China"s Leadership is feeling strong enough to challenge the West. They say they will stop supplying rare earths, that are necessary minerals for the electronics industry. The price of this precious commodity will explode, making it worth to risk war with China. Black-flagged ships may soon be patrolling the Yellow Sea, waiting for a reasonable excuse to provoke China. Xi' peaceful rise may not be peaceful nor a rise. Very bad.
Mainstream media are reporting that these elements do in fact exist to be mined in the United States and elsewhere; the rest of the world has simply stopped bothering since China provides them so cheaply. I assume they are not lying?
ReplyDeleteSurely developing the industry elsewhere is a better option than actual war. Even if it takes a few years.
The development of a mine is a very large and complicated project that takes up to ten years.
DeleteIf the site is in the third world, there are many political and safety risks. If in Canada, Australia, etc. - the environmentalists will turn impossible to dig a hole in the ground.
Summary: It is easier to occupy Western China.
If you like conspiracies, this is one. The Communist Party of China sold rare earth minerals very cheap, for decades. American producers could con compete and folded up one by one. China supplied the strategic minerals very cheap and without limiting quantities. The last American mine closed a few days ago, broke. America now depends totally from Chinese supplies. The price will surely rise and supply will be conditioned to political "friendship" towards China. When Japan tried to show some firmness in he Sokoku islands dispute, China stopped supplying Japanese electronics industry. The Japs understood.
ReplyDeleteI am not saying that the Chinese intend to black mail the world, only that that they have created a classic capitalist monopoly. I have studied the economies of monopolies, and their optimal pricing. I estimate about three times current price. Chinese will enjoy huge rents, and maybe they will choose to kill Western electronics and monopolize chips too.
If they paly it smartly, the West will acquiescence. If not I war. The Western savages love war.
I don't know if Western savages love war these days. Perhaps, as Machiavelli said of the Medes, they have become soft and effeminate after a long peace.
ReplyDeleteIf it is as difficult as you say to revive a mine, then it seems the West has made quite a mistake, in failing to protect its domestic industries.
In the US at least, the degree of environmental pushback varies widely from state to state, and I imagine a similar situation holds in Canada and Australia. In some states, the mining industry more or less controls the government (in West Virginia, to a farcical extent; look up their current governor and his past shenanigans).
And it seems that the one operating US rare-earths mine is in ... California. Oops. (And even if processing facilities are re-opened here, does that mine have ALL the minerals we need, or only some of them? I haven't yet found an article that fully explains the situation.)
Can environmentalists prevail when they are opposing not just some private company's profit, but national security? I wonder.
The last mine close last week.
ReplyDeleteFortune seems to think the MP Materials mine in California is still operating.
ReplyDeletehttp://fortune.com/2019/05/29/china-rare-earth-metals-trade-war/
However, there are no processing facilities in the USA. MP ships their ores to China for processing. MP is looking to set up domestic processing; and separately, an Australian miner has been in talks to do rare-earths processing in Texas. But for the time being, processing appears to be the bottleneck.
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