Can You Dig It?
When you hear the phrase mineral deficiency, you first thought is probably about calcium or iron or some other shortage that can affect your health. But companies and countries can also experience mineral deficiencies, and right now, as The Verge reports, there’s a new cold war is brewing over rare earth minerals. The need for these rare elements is nothing new. You’ve been using them in your phone, your electric vehicle, and your nuclear submarine for years. But the tariff wars have made the mineral wars a more urgent issue. “The future of everything from smartphones, to military equipment, to electric vehicles hangs on 17 rare earth minerals and the magnets that they’re made into. And China, the world’s largest refiner and producer, is tightening its grip and threatening the US’ largest automakers … Over the last 30 years, China has methodically cornered the market on mining and refining rare earth minerals, which are used to produce a variety of common items like passenger vehicles and everyday electronics. In the wake of US President Donald Trump’s increasingly aggressive trade war, China is leveraging its position as the world’s largest producer, at the expense of the American auto industry.” Oddly, rare earths aren’t necessarily all that rare. “Rather, they’re found everywhere in very low concentrations. Rare earth ores are easy to extract. They’re available all over the world, but they are very difficult to separate … If a new mine came online today, it wouldn’t really matter, either. The US no longer possesses the equipment to turn rare earths into rare earth magnets — those largely are made in, and come from, China.” Resources like these are often just underneath the surface, both when it comes to digging for them and when it comes to geopolitics. Consider that the US just strong-armed Ukraine into a minerals deal and that another region rich in these elements is Greenland.
+ The US and Brazil are two of the countries trying to catch up a bit with China. But there are many challenges and a lot of ground to make up. WSJ (Gift Article): Rare-Earths Plants Are Popping Up Outside China.
+ A US mining company called Molycorp had a head start in the rare earths business. For decades, “the US had the majority of the world’s rare earth production and a lead in processing rare earths and producing permanent magnets. The problem…is that Molycorp couldn’t produce enough rare earths to feed the growing demand. So, in the 1980s, Molycorp made the fateful decision to start doing business with China.” The Hustle with the dirt on minerals: What the hell are rare earth elements?
+ Rare earths are just one of the elements that makes this a winning moment for China. You don’t have to dig too deep to find the others: “Mr. Trump is taking a wrecking ball to the pillars of American power and innovation. His tariffs are endangering U.S. companies’ access to global markets and supply chains. He is slashing public research funding and gutting our universities, pushing talented researchers to consider leaving for other countries. He wants to roll back programs for technologies like clean energy and semiconductor manufacturing and is wiping out American soft power in large swaths of the globe.” Kyle Chan in the NYT (Gift Article): In the Future, China Will Be Dominant. The U.S. Will Be Irrelevant. Of course, as Chan argues, “Avoiding that grim scenario means making policy choices — today — that should be obvious and already have bipartisan support: investing in research and development; supporting academic, scientific and corporate innovation; forging economic ties with countries around the world; and creating a welcoming and attractive climate for international talent and capital.” Uh oh.
