After China Reduced Rare Earth Exports, US Announced Two Moves

China accounts for 85% of the world's rare earth production and has spent decades developing the most efficient technology, not only for production, refining but also for processing. Chinese dominant position in the field of rare elements, so that even the world's largest economy, the US, imports most of this resource, namely: 80% of imported rare metals.

In the past year, with Trump's tax increase, the Sino-US trade war has intensified, so Americans are increasingly worried that China will use rare metals as a weapon of trade warfare. Of course, there is a reason for this fear as there is a precedent. Eight years ago, Sino-Japanese economic and trade disputes intensified. Besides, the country began to rectify the phenomenon of rare elements development and banned the export to Japan. Subsequently, the price soared and Japan suffered heavy losses.

the US imports rare earth products from China image

On Sep 8, Customs announced the latest data. In August, China exported 4351.9 tons of rare earth, a decrease of 891.5 tons from the 5243.4 tons in July, a decrease of 17%. Since then, from January to August 2019, the exports of 3,2827.5 tons, a decrease of 2201.5 tons from last year's 35029 tons, a decrease of nearly 6.3%. Also, customs data also showed that in August, the export amounted to 240 million yuan, a decrease of 100 million from 340 million in July, a decrease of 29.4%.

In this regard, the US announced two big moves! First, USA Rare Earth and Texas Mineral Resources Corp. recently teamed up to develop a dome mine in Texas.

According to the two companies, the mine has 15 of the 17 rare elements and other minerals considered to be vital to US national security, with an annual production of more than 2,000 tons. Mine's economic life is estimated to be 20 years. There are 14% of resource estimates. Besides, the joint ventures of the two companies initially estimated capital expenditures of $350 million, and the estimated payback period for this capital expenditure is only 1.4 years.

Second, the US "joined" Australia! Earlier this month, Australia issued a report announcing support for 15 rare metals and key mining projects in the country to explore its "rare metals potential". According to the Financial Times report, these projects were proposed by more than 10 mining and metal companies, with a total development cost of 5.7 billion Australian dollars (about 27.755 billion yuan).

In this regard, Reuters pointed out that Chinese rare earth processing capacity is five times that of other countries in the world. If America wants to reach the level of Chinses processing, it must take several years to build processing plants. Moreover, the above report also stated that the processing technology of China is high and low in cost, and it is difficult for other countries to compete. What's your opinion on it? Do you think the US can get rid of its dependence on rare earth in the short term?