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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Concentration, Not Scarcity, Creates The Problem
- Rare earths are widespread but occur at extremely low concentrations, making extraction costly.
- That low concentration (one 'skittle' per bucket) drives complex, high-cost supply chains and strategic vulnerability.
Three Critical Stages Define Control
- The rare earth supply chain has three distinct stages: extraction, refining/separation, and component creation.
- Control over refining and component production, not just mines, determines strategic dominance.
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.