U.S. wants to end dependence on China rare earths, Yellen says

[BumRushDaShow]

Source: Reuters

SEOUL, July 18 (Reuters) - The United States wants to end its "undue dependence" on rare earths, solar panels and other key goods from China to prevent Beijing from cutting off supplies as it has done to other countries, U.S. Treasury Secretary Janet Yellen said. Yellen, who arrived in Seoul late on Monday, told Reuters she was pushing for increased trade ties with South Korea and other trusted allies to improve the resilience of supply chains and avert possible manipulation by geopolitical rivals.

"Resilient supply chains mean a diversity of sources of supply and eliminating to the extent we can the possibility that geopolitical rivals will be able to manipulate us and threaten our security," she said in an interview en route to Seoul. Yellen will map out her concerns in a major policy address in Seoul on Tuesday after touring the facilities of South Korean tech heavyweight LG Corp (003550.KS) during the final leg of an 11-day visit to the Indo-Pacific region.

According to excerpts of her remarks, Yellen will make a strong pitch for "friend-shoring" or diversifying U.S. supply chains to rely more on trusted trading partners, a move she said would also combat inflation and help counter China's "unfair trade practices." Yellen said South Korea had “tremendous strengths in terms of resources, technology, abilities” and its companies, including LG, were already investing in the United States.

"They have substantial capacity to produce advanced semiconductors," was particularly important given the United States' "huge dependence" on Taiwan Semiconductor, she said. It was critical to reduce U.S. dependence on certain Chinese exports since Beijing had cut off supplies to countries such as Japan in the past, while applying pressure in other ways to Australia and Lithuania, a senior Treasury official said.

Read more: https://www.reuters.com/markets/us/us-wants-end-dependence-china-rare-earths-yellen-2022-07-18/

[TexasTowelie]

1. A new mine is supposed to start production in Hudspeth County, Texas next year. nt

[2naSalit]

2. And so there will be...

More mining, eventually, in my front yard because that's where some of that stuff is. I wonder how that will go down because some of the potential extraction areas are on sensitive public lands.

We have to take these factors into account when deciding to tear up more landscape for our technology.

[jimfields33]

3. Yes. Take into consideration is a must but not a for sure deal breaker.

We have to decide which is worse, digging up some areas to get resources or continue down the path of climate change. By the way, the digging will continue just overseas which doesn’t help either. A very messy situation. Tough decisions have to be made. Not 100 percent will be happy with any option.

[2naSalit]

4. There really are no good options...

Given the current path to either end.

[The Mouth]

10. We have been effectively outsourcing our pollution

for decades now. We pretend we are being good environmental stewards, when actually many of our rare earth minerals, gems, and manufacturing are responsible for a lot of the world's pollution. But like a rich person in a gated community regarding poverty, we don't see it so we can pretend it doesn't exist.

[Auggie]

5. National security issue, but I imagine the corporate world is particularly spooked

[soryang]

6. North Korea's rare earth reserves

The Jongju site, in North Korea, is home to nearly 216.2 million tons of rare earth oxides, double the known world reserves. In terms of monetary value, if these figures are accurate, South Korea estimates the value of the mineral resources of its North Korean neighbor at $2,800 billion.

Billions in the Ground: The Race to Harvest North Korea's Rare Earth Reserves
by Patricia Schouker The National Interest Apr 1, 2019

https://nationalinterest.org/blog/korea-watch/billions-ground-race-harvest-north-koreas-rare-earth-reserves-50137

South Korea mineral resources are negligible.

[oldsoftie]

7. I've been screaming it for years; "Get critical mfg/suppllies OUT of China!"

But we've allowed china to tie up rare earth supplies in other countries too. We keep pushing batteries & solar but we're going to be even more tied to them regardless. The US doesnt have a high concentration of these items as far as I'm aware.
We need some good inventors

[BlueIdaho]

8. Rapidly followed by

A rapid reduction in Chinese made goods on American shelves.

[oldsoftie]

11. Yes. And even if it doesnt come back HERE just a different country.

One thats not trying to take over the world.

[BlueIdaho]

12. Exactly!

Why not throw our considerable financial weight behind nations that are not sworn enemies? No need to pull up the drawbridge, just find trading partners that are in sync with our values.

[oldsoftie]

14. I think its going to end up taking new laws to FORCE this.

Too many corporations are just not going to change the way they do things if they think they can save a buck. Although I;ve heard costs in china have gone up & they're not the "bargain' they used to be.
But at the very least we should prevent national security & other critical items from being sourced in china.

[DFW]

9. Well, rats. Sold that iridium too soon.....

Just joking, actually.

I took a flyer on 2 kilos (about 64 troy ounces) of 98.6% pure iridium in 2011. I didn't know much what I was doing, just acted on a hunch and the advice of a friend. It came out to about $220 an ounce, or $14,000 at the time. For years, it was unsalable, and then when the price went over what I had originally paid for it, and I tried to sell it, NO ONE could refine it. Not in Europe, not in the UK, not in the USA. Too complicated, too expensive, too many costs, blah, blah, blah. The price rose to a theoretical $6000 an ounce, but that did me no good, since I couldn't sell it. Finally, a smelter in the Netherlands found a smelter in Australia who could and would do it. The price of iridium promptly dropped to $3900 an ounce (for the period when my iridium was being negotiated), and I got about half the reduced market price. That's how the market works for the exotic, hard-to-work rare earths. They manipulate, we suck it up. Apparently iridium only is found where asteroids fall to earth, and Russia (where mine came from) is the biggest source for that.

After paying my 31.8% capital-gains-plus-surcharge taxes in the USA (28% plus 10% on top of that), I was still left with enough to pay almost a year's worth of my German taxes, so I was happy. At least SOMEONE on the planet was willing to buy it. Ironically, the Germans didn't take a cent in taxes, since it came under their "speculation gain" law, which means that if I had held it over a year (11 years qualifies), the gain was tax-free in Germany. But since the USA is one of only two countries on earth that does not recognize residence-based taxation, I must file in both countries, and I owed US tax on the gain despite my German residence.

By the way, I notice the current price of iridium is now again $6100 an ounce. Surprise, surprise. Oh, well. Maybe some people have refineries that can separate metals with a 3000° melting point in their back yards. I don't.

[kiranon]

13. Rare earths in Nevada and Southern California. Expensive to extract but need to onshore all this.

Have solar on the house in Texas and a Tesla battery because of the unreliability of the grid. We should be making what we need here. It may cost more but it is a matter of national security and will bring back jobs. Am from Nevada and there are lithium deposits here along with the rare earths. Will be moving back to NV full time next year.

[hunter]

15. Most of these rare earths get turned into stuff that soon becomes e-waste.

Electric cars and wind turbines included.

Maybe we should quit doing that.

[rockfordfile]

16. good

[paleotn]

17. Diversification of supply...

It's so basic and fundamental there's an old saying about it....eggs and baskets.

On the flip side, get use to much higher prices for electronic devices and other tech gadgetry. Rare earth mineral extraction is a nasty business and very expensive if done according to western environmental standards. Thus, much of our supply comes from China and the third world. About time we stopped offshoring our mess in order to get things cheap.