As part of the ongoing trade war between the US and China,
China has halted exports of rare earths, those raw materials that are such a vital
component of so many US military weapons and sensors. If the halt is protracted, this could cripple
US military manufacturing.
I love it!
This is exactly what the US needs to get us off our
complacent, vulnerable, regulatory-constrained asses and start producing our
own rare earths. We have them. We’ve just bound ourselves in so much
regulatory constraints that it’s not economical or feasible to produce
them. We need to unbind ourselves,
reduce our regulations to a more reasonable level, and recognize that certain
strategic materials need to be not only exempt from some regulations but
actively supported and encouraged.
Congress should put a such a bill on the President’s desk today.
Yes, I know, we’ve previously begun to build a rare earth
mining/refining facility but it’s nowhere near enough.
This is a losing proposition for China. They’re depriving themselves of a market,
hurting their own industries, and forcing the US to become more
self-reliant. It’s the very definition
of stupidity. This is what happens when
your geopolitical goal is global conquest instead of peaceful coexistence. Evil invariably defeats itself. We just need to help it along when the
opportunity presents itself..
If exploited properly, this is a winning proposition for the
US. We could develop a new industry,
create jobs, keep monies ‘in-house’, weaken China, and reduce one of our major
strategic vulnerabilities. We should
send China a thank-you note. Trump
should be on TV explaining this to the American people.
I love it!
Rare-earth is not really rare. What China really controls is refining technologies, especially certain heave rare-earth. Recent Minyama earthquake caused some heavy rare-earth supply disruption in China. These raw materials are sent to China to refine.
ReplyDeleteNow, question is if the federal government has determination to get refining technology done? will Trump this time respect science principles and experts, or his whatever? let people who can do to lead this R&D. It takes time to do R&D.
Frankly, Trump needs to learn from China - after his assault on Huawei in 2018. Chinese government has determination to develop domestic technologies which are and will be sanctioned by US, for instance, high end semiconductors. Both government and private sectors work hard to get things done. Rather than respect "patriotic" impatient talking heads, they respected experts.
There are plenty of rare-earth in Australia. There is a mining company in its stock exchange-Lynas. Unfortunately, it can only do basic refining on some and lots of its mined rocks have to send to China to refine. Of course, refined products are in China thus subject to Chinese laws.
DeleteAfter Trump had started blockade high tech products to China during his first term, it developed stunning technologies. One mistake made by Trump and followed by Biden was gradually tighten sanction than full scale sanction in one go. They hesitated to see American tech companies lose money thus turning against them. For instance, sudden ban all high end chip sales would send stock prices of suppliers tumble. Now, it is too late as China has developed domestic based high-tech alternates.
DeleteOne outcome is their advancement in high tech weapons. They got their 6th generation full scale prototypes far ahead of US without worrying need foreign components.
China is still highly dependent on imports of Western computer chips. From an article on Chinese chip imports,
Delete"Despite China's intentions to become self-sufficient in chip production, this year, Chinese companies increased their chip imports year-over-year as consumer electronics, PC, and server markets began to rebound last year.
In the first seven months of 2024, China imported 308.1 billion semiconductor units, valued at about $212 billion, which indicates a 14.5% increase in volume and an 11.5% rise in value compared to the same period last year, reports South China Morning Post citing General Administration of Customs of China. In 2023, China's total semiconductor imports were valued at $349 billion ..."
I enjoyed this. The concept of putting high tariffs on something you really need, that is already mostly embargoed is an interesting strategy.
DeleteIts going to take a while, as in several to many years, for the US to get large scale refining going as it needs to be. In the meantime, EVERYTHING that needs rare earth minerals is going to fall behind, and in particular US advanced defense products are going to be at a disadvantage.
I enjoy this channel. A lot of down to home truths.
https://www.youtube.com/watch?v=4O0ZubRSq7M
"The concept of putting high tariffs on something you really need, that is already mostly embargoed is an interesting strategy."
Delete???? You appear to be referring to rare earths but, to the best of my knowledge, there were/are no US tariffs on rare earths from China. Feel free to correct me if I'm wrong.
That aside, as stated in the post, this is a blessing for the US/West. It will force us to develop (hopefully quickly) our rare earth supply chain and eliminate a strategic vulnerability. Let's be honest, without such an action by China, the US/West would never develop their own supply chain. Better to do it now than trying to do it during a war with China.
The US does have strategic reserves of rare earths in unknown quantities. This will help mitigate the impact of China's actions to some degree.
As stated in the post, if the US/West takes decisive action, China will have shot itself in the foot by forcing the US/West to eliminate a strategic vulnerability. Had China continued to freely supply rare earths to the US, nothing would have happened and China would have retained their advantage over us. Stupid on China's part.
"Its going to take a while, as in several to many years, for the US to get large scale refining going"
Yes, it is, so the sooner we get started the better. In addition, we need to completely revamp/revise our regulatory impact on that particular industry, recognize its strategic importance, and support the rare earth industry with favorable legislation.
The US has already taken the first baby steps on the road to rare earth independence, as noted below.
"Massachusetts-based rare earths processing startup Phoenix Tailings, which recycles the metals from electronic waste and other sources, aims to boost its annual production from 40 metric tons today to 4,000 metric tons by 2027."
"China will have shot itself in the foot by forcing the US/West to eliminate a strategic vulnerability"
DeleteI think that China knows this thus it refrained from use this tool until it has to. It is one time weapon with hope to knock Trump down. It is a race on TIME - whether US gets refining technology done for industrial scale (not just in lab) in a short time or not.
Why do you think that ‘China’s geopolitical goal is global conquest’?
ReplyDelete"Why do you think that ‘China’s geopolitical goal is global conquest’?"
Delete'China is pursuing a multipronged strategy toward global governance.' - Council on Foreign Relations
https://www.cfr.org/china-global-governance/
'Xi Jinping Says China to Become Dominant World Power Within 30 Years'
https://www.newsweek.com/xi-jinping-says-china-become-dominant-world-power-within-30-years-1605848
'...the signs that China is gearing up to contest America’s global leadership are unmistakable...'
https://carnegieendowment.org/posts/2020/05/china-has-two-paths-to-global-domination?lang=en
'Xi Jinping has a plan for how the world should work...he’s escalating his push to challenge America’s global leadership'
https://www.cnn.com/2023/11/09/china/china-xi-jinping-world-order-intl-hnk/index.html
Five minutes on Google ^
This doesn't include all the 'Wolf Warrior' rhetoric from Chinese political leaders.
Lutefisk
Some things are blatantly obvious.
Delete"Why do you think that ‘China’s geopolitical goal is global conquest’?"
DeleteThis is a valid observation. Does China want to end up on top economically where they control world trade? Yup, pretty sure that's the main game. And they are achieving it faster than anyone could have anticipated.
Does China want to control the world militarily?
A very different question. If they really wanted to do that the Naval buildup would have a different emphasis. Instead, I put it to you that the PLAN is primarily about supporting Taiwan reunification, and also protecting Chinese trade routes from encroaching powers who may wish to disrupt them. Belt and road is not an intrinsically hostile initiative in military terms. The Chinese like to trade and make lots of money.
There are a few different 'anonymous' posters here.
Delete'This is a losing proposition for China. They’re depriving themselves of a market,....' . I'm not sure about that; the value of Chinese rare earths exports to the United States is about $500m p.a. - basically a rounding error, so completely inconsequential to China, but potentially very problematic for us. I hope we have built up a large strategic stockpile of these critical industrial and defense inputs to get us through some difficult times ahead, but somehow I doubt we have.
If we ignore environmental considerations, there's no reason why we can't construct a large-scale processing plant in the United States, but as an interim measure we should fund an acceleration and capacity increase of under-construction Canada and Australia-based facilities, with guaranteed off-take agreements; should have done this years ago, but better late than never I guess.
I don't agree that China is bent on 'world conquest' (whatever you mean by that). China is leveraging the size of its economy and the volume of its trade - sometimes coercively - to replace US hegemony in the Pacific with its own form of hegemony. That is what we should expect them to do, and what we have ourselves done many times in the past; it is not indicative of a path to 'world conquest' as I understand the term. I think China's primary focus is a domestic one - on improving the lives of ordinary Chinese people; not such a bad thing, although the fact that we are surrounding them with military bases must make them feel uncomfortable.
In any event, there isn't much we can do - either through weaponizing trade or through the threat of military conflict - to stop China going down whatever path it chooses to follow. A generation ago; well maybe, but now it's way too late.
Consider this; Greg Hayes, chief executive of Raytheon (RTX), said last year 'the company had "several thousand suppliers in China and decoupling . . . is impossible". I doubt the situation is much different with regard to Lockheed, Boeing, Northrup Grumman, so I don't think this is a fight we can win.
"There are a few different 'anonymous' posters here."
DeleteThat's why I strongly encourage the inclusion of a username at the end of a post.
" I hope we have built up a large strategic stockpile"
DeleteWe have but I have not been able to find any published quantities.
"decoupling . . . is impossible"
This is absurd. 'Decoupling' is no more impossible than the original 'coupling'. You simply find/develop alternate sources outside of China. It may take time and cause some short term pain but the long term benefit of increased stability and the elimination of any threat of supply chain disruption from China is well worth the time, effort, and any pain.
Hopefully, companies have learned their lesson about being tied to China.
Yeah, I guess he meant that it’s impossible without taking forever and costing more money than the company can afford to spend and stay in business.
DeleteSeriously - these guys have outsourced huge swathes of their core businesses, and have probably lost effective control and ownership of much of their key IP.
As you would know, it’s a heck of a lot easier to outsource than to insource, I doubt the Chinese suppliers are going to be very helpful and cooperative.
"If we ignore environmental considerations, there's no reason why we can't construct a large-scale processing plant in the United States, but as an interim measure we should fund an acceleration and capacity increase of under-construction Canada and Australia-based facilities, with guaranteed off-take agreements; should have done this years ago, but better late than never I guess."
DeleteI wouldn't bet this will work with Canada any time soon. For us to tread on our environmental regulations, which are pretty strict, in order to benefit the US is a complete non-starter in the current political environment. There is some level of FAFO involved in calling our Prime Minister a Governor, and expecting Canada to become the 51st state. There is currently a debate going on tonight for Prime Ministerial candidates for the election on the 28th, and they are all trying to outdo each other to distance themselves from Trump! It would actually be pretty funny if it wasn't so serious.
Australia, who knows? This is a long term play and governments come and go.
"I don't agree that China is bent on 'world conquest' (whatever you mean by that). China is leveraging the size of its economy and the volume of its trade - sometimes coercively - to replace US hegemony in the Pacific with its own form of hegemony. That is what we should expect them to do, and what we have ourselves done many times in the past; it is not indicative of a path to 'world conquest' as I understand the term. I think China's primary focus is a domestic one - on improving the lives of ordinary Chinese people; not such a bad thing, although the fact that we are surrounding them with military bases must make them feel uncomfortable."
Thank you. This is a sane and rational assessment of what is really going on. There is almost no road to kinetic violence unless someone other than China gets upset and starts it first. As far as the US starting a fight result in rapid unscheduled disassembly of Chinese assets? How are things going against the Houthis? I expect to see a serious retrenchment of US bases globally as the reality of the nation debt and the near impossibility of servicing it, let alone retiring it hits home.
"Yeah, I guess he meant that it’s impossible without taking forever and costing more money than the company can afford to spend and stay in business.
Seriously - these guys have outsourced huge swathes of their core businesses, and have probably lost effective control and ownership of much of their key IP.
As you would know, it’s a heck of a lot easier to outsource than to insource, I doubt the Chinese suppliers are going to be very helpful and cooperative."
Absolutely. This is comparable to a person who borrows far beyond their means. Its easy to slip into debt, but very hard to claw your way out.
Its also interesting that one of the more subtle Chinese anti-tariff threats is threatening to completely ignore all western IP rights. Most people won't get the implication, but that is terrifying. And before anyone says, "Oh, they are doing that anyway", no they aren't. The Chinese are filing way more STEM patents than the US and the old days of stealing US IP is gone. Too much to lose on the Chinese side. But yeah, in addition to raiding the patent files, back in the 90s the Chinese military virtually lived in LockMart and Raytheon servers for something like ten years. Pretty bad information security, and I say that as a Certified Information Systems Security Professional (CISSP).
In this case, it was easy to say NIMBY to rare earth processing in the US back when the demand was small, but now, while the volume involved in catching up may not be insurmountable, it is for sure going to be difficult. And I would love to see the demand curve for rare earths vs any likely new-build supply curve in the US. I expect its going to be negative for literally decades to come.
"expecting Canada to become the 51st state."
DeleteSeriously??? You can't recognize a farcical negotiating ploy? Trump and the US has no interest in acquiring Canada in any way, shape, or form. You can rest easy and get a good night's sleep tonight.
"One man's ..."
DeleteFeel free to repost without the political attack.
I do apologize, but it might be worthwhile to recognize that I have spent more than half of my 71 years out of my home country after my years in the military, most of it in senior management roles, and much of it in Europe and the Middle East, including some very enjoyable years in South Eastern Florida. I can honestly tell you that Canadians are not very happy at the current time. This matters, because having Canadians start to question their relationship with the US as allies is a very, very bad thing as the commanding general at NORAD mentioned.
DeleteI suspect most Americans have no idea how angry Canadians are at this point. Let me provide an illustration as staying friends matters, and right now there is doubt that will happen.
https://www.facebook.com/share/r/1DDBwVHuHb/
In addition, we are questioning the F-35 purchase, which viewed from a totally apolitical viewpoint is completely reasonable.
I wonder where this is going. I am not optimistic.
It may or may not be a good idea for Canada to embrace China, but that is where this is heading. Do you really want a China-aligned neighbor on the norther border using Chinese aircraft, ships and other military technology? Not to mention an intelligence sharing alliance like five-eyes, and a financial arrangement like the one that is rapidly emerging in BRICS?
I've been paid to look ahead for nearly 45 years. This is of course just another Internet opinion.
Lets try to be a little nicer to each other. We did it for over 100 years. Why would we break that up now?
"Canadians are not very happy at the current time"
DeleteWith all due respect, I think you're being overly dramatic and generalizing far beyond reality.
Other than amusing hyperbole from the politicians in both countries and some minor trade (tariff) spats, nothing has changed between the US and Canada.
"China-aligned neighbor on the norther border"
You need to relax. Canada is not going to become partners with China and certainly not over some minor perceived slight from President Trump.
The F-35 SHOULD be cancelled by all countries! That has nothing to do with US relations; it's just a bad program that's delivering an unaffordable, unmaintainable, mediocre aircraft. ANY country would be foolish to buy into that program.
"For us to tread on our environmental regulations, which are pretty strict, in order to benefit the US is a complete non-starter in the current political environment."
DeleteThen Canada has complete morons running the government (as does the US!). Rare earth industry development does benefit just the US. It benefits EVERY Western country that buys weapons, sensors, automobiles, cell phones, computers, toasters, and anything with a computer chip in it.
"With all due respect, I think you're being overly dramatic and generalizing far beyond reality.
DeleteOther than amusing hyperbole from the politicians in both countries and some minor trade (tariff) spats, nothing has changed between the US and Canada."
With all due respect, most Americans have little to no idea what is going on with either their northern or southern neighbors. If anything, I am seriously downplaying how annoyed Canadians are as a country. That doesn't mean Canadians suddenly dislike Americans, the needle hasn't moved on that. The links below are pretty good at explaining the political climate here now.
https://abacusdata.ca/canadians-plan-to-avoid-the-u-s-amid-political-tensions/
https://www.ctvnews.ca/windsor/article/27-per-cent-of-canadians-see-us-as-an-enemy-leger-poll/
https://www.thestar.com/news/canada/just-1-in-10-canadians-think-trump-is-joking-about-making-canada-the-51st-state/article_d52afc4c-e891-11ef-a3c7-7f548a653f1e.html
Needless to say, this is not healthy and it didn't need to happen. We had a nice stable relationship, beneficial to everyone that has been turned on its head in a couple of months. But I don't see it getting better any time soon.
We are not going to suddenly align with China, that would be a huge shift and would require years of continued mistreatment by the US. I do expect we are going to be mending some fences though. We have tariffs in place against China that are doing nothing more than shooting ourselves in the foot, particularly the agricultural and electric vehicle ones.
And yes, we need to get out of the idiotic F-35 program. There is enough information available about it now that we would be stupid to continue, that said, politicians...
Currently I don't believe we produce any commercial rare earths at all. We do have one fairly major project coming on line at some point, Torngat Metals’ Strange Lake Rare Earth Project. We also have a lot of tailings from Uranium mining which might be interesting to look at. There have been promises made to streamline the major project approval process which may help, but, politicians...
DeleteMy point was that we are unlikely to throw our environmental regulations in the dumpster just because the US got into a squabble with China. We are not in that position yet, and as far as I'm aware we are not in the chip-building business here. We also are not a big player in EV motors or anything else that requires large quantities of Rare Earths. Perhaps we should be. There is a lot of talk about re-industrialization in Canada, just as there is in the US. I would like to see BYD build a car plant just for starters. Jobs, rare earths and high technology all at the same time. I saw some numbers on the rare earths required for a Flight III Burke and a Virginia. The Burke was something like 2500 tons and the Virginia was somewhere well over 4000 tons. That's a lot of rare earths!
"we are not in the chip-building business here. We also are not a big player in EV motors or anything else that requires large quantities of Rare Earths."
DeleteOf course you are! You're failing to understand the interrelated nature of global economics. Whether you actually produce chips, cars, weapons, computers, toasters, or whatever, you still import and consume them. That makes you a huge consumer of rare earths! Where do you think those rare earths come from? Canada should be doing anything possible to secure a FRIENDLY, reliable source of rare earth manufacturing whether it takes place in Canada, the US, or anywhere else other than China.
You're also failing to understand the nature of a strategic resource. A strategic resource is one that, without, your national security is at risk. Understanding that, one understands that while the environment is important, national security takes priority and if that means bending or relaxing some environmental regulations then that's the price that MUST be paid for national security.
Canada saying no to rare earth production due to environmental concerns would be the height of stupidity and shortsightedness. It would also be cowardly and irresponsible to shrug vital resource production off on the US or others instead of taking responsibility for your own national strategic resource needs.
"The Burke was something like 2500 tons and the Virginia was somewhere well over 4000 tons. That's a lot of rare earths!"
DeleteThat's also incorrect. From a Defense Express article,
"Building one Arleigh Burke–class destroyer takes as much as 2.3 tons of rare earth metals, and a Virginia-class nuclear submarine needs 4 tons, according to a report by the International Institute for Strategic Studies (IISS), a London-based think tank."
I even find those numbers to be hard to believe given that rare earths are 'trace' components.
The strategic resource we need is chips and the products the chips go into, not so much the refined rare earths themselves. This is not dissimilar to the US where we don't have much manufacturing left here, and neither do you.
DeleteNobody said anything about not producing rare earths. We will have rare earth production (15,500 tons/year) coming on line fairly soon. It appears from what I've read that it is aimed at the North American market. But we won't see anything before 2028-2029 depending on how smoothly the final evaluations, environmental impact and indigenous consultations go.
We have to make a lot of very important defense decisions before that. It will be interesting to see where we end up. We generally try to partner with whoever the IP owner is and build locally when selecting defense technology. That is true of the F-35 and also the new destroyers.
So the looming question is, if we don't buy F-35s, what do we buy?
Yes, looks like its KG not tons. Without knowing exactly what they are used for, I have no opinion on validity. It does seem like a lot regardless.
Delete:Virginia-class Submarines: Each of these submarines requires 9,200 pounds of rare earth elements.
Arleigh Burke-class Destroyers: Each destroyer needs 5,200 pounds of rare earth elements.
F-35 Fighters: These aircraft use over 900 pounds of rare earth elements."
"It may or may not be a good idea for Canada to embrace China, but that is where this is heading. Do you really want a China-aligned neighbor on the norther border using Chinese aircraft, ships and other military technology?"
DeleteThe following statement from PM Carney shows that you are out of touch with the general sentiment or misrepresenting it for some reason.
"Canada's Prime Minister Mark Carney said that China is one of the largest threats with respect to foreign interference in Canada and is an emerging threat in the Arctic."
From: https://www.newsmax.com/finance/streettalk/mark-carney-canada-prime-minister/2025/04/18/id/1207423/
Absolutely. China is potentially a huge threat, particularly if they start to regard us as a threat. But they aren't to people who aren't to them.
DeleteCarney also said the relationship with the US has changed permanently, and we are going to have to try to build something new, however it will never get back to what it was. He also expressed how much of an aggressive threat the US is right now, including stressing again the we are never going to be part of the US.
So in reality there are two big potential threats out there right now, and the trick is going to be navigating a successful outcome despite them.
Here's an opportunity to watch the whole news conference, which I did live. I like Carney, he's a highly educated professional economist with scads of experience and a sense of humor.
https://www.youtube.com/live/4Lu_Q8ht_fc?si=BNFP0nn2sLwVXbDD
"But they aren't to people who aren't to them."
DeleteThat's amusing. So, you're saying Taiwan is a threat to China? Vietnam is a threat to China? Australia is a threat to China? Has the US threatened Chinese national security?
"how much of an aggressive threat the US is"
Even funnier than the China statement!
I think you've developed a very skewed perspective. You're welcome to your view but I'm confident it's not the mainstream view.
China regards Taiwan as a renegade province. That's where the "one China" deal came from. The US was an architect of the Shanghai Communique back in 1972.
DeleteChina has outsourced a ton of low-cost, low-tech manufacturing to Vietnam. Xi is just back from Vietnam a couple of days ago after signing a bunch of new trade deals including selling a Vietnamese airline Chinese Comac airliners. I'm not sure who Vietnam is buying military equipment from, but it would be interesting to know.
China is a the largest customer by far for Australian natural resources, and China has a huge amount of money sunk into Australian ports, most of them with dual-use civil/military contracts. Whether that was a good idea is another discussion.
I guess you didn't watch any of Carney's press conference. Unfortunately it was quite revealing. He described US messing around with US-Canada relations as "The biggest crisis of our lifetimes" which I though was interesting wording. He also described the US-Canadian relationship of increasing cross investment for the last forty years as "Over". He spent 6min 45sec in the very first topic of his press conference dealing with what he clearly regards as the US threat. 2:30-4:15, then French for a bit, then 5:00-9:30.
China got a minute and a half of attention. 17:15-18:46
It didn't even come into the press conference until he was asked a question about it afterwords. He did say "China is ONE OF the largest threats of foreign interference" which I don't think anyone who is aware of PLA cyber-ops would dispute, and he also said later under the subject of the Arctic that "China is the greatest geopolitical threat" which again is hard to argue with considering their naval buildup.
So while you may be confident my perspective is not mainstream, it is certainly shared by people in power here. I do hope things get back to something resembling normal, whatever the new "normal" is, but it won't be tomorrow and its going to cause a lot of pain to a lot of people on both sides of the border in the meantime. Nobody wins trade wars.
https://www.youtube.com/live/4Lu_Q8ht_fc?si=4A0J1AXPYU4WoGSU
I really hope you don't delete this, and further take the time to review my point of view.
DeleteI am presenting an alternative viewpoint. If you have evaluated all the alternative sources. Feel free. But please be careful about running a press conference through a NewsMax filter. Go to the source.
We've entered into pure politics and this blog is not the place for that so we'll end at this point. Thank you.
DeleteThank you for your tolerance. I am aware this blog is not geopolitics, and you have been generous with your time to allow some exploration beyond the norm. I do hope you watch the Carney presser fully. This is not meant as a parting (or parthian) shot, just a validation or not of our arguments.
DeleteChina dominates rare earth industries because all these products go to their electrified/motorized economy (i.e. EVs, robots, etc.) Due to China’s demographic issues, their factories are going ‘dark’ (complete autonomous thus no lightings needed), hence tremendous demands on (rare earth)permanent magnets for robot motors. Otoh, we are stuck with ICE auto industry with affinity towards big oil and stasis demand for rare earth derived products.
ReplyDeleteAre you perhaps missing the main point about rare earths? It's not their value or use in consumer products, though that is important, it's their value and use in military sensors and weapons. That's why they are strategic resources.
DeleteThat aside, you seem to have a very narrow view of the uses of rare earths. For example, they're used in semiconductor/computer chip production and chips are used in vast numbers of products. Chip manufacture demand is ever-increasing, not static.
"China dominates rare earth industries because all these products go to their electrified/motorized economy"
DeleteNo, they dominate because their government has been willing to accept and support the mining and refining facilities and processes. The US, in contrast, has so burdened the industries with regulatory constraints that it is not feasible or economical to produce rare earths.
Let’s look at some numbers (from cursory Google search), last year our mil expenditure is about $800B, our auto industry market is about $1600B (15million units). So demand wise, just auto industry alone, the market is twice the military. Otoh, China’s auto industry sold about 35million new cars, of which about 12million units are electric. So, general industrial material wise ( extrapolate to and include RE products), China’s auto industry consumes 2x of our auto industry, and 4x of our defense. With preponderance towards EVs (we’re not), their rare earth products demand, just from auto industry along, is probably 8x of our defense needs. And we’re not even talking about where most of electronics/industrial machinery ( in china) or semiconductors (in Asia) are made. Just a wild guess, China’s RE product demand and supply to Asia is probably at least 10x of ours. No (relative) domestic demand= no domestic supply; that’s why even our arms makers are relying on Chinese RE products.
DeleteWow, you're not getting this or you're just looking to manufacture some kind of argument where none exists. THE ISSUE ISN'T DOMESTIC DEMAND, IT'S MILITARY VULNERABILITY. I don't know how to put it any plainer.
DeleteWho cares what China's domestic demand is?
You're also looking at only auto manufacturing, for some reason, and ignoring everything else that uses rare earths which is anything with computer chips. Almost everything manufactured today seems to use computer chips from children's toys to medical equipment to phones to PCs and so on.
This is the definition of an unproductive discussion so offer something productive or let it go.
The biggest problem after the obvious environmental impact, how to mitigate and what not , which would take time and get new technology in to make it somewhat "cleaner", is that USA is a capitalist driven country and NO COMPANY is going to invest that kind of time and money when there's no long term policy in place.... this isn't the only area, we have discussed this here on other industries that really need a long term thought out policy OVER DECADES really and if this changes again in 2 years, 4 years, 6 years....then no one is really going to bother because no one wants to spend a billion or something in that ball park to then in 4 years be told by USG: "nah, sorry dude, we don't want your RE now anymore, it's too expensive or we don't care anymore where it comes from..."
ReplyDeleteI think that's where I would like any administration to start, let's have some sort of long term plan and strategy for the next decade or 2 so that gives a chance for US companies to see how they can make the technolgy and make it pay off.....
CHIPs act is not cancelled, but Intel looks to be unsalvageable. The best hope is TSMC transplanting its mfg. knowhow and management philosophy to US and make it work.
Delete" Intel looks to be unsalvageable."
DeleteNo idea what you're referring to. A quick Internet search shows,
-The U.S. Department of Commerce has awarded Intel up to $7.86 billion in direct funding through the U.S. CHIPS and Science Act to advance Intel’s commercial semiconductor manufacturing and advanced packaging projects in Arizona, New Mexico, Ohio and Oregon.
-This direct funding is in addition to the $3 billion contract awarded to Intel for the Secure Enclave program that is designed to expand trusted manufacturing of leading-edge semiconductors for the U.S. government.
-Today’s award, coupled with a 25% investment tax credit, will support Intel’s plans to invest more than $100 billion in the U.S.
-As previously announced, Intel’s planned U.S. investments, including projects beyond those supported by CHIPS, support more than 10,000 company jobs, nearly 20,000 construction jobs, and more than 50,000 indirect jobs with suppliers and supporting industries.
On top of that, demand is steadily increasing. That doesn't sound like problems for Intel. Quite the opposite. Please explain what you mean or I'll delete the comment as inaccurate.
I spent almost 30 years in the photolithography equipment business, so I’m familiar with semiconductor mfg. and lithography aspect of the industry. Intel has two problems: 1. its mfg.forte is its Intel CPU architecture and none else.
Delete2. Intel owns both chip design and fabs; fabless semiconductor powerhouse (e.g. Apple, Nvidia, AMD, etc.) would not release their designs and IPs to Intel.
For Intel to get back in the game,
1. it has to spin-off its fab ( otherwise it won’t get fabless companies’ business).
2. It has to learn how to make different chips (took TSMC several decades to master). Right now, Intel is a one-dish restaurant, whereas TSMC serves all kinds of dishes.
This is all fine, and there’s some good points made about how this isn’t something that is going to be solved overnight, no matter the will. But sure of course added domestic rare earth production would be a great thing. The need was most recently underscored a few years ago when covid snarled global supply chains.
ReplyDeleteThere’s an added complication however that not all rare earths (especially, heavy rare earths) aren’t naturally occurring in the US or, when they are, not in large quantities. We will still need to get them from somewhere. Canada would be an obvious candidate but as pointed out above they’re not exactly ready to pick up the phone.
There are plenty of rare earths in the US. The problem is that they tend to be dispersed and, therefore, it requires very large quantities of raw earth to extract usable amounts of the rare earths.
Delete"covid snarled global supply chains"
DeleteThis should have been a lesson that went soul-deep for the US. We need to greatly strengthen our supply chains for all our raw material and resource needs.