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Ryan Morfin:

Welcome to Non-Beta Alpha. I’m Ryan Morfin. On today’s episode, we have Professor Ron Suny from university of Michigan, talking to us about emerging trends in nationalism and what it means for the global order. This is Non-Beta Alpha.

Ryan Morfin:

Professor Suny, welcome to the show. Thank you for joining us.

Professor Ron Suny:

Happy to be here.

Ryan Morfin:

Well, you’re one of the world’s leading experts at nationalism amongst other things. In this current political and geopolitical environment with the great powers shifting maybe an inward view, maybe you could talk a little bit about just your definition of nationalism. Maybe we can go after that, around some of the hotspots that are looking inward and projecting power outward through the lens of nationalism.

Professor Ron Suny:

That’s a big question, Ryan. So, let me start sort of what you asked for, which is this definition, right?

Ryan Morfin:

Yep.

Professor Ron Suny:

So nationalism, first of all, is one of those terms like liberalism, conservatism, socialism, whatever, which has too many meanings. So, when people use the term, it can mean everything from the Russian motifs in an opera by Tchaikovsky to Hitler’s policies toward Poland and the Jews. It has this kind of grand and capacious meaning. When the thing means too many things and when it’s applied too often, it doesn’t really tell you much. It’s not very interesting.

Professor Ron Suny:

So, when I am trying to do I’m writing a book called Forging the Nation: The Making and Faking of Nationalisms and I begin with the notion that the nation itself, the thing we think of as the nation, the thing that nationalists appeal to is a thing that is made up. It’s constructed by nationalist, politicians, poets, historians, all kinds of people, and it can mean all kinds of different things. So, if you look at the United States, what would be American nationalism? Would it be some kind of patriotic commitment to the fundamental values of the founding fathers and the constitution declaration of independence? Would it be give me your tired, your poor, you wretched of the earth, come here and breathe free, or would it be America first, close the doors I’m in?

Professor Ron Suny:

Even though my parents were immigrants, we’re now here, born here, so we don’t want anymore. It can mean all these different things, but to be more precise at the moment in the answer to your question, naturalism, whatever it is, the idea that the nation comes first and a new kind of populist authoritarian almost nationalism, America first, Hungary first, make Russia great again, China against the world. Those kinds of nationalisms, the closing of doors, the guarding of borders, that has seen an upsurge in the last 10 years at least, and seems to be accelerating at the moment.

Ryan Morfin:

We’ve just gone through a really strong secular growth, global growth period that we’ll see what happens with the pandemic, but I guess the question is, globalization has been very successful for a lot of the world. The 19th century concept of a nation had borders, had an identity. How is globalization challenging that you think? And, is there a future, I mean, from a socioeconomic evolutionary standpoint, is there a future for nations if we get back on the globalization bandwagon or do you think that’s an outdated framework today?

Professor Ron Suny:

No, this is a really good question. I’ve actually written about this, and it’ll probably come in the book somewhere, right, toward the end, probably, you know? So, globalization is a kind of euphemistic term for the spread of global capitalism. It means that all over the world, there are no more Soviet Unions and that capitalism is the name of the game, you know? So, there’s not a single kind of capitalism. It could be neoliberal capitalism. It could be welfare capitalism like Scandinavia. It could be state capitalism as in Russia or maybe even China to a large extent. But, everyone is in a kind of relationship, which is about markets and trade and the flow of labor. So, globalization or the spread of global capitalism seems to be good as a term. So, people then worry, “Well, what about sovereign nations who make their own decisions and their own policies within the system?”

Professor Ron Suny:

There were a lot of predictions, some by colleagues at the University of Chicago, when you were student there, when I was teaching there, who believed that globalization is the name of the game, the nation is finished, right? It’s over. Then to everyone’s surprise after roughly 2000, 2005, the nation resurged. It’s back and it’s back with a vengeance, and it’s trying to assert itself. So, what you’ve got in the world today to put it neatly is two contradictory trends fighting each other in a way.

Professor Ron Suny:

The globalizing, deborderizing, transnational tendencies of capitalism, capital flows, labor, et cetera, and the resurgence of nationalism, trying to protect your own little capitalist market from the ravages of international competition, from the ravages of migration, which seemed to threaten your local culture and it’s a real struggle. You can see it in the United States between those who so much from the Clinton administration on proposed and promoted global trade free trade NAFTA, et cetera. Those more America first types like the Trump administration, that’s going back to something more like the national market, make it in America, close off to these kinds of trades, et cetera.

Professor Ron Suny:

There’s no predicting what’s going to happen, but I will add one more thing. Capitalism needs the nation. That is the nation still plays a big role in capitalism. There are most things are made in many countries, including the United States within that country, right? So, the two work together as well as compete with one another. So, the nation ain’t going anywhere, it’s sticking around, and it will have to adjust itself to the movements of global capitalism and international labor migration and capital flows, but it’s not going anywhere.

Ryan Morfin:

To ask a bizarre question, but I think it may not be too far fetched. How does, if we become a population of space faring adventurers if Elon Musk has his way, how does the concept of nation state start to migrate if we start to shift people to the moon or Mars, like how will you see that in 100 years from now?

Professor Ron Suny:

My daughter, son-in-law and I just watched this program called Watchman, and it’s based on a graphic novel sometime ago, and this crazy inventor guy invents a giant squid that threatens the world so that the nuclear powers like the Soviet Union or Russia, China, United States don’t destroy each other, right? So, you could make the point that no matter what happens with space travel and the intergalactic connections that might arise, people on earth in nations, in this global interconnected capitalist system that we have need to try in various ways to solve problems that in fact are transnational. Climate problems, right? Global warming, we used to call it. We have new euphemistic terms for it now, or epidemics, pandemics. Is this a national problem?

Professor Ron Suny:

It may have started in one wet market in China, but it’s spread at differential rates in countries that did better or worse, not mentioning any names here, on dealing with the crisis. So, nuclear proliferation, right? All these problems with energy. They are things which are in an integrated global system as we now have that need to be dealt with by nations obviously in negotiation with other nations to solve really transnational and global problems. Will people be rational? Sometimes they are more rational than others, or will they be more selfish, greedy, inward looking? Well, we’ll see. The pandemic has been such a shock to the economic system and to people’s own perceptions about things like inequality, race, the nature of the capitalist system, whether we need something more socialistic, that maybe this is a turning point. They’re calling it inflection point. I had to look that one up, but a turning point.

Ryan Morfin:

Well, one question I had for you is that in the 20th century, we had a debate between socialism, communism, and capitalism. It seemed that in the late ’80s, capitalism won and there was a peace dividend. It seems like in the last 20 years or so, there’s been a resurgence, if you will, or an evolution of this kind of fusion of like you mentioned state capitalism, the China model. It seems that Russia has developed a completely different model, maybe oligarchy that has capitalism for a few, but I mean, how has socialism and communism, how has it morphed in the last 20 years and what do you call China and Russia today? Are they practicing communism at all or is it a perversion of what Lenin and Marx would have crawled over and been very upset about what they see in today’s parties?

Professor Ron Suny:

To begin with, the Soviet Union and Soviet style communism or state socialism or whatever we’re going to call it was one particular manifestation. I would call it a perversion of what socialism was supposed to be about, right? Socialism in Marx’s own vision and even Lenin’s vision before the revolution of 1917 was about creating the most democratic society possible. That is not only having a democratic political system, but a democratic participatory economic system. That was the goal, and the socialists or the Bolsheviks, the communists won in the most backward country in Europe. That is in Russia, largely a peasant country, and that dream of democratization and socialism of that sort morphed over time into a dictatorship, of tyranny that cost millions of lives, et cetera.

Professor Ron Suny:

That system tried to reform itself in the 1980s and 1990s. Tried to do too much, too fast and ultimately collapsed. At the moment when the Soviet style state socialisms collapsed was the moment of the triumph in the West of a particular kind of capitalism. What we call neoliberal capitalism. That is the Ronald Reagan, Margaret Thatcher view that the market can do everything. The famous Chicago school, right? Markets are rational. Markets work perfectly well and everything will be well if we get the state out of things, if we end the kind of Keynesian and welfaristic state policies that actually did so well from 1945 into the 1970s, and we let the market work. So, the former Soviet style states-

PART 1 OF 4 ENDS [00:13:04]

Professor Ron Suny:

The former Soviet style states tried also to adopt this neoliberal market centered capitalism in much of Eastern Europe and in other places, for better or for worse. Russia, of course, carried that to an extreme, sold off the former assets of the Soviet Union, which had been state owned, to what we call the oligarchs in cahoots with the Yeltsin regime, created these huge amount of wealth in the hands of these people who collaborated with the government, mostly with Yeltsin, but also now with Putin’s government. And you have a system of oligarchic capitalism with state enterprises playing an important role. Lots of corruption, obviously in such a system. That system, I don’t even know what to call it. Sort of neoliberal, state capitalism, is that possible? It seems a contradiction. It’s different from China. China, of course, kept the communist party in power. It launched, very successfully, a market system, and it became one of the fastest growing economies in the world.

Professor Ron Suny:

And because of the hold of the communist party, this authoritarian form of capitalism and the amount of freedom they gave to entrepreneurs to do well, there was a kind of deal made. The party said to the entrepreneurs, you go make money and don’t mix in politics. We’ll do the ruling and you go make money. And I actually heard that from Chinese businessmen when I visited China in the 1990s. So that happened, and you’ve got a state capitalism with lots of market features, obviously in China that was doing so well. And it is after all the largest country in the world in terms of population and very ambitious and very well organized that it scared the hell out of the United States, which has been the dominant capitalist country and many other Western countries. And so now the United States, through various means, tariffs, accusations of all kinds of things about China, is trying to somehow contain China, which is going to be extraordinarily hard to do because it’s so big, so powerful, et cetera.

Professor Ron Suny:

And China of course has its own clay feet. They have serious problems. Authoritarian States have to maintain police regimes and censorship, none of which is good for entrepreneurship. And they also have problems with non Han Chinese nationalities. They’re putting hundreds of thousands of people in camps, in the weaker areas of St. John. So it’s a mixed bag, but what we’re seeing is that it’s a really global struggle between the United States, which is in many ways declining as a power and the Chinese, which is rising as a power. And if you read your Thucydides’s way back when, that’s a very dangerous scenario in terms of peace and war.

Ryan Morfin:

Yeah. And the book you’re mentioning, Thucydides’s Trap, I mean, not all of those 16 examples ended in war, but I think it was like 13 out of the 16 did. So the odds are not stacked in favor of a longterm successful, peaceful rise. But as it relates to socialism or communism, there still seems to be relics of the past still playing out. What would you consider Venezuela? How do you look at that framework? Are they just missing the boat? This model is dead and you need to adhere to a China model. Or how would you look at if you were advising the folks in Venezuela to look at their current practice of socialism?

Professor Ron Suny:

So, as I mentioned before, the word socialism means many different things, right? It can be state socialism of the authoritarian type as in the Soviet union or Mao’s China. It can be social democracy, very democratic with the most egalitarian states in the world, indeed the happiest states by many measures, the healthiest states. The people with the longest life lives are in Scandinavia, which are social welfare or social democratic states. And you have then other forms of socialism, which haven’t worked so well. I don’t know what I would call Venezuela. It’s a failed state in many ways. They can call themselves socialists if they like and they do have the support of the lower class people in that country, but they’ve messed up so badly. They’ve ruined the economy. They’ve given socialism a bad name. It’s going to happen to capitalism too, right?

Professor Ron Suny:

Capitalism being particularly look good in the 1930s during the great depression. So, but if I were thinking about the future and if I were thinking, how can we improve the situation? And the pandemic is a good example of a moment when all the pathologies, all the contradictions, all the weakness of the kind of capital system we have, particularly in the United States have been exposed, right? Tremendous inequalities, the diseases, killing poor people, blacks, Hispanics more than affluent whites, et cetera. We see all of this and it’s an exploding in racial demonstrations and so forth in. In such a moment, when you see this, you have to ask, well, which way should this capitalist system go? Should it try to continue to rely on the markets? Should the kind of Milton Friedman views, which seem quite outdated at the moment, survive?

Professor Ron Suny:

Or do we need, in a sense, a much more enlightened policy thinking about the common good, the public good, something like a public health system, which might have prevented or reduced the cost of this pandemic. Do we need investments in things like public goods, infrastructure in the country, ways to protect the most vulnerable people, money for mental health issues and so forth. We rely so much in this country on two institutions, to patrol and police a system that’s deeply flawed. One is the police, who have to do everything from mental health to dealing with the drug crisis to real crime, and two have the educational system. Which we use almost as a policing device or disciplining device to keep young people in their place. And education in particularly is underfunded. And yet we require it to do so much in its own weakened condition. So we need to think of ways in which the state works with the economic system and the private sector, et cetera, to move things in a way that some of these crises and some of these problems, which are shared by the whole population can be dealt with more systematically, more effectively, more rationally.

Ryan Morfin:

Well, as we’re talking about different kind of social constructs, the European union is another one that’s gone through a lot of change in the last few years. What are your thoughts about Brexit, UK exiting the EU and what are your thoughts on the future of this European experiment? Can they create a European nationalism or do you think it’s going to be too tough with the history there to really solidify a new identity?

Professor Ron Suny:

So, and I should first confess that I’m an anti nationalist. That is, I’m not a nationalist. I am probably what people would call an internationalist or a globalist or something like that. You can throw those terms around. That is I see nationalism is generally fairly pathological, but fairly dangerous, particularly in a world that is so transnational, so global, et cetera. Where these grand problems that cross borders need to be solved. But that being said, I celebrate and would celebrate, as a historian and political scientist, any effort like the European union, which tried to go beyond these kinds of antagonistic nationalism that led in the 20th century to two world wars. Since 1945, we haven’t had that. We have a divided Europe, we had the cold war, but the European union and its Alliance structures and all have prevented that from happening again. So I would definitely say that Brexit was a disaster, a terrible error.

Professor Ron Suny:

They’re going to pay a price for that. And now that Angela Merkel and others have realized, whoa, there’s problems within this union. We’ve got countries like Hungary and Poland and others who are becoming terribly nationalist and anti-democratic, et cetera. They’re trying to save this experiment. It’s delicate, it’s fragile, but it’s very worth trying to save. In the same way that when the American colonies first tried, Oh, we’ll join together in some kind of Confederation, that didn’t work. They needed a tighter union. And then they created the most successful economic and political experiment in history, probably with the constitution. So the other part of your question that was so interesting, Ryan, was could there be a European identity that would be like a national identity? That’s hard, that’s hard, but it has happened. That is a civic identity that we’re Europeans, even more than we’re French or Dutch or Albanian or whatever. Because of history, because of the importance of local cultures, differences of language, experiences that they’ve had through history, it’s harder to overcome those more local listic national identities and create some kind of civic European identity.

Professor Ron Suny:

But there’s no reason why people can’t have several identities at once. I can be an Armenian. My parents were Armenian. My mother was born here, my father over there. I can be an American. I can even be an internationalist and think about humanity. And so maybe something like that will work, but I regret that some of the great experiments like the Soviet union, which had its faults, of course, ultimately exploded into 15 different nation states. Many of them, very nationalistic and authoritarian at the moment, rather than through some more gentle process to evolve into more democratic, maybe social democratic union.

Ryan Morfin:

Well, and so Russia has taken a very proactive approach, recently. You see that now in Ukraine, now with Belarus, to go back and maybe reclaim maybe some ethnic Slavic, ethnic Russian territories that were broken up post the USSR. What are your thoughts on that? And I mean, what are your thoughts on the invasion from Russia to Ukraine? I mean, as a Russia expert, how did you look at that playing out? And is that just a telling sign of things to come?

Professor Ron Suny:

Almost everything we know about Russia in the United States is wrong. I’ll say very boldly. We have such a demonic view of Russia and of Putin, that everything is reduced to Putin being a KGB agent and Russia being a bad actor, et cetera. Russia is in many ways a normal state, but it’s a state that was once a great power that’s now a far weaker power. The first thing to know about Russia is that it’s relatively weak, economically and militarily vis-a-vis the United States and the West. It spends less than 10% of what we spend on defense. And I’m not even counting NATO. So it’s relatively weak, globally. At the same time, it’s relatively strong compared to its neighbors. Georgia, Ukraine, the Baltic countries, they’re now in NATO. We’ll see what happens if something happens there. So that’s the first thing to realize. That doesn’t mean that because the state is weak, it can’t be mischievous and it can’t make trouble for the world and Russia can make trouble for the world. But what is Russia really want? And what do you think its goals are? I would say that-

PART 2 OF 4 ENDS [00:26:04]

Professor Ron Suny:

What do you think its goals are? I would say this. I’m going to put this in a big picture. The world today is a struggle between Russia, which is a relatively weak power that wants to be a regional hegemon, it wants to dominate its region, the former Soviet union, and it has trouble doing that. It lost the Ukraine. The Ukraine went toward the West and Putin acted quite precipitously, quite brashly and seized Crimea, which only made the situation in Russia worse because of the sanctions, et cetera. Russia wants to dominate that area, but isn’t doing it so well. It does it to some degree with Central Asian powers, but it’s been reduced in its influence because of its own weaknesses.

Professor Ron Suny:

Russia, as a regional hegemon, is trying to dominate its region faces a very ambitious and quite powerful global hegemon. That is the United States. The United States actually seeks or at least influences much of the globe. It wants to be powerful in the Middle East, in Central Asia, in Afghanistan, in the South China Sea, in every part of the world, Latin America, Africa or whatever. We are not doing that so well. We’ve got ourselves involved in two wars that are going on for decades in Afghanistan and Iraq and the Middle East. And also the United States has been guilty or at least is now paying the price for what you can call imperial overreach. It’s gone too far. It can’t do all of these things. And the American public is reluctant. Indeed the current president is also reluctant to put the resources to spend what the liberal foreign policy established would like, which is to continue our efforts in all of these different parts of the world.

Professor Ron Suny:

Russia is playing a very shrewd game and it’s doing it rather well with a weekend in places like Syria, where they back the winner, the Assad regime, terrible ruthless regime, but Putin is a shrewd realist. He said, “These are the guys that are going to win. I’m going to be on their side.” And they basically reduced the American role. The Americans, in a shameful way, exploited the Kurdish population of Syria, and then abandoned them and allowed the Turks to move in and destroy their enclave Rojava in that area. And Russia did well by backing the winner. It didn’t do so well in Libya. They backed the central government and the Turks have backed who were doing better there. Be careful, Russia. You may also be with your limited resources engaging in Imperial overreach, and you don’t have the resources that the United States has.

Ryan Morfin:

Well, you brought up Turkey and I’m glad you did. I mean, they’re a NATO member. There’s talk of war between them and Greece. They’ve been playing in Syria as well. Libya, you mentioned. What is going on in Turkey? I mean, they just went from a secular nation to maybe an Islamic nation. Maybe they’ve always been an Islamic nation, but were trying to appease the West to get into the EU NATO. What are your thoughts about Turkey today?

Professor Ron Suny:

Turkey is a sad case, a tragic case. I love Turkey. I’m an Armenian. We suffered from the genocide of the Ottoman government in 1915, but I love being there. I have lots of connections with Turkey. I I’ve taught there and I’ve written a book about the genocide that explores that terrible tragic episode. But Turkey is sad and in a tragic situation. They were effectively under the first and early Erdogan government at the turn of this new century. They were moving in a democratic way. They were moving more closer to the West. They were trying to make a deal with the Kurds. Think of it. The Kurds are about 15 to 20% of the population in Turkey. They’re not allowed to study in their own language. A Kurdish child at six or seven when he goes to school, speaking Kurdish at home. Has to start day one in school speaking Turkish and only Turkish. This is a colonial situation with the Kurds.

Professor Ron Suny:

But Erdogan was moving in a really interesting way. We were free to discuss the genocide of the Armenians in Turkey, et cetera, roughly up to 2011. Then he began to move toward a more authoritarian position. He ended the negotiations with the Kurd. He put the leaders of the Kurdish party, the most democratic party, it’s called the HDP, in prison. He put hundreds of journalists in prison. He defeated the army, and he’s on his way to becoming a really authoritarian dictator, but not an effective one. The cities are against him. In the last election, Ancora, Istanbul, Izmir, the three biggest cities voted against his party. Istanbul now has a mayor of the Kemalists party, which is against Erdogan’s party. So he’s in a difficult situation, and the economic situation is not good as well.

Professor Ron Suny:

So Erdogan has turned like Putin in some ways toward nationalism, towards seeing the rest of the world as hostile to it and to imperial adventures. Invading Syria, playing in Libya, threatening Greece, poking its finger in the eye of the United States even. Though Erdogan has gotten a buddy buddy relationship with Trump who has given into him repeatedly. So maybe he thinks he can play the president.

Ryan Morfin:

You mentioned Erdogan is going more towards a Putin like posture going forward, but it doesn’t seem that Russia and Turkey have a good bilateral relationship. Is that accurate?

Professor Ron Suny:

That’s correct. That’s correct. Erdogan and Turkey have mutual interests. They have many things they would like to do. Mainly, particularly Putin of course, would like the United States to be weaker, would like the United States to come to make some deals with Russia, not to be as hostile to Russia. That hasn’t worked out, though he thought he could get a good deal from the current president. Erdogan also would like to see the Turks be more dominant in that region, Middle East, and have the Americans less influential there. They bought weapons from the Russians, again, poking their fingers in the eyes of the Americans.

Professor Ron Suny:

But at the same time, they don’t see eye to eye on a lot of questions. The area you might keep an eye on is what we used to call Trans-Caucasia which is now called usually the South Caucasus. That is the countries that are between Russia and Turkey, Armenia, Azerbaijan and Georgia. The Turks are allies of the Azerbaijanis. They see themselves as enemies of the Armenians. Armenia and Azerbaijan have an ongoing conflict in that region. Recently, there was some shooting there. The Turks declared their firm support for Azerbaijan.

Professor Ron Suny:

Russia is interested, I think, this is hard often to gauge, is to keep hostilities down. This is their backyard. They don’t want a lot of trouble there, and they have actually armed both Azerbaijan and the Armenians. Armenians are more of a loyal ally of Russia. Though I can say having followed it pretty closely that Armenians are less content with Russia than they had been in former years. Armenia is the one area, one country in that area that recently had a democratic revolution. Very popular revolution, brought a guy named Pashinyan to power and is fighting corruption. The Russians are keeping a wary eye on that to see what’s going on in that country. The situation is volatile. It could be a place of conflict. It’s worrisome. We’ll see what Russia and Turkey do if conflict breaks out.

Ryan Morfin:

Going back to China, so there’s talk right now a new Cold War emerging, technology war, currency war, economic war. Do you see us slipping into a similar type of socioeconomic competition with the Chinese model in the next five years, 10 years?

Professor Ron Suny:

The Chinese model has been remarkably successful. Now it has its limitations because it gives rise to corruption. It doesn’t allow the kind of freedom that entrepreneurs and startups and others might enjoy in the West, but it’s been one camp quarrel with success. The United States under the current administration seems determined, because of certain advisors in the White House, to try to limit China’s further growth. And it’s very interesting the rhetoric that’s been used. They talk about China as communists. They talk about the communist party and they’re raising a lot of these old Cold War images about China. Well, they worked well in the past, but people don’t seem to be buying it.

Professor Ron Suny:

After the success of Bernie Sanders and many of the young women and others of color who have been elected to Congress, socialism in America, whatever it means, it means something quite weak, I think. But social democratic welfaristic policies, efforts to end the great polarization of wealth and poverty in the country. That kind of movement has had great success among young people. People aren’t frightened by the word socialism in the way they were when you and I were in Chicago. They seem to be much more willing to think about ways that capitalism can be made to work better, perhaps by taking more, paying more attention to the weaker, the more vulnerable, the less well off.

Ryan Morfin:

I mean, it seems to me that if we start to move our supply chains back from China and the economic capacity that entails, it should have a wealth effect on the emerging middle class, the working class. I’m wondering if that is a solution that is going to be a byproduct of this, what I’ll call economic confrontation that I see on the horizon. But you bring up a good point about the movement around Bernie Sanders and now he’s two elections for two elections. I mean, he showed some pretty impressive numbers in terms of just volume of support. I don’t know how many more elections he has in him, but you see an emerging political class, I don’t know if it’s AOC or people like that, on the horizon that really will put a permanent socialist party here in the United States in the future?

Professor Ron Suny:

We’re not going to have a socialist party, but we might have a more progressive, more social democratic democratic party. Now, the problem is the current front runner in the democratic party is a moderate, a centrist, a liberal, and he’s wary of the left wing of his own party. He’s made some gestures and concessions, but you can look in the next week to see who he actually chooses for his vice-presidential choice. If he chooses Elizabeth Warren, then he’s saying I’m opening to the left. I’m opening to the progressives. We really got to move in a different direction. I would suspect that that’s not going to happen. It may be someone more centrist, more like Kamala Harris or my own governor here in Michigan, Gretchen Whitmer.

Ryan Morfin:

Well, he just announced. He just announced while we were on the show.

PART 3 OF 4 ENDS [00:39:04]

Professor Ron Suny:

But-

Ryan Morfin:

Well, he just announced. He just announced while we were on the show.

Professor Ron Suny:

Oh.

Ryan Morfin:

It’s Kamala Harris.

Professor Ron Suny:

Oh, really? Regrettable-

Ryan Morfin:

So-

Professor Ron Suny:

… my view, but …

Ryan Morfin:

Regrettable.

Professor Ron Suny:

It was a kind of particular conjuncture. It was Black Lives Matter, the killing of George Floyd, the people in the streets, and it became almost impossible to go any other way. Kamala Harris and Joe Biden is a very centrist regime or ticket. It’s going to be hard to attack them as radicals and Marxists and flame throwers and anarchists and so forth. The Republican Party will have to think of something new.

Ryan Morfin:

Yeah. It’s going to make for a much tighter election. I think she’s a moderate, Biden’s a moderate. Not to make a call, but what do you think’s going to happen in November? Do you think Biden runs away with it, or is Trump the maestro of pulling things from way behind and surprising people?

Professor Ron Suny:

It could be one or the other. That is, I think Trump is a kind of magician. I think Trump is … He’s a wonderful snake oil salesman. He’s very effective in these kinds of things. He has learned how to use social media and the media to dominate it. He seems a little bit confused at the moment, almost to be decomposing in front of our eyes in recent interviews and so forth. And the pandemic has obviously damaged him seriously.

Professor Ron Suny:

It will very much depend on how in the next two months or so things work out with the pandemic, whether people can be mobilized, young people and people of color and women in the suburbs, against Trump, or whether the Trump coalition, his base so to speak, holds together. I wouldn’t make a prediction. I’ll go out and vote, though. By mail.

Ryan Morfin:

Were you surprised in 2016 that he pulled it out?

Professor Ron Suny:

I worried about it. I seriously worried about it. We had such an extraordinary candidate in Hillary Clinton. She was certainly the most competent person ever to run for the presidency in the last half century since Franklin Roosevelt. But she was so brutally treated and so brutalized. That is, if you look at the recent documentaries about Hillary, it’s amazing what a job they did on her. So they created this monster, and she wasn’t Bill Clinton, she didn’t have the same charisma, et cetera.

Professor Ron Suny:

And ultimately, she did win the popular vote, let’s not forget, but they played badly at the end. And by 11,000 votes in Michigan, less than 11,000 votes, they took the state of Michigan. So it was quite surprising to people. Even Trump didn’t realize that he would be elected. He certainly wasn’t prepared for it, and he’s continued to be unprepared for it.

Ryan Morfin:

Well, we’re going back into the school season, and I wanted to just hear your thoughts about, as a professor, what are your thoughts about students coming back to campus? What are your thoughts about teaching coursework? Do you think younger kids should go back to school? What are some of your thoughts around the decisions a lot of parents are having to that?

Professor Ron Suny:

We have so much evidence that if you try to normalize things too soon, you’re going to have another spike in this virus. They’re about to bring 35,000 students back to our little town of Ann Arbor. I think this is delusional. I think it won’t work, and maybe by October we’ll have to close down again. I’m teaching only online, both of my courses. Many of my colleagues are upset that the administration is bringing back people. I know it’s a hardship.

Professor Ron Suny:

I feel bad for the freshman class. They want their freshmen experience. They want to come to campus and learn all the things that you learn your freshman year about drugs and drink and sex and all of those things, as well as some other learning goes on as well. But still, this is not the moment for that. This is not the moment for that.

Professor Ron Suny:

We should be much more circumspect, much more careful. Why not do that in January, when we learn what’s going on with this pandemic, when maybe there’ll be some effective vaccine? So I’m very much against the normalization in the short term.

Ryan Morfin:

You have a new book coming out, and I’m looking forward to it. It’s called Stalin: Passage to Revolution. Do you mind sharing a little bit about the synopsis of the book and what you’re writing about?

Professor Ron Suny:

About 35 years ago, maybe when you were a twinkle still, Ryan, I decided I was going to write a biography of the young Stalin, of Stalin up to the Revolution, because I had done a number of books on Georgia and Caucasia and so forth, and I was interested in this evolution. And so I started, and then I realized after a while, wait a minute, Gorbachev is opening the archives. I went ahead and learned Georgian, the language he spoke as a young person. And finally, when all the archives opened and so forth, I wrote this book.

Professor Ron Suny:

And what the book attempts to do is tell us a story of how the poor son of an alcoholic carpenter managed somehow. He was as a boy, a young fellow with a beautiful voice. He was called Bulbuli, Nightingale. He loved singing. He was a romantic poet. He was a nationalist. How that creature, how that person became the Machiavellian, tyrannical, despotic person that we know as Stalin. So this book tries to show how that movement developed, how it created people like Stalin, who ultimately came to power. That’s the story I’m …

Ryan Morfin:

Well, that’s out in October, and we’ll make sure we hyperlink it to this episode for our viewers. What are any silver linings you see in the geopolitical world today? I mean, it seems that we’re in a very dangerous place. There’s a lot of uncertainty, a lot of fault lines emerging. But are there any silver linings or things we should be worried about?

Professor Ron Suny:

Ryan, maybe you remember from our days at Chicago, Self, Culture, and Society, no matter how dire the situation might be, and when you study history, you see catastrophe after catastrophe. Think about the 20th century, right? Two World Wars, the Great Depression, all of these things. When you think about that, and you’re teaching young people, you never leave them with a pessimistic or cynical outlook. Pessimism leads to the right. Cynicism leads to a conservative position.

Professor Ron Suny:

I try to leave them with a much more optimistic view. That is, because history is really strange. I end many of my courses with, “Don’t mistake the present for the future.” Particularly young people. Anything can happen. And a lot will depend … You mentioned the election. If Trump wins, we’re going to move in one direction. If Biden wins, we’re going to move in another direction. Maybe not as far as I would wish, but certainly things will be different.

Professor Ron Suny:

So what are the bright sides? The bright side’s that people have been mobilized. People have been in the streets. I’m not talking about the ones who were doing looting or the kinds of negative things that have occurred, but imagine people, Black, white, Hispanic, all kinds of people out demonstrating against racism, against police brutality, against the indifference of the current regime, towards something better in their lives. That seems to me amazing.

Professor Ron Suny:

And the second bright light I would see, the silver lining or golden lining, is all those heroes. All those people who have been risking their own life to help people in hospitals, in nursing homes. It’s extraordinary. We can talk about people as greedy, as selfish, as out for themselves, and yet when you’re in trouble and you’re in a hospital or a nursing home or in a school with educators, you realize how wonderful people can be, how self-sacrificing people can be, how they find meaning and fulfillment in their life precisely from helping others. That’s why I’m still teaching. And I’m almost 80.

Ryan Morfin:

Well, you’ve got tremendous amounts of energy. And by the looks of that book stack back there, you’ve been plowing through a lot of new books. No one loves books more than you do, and I’m a close second, but … Well, Professor Suny, I love the fact that you were able to come and share some of your thoughts, and I really appreciate you coming on the show today. So thank you so much, Professor Ron Suny from University of Michigan.

Professor Ron Suny:

And I enjoyed it and seeing you, Ryan. So come again.

Ryan Morfin:

Absolutely. Thank you, sir.

Ryan Morfin:

Thanks for watching our episode today. And before we go, please remember to like and subscribe on Spotify, Apple Podcasts, or our YouTube channel. This is Non-Beta Alpha, and now you know.

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Ryan Morfin: Welcome to Non-Beta Alpha. I'm Ryan Morfin. On today's episode, we have Pini Althaus, CEO of USA Rare Earth, talking to us about the supply chain glut in rare earth minerals. This is Non-Beta Alpha.

Ryan MorfinPini, Welcome to the show. Thank you for coming on today.

Pini AlthausThank you for having me, Ryan. Good to be here.

Ryan Morfin: So you're an investor and a miner in rare earth minerals. Can you share with our listener base, what are rare earth minerals? Why are they important and why is there a geopolitical race going on globally?

Pini AlthausYeah, I mean, rare earths are an extremely ubiquitous part of all advanced manufacturing or technology manufacturing today's day and age. Several years ago, I had not heard too much about rare earths myself. I was not that familiar with it and being involved in this sector, in this company, for the past few years has given me an education of course. And I mean, I was sad to hear that 50% of all imports into the United States contain are earth elements and it runs the gamut from consumer electronic devices that we use every day. Our cell phones, our laptops, most communication devices, medical equipment. So there's a tie with COVID, which we can touch on at your discretion. Electric vehicles, defense equipment. So pretty much anything or everything high tech today has a rare earth element or critical minerals contained within them.

Ryan MorfinAnd what are some of the names of some of the more important rare earth? I know there's lithium for batteries, but what else is considered in this category, critical?

Pini Althaus: Yeah, so lithium is a separate category to battery material. The rare earths are 17 rare earths. The four, let's call it, key rare earths that we're focused on at our company, the four rare earths that go into the permanent magnets. And these are the magnets that are found, there are a number of them in your back of your cell phone or an iPad. But if you look at an F35 striker jet, you've got about a ton of rare earth magnets in those. And we've got two heavy rare earths and two light rare earths is part of the permanent magnets. You've got dysprosium, ytterbium are the heavies, and then you've got neodymium, praseodymium as the two light rare earths. So those would be key rare earths that are the focus.

Ryan MorfinAnd you use these in, I guess, in military applications as well, but historically, where has the United States sourced the rare earth for supply chain?

Pini AlthausYeah. And that's the shocking part. We've been securing those materials from China. So China controls the rare earth sector and has done so for the past 30 years or so. And it was a significant misstep on the part of the United States, allowing China to have this control. And actually this wasn't a question of China coming in and doing anything nefarious as far as stealing IP or anything. The US government made a conscious decision about 30 years ago to allow China to come to the United States and acquire the processing capabilities for rare earths. So just as part of some background, you've got the rare earth materials containing various mining projects, but once you extract them, you have to then process them and they go through certain phases before they get to the magnet phase. And China, the thought process was let China do the mining, let China do the processing.

Pini AlthausWe don't need to do that here. And we'll buy the materials from China cheaply and the premier of China at the time, Deng Xiaoping made the comment, he said, "The Middle East has oil. China has rare earths." And unfortunately we weren't smart enough to understand what he was saying. And the Chinese understood that the future of manufacturing is going to revolve around control of the rare earth and critical mineral supply chain. So if you think about it today, Ryan, we cannot build... Forget about consumer electronics and medical equipment. We cannot build the equipment that the US Pentagon or the US armed forces require, whether it's F35 fighter jet, Tomahawk cruise missile, communications equipment, without going to China and obtaining those materials. And it's obvious to all that this should be extremely alarming. We've seen China use this as a weapon, if you will, as far as how it interacts with other countries back in 2010, when there was a dispute between China and Japan on the East China Sea.

Pini AlthausSo China cut off rare earth exports from Japan for 40 days. Japan obviously being a significant user of rare earth elements for their high-tech manufacturing sector, that was stopped after 40 days. But in fact, it was President Obama that first made the United States aware of this, formed a division within the Department of Defense to handle this issue, but not much has happened. And we continue to be relying on China for these materials. And what has been made about trade war with China and whether the trade war is really the impetus for China withholding rare earth exports. And that is a huge misnomer. Whilst China had been talking or implying that they would cut off rare earth exports, the truth of the matter is that China, under it's made in China, 2025 mandate, its belt and road initiatives and others. And you seem to control the critical minerals and rare earth supply chain so that it can continue its dominance as a manufacturer or a global supplier of these materials and finished products.

Pini Althaus: It's the backbone of its economy. And in fact, China has become a net importer of rare earths from different countries like Miramar and others. So with that, they are decreasing the exports to countries like the United States, Japan and others.

Ryan Morfin: And was it ever a risk that the Chinese were going to turn off the exports of rare earth to the US during the trade war? How close were we to that? And was that ever some saber rattling that went down during trade negotiations?

Pini AlthausYeah, I think it was saber rattling. I think it would be paramount to an act of war. I can't say with any authority that that would not happen, but it would be probably, aside from war itself, it would be one of the most significant acts of war cutting the United States off from the ability to procure rare earths. But that being said, I mean, if you look at, as an analogy, the oil and gas sector and the reliance of the United States had for many, many years on OPEC countries to supply us with the oil. And we had embargoes and we had price manipulation by OPEC. This is far more significant given the ubiquity of where these rare earths go. And yes, we're always under the threat that China can cut off exports under the guise of a trade war or for any other nefarious reasons.

Pini AlthausBut I think even more importantly, to just as the natural run of the course of things with regards to their business and their desire to maintain themselves as the global leader in manufacturing and exporting of goods, China is in a position now where it actually requires these materials for their own domestic consumption and can legitimately cut off rare earth exports by stating that they need it for manufacturing and that would actually be somewhat correct. So we're in an extremely dangerous position here with this reliance on China. And it wouldn't just be China. If it was another country, it would be similar issues, not to the same extent, but reliance on one country for these materials is dangerous.

Ryan Morfin: And it's been mentioned in the past that in 2010, China flooded the market to really kill all the competitors in the rare earth mining industry. Where was the World Trade Organization during this period? And how did that play out and how does that set the chess board for China to run the tables?

Pini Althaus:

Yeah. So the WTO stepped in when China cut off rare earth exports from Japan, I think it lasted for about 40 days because the US and Japan protested the WTO, and they stepped in and China resumed exports. While I'm not an expert on these trade matters, one thing that I am aware of is that one of the reasons why China had to resume the export of rare earths was it did not legitimately need all the rare earths for domestic consumption. So therefore it was a nefarious act, if you will, to cut off rare earth exports. Now that has changed, which means China have to cut off rare earth exports today, they have a legitimate case to say that they require these materials. There's a shortage of these materials and they require them for their own domestic purposes. It is the backbone of their economy and there's very little we could do about this today, which is why it's becoming an even more urgent issue.

Ryan Morfin:

And the US government started stockpiling some of these after that incident. Can you talk a little bit about what DOD and DOE has done to start making sure that there's not a critical supply shortage going forward, and is it enough?

Pini Althaus:

Yeah, again, there is a national defense stock pile, and there are materials still that the United States needs to procure in order to shore up its stockpile. There are magnets, the finished magnet products as well, the United States government needs to stockpile. Again, there's a limited amount that the United States government has. It requires approval from Congress, whether it's in the NDAA or other approvals from Congress, to allocate monies for the national defense stock pile of these materials. That being said, there's no endless supply of these materials. And unfortunately, the apparatus, the way it's set up right now with the US government, it's going to continue to require having a secure supply chain of those materials for many, many years to come. So it's not a question of stockpiling for 10 or 20 years, and then this complacency and saying, we'll kick the can down the road. But keep in mind as well, Ryan, that US government accounts for low single digits of overall rare earth imports into the United States.

Pini Althaus:

We're talking about defense contractors, we're talking about the manufacturing sector. The direct impact this has on the economy, jobs, the automotive sector, and others is significant. So it's not just limited to the United States government. If you look at over the past couple of weeks, the sanctions that China have put on Raytheon, Boeing, Lockheed, et cetera. I mean, the question is where are they going to get those materials? And if we go beyond that, you need rare earths for the 5G network. Now that Huawei has been banned from installing the network, not only in the US but other countries, we have to have the ability to get a secure supply of these materials as well. Which currently, again, trying to control the hundred percent. So it runs across the board, both for government, defense and manufacturing in this country.

Ryan Morfin:

Well, and so help me paint a picture for our audience. Does China have all the mines for rare earth, or they're the only ones who started mining it? Or are their mines globally dispersed and nobody's been doing the actual infrastructure to do the mining?

Pini Althaus:

Yeah. So finding rare earth projects or rare earth elements is not the difficult part. It's finding them in significant quantities that makes a project economically viable. And part of that consideration are the environmental rigors that companies in the West have to adhere to. And China, even by their own admission, have had a complete disregard for mining these materials and even for processing these materials. And in fact, just the last week or so, the BBC did an expose on this, 60 Minutes has done an expose on this. But the Chinese have not denied this and have talked about cleaning up their act, but it has an effect on the bottom line for what the costs of mining and processing are if you have no environmental standards to adhere to. So China have exploited those rare earth projects they have, primarily in inner Mongolia, and have brought a number of projects online and quite quickly, and in a significant way, with a complete disregard for the environment.

Pini Althaus:

So it was seen as an environmental no-no in the West for many years. Now, what's happened over the past few years is you're starting to see rare earth projects in different parts of the world sprout up. You've got the Mountain World project in Australia owned by Linus, which is a producer of Nd and Pr, neodymium and praseodymium. So two of the light rare earths. They may have some heavy rare earths coming online at some point in time. And you've got Arafura, which is another company in Australia that we're working with to assist them with their processing so they don't have to send the materials to China for processing. But really these are a drop in the bucket for what the requirements are for the United States. And certainly what the requirements are for allied countries, the EU, et cetera. So there is a race, if you will, worldwide to start bringing projects online. The Chinese are very active in trying to secure assets outside of China.

Pini Althaus:

So in Africa. They have ownership of a project in Greenland. So there is somewhat of a race. The Australian government has stepped in and has started limiting the ability for China to own, or have ownership in, or off takes for the Australian rare earth projects. And that's part of the strategic Alliance between Australia and the US. Canada, similar thing as well. There are a number of projects that are looking to come alive, but these projects are, for the most part, will take many, many years to come online. We have to expedite the process. We have to assist with a [inaudible 00:14:41] supply chain and the domestic rare earth sector, because previously investors have been scared off by things like China flooding the market, which is not a possibility at this point in time, given that China can't actually afford to flood the market. They are already very heavily subsidizing their mine to magnet supply chain there.

Pini Althaus:

This is more now a case of being able to get production from non-Chinese sources so that the United States and allies have a viable, secure supply chain of these materials. And it's a concern worldwide. We speak to governments all over the world, and we're all facing the same issue. Some more than others, especially countries like Japan, that don't have their own rare earth projects there and are reliant on Australia where they've made some investments there. And in the United States, they've made an investment recently in Africa. So there is this race, if you will. And I think we've got a five-year window here to at least stand up a few projects worldwide. Otherwise we've lost this race and we will be dependent on China for many, many years to come. And Ryan, it's a bit of a hypocrisy. If you look at it where you've got materials going through clean, green energy applications, like electric vehicles, wind turbines, et cetera.

Pini Althaus:

That we're sourcing these materials from China, where they've, again by their own admission, has been complete environmental devastation to water bodies around these mines and processing facilities, to the communities. People have been getting sick around these projects yet we're putting these materials into our electric vehicles or wind turbines. It makes no sense at all. And people are starting to wake up to this. And that's why the sector is starting to see a lot of support come out of Congress and bi-partisan support. And in fact, it's one of the only bi-partisan issues right now in Washington. And it's good to see that some things decided to move in the right direction.

Ryan Morfin:

And is there a special process? You talk about the expense, is it really difficult to mine these? You have to go through a special chemical process to extract and clean and purify. Is it a lot harder than, say, gold or silver or some of the other, we'll call, more traditional elements?

Pini Althaus:

Yeah. It's all about the processing to some extent. So if you look at MP Materials in California, which used to be Molycorp before they went through their bankruptcy. They are a miner of Cerium and Lanthanum, which are two of the light rare earths, the lower valued light rare earths. Given that they do not currently have processing technology, they are sending those materials to China for processing where China is tariffing those heavily. Linus is also, they're doing their processing work in Malaysia and elsewhere. So it's really about the processing at this stage. One of the things that we've done, after we put out our PDA last year with our upgraded resource, which now includes a significant amount of lithium. We make a decision that, based on the test work that we had done around our processing methodology, that we were not going to send our materials to China. That it's paramount for us to do this work in the United States and in a collaborative effort as well.

Pini Althaus:

We've been asked by some of our investors, "Well, why would you be looking to help other projects with their processing?" And the answer is simple. There's no one project or one company that's going to put China out of business or make a dent, or somehow be able to take care of the overall demand worldwide for rare earths and critical minerals. And it's very important for us to have processing capability in the West. So that was the impetus for us opening up our own rare earth and critical minerals processing facility earlier this year, which we did in Wheatridge, Colorado. And in fact, we've made some significant progress on the method that we're using for this. And we're starting to collaborate with Australian companies, Canadian companies. We're currently talking to a group over in Europe as well, because this has to be a collaborative effort.

Ryan Morfin:

How does Europe solve for these problems? Do they have this better under control than the US?

Pini Althaus:

No, they're in a far worse position than we are. The EU commission recently put out a report, I think, a couple of months ago that the requirement for rare earths is going to increase tenfold within a short period of time. Lithium 18 times. They don't really have rare earth projects. Again, there are the Greenland projects, which people have heard in the news recently. Those need to further development work so they don't have rare earth projects ready to come online there. There are a couple of lithium projects that are spread around Europe, but for the most part, Europe is in an even more precarious position. If you look at Germany with the auto manufacturers, you look at the big companies like ThyssenKrupp and others, all these countries and companies are looking for alternatives to China, because we've already seen in the news about China withholding or reducing exports of some of these rare earths that are required for these industries.

Ryan Morfin:

And you mentioned earlier the regulatory posture of the US makes it difficult to mine. Is it becoming a more bi-partisan issue that we need to maybe relax some regulation around the mining exercise, to incentivize private sector to come in and start producing this? Or is the Republican party versus the Democratic party on two separate pages of music?

Pini Althaus:

Yeah. Good question, Ryan. I mean traditionally the Republican party is obviously being more pro-mining and in favor of less regulation when it comes to these things. With regards to our project, we're on Texas state land. So we don't trigger federal environmental permitting at this point in time. And obviously Texas being Texas, a mining state and oil and gas state, things are a lot easier in Texas than they are on projects on federal land where the Bureau of Land Management controls the environmental process around that. But the thing is here, and I don't want to step into what other companies are doing, et cetera, but we do need to be reasonable about allowing projects to come online if they're adhering to environmental standards that are acceptable worldwide. And what we do know, is that China is destroying the environment and cities and water bodies around their mines and processing facilities.

Pini Althaus:

We have standards here in the United States, and I think what we need to do is make it easier for companies to mine, while at the same time protecting the environment. And there are ways to do that. And we're definitely seeing buy-in from Congress, from both sides, with regards to looking how we can stand up a secure supply chain. And, obviously under the Obama administration, they had very strict regulations when it comes to mining. And that's changed under the Trump administration. Hopefully what we start to see is some normal middle ground that'll allow other projects to come online.

Ryan Morfin:

And typically in these rare earth mines, is it amalgamation of different minerals that are all consolidated together and you have to separate them out? Or do you ever find pure play, Europium, I can't even pronounce some of these. Gadolinium, Cerium. I mean, are they all mixed together and you've got to filter and sift them through, or are they pure play mines?

Pini Althaus:

No, they're generally they have a mix. So they're polymetallic projects. They have a number of different materials. Some projects, you more to what we call the light rare earths like MP in California or Linus in Australia. Our project is actually on the opposite end of the spectrum. We have a very high concentration of heavy rare earths. That being said, we do have to go through a process of separating these materials. But the case of our project where we've got 30 materials. We're not going to produce 30 materials. We're not going to market 30 materials. So what we're doing is we're focusing on the key materials that are marketable, that we need for permanent magnets, lithium as well, and working on the separation and the optimization of those materials in particular. But we're all faced with the same processing challenges and that is something that can't be set.

Pini Althaus:

There's no easy way to do this. There are different technologies that have been used in different parts of the world. So predominantly there's a process called solvent extraction, but it's big, it's bulky, it's not benign. It's a bespoke solution for one particular project. So it doesn't work for feedstock from other projects. What we've done is we're using a processing technology that's actually been around since the 1940s. It was part of the Manhattan Project. It's called continuous ion exchange. In fact, the Chinese use it to increase the purities from 99.99 to four nines, five nines, and even six nines. So for some applications you require higher purity levels. It's a far easier processing method to scale up and to take feedstock from other projects. In fact, we've demonstrated for the Department of Energy that we can take coal waste from Pennsylvania and do high purity separation of rare earths using our processing methods. So it's not a step that can be skipped unless one needs to send it to China for processing, which is not going to help us with our objectives here.

Ryan Morfin:

How many other, we'll call it, going concerns on any other businesses that are doing this, that are trying to, I guess, start the development of these mines. Are you guys one of a few or are you one of many? And is it an international or just a US game? Who's leading the charge at going after this?

Pini Althaus:

Yeah, well, I'd say the Australians are leading it outside of China right now. You've got some really good projects in Australia. Again, more skewed toward the light rare earths. There's one more heavy rare earth project in Australia, which is not yet producing. The United States, you've got MP Materials, you've got Ucore in Alaska, you've got the Bear Lodge project in Wyoming, which is also another light rare earth project. So as far as a heavy rare earth project that looks like it will come online in the near term, that would be our project. In Canada there are a couple of projects there as well, and again, more skewed toward the light rare earths. But we really need to get as many of these projects online as possible. Because again, I don't see it as competition. We all have a problem doing supply agreements or offtake agreements for our materials.

Pini Althaus:

In fact, one of the things that we're going to have to consider is looking at potentially scaling up our production, based on the demand that we're already starting to see. And I think other companies would find that as well. So it's all about the economics of the project. You have projects that were economically viable back in 2012 or rare earth prices with 35% or so higher than they are today, and are not necessarily viable today. So that's the challenge as well, economically viable projects. And we've got to get as many of them online as possible. It takes many, many years. I mean, our project has had over $70 million put into it to get to where we are today, and we're close to getting to the production scenario. It all revolves around processing at this point in time.

Pini Althaus:

We'd be very happy to see another couple of projects come online, because this is extremely important for national security and for the economy as well. I mean, if you think about it, Ryan, if you've got a billion dollars of rare earth materials, that translates into a trillion dollars or I should say trillions of dollars of finished product. So you've got a magnet in your phone there that's worth a couple of dollars and the cell phone's a thousand dollars. And electric vehicles and defense applications even more.

Ryan Morfin:

Yeah, everyone has one of these iPhones now, and there's tremendous amounts of rare earth on the circuit boards here. And I think people take it for granted that that supply chain is not secure right now. So one question for you, there's talk of this maybe medium term to longterm, but there's talk about mining in space. Do you think that's a feasible option in the longterm, medium term? What are your thoughts on that?

Pini Althaus:

No, that's just ridiculous. I mean, we're trying to find ways to make mining on earth economically viable. I think the cost of going up to space would be more than what our capex will be bringing our entire project into production. I mean, we've got about a 350 to $400 million capex to bring 130 year mine life into production. I'm not an aerospace expert, but I think sending a rocket, building a rocket ship and sending it up, I think maybe on the fuel alone, you could bring a couple of projects into production. So unless we have a fortunate situation or an asteroid lands on earth, and fortunate if it lands somewhere where we don't care, I don't see how that happens. And if it's big enough, it's a problem as well. It's nonsense. And even, options aside of the deep sea mining for rare earths, I mean, you've got all sorts of environmental issues around that as well. I think we need to look at projects that we can bring online, that can be done so in an economic way, that can be done so in an environmentally responsible way.

Pini Althaus:

I mean, one of the things that we've done at our project is we've got in excess of 60% of the materials that have come out around top, will have a clean green energy applicability to them. So we're using the benign processing method. We're going to be using renewable energy on site. In fact, we will likely be putting a solar farm on site as well. We've talked to a couple of companies that have approached us about that, and we'll be a net producer of power for the surrounding area. So there are ways to do it which don't affect the environment. Obviously if there's a project that's situated on a sensitive area, that's a unique situation for that specific project. We've seen it with the Pebble project, which is not a rare earth project. The Pebble project in Alaska where their environmental concerns is we've been recognized by both Republicans and Democrats, but we have to be reasonable about the projects that don't have environmental concerns.

Ryan Morfin:

So Pini, in season two, we ask all of our guests a series of six questions. They're usually, yes, no questions, but trying to take a survey of our conversations. And if you want to add a little context to the yes or no, feel free, but here goes the first question. If there was a COVID vaccine available today, would you take it?

Pini Althaus:

Yes.

Ryan Morfin:

Who do you think is going to win the election?

Pini Althaus:

Which election?

Ryan Morfin:

The US election.

Pini Althaus:

Well, I think it looks like Joe Biden's going to win it, but I think what happens, if we go past January six from my understanding is that the house will vote on it and it's one vote per state. But I don't know if I see it getting there at this point in time. I really don't have a crystal ball.

Ryan Morfin:

Third question. What type of economic recovery are we in? What type of shape is it taking? A V-shape, W, U, L?

Pini Althaus:

Yeah, I think 2021 is going to be challenging. I think we've been, and rightly so. I mean, we've had no choice as of almost every other country. We've been printing money for the past year because of COVID. And I think we've got to brace ourselves that, at some point in time, the chickens come home to roost. It was a necessary step. People needed it on an individual level. Businesses needed it as well, but I think we've got to do whatever we can to stimulate the economy, give people confidence to go out and work again, employ people. So I think we've got to watch ourselves, especially in 2021. And I have some concerns, but long-term, I think the approach in the United States is a healthy one.

Ryan Morfin:

During lockdown this summer and quarantine, was there anything in particular that you accomplished that you're particularly proud of?

Pini Althaus:

Yeah. A great amount of family time, which, if you would've asked me a few years ago if I could sit at home and be at home for six months, I would have told you absolutely not. I wouldn't be able to do it for six days, but it has... I'm sure it's done this with a lot of families as well. It's brought families together. We had a baby actually last year on Thanksgiving. So I was doing a lot of travel at the time and thought I wouldn't get to see my daughter in her first year or couple of years too often. And being home with her every day is actually been just the most amazing experience. So thankful at least for some silver lining in COVID.

Ryan Morfin:

Are there any silver linings that you see in the economy going into 2021?

Pini Althaus:

Yeah, I think we've gone through an absolute beating and it looks like we've got the ability to come out of it. And I think that's a testament to how strong the economy was built up in the years preceding COVID. So overall I remain an optimist. I mean, we are a country built on opportunity and going out and making it happen. And we're not a socialist country sitting and waiting for people to send us paychecks or wealth distribution or anything like that. I think the American dream still lives on. I think if you go out and you're willing to work and put your head to it and heart in it, I think we do have the ability to climb out of it. So if we look at what the economy is doing over the past few weeks, it looks like it's starting to rebound. And to me, that's assuring because it could go completely one way as well.

Ryan Morfin:

And the last question is, is there anything that you're watching, or listening to, or reading today that has been impactful on your thinking that you'd like to share with our audience?

Pini Althaus:

Yeah, that's a good question. I think it's been more personal stories. The news, I sort of take that in context or with more than a grain of salt. In some cases stay off the news channels for a number of days at a time, it became quite repetitive. But I think on the personal side, talking to friends, my family's all back home in Australia, they've just come out of 110 day lockdown, which we can't relate to that. It's been very trying on them and seeing the fortitude that they've had to come out of that and stay intact. I think the mental health issues that will come out of COVID are going to have a far longer effect than the economic issues. I think we're going to have to focus on mental health issues in this country for a long time to come.

Pini Althaus:

The impact on kids has been significant with regards to lockdown or remote schooling, et cetera. But to see people come through it. I think it's a testament to people in general and to the country and other countries as well, to see got that fortitude and survival instinct to try to get through whatever adversity we can. So hearing the personal stories, the challenges that people have gone through, I think it's made me a lot more aware of things that I have to be thankful for and where we can help out other people as well. I think we have to be united going forward because there are things...

Pini Althaus:

I think one of the things that COVID has shown us is we can get into this complacency and life goes on and we go one day to the next. And all of a sudden we get hit by something that affects everybody equally. I mean, COVID, whilst there were groups of people, whether it was the elderly or people with underlying health conditions, that got hit the worst. I mean, we all got hit in some form or another. So really, this should be something that unites us, not divides us.

Ryan Morfin:

Well, Pini, I appreciate you coming on today to talk to us a little bit about the supply chain crimp on rare earth and we'll definitely keep an eye on it and would love to have you back in the future.

Pini Althaus:

Thank you, Ryan. Thanks for having me.

Ryan Morfin:

Absolutely. Thank you. Bye-bye. Thanks for watching Non-Beta Alpha. And before we go, please remember to like, and subscribe on Apple podcasts and our YouTube channel. This is Non-Beta Alpha, and now you know.

 

The unique history of a Maryland based distillery and craft secrets on how to make great American Bourbon w/ Admiral Scott Sanders Founder of Tobacco Barn Distillery

The unique history of a Maryland based distillery and craft secrets on how to make great American Bourbon w/ Admiral Scott Sanders Founder of Tobacco Barn Distillery

The unique history of a Maryland based distillery and craft secrets on how to make great American Bourbon w/ Admiral Scott Sanders Founder of Tobacco Barn Distillery

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