rare earths

The New American recently provided an in-depth look at Chinese investments into the world’s minerals and metals supply. I’ve included an excerpt below, but I recommend you click here to read the full article. While the piece was certainly compelling, I want to point out a few key facts that were not included. The author, William F. Jasper, correctly mentions that a Chinese state entity tried to purchase Unocal in 2005 but was rebuffed; and that’s where things get interesting.

Back then, Unocal had a division called Molycorp (the then-shuttered rare earths mine). We have talked about Molycorp here before – take a look. I find it interesting that had that particular deal gone through, then China would have controlled Molycorp altogether. Today, the $6 billion company leads the U.S. effort to reverse (yes, that’s right) Chinese domination of our rare earth resources.

Excerpt: Now China, which already controls 97 percent of the global rare earth metals production, is trying to buy up America’s rare earth deposits. And that’s just the tip of the iceberg; it’s also targeted our gold, lithium, oil, gas, molybdenum and other critical mineral and energy resources. The Japan/rare earth incident and China’s more truculent tone toward America should send some sobering messages.

In yet another indication that a global race for resources is in full swing, this opinion piece carried by the Russian news agency Ria Novosti suggests that Russia, a generally resource-rich country, should rethink its long-held position that prospecting for minerals outside its own territory is not necessary.  According to the author, Africa, another area where China has enlarged its footprint and is looking to compete with Western countries for access to precious resources, should become the focus of a Russian resource policy shift for not just oil and gas, but also precious metals and uranium.

Recent decisions by China, the world’s leading rare earths producer, to tighten export restrictions and raise taxes have set off a flurry of global activity as nations are looking for ways to respond to these new realities. In the United States, policy initiatives aimed at securing an ongoing supply of these mineral materials are being [...]

It is easy to pity the U.S. policymaker, who has more than a few crises to cope with, but America can no longer afford to push aside the critical issue of metals and minerals.  Decisions made now — or inaction, which is a decision in itself — will shape our economic competitiveness and national security [...]

Canada’s Globe and Mail leads with a quote well-known in rare metals circles:  “The Middle East has oil…and China has rare earths.” Following Xiaoping Deng’s 1992 dictum, China developed its rare earths production to the point where, today, it provides 97 percent of the world’s supply. But don’t blame China for capitalizing on its market [...]

Placing emphasis on the stated Chinese government’s goal to preserve an important resource from “unqualified” rare earth miners, while at the same time protecting the environment, a China Radio International (CRI) segment earlier this week reports on the recent tax increase on Rare Earths resources.

Molycorp, the leading edge of the U.S. re-entry into Rare Earths production, has acquired a controlling share in Estonia-based Silmet, one of only two rare earths refineries in Europe. The deal will allow Molycorp to double its planned production capacities to roughly 6,000 tons per year.