There is talk of a venture between USA, Japan and
Mongolia to extract rare earth to counter China. That had been talked
about before.
The problem is it is not the availability of rare
earth raw materials, as it is in abundance all over the world. It can be
found in many countries. The real problem is refining it and the
extraction of the various usable elements. China holds more than 80% of
the refining facilities, besides also having huge reserves on its soil.
Now using the narrative that for reasons of 'national security issues'
it has to restrict exports of rare earth is as valid as the USA claiming
'national security issues' to ban Huawei.
Assuming the mining
venture takes shape, we have to remember that Mongolia is a landlocked
country, and still will need a port to bring the ores for refining.
Transporting those ores will be expensive, even if they managed to rent a
port from China, not to add that China may refuse to do the refining
for them. Setting up refining facilities is a very expensive investment
and even the USA, which has its own refining facilities, has to partly
make use of China's refining expertise to produce the best quality final
product.
So, they can try to unsettle China with all the
propaganda they want, but solving the problem is not a question of
months, but several years. What then if they can set up those facilities
to refine rare earth, can they realistically compete against China
holding all the cards over supply and demand factors?
Anonymous
Why go to Mongolia when India and Australia are among the top 8 countries with huge reserves to be extracted? And setting up mining facilities in Mongolia is so difficult and infrastructure and transportation so expensive.
ReplyDeleteChina and Russia together controls more than 56 million metric tons of all known reserves of rare earth, so how significant is their position in this sector is left to the imagination. Moreover, China holds more than 80% of all global refining facilities of rare earth elements as well. Even the USA needs China's facilities to refine their ores.
This move by China will cause the price of rare earth elements to shoot up, after being dampened over the years by the manipulation of the USA and the West. Everything that depends on rare earth is going to be more expensive. USA is reported to be making a US$300 million funding assist for Lynas of Australia, hoping to alleviate the crisis.
Problem is where is Lynas going to process the raw minerals now that no country, even Malaysia, wants to have processing facilites that causes health related issues. How long is it going to take for Australia and other countries to set up more refining facilities and can the world - USA, EU, Japan and South Korea high tech industries in particular - afford to wait for supplies to come on line to cover the shortage due to restrictions by China?
Now I understand why the USA is so interested in Vietnam. Vietnam holds the second largest rare earth deposits at 22 million metric tons and hardly touched. Besides, Vietnam is quite well developed infrastructurally today, with access to ports along its shores. Still, the question is the refining capabilities to support.
ReplyDeleteMany in the West and Asian vassal states say that Xi Jinping is the cause of tension and hostilies between China and them.
ReplyDeleteBut many Chinese nationals are cheering him on and many ethnic Chinese of other nationalities believe he is exactly the no nonsense person to challenge fhe bullies eye for eye.
As I always say, the USA and the West hates strong leaders, because it would be difficult for them to destabilise the country to install a stooge. That is why throughout history, they could not stomach communist ruled countries and will find ways and means to bring them down.
ReplyDeleteThe USA and the West hates China, Russia, North Korea, Iran for the one and only reason of being unable to bring them down without being able to interfere in elections, like what they did in Ukraine. And they keep on chipping away at this point. They professed not to deal with dictators, but could not do the same to the Saudis perpetual monarchy. Now the Saudis do not even think it necessary to deal with the USA. Mohammed bin Salman probably understood and took Kissinger's advice and is staying far away from being a friend of the USA. It is nothing but a fatal infactuation to remain as a friend of the USA.
The fact that Communism under China is able to progress exceedingly well, and bring so much benefits to the people, just as well or even better than a democractic system, is another reason for the USA and the West wanting to demonise communist countries at all cost, particularly China. China's ability to progress so fast under Communism is contrary to the adage that communism is inferior to democracy, and perennially touted as backward and a stifling system.
The reality, however, proved otherwise and the USA and the West are paranoid and have no answer to explain the oddity. Even communist Vietnam outperformed many democratic countries, eg India, touted to be the biggest democracy in the world, but having little to show for it.
And I may even suggest that North Korea could have given the South a run for its money if not for all the sanctions imposed by the rest of the world. And of course, isolated and friendless Communist Russia as described by the West, is doing economically better than the EU itself. Numbers don't lie, propagandas are predominantly lies.