STAFF NEWS & ANALYSIS
Finally, China Pushes Too Hard and Rare-Earth Mining Begins Elsewhere
By Daily Bell Staff - July 14, 2016

By monopolizing the mining of rare-earth metals, China could dictate the future of high-tech … This year, global consumption is expected to be about 155,000 tons, far more than the 45,000 tons used 25 years ago. Demand will only grow — likely at an accelerated pace — as the world tries to rein in climate change.  At the moment, only China can satisfy that hunger. Yet in 2010, Beijing cut rare-earth exports by 40 percent — possibly to boost its high-tech sector — and cut off supplies to Japan over a territorial dispute. – Foreign Policy

We’ve dealt with the rare-earth scarcity myth several times. But it continues to reoccur in the mainstream media.

The article above mentions that China cut supplies of rare-earth metals to Japan.

Yet we reported on a potential Japanese solution several years ago, HERE.

Now such metals have been found in the sea by Japanese researchers and perhaps these metals shall start to be mined. In fact, the lesson to be drawn once again is that the Earth is a great engine of energy and commodities. Nothing is rare in reality that comes from the Earth, though some of it may be harder to extract.

And in an earlier article, we wrote: “As for rare earths themselves, here are excerpts from an article (in the Smithsonian Magazine, of all places) that puts this so-called scarcity into context”:

Given their name, rare earth elements, and the fact that China controls 96 percent of REE production, you might think the Chinese had won some geologic lottery. But these metallic substances—elements 57 to 71 on the periodic table, plus scandium and yttrium—are not all that rare. It’s been economic and scientific smarts, not geologic luck, that has given China its near monopoly on these elements …

The United States has one of the richest REE deposits in the world, at Mountain Pass in California, but as interest in rare earths declined in this country in the late 20th century, China’s interest was heating up. Chinese scientists had visited during the Nixon Administration and taken their knowledge home, applying it to their own rich deposits. By the end of the 20th century, they were able to undersell the competition and drive most of the rest of the world out of the business …

Earlier this year, China blocked REE exports to Japan, renewing concerns about the Chinese monopoly and prompting new calls for developing rare earth production elsewhere. The Mountain Pass mine, which has been inactive for several years, is scheduled to start up again in 2011. A new report from the USGS documents REE deposits in 13 additional states, and India, Australia and Canada are planning to get into the rare earths business more heavily.

And anyone looking for new REE deposits could benefit from the years of Chinese work in this area. Most of the world’s heavy rare earths come from ionic adsorption clays in southeast China, [mineral commodities specialist Daniel] Cordier says, and no one has really looked at this type of clay elsewhere in the world. “There’s a lot of opportunity for exploration,” he says.

At least, Foreign Policy acknowledges there are moves to mine rare-earth metals elsewhere than China – unlike past profiles we’ve read.

[China’s] muscle flexing caused prices to soar, sparking new exploration for rare-earth deposits around the world …  There are currently 50 deposits at an advanced stage of development that could someday challenge China’s dominance.

And this is just the point: Almost nothing is really “rare.” Not oil, not water, not even food. If the price is right,  the supply will always be adjusted to fulfill the demand.

It’s called “supply and demand” and it works. But in this modern era, we’re not supposed to mention market efficiencies.

Laws and government are supposed to provide plenty of everything.

Conclusion: Of course neither does. You can’t restrain people’s freedoms in order to generate prosperity, or not for everyone anyway. Elite scarcity memes (and subsequent actions) enrich only a few at the expense of the many.

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  • Praetor

    My whole life all I have ever heard! We live a Universe of abundance, and live on a planet running out of everything. Go figure!!!!

  • Doc

    I’m not a big fan of referring to “supply and demand” as it in some way obscures what’s going on in the real world.

    How about referring to “production and consumption”, since it’s obvious that you have to produce something in order to consume it?

    It is less clear that you need to supply in order to demand, as those are less intuitive words and more abstract. It opens up for “experts” taking over the topic, telling people how things “really” are.

    • Paul Henderson

      What exactly are you trying to say here? I don’t think I am reading your statement clearly or do you just want them to rename established economic terms for your convenience? Call it whatever you will, Supply and Demand are at the core of understanding markets. Calling it something else doesn’t change the fundamentals.
      You’re statement begins to take a, Which came first, the chicken or the egg? twist as well. Your statement that, “you need to supply in order to demand” is sometimes true. But other times the Demand gives entrepreneurs the signal to Supply.
      Production is something that happens along the entire value chain of a product being developed for Consumption which is what happens at the end of the value chain.
      Sorry for my confusion, but your statement seems to be very wide open.

      • Doc

        Paul, the confusion is probably my fault. English isn’t my first language.

        I haven’t asked anyone to rename anything, simply to be careful with what words to use. DB editors have been open to similar suggestions in the past. Using vague or poorly defined aggregates plays into the hands of the central planners.

        That was an opinion I tried to air in this comment section.

        I suppose you have heard of Say’s Law, which is as fundamental as it gets. If not this is the best presentation, http://www.capitalism.net/Jamesmil.pdf. That will sort out the chicken and the egg discussion.

        • Paul Henderson

          Doc your English is great. Thanks for your clarification. I respectfully disagree that Say’s Law is the predominant theme of this piece though. I think price discovery and the action of Supply and Demand are the fundamental issue the authors were aiming toward. In this case I don’t think there is anything vague about price discovery as it relates to the Supply and Demand of a raw element. Very good to think about the propaganda of scarcity that we’re fed. Praetor mentions it and it’s force fed daily. Thanks all.

    • DrDean

      Why are we paying for fuel? Over unity occurs on a very regular basis. You can add a magnet to each blade of a wind turbine and then use a controlling magnet to generate far, far more electric current than the amount of electricity that you yourself have to put into the same system. Over unity is not only possible, this is an example of it. Trillions upon trillions of dollars are now invested in the economy of oil. Trillions upon trillions of dollars of bank credit is now invested in the economy of oil; trillions upon trillions of dollars of bank credit would like to see a return before being made obsolete.

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