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2/14/2017 by mdc
Matt Geiger opines that if there is one thing clear from the first few weeks in the White House, it is that the man relishes conflict. Political opponents, federal judges, trade partners, steadfast allies, it does not matter. If there is a conflict to be had, the new guy will seek it out. So far, China has been spared from his outbursts. This will not last for long.

When presented with conflict, China has not hesitated to cut exports of strategically important metals. Most recently, in 2010 the Chinese government shut down rare-earth exports to Japan virtually overnight, due to a territorial dispute in the South China Sea.

There is nothing stopping them from employing the same tactics against the U.S. as soon as the new guy starts acting belligerently towards China. Particularly as he tries to coax the U.S. into a manufacturing renaissance, there would be no better retribution than cutting the supply of the necessary inputs.

China accounts for the vast majority of reliable global production for the following four metals: heavy rare earths, tungsten, indium and antimony. The metals are vital to national defense, renewable power generation and other forms of high-tech manufacturing. At any point, China could fully restrict the U.S. from accessing these metals.... but there are alternative sources.

Below I provide a brief background on each of these metals. Additionally, I include the names of the development stage projects OUSTIDE of China that could most quickly replace Chinese supply if or when an export ban occurs.

Within the past five years, Lynas Corporation has commenced rare-earth production at the Mt. Weld project in Australia. While this has provided a significant supply of rare earths from outside of China, it is important to note that the vast majority of Mt. Weld's production is comprised of light rare earths. The world still remains beholden to China for virtually 100% of heavy rare earth supply..... but there are alternative sources.

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