China and Japan Covet the Same Rare-Earth Metals 159
An anonymous reader writes with this excerpt from The Australian: "Japan's increasingly frantic efforts to lead the world in green technology have put it on a collision course with the ambitions of China and dragged both government and industry into the murky realm of large-scale mineral smuggling."
Re:China's bastnasite and monazite supply for magn (Score:3, Interesting)
Interestingly enough, there is a major chinese financial stake in both major Aussie rare earths companies trying to develop Australian located deposits. ARU and LYC respectively. In LYC's case its a controlling interest. Haven't looked in depth into ARU as I don't hold.
The issue has seemed to be too far beneath the radar for the govt to get involved unlike say OzMinerals (where the federal govt moved to restrict how much stake the incoming Chinese companies were allowed to buy and specifically excluded their biggest resource, Prominent Hills, which is gold + copper).
disclaimer: I hold LYC, aussie citizen, ethnically chinese ;)
Re:Great! (Score:4, Interesting)
The supplies aren't in China (Score:4, Interesting)
Unless you're implying China is going to assassinate foreign industrialists, you're apparently confused. Most of the known reserves of rare earth metals aren't in China - the problem, for Japan, is that China has negotiated exclusive trading rights with several developing countries over their stocks of rare earth metals. So the local governments may even be in on this 'black market' - the problem is that if they openly sell directly to Japanese companies, China will bring suit against them in the WTO.
Re:Great! (Score:5, Interesting)
1) China's government is trying to lock up rare earth metals so that they can profit off of it politically. Since these are used in green technologies, this is bad environmentally.
China is going to profit off of it economically.
They have been pursuing a decades long mineral aquisition policy. And they're beating the USA.
Capitalism just can't compete with (Chinese) government financed companies.
Who in their right mind wouldn't want to do everything in their power to monopolize a limited natural resource?
You don't even really know that it's bad for the the environment... yet.
If it makes sense, someone will break the monopoly. More on this later.
2) This isn't really affecting the market, because there's a huge black market for the stuff. As shown by drugs, Prohibition, embargoes... black markets usually breed a lot of crime.
I'm not sure you make sense.
"not really affecting the market" and "huge black market" are contradictory.
Not to mention that black markets are by definition illegal; claiming that they breed crime is tautological.
1) "Ginya Adachi, from the Japanese Rare Earth Association, said that China's dominance of rare earths would serve the developed world with a rude shock about global trade: Japan, America and Europe must now realise that some markets are not real, but political."
Pure hyperbole. China's lock on rare earth metals isn't recent news. They've had it for >20 years.
And there are dozens of markets whose prices are set because of political considerations.
If I wanted to be pedantic, I could argue that every tariff and subsidy qualifies.
Last but not least, that article was shit.
It leaves out tons of back story and doesn't even mention why people are talking about this again.
1. An Australian group called "Lynas" couldn't get the funding to build a refinery in Malaysia or develop a new mine in Australia until they sold 51% of their ownership to China for 500 Million.
2. A Chinese invesment company just bought 25% of a major Australian rare earth mining corp
Looks like this strategic resource isn't all that strategic since nobody is willing to fork over the cash to build refineries outside of China, without Chinese cash.
Maybe Canada will since they're pretty much the only player left.
Re:What's the big deal? (Score:3, Interesting)
From what I understand from the article, China only holds 95% of the supply because they are able to provide the metals for cheaper.
It's a poor article.
China holds 97% of the output, mostly because they own the processing plants.
China only has ~50% of the global supply, but has bought control of even more.
If these Chinese companies took advantage of their "monopoly position" by raising prices significantly, then other countries/companies would simply mine their own rare earth metals.
It isn't about mining, it is about refining.
Almost all roads lead to Chinese processing plants.
Re:Great! (Score:4, Interesting)
Last but not least, that article was shit.
It leaves out tons of back story and doesn't even mention why people are talking about this again.
1. An Australian group called "Lynas" couldn't get the funding to build a refinery in Malaysia or develop a new mine in Australia until they sold 51% of their ownership to China for 500 Million.
I don't usually quote myself, but I was reading more and this is just rich: ::epic facepalm::
Goldman Sachs is the company that pulled financing from Lynas' processing plant.
An American investment firm allowed the Chinese to take over the world's largest rare earth mineral processing plant.
MOD PARENT UP -- good historical points! (Score:3, Interesting)
My sister's work has offices in China. It's become clear to them (and the Chinese will tell you this to your face, if you ask) that China's REAL motivation with all this new "capitalism" is in sucking all the wealth out of the West.
Which goes right along with what you said. (Interesting post, BTW.)