“The last U.S. rare-earth mine ceased mining operations in 1998, the same year that the premiere U.S. rare-earth metallurgist company, Indianapolis-based Magnequench, was essentially sold to members of Deng Xiaoping’s family. Magnequench’s facility was shut down, moved and reopened in China in 2003… Since then, U.S. defense contractors have become completely reliant on Chinese sources for rare-earth metals, alloys, and magnets… The reality is that all rare earth metallurgy used in U.S. defense systems originates in or must pass through China… control over the supply of critical materials and enormous contracts thereby gives China tangible control over the financial fortunes of the defense industry. Perhaps this also helps explain the Pentagon’s unwillingness to force a solution.” – (emphasis added).
“With China attempting to tighten their noose around the current global supply of critical rare earths by setting the foundation for a national rare earth group, there’s a new sense of urgency for a domestic supply of critical rare earths” – Rare Earths Inc. CEO Kevin Cassidy.
In a “Comment” article posted by India’s Institute for Defence Studies and Analyses yesterday, we are told by author Ajey Lele that Japan and India are finding common ground in the need to co-operate with each other to counter-act China’s near-monopoly on “rare earth elements” (REE’s). Specifically, Japan finds its electronics industry and sovereignty threatened by China, and India is the second-largest producer of REE’s and has a history of enmity and military conflict with China.
The following article, by India’s “Institute for Defence Studies & Analyses”, describes in detail how China is implementing its control over the world’s supply of “rare earth metals” for its own strategic benefit. China went to a great deal of determined effort to achieve its present monopoly, and is determined to hold on to it for as long as possible.
“The US was once self-sufficient in domestically produced REEs, but over the past 15 years has become 100 per cent dependent on imports… Over the last few years, realizing the dangers of Chinese monopoly, countries like India, Japan and Vietnam have started collaborating in REEs.”
“(China) produces more than 90pc of the world’s rare earths, which are used in hi-tech equipment ranging from iPods to missiles, and it has set production caps and export quotas on them… Government stockpiling could reduce the volume of China’s exports of rare earths…”
There are three primary issues here, and they are all massively important. The first is that ‘rare earth metals’ are vital to the production of military equipment such as radar systems and lasers for ‘smart bombs’ and other precision-guided weapons, and in the production of satellites, avionics, night vision equipment, and many other essential items. Peaceful uses are many, including virtually all aspects of the high-tech revolution.
“China has been imposing tariffs and quotas on its rare earth exports for the last several years, curtailing global supplies and forcing prices to rise eightfold to fortyfold during that period for the various 17 rare earth elements.”
This is going to get much, much worse before it gets better. If it can get better… “rare earth” is perhaps the most under-reported issue in the world right now. -JG.
“(You) can’t fight a modern war without rare earths, being essential for radar, missile guidance systems, navigation, and night vision goggles… China now produces 97% of the world’s rare earth supplies…”
“America was once the world’s largest producer of these elements, until it was undercut on prices by China and all US production ceased.”