Tag Archives: Rare earth elements

Doug Casey on What Could Happen if China Restricts the Supply of These Obscure Metals

It wouldn’t be the end of the world if China restricted its exports of rare earth elements. From Doug Casey at internationalman.com:

International Man: Rare-earth elements (REEs) were in the news recently. What is the significance of these 17 obscure elements from the periodic table?

Doug Casey: Obscure elements seem to come into public view every few decades, typically during a commodity bull market. I remember the so-called “strategic metals” boom, back in the early 1980s, when everybody went wild about cobalt and tantalum, among other elements. I remember there was a well-known broker in New York who was actually selling 55-gallon drums full of cadmium to naïve clients. There are probably, even now, some poor people with the stuff stored in their garages.

This is a cyclical phenomenon, not unlike what’s happening with stocks like GameStop. It’s mostly a consequence of too much money being printed and lots of it looking for a place to hide.

Now it’s the turn of rare-earth elements. Many readers will recall them from chemistry class. More technically, most of them are also known as lanthanides, in their own row at the bottom of the periodic table. They’re actually not all that rare. Fun fact: Cerium is more common than copper in the earth’s crust. That is indicative of the problem. REEs are generally widely dispersed, but there are relatively few places where deposits are concentrated enough to be considered ore.

Economic deposits of REEs may be somewhat hard to find, but there are scores of known REE resources, not counting the millions of tons of electronic junk that can be recycled for them. But the lack of minable reserves is solvable with higher REE prices. There are also problems in mining, concentrating, and refining that are peculiar to REEs. Mining anything can be messy, of course, but REE’s chemical characteristics make them more of a problem than many minerals. Although, this is nothing that can’t be solved with inputs of capital and technology.

Continue reading→

Trade War Becomes “Tech War” As Trump Cracks Down On China’s Rare Earth Metals, by Tyler Burden

Rare earth metals are essential to many high-tech products, and the US imports most of them from China. Does putting tariffs on them make any sense? From Tyler Durden at zerohedge.com:

While a closer read of the 200+ page schedule released last night by the Trump administration that listed all the exports captured by the $200BN in new proposed Chinese tariffs revealed some oddities such as badger hair, bovine semen, frog legs, flamethrowers, fetal bovine serum and blood, one product group stood out: rare-earths, an esoteric collection of minerals with strange names (Dysporsium, Europium, Neodymium, Lanthanum and Yttrium), which all have niche, high-tech applications and a history of scarcity. They’re used in everything from cell phones to hybrid vehicles to wind turbines and military hardware, which as Bloomberg writes suggests that the trade war is starting to hit its stride as a tech war.

But more importantly to the trade – or now tech war – is that China is effectively the only producer in size of these critical components that keep America’s high tech industry running.

Rare earths, which are also used in military applications, weren’t mined domestically last year, leaving the U.S. to rely entirely on supplies from abroad. According to the US Geological Survey, the country imported $150 million worth of rare-earth metals and compounds in 2017, a 27% increase from the prior year.

More notably, China accounted for 78% of the imports of the materials in 2013-2016. China also produced more than 80% of the world’s rare-earth metals and compounds in 2017, and has about 37% of global reserves, according to Bloomberg.

What is odd, is that by targeting rare earth metals, Trump could impair only the US tech sector, but end up damaging the broader economy: just last year we wrote that “Rare Earths Are China’s Most Potent Weapon In A Trade War“, and by imposing tariffs on China’s exports, not only will their prices soar for their end-users in the US, but if China is so willing, it could halt exports altogether, rerunning the 1983 oil embargo scenario… however using a far more valuable modern day equivalent to oil.

And, as Dan McGroarty – the founder of Carmot Strategic Group, a consulting firm that advises companies on rare-earth minerals and metals – told Bloomberg, tariffs on rare-earth elements “could be a significant pain point for the U.S.”

To continue reading: Trade War Becomes “Tech War” As Trump Cracks Down On China’s Rare Earth Metals

Sexy metal: the missing element in the Korean puzzle, by Pepe Escobar

North Korea has a lot of rare earth elements, which are extremely important in high-tech products, particularly weapons. From Pepe Escobar at atimes.com:

US Secretary of State Mike Pompeo knows the importance of rare earth elements, and North Korea has reportedly found one of the world’s biggest deposits 150km from Pyongyang; is this another factor behind the recent thaw with the US?

A THAAD missile system intercepts ballistic missiles during a test near the US in Sept 2013.
Photo: AFP/ DoD handout / Missile Defense Agency

A THAAD missile system intercepts ballistic missiles during a test near the US in Sept 2013. Photo: AFP/ DoD handout / Missile Defense Agency

This may not be about condos on North Korean beaches after all. Arguably, the heart of the matter in the Trump administration’s embrace of Kim Jong-un has everything to do with one of the largest deposits of rare earth elements (REEs) in the world, located only 150 km northwest of Pyongyang and potentially worth billions of US dollars.

All the implements of 21st century technology-driven everyday life rely on the chemical and physical properties of 17 precious elements on the periodic chart also known as REEs.

Currently, China is believed to control over 95% of global production of rare earth metals, with an estimated 55 million tons in deposits. North Korea for its part holds at least 20 million tons.

Rare earth elements are not the only highly strategic minerals and metals in this power play. The same deposits are sources of tungsten, zirconium, titanium, hafnium, rhenium and molybdenum; all of these are absolutely critical not only for myriad military applications but also for nuclear power.

Rare earth metallurgy also happens to be essential for US, Russian and Chinese weapons systems. The THAAD system needs rare earth elements, and so do Russia’s S-400 and S-500 missile defense systems.

It’s not far-fetched to consider ‘The Art of the Deal’ applied to rare earth elements. If the US does not attempt to make a serious play on the Democratic People’s Republic of Korea’s (DPRK’s) allegedly vast rare earth resources, the winner, once again, may be Beijing. And Moscow as well – considering the Russia-China strategic partnership, now explicitly recognized on the record.

The whole puzzle may revolve around who offers the best return on investment; not on real estate but sexy metal, with the Pyongyang leadership potentially able to collect an immense fortune.

Is Beijing capable of matching a possible American deal? This may well have been a key topic of discussion during the third meeting in only a few weeks between Kim Jong-un and President Xi Jinping, exactly when the entire geopolitical chessboard hangs in the balance.

To continue reading: Sexy metal: the missing element in the Korean puzzle