How China created a chokehold on the rare earths industry : NPR
China has been able to cut Europe and the United States entirely from several critical metals of rare land. How did he develop such maintenance in an industry that the United States once controlled?
Ailsa Chang, host:
Now we are going to take a look at Beijing near the monopoly on the refining of rare earths. Emily Feng reports how China has developed a workforce on them.
Emily Feng, Byline: rare earths are now so coveted, some people store them in the chests.
Louis O’Connor: Make no mistake – I mean, there are walls and doors of 3 1/2 meters and armed security.
Feng: It’s Louis O’Connor. He helps manage a company where investors can join rare land actions which he stores in an underground safe in Germany. China has made export restrictions on seven types of rare land this spring in response to American prices, and O’Connor says that he and his investors immediately felt the crunch.
O’Connor: They install what you could call a tap system where they can activate and deactivate.
Feng: And when China has turned this tap this spring, the United States felt the pinch. But as late as the 1980s, it was the United States that dominated rare earths in a mine in California called Mountain Pass. Mark Smith was a MolyCorp executive, a company producing Rare Terres.
Mark Smith: At his peak, he actually produced 100% of Europium – which is a strong rare earth – which the world needed.
Feng: Then China saw the potential of these minerals. They wanted to learn from the United States, so Smith said that from the 1960s, Chinese leaders began to visit Mountain Pass.
Smith: We have toured them. We explained what we are doing, allowed them to take photos and everything else. They brought it back to China.
Feng: Then Chinese companies increased their production and underestimated world prices. But industry in China at the time was very unregulated and polluting. Here is Smith again. He frequently visited China during this period.
Smith: They would exploit the side of the hill. They would pour buckets of five gallons of sulfuric acid or hydrochloric acid, to pour their ore and let stand and stew for a while, then they would bring the liqueur into the jugs of five gallons.
Feng: All this, of course, has created huge environmental problems. And at the end of the 1990s, Beijing was enough. It began to impose production and export quotas to stop price wars, limit pollution and limit foreign participation. Rod Eggert teaches the mineral economy at the Colorado School of Mines. He explains that these quotas have created two price sets. These controls also had the involuntary consequence of creating a flourishing smuggling industry …
ROD EGGERT: And so there was an incentive to undocumented or illegal or unauthorized exports.
Feng: … to bypass the export limits. The academics estimate that up to a third of the rare land products in the country in the mid -2000s, were illegal – smuggled China. In addition, in 2014, the World Trade Organization ruled against these export limits. But China was already changing tactics.
(Soundbit of archived registration)
Unidentified person N ° 1: (Speaking Mandarin).
Feng: China was consolidated. In 2012, he started monitoring small mines, even exploding illegal operations.
(Soundbit of archived registration)
Unidentified person 2: (Talking about Mandarin).
Feng: China closed hundreds of illegal mines and refineries, then only formed six oversized companies, mainly belonging to public property, nicknamed the six Big, in China. China could now control the offer and the price through the large six. And today, Chinese companies have essentially set the price of rare land.
(Diaphony)
Feng: But American companies have tried to find ways to overcome the domination of China.
Unidentified person # 3: Tips at the bottom is the chemical product of which I was talking about which allows you to separate …
Feng: companies like this, called Phoenix Sailings – It is a Massachusetts startup that takes mining waste and extracts rare earths inside.
I’m just – I like you to have acid labeled VAT.
(LAUGH)
Feng: I won’t touch that.
Unidentified nobody # 3: Please do not do it.
Feng: This is only one of the few American companies prepared to refine rare earths. Here is Nick Myers, one of the co-founders.
Nick Myers: Our main customers are in the automotive sector.
Feng: But like the other American American land companies, they say it was difficult to obtain capital and gain ground, in part because China has so many market share. Then this year, things have changed.
MYERS: Defined tone defixing – I think what happened are the people of large automotive companies or prime numbers of defense realized that they had told their bosses that China would never make their offer.
Feng: But this year, China has closed the offer. Phoenix residues have obtained a large part of the investments, and other American companies are finally hoping to catch up with China.
Emily Feng, NPR News, Burlington, Massachusetts.
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