China Tightens Grip on Rare Minerals

[katkat]

Source: NewYork Times

"China is set to tighten its hammerlock on the market for some of the world’s most obscure but valuable minerals. China currently accounts for 93 percent of production of so-called rare earth elements — and more than 99 percent of the output for two of these elements, vital for a wide range of green energy technologies and military applications like missiles.
...
In each of the last three years, China has reduced the amount of rare earths that can be exported. This year’s export quotas are on track to be the smallest yet. But what is really starting to alarm Western governments and multinationals alike is the possibility that exports will be further restricted.

Until spring, it seemed that China’s stranglehold on production of rare earths might weaken in the next three years — two Australian mines are opening with combined production equal to a quarter of global output. But both companies developing mines — Lynas Corporation and smaller rival, Arafura Resources — lost their financing last winter because of the global financial crisis. Buyers deserted Lynas’s planned bond issue and Arafura’s initial public offering.

Mining companies wholly owned by the Chinese government swooped in last spring with the cash needed to finish the construction of both companies’ mines and ore processing factories. The Chinese companies reached agreements to buy 51.7 percent of Lynas and 25 percent of Arafura."

Read more: http://www.nytimes.com/2009/09/01/business/global/01minerals.html

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The Lynas deal has not yet been approved by Australian regulators.

If I were Obama, I'd use some U.S. cash to make sure there was U.S. control of enough of this resource. And start looking for deposits elsewhere.

Another thing the article mentions is that the Chinese are using their control to force manufacturers who want to use these ores to build their plants in China. Not so great if we ever go to war with China.

[drm604]

1. Hopefully the U.S. or a combination of the U.S. and allies

can make some kind of deal with Australia and those two companies. I'm sure that the Australian government understands what's at stake.

[BobRossi]

3. Yeah, we could borrow more money from China to finance it.

><

[drm604]

5. Not a helpful comment. What would you suggest?

Do you feel that the alternative, letting the Chinese monopolize these minerals, is better than borrowing?

There may be other things that can be done. There might be U.S. companies or investors that would like to purchase stock in these mines, or perhaps some of our allies may be interested.

[BobRossi]

2. Maybe we should give them some rare metals of our own.

I'm thinking entriched plutonium. I's sure the Air Force could deliver it.

[drm604]

7. Yes, let's nuke China, why don't we?

That would certainly increase the availability of these minerals.
:eyes:

[wuushew]

9. Whaaaaaa?

:wtf:

[fascisthunter]

10. that would be the dumbest thing possible

thankfully, you are not in charge, nor is Bush and Cheney.

[David__77]

14. Unfortunately, wishing war against China is a common refrain here.

There are plenty of Cold War-style "progressives" who want to wage war on China.

[customerserviceguy]

4. There's only one problem with using "U.S. cash"

we have to borrow it from the Chinese first.

They've finally got our collective gonads in a vice, if we need these minerals to go green.

[katkat]

6. finances

I am pretty sure the Chinese can't do too much about the U.S. investing in this without the Chinese damaging themselves financially due to financial market repercussions. Since they own a bundle of US debt, they don't want the dollar tanking.

[customerserviceguy]

18. Oh, they don't want to damage us permanently, we're way too important of a market

But that will not stop them from using most of the 21st Century to transfer our wealth into their hands. It's not unlike what we did in the last century to transfer wealth out of South America and Africa to our benefit.

[Bigmack]

8. Let's not do anything like...

at least getting into the race for these rare minerals. Let's just continue to piss away our money in Iraq and Afghanistan. We've done so well in those places, I'm sure our military might will scare the Chinese into backing off.

Do I need to add :sarcasm:?

[Poll_Blind]

11. It's so crazy it's almost funny- except for the fact that it's very real. n/t

PB

[Ghost Dog]

12. There appear to be some potential sources, from Canada to Chile

in the Americas, and more, I suppose, in Eurasia and Africa, that just need development.

Rare Earth Element (REE) mines and potential mines are being much-promoted/hyped recently, I've noticed.

Anyone interested should do their own research, of course. :)

[David__77]

13. Why on earth would we go to war against China?

I know the US destroyed China's embassy in Yugoslavia in 1999, but I have no idea why there'd by war against China. Some neoconservatives want it I guess, but their influence is negligible.

Better to cooperate with China for regional development.

[Juche]

15. The global recession has been great for China

They have tons of savings and now they got to buy up natural resources all over the world. They made good deals on oil and various metals and other raw materials when sellers were desperate for cash.

China is going to kick our asses sooner or later, because in the US we never would've planned that far ahead. We doubled our national debt during the good years (2000-2007) with war and supply side tax cuts, and when the bad years came we had to borrow a trillion just to survive. Meanwhile China saved its money and got to spend it wisely when sellers were willing to bargain. In the long run we can't compete with something like that.

Anyway, there is good and bad to it. As long as China improves its human rights positions, then it won't be so bad. But a world where dictatorships like China control global politics is going to suck. They have little interest in the human rights situation of places like Myanmar, N. Korea or Sudan. And even though their environmental record is improving, it is still terrible.

[sofa king]

16. No Erbium for you!

[Lagomorph]

17. If I were Obama, I'd use some U.S. cash to make sure there was U.S. control of enough of this...

What cash?

China is up their ass in US cash.

[PFunk]

19. All of a sudden I see africa comming more into play to coutner this.

Despite the activity that has occured it's still pretty much untouched territory mineral (and oil) wise. Which in my opinion may be more bad news for the region.

[ElsewheresDaughter]

20. Their are no easy answers...nt