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China Moving To Restrict Neodymium Supply
GuyFawkes writes with this quote from the Independent:
"Britain and other Western countries risk running out of supplies of certain highly sought-after rare metals that are vital to a host of green technologies, amid growing evidence that China, which has a monopoly on global production, is set to choke off exports of valuable compounds. Failure to secure alternative long-term sources of rare earth elements (REEs) would affect the manufacturing and development of low-carbon technology, which relies on the unique properties of the 17 metals to mass-produce eco-friendly innovations such as wind turbines and low-energy light bulbs. China, whose mines account for 97 per cent of global supplies, is trying to ensure that all raw REE materials are processed within its borders. During the past seven years it has reduced by 40 per cent the amount of rare earths available for export."
They have fought to secure those same elements and done their homework. it gives them an economic advantage with both manufacturing and raw mining/refining done in the same place. most western countries in the same position would do the same as would any corporate entity in the western hemisphere. they can export the finished products at a huge markup compared to what they would get for raw minerals.
China is mining a vein of Unobtainium!
Anybody want my mod points?
The whole point of free trade was to unlink, fundamentally, resources from national ownership. Now that the Chinese have crossed the rubicon on the basic issue of access to materials on open markets, what is really the point of pretending that they are genuinely interested in free trade? Do we still want to pretend that they are interested in moving towards western liberalism. As much as Republicans called liberals Chamberlins on other issues, conservatives still ignoring the growing failure of free trade with the east are really, fundamentally, the genuine Chamberlins of our day. I hope they choke on their Walmart stock.
This is my sig.
Sounds like the WTO could have a bit of leverage considering how much comes out of China right now that could be gradually restricted...
And replaced with what? And what if the Chinese decide to retaliate and simply shut down exports for a couple of months? Who do you think will cry uncle first?
"The average reporter we talk to is 27 years old......They literally know nothing." - Ben Rhodes
This has been discussed here on Slashdot before, but rare earths are not as difficult to mine and produce as the term "rare" implies; they are rare only in a relative sense compared to other common elements of the Earth's crust. They are mostly not rare on the same order as gold or platinum group metals, although there are exceptions. There are plenty of sources for most of these elements in the continental United States and other nations outside of China; it just costs a certain amount of money to mine and refine them. If China chokes off supplies from their own mines and processors then it will make those same sorts of mines and processors cost-competitive again here in the United States and elsewhere in the world. This really isn't that big of a deal.
Time to explore for new deposits. If the price of rare earth elements increases enough, it'll be worthwhile. Australia, the American west, and Africa still have vast unexploited mineral wealth.
I always have to wonder at what point the "if you owe the bank $10,000 you have a problem, if you owe the bank $10,000,000 they have a problem" principle kicks in...
The willingness of China to send actual goods(at the cost of deferring domestic consumption) in exchange for little green US treasury gift cards as some sort of neo-mercantilist scheme is rather convenient.
The following link is ESSENTIAL reading
http://seekingalpha.com/article/178225-on-the-rare-earth-crisis-of-2009
http://slashdot.org/~GuyFawkes/journal
Umm, the Chinese did not cut off the supply of Opium. They cut off the demand for opium. The British were illegally smuggling opium from India into China, then the Chinese enforced their laws, leading to war.
This was discussed previously on http://science.slashdot.org/story/09/09/08/2119201/China-Considering-Cuts-In-Rare-Earth-Metal-Exports
:)
If you hurry up and copy/paste a few comments from there, you may be able to get a cheap +5 Informative.
http://www.choruscars.com/Chorus_NEO_WhitePaper.pdf
There are plenty of prospective or former mines around the world; it's just that China was so much cheaper that it made little or no sense to exploit those sites until now.
The real trouble here is the sudden change in price, but at the rate demand for it has been going up, it seems inevitable that engineers are going to need to find alternatives to it -- regardless of what China does.
--Greg
Or more likely, Japan will just shift its neodymium orders to mines in the US, Australia, Brazil, and elsewhere, as these will increase their output when China drives up global prices by restricting her exports. Rare earth metals are only relatively rare -- we're not nearly about to run out of the things, and China isn't the only country with significant total reserves. At any rate, Japan doesn't owe China war reparations anymore anyway: Mao Zedong waived all reparations as part of the price for buying Japan's diplomatic recognition in 1972.
Thanks for catching that, I'm much better able to participate in this and future discussions having read your post. I'm glad someone with your insight and expertise on China is watching Obama so that we don't miss these crucial turning points in history.
Useless retaliation. Only stuff is worth something. Try to build an hard disk magnet with an alloy of steel and dollars if you are able to. Chinese are just leveraging their resources, which, by the way, does not come cheap in terms of labor and environmental damage. Maybe you didn't notice , but Chinese government is trying to spend as fast as possible those mountains of soon-to-be-rubbish banknotes called dollars. They go after everything: from nationwide mining deals to subsidizing the buy of small groceries shops in northern African countries or restaurants in Italy. Because, at the end, only real, solid stuff matters.
Subsistence style living is not an option ... large scale commercial style farming is the only way to feed the number of people we have (and it isn't enough, really). So if we're headed down the path of subsistence living ... well ... buy a lot of guns and bullets, because there isn't enough to go around.
"Who is the Journal of Quantum Physics going to believe?" --Stephen Hawking
the first is just the irony of the country touted as having "A Bad Human Rights Record" (when in fact they are just using common sense to keep control over 1.3 billion people)
What the...?
People don't say that China has a bad human rights record because of the One Child Policy. They say that for, among other things, the One China Policy. Did you hear about the unrest of the Tibetans and the slaughter they endured as a result? Did you hear about the Uyghur towns in XinJiang Province wherein the government went in one day saying that everyone needs to be in their homes tomorrow or be shot and then coming through the next day and killing everyone on the streets?
You seem like a relatively informed person, did you hear about the rocket tests that destroyed entire towns?
How about the supremely corrupt officials covering up reports of lakes polluted to the point of poisoning absolutely every last person in the bordering towns?
Don't get me wrong. I love China. Wonderful place, great people, amazing food, and a beautiful land. But that government is abhorrent when it comes to treating its people right.
Sometimes, you can, you go to hell for the rest of your life! That's a true thing.
very gooood. i think this is highly amusing, on several fronts. the first is just the irony of the country touted as having "A Bad Human Rights Record" (when in fact they are just using common sense to keep control over 1.3 billion people) happens to now hold a damocles sword over the rest of the world if it wants to go "green".
According to wikipedia, this entire article is just silly. Neodymium is not rare, nor only occurring in China.
Religion is regarded by the common people as true, by the wise as false, and by rulers as useful.
What "4 to 5 times of" do western industrialized nations produce more of (limited to manufactured articles), and of those, how many "things" that are still produced in the west are in at least part dependent on Chinese manufactured components? Remember it takes all of the parts to make a "whole". "Assembled in western nation" is not the same for the economy as "totally manufactured in western nation". Or just "rebadged and sold in western nation with a corporate name that reflects a contract in a drawer in Delaware" is not the same as totally manufactured and sold in western nation.
And within that ratio, how much of a percentage of various national economies does that really represent? Example,. if western nation A produces 4-5 times as many automated shoe lace tiers, is that really something to brag on? Ok here's one that still really exists, big commercial airplanes, still mostly made in the west, this is a gimmee, (although china's domestic airplane production is rapidly advancing), but how much of a big new airliner is dependent on chinese parts? How about autos? How about high tech new medical equipment? Stuff like that.
Or are you including such things as **AA "copies" being worth such and such according to their figures, along with casino banking paper financial theoretical products like those wonderful collateralized debt obligation pieces of paper, all of those non product products, and just printed up pictures of dead political leaders being passed off as real products?
There's this rosy picture wall street and DC talking heads "economy" that includes debt being called an asset, the same one that needed trillions in emergency inflationary pictures of dead political leaders to "keep afloat" (same in Europe), then there is the real no BS economy, so which are you referring to?
Historically, production in China was cheaper due to lower labor (and land) costs, so over the decades many companies moved labor-intensive manufacturing operations there. In turn, this meant other countries had to start importing these goods from China, resulting in a balance-of-payments deficit. As a result of this China now has a large share of the world's manufacturing base, as well as large foreign currency reserves that can be used to buy goods/land/resources/companies abroad. China has historically used many of these reserves to buy hundreds of billions of dollars worth of US Treasury Bills, so in theory the US is legally indebted to China. Two things to keep in mind though: 1) China's lower labor costs won't last -- they're rising at 15-25%/year. As a result many companies have already begun shifting manufacturing operations back out of China, this time to even lower-cost manufacturing countries like Vietnam, Malaysia, Burma, etc. 2) China can't really use its US Treasury holdings to bully the US -- in fact, it can't even really count on the value of all the US Treasury Bills it holds. If it starts dumping US Treasuries in bulk, the price of treasuries will drop like a stone and wipe out much of the value of China's foreign reserve. Moreover, US Treasuries are, in the end, just a promise from the US government to pay with no real guarantee -- if China starts using them as a weapon, the US may just opt to repudiate the debt (though not without major consequences in terms of investor confidence and future interest rates).
The global economy is an illusion. China controls its exchange rate. If they let it float, chinese products would double
triple or maybe even 10X in price almost overnight. China controls imports thru numerous techniques (as do we and everyone else).
They just recently clamped down on even what web sites will be visible. China is a tightly controlled economy which plans on being number 1 in 5 to 10 years. They think long term and are willing to abuse its citizens in the process. My big worry is once they get those subs they are bulding up & running, the west is screwed. They will now be able to offer the one "product" that up until now, only we could offer. Security. Imagine if you are the Arab nations with all that oil and you can either trade with the US and collect "dollars in an account" and a guarantee of protection or you can get "computers, cars, boats, appliances, furniture, pillows, blankets, screws, bolts, steel, aluminum, pipe, tools, and pretty much anything you want" AND protection from the chinese, who would you sell your oil to? For that matter, ANY raw material producing country will do biz with the chinese, not us. China has played the capitalists over the past couple of decades very well.
I saw a documentary a few months ago where the Chinese had secured much of the lithium (as in batteries) mines and were negotiating in Bolivia if I remember correctly for their undeveloped resources which apparently are enormous. The problem here isn't China hoarding up the resources.. imho, it's our next quarter mentality.
a return to subsistence-style living and community-driven societies
We have over 6bn people on this planet. If we all went back to subsistence farming, 3/4 or the world will begin to starve in very short order. Starving people tend to do weird things, like start wars, skirmishes, riots and things like that - over suddenly scarce resources (oh like, I dunno... food supplies , arable land, things like that?)
...with countries like Poland, who have just absolutely amazing self-reliant and vibrant communities...
It's not a question of being lazy - it's a simple question of logistics that don't fit the paradigm, no matter how utopian and pretty it seems on the surface. There's also the the fact that a subsistence population tends to have astronomically higher birthrates, which tends to increase the pressures instead of alleviating them (but then with the return of disease and a higher child mortality rate, coupled with a lower life expectancy, who knows?)
...are you ready for that change...
I suggest extra ammunition and a rather large stockpile of MRE's until the excess population either dies of starvation or kills each other off. Defensible modifications to your house would help as well. May want to move to a sparsely-populated area as well and ride it out there.
-OR-
I suggest that you've spent way too many evenings watching Life After People re-runs, and fantasizing about some sort of post-armageddon future where you get to re-populate a shattered Earth with a gaggle of cute chicks who look to you as some sort of leader... or similar. May not want to close on that farmhouse in Idaho just yet, though.
It is my contention that:
1) The whole "Peak Oil" thing is somewhat of a sham, given that technology is emerging beyond a dependence on petroleum (we should be there completely within a couple of decades under normal market conditions, and if oil does start to become scarce, I'm certain that we'll get there even sooner due to simple market pressures). That said, it does have its uses in getting people to move to cleaner tech sooner (and no, you don't necessarily need Chinese rare earth metals to do it - see also hydroelectricity, monocrystal photovoltaics, etc).
2) China isn't the one and only repository of rare earth metals on this planet - if sufficiently motivated, I suspect that other sources will be found and/or synthesized if need be. Also, there are alternate means of creating clean tech w/o using rare metals to do it - it's all a question of economics and need.
3) People have been constructing and selling apocalyptic vision ever since St. John wrote his version on the Isle of Patmos. May not want to hold your breath just yet.
Quo usque tandem abutere, Nimbus, patientia nostra?
So what? We should start reopening some of our own mines in the US. For now we should continue buying them from the Chinese. The great thing about this economic relationship is that we get the minerals and China has to deal with the pollution.
It's a competition and lately we've been hobbling ourselves trying to protect the income of existing corporations by killing new businesses.
Software / business model patents are not helping us compete. They're crippling our new businesses.
And how much of that stuff is dependent today on Chinese supply of components? And how much is stagnating in the west, and just being shifted to China? How much is "assembled here" as opposed to really "made here"? And what have the trends been? That's the main point and is related to the entire topic.
Here's one example from your list, Caterpillar, two articles that should to to show what I am talking about
http://www.chinasourcingnews.com/2008/08/29/12503-caterpiller-expands-its-global-business-model-in-china/
http://money.cnn.com/news/newsfeeds/articles/prnewswire/CG24504.htm
And you can go back and look, or remember, Cat was one of the primary lobbyest forces to restrict imported steel tariffs. Using them as an example of "all made in merika!" is just false. They use a lot of foreign sourced, and are gradually shifting production eastward, just like every other manufacturing industry has been doing. Of course not all the way yet, but this is the trend, and thousands and thousands of abandoned factories in the US prove this.
When I was a kid, and the US was the largest creditor nation, we really *did* have a lot of "all made here" things, heck, most everything was. As manufacturing keeps getting outright offshored or has become dependent on imported components so all there is is the last stage assembly, we have gradually replaced produced wealth from the "vertical stack" manufacturing model we used to have with *debt*, national and private, and running trade deficits, and have been sneaking up on economic collapse. This economic situation has exactly paralleled the shift in manufacturing.
Manufacturing is the big kahuna on producing wealth. You stop doing it, you start to go downhill. You increase doing it, you prosper. The more that is vertically integrated within your own area, the more those currency units get spent and respent and respent where they improve the over all local economy. The more you ship them out, the more the local economy goes sour and the more in debt you go.
There is going to come up a point where the manufacturing nations like china will no longer be interested in IOUs and will only want to do business with such areas as provide them with real wealth, the raw resources and energythey need, for their products (a few billion people, a good market size), and that combined with their own internal markets will be *large enough* for them to just say "thanks, but don't really need ya anymore as customers old western nations, see ya!" to the nations that previously made stuff..like the US.
Now I know this doesn't matter to the top 1%, they are globalists and can just move, they don't care. The rest of the people though..
This is the deal, is this economy, the "official" numbers, a reflection of the good deal for wall street, their economy, or of main street? Which is more important, making sure the top 1% keep getting richer, or trying to maintain a better balance, especially within your own middle class?
The Chinese "communist" dictatorship - the most murderous in human history - has obviously a long list of crimes to their "credit" (modern corporate speak), but in this context it might also be relevant to mention that part of that regime's near total control over the rare earth elements is due to China's invasion and ongoing genocidal occupation of Tibet since 1950.
Mao Zedong may have "only" wanted pre-one-child-policy era lebensraum for the Chinese masses (from 1950 to 1970 the Chinese population doubled from 500 million to 1 billion), geopolitical and military control over the Central Asian highlands of Tibet and incomprehensible (in communist terms anyway) validation of China's fairytale-like feudal imperial claims over the absolutely non-Chinese Tibetan people when he sent his Communist Party's then-idle wardogs to invade and occupy Tibet, but it turned out that the subsequent Chinese national-socialist (read: Chinazi) leaders and their affiliated business "princelings" have found it incredibly lucrative to ransack Tibet of its natural resources.
Nearly all historically invaluable precious metal artifacts and statues were melted for Mao's foreign currency purchases (while the invaluable Buddhist scriptures and almost all of the more than 6000 monasteries were simply burned down or bombed. Tibet's forests have been hacked down and shipped off to China (leaving only erosion behind). Uranium, gas and oil are extracted by Party-affiliated cronies and the Chinese regime only leaving behind severe pollution. All profitable industrial metals, including the rare earth metals, are being excavated while protesting native Tibetans get the old Gestapo treatment. Et cetera and et cetera.
Did I mention that the Chinese dictatorship is hard at work damming and diverting the major Asian rivers originating in Tibet and providing lifeline to over a billion South-Asians (incl. India) downstream, in order to generate electric power and to provide water for the occupying Chinese state and the newly settled Chinese instead? United Nations' conventions be damned in every case.
So what if the Chinese regime now wants to restrict the supply of crucial industrial metals? Don't say you didn't see it coming. Consider sending a distress signal to your democratic representative, that is if the "western" corporations don't already have him or her in their pocket.
The Western and democratic peoples need to either shut up and live with the consequences, or do something before it's too late for all of us.
Should invading one's peaceful neighbours be opposed, or rewarded with trade deals?
"Future wars will be fought not about oil but rare earth materials."
Nonsense. The model for getting those already exists in Africa, where one pays the locals what the market will bear and they handle the light work,
War disrupts mining, while unconventional logistics route around inconvenient situations.
"This post is an artistic work of fiction and falsehood. Only a fool would take anything posted here as fact."
California Has Enough a Neodynmium at the Mountain Pass Mine to supply all US needs for the foreseeable future. Though the environmental movement has shut down the mine, it can be opened back up in very little time to provide these materials to the US.
You need to take a look at how money is created and destroyed. Running a deficit is how the US government creates money (it is borrowed into existence). If you destroy money, you get a recession, so under the current monetary system (i.e. the fed), the US government is pretty much guaranteed to run a deficit, leading to exponentially increasing national debt.
hth.
Deleted
Is it true that I could take $10,000 from the US and go to China and have x10 the shopping spree than I could in the States?
No, you can't.
WalMart and practically every other retailer can, but you must spend your money with them. If you try to take $10,000 out, you'll be put on some list for suspicious financial transactions (at least), or have it confiscated if your paperwork isn't exactly up to snuff. And when you bring that 'stuff' back, the nice people at customs will want a cut of it.
Have gnu, will travel.
We mostly don't have a command economy, while China mostly does. China is able to have long-term coherent planning that we can only dream of.
Here in the USA, who would buy up the supplies? Maybe a few speculators with no real use for the metals would do that, but they'll sell to the higest bidder whenever they please. They won't work together to control supplies for the good of the nation.
Suppose the government took control of the supplies. OK, how do we use the supplies? We'd auction them off! Even if we did limit the auction participants to US citizens, we wouldn't stop those people from selling to China or even acting as agents for China.