❝ We could change the chessboard in the same way that fracking did for US oil and gas production.”
— Heidi Crebo-Rediker
🎙️ Episode Details
Guest: Heidi Crebo-Rediker
Topic: Securing American Critical Resources
Host: Lyric Hughes Hale, Editor-in-Chief of econVue
Producer: Sam Fu
Recorded: Thursday, July 9, 2026 | 48 minutes
Episode Overview
❝We need to throw the kitchen sink at decreasing our dependence and we need to do it collectively.”
In this episode of The Hale Report, I speak with Heidi Crebo-Rediker, senior fellow at the Council on Foreign Relations and one of the country’s leading voices on geoeconomics, economic security, and economic statecraft.
Heidi served as the first chief economist at the US Department of State, advising two secretaries of state on the intersection of economics, finance, diplomacy, and national security. Her career began with Russian area studies at Dartmouth and work on the Soviet economy during the period of perestroika — an early experience that shaped her understanding of economics not only as markets, but as power.
Our conversation centers on her new Council on Foreign Relations Special Report, co-authored with Mahnaz Khan: Leapfrogging China’s Critical Minerals Dominance: How Innovation Can Secure US Supply Chains.
The scale of the problem is easy to miss. Rare earths are not a large market. They are a small market sitting underneath very large systems.
In an earlier econVue piece, I noted that the entire global rare earth market was estimated at only $19.5 billion, while US rare earth imports from China were only about $170 million. Yet China’s October 2025 export restrictions helped trigger roughly $1.5 trillion in equity losses, while US-listed rare earth firms gained about $33 billion in market capitalization.
That is the paradox at the center of this episode: a tiny visible market can create enormous hidden dependence.
The direct import value of rare earth compounds and metals does not capture the real exposure. Rare earths enter the economy embedded in magnets, components, electronics, vehicles, defense systems, turbines, robotics, and industrial equipment. The market price of the mineral does not reflect the systemic cost of losing access.
The report argues that the United States cannot simply out-mine, out-process, or outspend China. Instead, it must use its own strengths — innovation, substitution, recovery, recycling, finance, and allies — to reduce China’s leverage over the minerals that power advanced manufacturing, defense systems, AI infrastructure, robotics, batteries, electric vehicles, wind turbines, and the technologies of the future.
As Heidi explains, the problem is not simply that China mines rare earths. Rare earths themselves are not rare. The deeper choke point is processing, manufacturing, know-how, and the production of permanent magnets — the components that make rare earth dependence matter.
China understood this early. In 2010, China cut off Japan’s access to rare earths and magnets, creating what Heidi describes as a wake-up call for advanced economies. The United States responded by investing in R&D through national labs and research universities. The result, she argues, is that some of those investments are now reaching commercialization.
That is why she sees a possibility for what she calls a “fracking moment” in critical minerals: a technology-driven shift that could change the chessboard, just as fracking changed US oil and gas production.
🎤 Topics and Key Moments
We begin with Heidi’s path into economics: studying the Soviet economy, central planning, and the transformation of post-Soviet Russia. That background gives her a distinctive view of today’s US-China competition, not simply as a trade dispute, but as a contest over economic systems, industrial capacity, and state power.
We then turn to the central question of the report: what does it mean to “leapfrog” China?
For Heidi, leapfrogging does not mean ignoring mining. Traditional mining still matters. But mining and processing projects take years, often decades, to permit, finance, build, and qualify. Innovation may offer faster routes to resilience.
Among the most promising areas:
Rare-earth-free or reduced rare-earth magnets.
Materials engineering may allow companies to bypass some of China’s most important choke points rather than simply replicate them.Biotech applied to mining.
Heidi points to examples such as microbes being used to reopen copper mines and extract value from spent mines in cleaner and more commercially viable ways.Waste is a strategic resource.
Mine tailings, e-waste, old batteries, old magnets, hard drives, phones, wind turbines, and other end-of-life products contain strategically valuable materials. The United States often treats these materials as waste and exports them, even though they can feed directly back into China’s supply chain.
As Heidi puts it, if China is restricting access to rare earth elements and magnets, it makes no sense for the United States to export waste streams that contain those very same materials.
The Business Model Problem
One of the hardest questions in the episode is how to make resilience investable quickly and at scale.
Critical minerals are strategically enormous but commercially small. Markets do not automatically pay for national-security resilience. Companies need customers, margins, financing, and predictable demand. If China can use its dominance to lower prices, flood markets, restrict inputs, or make Western projects uncommercial, then innovation alone may not be enough.
That raises the question: do the United States and its allies need price floors, collars, grants, equity investments, offtake agreements, procurement commitments, or other tools to keep non-Chinese capacity alive long enough for innovation to scale?
Heidi’s answer is that this is one area where intervention is warranted because the United States is so far behind and so dependent on China. But the tools must be used with transparency, good governance, and a clear understanding of when and why Washington should become a shareholder, lender, buyer, or guarantor.
Why Allies Matter
This is not only a US problem. Australia, Canada, Brazil, Japan, India, Europe, and others all have roles to play as producers, processors, buyers, financiers, and innovators.
The G7 has already elevated critical minerals as part of the economic-security agenda. NATO is now bringing raw materials into the defense-industrial conversation. Heidi draws a useful distinction: the G7 framework is more civilian and economic, while NATO’s interest is tied to the defense applications of magnets and heavy rare earths.
Both matter. Semiconductors, electric vehicles, robotics, turbines, MRIs, and defense systems all depend on materials whose supply chains have become a quiet fault line in global power.
🔑 Key Takeaways
Rare earths are not rare.
The problem is not scarcity alone. It is processing, manufacturing, know-how, and China’s dominance of the magnet supply chain.China’s leverage is now a tool of economic statecraft.
Heidi argues that as long as vulnerabilities remain, Beijing’s ability to weaponize export controls and supply-chain dependence will remain a serious risk.Innovation may be faster than traditional mining.
New materials, waste recovery, recycling, and cleaner processing technologies could scale more quickly than conventional mining projects.Waste is a strategic resource.
End-of-life products and industrial waste streams may become “America’s next mine.” As Heidi puts it, “The low-hanging fruit is really to scale the waste-based recovery”.The business model still has to work.
Resilience will not happen unless companies can finance projects, find customers, and survive Chinese pricing power.This could be a fracking moment.
The United States has changed the global energy landscape before through innovation. Heidi argues that critical minerals may offer a similar opportunity — if we move quickly.
The HSRI Connection
This is also why this issue is so central to the work we are building at the Hale Strategic Resources Initiative — HSRI.
The strategy is increasingly clear, and allied forums can provide the diplomatic umbrella. But implementation requires bringing together groups that do not naturally sit at the same table: scientists, manufacturers, investors, regulators, insurers, defense buyers, communities, and allies.
The question is not whether America can recreate China’s mineral supply chain. The question is whether America and its allies can make China’s chokepoints less decisive.
The Challenge
For decades, globalization rewarded efficiency, low cost, and just-in-time production. Critical minerals reveal the hidden cost of that model. The United States and its allies do not need to become China. But they do need to learn how to organize science, capital, industry, policy, and strategy at scale.
That is the challenge Heidi Crebo-Rediker’s report places squarely on the table, and why this conversation matters now.
🔗 Mentioned in This Episode
Leapfrogging China’s Critical Minerals Dominance: How Innovation Can Secure US Supply Chains - Council on Foreign Relations
Mahnaz Khan, Silverado Policy Accelerator - Vice President of policy for critical supply chains. She leads the organization’s critical minerals portfolio.
NATO Summit Defence Industry Forum — Defence Critical Raw Materials
NATO multinational project on defence critical raw materials
Hale Strategic Resources Initiative — HSRI
About Our Host
Lyric Hughes Hale
Lyric Hughes Hale is Editor-in-Chief of econVue and host of The Hale Report. She is also the founder of the Hale Strategic Resources Initiative — HSRI, a nonprofit research initiative focused on the geopolitics of critical resources, from minerals and energy to medicines and advanced technologies.
