Elon Musk Pal Spotlights Regulatory Absurdities for American Mining
Chamath Palihapitiya was recently interviewed by Tucker Carlson and offered interesting anecdotes about his frustrations as a mining investor. Might he be a catalyst for needed change?
In July 2020, Chamath Palihapitiya co-led a $200 million private investment in public equity (PIPE) into Fortress Value Acquisition Corp., which merged with MP Materials to bring the Mountain Pass mine in California into commercial production. Mountain Pass is one of the largest sources of rare earth metals outside of China.
Mountain Pass was Palihapitiya’s big bet on monetizing “climate change” by being a domestic supplier of minerals essential for the “green transition.”, but he has grown disillusioned with the adverse American regulatory environment for mining.
Born in Sri Lanka, Palihapitiya moved to Canada at a young age. He studied electrical engineering at the University of Waterloo before transitioning into business and finance. In the ensuing years, he invested early in several of Elon Musk's ventures, including SpaceX and Tesla.
Geopolitical considerations drove his investment in MP Materials. He aimed to reduce U.S. reliance on China for rare earth materials and expected quick progress and a warm reception from authorities. However, during an interview on January 23, 2025, Palihapitiya explained the investment to Tucker Carlson and declared it nearly impossible to achieve final permitting to mine anything in California due to excessive regulatory hurdles.
He contrasted California’s water torture with his experience in India, where he secured a rare earth sourcing deal with the government in 18 months. Yet, even though Mountain Pass could satisfy its “clean and green”, the permitting process in California had a 13-year timeline.
“Rare earths are a misnomer. They are not rare, but they are abundantly available in the earth. There is an incredible supply of rare earths in California. You could not for the life of you get a permit in California, no matter how clean. How green. To mine those materials to make sure that we could make magnets so that we could make the robots so that we maintained our technical supremacy.”
With Palihapitiya having Musk’s ear, could he be a catalyst to bring DOGE’s attention to the obstructions harming American mining? The federal government seems acutely aware that the US does not have a reliable and independent supply chain for minerals crucial for maintaining technological and economic power across various industries. Likewise, America has lost a significant portion of its materials processing and fabrication capacity, which needs to go hand in glove with mining.
Musk has previously expressed interest in Tesla potentially getting involved in mining, specifically for lithium, and has emphasized the need for innovation in the industry. He has underscored the importance of domestic mining in ensuring a stable supply chain for battery materials necessary for EVs, especially in reducing reliance on foreign sources for several minerals, notably lithium and nickel. Tesla already operates a lithium refinery in Texas.
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