Rare Earths Redux

Some eight years ago we wrote extensively about rare earths and China's actions to control the market. We further noted that for decades the US was the world's supplier of them. We did not run out, we just closed the mine! It was in California and they wanted it closed. The elements are still there folks, lots of them.

Then along comes the NY Times, the paper which seems to be a bit short sighted. They note:

Rare earth refining is done on a large scale in only two places on earth: China, and Lynas’s plant here in Kuantan, Malaysia, a sprawling industrial area on the coast of the South China Sea. The company mines rare earths out of a collapsed volcano in Australia and ships them to Kuantan to be refined. Building that plant nearly sank Lynas. When Ms. Lacaze was named chief executive in June 2014, the company was struggling with $450 million in debt. Design flaws had delayed full production. It faced criticism from environmentalists (NOTE: which by the way was the California problem). China is her most immediate challenge. Lynas is now profitable, but Ms. Lacaze sees a potential trade war between China and the United States as more of a threat than an opportunity. Beijing could keep rare earths off the market, depriving many American and European manufacturers of the minerals they need. Lynas couldn’t compensate for it all. It accounted for only about 12 percent of world output of rare earths last year, according to Adamas, the research firm. Chinese companies accounted for more than four-fifths.

But the US could compensate, and actually dominate the world market. See the MIT status updates. The Times continues:

Even if it doesn’t disrupt the supply, China will likely keep its grip over the market for rare earths for a long time to come. It also dominates research and development of these minerals, giving it a leg up on the future, Ms. Lacaze said. “I think there’s about 100 Ph.D.s in rare earths working in applications inside China and working in technology development,” she said. “To my knowledge, do you know how many Ph.D.s there are outside of China?” With the fingers of her right hand, she made a zero.

I believe she is grossly in error. But leave that aside. Steel and aluminum are important but rare earths are truly strategic. Furthermore the PLA controls Chinese production. Perhaps some one in the current Administration will catch on. The last one never did. Now we have a real problem!

Now Bloomberg notes:

China’s grip on rare-earths supply is so strong that the U.S. joined with other nations earlier this decade in a World Trade Organization case to force the nation to export more of the materials, not less, after prices spiked amid a global shortage. The WTO ruled in favor of the U.S., while prices eventually slumped as manufacturers turned to alternatives. Imposing duties will “bring home to the American public the reality of how much of what they use in everyday life contains these technology metals,” Jack Lifton, the Michigan-based founder of rare earth consulting service Technology Metals Research LLC, said by phone. “The Chinese mine the rare-earths, they separate them, they refine them. This is the long-term trend and a 10 percent tariff will not do anything to stir any domestic production in the U.S.”

The real problem is that the US has the largest Rare Earth reserves, closed down a few decades ago due to "environmental" concerns.  Like the Times, Bloomberg seems to be totally oblivious to the availability and the amount in the US. To some degree this is a "Yellow Journalistic" approach in my opinion. The US should and must reinvigorate its own sources, now. Just look at the USGS map!