|
Back In 2000 the United States
granted Beijing Most-Favored-Nation status and let the communist
regime join the World Trade Origination (WTO). Sadly this move was obviously
not well thought out and has caused our present problem of securing our ever
growing need for the most coveted 17 rare earth elements. According to the US
Government Accountability Office (GAO), not only did we
abandon our capacity to produce these critical elements but restarting mines
and production plants could take up to 15 years.
As reported by Robert Maginnis, a new Pentagon report
to congress admits our military is critically dependent on Chinese produced
for high end weaponry. This dependency was a self
inflicted wound that demonstrated how naïve we were regarding Red
China. They are a regime that is ready t leverage
any advantage.
As has been documented by many of
my colleagues, China produces 97% of all rare earth elements (REE). 17 of these elements
have unique magnetic properties critical for high tech military equipment
such as advanced fighters, lasers, precision guided missiles and 21st
century consumer technology found in iPhones, iPads,
wind turbines and MRI and CAT machines.
We knew more than a decade ago the
Chinese intended to monopolize the REE market and then use that position for
its advantage. Beijing is playing this out as scripted as it cut back on
exports and has shown an inclination to use those exports to leverage
disagreements.
Prior to 1990, the US was the
global leader in the production of REE’s. That changed because the
Chinese would do it for $0.10 a day and no bathroom breaks. Meanwhile, China
created a monopoly with a combination of cheap labor, nonexistent
environmental standards and state subsidized loans.
China’s state owned banks
granted subsidized loans to promote social stability through full employment.
Those loans created such a massive mining sector that most of the mining
sector never recovered their operating costs and predictably global prices
plunged. The plunging REE prices helped fuel the technological revolution but
the West became hooked on cheap Chinese REE’s as uses expanded from cathode
ray tubes to components for wind turbines, hybrid cars, laptop computers,
cellular phones and at least 36 sophisticated weapons platforms.
Now China is consolidating the REE
sector and Beijing’s monopoly is working, but the monopoly can be
temporary if nations like the US act quickly. As I have written rare earths
are not all that rare but they are expensive to mine and extract. The risk
adverse mining sector are not likely to act without
government assistance.
So what should America do to reduce
its almost total dependence on Chinese REE’s?
The Pentagon has stated that we
need to start stockpiling certain elements like dysprosium, yttrium,
praseodymium and neodymium for the most critical weapons manufacturing. They
further call for granting higher priority to weapons manufacturing over
commercial production. That seems prudent until non
Chinese REE sources are readily available. Finally out of the six
domestic REE companies assessed only one has the facilities and experience to
reduce all 17 elements. That company is Molycorp which operates the Mountain Pass facility and indicates
its intention to restart operations in 2012. The bad news is that Molycorp lacks the manufacturing assets and facilities to
process these rare earths into finished components such as permanent magnets.
There have been reports that Molycorp will be
cooperating with the US Department of Energy Ames Laboratory in an effort to focus on creating commercial grade
REE magnets which are critical for miniaturization. Add to this that Molycorp does not have substantial amounts of heavy rare
earths such as dysprosium, which is used for heat resistant permanent magnets
used in defense systems.
China is an economic piranha, not a
free market. We need to rebuild our REE supply system and stop being
economically bullied by China. We need to start protecting our defense and
private industries from Beijing’s abusive trade policies.
|
