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Thread: China and the Rare Earth Supply Chain Policy Brief

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    Default China and the Rare Earth Supply Chain Policy Brief

    Can you believe that the Mountain Pass mine in California, the only place in the US where RREs are mined is now part owned by the Chinese. Further the mined ores have to be sent to China for further processing. That's how bad the situation has become.


    Rare earth elements are used in the production of high tech devices such as defense equipment (e.g. radar systems and guided missiles) and energy technologies (e.g. electric vehicles and wind turbines)
    China dominates the supply chain of rare earth elements, having 37 percent of proven reserves, producing 63 percent of global output, and housing about 85 percent of the processing capacity
    An Australian company operates the only non-Chinese separation plant, located in Malaysia
    The United States produced 12 percent of global rare earth supply in 2019 at its Mountain Pass mine, but the ore must be shipped to China to be upgraded into compounds and products which are then shipped back to the United States
    The Mountain Pass mine that produces the U.S.’s rare earths is partially owned by a Chinese company
    The United States imports about 80 percent of its rare earth requirements from China, compared to a high of 23 percent of imported oil from the Middle East[1] in 2001
    The United States is much, much more dependent upon China for the rare earth minerals necessary for renewable energy technologies than it ever was on the Middle East for oil imports
    The U.S. Department of Defense is funding two separation plants in the United States under a program initiated by President Trump
    There are 17 rare earth elements that are used in the production of high-tech devices such as smartphones and computers, defense equipment such as radar systems and guided missiles, and energy technologies such as electric cars and wind turbines. While these elements are common in the earth’s crust, they are found in tiny concentrations and are mixed together, making them difficult to isolate. China has the most proven reserves of rare earth elements (37 percent[2]) and produces around 63 percent of global output[3], which it uses to fuel its high-tech industries, exporting the remainder. Global consumption of rare earth elements in 2019 was about 210,000 metric tons—10.5 percent more than in 2018 and about 4.7 times greater than the 45,000 metric tons used 28 years ago.

    According to the Energy Information Administration, reserves are “estimated quantities of energy sources that analysis of geologic and engineering data demonstrates with reasonable certainty are recoverable under existing economic and operating conditions. The location, quantity, and grade of the energy source are usually considered to be well established in such reserves”. Thus, reserves are not the entire resource base since more sources are bound to be found with additional exploration.

    Light and Heavy Rare Earth Metals

    Rare earth metals are often broken up into two categories according to their atomic weight[4]: light and heavy. All rare earth metals are part of a chemical group called lanthanides; light rare earths represent the lanthanides with the lowest atomic numbers. Light rare earths include: cerium, lanthanum, praseodymium, neodymium, samarium and scandium. Of those, neodymium is considered one of the most critical. The metal is used in everything from mobile phones and electric cars to medical equipment. Neodymium is also the main light rare earth used in the creation of permanent magnets. These magnets are versatile and are heavily used in data storage systems and wind turbines. Praseodymium is also a significant light rare earth metal that is used in alloys with magnesium to form aircraft engines and in creating permanent magnets.

    Heavy rare earth metals are defined by their higher atomic weights relative to light rare earths. They are less common, and some elements within the group are facing shortages as demand outpaces supply. That typically makes them more valuable than light rare earths, though they also have smaller markets.
    Dysprosium, yttrium and terbium are considered critical elements in the heavy rare earth metals group as they face low supply and increasing importance in the development of renewable energy technologies. Like the light rare earths, heavy rare earths also play a critical role in other technology, including hybrid cars, fiber optics and medical devices. Dysprosium is used in tandem with neodymium in magnets that are vital to modern technology and renewable energy. In addition, dysprosium oxide is used in nuclear reactors to help cool fuel rods to keep reactions under control.

    Top Countries Producing Rare Earth Elements
    China

    China has dominated rare earths production for a number of years. In 2019, its domestic output of 132,000 metric tons was an increase from 120,000 metric tons the previous year—an increase of 10 percent. Chinese producers must adhere to a quota system for rare earths production. The full-year quota[5] for mining in 2019 was set at a record high at 132,000 metric tons, and the quota for smelting and separation was 127,000 metric tons. The quota system is a response to China’s problems with illegal rare earths mining[6]. Currently, six state-owned miners are in charge of China’s rare earths mining industry and operate at the behest of the government.

    Mining is only one portion of the supply chain. China also dominates rare earth processing with at least 85 percent of global rare earth processing capacity. The only exception[7] is Australia’s Lynas Corp which operates a separation plant in Malaysia.

    In late May 2019, China raised the prospect of using its control of rare earths in its trade war with the United States but did not announce formal restrictions, which it has done previously. In 2010, China cut its rare earth exports by 40 percent and cut off supplies to Japan over a territorial dispute[8], causing prices to soar. These actions were challenged by the United States, the European Union, and Japan, resulting in a ruling against the country’s export quotas by the World Trade Organization (WTO). The WTO ruled that the export quotas represented an unfair restriction that allowed China to control global rare earth prices. Because China does not impose the regulations on mining rare earths that other countries do, “toxic wastes from rare-earth facilities have poisoned water, ruined farmlands, and made people sick”[9].

    United States

    From 1940 to 1990, the United States produced and mined its own rare earth minerals at the Mountain Pass mine in California. Until the 1980s the United States was one of the world’s largest producers, but was usurped by China, whose production increased by more than 500 percent since 1990 due to its substantial deposits and cheap labor. The cost of developing a rare earth mine can cost up to a half-billion dollars[10]. Generating profits from rare earths has proved elusive for non-Chinese companies and low prices make the funding of new projects difficult to justify.

    Rare earths supply in the United States currently comes only from the Mountain Pass mine in California, which went back into production in the first quarter of 2018 after closing in the fourth quarter of 2015 due to China’s competitive prices, opposition from environmentalists, and U.S. environmental regulations escalating the cost of production. It was run by Molycorp before it went bankrupt and then was bought[11] by MP Materials in 2017. In 2019, the United States produced 26,000 metric tons of rare earths, up from 18,000 metric tons the previous year—a 44 percent increase, accounting for 12 percent of global production.

    The rare earth ore that the United States mines at Mountain Pass gets shipped to China to be upgraded into compounds and products which are then shipped back to the United States. MP Materials, who mines Mountain Pass, is one of the three companies chosen by the Trump Administration’s Department of Defense to receive direct government funding for one of two separation plants in the United States[12]. However, that will happen only after a review by its Chinese shareholder, Shenghe Resources, is completed. Australia’s Lynas is teaming with Texas-based Blue Line on a heavy rare earths separation plant. But, once the oxide is generated at the separation plants, it may still have to go to China for further processing.

    The United States is a major importer of rare earth materials, with demand for compounds and metals worth $170 million in 2019[13]–up from $160 million in 2018. The country has classified rare earths as critical minerals, a distinction that has come to the fore due to trade issues between the United States and China. According to the United States Geological Survey, the United States gets around 80 percent[14] of its rare earth imports from China.

    The United States currently has virtually no capacity to produce neodymium-iron-boron magnets—the most common end-use application for rare earths and one that is set for major growth as electric vehicles increase their market share. Rare earth magnets are also key inputs to many other applications from wind turbines to the F-35 fighter jets. General Motors had one of the two original patents for the magnets but sold the rights to China. Japan’s Sumitomo sold the other patent to Hitachi, which is now the primary supplier outside of China.

    At the end of 2020, Congress passed a critical minerals research and development program managed by DOE’s Office of Fossil Energy and authorized at funding levels between $23 million and $25 million annually through 2025 to develop advanced separation technologies for the extraction and recovery of rare earth elements and other critical materials from coal and coal byproducts[15].

    Myanmar

    Myanmar mined 22,000 metric tons of rare earths in 2019, up from 19,000 metric tons the previous year—a 16 percent increase. Little information is available about the country’s rare earth mineral deposits and mining projects, but the nation had a close relationship with China — in 2018, Myanmar provided 50 percent of China’s medium to heavy rare earths feedstock. However, at the end of 2019[16], Myanmar closed its borders to China, driven by a stated aim of environmental protection and remediation. The recent coup there calls into question its reliability as a supplier to the world.

    Australia

    Rare earths production in Australia has been rising steadily for the last few years. In 2019, its output was 21,000 metric tons[19], the same level as in 2018. The country holds the sixth largest-known rare earth reserves in the world, and is poised to increase its output. Australia-based Lynas Corp, the only non-Chinese rare earths producer, operates the Mount Weld mine and concentration plant in the country, and it recently announced plans to boost production to 10,500 metric tons per year of neodymium-praseodymium products by 2025. Lynas’ Mount Weld project was supported by the Japanese government[20], which extended loans and lowered interest rates during the start-up phase. Northern Minerals opened Australia’s first heavy rare earths mine in 2018. Its main products are terbium and dysprosium, the latter of which is used in technology such as permanent magnets.

    In November 2019, Australia signed an agreement with the United States[21], which mandated both nations’ geological agencies work together to assess the potential for new supply. Australia identified 15 rare earth and critical minerals projects hoping to attract commercial funding and is offering state-backed loans to help develop them.

    India

    In 2019 rare earths production in India was 3,000 metric tons. In the fall of 2014, Indian Rare Earths and Toyota Tsusho Exploration entered into an agreement regarding the exploration and production of rare earths via deep-sea mining. Despite this deal, India’s current rare earths production industry is far below its potential[23]. The country holds almost 35 percent of the world’s total beach sand mineral deposits, which are significant sources of rare earths.

    Russia

    Russia produced 2,700 metric tons of rare earths in 2019[24], same as in 2018. The country’s government is allegedly “unhappy” with its supply of rare earths, and the companies IST Group and Rostec made a $1 billion investment into production a few years ago. It is expected that production in Russia will increase over time through the development of pre-existing rare earths fields. The country now accounts for roughly 1 percent of global production.


    Source: Investing News
    Conclusion

    China has a virtual monopoly on the processing of rare earth elements that are needed for high tech (smartphones and laptops), defense equipment, and so-call “green” energy technologies. It not only produces the majority of rare earth elements, but it has the most rare earth reserves. China’s market dominance enables it to control prices and put pressure on challengers that threaten its ‘Made in China 2025’[25] strategy to create a vertically integrated supply chain encompassing mining, magnets, and high-tech manufacturing. The West needs to move rapidly to regain control of its industrial future; “green” energy policies that foster an overwhelming dependence on China threaten it.
    https://www.instituteforenergyresear...-policy-brief/
    As Gustave Le Bo lamented: “The masses have never thirsted after truth. They turn aside from evidence that is not to their taste, preferring to deify error, if error seduces them. Whoever can supply them with illusions is easily their master; whoever attempts to destroy their illusions is always their victim.”

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    Our Elite Class, almost always failing. I really dont see why you get on my case about being depressing when it looks all the world like

    1) The Chinese already substantially control America and

    2) It is decades too late to figure what they are doing and do anything about it.
    "The dismissing of everyone on the fringe as a kook, or a crank, or a quack, or whatever, is the end of progress" <<<<<<<<<Bret

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    China (Xi)early recognized the strategic and economic potential of rare earths. and set on that course to acquire
    They produce a LOT ( raw minerals) and glom up the worlds supply.
    It's illustrative of their behavior - glomming up PPE in the early COVID pandemic as well

    what do we do> sell it to China!

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    Quote Originally Posted by anatta View Post
    China (Xi)early recognized the strategic and economic potential of rare earths. and set on that course to acquire
    They produce a LOT ( raw minerals) and glom up the worlds supply.
    It's illustrative of their behavior - glomming up PPE in the early COVID pandemic as well

    what do we do> sell it to China!
    China thinks things through, and can stick to a plan so that they win in the end....two life skills that America is now allergic to.
    "The dismissing of everyone on the fringe as a kook, or a crank, or a quack, or whatever, is the end of progress" <<<<<<<<<Bret

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    Quote Originally Posted by Hawkeye10 View Post
    China thinks things through, and can stick to a plan so that they win in the end....two life skills that America is now allergic to.
    schizophrenia POTUS ideologies ( Biden's insane hate of all things Trump that has him destroying immigration for ex.) dont help. and a Congress that can only occasionally burp out large OMNIBUS or "relief" packages seals the deal

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    Quote Originally Posted by anatta View Post
    schizophrenia POTUS ideologies ( Biden's insane hate of all things Trump that has him destroying immigration for ex.) dont help. and a Congress that can only occasionally burp out large OMNIBUS or "relief" packages seals the deal
    The Revolution is trying to get to open borders as fast as they can, for reasons that have nothing to do with Trump.
    "The dismissing of everyone on the fringe as a kook, or a crank, or a quack, or whatever, is the end of progress" <<<<<<<<<Bret

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    Quote Originally Posted by Hawkeye10 View Post
    The Revolution is trying to get to open borders as fast as they can, for reasons that have nothing to do with Trump.
    It's the same reason that Blair opened the borders in 2004 to eight East European countries, firstly to get cheap labour and then to get Labour voters.
    Last edited by Primavera; 03-01-2021 at 04:57 AM.
    As Gustave Le Bo lamented: “The masses have never thirsted after truth. They turn aside from evidence that is not to their taste, preferring to deify error, if error seduces them. Whoever can supply them with illusions is easily their master; whoever attempts to destroy their illusions is always their victim.”

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    Quote Originally Posted by Primavera View Post
    It's the same reason that Blair opened the borders in 2004 to right East European countries, firstly to get cheap labour and then to get Labour voters.
    Well then things have gotten worse because a big part of the reason now is to make America weaker, either because they hate America or hate themselves or because they think this needs to be done if their globalists fantasies are going to come true.

    However, whether they know it or not, and some might, all that they are really going to accomplish is to make China's global domination easier.
    "The dismissing of everyone on the fringe as a kook, or a crank, or a quack, or whatever, is the end of progress" <<<<<<<<<Bret

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    Quote Originally Posted by Hawkeye10 View Post
    China thinks things through, and can stick to a plan so that they win in the end....two life skills that America is now allergic to.
    Here is a UK company that is actually addressing the problem rather than just talking about it!


    Have you heard of the oddly named rare earth metals Neodymium and Praseodymium, commonly and more easily known as NdPr? They’re to the green energy revolution what Thailand or Ibiza once were before the whole world found out about them – someone’s little secret.

    Now, one of only a few ways to enjoy this off-the-beaten-track discovery is with NdPr miner Pensana Rare Earths Plc.
    https://pensana.co.uk/the-rare-earth...cret-for-long/
    As Gustave Le Bo lamented: “The masses have never thirsted after truth. They turn aside from evidence that is not to their taste, preferring to deify error, if error seduces them. Whoever can supply them with illusions is easily their master; whoever attempts to destroy their illusions is always their victim.”

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    Quote Originally Posted by Primavera View Post
    Here is a UK company that is actually addressing the problem rather than just talking about it!




    https://pensana.co.uk/the-rare-earth...cret-for-long/
    How is the world a better place if the separation and refining is done in Yorkshire rather than Africa where it is mined?

    I fail to see the point.
    "The dismissing of everyone on the fringe as a kook, or a crank, or a quack, or whatever, is the end of progress" <<<<<<<<<Bret

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    Quote Originally Posted by Hawkeye10 View Post
    How is the world a better place if the separation and refining is done in Yorkshire rather than Africa where it is mined?

    I fail to see the point.
    Wouldn't be the first time!

    Pensana Rare Earths’ Longonjo NdPr project in Angola will soon begin production. With a thick blanket of NdPr mineralization over 1.5km, Longonjo is one of the largest and highest grade deposits in the world. This translates into 56,000 tonnes per annum of NdPr rich concentrate, which will be processed on-site into a product that will then be exported to markets globally for around $30,000 per tonne.

    Ahead of this, Pensana Rare Earths, which is already listed on the Australian Stock Exchange (ASX:PM8), will list in early February on the main board of the London Stock Exchange (LSE:PRE). And while this will make an investment in Pensana Rare Earths and NdPr the double whammy of high potential returns on investments through an established LSE-listed company, the firm and the Longonjo mining project are also focused on ensuring the strength of its sustainability and ESG (environmental, social and governance) credentials in an effort to ensure long-term success for all concerned – local Angolans through to investors – at a low impact to the environment.

    Greener and fairer

    Angola is trying to diversify its economy away from oil, gas and diamonds into mining, agriculture and tourism after years of brutal civil war. Pensana Rare Earths’ goal is to provide industries with a low-cost, high-quality, reliable NdPr solution to drive the production of greener energy and the electrification of transport around the globe, and along the way ensure its impact locally in Angola is positive.

    You can’t keep a good thing hidden forever, but before the hordes arrive, consider Pensana Rare Earths and NdPr for a direct investment in a game-changing commodity and a greener future.
    Last edited by Primavera; 03-02-2021 at 02:47 AM.
    As Gustave Le Bo lamented: “The masses have never thirsted after truth. They turn aside from evidence that is not to their taste, preferring to deify error, if error seduces them. Whoever can supply them with illusions is easily their master; whoever attempts to destroy their illusions is always their victim.”

  12. The Following User Says Thank You to Primavera For This Post:

    anatta (03-02-2021)

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    Quote Originally Posted by Primavera View Post
    Wouldn't be the first time!
    I am a human not a God....if I had given you the wrong Idea then I am sorry.

    Can you talk to me like a real person for a moment? Why is it a good Idea to do this work in Yorkshire rather than Angola? What is the benefit?
    "The dismissing of everyone on the fringe as a kook, or a crank, or a quack, or whatever, is the end of progress" <<<<<<<<<Bret

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    Primavera (03-02-2021)

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    Quote Originally Posted by Hawkeye10 View Post
    I am a human not a God....if I had given you the wrong Idea then I am sorry.

    Can you talk to me like a real person for a moment? Why is it a good Idea to do this work in Yorkshire rather than Angola? What is the benefit?
    Do better next time! Biden is just talking about doing something, Pensana are actually doing.
    Last edited by Primavera; 03-02-2021 at 03:13 AM.
    As Gustave Le Bo lamented: “The masses have never thirsted after truth. They turn aside from evidence that is not to their taste, preferring to deify error, if error seduces them. Whoever can supply them with illusions is easily their master; whoever attempts to destroy their illusions is always their victim.”

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    Quote Originally Posted by Primavera View Post
    Do better next time!
    Crickets are always a bad sign.
    "The dismissing of everyone on the fringe as a kook, or a crank, or a quack, or whatever, is the end of progress" <<<<<<<<<Bret

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    Quote Originally Posted by Hawkeye10 View Post
    I am a human not a God....if I had given you the wrong Idea then I am sorry.

    Can you talk to me like a real person for a moment? Why is it a good Idea to do this work in Yorkshire rather than Angola? What is the benefit?
    What work? The rare earth's mine is in Angola and the UK company is based in England! Neodymium and Dysprosium are essential to wind turbines and battery powered electric vehicles, the Chinese are kicking themselves that didn't get to control that mine as well.
    Last edited by Primavera; 03-02-2021 at 09:29 AM.
    As Gustave Le Bo lamented: “The masses have never thirsted after truth. They turn aside from evidence that is not to their taste, preferring to deify error, if error seduces them. Whoever can supply them with illusions is easily their master; whoever attempts to destroy their illusions is always their victim.”

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