Rare Earth Elements: Why the US Shouldn’t Panic
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Posted On: 10/09/2020 3:27:32 AM
Rare Earth Elements: Why the US Shouldn’t Panic Just Yet
Statistics show that the U.S. gets 80% of its rare earth elements from China, and now that there is tension with China, there are fears that the Asian country could “weaponize” rare earth elements in its trade war with the U.S. by cutting off supplies to starve U.S. industries that need these elements. The industries in which rare earths are used include medical devices, advanced weapons systems, wind and solar energy, electric vehicle making and so many others. However, there is no need for panic regarding the Chinese dominance of the supply chains of rare earth elements, and here is why.
Local Production Can Be Ramped Up
The name “rare earth elements” often misleads people into thinking that it is hard to find these products in the earth. However, this isn’t true because rare earths are quite common. The only challenge is that they occur hidden in other ores, and complex as well as costly processes have to be performed to extract and purity these rare earths.
At the moment, China has the biggest number of purification facilities for rare earths, but a mine for these elements exists at Mountain Pass in California. If China cuts supplies, the owner of this mine would simply ramp up production and keep U.S. industries operational.
Sourcing Can Be Obtained Elsewhere
In the event that China restricted rare earths exports to the U.S., manufacturers can turn to suppliers elsewhere to address their needs. For example, Australia has one of the largest rare earth elements processing facilities outside China, and they can step up production quickly to meet the increased demand.
Existing Mining Companies Can Pivot to Rare Earths
When supply is low and demand is high enough, it is possible for existing mining companies to expand their operations and start separating rare earths from the waste currently generated by their operations.
Industries Can Tweak Their Rare Earths Needs
If push comes to shove, industries that use rare earth elements could be forced to look for ways to eliminate or reduce the quantity of rare earths that they use. This reaction isn’t unprecedented, as Japan automakers developed hybrid car motors which did away with or reduced the need for rare earth elements after China cut its exports to Japan in 2010. Oil refineries also reduced their rare earths needs during that scare, and so did glassmakers. This therefore goes to show that innovation can respond to supply shortages and come up with alternatives in the face of rare earths supply shortages instigated by China’s trade war with the U.S.
As you can see, there will be no doom and gloom if China decided to cut off supplies of rare earth elements to the U.S. Lots of options exist, and a lot of good could actually result from China restricting exports to the U.S.! This is probably the same view that is held by mining entities like Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR).
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
Statistics show that the U.S. gets 80% of its rare earth elements from China, and now that there is tension with China, there are fears that the Asian country could “weaponize” rare earth elements in its trade war with the U.S. by cutting off supplies to starve U.S. industries that need these elements. The industries in which rare earths are used include medical devices, advanced weapons systems, wind and solar energy, electric vehicle making and so many others. However, there is no need for panic regarding the Chinese dominance of the supply chains of rare earth elements, and here is why.
Local Production Can Be Ramped Up
The name “rare earth elements” often misleads people into thinking that it is hard to find these products in the earth. However, this isn’t true because rare earths are quite common. The only challenge is that they occur hidden in other ores, and complex as well as costly processes have to be performed to extract and purity these rare earths.
At the moment, China has the biggest number of purification facilities for rare earths, but a mine for these elements exists at Mountain Pass in California. If China cuts supplies, the owner of this mine would simply ramp up production and keep U.S. industries operational.
Sourcing Can Be Obtained Elsewhere
In the event that China restricted rare earths exports to the U.S., manufacturers can turn to suppliers elsewhere to address their needs. For example, Australia has one of the largest rare earth elements processing facilities outside China, and they can step up production quickly to meet the increased demand.
Existing Mining Companies Can Pivot to Rare Earths
When supply is low and demand is high enough, it is possible for existing mining companies to expand their operations and start separating rare earths from the waste currently generated by their operations.
Industries Can Tweak Their Rare Earths Needs
If push comes to shove, industries that use rare earth elements could be forced to look for ways to eliminate or reduce the quantity of rare earths that they use. This reaction isn’t unprecedented, as Japan automakers developed hybrid car motors which did away with or reduced the need for rare earth elements after China cut its exports to Japan in 2010. Oil refineries also reduced their rare earths needs during that scare, and so did glassmakers. This therefore goes to show that innovation can respond to supply shortages and come up with alternatives in the face of rare earths supply shortages instigated by China’s trade war with the U.S.
As you can see, there will be no doom and gloom if China decided to cut off supplies of rare earth elements to the U.S. Lots of options exist, and a lot of good could actually result from China restricting exports to the U.S.! This is probably the same view that is held by mining entities like Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR).
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
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