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Guest Post: China’s Rare Earths Monopoly - Peril or Opportunity?

Tyler Durden's picture




 

Submitted By John C.K. Daly of OilPrice.com

China’s Rare Earths Monopoly - Peril or Opportunity?

The prosperity of China’s “authoritarian capitalism” is increasingly rewriting the ground-rules worldwide on the capitalist principles that have dominated the West’s economy for nearly two centuries.

Nowhere is this shadow war more between the two systems more pronounced than in the global arena of production of rare earths elements (RREs), where China currently holds a de facto monopoly, raising concerns from Washington through London to Tokyo about what China might do with its hand across the throat of high-end western technology.

In the capitalist West, as so convincingly dissected by Karl Marx, such a commanding position is a supreme and unique opportunity to squeeze the markets to maximize profits.

Except China apparently has a different agenda, poking yet another hole in Marx’s ironclad dictums about capitalism and monopolies, further refined by Lenin’s screeds after his Bolsheviks inadvertently acceded to power in 1917 in the debacle of Russia’s disastrous involvement in World War One. Far from squeezing its degenerate capitalist customers for maximum profit (and it’s relevant here to call Lenin’s dictum that if you want to hang a capitalist, he’ll sell you the rope to do it), Beijing has apparently adopted a “soft landing” approach on rare earths production, gradually constricting supplies whilst inveigling Western (and particularly Japanese) high tech companies to relocate production lines to China to ensure continued access to the essential commodities.

REEs are found in everyday products, from laptops to iPods to flat screen televisions and hybrid cars, which use more than 20 pounds of REEs per car.  Other RRE uses include phosphors in television displays, PDAs, lasers, green engine technology, fiber optics, magnets, catalytic converters, fluorescent lamps, rechargeable batteries, magnetic refrigeration, wind turbines, and, of most interest to the Pentagon, strategic military weaponry, including cruise missiles.

Technology transfer is the essential overlooked component in China’s economic rise, and Beijing played Western greed on the subject like a Stradivarius, promising future access to China’s massive market in return, an opium dream that rarely occurred for most companies. You want unimpeded access to Chinese RREs? Fine – relocate a portion on your production lines here, or…

Which brings us back to today’s topic.

Rare earths and investment – where to go?

China is riding a profitable wave, which depending on what figures you read, produces 95-97 percent of current global supply, and unprocessed raw earth earths ores are currently going for more than $100,000 a ton, or $50 a pound, which some of the exotica fetching far more (niobium prices has increase an astounding 1,000 percent over the last year). Rare earth elements like dysprosium, terbium and europium come mainly from southern China.

According to a United States Energy Department report, dysprosium, crucial for clean energy products rose to $132 a pound in 2010 from $6.50 a pound in 2003.

The soaring prices however have also invigorated many countries and producers to begin looking in their own back yards, for both new deposits and former mining sites that were shuttered when production cost made them uneconomic before prices went through the ceiling.

However, a number of unknown factors play into developing alternative sources to current Chinese RRE production. These include first prospecting possible sites, secondly, their purity and third, initial production costs, where modest Chinese labor costs are a clear factor.

The 17 RRE elements on the Periodic Table are actually not rare, with the two least abundant of the group 200 times more abundant than gold. They are, however, hard to find in large enough concentrations to support costs of extraction, and are frequently found in conjunction with radioactive thorium, leading to significant waste problems.

At hearings last week before U.S. House of Representatives Committee on Foreign Affairs Subcommittee on Asia and the Pacific, Molycorp, Inc. President and Chief Executive Officer Mark A. Smith stated that his company was positioned to fulfill American rare earth needs, currently estimated at 15,000-18,000 tons per year, by the end of 2012 if it can ramp up production at its Mountain Pass, California facility.

Which brings us back to foreign producers. A year ago Molycorp announced that it was reopening its former RRE mine in Mountain Pass, Calif., which years ago used to be the world’s main mine for rare earth elements, filing with the SEC for an initial public offering to help raise the nearly $500 million needed to reopen and expand the mine. Low prices caused by Chinese competition caused the Mountain Pass mine to be shuttered in 2002.

Mountain Pass was discovered in 1949 by uranium prospectors who noticed radioactivity and its output dominated rare earth element production through the 1980s; Mountain Pass Europium made the world’s first color televisions possible.

Molycorp plans to increase its capacity to mine and refine neodymium for rare earth magnets, which are extremely lightweight and are used in many high-tech applications and intends to resume production of lower-value rare earth elements like cerium, used in industrial processes like polishing glass and water filtration.

In one of those historic economic ironies, China was able to increase its RRE production in the 1980s by initially hiring American advisers who formerly worked at Mountain Pass.
The record-high RRE prices are also underwriting exploration activities worldwide by more than six dozen other companies in the United States, Canada, South Africa, Malaysia and Central Asia to open new RRE mines, but with each start-up typically raising $10 million to $30 million, not all will succeed. That said, the future is bright, as almost two-thirds of the world’s supply of REEs exists outside of China and accordingly, China’s current monopoly of REE production will not last.

So where do investors look to cash in on the RRE boom?

First, do your homework.

Exhibit A is Moylcorp, which would seem to be in unassailable position as regards U.S. production, but which nevertheless on 20 September after JPMorgan Chase & Co. lowered its rating of the company, citing declines in rare-earth prices, causing its stock to plummet 22 percent in New York Stock Exchange composite trading, despite being the best-performing U.S. IPO in 2010 after beginning trading in July, more than tripling after rare-earth prices soared as China cut export quotas.

Is there money to be made in RREs?

Undoubtedly – but the homework for the canny investor needs to extend beyond spreadsheets to geopolitics, mining lore, chemistry and Wall Street puffery. That said, it seems likely that whatever U.S.-based company can cover the Pentagon’s RRE requirements is likely to see more than a minor boost in its bottom line.

Gentlemen, place your bets – but do your homework first.

 

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Thu, 09/29/2011 - 19:33 | 1724202 Rainman
Rainman's picture

Never heard of rare earths until today. Don't know if I should be scared or not.

Thu, 09/29/2011 - 19:40 | 1724217 lolmao500
lolmao500's picture

For real? Damn.

Thu, 09/29/2011 - 20:11 | 1724309 eureka
eureka's picture

Rare Earth Elements - REEs - go into hi-tech batteries and component materials.

With or without REEs - China will tank the US within the next two years.

China doesn't need us - China can decouple - EU is more than twice the US - China will choose EUR and EU markets and rid itself (and the world) of US Empire.

TO WIT - EDUCATE YOURSELF:

http://www.alt-market.com/articles/266-is-china-ready-to-pull-the-plug

Thu, 09/29/2011 - 20:34 | 1724379 Absalon
Absalon's picture

China needs the US a lot more than the US needs to China.

Thu, 09/29/2011 - 20:38 | 1724396 sgt_doom
sgt_doom's picture

You are framing it completely off kilter, Absalon.

China has the monies and investments for this monopoly as the World Bank (thanks to the global banking cartel) finances the building of dams in China, so that China can create REE monopolies and build dams in Africa and Brazil, circumventing environmental and human rights concerns (which might pose a prob to the World Bankster).

And then, there's all that offshored production assets and capital assets from America to China.

Yup, don't wake me up for the next war to destroy the surplus capacity (those activities the banksters always favor), as I will not be concerned......

Thu, 09/29/2011 - 23:00 | 1724689 chindit13
chindit13's picture

I can't quite locate all that money that China supposedly has.  I do see lots of printing, in fact, they could teach Ben a thing or two about printing.

Those "reserves" are just revenues from foreign sales.  China might produce for $100 equivalent and sell to Walmart for $90, gaining $90 of FX reserves but losing $10 overall.  Then the PBoC prints new yuan and trades it to the exporter for the dollar revenue.  Most of those reserves then go back to Timmy.

China has spent a lot of money on empty buildings and empty cities.  The ROI on those cannot be too high.  Time and climate tend to render any structure less useful and less valuable.  In essense, such investments are the equivalent of lighting money on fire, or blasting gold off in a rocket and sending it into space.  Also, if empty structures were such a good thing---other than the GDP boost---then we should applaud the housing industry and Angelo Mozilo for doing so much good work up until 2006.

Adjust China's GDP for real inflation, then net out the debt-driven growth, and what is the real GDP?  Is it still positive?

Fri, 09/30/2011 - 04:16 | 1725010 Element
Element's picture

We aussies fill ships with red and black gravel ... send it in to China  ... and they wire us back some digits and mouse clicks ...

it's a pretty sweet deal ...

for them

Fri, 09/30/2011 - 10:02 | 1725613 gmrpeabody
gmrpeabody's picture

Nice article Tyler, I've made my share of profits from the REE mania. So..., is it REE or RRE.? I was getting a headache with trying to keep up. 

Thu, 09/29/2011 - 21:25 | 1724510 Jumbotron
Jumbotron's picture

Absalon says:   China needs the US a lot more than the US needs to China.

Not for long.

Thu, 09/29/2011 - 22:00 | 1724574 eureka
eureka's picture

ABSALON, viking warrior - copy & paste the link/address I provided  - read the article - ponder the solid arguments made - then tell us what you think.

Thu, 09/29/2011 - 22:35 | 1724642 Absalon
Absalon's picture

You googled Absalon - good for you.  He was a Danish warrior and bishop and really came after the Viking era was over.  He fought pirates and brigands, imposed law and order and founded a city that became known as Merchants Harbor as a result of his success (the name has been shorted and corrupted and as a result we know it in English as Copenhagen).  I use that screen name because I believe in the fundamental importance of the rule of law to a well functioning economy.

 

I have read the article you linked to.  I am still of the view that China needs the US a lot more than the other way around.  My point on that was not limited to rare earth elements.  China buying US treasuries is part of its predatory currency practises and that lending is doing a lot more harm than good in the US.  The best thing that could happen to the US economy would be if China stopped lending money to the US. 

Fri, 09/30/2011 - 02:36 | 1724979 eureka
eureka's picture

I agree it would be great if China stops lending to US - US will have to dismantle its military empire - and that would be great for the US economy.

Fri, 09/30/2011 - 04:29 | 1725013 AnAnonymous
AnAnonymous's picture

You read such things in this US driven world.

How can an extorter depriving oneself from one's tools of extortion be good for the extorter?

The dismantlement of the US military empire is one of the few things that could bring down (understand here: crash, not going down a few points per year) the USD.

Without the US military oppression going around in the world, many commodities providers will be at last free to reject the USD vs commodities deal and wooops, so is gone the world reserve currency status.

Thu, 09/29/2011 - 21:31 | 1724522 Everybodys All ...
Everybodys All American's picture

You my friend are betting on the red Chinese? Good luck with that trade. China has much more fraud that will be exposed. Tank the US. Don't count on it. We have our problems but so does the rest of the world. If not why in the heck is the dollar gaining strength?

Thu, 09/29/2011 - 22:09 | 1724591 eureka
eureka's picture

Because Wall Street pretends that ECB will soon pump up US rigged EU banks.

Thu, 09/29/2011 - 22:41 | 1724654 Absalon
Absalon's picture

China has much more fraud that will be exposed.

 

I agree.  One of the reasons why China has had to rely on exporting manufactured goods is precisely because China is so corrupt.  If you come in as a Taiwanese company, manufacture goods to a Western design put them in a container and ship them to Los Angelos and get paid by letter of credit you:  do not challenge vested interests in China, have minimal need to rely on the Chinese education or legal systems and do not need to worry about merchandising or distribution.  That's why the biggest employer in China after the government is Foxcon.

Fri, 09/30/2011 - 01:28 | 1724903 LikeClockwork
LikeClockwork's picture

What's down with Chinese banks today (specifically)?

0939.HK is down 5% and the other big 4 even more. Tyler?

Fri, 09/30/2011 - 08:59 | 1725403 g speed
g speed's picture

I haven't looked but if I were to guess I'd say that depositors are pulling out to put money in black market lending because of central planned return on savings does not generate enough to stay with inflation. just an old fashion run on china gov't banks--- just a guess.

Fri, 09/30/2011 - 04:31 | 1725014 AnAnonymous
AnAnonymous's picture

We have our problems but so does the rest of the world.

///////////////////////////////////////////////////////////////////////////

The difference is that it is a US world order and that many problems the rest of the world has stems from the US itself.

The reverse is not true. As hard as the US citizens try to propagate it, Zimbabwe is not the root cause of the current world crisis. The US is.

Fri, 09/30/2011 - 11:30 | 1725939 bid the soldier...
bid the soldiers shoot's picture

You said the same thing about Genghis Khan and the Mongolian Horde. You're starting to sound like a broken record.

Thu, 09/29/2011 - 21:44 | 1724543 DormRoom
DormRoom's picture

Companies are innovating their way out of REE dependencies

 

http://www.bloomberg.com/news/2011-09-28/rare-earths-fall-as-toyota-deve...

Thu, 09/29/2011 - 22:06 | 1724588 eureka
eureka's picture

Companies are innovating their way out of paying taxes in the US - and out of manufacturing in the US.

US companies.

Thu, 09/29/2011 - 19:41 | 1724224 Long-John-Silver
Long-John-Silver's picture

You are a rogue agent in the Matrix, what could possibly scare you?

Thu, 09/29/2011 - 19:56 | 1724272 SilverIsKing
SilverIsKing's picture

That rock you've been living under...yup, Cerium.

Thu, 09/29/2011 - 20:23 | 1724349 Silver Bug
Silver Bug's picture

I have been a huge bull for REE's for quite some time, although they like everything else lately have gotten hit hard. REE's more so than some other asset classes. The long term story remains the same here. If you want to make a killing get some good quality REE's into your portfolio.

http://silverliberationarmy.blogspot.com/

Fri, 09/30/2011 - 10:11 | 1725628 gmrpeabody
gmrpeabody's picture

And it's a delicate balance between those with the purist heavies and those that are first to market. Perhaps a balanced blend of the two.

Thu, 09/29/2011 - 21:57 | 1724566 skidrow
Thu, 09/29/2011 - 22:04 | 1724567 Jumbotron
Jumbotron's picture

RAinman says: Never heard of rare earths until today. Don't know if I should be scared or not. 

Do not be scared but be very concerned that quite literally the technology that Arthur C. Clarke states in the third of his laws concerning technology...Any sufficiently advanced technology is indistinguishable from magic...which we all take for granted today is made possible by the Rare Earth elements found mostly in China and in countries such as Africa where China is making huge strides in colonializing for its profit.

What is interesting is the story about Mountain Pass and the discovery of America's motherlode of Rare Earth minierals and elements.  What is not mentioned is a not so rare but still classified as a Rare Earth mineral known as Lanthanum.  I have known about this mineral for years as I use about 8 lenses for my telescope that all have at least one if not two elements made of Lanthanum.  Lanthanum is great for this purpose for it has a very low diffraction rate for light.  In other words, more of the light from a distant star gets through my eyepiece to my retina without loss from diffraction and the color stays more pure for the same reason.  These eyepieces are typically more expensive but are well worth it.

However, you may not know just how important Lanthanum is in fields outside amateur astronomy.  That same low light dispersion and diffraction properties make glass elements infused with Lanthanum great for micoscopes that help scientists see the minute and doctors see things that can hurt or help us biologically.

Lanthanum was used in arc-lights that help light movie sound stages and in the projection lenses at theatres.

Lanthanum is a key element in the production of rechargable batteries.  Go into any Home Depot, Office Depot ( I used to work there and sold these batteries) ect. and you will find Eveready Batteries made of Nickel Metal Hydride.  While not as good as Lithium rechargables, they are cheaper than Lithium and better than Nickel Cadmium because they do not develop as much of a "recharge memory" which shortens their useful life as Ni-Cads do.  Even more interesting is if you drive a Toyota Prius or know someone who does, they are literally sitting on top of a bank of Nickel Metal Hydride batteries....thanks to the rare-earth mineral Lanthanum.

But wait....there's more. 

Want to study gamma rays or neutrons....you need Lanthanum. 

Like those fancy arc-wielders that help us wield together bridges, buildings, cars, everything?  Lanthanum tip ignition elements get the show going. 

Speaking of working with metal...want to make steel more malleable but retain its stength....sprinkle in a little Lanthanum.

Suffering from renal failure....Lanthanum can help flush out harmful phospates from your system so you can quite literally live another day.

You want to see something on the electron level or smaller....you need Lanthanum to build a tunneling electron microscope.

There are many more things this miracle element can do and we had the motherlode of it at Mountain Pass until we mined it out and shut it down.  Now....where can you find the majority of this miracle element Lantanum?

Africa.....and you guessed it....China.

We not only will NEVER AGAIN be the masters of our own destiny due to PEAK OIL....WE DOUBLY WILL NEVER AGAIN BE THE MASTERS OF OUR OWN DESTINY DUE TO PEAK RARE EARTH MINERALS.

For in order for the "magic" to continue to flow we must now turn our eyes to Mount Doom, which resides not in Mordor...but in China.

Thu, 09/29/2011 - 23:04 | 1724696 WonderDawg
WonderDawg's picture

Eloquent. Poetic. Thanks for teaching me something today.

Fri, 09/30/2011 - 00:39 | 1724840 Dr. Eldon Tyrell
Dr. Eldon Tyrell's picture

Small correction.  The rare earths are elements on the periodic chart.  Not minerals.  :)

Fri, 09/30/2011 - 00:58 | 1724867 bid the soldier...
bid the soldiers shoot's picture

"I will take the ring," said Jumbotron, "though I do not know the way."

Fri, 09/30/2011 - 01:43 | 1724927 LikeClockwork
LikeClockwork's picture

China courtesy of Baotou Steel Group has a motherlode of REE but there is a race on to develop other deposits, its more about getting environmental permits. How this coulumnist deduces that manufacturing will be herded into China for REE products is unsubstantiated horseshit. What durable goods company chooses to place macine orders outside of China. Most of anything I own is made in China. Therefore John Daly's prophecy must have already come true. What an asshat.

 

 

Some comparison data:

https://sites.google.com/site/4lynasheads/

Fri, 09/30/2011 - 07:45 | 1725200 Dismal Scientist
Dismal Scientist's picture

Then pay attention. Has been a topic here for well over a year.

Thu, 09/29/2011 - 19:47 | 1724233 Racer
Racer's picture

Sun Tzu

Bankrupt USA

GOTCHA

Thu, 09/29/2011 - 22:49 | 1724663 tmosley
tmosley's picture

Taking whole, bitchez.

Thu, 09/29/2011 - 19:51 | 1724257 caerus
caerus's picture

REEs are found in lots of superfluous products!

Thu, 09/29/2011 - 21:09 | 1724479 ali-ali-al-qomfri
ali-ali-al-qomfri's picture

hardly superfluous.

http://www.windbluepower.com/Lite_Breeze_Low_Wind_Generator_Kit_p/cy-low...

as the winds of change sweep across the plains, why not pull some ac out.

 

Thu, 09/29/2011 - 21:17 | 1724493 caerus
caerus's picture

yeah but can you eat it?

Thu, 09/29/2011 - 21:21 | 1724501 BigDuke6
BigDuke6's picture

r u st$ned again boy?

i'll b joining u soon....

Thu, 09/29/2011 - 23:07 | 1724699 WonderDawg
WonderDawg's picture

Check.

Thu, 09/29/2011 - 22:06 | 1724586 Jumbotron
Jumbotron's picture

caeris says.....REEs are found in lots of superfluous products!

AAHhhhhh....dude....you may want to read my post above you.....

Jumbo

Thu, 09/29/2011 - 19:53 | 1724261 Absalon
Absalon's picture

The choke point in REE production seems to be refining capacity, not mining capacity.

 

It is apparently very dirty - lots of nasty chemicals and frequently radioactive by products.  Low environmental standards was China's true advantage.

 

Thorium might have some commercial value if countries start using it as an alternative in nuclear power plants. 

 

It seems to be of considerable urgency that the West bring refining capacity on stream.   An Australian mining company, Lynas,  is building a refinery in Malaysia.  If I were looking to invest I would look at who is going to be first to have refining capacity. 

http://www.nytimes.com/2011/03/09/business/energy-environment/09rare.htm...

 

Thu, 09/29/2011 - 20:52 | 1724430 Prometheus418
Prometheus418's picture

Good point.

It's my understanding that Rockefeller didn't make his money wildcatting- he made it in refineries, and then multiplied it when the government broke up Standard Oil (The parts were evidently worth more than the whole.)

Worth looking into, to be sure.

Thu, 09/29/2011 - 21:02 | 1724458 Schmuck Raker
Schmuck Raker's picture

I recently became aware of the possible use of Thorium as a safer(?) fuel for reactors. I hope the potential is real, not just another alt-energy red herring. I suspect there would be more chatter about Japan, Germany and others looking into this if Thorium was that attractive. But, we can hope.

Re your earlier comment on China decoupling: No. Way.

Ever seen two dogs stuck together?

Thu, 09/29/2011 - 23:13 | 1724713 WonderDawg
WonderDawg's picture

Thorium nuclear technology has been around since the 1960's. The program at Oak Ridge was defunded in the '70's. There's been some speculation as to why it was defunded, with regard to the anti-nuclear movement. It's probably the best candidate for a sustainable source of energy on a mass scale, yet for some reason it can't get any traction. I'd be interested to know why.

Thu, 09/29/2011 - 23:46 | 1724766 jonjon831983
jonjon831983's picture

They say conventional nuke plants were promoted because military needed the by-products... ie Plutonium to make the nukes that help us sleep at night. :) Join the partay

Fri, 09/30/2011 - 05:45 | 1725049 fredquimby
fredquimby's picture

I have had Lynas for a while. It popped up 35% over tuesday night after a week or two of 1% declines.

Fri, 09/30/2011 - 10:19 | 1725661 gmrpeabody
gmrpeabody's picture

I keep getting this creepy feeling that China has that Malaysia threat well in hand.

Thu, 09/29/2011 - 19:53 | 1724264 LetThemEatRand
LetThemEatRand's picture

REE's and PM's are a big part of the reason we're in Afghanistan.  http://www.scientificamerican.com/article.cfm?id=afghanistan-holds-enorm....   I'm sure that some well connected crony capitalist companies in the US and Europe will not receive profitable mining rights...

Thu, 09/29/2011 - 20:09 | 1724304 caerus
caerus's picture

agreed...i'd rather take the gold, copper, and iron though... mineral riches in afghanistan

Thu, 09/29/2011 - 20:56 | 1724444 Prometheus418
Prometheus418's picture

Gold and copper, yes.  Iron, not so much.  Could be a function of geography, though- where I'm at, if you drop a magnet in the dirt, it comes up covered in tachinite.

No shortage of iron anywhere, though.  At $.60 a pound for scrap (on a good day,) and considering that your municipality will sieze your property if you store the stuff in your yard, it's not really worth the effort unless you're a steel tycoon.

Thu, 09/29/2011 - 23:31 | 1724739 mjk0259
mjk0259's picture

Wow, you assume the US ruling class would embark on a military venture to get some benefit for the average US citizen? If that's the case, why didn't we keep Kuwait? The majority of the population was pseudo-slaves that would have welcomed it and most of the rest had already run away. The initial dispersal of the Taliban in Afghanistan was great but we have spent far more money on that venture then it would cost to just open rare earth and pm mines in the US and we could have done in the same in Afghanistan even under the Taliban for bribes in the tens of millions instead of hundreds of billions.

 

Fri, 09/30/2011 - 04:51 | 1725020 AnAnonymous
AnAnonymous's picture

If that's the case, why didn't we keep Kuwait? The majority of the population was pseudo-slaves that would have welcomed it and most of the rest had already run away.

//////////////////////////////////////////////////////////////////////

What does it mean? What does keep Kuwait mean?

What matters for the US is that the resources of a country does not go to a country (including the country owning the resources) without the US consent and US involvement.

What matters is that resource extracting countries that put their resource extraction on the world market due to free market mechanism have to buy it back using USD.

It is what matters to the US.

Afghanistan is not different. And they will be kept under US dominion until they grow useless, meaning depleted of the resources that could have served to empower a rival to the US world order hegemon, that is the US.

Fri, 09/30/2011 - 06:49 | 1725122 LetThemEatRand
LetThemEatRand's picture

You misunderstand my point.   The American people get no benefit.  Multi-national corporations and the military industrial complex get all the spoils.   The fact that taxpayers lose more than the spoils, doesn't matter.  Same thing with Iraq.  The oil majors are making huge profits already there.

Thu, 09/29/2011 - 19:54 | 1724266 digalert
digalert's picture

Lynas aka LYSCF

Thu, 09/29/2011 - 20:11 | 1724275 Pancho Villa
Pancho Villa's picture

China's ban on REE exports may lose its effect once REE production outside of China picks up.

And if China then decides to lift its export ban, many or all of these new companies might go broke.

If you play this game, don't be too greedy.

Thu, 09/29/2011 - 20:00 | 1724281 rocker
rocker's picture

They are blowing up everything because of the up coming Greatest Depression.

  We are  "Worse than Japan Now"  

Fear Not because Lord Blankfein will save us.  Why?  As said on ZH:   Goldman Sachs Rules the World.   

We are so................ 

Thu, 09/29/2011 - 20:02 | 1724287 dick cheneys ghost
dick cheneys ghost's picture

These commie's are holding the world hostage with all their rules about doing business with them in china........is it because they have no ideas and no brands? 

Thu, 09/29/2011 - 23:34 | 1724744 mjk0259
mjk0259's picture

Confuseus say we don't need brands. After your greedy ruling class outsource manufacturing to us and show us how to do everything for short term pop in stock options to enrich ruling class, we take over market and buy your brand for chump change. Ah so.

Fri, 09/30/2011 - 05:06 | 1725026 AnAnonymous
AnAnonymous's picture

After your greedy ruling class outsource manufacturing to us

/////////////////////////////////////////////////////////////////////////

Greed can be seen as a root cause to outsourcing.

But more generally, that is Smithian economics that lead to outsourcing.

Smithian economics push for concentration of wealth taken from an exterior to an interior.

By concentrating wealth on a zone, the natural consequence is that all human beings whose activity is is not enough rewarded to afford people living off that activity to stay within the zone are expelled from the zone.

It is quite easy to picture: one takes one area.

The area is divided into two zones, A and B. All wealth from B is transfered to A. This simple move has two consequences: the cost of living on A increases while the cost of living on B decreases.

It grows worse when the wealth transfered from B to A is used to accomodate A environment to be more human life friendly. Not only A grows better than B in relative terms, but it also grows better in absolute terms as often, transformation of the environment involves irreversible processes.

It grows better and better to live on A while it grows worse and worse to live on B. Of course, all this has a cost and anyone whose activity is not valued enough is bound to be expelled from A to live on B if anyone is not able to change activity and get one valued enough to allow living on A.

Outsourcing has nothing to do with a ruling class outsourcing activity. The US ruling class simply follows a trend pushed by Smithian economics.

In the US, most US citizens would consider a house cleaner claiming that he must be allowed to live on Park Avenue because he is employed there. US citizens would laugh at that. And here, we are talking about activity (house cleaning) that is bound to the location it is set.

Not the case for many other activities whose site can be displaced.

The whole US landscape has been shaped by Smithian economics. The only oddity is that US citizens who have supported Smithian economics heartfully want the trend to stop at the US borders. Never got one US citizen to explain this.

Thu, 09/29/2011 - 20:04 | 1724290 fyrebird
fyrebird's picture

Wait. China has something we need?

We have armies for shit like this. Someone notify the Pentagon.

Thu, 09/29/2011 - 20:46 | 1724320 Zero Govt
Zero Govt's picture

The Enviros champion, the Toyota Prius, has come a cropper using the rarest minerals on Earth. Oh the irony!

Unless of course the Hybrid car is a Toyota marketing fraud. You know, selling a tedious dull fridge on wheels as a sexed up way to save the planet. Its sacks of flab (batteries) are mined in Cananda, the area so polluted for miles around all plant and animal life is extinguished and NASA use it as a barren landscape for trialing moon buggies. The battery is shipped on to Europe, then to China and then Japan (so much for eco-tourism)

That's ignoring this overweight, dullard zombie on wheels is heavier than your average sporty petrol or not even close to being as economical as a diesel engined car. The Prius is heavier, more complex (running 2 power systems) and expensive to manufacture, the battery runs off the petrol engine anyway and if you top up from the mains it runs off coal (the Prius simply can't get enough hydrocarbon fixes).

The Toyota Prius is 'saving the planet' by consuming more rare Earths and costing the Earth in extra complexity and expense and consumes MORE hydrocarbons than hydrocarbon cars like diesels!!! ...ask Toyota for their commitment to saving the planet when they still have a vast array of giant mud-plugging 4x4's in the range?

The Prius driver is an absolute twat, of all motorists on the road he's without question No.1 for 'being taken for a ride'

Thu, 09/29/2011 - 23:38 | 1724754 mjk0259
mjk0259's picture

Canada is pretty big and mostly an empty frozen wasteland where early explorers starved to death while being eaten by bugs. You couldn't do much environmental damage to most of it no matter how much you tried. It's hard to believe a RE mine would do more environmental damage than tar sands oil extraction since the latter  is in much greater volume per car.

 

All cars are complex nowadays. You literally need a computer to figure out what is wrong with any of them.

Fri, 09/30/2011 - 01:37 | 1724909 Zero Govt
Zero Govt's picture

"Enviromental damage" is another loony socialist eco-fraud waste product from these worthless shrill morons ...you ought to see how much damage the enviroment does to the enviroment! ...or count up how many billions of tons of waste products plants and animals leave lying about every year ..and one hurricane, tornado, tsunami or volcano can certainly create a nice blast of enviro-on-enviro damage ..if only one of these natural eco-disasters would wipe out the entire global green community at a conference the irony would be truly stupendous and most welcome 

Fri, 09/30/2011 - 05:13 | 1725032 AnAnonymous
AnAnonymous's picture

"Enviromental damage" is another loony socialist eco-fraud waste product from these worthless shrill morons ...

;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;

Typical US citizenism: statement of a fact derives not from the fact but from one belonging to a certain group. Eliminate the group and you eliminate the fact (when indeed, one can only hope to eliminate the statement of it)

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
you ought to see how much damage the enviroment does to the enviroment!

////////////////////////////////////////////////////////////////////////

I'd love to see something like that.

Alas, some basic straightforward observations show that:

-nature 'has' done a good job at conserving itself.
-some human beings have done an acceptable job.
-others not so much.

But hey, US citizens are US citizens first and all, their armies are all around the world, patrolling and invading countries to assert control over ressources. Denial being denial and US citizens breathing denial, well, this little current situation does not force them to admit that resources matter...

Fri, 09/30/2011 - 00:45 | 1724852 leftcoastfool
leftcoastfool's picture

Nice hyperbole, but I've been getting a solid 45 mpg for the last six years from my "dull fridge on wheels".  You must live in Europe if you have access to the high mileage diesels you mention...

Fri, 09/30/2011 - 01:46 | 1724897 Zero Govt
Zero Govt's picture

No "hyperbole" mate, all facts... you ought to check them out sometime instead of swallowing eco-garbage like a sup. The Toyota Prius PR campaign is a sucker punch for the pius who don't mind driving around in a pretence.. pretentious eco-snobbery for little Emporers wearing no clothes

I get 34mpg from my BMW 335 diesel (the 3-Series is the most reliable car on the planet too, Toyotas reliability/reputation has been falling to bits for years)...try 28-30mpg at 100-130mph cruising down a motorway.. your Prius would take 2 years to get there and be screaming its batteries off pulling 12mpg.. it's one sad excuse, or eco-fraud, of a fat, lathargic, wheezing fridge... I'm happy you Pius drivers are not feeling taken for a ride (fool), ignorance is bliss isn't it?

Next time buy a proper car

Fri, 09/30/2011 - 06:23 | 1725086 fredquimby
fredquimby's picture

Apart from Pruises perhaps destroying parts of Canada (That's the canadians perogative until enviro-crimes are brought in!) ........The Prius makes no noise when in electro mode and emits no fumes or pollution when it is standing in traffic outside my window, or when parking in my underground garage. It also runs at 3L per 100 km average (a BMW 335 Diesel is 6.53L per 100km) , it uses cheaper, smaller tires than most cars and all SUVs, is fun when on the motorway when truck surfing and trying to keep consumption to a minumum and sometimes even have the main engine cut out and go onto zero consumption using electro mode when doing 70mph cruising (yes that is fun!).

It also attracts a 1/4 of the annual Govt. road tax and no registration tax, pays nothing in the congestion charging zone in London ($10 a day), has free parking in many places and will soon be able to be plugged in to take advantage of less dirty centrally made power (if you live in a developed country where coal-fired stations are on the way out).

Also, The Prius (3042lbs) is lighter than a 3 series BMW (3825lbs) an Audi A3 (3219lbs).

P.S just saw above replies....haha you are a Beamer driver!! No wonder you are such a....

 

 

Fri, 09/30/2011 - 07:31 | 1725178 Taint Boil
Taint Boil's picture

 

 

There is a link Here under energy that compares the Hummer to a hybrid.

Hummer $2.07 per mile

Prius $2.87 per mile

Most (99% ??) don't understand the basic laws of physics, and never will.

Thu, 09/29/2011 - 20:16 | 1724322 whatswhat1@yahoo.com
whatswhat1@yahoo.com's picture

Nothing happening with RE's until the economic problems are cured.  Sooooooooo, place you bet and get in bed with Rip Van Winkle for 20 years.

Thu, 09/29/2011 - 20:41 | 1724323 fyrebird
fyrebird's picture

Oh and BTW, rare earths are not actually all that rare as a component of the Earth's crust. They are just hard to separate into distinct elements. When you get a "rare earth" you get most of the Lanthanide series of light metals and the total mix is of limited value. However each one alone has special properties (except a few which remain junk) and if you can pull them apart you can get at those properties. For a long time they were nearly impossible to isolate (making them ... rare) but that all changed a while back. Now you can isolate the things in fair purity by the metric ass load.

A few RE are extremely good for making magnets, or as doping for strong magnet alloys. The technology industries love them. A few others are used in the lighting industry because they confer valuable colors from their emission spectrum.

Like any other metal, whoever has the purest deposits has the goods. But I'll tell you what's really happening here: America and the West gave up on mining and manufacturing, all that is now done in China, and they can jack us around all they want because we let them. The few hi-tech things we still make use rare earths, particularly in magnets and high-speed networking, so China can jack us around, destroy our remaining technical industries, and skate away with another industrial sector. We are that much less and they are that much more. Well well.

Could change all that. But we won't. The shareholders won't stand for it. Heh heh ... go ahead and die fuckers.

Thu, 09/29/2011 - 20:17 | 1724324 whatswhat1@yahoo.com
whatswhat1@yahoo.com's picture

Nothing happening with RE's until the economic problems are cured.  Sooooooooo, place you bet and get in bed with Rip Van Winkle for 20 years.

Thu, 09/29/2011 - 20:20 | 1724335 caerus
Thu, 09/29/2011 - 20:19 | 1724327 disabledvet
disabledvet's picture

molycorp will find a bottom (and it will be well above zero in my view.) simply put the folks making your i-phone are not going to be dictated to by a bunch of clowns in Beijing insofar as the production of their phone is concerned. In short they'll invest in moly-corp themselves not out of fear of a loss of supply but just the need for consisent pricing in said commodities which the Chinese first by constricting supply and now by apparently flooding the market are simply not allowing.
http://www.youtube.com/watch?v=sBksHaTQCbU&feature=player_detailpage

Thu, 09/29/2011 - 21:31 | 1724521 Solid
Solid's picture

The iPhone is made in China

Thu, 09/29/2011 - 20:23 | 1724348 malek
malek's picture

This is the umpteenth time I read the claim "hybrid cars, which use more than 20 pounds of REEs per car" again.

Unless you count Lithium to be a REE which would be wrong, how can a Prius or other hybrid contain 20 pounds of REE?
Can someone provide a link to a serious source of information on that.

Thu, 09/29/2011 - 20:38 | 1724397 fyrebird
fyrebird's picture

It's nonsense. People are thinking that any metal not a PM or iron is a RE. Horseshit. REs are the Lanthanide series, are found all over the place, and are only called "rare" because it was (at one time) hard to isolate them each from the other.

China is making them by the cargo container because they make every fucking thing already.

We gave away our industrial base for an extra round of corporate bonuses, AND people are stupid as a sack of hammers. Might as well bring the bear cavalry cuz we're tooled now.

Thu, 09/29/2011 - 21:05 | 1724469 Dr. Eldon Tyrell
Dr. Eldon Tyrell's picture

 

They are not rare BUT they are difficult to find in economically viable concentrations.

China has one of the largest economically viable mines. 

http://en.wikipedia.org/wiki/Bayan_Obo_Mining_District

Mountain Pass was number one before China took over in the 80's.

There is some speculation when China tried to buy Unocal back in 2005 it was really to get at Molycorp which was owned by Unocal.

"In 1977, Unocal acquired The Molybdenum Corporation of America (now Molycorp).[7] Among the assets acquired was Mountain Pass rare earth mine, a then world's largest producer of rare earth elements."

"In March 2005, the Chinese National Offshore Oil Corporation (CNOOC) tried to acquire Unocal with a bid that valued Unocal at between $16 billion and $18 billion. Following a vote in the United States House of Representatives, the bid was referred to President George W. Bush, on the grounds that its implications for national security needed to be reviewed.[8] CNOOC withdrew its bid. Soon after, Unocal merged with Chevron"

 

http://en.wikipedia.org/wiki/Unocal_Corporation

 

Connect the dots...

Thu, 09/29/2011 - 20:55 | 1724440 Dr. Eldon Tyrell
Dr. Eldon Tyrell's picture

The batteries are made of Lanthanum which IS a rare earth element.

Have you heard the term Nickel Metal Hydride battery?...The metal is Lanthanum.

The sources are all over the net for this claim.

 

"Each electric Prius motor requires 1 kilogram (2.2 lb) of neodymium, and each battery uses 10 to 15 kg (22-33 lb) of lanthanum."

http://www.reuters.com/article/2009/08/31/us-mining-toyota-idUSTRE57U02B...

Thu, 09/29/2011 - 20:36 | 1724382 stacking12321
stacking12321's picture

"China’s Rare Earths Monopoly - Peril or Opportunity"

the chinese character for "crisis" is the same character used for "opportunity"

no, really, it's true, i read about it on the interwebs.

 

and the chinese have not cornered the market on dystopium.

usa is rapidly ramping up production

Thu, 09/29/2011 - 20:38 | 1724388 hivekiller
hivekiller's picture

Rare earth minerals are not really rare. They are found everywhere but are found in concentrated deposits in China. One reason we're in Afghanistan is to corral these elements. However there was recent new report that large deposits of rare earths were found by the Japanese in the Pacific Ocean. http://www.bbc.co.uk/news/world-asia-pacific-14009910

Thu, 09/29/2011 - 20:38 | 1724390 buzzsaw99
buzzsaw99's picture

the usa has rare earths in the ground but china doesn't have any environmental standards, labor standards, or anything else to get in the way. I would pay extra for them to keep trashing their landscape instead of ours.

Thu, 09/29/2011 - 20:44 | 1724413 fyrebird
fyrebird's picture

But you won't pay extra for the level of regulation and oversight needed to do the same job without borking the planet and killing thousands of miners. Nice.

Thu, 09/29/2011 - 20:52 | 1724428 buzzsaw99
buzzsaw99's picture

nihilist-nimby, that's me. ;)

 

actually I am more of a Luddite but nobody wants to hear that sermon.

Thu, 09/29/2011 - 22:00 | 1724572 Hurdy Gurdy Man
Hurdy Gurdy Man's picture

Kevorkonium, bitchez!

Thu, 09/29/2011 - 22:00 | 1724573 Hurdy Gurdy Man
Hurdy Gurdy Man's picture

Kevorkonium, bitchez!

Thu, 09/29/2011 - 23:44 | 1724762 mjk0259
mjk0259's picture

What percentage of the US landscape would be trashed by re-opening one mine?  Zero - it's already a big whole in the ground with piles of dirt and rocks around it. That's an open pit mine - very few casualties in such a mine. Maybe in the long run, there's a few more cancer deaths from waste products leaking out into water supplies but that will happen anyway after the end products go to landfills.

Thu, 09/29/2011 - 20:42 | 1724408 Count Laszlo
Count Laszlo's picture

Two words:

Demand Destruction

Move along.

Thu, 09/29/2011 - 20:46 | 1724417 PulauHantu29
PulauHantu29's picture

Hypnosium is in abundance in DC...can we export that?

Thu, 09/29/2011 - 21:55 | 1724564 buzzsaw99
buzzsaw99's picture

hypnosium, and its derivative alloy hopium-unobtainium

Thu, 09/29/2011 - 20:55 | 1724439 Sokhmate
Sokhmate's picture

For the benefit of those unfamiliar, REE are elements that have high impact on society, such as Govermentium, Hopium, Balonyium, Tarpium, Talfium, Moneyprintium, Bozonium, Fastfudium, Teeveeium, Boobtubium, Helocium, Solyndrium, and about 1000 more. Some elements are virtual. They collectively fall under two categories; the Absurdides (from Absurdium) and the Gullibilliumides (from Gullibillium)

Thu, 09/29/2011 - 21:12 | 1724487 Mike2756
Mike2756's picture

Does fcx and mcp have a piece of this? lol.

Thu, 09/29/2011 - 21:22 | 1724504 caerus
caerus's picture

balonyium is my favorite, wait...boobtubium

Thu, 09/29/2011 - 22:07 | 1724590 MK ultra
MK ultra's picture

Oh, so everyone's a fucking geologist now.

 

 

Fri, 09/30/2011 - 02:20 | 1724964 JB
JB's picture

LMAO!

Fri, 09/30/2011 - 11:10 | 1725845 bid the soldier...
bid the soldiers shoot's picture

Sarcasium

(the one REE that rules them all)

Thu, 09/29/2011 - 22:12 | 1724597 Jumbotron
Jumbotron's picture

Sokhmate says....For the benefit of those unfamiliar, REE are elements that have high impact on society, such as Govermentium, Hopium, Balonyium, Tarpium, Talfium, Moneyprintium, Bozonium, Fastfudium, Teeveeium, Boobtubium, Helocium, Solyndrium, and about 1000 more. Some elements are virtual. They collectively fall under two categories; the Absurdides (from Absurdium) and the Gullibilliumides (from Gullibillium)

 

Now that's some funny shit right there !!!

Fri, 09/30/2011 - 15:45 | 1727153 Chuck Walla
Chuck Walla's picture

I think these are in the same category as the "Noble Asses".

Thu, 09/29/2011 - 21:16 | 1724490 BigDuke6
BigDuke6's picture

hmmm, a good spot that article.

rare earths aren't so rare, i bought in dec 2009 and the stock (GGG.ax)  doubled , i held on for CGT purposes and its now back to even money. Fuckbollocks.

the word is you should concentrate on stocks who are close to production because with all the other big deposits coming on line prices will fall.

also heavy rare earths are more in demand than light rare earths.

GGG has a massive deposit in greenland of heavy rare earths and uranium but its slow progress with those hillbillies worrying about their pristine wilderness.

Thu, 09/29/2011 - 21:20 | 1724499 Mike2756
Mike2756's picture

mcp looks like it'd be a decent trade in the mid to lower 20's.

Thu, 09/29/2011 - 21:14 | 1724489 onearmedlove
onearmedlove's picture

You want unimpeded access to Chinese RREs? Fine – relocate a portion on your production lines here, or… 

 

Cede us California. We have the people. You have the land. 

 


 


Thu, 09/29/2011 - 21:22 | 1724503 Westcoastliberal
Westcoastliberal's picture

Rare Earth "Get Ready" 1970

http://en.wikipedia.org/wiki/Rare_Earth_%28band%29

 

Bought back into MCP last week on the dip.

Thu, 09/29/2011 - 21:59 | 1724569 skidrow
Thu, 09/29/2011 - 22:11 | 1724595 Stuck on Zero
Stuck on Zero's picture

The U.S. response to China should be to declare that we will not export raw food products like meat, rice, or soybeans.  If China wants the food they will have to set up the food plants here and then export fortune cookies, Peking Duck, and soy sauce to China.  The only way to deal with mercantilists is tit-for-tat.  This was proven many years ago in computer models.

Thu, 09/29/2011 - 22:14 | 1724601 frank888
frank888's picture

We got also an excellent article on this matter from Bloomberg...

Conclusions NOT SAME !!

 

30092011 Rare Earths Fall as Toyota Develops Alternatives


Prices for cerium and lanthanum, the most abundant rare- earth elements, will drop by 50 percent in 12 months, Christopher Ecclestone, an analyst at Hallgarten & Co. in New York, has forecast. Neodymium and praseodymium, metals used in permanent rare-earth magnets, may fall as much as 15 percent, he said.

Fri, 09/30/2011 - 00:13 | 1724791 jonjon831983
jonjon831983's picture

Back in the starts of the REE bubble I read as much non-technical news about em as I could.  (based on news I was reading it seemed way hyped) 

Definitely not rare, but as some have mentioned there are few economical concentrations.  Hell, a couple months ago Japan declared they discovered large deposits on the ocean floor (just would be expensive to harvest)

USA has REEs (someone referenced MolyCorp), but back in 80's China had been dumping REEs into world economy, which crashed prices and forced foreign operations into non-competitive situation - hence shutting down mines/production.

The problem has been a bottleneck in the refining REEs as it can be quite dirty.  One example is a shutdown REE processing plant in Malaysia.  Some foreign firm wanted to re-open the plant, but it met with major domestic opposition because the REEs they were refining left radioactive by-products.

I commented this on ZH before - The BEST (depending on timelines / situational) thing to happen is if China reduces exports and prices spike up because A) It will force exploration and development of mines and B) force other countries to start producing/refining their own hence effectively diversifying the supply.  However, here is a point C) in favour of China. It is good because the reductions apparently are an effort by the Chinese government to consolidate the industry (just like those backyard iron companies we heard about during the Iron Ore boom) and to apply greater environmental standards.

The only company I cautiously bought into was a Canadian company called AVL (Avalon REE's) - Last I heard of them they were going to try building a refinery up in NorthWest Canada where they operate (apparently, far from infrastructure).  Not endorsing, I just happened to see it on the MSM enough times to buy into it in hopes of a medium term trade.  Anyways, I held for approx 1 year and sold it for a small 10%-ish profit, but not too long after selling it doubled.  As of now it has crashed back down to my original buy price.

Maybe with the recent price crashes these sorts of stocks are more favourable, but many are in development stages with the usual problems of junior miners.

Anyways, just my take on this - good luck.  Dunno if I will get back into it any time soon as these speculative plays seem to not be my cup of tea.

Fri, 09/30/2011 - 01:32 | 1724910 Yen Cross
Yen Cross's picture

 Rare Earths, are great when they are in demand. Not so much when " Gorilla Glass" is pase'...

Fri, 09/30/2011 - 03:35 | 1724996 Hobbleknee
Hobbleknee's picture

What's stopping the US from mining rare earth elements?

Fri, 09/30/2011 - 09:43 | 1725563 Stuck on Zero
Stuck on Zero's picture

What's stopping the US from mining rare earth elements?  Answer:  Armies of bureaucrats, environmentalists, lawyers, politicians, banks, and hordes of bloodsucking do-gooders.

Fri, 09/30/2011 - 04:04 | 1725006 Element
Element's picture

This will be temporary, Australia and the US each have more than enough REs to cause China to play nice.

Start playing geopolitics with commodities and it is Beijing that loses. They are in a very vulnerable strategic position ... and I'm sure they know it ... they just hope the rest of the world don't realise it too.

Beijing tried to play geopolitic bluff with iron ore prices in 2009, as well ... and they got their arses and wallets slapped several shades of purple ever since.

They need to be careful stirring up the shite in resources, because they don't have all (or even most) of what they need.

The Anglophiles do however have it all ... in bulk.

 

 

Fri, 09/30/2011 - 06:07 | 1725070 mogul rider
mogul rider's picture

Oh great, here somes the next pump.

 

You know - It is amusing that as soon as one "safe haven" gets obliterated another myth is formed as the next great investment. The ability of the stupids to get screwed is truly sad to watch.

Avalon, Great Western et al. Have all done the circuit pumping this crap.

Do an analysis of the total market for these materials and you will see something interesting. At a conference a year ago, Rick Rule said that scamium, sleazium, and robium, were the future and to be careful of the pump.

I see it has arrived. Dude quit talking the book and sell your losses. Toyota just announced they are decreasing REE's in their manufacturing processes and the other big 5 have done so also.

In one moment China will drop their price and wipe all of the explorers, producers, etc out in a second and you - the sad sack investor - will be out another 80%.

Be careful of the hucksters - You just saw what happened to your bullet proof Silver.

 

 

Fri, 09/30/2011 - 06:44 | 1725111 Iriestx
Iriestx's picture

Oil refineries quite literally use HUNDREDS of tons of rare earth elements  every day to make catalyst for their catalytic cracker units to make their refined products.  Gasoline production is hands down the largest consumer of rare earth metals.  Don't forget them.  It's fun to talk about ipads and fancy electronics, but without hundreds of tons of rare earth catalyst every single day, you won't have any fuel for your automobile or heating oil for your home this winter.

 

As if things were bad enough in the industry with razor thin margins thanks to competing with unregulated mega-refineries in India and China, all the while being crushed by our own dick-suck EPA.  Now for America facilities, the price of these emements for catalyst have literally made margins disappear.

Fri, 09/30/2011 - 07:30 | 1725177 MOAB
MOAB's picture

Careful of Lynas Corp (LYC). they were touted a little while ago, until people got wind of the CEO's plan to "side-pocket" one of the ore bodies. On top of that there is a stink brewing over the ore separation plant in Malaysia. The locals had a japanese company dump toxic tailings, so theyre "once-bitten".

Fri, 09/30/2011 - 07:38 | 1725184 gmak
gmak's picture

A couple of points:

  1. When prices go up in a commodity, expoloration increases, undeveloped mines become viable. Afghanistan is a case in point.
  2. Substitutes become affordable. The big users (electric cars ,wind turbines, oil refining catallysts) are likely looking for alternatives ever since China flexed its rare earth muscles. I would suggest that it is now economically feasible to engineer rare earths out of their technology (used primarily in permanent magnets) - especially cerium and lanthanum, followed by neodymium and praseodymium (these last two are the ones used in magnets).

In the interim, it is a speculative trade - like any other commodity. Perception of pending shortages / oversupply will drive short-term prices.

Fri, 09/30/2011 - 08:27 | 1725311 entropos
entropos's picture

Guys, guys...
...it's ok. I found moar rare earths not in China.

We're all saved now!

http://www.scientificamerican.com/article.cfm?id=afghanistan-holds-enormous-bounty-of-rare-earths 

 

goddamit. 

Fri, 09/30/2011 - 09:04 | 1725414 Sathington Willougby
Sathington Willougby's picture

 

A commodity is nothing we can't get by pointing guns at someone.  I'm tired of hearing candidates like Ron Paul.  We need to look at someone like Romney or Perry, they have good ideas on double taxation through applying coercive force to ensure business plans.  Or Cain who has some pretty good ideas about inflating the currency with a central bank.  Why don't I get to hear more about the globalist approach?  Heck even Huntsman knows about how to better get China to buy some more of our debt.  Our energy independence strategy just needs the right touch from the GOP to be working fine.  No I'm not talking crazy about shutting down govt like Paul and the liberaltarians.  That's kooky.  They live in a dream world where people have rights.  It would work just fine if "our guys" were doing it not "their guys".  

When can we get a candidate that is ready to sacrifice a few personal and economic liberties and maybe the lives of a few third worlders (divide the cost of life by the socio-economic status of the nation, American is 1, Iraqi 0.3 etc) so our foreign policies can be more effective at securing the business plans of our corporations here in the homeland?

 

 

 

http://www.youtube.com/watch?v=dYZtAVMR-B4

 

Oh, I forgot to add: FUCK YOU NATIONAL REVIEW, GOP AND THE CORPORO-BANKER ESTABLISHMENT

Fri, 09/30/2011 - 15:43 | 1727142 Chuck Walla
Chuck Walla's picture

The "Bolsheviks" didn't do anything inadvertently.  While the revolutionary Duma debated theory, they took up their guns and stole the power of the State with the threat of violence.  Amazing what you can steal with just the threat of violence. (See the IRS and US Congress).

Wed, 06/20/2012 - 14:13 | 2544392 LMLP
LMLP's picture

Time to Look at REE's again.... this news is BIG

 

"Ministry official Jia Yinsong, said excessive extraction was leading to a depletion of China's rare earth reserves. He said China held 23 percent of known reserves, not the 36 percent that the United States has cited for China."

China somehting like 90-95% of global production which is kept and much lower stocks than previously thought....

whilst production can be brought online it takes far too long.... price volatility high but levels are awesome as are the techs.... The message is clear  "GOT RARE EARTHS?"

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