China’s Dominance of Crucial Rare Earth Elements and What Comes Next

China’s Dominance of Crucial Rare Earth Elements and What Comes Next. An interview with Doug Casey.

International Man: Former Chinese leader Deng Xiaoping once said, “The Middle East has oil. China has rare Earth.”

Today, China dominates the production and processing of REEs. Why is that? How likely is it that the US or someone else will be able to break China’s stranglehold soon?

Doug Casey: Deng wasn’t entirely right when he said that. China’s strength in this area isn’t so much in the mining of these things as it is in their processing. Mining any kind of ore is messy and dirty. But processing can be even worse. Smelting takes huge amounts of heat, makes a lot of nasty smoke, and leaves kilotons of toxic waste. Then refining it further takes more of the same, usually plus nasty acids. The Greenies hate mining and refining and try to make them impossible in most places. That’s why so much of it happens in China.

You might say that the immense political and media power of the Greens and eco-warriors is the real reason the West relies on China for REEs. …

If the wind, solar, and EV manias went away, we really wouldn’t need a lot of REEs.

It’s especially ironic because giant windmills and giant solar farms are not only highly uneconomic and unreliable but very un-green. These people not only don’t look at the immense mining, refining, and manufacturing costs of making these artifacts but haven’t even started to consider the costs of disposing of them at the end of their useful lives in 10-20 years. The indirect and delayed consequences of the trillion-dollar ideological statements that they’re making are huge. …

The fact of the matter, as has been the case for two generations, is that very few students in the US take degrees in things like geochemistry, geology, and mining engineering. But huge numbers do in China. As a result, there’s going to be even more mining, development, and production in China and a lot less in the US. …

It wasn’t so long ago that American wannabe Masters of the Universe liked to say, “We think, they work.” Well, the problem is that most of the things that we think about aren’t productive. In fact, they’re delusional and destructive. It’s no accident that actual production has migrated out of the US, which has become a high-tax, high-regulation environment compared to other places in the world.

It takes three or four processing steps to extract gold from its ore, which is pretty typical for most of the metals we use. But it takes over a thousand processing steps for some REEs. It’s complex, expensive, and dangerous, and creates some nasty pollutants.

(The reason is that REE atoms all have the same outer electron shell, and thus most of the same chemical and electrical properties. It is the second electron shell where they differ, so more subtle techniques are required.)

The Chinese have  a monopoly on processing, not mining. The CCP tries to close down attempts at processing outside China. For example, Australian company Lynas mines REE ore in Western Australia and built a plant in Malaysia to process it. So the Chinese started a nimby movement to close down the Malaysian plant for environmental reasons.