While we engage in petty bull****, China has

[Dinner]

There is a good video at the bottom of this page: http://www.msnbc.msn.com/id/45176816.../#.TrZdcbL6OJo

They're right that once the materials are mined they're sent to China for processing. Part of that is that China is a really cheap place to locate heavy industry and part of that is that much of the ore is radioactive and dirt to process so it's hard to process in the west and still meet environmental and work place safety standards. CMNN is a Chinese state owned firm which operates at a lose but is subsidized by the Chinese government which allows them to keep a lock on refining REE ore so even though REE mines can be opened China still has a key lock. BTW according to MSNBC Canada has the world's largest REE reserves but they're mostly in the far north of Canada so it would be massively expensive to develop both the mines and the roads/rails to bring those materials to market.

[Dinner]

The Chinese state firm PetroChina (the state oil company) didn't start up until 1998 but today they're one of the largest oil companies in the world despite the fact that China has very little domestic oil. China's government has an industrial policy, they identify key industries, then subsidize the crap out of those industries and create government policies to promote those industries (protect them from foreign competitors, use diplomacy to help them lock up foreign reserves, manipulates the currency to goose exports, etc...). The US needs a national industrial policy which identifies and promotes national industrial goals but we're too stuck on "Duh gob-nint is bad" and "big corporations are always right". Heck, even Germany and Russia have national industrial policies so why don't we have one? It's the intelligent thing to do.

[dannubis]

There is a good video at the bottom of this page: http://www.msnbc.msn.com/id/45176816.../#.TrZdcbL6OJo

They're right that once the materials are mined they're sent to China for processing. Part of that is that China is a really cheap place to locate heavy industry and part of that is that much of the ore is radioactive and dirt to process so it's hard to process in the west and still meet environmental and work place safety standards. CMNN is a Chinese state owned firm which operates at a lose but is subsidized by the Chinese government which allows them to keep a lock on refining REE ore so even though REE mines can be opened China still has a key lock. BTW according to MSNBC Canada has the world's largest REE reserves but they're mostly in the far north of Canada so it would be massively expensive to develop both the mines and the roads/rails to bring those materials to market.

And there lies part of the idiocy of the west vs China. We choose to have some anonymous chinese worker in inner mongolia die for our windmill turbines but then complain that the Chinese use their monopoly on rare earths to controll the market.

[Tupac Shakur]

You give them way too much credit.

Actually, it's China that gives us way too much credit.

[Kuciwalker]

I believe that was has happened was that this was followed by Chinese interests going and buying those other mines.

Oh no! The Chinese have purchased the rights to physical assets that are actually located in our country and literally cannot be removed without engaging in precisely the sort of productive activity we're worried the Chinese won't do (mine them!). So, um, what are we worried about again?

[Kuciwalker]

Not quite but a combination of several things:

1) Rare earths are indeed not rare. They are in fact quite common

2) However, rare earth mining and processing is very polluting (one of the main by-products is radioactive Thorium - a lot of other toxic stuff is found as well). This caused "the west" to rather close its own captive mines and go for (at that time) cheap chinese supply

3) As time went by the chinese became the only supplier of rare earth elements

4) 2004 Boom in commodity demand has increased prices times ten.

5) People are reopening mines because of huge margin potential but it takes time to get the necessary environmental approvals and rehabilitate the mining pits.

So for the moment, the chinese are the only exporters in times of high prices. This will in a few years settle down once the other pits start producing again.

Yes. Oh no, those dastardly Chinese, unintentionally causing a momentary distortion in commodity prices in their general quest to subsidize American consumption.

[Kuciwalker]

Yes, I believe I have said that multiple times. China put export limits in place last year in an attempt to force electronics makers to relocate to China if they wanted access to REEs but the moment they cut exports several other big mines not only reopened by greatly expanded their operations. Stimulus funds were used to help finance the reopening of the Mountain Pass mine here in California which is one of the world's largest REE mines. That mine used to supply the majority of the world's REEs and can easily ramp up production as it's reserves are so large and so close to the surface.

i.e. China has not, in fact, cornered the market on rare earth metals?

[Elok]

This is going to cause a crisis of faith for the "Oerdin is always wrong" crowd. Darn geological arguments.

[Tupac Shakur]

A quick Google search suggests that Oerdin's claim that stimulus funds were used to reopen the Mountain Pass mine is a false one.

[Ogie Oglethorpe]

Crisis passed. As for his ability to get things right even in his own field, even Texans knew better than to hire him for his 'expertise'.

[dannubis]

Yes. Oh no, those dastardly Chinese, unintentionally causing a momentary distortion in commodity prices in their general quest to subsidize American consumption.

That was not what I said or intended to say. Of course the Chinese use their monopoly to further their own interests. They'd be stupid not to.

[dannubis]

i.e. China has not, in fact, cornered the market on rare earth metals?

Are you deliberately being dense ?

The mining itself is not the problem. It is the porcessing of the mined material that is constrained. This will ease away in a few year when new processing plants are coming on-line but right now we will have to pay what the chinese ask for. And the beauty of it all is that we handed them this position on a gold platter.

[giblets]

eaten our lunch. They've successfully outplayed us. I, for one, welcome our new Chinese overlords.

This is a joke, right? I don't know why some people are so paranoid about China.

[Hauldren Collider]

I for one am not worried that a country with as much internal trouble as China could overtake us. In order for them to catch up, they'd probably need to undergo so many reforms that by the time they did overtake us, they wouldn't be particularly worrisome/evil/communist etc.

[Guynemer]

Actually, it's China that gives us way too much credit.

zing