Chivalrous Island: Chinas rare earth trump card has not yet come out of the hand table that first panicked.

 Chivalrous Island: Chinas rare earth trump card has not yet come out of the hand table that first panicked.

Chinas rare earth trump card has not yet been thoroughly launched, but friends at the other end of the table panicked first.

A few days ago, the U.S. Department of Commerce released a report entitled The Federal Strategy to Ensure the Safe and Reliable Supply of Key Minerals, which is considerable in length, but the core expression is as follows:

Strategic minerals in the United States are heavily dependent on imports, and unprecedented action is needed to ensure that their supply is secure.

In this autumn of survival, we also take rare earth as an example to express the concern of the whole country: if China embargoes on rare earth, the US mineral supply chain will encounter a major impact (Significant Shocks).

How can you twist the wet land out of your own hands when youre just clamoring and clamoring?

The U.S. Department of Commerce has issued the Federal Strategy to Ensure the Safe and Reliable Supply of Key Minerals


Its not the first time that the United States has caught up with rare earths and other key minerals.

At the beginning of this report, the former situation was stirred up.

As early as February 2018, the U.S. Department of the Interior issued a Key Minerals List listing 35 kinds of metal minerals that are highly dependent on foreign countries and vital to U.S. economic development and national security.

Among them, 31 kinds of minerals account for more than 50% of the total annual consumption, while 14 kinds of minerals have no productivity at all in the United States and rely entirely on open hands.

Where does the supply come from? The top producer of 19/35 minerals is China, while the top supplier of 13/35 minerals is China, too.

In order to be justified, the report also attaches an additional net import data of key minerals from the United States for 2017 to emphasize the inseparability of old owners:

Net Imports of Key Minerals in the United States in 2017

Face up, China ranked 20 times in the list of importing countries of nearly 40 minerals; Lizi, rare earth, bismuth, antimony, scandium, barite and other imports from China accounted for more than 50%, of which scandium is 100% to be brought from China.

The situation is not optimistic, and Trump, whose trade campaign is booming, has already issued a presidential executive decree to seek a reassuring pill to reduce the dependence on strategic mineral imports.

The report of the U.S. Department of Commerce is a response to the Presidents executive order, which contains six action plans, 24 goals and 61 specific recommendations.

Where is the intention? Reliable supply of key minerals and the resilience of their supply chains are crucial to the economic prosperity and national defense of the United States. We should be aware that the United States is heavily dependent on foreign key mineral resources and foreign supply chains, which may lead to economic and military strategic vulnerability.

In highly concise Chinese, some people find that self-isolation from the world is similar to self-destruction and panic.

How to deal with it? Of course, we should first think about ruts.


After careful study, the U.S. Department of Commerces rescue strategy is quite diverse.

For example, as the first of the six programs of action, Promoting the transformation of research and development deployment of key mineral supply chains, the three survival directions are quite clear: first, to open up sources, i.e., to explore a variety of key mineral sources in the United States; second, to reduce expenditure, to process, manufacture and recover minerals more effectively, thereby minimizing waste; third, to prepare similar substitutes for scarce minerals. Lets wait till tomorrow.

Naturally, the classic brand of allied warfare is also indispensable. This report details how to strengthen international trade and cooperation related to key minerals, such as Canada, Australia, Japan and South Korea, which are desperately pulling aside when the storm is approaching.

The areas of cooperation include, but are not limited to, identification and exploration of key mineral resources, processing and recovery of key minerals, reduction of supply risks and prevention of supply chain disruption, and even joint follow-up and sharing of foreign investment and acquisition information.

The US chemical company BlueLine Corp. and Australian mining company Lynas Corp. have also signed a memorandum of understanding with the Commerce Department to set up rare earth separation plants in the United States in an attempt to fill key gaps in the U.S. supply chain.

At the same time, the report also calls for improving the understanding of key mineral resources in China. According to the priority, at least once every two years, the national or regional assessment of key mineral resources in potential deposits will be completed. It is not only understanding, but also making full use of the Purchase of American Products Act to strengthen domestic procurement and promote its own mineral production.

Finally, administrative procedures have been warned by the U.S. Department of Commerce not to delay this time. Land Administration, Forestry Bureau, etc. should review the areas currently withdrawn or protected from development to assess whether these restrictions should be lifted or reduced.

Is it a gallop? Or panic?

Application of Rare Earth Elements (Figure Source: China-Thailand Securities Research)


On the periphery of the report, interest has not diminished.

In the US tariff list for about $300 billion of Chinese imports to the United States released on May 13, local time, rare earths and other key minerals accidentally evaporated; in the tariff list for imports originating from the United States of America of about $60 billion, announced by China on May 13 and effective on June 1, the tariff on imports of rare earth metals from the United States was raised to 25%.

Rare earth, known as the vitamin of modern industry, has been talked about before. Its utility and strategic value in the fields of metallurgy, petrochemical, optical, laser, hydrogen storage, display panel, magnetic materials and other modern industries can not be replaced overnight.

As far as the United States is concerned, the amnesty for Chinese rare earth imports into the United States is also the margin that it has to keep.

After all, U.S. warplanes and missiles are on the rare earth front line, from Lockheed Martins F35 to guided missiles and target-setting lasers, all depending on rare earth to perform key functions.

In addition, according to reports from the Congressional Research Service Center, rare earth elements, including yttrium and terbium, are used for laser targeting and weapons for future combat system vehicles; and rare earth elements are indispensable for Stryker armored vehicles, Predator UAVs, Tomahawk cruise missiles and even ordinary radar and sonar.

The U.S. Department of Defense also issued a warning signal: The U.S. defense system relies heavily on Chinese rare earths. Exaggerated? Data show that 80% of the demand for rare earth in the United States is strongly dependent on China on the other side of the ocean.

In addition to rare earths, other key minerals reported by the US Department of Commerce have also come a long way.

For example, magnesium is listed as one of the six key minerals vital to the United States, and China is its main producer. From aerospace to armored vehicles, from guns and artillery to missile ammunition, from optoelectronic instruments to military computers, sense of existence brushes everywhere; tungsten produced and supplied by China to the United States in large quantities is widely used in the field of ammunition due to its high density and hardness; and fluorite, for example, is widely used in the field of ammunition. Widely used in metallurgy, aluminium smelting, glass, ceramics, cement, chemical industry...

Naturally, in early May, some American officials met with the hero of the American automobile manufacturer, Lithium. Behind the first national supply chain strategy for electric vehicles launched by the United States, there is a huge gap between the proportion of lithium-ion batteries produced by China and that of the United States, which accounts for two-thirds of global production.

It is worth noting that four of the six key minerals mentioned above in the United States have an average net import dependence of 50%.

Economy, trade and national defense all rely on the global supply chain breath. At this time, we have to shake off our shoulders and do it alone, but also try our best to grasp our own doors. No wonder the Ministry of Commerce and the Pentagon have jumped one after another.

A screenshot of the U.S. Trade Representatives announcement on May 13 made it clear that the products to be taxed did not include drugs, specific medical products, rare earth materials and key minerals.


Few people in the world believe that a trade war will win except the White House, which now relies on the unprecedented actions reported by the U.S. Department of Commerce. How many successes and failures can the White House actually recover?

Looking at rare earth, a key mineral that has recently taken the spotlight, the report does offer many specific suggestions: for example, research projects led by the U.S. Department of Energys Office of Fossil Energy and the National Energy Technology Laboratory are said to have been able to separate rare earth elements from coal gangue materials.

Under the idea of developing alternatives, Northeastern University researchers have developed ferronickel alloys to replace neodymium and dysprosium in rare earth elements, while some researchers at the National Laboratory of the United States and the University of Minnesota invented a permanent magnet made of iron and nitrogen in 2016.

How to apply R&D results? Fifty pages of the report have not yet reached the point of building a high house. It is interesting to see when the door of the laboratory will open to the world. The only certainty is that the manufacturer is in no mood to wait. After all, according to the report, key mineral industries in the United States are at all stages of manufacturing advanced technological products such as mining, separation, metal reduction, alloying and high-performance rare earths. They all experienced layoffs, business failures and production line shifts.

If we want to respond quickly to military and civilian needs in wartime and emergency situations in the United States and other countries, as he said, Im afraid the most important thing we need is far more time than we imagined.

On this point, American businesses and the media are quite clear.

Citigroup said the United States has no ready-made way to break its dependence on Chinas rare earth supply; James Kennedy, president of ThREE Consulting, a rare earth industry-focused company, also wrote that the United States is focused on rare earth mining rather than the entire supply chain, while China, from 2011 to now, has more rare earth patent applications in China than in other countries in the world. And.

When will we catch up? More than three years ago, the United States Government Accountability Bureau published Rare Earth Materials: Developing a Comprehensive Approach to Help the Department of Defense Better Manage National Security Risks in Supply Chains, which responded that the United States may have to wait 15 years to rebuild its domestic supply chain of rare earths.

In the meantime? The U.S. Department of Commerce has not forgotten to mention the episode in 2010 when China banned the export of rare earths to Japan. In addition to Significant Shock, the cut-off may lead to despair.

There is oil in the Middle East and rare earth in China. Following the previous two days and three sessions of the National Development and Reform Commission (NDRC) on rare earth management and development with industry experts, since June 10, three ministries and commissions of the NDRC, the Ministry of Industry and Information Technology and the Ministry of Natural Resources have taken the lead in conducting research on rare earth and other strategic mineral resources in several provinces.

The research scope is similar to that of the U.S. Ministry of Commerce, such as the general situation of strategic mineral resources in the upper, middle and lower reaches and the operation of the industry, international trade, domestic and foreign cooperation, and providing suggestions to improve the guarantee capacity of rare earth and other strategic mineral resources.

Former U.S. Treasury Secretary Henry Paulsons prophecy still rings in his ears: Protectionism will defeat itself; China will react strongly to public threats, China will not shrink, but more likely to retaliate, so that key export industries will be hurt.

Nowadays, the next trump card of China is in high spirits, so dont let it have to be played.

Source: Chivalrous Island Responsible Editor: Qian Mingxiao_NBJ10675