You may have seen the story over the weekend on China’s suspension of military exchanges with the USA.
The geopolitics of natural resource geography may be about to rear its head for the first time since the Cold War ended. Perhaps a Cool War is now underway. Americans currently in political power seem to have very short memories to balance their rather noticeable lack of worldly experience. If China were to forbid the export of all components or devices that contain rare metals (including rare earth metals), to any defense-related supplier, then it could insure a crisis in US Department of Defense procurement.
I hope that this is a wake up call to those in Washington, D.C., who play semantic games with words like “strategic” and “critical”, to avoid facing the issue of reviving the US domestic supply chain for rare earths beginning with, and including, mining. With a few hours of the Defense budget or even fewer hours of the stimulus spending allocated as a loan guarantee, the US government could kick start the mining of the light rare earths in Mountain Pass, California (owned by Molycorp) and of heavy rare earths in Idaho’s Lemhi Pass (owned by US Rare Earths, Inc.) as well as restart the refining and fabricating of rare earth based metals in this country.
This would mean that neodymium-iron-boron and samarium-cobalt permanent magnets, neodymium lasers, nickel-metal-hydride batteries, and fluid cracking catalysts as well as a myriad of other products for both the defense and civilian industries, could be made here in the USA and give our government freedom to make policy without having to kiss a**.
And, by the way – that freedom would also include the freedom to make industrial policy such as a national decision to support making electrified cars in the USA, without being dependent for critical raw materials on politically unfriendly countries.
Disclosure: I am a paid business development consultant to US Rare Earths, Inc.
I couldn’t agree more, and since Friday last, I have posted very similar thoughts on various blogs in response to the numerous articles across the globe, with many other posters raising the same concerns. What I haven’t heard is any substantive or sensible response from our government, and I don’t know what the responses were at the Strategic Materials Conference, where there should have been some very heated discussions given the focus of that meeting.
Granted, such an annoucement could have sent shockwaves through the markets or at least caused a blip. But instead, stock prices dropped, while Chinese prices escalated. Now I know this site is not a stockwatch, but it is one metric. So, can there be that much apathy, or is there a purpose here?
It also seems apparent to me that the DOD should at least make some rapid preemptive moves to secure one or two sources rich in their preferred materials, and get them mining. Then they can begin a crash program to develop even a small pilot facility or two at a secure base, to refine, purify, and produce the key materials they need. If anyone has the money, expertise, and personnel to accomplish such a task, it is surely the DOD.
Waiting on the bureacracy and the “free” market to get off their duffs is no smarter than relying on the Chinese for 100% of their most crucial materials. We have the resources and at least a few shovel-ready sources on American soil like USRE and Bokan Mountain for HREEs, and Molycorp for LREEs. Our Canadian friends have two mid-chain facilities that are currently producing enriched and purified powders at LCM Birkenhead UK, and alloys at GWTI in Troy Michigan, both of which can fill supply chain gaps between mining/refining and product manufacturing.
Whatever the case, it seems that this whole issue will be ignored until critical mass is reached. I don’t know what else to think, but a “Can’t Do” attitude seems to prevail at the moment, and I do not think that it is a matter of either ignorance or incompetence.
Jack & Tek: I was present for almost all of the presentations and panel discussions at the Strategic Materials Conference, and I can tell you that, to my knowledge, the only person who publicly mentioned the issue of Taiwan and the recent news from China was me, during a question to a panel of Washington folks. There was no indication at any point during the Conference, at least during the public portion of it, that these recent events had any influence or bearing on the proceedings.
Interpret that as you will…
Will Rogers once said, “There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest of them have to pee on the electric fence for themselves.”
With the exception of the reference to ‘electrified cars,’ which some will interpret as indirect support for plug-ins as opposed to hybrids, it’s a great cautionary article.
Some of the headlines from Davos were, that no one dared mention the China / Google flap either. For now it seems that China has socio/political carte blanche anywhere and everywhere in the world. But I can’t help but think that this is not so much affairs of state, but rather exclusively the concern of internationals business and finance interests. Our Captains of Industry have invested heavily in China selling themselve and us out, demonstrating their disdain for the nation who incubated their fortunes and the labor who built their industries. They show no signs of conscientious reconsideration whatsoever.
Jack,
Thanks as always for the article.
I read recently in the Wall St Journal the wait time for mining permits in the US is one of the longest in the world (>7 years). Is there any lobbying to reduce this time to market for miners (rare earth miners included, of course) that would make the US more competitive? Do you think hassles with permits and other red-tape are reducing production, speculation and technological advances that would discover more efficient ways of extracting the materials?
Comments on this entry are closed.