In late 2008 it was announced that Hemlock Semiconductor was planning to spend up to $2.5 billion to build a facility to manufacture polysilicon in Clarksville, TN. Polysilicon is the foundation for solar panels. The facility was built, and a lab was built at nearby Austin Peay University to train workers. The plant was built, workers were hired and trained and pilot production began. In late 2014 it was announced that the plant was closing - what happened? China cut the price of polysilicon below Hemlock’s (and others) price of production, competing suppliers folded giving China a near monopoly on polysilicon below Hemlock’s silicon.
China is playing the same game with REE, and the U.S. has its head in the same noose as the EU. Attempts to mine REE in the U.S. face opposition from environmental groups, and obtaining permits to refine REE concentrates face stringent EPA permitting process and more opposition from environmental groups.
China’s REE & polysilicon policies are just a facet of China’s mercantilist policies, attempting to coerce the world into purchasing higher value added products from China by controlling the supply of critical raw materials. Additionally, control of critical materials used in defense applications through end user certification gives China visibility & control over the wests defense modernization efforts.
The west needs a unified response to Chinas aggressive mercantilist policies, certainly subsidizing non-China producers is one approach. Another is to use tariffs to set a floor on the price of China’s raw material & higher value added products utilizing critical materials to eliminate any competitive advantaged gained through this behavior. This would give non Chinese suppliers assurance that they won’t face getting cut off at the knees by a Chinese trade war.
The west also needs to find a happy medium between environmental protection and the production of the raw materials required by a modern industrial economy. It does the world no good to have some countries environmental controls force production to some other corner of the world having minimal to no environmental protection.
Yes, oil and refined products produced on the other side of the world with minimal environmental controls is obviously better that the same products produced locally with environmental controls.
Your Sunday articles are always some of the best of the week, thank you. Rare Earths are going the way of every industry China wanted to conquer. Going back 20 plus years I have observed these industries but I’m sure it’s much deeper. Steel, mid, low end semiconductor manufacturing, high tech manufacturing ( iPhone, many electronics, solar panels), now a major play to control rare earths, that is a major power grab against the world, except we’re not really paying attention to the consequences imo.
The drug dealer playbook. Here is something cheap to get you hooked, jack up the prices, and if you choose to source your drugs elsewhere, they will crash the competitors' market until they are once again the only choice.
When you write for the American audience, keep in mind that a quick conversion will get our attention. 400 kilograms means less to me than "...approaching half a ton of REE."
Its chicken and egg. If EU/UK stopped being utter prats on the geo political world stage, supporting every 'war' that the Empire wanted to pursue. they would find that China would have little incentive other than to look for win win trade deals ( ditto Russia with oil/gas etc).
Of course having inadequate negotiators/'leaders' doesn't help.
The EU/UK had leaders have a strategic vision of the future that includes being friends with scam artists who siphon off massive subsidies from idiotic policies.
I would add that being prats on the geo political stage doesn't help their populations but it does enrich them as individuals.
You write "you have to understand the scale and ruthlessness behind China’s REE machine." Ruthless indeed. China has completely sacrificed its environment, public health, wildlife, etc. to industry and *does not care*. It seems unlikely the EU would be willing to do the same, although, as things get more difficult, perhaps I'm wrong. Finding ways around REEs seems more likely, or, if the US and other countries go down the path of REE development, finding other sources.
The US and other manufacturing nations could accomplish a coordinated response to sourcing REE and their refining in the EU and Asia. But goodness sakes, keep the EU, OECD, and UN out of it. Geesh!!!
In US, the DoD just followed your playbook with MP Materials by agreeing a 10-years off take at double market prices. If the EU does the same for NEO's Phase 1 and Phase 2 magnet facility (5k tons) that would offer Europe substantial leverage over China in their ongoing trade talks.
You write "Within a decade, France went from importing the vast majority of its energy to producing over 70% of its electricity from nuclear power. Today, it still enjoys some of the cheapest, most stable electricity in Europe." But it still imports the vast majority of non-electricity "energy" (which in most countries is around 80% of total energy use). Also probably in the form of end products (e.g. steel, chemicals, food, etc.).
Yes, France, like the rest of Europe, relies on imported fuels and industrial inputs. But it radically transformed one critical part of its energy system and secured long-term resilience in its electricity supply.
But electricity still requires copious amounts of fossil fuels (mining materials (diesel), refining materials (diesel, coal), building factories to build tech (diesel, coal, etc.), and so on). And much of what we use fossil fuels for can't be replaced by electricity. E.g. plastic, fertilizer, asphalt, etc.).
They do. It takes HUGE amounts of concrete (coal!) to make a nuclear power plant. And repurposed uranium from nuclear weapons is starting to run out, so more nuclear power plants means more uranium mining. And of course, we still have no idea what to do with the waste. Diesel generators must be used as backup in case the grid goes down to keep the cooling systems working. And of course, the grid lines from the power plants require massive amounts of fossil fuels for the steel, aluminum, copper, etc. and destroying ecosystems for installing pylons, etc.
In late 2008 it was announced that Hemlock Semiconductor was planning to spend up to $2.5 billion to build a facility to manufacture polysilicon in Clarksville, TN. Polysilicon is the foundation for solar panels. The facility was built, and a lab was built at nearby Austin Peay University to train workers. The plant was built, workers were hired and trained and pilot production began. In late 2014 it was announced that the plant was closing - what happened? China cut the price of polysilicon below Hemlock’s (and others) price of production, competing suppliers folded giving China a near monopoly on polysilicon below Hemlock’s silicon.
China is playing the same game with REE, and the U.S. has its head in the same noose as the EU. Attempts to mine REE in the U.S. face opposition from environmental groups, and obtaining permits to refine REE concentrates face stringent EPA permitting process and more opposition from environmental groups.
China’s REE & polysilicon policies are just a facet of China’s mercantilist policies, attempting to coerce the world into purchasing higher value added products from China by controlling the supply of critical raw materials. Additionally, control of critical materials used in defense applications through end user certification gives China visibility & control over the wests defense modernization efforts.
The west needs a unified response to Chinas aggressive mercantilist policies, certainly subsidizing non-China producers is one approach. Another is to use tariffs to set a floor on the price of China’s raw material & higher value added products utilizing critical materials to eliminate any competitive advantaged gained through this behavior. This would give non Chinese suppliers assurance that they won’t face getting cut off at the knees by a Chinese trade war.
The west also needs to find a happy medium between environmental protection and the production of the raw materials required by a modern industrial economy. It does the world no good to have some countries environmental controls force production to some other corner of the world having minimal to no environmental protection.
High environmental standards that outsource pollution is one of the great ironies of overzealous green policy.
Yes, oil and refined products produced on the other side of the world with minimal environmental controls is obviously better that the same products produced locally with environmental controls.
Your Sunday articles are always some of the best of the week, thank you. Rare Earths are going the way of every industry China wanted to conquer. Going back 20 plus years I have observed these industries but I’m sure it’s much deeper. Steel, mid, low end semiconductor manufacturing, high tech manufacturing ( iPhone, many electronics, solar panels), now a major play to control rare earths, that is a major power grab against the world, except we’re not really paying attention to the consequences imo.
Thanks, Dave! Agreed, you get cheap stuff today but cheap always comes at a cost.
The drug dealer playbook. Here is something cheap to get you hooked, jack up the prices, and if you choose to source your drugs elsewhere, they will crash the competitors' market until they are once again the only choice.
Great analogy.
40 years in fringe finance, you see patterns the PhDs and MBAs miss.
When you write for the American audience, keep in mind that a quick conversion will get our attention. 400 kilograms means less to me than "...approaching half a ton of REE."
Good point! My readers are about half US-based, so I’ll start including both units more consistently.
Its chicken and egg. If EU/UK stopped being utter prats on the geo political world stage, supporting every 'war' that the Empire wanted to pursue. they would find that China would have little incentive other than to look for win win trade deals ( ditto Russia with oil/gas etc).
Of course having inadequate negotiators/'leaders' doesn't help.
You reap what you sow.
That’s definitely one of the underlying dynamics worth factoring in.
The EU/UK had leaders have a strategic vision of the future that includes being friends with scam artists who siphon off massive subsidies from idiotic policies.
I would add that being prats on the geo political stage doesn't help their populations but it does enrich them as individuals.
You write "you have to understand the scale and ruthlessness behind China’s REE machine." Ruthless indeed. China has completely sacrificed its environment, public health, wildlife, etc. to industry and *does not care*. It seems unlikely the EU would be willing to do the same, although, as things get more difficult, perhaps I'm wrong. Finding ways around REEs seems more likely, or, if the US and other countries go down the path of REE development, finding other sources.
The US and other manufacturing nations could accomplish a coordinated response to sourcing REE and their refining in the EU and Asia. But goodness sakes, keep the EU, OECD, and UN out of it. Geesh!!!
In US, the DoD just followed your playbook with MP Materials by agreeing a 10-years off take at double market prices. If the EU does the same for NEO's Phase 1 and Phase 2 magnet facility (5k tons) that would offer Europe substantial leverage over China in their ongoing trade talks.
Let’s see if Brussels pays attention.
You write "Within a decade, France went from importing the vast majority of its energy to producing over 70% of its electricity from nuclear power. Today, it still enjoys some of the cheapest, most stable electricity in Europe." But it still imports the vast majority of non-electricity "energy" (which in most countries is around 80% of total energy use). Also probably in the form of end products (e.g. steel, chemicals, food, etc.).
Yes, France, like the rest of Europe, relies on imported fuels and industrial inputs. But it radically transformed one critical part of its energy system and secured long-term resilience in its electricity supply.
France could make the strategic decision to replace things that run on fossil fuels with things that run on electricity.
But electricity still requires copious amounts of fossil fuels (mining materials (diesel), refining materials (diesel, coal), building factories to build tech (diesel, coal, etc.), and so on). And much of what we use fossil fuels for can't be replaced by electricity. E.g. plastic, fertilizer, asphalt, etc.).
Nuclear power plants produce electricity.
They do. It takes HUGE amounts of concrete (coal!) to make a nuclear power plant. And repurposed uranium from nuclear weapons is starting to run out, so more nuclear power plants means more uranium mining. And of course, we still have no idea what to do with the waste. Diesel generators must be used as backup in case the grid goes down to keep the cooling systems working. And of course, the grid lines from the power plants require massive amounts of fossil fuels for the steel, aluminum, copper, etc. and destroying ecosystems for installing pylons, etc.