US Plays with Ideas of Mongolia On Rare Earth and Splashed with Cold Water

If Sino-US relations are going to break down, US will face the dilemma of not getting enough qualified rare earth, which is undoubtedly a situation that Trump needs to change. Thus, the "Golden Lion King" gathered his eyes on China's neighbor- Mongolia.

Senior US government officials revealed that Trump discussed the issue of building a free trade zone with the visiting Mongolian president on July 31 and American investment in rare minerals in this country. How to break China's monopoly position has become an important task for the United States.

In this regard, the domestic authoritative media commented that: may not represent feasiblly. Although Mongolia has abundant reserves and is a heavy rare element urgently needed in the United States, it is necessary to solve a lot of problems to convert the soil full of impurities into products with a price higher than gold. To solve the problem, American policy often repeats and changes. Whether it can be implemented or not is still unknown.

Mongolia has abundant reserves of heavy rare earth image

First of all, we must make it clear that the United States also has a large amount of light rare earth resources, but all of them are low-value. The cutting-edge military, semiconductor, and permanent magnet products use heavy rare metals, while China is the world's largest source of heavy rare metals, also with the largest export volume.

Trump wants to circumvent China and invest in a heavy rare earth processing base in Mongolia. The problems will be beyond imagination, and the biggest problem is its poor infrastructure and power supply.

So how bad are the infrastructure and roads? It is no exaggeration to say that there is no decent high-grade road in this country, and there is a shortage of heavy transport vehicles. There was such a real thing: to please the US, Mongolia had intended to send a horse to Barron, Trump’s youngest son. However, due to the weak transportation conditions, the horse has not been sent out until now.

If the transportation route of a horse can't be solved, if the United States wants to establish a production base in a remote and desolate mining area, it can be imagined that it need take several years to repair roads, and production materials can be delivered smoothly before the construction started. The establishment of factories will take many years as well. This will be a time-consuming project that requires a lot of capital investment. Trump, who is eager for quick success, may not have this patience. Moreover, whether he can win in the 2020 election is still a problem.

Even if the problems of the factories and transportation system are solved, the mining, separation, screening, and purification need to consume a lot of water and electricity, and it is very lacking these two things. In particular, the country's weak power supply capacity can only guarantee the use of large cities like Ulaanbaatar. To protect the power of remote mines, it is a huge investment in infrastructure. The three inputs of roads, water and electricity are conservatively estimated to exceed billions of dollars, and American enterprises will be unable to bear.

Therefore, the US overseas project may cut off the time-consuming and labor-intensive infrastructure process, and turn Mongolia into a cheap raw material supply site, at the expense of the Mongolian environment, to provide the United States with essential heavy rare metals primary products are then shipped to the United States or Australia for further processing.

As a result, the cost of its products will inevitably soar, and it cannot be compared with China, which is mature and has a complete set of rare earth industrial chains. So, Trump’s intention on Mongolia is a nightmare for his successor.