china actually has pindostan at its mercy

Beijing Could Use Rare Earth Metal Exports as Pressure Point in Pindo Trade War
Sputnik News, May 22 2019

After Chinese President Xi Jinping visited a rare earth metal facility earlier this week, fears of a coming clamp-down on exports of the valuable materials have been renewed. China produces the vast majority of the world’s rare earths, which are used in electronic devices. On Monday, Xi paid a visit to the JL MAG Rare-Earth Co Ltd facility in Jiangxi Province, where rare earth metals are both mined and processed into a useable form. Accompanied by Vice Premier Liu He, who has led the tense trade negotiations with Washington, Xi’s visit instantly raised fears the world over that Beijing could use its leverage over the global supply of rare earth metals in a devastating counter-offensive in the burgeoning trade war. Rare earth metals could be a pressure point on the Pindo economy that might bring Washington back to the negotiating table. James Kennedy wrote on Tuesday in National Defense:

China could shut down nearly every automobile, computer, smartphone and aircraft assembly line outside of China if they chose to embargo these materials.

Amanda Lacaze told the NYT in Jul 2018:

I think there’s about 100 PhDs in rare earths working in applications inside China and working in technology development, but there are none outside of China.

Stocks in 20 of the largest rare earth producers around the globe jumped on Monday by 6.4% following the news of Xi’s visit to the Jianxi factory. The MVIS Global Rare Earth/Strategic Minerals Index, which tracks the shares of 20 producers from 10 countries, recorded leaps on Monday and Tuesday in key stocks, including the firm Xi visited, which recorded a 10% jump in value on Monday and a second 10% jump on Tuesday. The 17 so-called “rare” earth metals aren’t actually that rare at all. They are quite plentiful in Earth’s crust. However, they’re typically found in compounds fused with other metals, making their extraction and purification complex, expensive and dangerous. Some of the most common uses for rare earth metals includes cathode ray tubes and flat panel display screens made from yttrium, cerium, lanthanum, europium and terbium; glass made from cerium, lanthanum and lutetium; and magnets made from dysprosium, gadolinium and praseodymium; especially permanent magnets made out of neodymium iron boron, which are used in every kind of electronic device from hard disc drives to sound systems, generators and turbines. They’re used in the defense industry to provide radio frequency circulators for Raytheon’s Patriot missile system, and they’re used to produce lasers, microwave equipment, superconductors, smartphones, computers and more. Since the 1980s, China has dominated global output of rare earth metals, producing 120,000 tons of them in 2018, accounting for 71% of global output. Pindostan uses about 20,000 tons of rare earth metals each year. China supplies 59% of Pindostan’s consumption of rare earths, worth about $155m in trade. Pindostan’s only working rare earths mine, in California, is now Chinese-owned and exports its raw material to China for processing. Today, the center of rare earth mining and processing is in China’s Inner Mongolia, Jiangxi, Shandong, Sichuan, Guangdong, Fujian, Hunan, Yunnan and Guangxi provinces, where 90% of the the world’s mining occurs. However, paradoxically, China is also a net importer of rare earths. That’s because of the immense amount of manufacturing that takes place there, as well as Beijing’s willingness to circumvent environmental regulations that cause much higher costs for refining processes elsewhere. Last year, China imported 167% more rare earth oxides and oxide equivalents than in 2017 and 10 times more than in 2015. The WTO has rebuked Beijing for restricting rare earths exports, saying in March 2014 that it violated global trade rules. The move followed a lengthy dispute based on a 2010 production curb, which Beijing justified by saying it was trying to curtail pollution and to preserve world resources. the EC said at the time:

The sovereign right of a country over its natural resources does not allow it to control international markets or the global distribution of raw materials.

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