How Rare Earths (What?) Could Be Crucial in a U.S.-China Trade War

One of the proposed commercial uses of space is the mining of asteroids for rare earth metals. You think the price of your iPhone is astronomical now,...

While we spent trillions chasing the middle East phantom in Iraq and Afganistan,China became heavily involved in Rare Earth,of course ,perceiving the present and the future of technology.They didn't need to steal or tariff.While we're not blind we developed wind and solar here the manufacturing quickly switched to China,some by us, some by them.we need to get off the war wagon ,across the globe and fast before complete doom sets in.

Many people keep stating factually wrong things about China, the most common is that "China wants to control the world". For anybody really interested, read Henry Kissinger's "On China". China is not, and never has been, and expansionist country. China considers itself the middle kingdom, surrounded by friendly vassals. China is not an expansionist country like the UK, France, US, Russia, Japan... they have no interest in controlling the world, but they do want to have influence over their sphere. Their interest is maintaining positive economic growth so they can deal with their 1.5B people.

I don't think Trump cares whether we have a strategic supply of rare earths or not, among other strategic commodities. He's going to cut China off anyway, and let the chips fall where they may. The terrible dislocation this will cause will finally make it attractive to bring back our domestic rare earths mining and refining. We used to have those in the Midwest, as many have observed here. That's probably also why he's cutting the EPA off at the knees, so nobody can really raise much of an environmental objection if this kind of thing starts up again.

Of more importance is the Chinese monopoly on the ingredients for generic medicines (many of which are then compounded in India), and on which there are few purity controls. There could be NO MEDS AVAILABLE in less than 60 days after a trade war begins! There are already shortages now.

If China offers US Treasury bonds at a discount, they will find the buyers. Would China sell at a discount? Depends on what strategic or tactical advantage(s) they get in return. They aim to dominate Earth, and there are many methods to push that aim forward. Discounts on US bonda could be one. Might not even be that expensive.

Numbers US production, Rare Earth oxides 1988 40 000 (Tons) 2016 0 PRC production , Rare Eart 1988 0 T 2016 105 000 Price Price, dollars per kilogram Cerium oxide 2012 dollars per kg 10-12 2016 dollars per kg 2 Dysprosium oxide, 2012 dollars per kg 600-630 2016 dollars per kg 183-186 US tariffs on imported Rare Earth Scandium and Yttrium 5.0% ad val Cerium 5.5% Other RE free The last and once largest US mine, Mountain Pass, CA , sold in 2017 for $ 20.5 million to a Chinese group with ties to the Chinese government - beating out American bidders. There were speculations that this purchase was not economically motivated but a strategic move by the PRC Rare Earth mining is a labor intensive business with costly environmental regulations. Hence US RE companies are and were unable to compete against low wage countries with weak environmental laws The disappearance of this strategic resource is yet another outcome of globalization not foreseen by its proponents. You can either have free trade and become dependent on others ( PRC blackmailed Japan on RE ) or restricted trade to preserve your independence but you can not have both. Data https://minerals.usgs.gov/minerals/pubs/mcs/2017/mcs2017.pdf

No closed rare earth mines or production facilities in Trump's base due to the overseas production of rare earths. Consequently, unlike common steel produced by our allies, their overseas production could not possibly be of any strategic interest to Donald's re-election. Strictly a back of the envelope calculation, but I suspect the costs of refined rare earth metals employed in all components of a Gerald Ford class aircraft carrier exceed the cost of the its ingot and rolled steel costs. Yet in Trump's mendacious strategic calculations no constituency equates to no strategic value.

It should worry policy makers. Well, let’s put it on the list, along with voting machines with no paper trails, a secret meeting between our president and Putin, still-unaccounted-for immigrant children...... But having just had my fill of the House interrogation of that poor FBI agent who dares have personal political opinions, I can see that all those Republican representatives have their finger on the pulse of the true threat to our democracy, our economy. So far, no transcontinental high speed rail, no jobs from China seeking asylum back here, no tax breaks for any new rare earth facilities....no encouraging farmers to diversify out of one crop soybean exports. But that giant tax break for billionaires will no doubt trickle down to the rare earth entrepreneurs- someday. Right after the McCarthyesque witch hunt now playing. I’ll bet there’s even a list.

Pat of the problem is that the West allowed Chinese companies to buy and gobble rare earths mines across the world. These minerals should be classified as security interest and the Chinese efforts to monopolize them curtailed.

For those people keen to undermine China due to ethnic and/or cultural prejudice, or all of them plus politicking such as ideological proselytism, yes, it's a big trouble and source of great resentment. For these haters, kindly I just warn them about the harm heartburn may bring to their health. Unlike those ones who want to work with China. These are welcome!

Weren't there rare earth mines in the U.S. that were shuttered due to Chinese competition?

That is the danger of globalization without any protection for crucial industries. Even good things taken to extremes can be bad. Republicans preached free trade, but refused to "pick winners and losers," while Democrats cowardly followed their lead. Meanwhile China was picking winners, and leaving us the losers. They didn't do it with tarrifs. They did it by investing in key industries and education for its citizens.

American greed and profiteering coupled with unfettered consumerism driven by an addiction to cheap imported goods and the hidden costs of their "too good to be true" prices; what could possibly go wrong?

Your optimism is refreshing. What if Trump is not a childlike buffoon, but working for the Russians? Or maybe he is working for the Chinese, while using the Russia thing as a distraction? Or maybe he strategically thinks that the chaos of economic catastrophe will give him time and power to make himself "president for life." Or maybe the global billionaires that control both China and Russia are using Trump to destroy our democracy, so they can have capitalism without democracy here as well? I really find the idea that Trump is an imbecile, but managed to become president of the most powerful country in world history, the least likely and most desirable scenario. Picking one explanation for an incomplete set of facts, instead of keeping all possible scenarios alive until they are proven false one by one, is bad science, bad history, and bad political science.

There is another side here. Regardless of a trade war, China could hold us and Europe hostage to rare earth supplies for other objectives such as hostility to their China Sea intrusions. China will be very cautious on any embargo of these products. As this article points out these products are only rare because of capacity to refine them, essentially. I would not be surprised if we have not started a secret government project similar to the old Manhattan Project to build a refining facility adequate to supply our needs under the guise of national security. It would be folly not to do so.

Zero PHDs working in rare earth materials outside of China? That is the danger of globalization without any protection for crucial industries. Even good things taken to extremes can be bad. Trade is good, but that doesn't mean that everything has to be given to world markets as if world markets will always behave. Even without Trump, a similarly deranged Chinese leader could have created this crisis. Republicans preached free trade, but refused to "pick winners and losers," while Democrats cowardly followed their lead. Meanwhile China was picking winners, and leaving us the losers. They didn't do it with tarrifs. They did it by investing in key industries and education for its citizens (like 100 PHDs working in rare earth materials). The Republican Party, without opposition from Democrats, has spent decades insisting the we NOT invest in our people or our industries, especially the most advanced, and now we are vulnerable to China shutting us down. A country without industry is a hollow shell. Europe has shown that a careful balance of regulation and investment makes for an advanced economy that still takes care of its citizens and the earth. The Republican model is a national sell off of our vital industries and now our Constitution. The failure of Democrats to oppose this mission helped make Trump possible.

The mountain of iron ore tailings in Moriah, NY is a source of rare earths waiting to be extracted. Now is the time.

Anytime the mining industry makes the news is good. People pay attention! Mines aren’t opened “just for fun”. Like any factory, mines close when it’s no longer economically favorable to operate. The US mining industry is highly regulated- that’s good. There is probably a mine within your county. Go visit it. Open your eyes. It’s not all “coal is bad”. Before you shun coal remember it is the only truly transportable source of energy in large quantities that doesn’t require a pipeline. We have a strategic need for coal. You should want coal to move over waterways like the Great Lakes, not oil and gas. Highways, farms, skyscrapers and neighborhoods “despoil the land” too.

American politicians on both left and right gleefully tried to kill China's ZTE. It would be interesting to analyze how many US technology companies will shut down if China implement a moratorium on rare earth export. Imagine the scenario if the only up-to-date smartphones available are Chinese brands? When politicians play the zero-sum game with zero understanding of the intricacies of global trade they are really creating a lose-lose situation.

Trade war article or gender war article? The middle part couldn’t decide

Curious how much mining for rare earth minerals will now commence in the area that was formally part of the Bears Ear National Monument.

So, we don't have a strategic reserve for these rare earth metals, even though they are essential for our economy and defense? Wow! Now, if the smartest man alive (at least in his own opinion) would have really ready, able and willing to beef up our national security, he wouldn't have started an unnecessary trade war with Canada over "national security concerns", but rather focused on provisioning for real threats such as this one. A Chinese embargo on rare metal exports would not just affect Tesla as mentioned, but also defense-related manufacturing, and, equally bad, our medical care. If we don't have gadolinium, no more gadolinium contrast MRIs. Ask any radiologist why that would be a really bad situation for a number of patients.

After working extensively in this field after the market surge in 2010, I know of many PhDs that came from funded projects related to 'clean' rare earth extraction from universities in both Germany and China. But China controls even more of the supply chain than is mentioned in this article. Most of the light rate earths produced by Lynas are destined for use in magnets (from electro motor drives to wind turbines to the vibration mechanism in phones) which, even if not produced directly in China, find their way there at some point during their processing life cycle. Magnaquench and Molycorp (before the latter went bankrupt) were shipping materials to China for magnet production. There is one rare earth magnet producer in all of Germany and they essentially receive federal subsidies to stay afloat. The reason is that the price increases discussed in this article represent the export tax on rare earth materials (now made even higher to the US). High export tarifs on heavy metals have always been the norm in China in order to incentive manufacturing to take place locally. This investigative report has some good insight into the impacts of rare earth mining in China in the third segment. https://mobile.francetvinfo.fr/replay-magazine/france-2/cash-investigati...

Just to clarify terminology: rare earth metals are elements, the fundamental building blocks of the universe. In nature, they are almost never found in "native" form, that is, chemically pure. Instead, they are found as chemical components of minerals, commonly as trace amounts. The terms mineral, metal, and element are usually not interchangeable. Thus exploitation requires finding either unusual minerals or local variations of more common minerals with high trace amounts of the desired rare earth element. And like most geologic resources, these are not equally distributed. Beyond discovery, producing industrial quantities from a trace occurrence requires processing a large volume of ore, adding to the expense.

It doesn’t scare me,” Ms. Lacaze said, “but it should scare policymakers.” The policymakers are too busy serving themselves and their donors.

Stop trying to make us feel good. We are on a trip with Bozo the Clown and we can do nothing but hold on. If his agenda wasn't rooted in bigotry and fascism, it might be worthwhile.

I'm concerned about the development of a black market in rare earths...not just the exorbitant costs, but also the violence and crime that inevitably is associated with black markets.

Rare earths are found in abundance in the waste stream from mining certain types of coal. As is noted in many comments, the US has to raw material to meet its needs but does not do so because refining rare earths is a very environmentally toxic process. That explains why ore mined in Australia is sent to Indonesia to be processed instead of being done in Australia. Chinese indifference to the environment explains why China is currently the world leader in production. To diversify supply beyond China, US industry must develop an environmentally acceptable refining process. This should be a high priority for our National Laboratories and DARPA. Since Chinese control of this resource is an economic and military threat, logic dictates a temporary relaxation of environmental regulations on refining these materials. Producers must understand that this is temporary and they are expected to cooperate with the Labs in finding an environmental solution.

I wonder if any of the American rare earth companies that are mentioned in the comments (note, not in the story!) just pulled up stakes and went to China. "Partner" with the government and become an un-patriotic business. As so many have done.

Maybe this trade issue will focus our technology on recycling rare Earth metals from e-waste. Our IPhones cause a lot of environmental destruction in the mining and production of them, then every few years we toss them in landfills and they continue degrading the environment .

Rare earths have been a strategic material for years, yet the U.S. has been complacent about insuring availability. The high cost of extraction has put off domestic production, allowing the mining and extraction industry to wither away. Alternate sources of rare earths should be identified and research into alternatives to rare earths should be funded. These are rational ways of dealing with the situation, but rational thinking has been in short supply for a long time. American companies decided that enriching a small percentage of the population was more important than social responsibility, and started moving jobs to China. Now, we are mad at China because they were willing to sacrifice their environment and culture to raise their standard of living. Greed drives the decisions that have hurt America so much, a lust for money which insists that every penny of profit must be squeezed out of an enterprise, without regard for the future of the workers, or the company. Companies could have stayed in the U.S. and been profitable, but they could make so much more having the work done in China. Environmental compliance is not impossibly expensive, but it cuts into the profit margin, which seems to be unacceptable.

This was identified as a strategic vulnerability years ago. Each time we stated talking about it China reduced prices and increased supply so that it was not economic for us to restart mining here. (Think of OPEC keeping prices too low to encourage expanding current US oil production.) It is an expensive pursuit, environmental regulation or not. This is what a real strategic problem looks like. This is what you need an effective government to deal with. This probably requires a big investment, environmental tradeoffs, tax breaks and subsidies. You might consider some tariffs to redirect domestic demand to support a minimum critical resource infrastructure. You need to have a plan to ramp up if foreign supplies are curtailed. This is a real problem; not Trumped up nonsense.

How about subsidizing the industry instead of giving environmental wavers? Are really the only options "cheap and you die" or "expensive and I don't make it"? Since it is a national security issue, a subsidy or a government financed and controlled company would be justified. Capitalism does not have to mean suicide, more so when countries like China do not follow capitalistic rules at all.

Next time someone tells you that this or that research project is useless, remember this article. Even failures teach you something, but for that you need educated and dedicated experts, not carnival barkers like our Liar in Chief.

OK, I have a ZTE phone, can I sell the rare minerals in it? Am I being spied on by China? Can these phones be detonated from China as bombs??? A consumer wants to know.

And the Chinese would not play this card because.......? Just like they wouldn't sell 10 year T-bonds (which directly affect US mortgage rates) because......?

Not likely. With 75% of the supply of rare metals, China holds the rest of the world at ransom.

Good article, and about time. Rare earth/metals are absolutely essential for high-tech computing - there's no replacements. They are the strategic material of this century, not oil. China produces around 75% of the global supply. They occur in very low concentrations, so the extraction process is unwieldy and expensive, and must be on an enormous scale to be profitable. Like most strategic industries, the Chinese state likely subsidized the operation. As mentioned, in a dispute with Japan, China cut-off the supply and Japan caved in a matter of days. This is China's high card they are keeping in their hand for now. Does Trump even know what they are? He's still promoting coal.

Yeah the USA had rare earth mines in the Midwest. We used to produce the total worlds supply of rare earths. Until China came along and started producing the same rare earths but with no regulations or wages for their miners. Today, the US rare earth mines are all inactive while China controls a global strategic resource. I'd say the fact that we allow this to occur is more of a national security threat then steel production. In fact, it is an actual national security threat. If we ever did have a war with China we would not be able to produce any new electronic components for months!

Companies may relocate their manufacturing out of China. But will they move it back on American soil? If they move it elsewhere, America's merchandise deficit will continue, just not with China.

American companies used to make rare earths, but were forced out of business by the lower prices offered by the Chinese, in large part due to the high costs of environmental compliance in the US. We should seek out and work with one of more US producers, giving them long term environmental waivers that allow them to be competitive with the Chinese.

China is in a dilemma. The longer they play the trade war game, the more companies are relocating production out of China. China surely understands that they have been playing the existing agreements to such an extent that the imbalance is not sustainable. The US may pay higher prices, for a while, until sourcing has been changed, but China risks having what happened to the US manufacturing base happen to them. It will be picked up and moved.

Very interesting article. It looks like Trump doesn’t hold all the cards that he thinks he does in this China trade war. It appears that these rare earths are actually as rare as their name denotes and with China holding the lion’s share of these products it gives that country a significant edge over the US as these products go into almost all of the advanced technology products that the US has deigned and is building abroad. Trump, the ignoramus that he is, I’m sure doesn’t understand this fact and is not listening to his advisors that do. This is just another crack in the dam that may soon burst under Trump’s so called leadership.

We have a ten year old boy (at least his mental state) conducting a trade war with China. He does not understand trade. He does not understand China has a strong hand. He does not understand that China can cut off the world supply of rare earth metals to the point that major industries in the United States will be crippled. Trump is neither strategic or tactical; he is incompetent. He is going to destroy our economy. China is in the driver's seat; Trump is reason all us are going to be taken on a bumpy ride. My only satisfaction in this nightmare is that the people who voted for him will begin paying the price for their misinformed, stupid choice.

Of course, the Fake President's brilliant economy advisors, including the dissembling t.v. pundit Kudlow, most likely never considered this Chinese component in constructing their "bound to fail" tariff strategy. I'm waiting for China to really up the ante, when it starts leveraging that almost $2 billion in U.S.Treasury bonds it holds against us. And to think that yesterday in Brussels Trump falsely accused Germany of being "controlled" by a Russian pipeline!