I was on CNBC-TV today, Sep. 2, 2009, for a sound and image "bite' about the impact of the supposed Chinese "decision" to cut off exports of HREEs and to reduce exports of LREEs.
Of course the Chinese have been reducing their export allocations of all REEs for the last 5 years and will simply continue this process in the next 5 years. Export allocations of REEs are already below the demand just of Japan, so the crisis of security of supply isn't coming; it's here now.
It is said that China has said that it may completely eliminate the export altogether of the HREEs, dysprosium and terbium. This would be a disaster for the high performance and military users of REE based permanent magnets, because dysprosium and terbium are necessary and cannot be substituted as additives for REE based permanent magnets that raise the curie point of those magnets. This means that REE based permanent magnets without dysprosium and terbium will not operate at high temperatures. Thus the use of such magnets in high temperature environments would require an expensive weighty cooling system. This subtracts range from hybrid cars, performance from wind turbines, and payload from exploration and military rockets.
i was surprised when commentator Erin stopped putting me on camera after I told her that her tagline of "China hoarding" REEs was wrong. China is merely saying that it is giving priority to domestic uses of its own resouces. I had pointed out to Erin that free market capitalism and globalism requires that any and everything be available for a price, but that is not the Chinese way of thinking. Chinese bureaucrats believe that the health, safety, and well being of the Chinese people come before that of foreigners and that Chinese resources should be used first to improve Chinese daily life. Just substitute the word "American" for Chinese in the sentences above and tell me then that you don't beleive in that and that you don't wish that American bureaucrats thought the same way!
Here's the Rare Earth story in compact form as I forwarded it to the CNBC producer who requested some talking points and then ignored them.
The Rare Earth Story
10. There are huge privately owned resources of LREEs in California (MolyCorp), Idaho, and Montana(Thorium Energy, Inc.), and there are perhaps the world's largest untapped reserves of HREEs in Canada (Avalon Rare Metals (AVL.TO) and Great Western Minerals Group (GWG.V).
11. The technology to separate REEs from ores exists in North America and is in operation at Mountain Pass, California, the largest such vertically integrated operation in the world outside of China.
12. The technology to reduce compounds of REEs to produce metallic and alloy forms of REEs exists in the USA and in the United Kingdom in both of which places it is owned by a Canadian company (GWG.V)
12. The technology to fabricate REE based permanent magnets exists and is dormant in the USA due to a lack of assured REE supply.
The de-emphasis in America on wealth creation by the devlopment of natural resources and the domestic manufacturing of their end products has now reached a crisis in the case of the rare earths. If we don't stop the erosion of this method of wealth creation a trickle of lost jobs and opportunities will become a flood. Our security is now threatened. We need to wake up immedately or just replace China s the world's sleeping giant.