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[flagged] Chinese Dominance of Rare-Earth Metals Threatens to Disrupt U.S. Manufacturing (globelynews.com)
35 points by ptmnds 48 days ago | hide | past | web | favorite | 39 comments

For about a month or two, after existing stocks have run down and before local refineries have started up...

China's not the only source of rare earth metals...just the only location currently willing to accept the environmental costs of refining the ore to extract the valuable stuff. Within the past week, 3 mining companies have already announced plans for non-Chinese rare earth metal refineries, to be sourced from the Mountain Pass mine in CA that provided nearly all of the world's rare earth materials until the 1990s.

The mine is still very viable and was re-started several months ago. It was originally shut down because it wasn't feasible to run with environmental mitigation costs factored in...but now it's considered a strategic facility and so it can count on the federal government to provide any financial support needed on that front.

They can be refined in environmental ways, it just costs a bit more money. Domestic refiners shutdown because China underpriced them by not having sane environmental regulations.

a bit more money

Do you have any reference for how much exactly it would cost in less environmentally harmful way?

Using made-up numbers, the problem goes roughly like this:

Start with a million tons of rock. Process it. Now you have 999998 tons of very finely powdered rock, 1 ton of valuable product, and 1 ton of naturally occurring radioactive waste. You aren't permitted to mix the radioactive waste back into the rock, even though that is where it came from in the first place.

Among other things, you get thorium.

The thorium itself possibly becoming a valuable commodity if Gen III/IV nuclear reactors get built. It’s a very stable isotope (age of the universe half-life so far) and doesn’t emit hard gamma radiation (though its daughters do, but again very long half-life), store it up.

And if you're doing it the cheap way... a lake of acid.

A standing general reminder for anyone new to Rare Earths - they are rather humorously mis-named. They are not especially rare.

They're not as common as iron, but more abundant than silver.

Where are the local refineries you are talking about? I'd love to learn more because I'm under the impression that Chinese refineries have so much over capacity that they have already put all US refineries out of business.

There are none, which is why there is the gap. There is one under development in CA at the mountain pass move, one announced in west Virginia, and one announced in Nevada.

Due to the way rare earths are refined, the facilities are relatively cheap and fast to build. .. but they're expensive to operate in the West.

From what I've read, this looks like it's just posturing on China's part. There are plenty of other sources that can be brought online quicky. The bigger picture is what I'm trying to understand.

How real of a threat is the trade war to China? Could it cause a recession? Worse? Will it have long-term effects for them?

Which party is likely to suffer the least, or gain the most?

Is the US planning on strong arming China long enough for other countries to step in, eg. India, Vietnam, etc.?

What's the objective here? Is it to rebalance power, maintain the lead a little longer, permanently knee-cap them, ...?

It seems like once the old guards in the CCP rejected the reformist trade deal in late May that the inevitable path for both countries is disentanglement. Thus the 25% tariff hike on all Chinese imports possibly starting June 24. Thus the crackdown on Chinese tech with ties to the Chinese government, such as Huawei and DJI. We are now seeing the progression of complete separation of US and China, economically and financially. Between two completely different ideals: autocratic authoritarian, state sponsored economy vs republic, free market

Not 100% true. Semiconductor industry isn't a result of free market, it is a highly strategic sector that is largely influenced by political/military goals, this is a claim from Obama administration's own report of China's ambition in chips.

Quote from the report

> 'The global semiconductor market has never been a completely free market: it is founded on science that historically has been driven, in substantial part, by government and academia; segments of it are restricted in various ways as a result of national-security and defense imperatives; and it is frequently the focus of national industrial policies. Market forces play a central and critical role. But any presumption by U.S. policymakers that existing market forces alone will yield optimal outcomes – particularly when faced with substantial industrial policies from other countries – is unwarranted. In order to realize the opportunities that semiconductors present and to effectively mitigate major risks, U.S. policy must respond to the challenges now at hand'

I'd never thought about it like this... pretty scary. Our economic ties always calmed my anxiety about a US-China war starting

I wouldn’t worry, China is no shape to start a war with US. It is currently facing 3 wars: political leadership - with Xi faction vs the old guards. Internal population, with unrests in Xinjiang, Tibet, Hong Kong, and economically suffering northeast and western region. And neighbors, with Taiwan, Vietnam, Indonesia, Philippines, and India, over South sea. The CCP doesn’t have the financial or political capital to fight any of the wars currently.

A 4th war with the economic superpowers - US, EU, Japan would end with so quickly with simply an economic sanction.

OTOH, we can say something similar about the US.

Trump has been battling investigations and possible impeachment hearings since day one. Partisanship amongst voters is at a 40 year high. And the US is waging the longest war in its entire history, with no proper resolution in sight. Plus -- who knows? -- it might just start a brand new war against Iran.

The last thing the US needs is a military war with China.

A war with China won't be a war fought on the ground. It will almost assuredly be a war of navies and cyber. The US can handle both in perpetuity. Neither country wants to use nukes and the US has 0 interest in occupying China.

> The US can handle both in perpetuity

How can we be so sure?

Unfortunately I suspect the Chinese -- coming from a culture with one party and zero dissent -- take all the anti-Trump rhetoric in the American media as a sign of weakness, and this emboldens them to drag out a trade war that they have no hope of winning.

Economic ties are great and all, but compared to the absolute insanity of opening up the possibility of MAD I don't think they're really all that important when we're talking about a US-China war.

They might do something to limit proxy wars, but if we're already cutting some ties over some bullet points on a trade deal, I can't imagine they would have deterred any type of at all war anyways.

yeah starting to realize how fragile they were in the first place but I guess I'll know more as we see it play out

That is the terrifying situation we are in... where the current batch of populist authoritarians are starting to tear down the economic spiderweb that connects most of the world. This was a system created with the intention of making another war so costly/impossible it was avoided. The EU arose from this concept. This isn't something I am afraid of in the next 5 years, but it is something I am really afraid of over the next 25. Unless China gets crazy and goes after Tawain for posturing.

I don't fully blame the populist either for their recent craziness, not enough was done to keep society "fair" and to provide a strong social safety net during the wild ride of globalization. The EU did a better job but is now under migrant pressure and fear-mongering, and the USA is imploding under health care, the cost of having/raising kids, and the middle and lower income brackets having 40 years of degraded earnings power.

Hopefully, we can sort it out with some good voting and a political realignment in the USA.

This is my take:

Since China has had US military bases in its backyard for the past 70 years it finally feels that it’s big enough to flax some muscle in Pacific. Hence they’re doing that shit in South China Sea. US empire naturally sees this as a threat to its colonies and interests in Pacific. In order to seam like it’s doing something about it is pushing the anti China propaganda to its population by imposing the tariffs and in turn it is filling its coffers which are somewhat lighter since it gave the tax cuts to big business. Of course it has positioned the tariffs as if China is giving them that extra 25% instead of letting the American consumer realise that they’re the ones who will eventually foot that bill through higher prices. There won’t be any war. Neither country can afford it. And China won’t do much about it. They just want to seam like they’re retaliating in front of their population.

I would say to get China to stop doing a bunch of shady shit like IP extraction but in reality I doubt people in charge care about that as anything but an excuse for strategic leveraging.

Same thing happened in 2010. There were talks of restarting mining in the US but obviously it didn't follow through. Those who do not learn history are doomed to repeat it.


Isn't it the case that some of these are waste materials of existing mining activity and that some mines could tool up very quickly to refine them, only it just wasn't economical to do so?

Not sure if it's waste material, but yes, the only reason there isn't non-Chinese supply is economics. If they ban export the economics changes quickly.

"However, a recent analysis of the current situation published by Barrons suggests that alternative sourcing and better management of supply chains in the rare-earth industry could help U.S. companies ward off a potential crisis"

Is buried at the end of the article as it undermines the whole clickbait premise.

China is threatening to disrupt U.S. MANUFACTURING. If that's their response to the blacklisting Huawei they are looking very weak and should just throw int he towel.

i don't recall China repeatedly stating that he wanted a trade war, then unilaterally announcing tariffs on twitter leaving his own state department in the lurch. I think there may have been another party doing all that stuff.

Correct, China would prefer to continue to not live up to its commitments for 20 more years.

If you’re implying that the US manufacturing sector is too small to matter, you are incorrect. Manufacturing is still huge in the US and such a disruption would be very painful.

So you think that China restricting export of rare earth metals to the US would be very painful if it happened?

don't mean to make an offtopic request, but anyone have book or podcast recommendations for learning more about the Chinese political situation?

I found Everything Under the Heavens to be rather enlightening.


thanks, I'll check it out!

I think this is really unlikely to happen, because all Trump has to do is put even higher tariffs on any goods that use said elements that are made in China.

The impact would cripple Chinese exports to the US, which could put their economy into recession - and a recession is the last thing that Xi wants to deal with.

My gut tells me that the rare earths will be more subtle - such as export slowdowns due to new paperwork requirements that magically appear. Much more effective, and China doesn't have to look like the bad guy.

You’re assuming United States production facilities can just push a button and they all turn on. Or that you can take what’s being produced in China and just automatically produce it here?

Neither actually.

I’m saying that if China bans the US for importing it that a trade war of unimaginable consequences will be started.

Right now it’s just a scuffle.

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