China Report: America, China Knows That You Need Rare Earth Elements

Editor’s Note: The story below is drawn from a China news source on October 1, 2018.  Global REEs Venture shares this story with readers to shed light on the fact that the issue of rare earth supply is a major problem for America. The fact that America has kept rare earths off the “tariff list” is obvious.  It draws parallels to the Hans Christian Anderson story “The Emperor Has No Clothes”.  At the moment, America Has No Rare Earths…

Those who read the full story will realize that rare earth elements are a global problem too.  Yes, rare earth elements are a problem for China too.  Rare earth elements are a problem in Malaysia, Australia and all other parts of the world.  The Lynas Corp. fiasco has little to do with availability of (Australian) rare earth elements.  The real concern with Lynas Corp. is a regulatory matter associated with processing.  The Malaysian government has good reason to be worried.  The toxicity of rare earth processing is prominent in the mind of leaders in China. Incredibly, the American-led trade war is causing industrial nationals around the world to fight for their own in ways that will accelerate global warming and pollution.

In the near-term, America faces immediate, mission critical exposure due to its complete lack of “manufacture-ready” rare earth elements.  Indeed, there are sources of rare earth elements in the USA.  However, novel extraction and processing techniques (e.g., coal-based rare earth elements) will require $100’s of millions of dollars for research and development.  The ambitious, but modest DOE programs and activities at leading universities are simply not enough.  

In the meantime, it is noteworthy to consider the Chinese author’s perspective in the story that follows.  President Xi and the leadership of China are looking beyond the current trade dispute to something more profound.  In the near-to-intermediate term, actions relating to the supply and access of rare earths could be punishing to America.  As Donald Trump likes to say “We’ll see what happens…”  

“Oil is the blood; steel is the body; but rare earth elements are the vitamins of a modern society.”

America Has No Rare Earths.  If Mountain Pass is every placed in service beyond modest production levels, the rare earth oxides will go straight to China for separation.  Don’t look now, but this is not an example of an American rare earth mine.  

As frightening as near-term rare earth supply shortages may be, there is a bigger problem.  The fact of the matter is that the present technology for mining and processing rare earth elements is toxic.  Moreover, the process is not sustainable.  This morning, America’s Secretary of Defense cancelled his trip to China due to worsening relations.

China is cognizant of the worldwide rare earth problem [it is not the supply issue] and it knows that work on a solution must be undertaken post-haste.  America needs to address two issues in relation to rare earths; 1.) supply, and 2.) non-toxic processing.

In the long run, is there wisdom is fighting for one’s island only to be overtaken by the sea?  

Mike Luther, Managing Director & Editor Global REEs Venture

China Story follows.

Why is the United States not afraid of China restricting rare earth exports?

【看中國2018年10月1日訊】(看中國記者文龍綜合報導)

[Look at China October 1st, 2018] (Look at the Chinese reporter Wen Long’s comprehensive report) The US announced a list of tariffs on imports of goods worth $200 billion from China, removing strategic commodities such as rare earths. This is China’s secret weapon in the trade war. But is this really the case?

90% of US rare earth imports come from China

The United States has removed rare earth metals and metals used in magnets, radars, and consumer electronics in a previously announced list of 10% punitive tariffs on $200 billion in Chinese imports. Reuters reported that this shows the US strategy. Dependence on China in mineral products.
Most of the metals in the US tariff list originally prepared by the United States were listed in the list of 35 metals that were considered to be vital to US security and economic prosperity in May this year.

China is the world’s largest producer of rare earths and the largest supplier to the United States. Rare earth metals and secondary metals are widely used in the US industry, from aero engines, to mobile phones, to oil and gas drilling.

According to the US Geological Survey, Mineral Summary, the US imports of rare earth compounds and metals in 2017 have increased significantly compared to 2016. In terms of world rare earth production and reserves, China’s rare earth production in 2017 was the same as the previous year, reaching 105,000 tons. China’s annual production of rare earths accounts for 81% of the world’s total, while rare earth reserves account for only 37% of the world’s total.
Chinese miners have issued a statement saying that in 2017, 78% of US rare earth imports came directly from China, a figure that increased by 6% from the previous year. Of the remaining 22%, were from Estonia (6%), France (4%), Japan (4%) and other countries (8%). The amount of rare earths imported from Estonia, France and Japan is also derived from minerals extracted from China and other regions. That is to say, in the United States last year, nearly 90% of the rare earth imports were from China.

The official media “Xinhua News Agency” also issued a document in April this year, “If there are no new rare earth materials from China, more than 80% of the US military equipment will not be able to operate and become a display.”

However, some analysts said that whether China uses rare earth metals as retaliation or bargaining chips remains to be seen, and it is also one of the focuses of the outside world.

Why is the United States not afraid of China restricting rare earth exports?

The application of rare earths in the United States can be said to be the ultimate. In the military industry alone, rare earth elements are widely used in the US military’s new generation fighters F-22 and F-35, as well as underwater strategic nuclear submarines, including various surface warships.

Some analysts believe that the reserves of rare earths in the United States are not low, second only to China, the United States was once the largest rare earth mining and exporting country, and the rare earth reserves in southeastern California can be used for more than two hundred years. Because China’s export of rare earth is not only cheap, the access is relatively loose, and it avoids the pollution problems caused by mining. Therefore, the United States simply shut down its own mining area and imported it, but this does not mean that the United States will not survive if it left China’s rare earth.

In response to the argument of Xinhua News Agency, Chen Gong, founding partner of Anbang Consulting, said that the responsibility of public opinion is naturally to sing high-profile, but if the government departments are also acting under high-profile, it may put the national economy and people’s livelihood in a dangerous situation. The market economy is a system economy, which is determined by the principles of the market economy. In the face of systemicity, any highly targeted, one-size-fits-all administrative policy faces enormous costs and is at risk of failure.

China is worried about environmental pollution and mining
The content of rare earth elements is quite large in the earth’s crust, far higher than the reserves of gold. An important reason for the scarcity of rare earth elements is that the content of rare earth elements in common rare earth minerals is extremely low, which causes great difficulties in industrial purification. The process is complicated and costly. The most unacceptable is that it will produce a large amount of polluted toxic waste water, which will cause great damage to the environment. For a long time, this is a problem that plagues people.

Current affairs commentator Dr. Tian believes that there is still one of the biggest problems. Mining rare earths releases a lot of radioactive elements, which is a very big problem for people’s health. This is why, in the past, after so-called reform and opening up in China, it has become the only country in the world that can mine rare earths and export a large number of rare earths at the expense of human health.

The New York Times also reported that China’s almost unregulated rare earth mining and refining has accumulated over the past 20 years, causing today’s serious pollution situation and paying a serious environmental pollution price. For example, the radioactive toxic substances leaked from the rare earth refining production in Tianjin have been slowly infiltrating into the underground, approaching the Yellow River, an important source of water for 150 million people; the illegal open-pit mining of rare earths in Jiangxi Province has been flooded; the strong acid of open-pit rare earth mining sites in Guangdong Province, etc. , destroying rice fields and streams. All parts of China are facing serious environmental damage.

Moreover, more than half of China’s rare earth mines are illegally mined, and a large number of mines are jointly controlled by gangsters and unscrupulous officials to earn huge profits, which is completely ignored by regional environmental ecology.

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