Rare earth metals
Exotic minerals used in loads of products
From phones, to batteries, to bombs.
And China supplies rare earths to the US.
But amid the trade war,
China has threatened to America’s cut rare
earth supply.
Welcome back to China Uncensored.
I'm Chris Chappell.
What do Lanthanum, Neodymium
and Yttrium have in common?
Other than being your ace in the hole
during your next game of Scrabble,
they’re all rare earth metals—
also known as “rare earth minerals” or
simply “rare earths.”
There are a total of 17 rare earth metals
on the periodic table.
Rare earth metals are used in everything from
batteries,
to cell phones,
to precision-guided missiles.
“Rare earths are quite distinct among themselves,
within that family,
but one of the characteristics that they do
all share
are these fantastic magnetic and conductive
properties.”
For example, if you combine Neodymium with
Iron and Boron,
you can make a powerful permanent magnet.
Those magnets can be used in things from small
headphones
to big motors.
And one country dominates the market for rare
earth metals—China.
“They decided more than a decade ago
that it was an incredible strategic asset.
Having all of these rare earth minerals
they knew would put them in a dominant position
to manufacture everything from missiles technology,
to guidance systems and magnets
that go into guiding the fins of missiles
to the touch screens that we use on our iPhone.
They knew that they would be in charge of
all of that.”
China has around 44 million tons of rare earth
reserves.
That’s twice as much as Brazil or Vietnam,
and way more than the United States.
In 2018, China produced 70% of the world’s
supply of rare earths.
But that wasn’t always the case.
There was a time when the US
was the world’s top manufacturer of rare
earths.
James Litinsky is the CEO of a capital group
that bought the Mountain Pass Mine in California,
after it went bankrupt.
“Mountain Pass,
the site that we acquired out of bankruptcy,
from the 1960s through the 90s
was the leading rare earths producer in the
world.
But essentially in China
they have a lot less stringent environmental
controls
and so about 20 years ago they took over the
industry.”
The problem with rare earth production isn’t
so much the strip mining.
That makes for an ugly landscape,
but it’s a mostly harmless hole in the ground.
The real problem is the toxic chemicals
used to process the rare earth ore.
“It is an incredibly destructive and poisonous
process.
Going through the incredible amount of soil
you have to go through to get these minerals
out of the earth.
And so we just don’t abide by those standards.
We won’t poison our croplands the way China
has been willing to.”
And if any country is willing to poison its
own farmland, it’s China.
Like in the Chinese city of Baotou,
the biggest industrial city in Inner Mongolia.
It’s home to the ginormous Baogang Steel
and Rare Earth complex.
Inside the plant, toxic chemicals are used
to process the ore and extract the rare earth
metals.
Then radioactive waste gets dumped in a massive
lake of toxic sludge.
The BBC calls it a “dystopian lake filled
by the world’s tech lust.”
Farmers living near Lake Dystopia
complain the wind whips up cancer-causing
toxins
and dumps them on their land.
Which poisons the soil and water.
And causes the farmers’ teeth
to fall out and their hair to turn white.
And now, the US gets 80% of its rare earths
from China,
including places like Baotou.
And even if you don’t care about environmental
pollution,
there’s another problem:
China is using its dominance of the rare earth
market
as a weapon in political disputes.
Like back in 2010,
when China got into a territorial spat with
Japan
over control of the Senkaku Islands.
In retaliation,
China hiked rare earth prices 10 times for
Japan,
the world’s biggest buyer of rare earth
metals.
“100 percent of our rare earth minerals
come from China.”
His company makes magnets for laptops,
and depends on a steady supply of rare earths.
By choking off the supply,
China put his business in a stranglehold.
And then in May of this year,
China signaled that it might weaponize rare
earths
as part of its escalating trade war with the
US.
“China will meet the reasonable demand
of other countries for rare earths.
But it would be totally unacceptable to us
if these countries were to use rare earths
to produce products used against China
or to oppress us.”
The CCP mouthpiece the People’s Daily
also ran an editorial, asking,
“Will rare earths become a counter weapon
for China
to hit back against the pressure the United
States
has put on for no reason at all?
The answer is no mystery.”
Wow, they’re not very good at subtlety,
are they?
Then the Global Times ran this editorial,
quoting a senior academic who said “the
‘ace’ in China's hand
is a complete ban on exports of rare earths
to the US,”
adding that “this is not the only way to
make the US economy feel pain.”
The trouble is, weaponizing rare earth exports
seems to be backfiring on China.
Burned by the rare earths price hike over
the Senkaku Islands,
Japan decided to cut its dependency on Chinese
rare earths.
“Japanese government with Japanese company
will collaborate together to looking for another
countries like Vietnam,
Mongolia and Central Asia, Kazakhstan.”
And then last year,
Japan discovered a huge underwater deposit
of rare earth metals
that will last for centuries.
And China—
by squeezing supply and causing prices to
rise—
has also given America the opportunity to
free itself
from *its* dependency on Chinese rare earths.
“The United States used to be
the single most important producing country
for rare earths.
From a single mine,
called the Mountain Pass mine.”
The Mountain Pass mine is located in Southern
California
near the border with Nevada.
After it went bankrupt,
the mine was bought by JTL Capital Group,
which hired more people and invested in the
facility.
“We bought the facility out of bankruptcy
in 2017.
At the time it had 8 employees and it was
in care of maintenance.
Over the last two years we’ve been doing
a ramp-up in two stages.
Over the last two years we’ve hired 200
people,
so we’ve created 200 American, hard-working
jobs.”
But what about the toxic pollution?
Well, it turns out the mine’s previous owner
invested
in a cutting-edge facility that allows rare-earth
processing
with minimal environmental impact.
“One good thing they did is that they spent
1.7 billion dollars
building a state-of-the-art environmentally-friendly
facility.”
Right now the plant only makes a rare earths
concentrate
that it ships to China for processing.
But, within a year, its owner says,
Mountain Pass will be fully decoupled from
China.
“At that point we will be fully self-sufficient
from China
and one of the major global producers.”
So it turns out, by weaponizing rare earths,
China may have inadvertently shot itself in
the foot.
By restricting its own exports market,
it is helping the US become rare-earth self-sufficient.
And, by shifting the refineries to America,
it’s also better for the environment.
This is what I call,
win-win non-cooperation.
So what do you think about how China’s
weaponizing rare earth exports has backfired?
Leave your comments below.
Once again, I’m Chris Chappell.
See you next time.
