rare earths

In the previous Communist Party Congress, Xi Jinping, the president, admitted that China was seeking to foster other countries’ dependence on China in what he called “killer industries”. We are sleepwalking into this trap. This is particularly problematic around rare earth minerals and renewable energy where China has a monopoly, and where we are falling hook, line and sinker.

China doesn’t have a monopoly on rare earths, never has had an uncontestable monopoly on rare earths and when it tried to use its dominance in rare earth supply it found that it was swiftly contested.

We’ve known all of this for well over a decade now.

But the non-rarity of the rare earths themselves means that China’s position isn’t sustainable. That California mine, for instance, could potentially supply 20 percent of world demand, currently around 130,000 tons a year. Another facility, Lynas Corp.’s Mount Weld in Australia, has the capacity to produce a similar amount. In fact, there are enough rare earths in the millions of tons of sands we already process for titanium dioxide (used to make white paint) to fill the gap, while we throw away 30,000 tons a year or so in the wastes of the aluminum industry. There’s that much or more in what we don’t bother to collect from the mining of phosphates for fertilizers, and no one has even bothered to measure how much there is in the waste from burning coal.

If rare earths are so precious, why isn’t the United States working harder to collect them? The main reason is that, for these last 25 years, China has been supplying all we could eat at prices we were more than happy to pay. If Beijing wants to raise its prices and start using supplies as geopolitical bargaining chips, so what? The rest of the world will simply roll up its sleeves and ramp up production, and the monopoly will be broken.

That’s from 2010. Yes, it’s me of course – perhaps the only British political and economic commentator who actually knows anything about rare earths.

BTW, that California mine did reopen. Then went bust again. And is now open again. Lynas increased production, nearly went bust, refinanced and now supplies. Energy Fuels has been picking up wastes from the titanium industry (that’s what the deal with Chemours is about) to process for rare earths. Rainbow Rare Earths has devised a plan to extract from that phosphogypsum waste from the fertiliser mining. And, yes, measurements have been made, even technologies devised, to extract from coal wastes.

Note, please, again. The quote above is from the year 2010. In 2014 Marginal Revolution said:

Addendum: Bonus points to Tim Worstall, economist blogger and rare earth dealer, who in 2010 at the height of the crisis pointed out that rare earths were neither rare nor earths and China’s monopoly had been won only by low prices that accrued to our benefit. “If Beijing wants to raise its prices and start using supplies as geopolitical bargaining chips,” he wrote, “so what? The rest of the world will simply roll up its sleeves and ramp up production, and the monopoly will be broken.” Nailed it.

Which leaves us with this interesting question. Why is anyone trying to base government policy on something we’ve known is wrong this past 15 years?