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'Smart-bomb' technology moving to China
WorldNetDaily.com ^ | Tuesday, August 12, 2003 | Sherrie Gossett

Posted on 08/12/2003 2:23:14 AM PDT by JohnHuang2

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To: Paul Ross
A good traitors list for reckoning day.

"GOT ROPE?"

61 posted on 08/13/2003 9:08:15 AM PDT by Travis McGee (----- www.EnemiesForeignAndDomestic.com -----)
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To: LS
You are apparently equipped to lead on this issue. We need more like you.
62 posted on 08/13/2003 9:17:05 AM PDT by GOP_1900AD (Un-PC even to "Conservatives!" - Right makes right)
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To: Dead Dog; Orion78; DarkWaters; Paul Ross; Noswad; lavaroise
Oddly, nearly all on the Western Left and many who claim to be on the Western Right discount the perspective given in this Nyquist article. To me, not only does such a reaction itself serve to confirm the efficacy of the Perestroika Deception, but it also confirms that most of my Western brethren have yet to read and comprehend Sun Tzu's "Art of War." The Perestroika Deception encompasses a number of Sun Tzu's principles including, but not limited to, "Know your enemy," "Sow confusion," and naturally "Feign weakness."
63 posted on 08/13/2003 9:28:40 AM PDT by GOP_1900AD (Un-PC even to "Conservatives!" - Right makes right)
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To: Dead Dog

And I read a 2002 PRAVDA commentary , that contained one very interesting comment, ie "....At their meeting, Pres PUTIN was amazed to learn from Pres BUSH that Pres BUSH could not understand that one of the most fundamental principles of a TRIANGULAR Big-Power Relationship, is that the two weaker powers (in this case, Russia and China) will inevitably gang up against the strongest (the US)...."
64 posted on 08/13/2003 9:38:13 AM PDT by The Pheonix
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To: belmont_mark
Well, it's common sense, isn't it? You don't give your enemies a monopoly over your weapons-making capabilities.

By the same token, the thing that gives us an ongoing and constant advantage over our enemies is preciselyl the free trade that makes our industries constantly more competitive and better. At the same time, we have structures they will never have: sanctity of contracts, freedom of labor, private property rights, freedom of religion (yes, it does have an economic component), and above all, a system that ENCOURAGES FAILURE. None of our competitors have this. Better for us, the moment they do get this, they "become like us" and we have won. They are screwed, no matter what.

65 posted on 08/13/2003 9:38:49 AM PDT by LS
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To: belmont_mark
"All War is Deception"


Applicable to us right now..

"When on treacherous ground, fight!"
66 posted on 08/13/2003 9:40:42 AM PDT by Dead Dog (Income tax is slavery, Wellfare is bribary.)
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To: Alamo-Girl; chimera; Cacophonous; Ben Ficklin; Nathaniel Fischer
Check out the buried link inside the article as well, reprinted in full here for posterity:


U.S. technology

This is a WorldNetDaily printer-friendly version of the article which follows.
To view this item online, visit http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=31385

Thursday, March 6, 2003



AMERICA'S CHINA SYNDROME
Beijing acquires more
U.S. technology

Transfer of high-tech equipment result of long-range espionage

Posted: March 6, 2003
5:00 p.m. Eastern

Editor's note: WorldNetDaily is pleased to have a content-sharing agreement with Insight magazine, the bold Washington publication not afraid to ruffle establishment feathers. Subscribe to Insight at WorldNetDaily's online store and save 71 percent off the cover price.

By Scott L. Wheeler


© 2003 News World Communications Inc.

Outraged U.S. technology experts and documents obtained by Insight indicate that the acquisition and subsequent transfer of high-tech rare-earth-magnet equipment and technology to the People's Republic of China is the result of a long-range espionage plan by the late "Paramount Leader" Deng Xiaoping directly involving two of Deng's sons-in-law.

The revelations come as Magnequench Inc., a company partially owned by the San Huan New Materials and Hi-Tech Co. – itself at least partially owned by the PRC government – prepares to shut down a factory in Valparaiso, Ind., that produces critical parts for U.S. precision-guided weapons. The company then plans to ship the machine tools to China. Insight has learned from technology experts, plant insiders, internal PRC documents and historical records that the PRC had targeted the U.S. technological advantage in exotic materials and manufacturing and developed a long-term plan to acquire it in the United States and export a crucial U.S. military advantage to the communist-controlled mainland.

In 1995, San Huan New Materials and China Nonferrous Metals Industrial Corp. partnered with a U.S. investment firm to buy Indiana-based Magnequench from General Motors Corp. Insight has learned that the president of China Nonferrous Metals Industrial, Wu Jianchang, is married to Deng Lin, the eldest daughter of the late Deng Xiaoping. The chairman of San Huan New Materials, Zhang Hong, now chairman of Magnequench, is the husband of Deng Nan, second daughter of Deng Xiaoping. Deng Nan also is vice minister of state on science and technology for the PRC.

Though blocked by secrecy rules from going public, government officials expressed alarm about allowing the Chinese government access to strategic technology now being used to produce critical neodymium-iron-boron magnets for servos used in U.S. guided missiles and smart bombs. An even more critical technology, according to experts, was exported to the PRC in 1999 by Magnequench. That transfer included high-tech equipment used to enrich uranium for nuclear weapons, raising additional concern because of China's record of proliferating nuclear technology to rogue nations.

As noted, the PRC acquisition of the rare-earth-magnet technology was part of a long-term campaign initiated by Deng Xiaoping, who ruled the PRC from 1978 until his death in 1997. In 1992, Deng acknowledged the value of the PRC rare-earth reserves in the Baotou region, saying, "There is oil in the Middle East; there is rare earth in China." Documents from the Baotou National Rare Earth Hi-Tech Mine, obtained by Insight, reveal the importance to the PRC of the exotic materials, noting: "The reason why rare earth, a small industry with annual consumption of only 75,000 tons REO [rare-earth oxides] and a market value below U.S. $100 million, has been given attention by Chinese leaders at all levels is due to its uses in modern high-tech industries because of its special chemical and physical properties. As a matter of fact, rare earth has been listed in the category of strategic elements in many countries, such as the U.S.A. and Japan."

A 1999 congressional report on PRC espionage directed at commercial and military technology from the United States says that the Chinese "State Science and Technology Commission," the agency where Deng Nan, wife of Magnequench Chairman Zhang Hong, serves as vice minister, is responsible for "importing technologies for military use." The report, known as the "Cox Committee Report" for the select committee's chairman, Rep. Chris Cox, R-Calif., states: "In 1986, 'Paramount Leader' Deng Xiaoping adopted a major initiative, the so-called 863 Program, to accelerate the acquisition and development of science and technology." According to the congressional report, "The PRC claims that the 863 Program produced nearly 1,500 research achievements by 1996 and was supported by nearly 30,000 scientific and technical personnel who worked to advance the PRC's economy and ... national-defense construction."

The report lists "exotic materials" such as "rare-earth metals" as technology being sought to enhance the PRC's military capabilities. It says China was using "joint ventures" with U.S. businesses as a way of obtaining "dual-use technology" that has both industrial and military applications – such as that it obtained with Magnequench. "The PRC is also working to translate foreign technical data, analyze it and assimilate it for PLA [People's Liberation Army] military programs," says the report.

The sons and daughters of Chinese leaders are considered to be the next layer of leadership in the PRC. Sometimes referred to by the sarcastic term "princelings," they frequently turn up in high-level positions of responsibility in the Beijing power structure. Professor June Teufel Dreyer, chairman of the political-science department at the University of Miami (Fla.) and a commissioner of the U.S.-China Security Review Commission, tells Insight that the role of Zhang Hong is significant. "Someone in intelligence should investigate who are the princelings and what are the implications to national security," she says. Zhang Hong did not return telephone calls requesting comment.

Critics say the Chinese plan is transparent. While the PRC was engaged in high-level technological acquisitions to obtain the related technology and machine tools that make permanent rare-earth magnets, a U.S. company mining the raw materials for the magnets was about to be closed. Until 1998 there were essentially two active mines in the world producing rare earths for the exotic magnets – the PRC's Baotou mine and an American-owned mining operation in the Mojave Desert.

The tiny town of Mountain Pass, Calif., was home of the Molycorp mine from which experts say the highest-grade rare earths in the world came. In 1996, the vital Molycorp mine was accused by the Bureau of Land Management of running afoul of regulations to protect the desert-tortoise habitat. After paying a series of fines and spending a fortune to jigger its mining so as to accommodate protectors of the desert tortoise, the company that supplied almost all the U.S. rare earths laid off hundreds of workers and stopped production.

Prior to the 1998 shutdown of the Unocal-owned mine, Molycorp and its leading competitor, China's Baotou mine, supplied more than 80 percent of the world's rare earths. Afterward, according to Baotou company documents, "The U.S.A. has rare-earth resources, but has nearly stopped rare-earth production because of high production cost and environmental concerns, and instead has become one of the major rare-earth importers. ... In 1999, the total world consumption of rare earth was about 75,000 tons REO, and China met 88 percent of this demand."

Walter T. Benecki is a consultant to the Worldwide Magnetics Industry. He tells Insight that the PRC has ambitions beyond supplying the world with rare earths: "The Chinese, in my opinion, are going to dominate the worldwide production of sintered neodymium-iron-boron magnets in the next five years" – the kind of magnets necessary for making missiles and smart bombs and that soon no longer will be made in the United States.

U.S. government officials in charge of national security see importation from communist-controlled China of strategic components for U.S. weapons systems as a choke point in the event of hostility in the Pacific Rim. The lag time for the United States to reopen rare-earth mining and build an assembly line to produce the allied magnets could cripple crisis response, defense experts say.

This again raises questions about the sale of Magnequench and the export of its technology and machine tools to Beijing.

In short, the U.S. government had two opportunities to stop the leakage of this technology to the PRC. First, in 1995, when the two PRC companies attempted to acquire Magnequench, the sale required approval from the Committee on Foreign Investments in the U.S. (CFIUS). Concerns raised by American officials about what they considered a clear case of the PRC attempting to obtain control of vital U.S. weapons technology was shot down, and CFIUS permitted the buyout. The second opportunity came in 1999 when company officials say they sought U.S.-government approval to export equipment from the Magnequench plant in Anderson, Ind., that could enhance China's ability to enrich uranium for a nuclear weapon. Stronger opposition to the transfer within government ranks again was stymied, and the high-tech computerized machine tools were moved to the company's new plant in mainland China.

According to the U.S. government's Military Critical Technology List, at that time China's rare-earth-magnet capability was limited. By 2002, according to industry experts, China was able to produce a significantly more powerful rare-earth magnet that some experts say was a direct result of technology gained in the Magnequench buyout and subsequent technology transfer.

Some blame what they see as a failure of the U.S. government to safeguard weapons technology on the relaxing of export controls during the Clinton administration. Officials within the technology-export-control regime see the most recent development in the Magnequench case as an opportunity for the Bush administration to draw clear lines of distinction between itself and the export-control policy of the previous administration by interceding. It has only to order San Huan New Materials to divest its interest in Magnequench before the company carries out plans to export to China the equipment currently producing critical parts for U.S. precision-guided missiles and smart bombs.


Subscribe to Insight


Scott L. Wheeler is an investigative reporter for Insight magazine.



67 posted on 08/13/2003 12:53:36 PM PDT by Paul Ross (A nation which can prefer disgrace to danger is prepared for a master, and deserves one!-A. Hamilton)
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To: Ben Ficklin
The corroboration of the Molycorps Mountain Pass mine closure appears to be substantial.
68 posted on 08/13/2003 1:00:16 PM PDT by Paul Ross (A nation which can prefer disgrace to danger is prepared for a master, and deserves one!-A. Hamilton)
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To: belmont_mark; The Phoenix
More evidence of China's long-run thinking and follow-through.
69 posted on 08/13/2003 1:01:43 PM PDT by Paul Ross (A nation which can prefer disgrace to danger is prepared for a master, and deserves one!-A. Hamilton)
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To: ntrulock
Is it worth our while to try and post to Donald Rumsfeld, or is this already a done deal?
70 posted on 08/13/2003 1:03:25 PM PDT by Paul Ross (A nation which can prefer disgrace to danger is prepared for a master, and deserves one!-A. Hamilton)
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To: Paul Ross; Alamo-Girl; hedgetrimmer; Redcloak; A. Pole
The 30 year plan/expansion of Molycorp's Mountain Pass Rare Earth Mine

In 1992 Molycorp made the decision to expand the mine based upon the determination that there were 30 years of reserves based on existing production. Without this expansion there would be little mineral left to mine.

Realizing the difficulties they would have in the permitting process, Molycorp did a land swap with BLM which put their operations totally on private property. With the operation on private land, the feds and the state would not have jurisdiction and the lead agency would be San Bernardino County, who's planning commission does have jurisdiction.

SB County published the Draft Environmental Impact Report(note that is a report and not a statement) last April and the comment period ended in May. The final report will be issued when the consultants work is done and another comment period will follow. The county will then issue a permit with the chosen alternatives. Click here for the report.

If the 150 page report is too much, this EPA document from 1998 is accurate in spite of its brevity

Everything you ever wanted to know about rare earth minerals and their production, consumption, tariffs, stocks, prices, foreign trade, World Review, and Outlook can be found in this USGS report

Rare Earth Magnets: Patents/History

71 posted on 08/13/2003 1:07:40 PM PDT by Ben Ficklin
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To: Ben Ficklin; Paul Ross
Thanks for the information!
72 posted on 08/13/2003 4:37:56 PM PDT by Alamo-Girl
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To: harpseal
Magnequench's patented "jet casting" process was removed to China has soon as they bought Mag in 1995...according to Insight magazine. Plus the management changes...make it clear that their is NO PARTITION preventing the American technology from flowing to the Chinese companies...
73 posted on 08/15/2003 6:50:35 PM PDT by Lo-Pro
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To: RadioAstronomer; All
It was the DECISION to shut the plant down that happened in 2002, about a year after it was bought.
74 posted on 08/15/2003 6:52:41 PM PDT by Lo-Pro
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To: murdoog; All
According to the Pentagon, the US now purchases 75% of rare earths from China....citing cheaper prices. What about supporting American mining?
75 posted on 08/15/2003 6:55:56 PM PDT by Lo-Pro
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To: Lo-Pro
Magnequench's patented "jet casting" process was removed to China has soon as they bought Mag in 1995...according to Insight magazine. Plus the management changes...make it clear that their is NO PARTITION preventing the American technology from flowing to the Chinese companies...

But the fact is the last of the production is moving there also.

76 posted on 08/15/2003 6:59:36 PM PDT by harpseal (Stay well - Stay safe - Stay armed - Yorktown)
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To: RadioAstronomer; All
From Insight Magazine, Feb. 2003: "Indianapolis-based Magnequench Inc. has not yet publically announced the closing of its Valparaiso, Ind., factory, but Insight has confirmed that the company will shut down this year and relocate at least some of its high-tech machine tools to Tianjin, China." "In an interview with Insight, Magnequench Inc. President Archibald Cox Jr. initially denied but later confirmed having a contract for the production of rare-earth magnets for the JDAM." MEMO FROM 2003: ""We are going to sell everything in the plant ... unless we can use it somewhere else," says Cox. Insight has obtained evidence that "somewhere else" may mean China. A copy of an internal memo from the Valparaiso plant seems to contradict the "sell or auction" option. A brief memo, dated Jan. 23, states in part, "In the near future you will be seeing people in the plant performing measurements and a variety of estimating and planning activities in preparation for equipment sale and/or removal ... to give the company an idea of cost and logistics." According to eyewitness accounts, all such "people have been from China." "The one surefire deterrent to Magnequench UG's move to China would be for President George W. Bush to exercise his authority under the 1988 Exon-Florio amendment to the Defense Production Act and order San Huan New Materials to divest its holdings in this strategic U.S. company." MARCH 2003 Insight Mag "The revelations come as Magnequench Inc., a company partially owned by the San Huan New Materials and Hi-Tech Co. -- itself at least partially owned by the PRC government -- prepares to shut down a factory in Valparaiso, Ind., that produces critical parts for U.S. precision-guided weapons. " NORTHWEST INDIANA TIMES April 22, 2003 "The Magnequench plant will be shut down by November and remaining employees will receive job counseling, company and union spokesmen said......United Steel Workers of America, representing about 175 of the workers, is negotiating with Magnequench for terms of how the lay-offs will take place and whether workers will retain benefits, said Jo-Elaine Robinson, international staff representative for the union. Work at the plant goes on while Magnequench gears up a facility in China to handle production, Robinson said. "The company is moving the technology to China," she said. "As they bring up the China plant. work in Valparaiso will fall off." Collevechio said no equipment from the Valparaiso plant has yet been moved to China. ....Magnequench press operator Anne Robinson said workers have heard nothing definite about when the plant will shut down. "Everybody's just in limbo," Robinson said. "We're hoping the government will step in and say you can't take this out of the country." " NORTHWEST INDIANA TIMES July 10, 2003 "Magnequench workers prepare for layoffs Valpo plant, Indy headquarters set for move to China. Magnequench workers are putting in their final days on the job as owners prepare to move the magnet-making operation to China. The Valparaiso plant is set to shut down by the end of September, and the company's Indianapolis headquarters will close by early next year, company officials said." [note: The HQ are also being moved...to Singapore. "Equipment is being moved from the factory, at 425 Elm St., employee Anne Robinson said. "They took two (magnet) presses the week before last," she said.A union representative for the nearly 225 employees said layoffs will start as early as July 18, but workers have heard it might be a week later, Robinson said. Robert Collevechio, the company's vice president of human resources, couldn't confirm when the company will start letting people go. Workers were given 60 days notice May 19 of the plant's impending closure, in accordance with the federal Worker Adjustment and Retraining Notification Act. But unofficial word had gotten out by late last year, sparking a protest in March by area lawmakers U.S. Rep. Pete Visclosky and U.S. Sen. Evan Bayh." NORTHWEST INDIANA TIMES July 31,2003 "factory about to close, Magnequench workers marched up one of the city's main drags......The plant is set to close by Sept. 30, with most workers to be gone by Aug. 15. Magnequench has begun dismantling some equipment in the plant and moving it to China." NORTHWEST INDIANA TIMES August 2, 2003 "The plant, owned by Indianapolis-based Magnequench Inc., is scheduled to close by Sept. 30 with most workers to be gone by Aug. 15........Visclosky said he also has asked the U.S. House Armed Services Committee to review contracts Magnequench holds with the U.S. Department of Defense. "These contracts must be reviewed in order to verify the legality of the pending move to China," Visclosky said." NORTHWEST INDIANA TIMES July 29, 2003 "The march won't halt the plant's closure -- targeted for Sept. 30 -- but might give workers a sense they're not alone, union representative Jo-Elaine Robinson said. " "This especially hits home for fired factory workers from companies like Magnequench Inc., the Valparaiso magnet-making factory that's relocating its operation to China next month." <a href="http://www.nwi.com/articles/2003/07/16/business/business/bcf88c2c676ddef086256d640078612b.txt ><b>NORTHEST INDIANA TIMES July 16, 2003</b></a> Magnequench, union reach shutdown agreement Plant to close by Sept. 30, most workers gone by Aug. 15 "The company signed off Sunday on a shutdown agreement with United Steelworkers of America, the union representing about 168 hourly workers at the plant, a pair of low-slung buildings at the east end of quiet, tree-shaded Elm Street near downtown Valparaiso. The agreement targets Sept. 30 as closing date for the plant, a producer of magnets used in U.S. defense system "smart bombs." The operation is being moved to China......Workers will be terminated beginning this week until the plant closes, with most to be let go by Aug. 15, according to the agreement."
77 posted on 08/15/2003 7:26:03 PM PDT by Lo-Pro
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To: Ben Ficklin; All
Insight mag cites the mine shutdown in 1998....the mine's separation facilities were shutdown and remain so...due to problems from Bureau of Land Management (waste-water disposal) and Chinese competition. Pentagon says 75% rare-earth material is purchased from China, b/c it's cheaper. Whatever happened to "BUY AMERICAN?" Even though the Mountain Pass mine has the world's highest-quality rare-earth deposits. IN 1999, the National Defense Stockpile depleted all remaining reserves of rare-earths. From Molycorp site...."SEPARATION OPERATIONS Molycorp has the capability of producing lanthanide concentrates as well as high purity products in several forms. The separations facilities are temporarily suspended subject to the resolution of waste water disposal issues. Bastnasite is selectively leached to separate the insoluble cerium fraction from the other lanthanide elements. The cerium product is washed to remove any contaminants, then filtered and dried prior to packaging according to customer specifications. The dissolved lanthanides proceed through impurity removal steps, then to solvent extraction cells where a collector preferentially extracts the heavier elements and rejects the lighter fraction. The heavier fraction is separated at our Europium recovery facility where Europium is extracted as a high purity oxide. The lighter fraction may be precipitated, thickened, filtered, dried and packaged as lanthanum concentrate or further purified via solvent extraction to produce high purity lanthanum, praseodymium, or neodymium products. " ALso see US Code Chapter 30, Title 30...Strategic and Critical Minerals and their importance to the economy and defense.
78 posted on 08/15/2003 7:36:52 PM PDT by Lo-Pro
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To: harpseal
Oh, I certainly agree it's a problem!! Plus "GA Powders" which Magnequench picked up, was created with almost $500,000 in taxpayer money!... It was created in part to give the US taxpayer a return on their investment. The patent holders will certainly get some moolah..
79 posted on 08/15/2003 7:39:24 PM PDT by Lo-Pro
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To: Ben Ficklin; All
According to Dr. Stanley Trout, a former advisor to Molycorp and consultant/owner with Spontaneous Materials, Molycorp severely cut back their operations. He cites several forces in play at the same time. The environmental problems and the deteriorating prices on rare earths, mainly due to Chinese competition, were the two main causes. Molycorp contracted its operations out, starting around 1990, as the world market changed, but Molycorp as a company still operates today. According to Trout, "In fact they are wondering how to operate in the future, but they do plan on continuing the business. Yes, the Mtn. Pass deposit is the highest quality deposit in the world." The San Bernadino County report on Molycorp's 30-year plan, states that it does not deal with the waste-water issue as that's beyond the scope of the report. Hundreds of workers were laid off at the time of the 1998 shut down according to Insight Magazine. Funny thing is, Ne-Fe-B magnet discovery (neodymium or "Ne" being the rare-earth component) was partially motivated by the cobalt shortage of the 70s-80's....US didn't want to be in depency mode again...and these types of magnet needs used to be met by samarium-cobalt magnets. At the time of the GM discovery, it was applauded that Ne-Fe-B magnets were not only vastly superior (and therefore useful in servo motors) but also cheaper. Gee, Pentagon, how cheap do we have to go???
80 posted on 08/15/2003 9:01:03 PM PDT by Lo-Pro
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