that a Clara did a recent IPO. They perceive it as a junior mining company.

But it’s totally the opposite. No, a Clara is it is a new company, but is backed by two industrial and mining groups with several decades of experience in Latin America. And I think that that adds a significant reputation and reliability to the operations we’re developing in in the continent.

Perfect. All right. Well, tell us about your future plans for the immediate future.

Let’s say the next one year to two years. Basically, how are your investors expecting you as CEO to add more shareholder value? Very well. Look, in the case of Brazil, where we have our largest deposit, we’re about to ramp up our pilot plant.

It will be in operation in the month of April of this year. If you’re interested to come and you, David, are already are already invited to come and see us, please. Thank you.

I think you’re going to be surprised and feel the enthusiasm that we feel because the process that we have developed is quite unique in the world. I like to say that to people that they have never heard a mining company like ours because we do not use explosives. There’s no crashing and no milling.

We recirculate the water that we use with 95 percent efficiency. We use a fertilizer as reagent and we recycle it with 99 percent efficiency. And that that recirculation allow us not to have a tailings dam.

And we’re committed to reforesting all the area. You can see all of these in real life in Brazil. Again, you’re all invited.

So that’s that’s the first step. I think a second very concrete step is we’re going to have in Q3 of this year a separation plant, a hopefully in the United States of America, showing that we have the technology also to convert the carbonates that are going to be produced in the mine. Think of it as.

And we’re going to be separating them in very specific oxide oxides of each rare earth with a patented and own technology in the in the United States. And that will make us, again, as a very unique company that has both the heavy and the light rare earth supply and the technology to convert that into into oxides. So we’re very proud about that.

And we believe that that is significant value generation. We’re going to have feasibility studies completed in Chile at the end of this year and in Brazil at the beginning of next year. And that will put us in position really to develop the partnerships that you mentioned earlier with different OEMs and different potential potential clients that want to secure a, again, reliable, but also very importantly, socially and environmentally sustainable rare earths.

This process that I described to you is quite unique, is different to the way that China approaches this. China is very well known that they use in situ leaching methods, which consist of basically deploying the chemicals on top of the hills that contain the rare earths. We believe that we can do much better than that.

And that’s what we are offering to our clients and to the world. Very good. Tell us a little bit about yourself, Ramon.

Tell us about your professional background and then tell us a little bit about the company’s management team and some highlights of your team’s backgrounds. Thank you. I’ll try to make it brief on myself and then focus on the team.

So basically, I started my career as a banker. I worked in New York for close to seven years. I studied in New York as well, did my MBA there.

And then in 2005, I came back to Peru. I started working with Mr. Hochschild since 2005. So we’ve worked together already for close to 20 years.

There are two important senior people who work for Aclara that have similar profiles. Our executive vice president, Jose Augusto Palma, he’s also worked with the Hochschild group for 20 years. And Francois Mott, who is our CFO, he’s worked together with us for 15 years.

So we have a very strong history together. We have a very strong cultural fit. And then we have Barry Murphy, our CEO.

He’s a very experienced engineer who has worked for very large companies, you know, developing projects specifically in South America. And we have two important country managers. Murillo, I already talked about him in Brazil, coming from Appian.

And Nelson Donoso, who is a seasoned senior manager in Chile, living in Concepcion. He’s also the president of the industry association there. So great relationships at all levels, you know, of stakeholders in Chile.

So we have put together really an innate team to develop this. And very recently, we have hired a team of engineers in the U.S., again, very associated to Virginia Tech. PhDs from Virginia Tech who are developing, co-developing with Aclara the technology to do the processing and separation in the U.S. So I’m very proud about the team.

We’re working under a startup culture, but with very strong backing, you know, from solid shareholders. We have a fantastic financial position right now. We have approximately 50 million U.S. dollars in cash.

We have zero debt. So we are very well funded to achieve our goals. OK, very good.

Well, we’ll put the link down below to the Aclara website. So if you’d like to learn more, click there. Thank you very much, Ramon, for your time today.

We’ll follow up more and I’m looking forward to visiting your team in Brazil. Absolutely. Thank you very much, David.

It’s a pleasure. Thank you. And thank you for watching.

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