Not quite the “Golden Share” the government has in US Steel, but interesting.
Steve
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Communism is alive and well in the USA.
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Not “Communism”, as the company remains in private hands, as long as they conform to government diktat.
Steve
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So it’s socialize the costs and privatize the profits again.
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I recently said that but I was assured it’s the shiny version so it’s all good.
The Captain!
I wonder how many people in the regime front-ran that announcement with their own accounts?
Steve
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Dang and nobody yelling about alarm bells being set off. Does that tell you anything? Maybe the Government owning business’s isn’t a bad thing like some people have been telling us ?
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Building capacity to compete w China is risky as they can easily under cut prices and force you out of business. Govt contracts are one way around this problem.
Do economists seriously suggest we should have our economy depend on supplies of rare earths from China? Because they are low cost producers?
How large should our strategic reserves be?
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I do not have a problem with the Government having contracts with business’s but I do have a problem with them buying in. The site the Pentagon bought into is not the only one in the United States. Now that site has an unfair advantage. There is a site at the Salton sea that is working on a unique extraction method but how can they compete with the Pentagon?
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Agreed. Domestic competition would set up the US to better compete with China. Government subsidies across the industry would be better. Providing an advantage to one company hurts the US.
Now, that’s a great thing to ponder. Here’s another, who will vote the 15% shares? Kegseth?
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That seemed to be what Friedman was advocating: buy everything from the lowest cost provider. He had a Nobel, so that gave him street cred.
Steve
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“Conflict of interest” seems to be the rule in Shiny-land now.
Steve
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Given the hang time of cabinet officials on the last go around, what the SecDef thinks would actually be irrelevant. I would expect the SecDef to do as his master bids, to keep his job. It’s all about what the POTUS wants to be seen, like assuring all good opportunities at the company are given to straight, white, Christian, men.
Steve
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The Salton Sea project is mostly about direct recovery of lithium. I have not heard of a rare earths project. No doubt someone is working on it. Warren Buffett is one of the investors in one of the Salton Sea project. They had technical difficulty and little has been published about it since. Will not be easy.
The MP Materials site in California is the same one once owned by Chevron. It has been through a series of owners through an a series of bankruptcies. Mostly over onerous environmental issues. They do not refine the rare earths. Traditionally they isolated a concentrate that was shipped to China for final processing. Now they are adding refining capacity and plan to make rare earth magnets.
If you want to put your 401K into this project, its ok with me. But most of us would be very reluctant due to high risk. Govt support of some sort does help. This is almost a penny stock.
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Your right my mistake.
I have no problem with government supporting the industry but I do have a problem with government picking winners and taking over industries. There are many sites across the US that have found rare earth, Montana, Alaska, Wyoming, you can find them all by googling them. But I doubt they will be developed now. It seems the government would have been better off helping the industry get processing going with subsidies than putting money into one company. Ah well I guess my idea of the government taking over healthcare should have an easier path now. So at least I can thank them for that.
It would be great if one day we had half a dozen companies producing rare earths. At present MP Materials is the one further-est along with much already invested. If the govt supports only one, that is the right one. Yes, if more come along one day that would be great.
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“support” is subsidies or loan guarantees, at below market rates. “support” is not “control”. Ownership is “control”.
Steve
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I was nearly in full agreement when I thought about it some more. I wonder if it may be that they have an unfair disadvantage. Because government tends to meddle, and when government funds things they meddle a little, but when government OWNS things, they meddle a lot. I can just imagine … A Chinese company makes the most effective equipment to do this work, and the company plans to buy some of that equipment. The Board of Directors has a discussion, and the government members think that they should buy US or European equipment despite it being half as efficient and three times more costly. Then a member of congress gets hold of the government board members and twists their arm to locate the post processing plant in Arizona (despite the excessive heat there and lack of ready water supplies causing substantial additional expense). And another member of congress makes them locate the final packaging in Pennsylvania so all the stuff has to be shipped hither and yon causing even more expense. By the time they’re done, this company is the least efficient and least effective one by far.
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In 2010, the then President PROMISED to support n subsidize MOLY (the ticker for today’s MP). (and Ucore in Canada and Alaska). Cause they were THE leaders in North America.
The swamp said no to MOLY n UURAF, the Pres did NOT fight for it, and China was allowed to monopolize REEs.
So, perhaps “skin in the game” will stop the swamp from un-aliving government support for MP and the national security that a domestic supply of REEs provides.
Not only did China monopolize REEs production, they sucked up all the expertise in that field.
Having an operational REEs mine here in the US at least suggests some expertise will be developed and maintained.
ralph
MOLY went bankrupt.
Ucore today is a penny stock.
https://finance.yahoo.com/quote/UURAF/?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAANqu4nZ0ulnXRQGTYHdD9H6_K6vG1FPZSa62Av862lEbb4hDC9OU50sSeOFLs6kO5oIoVwj5rBwBdUM-S7oxkc0X0M4nGQWaoLVERog46R-GpM1SNFF86DxXX_huDLg5md5Ih4H2YeL1mR7H-DGBtqFGRrktdkkEbVybgcC9QBGZ
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I can’t wait to see what Companies Mamdani supports.
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