Rising trade tensions between the United States and China have raised concerns over 17 rare-earth minerals that sound exotic for high-tech products like robotics, drones and electric cars.
China recently raised tariffs to 25% for rare earth exports to the US and has threatened to halt exports entirely after the Trump administration raised tariffs on Chinese goods and the telecommunications giant. blacklisted Huawei.
With names like Europium, Scandium and Ytterbium, most of the rare earth minerals are mined in China, where lower wages and relaxed environmental standards make production cheaper and easier.
But trade experts say no one should worry about threats from China to stop exporting the items to the US.
There is a rare mineral mine from the United States in California. And Australia, Myanmar, Russia and India are also the main producers of the somewhat dark minerals. Vietnam and Brazil have huge reserves of rare earths.
“The sky is not falling,” said Mary B. Teagarden, a China specialist, professor and associate dean of the Thunderbird School of Global Management in Phoenix. “There are alternatives.”
Simon Lester, associate director of the Center for Trade Policy Studies at the Cato Institute think tank in Washington, agreed. “In the short term, it could be a big disruption, but companies that want to stay in business will find a way,” he said.
While the U.S. is among the top 10 countries in the world for rare earth production, it is also a major mineral importer, sourcing 80% of what it buys from other countries from China, according to the Geological Survey. Last year, China produced about 120,000 metric tons of rare earths, while the United States produced 15,000 metric tons.
The United States also relies on China to separate minerals mined from the Mountain Pass Mine, the only rare earth mine in the United States, which was purchased two years ago by Chicago-based JHL Capital Group LLC.
“We need to develop a US-based supply chain so there is no possibility that we could be threatened,” said Ryan S. Corbett, managing director of JHL Capital.
The main products from the mine are neodymium and praseodymium, or NdPr, two elements that are used together to make the lightweight magnets that help electric cars and wind turbines and are found in electronic devices such as laptop hard drives.
Mountain Pass, located in San Bernardino County, California, was one of the world’s leading suppliers of rare earth minerals, but China began to take control of the market in the 1990s and the United States mine stopped mining. production in 2002.
Mountain Pass subsequently restarted production only to close again amid a 2015 bankruptcy. Corbett said mining resumed last year after JHL Capital bought the site with QVT Financial LP of New York, which owns 30%. , and Shenghe Resources Holding Co., Ltd. of China, a non-voting shareholder with 9.9%.
Mountain Pass has since focused on achieving greater autonomy with a $ 1.7 billion separation system due to go live late next year, allowing it to skip shipping rare earth ore to China for that. He passed.
China could hurt itself in the long run by cutting off the US, specialists said.
David Merriman, a rare earth analyst for Roskill Commodities Research in London, said that during a similar trade shift with China in 2011, Japan began scouring countries for minerals needed to make electronics in Australia.
Australian rare earth production giant Lynas Corp. Ltd. this month announced a proposed deal with Blue Line Corp. of Texas for a separation facility at an industrial site in Hondo, Texas.
There may also be other options. Rare earth deposits have been detected in other US states, such as Wyoming and Alaska, as well as in several remote areas of Canada. The Department of the Interior calls for more prospecting and extraction of “critical minerals”, including on public lands that are currently considered off-limits and even in the oceans.
“We have to be more progressive,” said Alexander Gysi, assistant professor of geology and geological engineering at the Colorado School of Mines in Golden. “It would be better for the US to have a greater variety of sources for rare earths.”
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