Taming the Chinese Rare-Earth Tiger: Is China a paper tiger when it comes to mining and refining rare earth elements? Not yet...but it could become one.

Much is made of China's dominance in the rare earth elements (REE). Currently, China controls over 90% of the refined or processed market for REEs. Most advanced technologies, including weapon systems, depend on REEs, and adequate substitutes do not exist. On the surface, China's monopolistic control over refined REEs induces a severe case of the vapors among U.S. national security analysts. But how extensive and stable is China's control of the REE market? If China's market control is neither extensive nor stable, perhaps doing nothing or policies that target China's Achilles heel would be the U.S.'s best course of action. A close look at the data seems necessary before any U.S. response is undertaken.

Synonyms for REE include rare-earth metals (REM), rare-earth oxides (REO), and lanthanides. Unless writing technical papers, distinguishing among the various synonyms isn't worth the effort. In general, REE are 17 elements that are critical in our high-tech world. REE are not rare but are typically not found in significant concentrations anywhere in the world. For example, large ore deposits with concentrations above 6% are virtually unknown outside South Africa's closed Steenkampskraal mine. Refining REEs presents its own problems, since the refining process often produces significant amounts of toxic and radioactive waste, like thorium and uranium. The takeaways are (1) feasible mining concentrations of REEs are scarce and (2) refining REEs imposes environmental risks.

The graph below uses data from the U.S. Geological Survey's National Minerals Information Center (USGS/NMIC) and plots the world share of REE mining production for China, the U.S., and the rest of the world (ROW) over the last thirty years.

Source: Data for 1990–2017 from the USGIS/NMIC Mineral Yearbooks 1994–2017 (Table 6: 1994–2016, Table 8: 2017); USGIS/NMIC Mineral Commodity Summary 2018–2021.

Referring to the graph above, China’s production share rose sharply through the 1990s and reached a peak of 97.5% in 2005.

But From there, China’s share suffered a steady decline that dramatically deepened in 2017, until China accounted for 58.3% of global REE ores in 2020. The accelerated decline is largely due to the Trump administration’s push to increase U.S. REE mining, which grew from nothing to the world’s second largest producer, and the rapid growth in REE ores from Myanmar, which increased from nothing in 2017 to the world’s third largest producer.

With the discovery of new deposits and mines reopening outside China, such as Burundi’s Gakara Rare Earth Project and South Africa’s Steenkampskraal mine, the outlook is poor for China to regain its overwhelming dominance in REE mining. In this regard, China is beginning to look like a paper tiger, suggesting that the best U.S. response would ensure the operation of normal market forces.

Myanmar’s situation tells us that China’s lead in REE processing is highly unstable. Unlike its own REE reserves, China does not have territorial control over REE ores mined in other countries.

Instead, China relies on commercial contracts to secure foreign ore to process, and long-term international contracts are often subject to re-negotiation, re-interpretation, and repudiation.

Eliminating China’s stranglehold on refined REEs requires only the political will by the U.S. and other countries to build or expand REE-processing sites outside China.

But, but, but ( as Larry Kudlow would say ), This is easier said than done. In the west, we have the ENVIRONMENTALISTS and their media supporters to contend with.

People generally resist being neighbors to industrial sites that create toxic and radioactive waste. Careful site selection and research into new refining techniques that reduce toxic wastes could lessen public resistance. However, it is extremely unlikely that all public concerns will be abated, at least in the near term.

This illustrates the absolute necessity of political leadership and resolve to protect our high-tech world against the manipulation by China through its leadership in refined REEs.

And the folks running China aren’t stupid. We can expect China to fund political and environmental groups to stop new REE-processing facilities, much like how Russia funds U.S. environmental groups that lobby and protest the development of U.S. fossil fuels.

We can expect China to release or fund stories in the press opposed to new REE-processing facilities. We can expect China to use every imaginable coercive means necessary to artificially prop up its power in the REE markets. Make no mistake: the fight over new REE-refining facilities will be heated and very public.

Of course we have the already bought and PAID FOR Joe Biden ( through his son, Hunter as bag man ), who will be willing to do anything his CCP money men tell him to do.

“The folks running China aren’t stupid. We can expect China to fund political and environmental groups to stop new REE-processing facilities, much like how Russia funds U.S. environmental groups that lobby and protest the development of U.S. fossil fuels. “

How many people know this? It should be exploited for our gain.

“Russia funds the US Environmental Movement!” Needs publicity.

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