Rare earth war - China squeezing Americans' balls

 Now I understand why Joe Biden went to Vietnam recently. It seems that Vietnam has the world's second largest rare earth reserves still to be exploited, and is thinking of reopening a dormant mine for rare earth extraction, said to be to counter China of course. That must be music to Biden's ears. Joe was there in Vietnam recently and we now know why. It was not cementing ties as he spouted. It is looking after the USA's interest, clear and simple.

However, extraction of the ore is not difficult, and rare earth ores are abundant in most countries. The real problem is processing them into useful elements, which China is the world's largest processing hub. Setting up processing plants in most other countries will be a very costly matter. Even the USA is said to be using China to process part of its rare earth, knowing that China produces the best quality rare earth elements. Wonder whether this is still being done. Of course they can find investors to set up processsing plants, but at what cost and how long will it take.

Why is China not really rattled by all this? Mongolia is now out of the agenda for the USA and South Korea, having no means to move the rare earth ores out to South Korea for processing. Where will Vietnman's rare earth be processed in the near term is the question? China is not going to do it as that would run counter to its plans. China is going to let them set up expensive processing plants and produce costly essential elements. The next problem is for them to crack their heads on how to compete with China. Who has outcompeted China over the years in every economic endeavour?

Remember that China now controls the biggest rare earth reserves and produces the purest rare earth elements. China is also reported to have succeeded in finding a new method of extracting essential elements from rare earth ore, that is said to be much much cheaper and cost effective than using conventional methods. This is a game changer.

Now, why is China not rattled by what is happening in Vietnam? Since China controls the world's output of rare earth elements, China can dictate the market for such products. In the past the West had tried ways and means to force China to lower its rare earth element prices, attempting to kill China's rare earth industry. Any new competitor going into the industry has to face the consequence of China making a similar move to kill them off, forcing such competitor's pricing impossible to counter China's. What then would all those multi billion dollar investments reap in return? Investors are not going to invest in expensive processing facilities with uncertainty, knowing the pitfalls of taking on China's total control of the market.

Anonymous