Author Topic: Chinese Rare Earth Element Implications... / NY Times News Article  (Read 3949 times)

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Offline Panda Halves

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"Now, corporate executives say, it is using its near monopoly on certain minerals — in particular, scarce metals vital to products like hybrid cars, cellphones and energy-efficient light bulbs — to make it difficult for foreign manufacturers of high-tech materials to build or expand factories anywhere except China." NY Times

Full article:
http://www.nytimes.com/2011/08/25/business/global/chasing-rare-earths-foreign-companies-expand-in-china.htm

It seems like this is the progression...
Step one: devalue currency to attract manufacturing companies
Step two: steal manufacturing jobs
Step three: increase American trade deficit
Step three: establish monopoly in rare-earth-elements and precious metals
Step four: force manufacturing jobs to stay in China due to resource monopolization, currency manipulation, & trade deficit
Etc....

PH


Underbidder

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Re: Chinese Rare Earth Element Implications... / NY Times News Article
« Reply #1 on: August 25, 2011, 04:12:23 PM »
Yeah, "They took our jobs"!  LOL !   :ohmy:
Actually the US gave it away, by design, but that's a whole 'nutter story... I totally agree with your points... It's part of the plan.  The US has McDonalds jobs, but not enough for all the unemployed teenagers and now underfunded retirees who find their plans financially decimated by market crash, zero interest returns, total loss of home equity, and inflation. It is nothing less than Treason, by those who have presided over this debacle, the bringing of a proud and prosperous country to it's knees by decades of unsound policy.

Back to Rare Earths: Fascinating, highly leverage investment play, on these so called rare, minerals used in high tech military, battery, solar, energy, etc.  Nothing actually rare about them, except that they need to be concentrated enough to make them commercially viable.  The US had the market with Mountain Pass mine, but was shut down due to environmental problems and changing market, among other factors. Shut down again by regulations.. Just like all manufacturing in the US...  The Chinese stepped in opportunistically, got lucky finding a super high grade mine, giant iron mine actually that made mining of rare earths as free byproducts if they chose, and they did, so lowered price and cornered the market.  A few few former producing mines are being hurried back into production, and there are so few other economically feasible sites, it'll be a race and only a few might make it. Then there is the mix of heavy vs light, and the pricing and margins for each.  The category really flew about a year ago, with James Dines declaring himself the original REE guy.  Now they've crashed, as they were too hyped.  Anything with the word Rare took off.  They've built a nice base. Lyscf is ahead in the race. MCP is the US former mine, trying to reramp up. HREEF is the  former Russian mine. REE and AVL are North American and hurrying to compete, as is UURAF.
Great Western GWMGF is putting together vertical integration, as processing is also a limitation. GDLNF is highly prospective.  There are many others, but most are crapshots. Then there is dacha dCHAF who just stockpiles the stuff. Just wait until they finish basing and move again though, the group rockets after than any I've seen. Hundred percent gains and drops in a few weeks happen.  DYODD, and I hope most of the above is accurate.
« Last Edit: August 25, 2011, 04:23:21 PM by Underbidder »

Offline Grip

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Re: Chinese Rare Earth Element Implications... / NY Times News Article
« Reply #2 on: August 25, 2011, 06:39:39 PM »
Yeah, "They took our jobs"!  LOL !   :ohmy:
Actually the US gave it away, by design, but that's a whole 'nutter story... I totally agree with your points... It's part of the plan.  The US has McDonalds jobs, but not enough for all the unemployed teenagers and now underfunded retirees who find their plans financially decimated by market crash, zero interest returns, total loss of home equity, and inflation. It is nothing less than Treason, by those who have presided over this debacle, the bringing of a proud and prosperous country to it's knees by decades of unsound policy.

Back to Rare Earths: Fascinating, highly leverage investment play, on these so called rare, minerals used in high tech military, battery, solar, energy, etc.  Nothing actually rare about them, except that they need to be concentrated enough to make them commercially viable.  The US had the market with Mountain Pass mine, but was shut down due to environmental problems and changing market, among other factors. Shut down again by regulations.. Just like all manufacturing in the US...  The Chinese stepped in opportunistically, got lucky finding a super high grade mine, giant iron mine actually that made mining of rare earths as free byproducts if they chose, and they did, so lowered price and cornered the market.  A few few former producing mines are being hurried back into production, and there are so few other economically feasible sites, it'll be a race and only a few might make it. Then there is the mix of heavy vs light, and the pricing and margins for each.  The category really flew about a year ago, with James Dines declaring himself the original REE guy.  Now they've crashed, as they were too hyped.  Anything with the word Rare took off.  They've built a nice base. Lyscf is ahead in the race. MCP is the US former mine, trying to reramp up. HREEF is the  former Russian mine. REE and AVL are North American and hurrying to compete, as is UURAF.
Great Western GWMGF is putting together vertical integration, as processing is also a limitation. GDLNF is highly prospective.  There are many others, but most are crapshots. Then there is dacha dCHAF who just stockpiles the stuff. Just wait until they finish basing and move again though, the group rockets after than any I've seen. Hundred percent gains and drops in a few weeks happen.  DYODD, and I hope most of the above is accurate.
Should we just do as Jim Rodgers and move to Shanghi? The USSA is getting a little "gamey". The biggest problem is for the military complex, as they need these RA's for smart weaponry. We have the ability to spool up production, but it will take time...
« Last Edit: August 25, 2011, 06:50:10 PM by Grip »

Offline r3globe

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Re: Chinese Rare Earth Element Implications... / NY Times News Article
« Reply #3 on: August 25, 2011, 09:01:46 PM »
I really hope China will start minting Scandium Pandas. If they do, they will have very low mintage :)

tamo42

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Re: Chinese Rare Earth Element Implications... / NY Times News Article
« Reply #4 on: August 25, 2011, 10:23:09 PM »
This is one of those slow-motion (mag lev) train wrecks. Everyone has known for years that this was coming.

Like Underbidder said, rare earths are not all that rare, but rare earth mines are. Once China starts making its monopoly power felt, firms will open mines elsewhere. There is a lag of a few years to get a mine operational though.

On the other hand, if the firms that are buying the rare earths would have built plants in China anyways, then the monopoly power won't be "felt" by those firms.

Offline davidt3251

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Re: Chinese Rare Earth Element Implications... / NY Times News Article
« Reply #5 on: August 25, 2011, 11:03:20 PM »
Toronto listed NEM.TO (Neo Material Technologies is a Canadian public company with plants in China
http://www.raremetalblog.com/2011/05/neo-material-q1-profit-more-than-doubles.html

One other reason the Chinese have restricted exports is that their resource of rare earths, is that the Chinese Bayan Obo clays, is both depleting rapidly and extremely toxic. It is interesting how Chinese rare earth export restriction is reported as a global restriction but in reality is designed to affect Japan the most. The Chinese have an ecological nightbare on their hands at Bayan Obo, but the Japanese were particularly bad operators the Chinese allege. Apparently the Japanese mined under agreement and left without any remediation work being done, a violation of terms. Pollution at the Japanese mines is particularly aevere, the Chinese say.

With new rare earth supplies and substitutes coming online there is a question about whether there will be any shortage of rare earths in 2015 (except maybe the magnet rare earths like neodymium and dysprosium).

It is going to be interesting to see if the Chinese acquire foreign rare earth producers because numbers show China needs all their domestic rare earths for domestic consumption as Bayan Obo runs out (Japan doesnt have domestic reserves so easier to beat up on this regard too, there are no Japanese deposits to buy so restricting exports has less risk)

The Chinese might buy the Canadian firms Avalon, Quest (both have their own toxicity issues). Until US firm Molycorp develops heavy rare earths it is less attractive. The toxicity issue is also impacting Australian firm Lynas which wants to process in Malaysia but locals are protesting as they are worried about pollution-and rightly so. The fact is that some rare earths prices can go much higher short term. Which would you rather have at your wind farm. A windmill motor with a gearbox because the magnets overheat at low speeds and thus you need a maintenance firm, with all its costs. Or a windmill with no gearbox (direct drive) because the magnets dont overheat at high speed or low speeds. Neodymium will have to go much higher to outweigh the benefits of no gearbox, no gearbox maintenance, and no five year replacement for the gearbox.

Offline badon

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Re: Chinese Rare Earth Element Implications... / NY Times News Article
« Reply #6 on: August 25, 2011, 11:31:20 PM »
The fact is that some rare earths prices can go much higher short term. Which would you rather have at your wind farm. A windmill motor with a gearbox because the magnets overheat at low speeds and thus you need a maintenance firm, with all its costs. Or a windmill with no gearbox (direct drive) because the magnets dont overheat at high speed or low speeds. Neodymium will have to go much higher to outweigh the benefits of no gearbox, no gearbox maintenance, and no five year replacement for the gearbox.

Great nutshell-info, thank you for sharing it.

Offline ghostrider80811

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Re: Chinese Rare Earth Element Implications... / NY Times News Article
« Reply #7 on: August 26, 2011, 04:58:00 AM »
"Now, corporate executives say, it is using its near monopoly on certain minerals — in particular, scarce metals vital to products like hybrid cars, cellphones and energy-efficient light bulbs — to make it difficult for foreign manufacturers of high-tech materials to build or expand factories anywhere except China." NY Times

Full article:
http://www.nytimes.com/2011/08/25/business/global/chasing-rare-earths-foreign-companies-expand-in-china.htm

It seems like this is the progression...
Step one: devalue currency to attract manufacturing companies
Step two: steal manufacturing jobs
Step three: increase American trade deficit
Step three: establish monopoly in rare-earth-elements and precious metals
Step four: force manufacturing jobs to stay in China due to resource monopolization, currency manipulation, & trade deficit
Etc....

PH



PH, thanks for the link.  I remember Jim Rogers saying last year that China owns the right for 95% of all the commodities in the world while America was busy spreading "peace and democracy" abroad.  I once talked to some of my co-workers about this very subject since it will hamper US abilities to make our own missiles, ships, bridges,ammo, computers etc...etc...and most didn't even have a clue but talk about sports, celebrities,or the newest fashion and they can get you detailed intricate information!  (shakes head in disbelief)


Like someone else said in here, moving to China may or may not be such a bad ideal considering the suicide direction the US heading to.  I also want to share China has a real estate bubble too just like the US did and add the intrigue of China's Ghost Cities.  Lets see, what happens when a unstoppable force meets an immovable object, cheers.   

Offline peng_you

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Re: Chinese Rare Earth Element Implications... / NY Times News Article
« Reply #8 on: August 26, 2011, 05:44:02 AM »
They are called ghost citites now. Remember the Chinese are very patient and very precise in their calculations. They find every possible way to exploit any leverage that they may have. 10 years from now, all of these ghost cities will be thriving economic hubs.
Peng_you

Offline BChung

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Re: Chinese Rare Earth Element Implications... / NY Times News Article
« Reply #9 on: August 26, 2011, 08:07:21 AM »
If the real estate crashes those wont be ghost cities anymore.... money will leave the real estate market and flow more to other asset classes, which IMO is a great thing for both the people and our investments. Every Chinese city is copying the HK model where they sell land are premium prices to support their spending. It will burst sooner or later and I just hope that it burst right now.

Most chinese buy their homes with 100% cash I can hardly see a melt down like the US or the Asian Financial crisis....

Offline Panda Halves

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Re: Chinese Rare Earth Element Implications... / NY Times News Article
« Reply #10 on: August 26, 2011, 09:00:43 AM »
Chinese ghost cities are a byproduct of failed marketing.
- wild real estate deals and speculation build entire cities that were never filled
Detroit.... is also a ghost city for a more ominous reason.
- loss of manufacturing jobs and bad economic policy empties cities once filled
« Last Edit: August 26, 2011, 09:10:31 AM by Panda Halves »

Underbidder

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Re: Chinese Rare Earth Element Implications... / NY Times News Article
« Reply #11 on: August 26, 2011, 12:11:33 PM »
So, what's the consensus, to short Chinese market in the short term, or go long?

Offline exchange

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Re: Chinese Rare Earth Element Implications... / NY Times News Article
« Reply #12 on: August 26, 2011, 12:23:14 PM »
Just wanted to add my two cents regarding Chinese real estate.

Many expect if and when the Chinese real estate market crashes, it will end up like it did in the US. I completely disagree. In the US, you could of bought a house\apartment with pretty much "0" down payment. In China that is not possible. In China you better make sure you've got the money before even considering buying anything. Based on that any market crash should not be remotely close to the US.

The main problem with what happened in the US is people bought houses they could not afford. Everyone felt they were in title to own a house regardless of the consequences. Owning real estate is a priviledge, not a right.

You can't spend and spend and at the same time buy a house, its either one or the other. Most Americans chose to do both.

exchange

Offline exchange

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Re: Chinese Rare Earth Element Implications... / NY Times News Article
« Reply #13 on: August 26, 2011, 12:31:19 PM »
Most chinese buy their homes with 100% cash I can hardly see a melt down like the US or the Asian Financial crisis....

Exactly.

exchange

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Re: Chinese Rare Earth Element Implications... / NY Times News Article
« Reply #14 on: August 26, 2011, 12:33:17 PM »
Are the ghost towns then owned by families who put down 100% cash. or by speculating huis?