The Red Line 121 - Rare Earth Elements: The Futile Fight Against China
Jun 17, 2024
Delving into China's control of rare earth elements, the podcast explores challenges in the supply chain, US struggles in small modular reactor industry, financial risks in rare earth mining, and the importance of securing alternative supply chains. The discussions highlight China's dominance, national security implications, and the need for Western countries to reduce dependency on China.
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Hidden Subsidies Distort Global Prices
- Pricing transparency is opaque because Chinese state-owned enterprises absorb subsidies and hidden costs.
- That opacity prevents accurate cost comparisons and discourages non-Chinese investment in refining.
Weaponizing Supply Changed Perceptions
- China's 2010 cutoff of rare earth exports to Japan exposed how minerals can be weaponized.
- That incident spurred national security concern and policy shifts in the US and allies.
Extraction Gains Mean Little Without Refining
- Western countries have expanded extraction but still export most ores for Chinese refining.
- Only five refineries exist outside China, so upstream gains don't fix midstream dependence.