I think this rare earth ban is over reported. The total rare earth import from China into the US is minuscule compared to the total. The US has reserves and will find it elsewhere if the ban is extended.
China has exerted light hand in its retaliation in 2018 during the 1st trade war. This time they are not going so light.
Despite that we should not see the rare earth ban as so much of a surprise. China has warned repeatably that it will do so, and it finally did it. China has given the US chances to step back, and that should not be construed as been weak or undecisive.
I just hope they understand that in the case of Taiwan. Retaking Taiwan by force is not an easy endeavor but China has the capabilities to do it. The US should not confused its unwillingness to do so with an incapacity. China has clearly said that they don’t want and will not use force if they don’t have to.
I bring this up to say that the same thing goes with this commercial war. The US should understand when China gives it some slack it is not in weakness but for the sake for better relation with the US, and a better position in the world. At one point, it will not be able to yield, and it will not.
Just curious - why do you think it’s over reported? The latest numbers show that China processes around 92% of the world’s rare earth minerals. That doesn’t seem minuscule.
I think the total value of the import is less than $200millions (Most of that is from China-yes China has most of the rare earth market). Compare that to about 500billions of total import into the US from China. Yes I said total meaning the total import of all goods.
As I mentioned, China had been signaling this ban for some time. The U.S. had ample opportunity to build up reserves and will now have to manage the consequences. It’s not insignificant, but compared to the range of challenges the U.S. faces, it’s not a major issue—at least for now.
Understood. The significant impact isn’t necessarily tied to the value. REEs are needed for all sorts of new-fangled, technological, whiz-bang things. Even if we mined more, we can’t process them. The stockpile of processed material is dwindling. Changing the US supply chain for REEs will take years.
It is not the value of the rare earths themselves but the fact that you cannot make some products without them. There is less than $1 worth of the super magnets that power a hard drive, but you can’t make today’s hard drives function at speed by another process.
Rare earths are also used in screens (phones, monitors, TV’s, fighter jet cockpits) and in fiber optics, LED lights, lasers, and oh yes, electric motors for EVs and other high performance applications.
And it isn’t the raw rare-earths that’s the issue. It’s REFINED rare earths, which is a messy and dangerous process. (Many of the rare earth minerals seem to travel with radioactive ores, making separating them expensive and difficult to locate thanks to NIMBY crybabies not wanting radioactive slag dumped in their local swimming holes. China, which has fewer such problems thanks to its autocratic government, cornered the market while we were happy to let it go. Now they have us by the short hairs, as the saying goes.)
Australia, which is mostly desert, has started some refining operations. There have been a couple attempts in the US (we have the basic ores in several states) but it’s slower going thanks to NIMBY and those pesky regulations that keep isotopes out of your drinking water.
Yes I understand that. From magnets inside our vaccum cleaners to missiles, we need them, and they are dirty to process. That’s why we asked China to do our dirty work. But now we want to do it ourselves? We are ready to get dirty?
Long story short, there’s little chance that the deal will go through unless both sides are willing to give up significant concessions.
Why is this important to the REE discussion? The majority of REEs in Ukraine are located in territory occupied by Russia.
So, on one hand, we’re trying to make a deal for minerals with Ukraine, and on the other hand, we’re pushing a peace “deal” that gives up most of the REEs to Russia.
Maybe the US backed peace deal will change after the minerals deal is agreed to?
The US is playing Slap Jack, while others are playing Hold 'Em…
Jumping back 20 posts or so, back when the post title related to the thread content, the Journal today has a piece on dysprosium, a rare earth metal that’s used in magnets in everything from seat belts to EV motors to, well almost anything. And here’s the problem, in graphic form:
In its retaliation against U.S. tariffs, China slowed exports of several [rare-earth minerals and magnets] this month, setting off a panic among U.S. automakers.
“You cannot build the motor without the magnet,” said a senior automotive executive. “If we want electric-vehicle production to continue to happen in the United States, this has to be solved.”
Under the new Chinese rules, U.S. companies have to apply for a license to export the minerals from the Asian country, a monthslong process that leaves carmakers uncertain if they will be able to replenish their supplies of this precious material.
While President Trump has said that his administration is actively [talking with Beijing on trade], it couldn’t be determined whether such discussions would lead China to soften its stance on these particular exports.
[Tesla] Chief Executive [Elon Musk]recently said a lack of the magnets could derail plans to build the [Optimus humanoid robot] at the company’s factory outside Austin, Texas.
Derail? How about stomp into oblivion? The article mentions that while there are ores of dysprosium in the US, it takes an average of 29 years to get a mine up and running. Another small issue? The US doesn’t have the technology to separate dysprosium from the ore, something the Chinese have mastered with their decades of experience. (There is one mine in the US, too small for our needs, and the refining operation is just coming on line.)
Now that doesn’t mean we couldn’t eventually figure it out. Or even that there aren’t alternatives; early EV motors were made without it - they were just far less efficient, making the range and power less attractive. And manufacturers are already searching around for, say seat belts that don’t use them which do exist, it just requires more/different sensors to confirm that the belt it buckled before the car takes off. That’s all re-engineering, which takes time.
And of course, the crucial nexus:
China’s head start on mining and extracting the precious elements makes it difficult to build alternative sources. “A mine in China, to produce from an ore to oxide, costs around $11 to $15 a kilogram,” said Mukherjee, of Benchmark Mineral Intelligence. “For a mine in Brazil, it’s approximately $35 to $40 a kilogram. It would be even higher in the U.S. or Australia.”
