“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).
The above extracts are from defenseone.com’s article “Here’s a way out of our rare-earths mess” written by James Kennedy, and posted on May 12th this year (1). And, as James Kennedy also tells us, “China has demonstrated its ability to bankrupt any new producer. China has also shown its willingness to use rare earths as a geopolitical weapon, as it did to Japan in 2010.” (2).
I began posting information on this issue on June 1st, 2011 by reproducing Mad Hedge Fund Trader’s article “Rare earths are about to become a lot more rare” and finished with “An update on China’s ‘rare earth metals’ near-monopoly” on January 12th, 2014, (3), in which I quoted Rare Earths Inc. CEO Kevin Cassidy as saying “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”.
In one of the earlier posts, I quoted as follows: “(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.” – “Now congress wants to get involved, proposing a rare earths strategic stockpile for the military, and offering subsidized loans to fund it.”
No meaningful action has yet been taken, and the Americans (and the West) are now thoroughly caught in the Chinese snare.
Here’s hoping that the U.S. Senate will address this problem once and for all.
And if they can’t, then the Chinese economic stranglehold over the U.S. is almost complete – and may well prove fatal, as I am sure it is intended to.
(1) – See “Here’s a Way Out of Our Rare-Earths Mess” here.
(2) – See “China has halted rare-earth exports to Japan, reports The Times” (Sept. 23rd, 2010) here.
(3) – See my “Rare Earths Metal Crisis” category here.