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Showing posts tagged 'exports'


12 June 2019

Worries about the rare earth minerals needed for high-tech products

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Rising tensions between US and China have sparked worries about the 17 rare earth minerals needed for high tech products like robotics, drones and electric cars.

China recently raised tariffs to 25% on rare earth exports to the U.S. and has threatened to halt exports altogether after the Trump administration raised tariffs on Chinese products and blacklisted telecommunications giant Huawei.

With names like europium, scandium and ytterbium, the bulk of rare earth minerals are extracted from mines in China, where lower wages and lax environmental standards make production cheaper and easier.

But trade experts say no one should panic over China’s threats to stop exporting the elements to the U.S, since there are rare mineral mines in California, Australia, Myanmar, Russia and India, which could step in when needed.

“The sky is not falling,” said Mary B. Teagarden, a China specialist, professor and associate dean at the Thunderbird School of Global Management in Phoenix. “There are alternatives.”

Simon Lester, associate director of the centre for trade policy studies at the Cato Institute think tank in Washington, agreed. “Over the short term, it could be a big disruption, but companies that want to stay in business will find a way,” he said.

Although the US is among the wold’s top countries for rare earth’s production, it is also a major importer for the minerals, looking to China for 80% of what it buys, according to the US geological Survey.

Mountain Pass, located in San Bernardino County, California, was once top supplier of the world’s rare earth minerals, but China began taking over the market in the 1990s and the U.S. mine stopped production in 2002. Mountain Pass later restarted production only to close again amid a 2015 bankruptcy. Since then, Mountain Pass has focused on achieving greater autonomy with a $1.7 billion separation system set to go online late next year that would allow it skip sending rare earths ore to China for that step.

Australian rare earths production giant Lynas Corp. Ltd. this month announced a proposed deal with Blue Line Corp. of Texas for a separation facility at an industrial site in Hondo, Texas.

There may be other options, too. Deposits of rare earths have been detected in other U.S. states including Wyoming and Alaska, as well in several remote areas of Canada. The Interior Department is calling for more prospecting and mining of “critical minerals,” including on public lands currently considered off-limits, and even in oceans.

“We have to be more forward thinking,” said Alexander Gysi, an assistant professor in geology and geological engineering at the Colorado School of Mines in Golden. “It would be better for the U.S. to have a greater range of sources for rare earths.”

Tags: huawei china tariffs technology exports usa


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