Author Topic: Chinese Rare Earth Element Implications... / NY Times News Article  (Read 3503 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

Underbidder

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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?

Offline ghostrider80811

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Re: Chinese Rare Earth Element Implications... / NY Times News Article
« Reply #15 on: August 26, 2011, 05:50:08 PM »
Underbidder,


I read speculation and to increase Chinas GDP but who knows?  Anyone care to chime in?  Also, exchange and babycyt23 is right when Chinese buy real estate, they pay mostly all cash, even in Hong Kong.  My cousin lives in Central HK and he's renting in hopes the real estate will crash since it went up so fast in such a short time.  The amount of money he spends on rent in central can get him a nice mansion in TX.  He told me some of his buddys spend 10-15Gs USD/month for rent!

Offline exchange

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Re: Chinese Rare Earth Element Implications... / NY Times News Article
« Reply #16 on: August 26, 2011, 05:58:04 PM »
Underbidder,
The amount of money he spends on rent in central can get him a nice mansion in TX.  He told me some of his buddys spend 10-15Gs USD/month for rent!

and that is why we buy Chinese coins, the amount of money available on that side of the world is astonishing. Add to the equation a much higher population than Europe and the US combined and you got some serious demand.

exchange

Offline BChung

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Re: Chinese Rare Earth Element Implications... / NY Times News Article
« Reply #17 on: August 26, 2011, 10:13:00 PM »
Underbidder,


I read speculation and to increase Chinas GDP but who knows?  Anyone care to chime in?  Also, exchange and babycyt23 is right when Chinese buy real estate, they pay mostly all cash, even in Hong Kong.  My cousin lives in Central HK and he's renting in hopes the real estate will crash since it went up so fast in such a short time.  The amount of money he spends on rent in central can get him a nice mansion in TX.  He told me some of his buddys spend 10-15Gs USD/month for rent!

Now you know how hard my life is..... the amount of money that I will spent to buy or rent a home in HK is ********* Ridiculous..... it has always been a myth that HK is a low tax heaven. The Government have simply sell/rent their land AT high price in the first place making it more or less like a pre tax on everyone.

I think HK property is in a bubble already, as not only CHinese buyers are buying, everyone is buying. There are end users mortgaging at 5% down payment although they make up a small percentage, and they are mostly young couples around my age. The rise in price is mostly due to money finding places to go as the HKD is peg to the USD (IMO a Curse while many Locals is too scare to change)hot money have been flowing in since the FED keep on printing money. Not only the FED, but the Chinese Hot money have also been flowing to HK as its more convenient for money in Mainland China to flow to HK. 

Regarding the Chinese Ghost cities they are mostly bought by  people who can afford them. The close capital system in China have been forcing money to treat Ghost cities like gold. If the property market does crash I see Ghost Citites being lively cities because there is a demand as a matter of a fact a huge demand but the price is keeping most chinese away as they simply cant afford it. If prices crashes the fundamental demand is there to support it.

Also not the whole China is experiencing a property bubble. eg. Zhong Shan a 2nd - 3rd tier City in Guangdong does not experience the same ridiculous prices as shenzhen and Guangzhou. One can buy an place for around 0.5 RMB MIl (0.35 MIL RMB for older not so convenient places) instead of 2 RMB Mil + (older less convenient maybe around 0.8 RMB Mil min). SUre the wages are higher in Gz and SZ but the its not 3-5 times higher like the property price.
 You can be a store sales for 2000 RMB in ZhongShan while in SZ and GZ you can get a monthly wage of 3500 - 4000 RMB only.  Personally I think SZ is a special case as many HK people go there to buy property - Half or a Third the price, twice or triple the size with a much much better view. (which I am persuading my GF to drop her typical HK people superiority complex when they compare themselves to mainlanders)

As I mentioned earlier the Beijing Leadership is too Chicken to do anything right unlike the former premier Zhu Rongji who close down zombie state own enterprises and pop the last property bubble to bring the Chinese economy back on track. If property prices continue to rise than the burst will be serious bring serious pain IMO.

Offline comeaux

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Re: Chinese Rare Earth Element Implications... / NY Times News Article
« Reply #18 on: August 27, 2011, 01:36:25 PM »
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
I would say "many" ... not "most"  :001_smile:

There are still alot of reputable, ethical & hardworking Americans such as myself who have worked very hard our whole life and who buy our homes as we agreed to when we made/signed the commitment to do so.

There is so much propaganda on TV nowadays and all the silly reality shows that unfortunately it paints a broad brush and stereotypes ALL/MOST Americans as behaving unethically and living beyond their means when it's actually only a small percentage of the population.

Offline badon

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Re: Chinese Rare Earth Element Implications... / NY Times News Article
« Reply #19 on: October 15, 2011, 10:06:05 PM »
My impression has been that it is the majority. It seems to me that only a small fraction of people are fully solvent. Most of those people are homeless, with no debt, and no assets :)