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China Begins Stockpiling Rare Earths, Draws WTO Attention

timothy posted about 2 years ago | from the stockpiling-is-the-pejorative-for-conserving dept.

Businesses 227

eldavojohn writes "A report by China Securities Journal claims that China is now stockpiling rare earths although it has not indicated when this stockpiling started. Many WTO members have complained about China's tightening restrictions on exports of rare earths while China maintains that such restrictions are an attempt to clean up its environmental problems. A WTO special conference scheduled for July 10th will hopefully decide if China's restrictions are unfair trade practices or if the US, the EU and Japan are merely upset that they can't export their pollution and receive rare earths at low prices. Last year, China granted its mining companies the right to export 30,200 tons but in actuality only 18,600 tons were shipped out of country."

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227 comments

China begins stockpiling First Posts (0, Offtopic)

Anonymous Coward | about 2 years ago | (#40552143)

Our Chinese weapons are superior!

Ah, international politics (0)

Anonymous Coward | about 2 years ago | (#40552159)

The grease that keeps the wheels of free trade grinding!

Because that's just what we need!

Or something.

Smart but not nice (5, Insightful)

GameboyRMH (1153867) | about 2 years ago | (#40552171)

China thinks ahead, but doesn't play nice.

They could be doing it not just for practical purposes but possibly for setting up a DeBeers of rare earth metals.

Re:Smart but not nice (3, Informative)

dutchwhizzman (817898) | about 2 years ago | (#40552237)

It's not as if there is no other source than Chinese land for those minerals. DeBeers just buys all the diamond mines to get a monopoly, China can't do that with rare earth mines, so that won't happen.

Re:Smart but not nice (0)

Anonymous Coward | about 2 years ago | (#40552275)

Why can't China do that with rare earth mines?

Re:Smart but not nice (5, Informative)

benjfowler (239527) | about 2 years ago | (#40552289)

They're tried.

The Chinese (through various proxies) tried buying Australian rare earth mines in Australia. There was political dissent within Australia, so the Chinese deployed viruses on the computers of MPs and Australian miners to get an inside track of the negotiations.

Can't remember how it ended, but I think that basically, the Chinese were caught doing the wrong thing, the negotiations ended, and the Chinese left in a huff and a blizzard of threats.

Re:Smart but not nice (1)

Anonymous Coward | about 2 years ago | (#40552705)

I'm surprised they'd even try. There's a lot of vocal, open contempt for the Chinese in Australia. So much so that I couldn't help but think how it'd never fly in the states. It's a little bizarre, but it's like a much harsher version of the old, "Buy American" campaigns of yesteryear.

Re:Smart but not nice (0)

Anonymous Coward | about 2 years ago | (#40552923)

The US would have to have a rare earth mine to buy. Last I heard the only one near production was in CA and not presently mining.

Re:Smart but not nice (2, Insightful)

Anonymous Coward | about 2 years ago | (#40552851)

The issue is that for suppliers in other countries to emerge, there basically needs to be some profit in it for the investor.

With China sitting on enormous stockpiles however, they could just release a bit of that stockpile, causing the price to crash and putting any foreign company out of business.

WTO basically needs to either tell China to allow unlimited sales abroad, or, to allow foreign nations to subsidise their rare earth metal industry to cover for any price crash caused by China.

Re:Smart but not nice (1)

MightyYar (622222) | about 2 years ago | (#40552265)

It's probably a combination of factors. They really do have horrible environmental problems, and there probably are people with power in China who really do want to limit the exportation of fruits of this damage to discourage the practices. Then you probably have people with power who want to limit exports because China has the market cornered and this raises profit or strengthens their hand in trade negotiations. Those people have reason to work together and so you have the current situation.

Re:Smart but not nice (2)

ShanghaiBill (739463) | about 2 years ago | (#40552601)

They really do have horrible environmental problems

On a per-capita basis, China produces far less pollution than either the USA or Europe. There are fewer restrictions on factory emissions. But the workers at that factory arrive on bicycles instead of commuting 30 miles in a four ton SUV. If you look at all the sources, moving production to China leads to less pollution in some cases.

Re:Smart but not nice (1)

Anonymous Coward | about 2 years ago | (#40552947)

Add to it the pollution of transporting everything you buy from china over the ocean and getting it all across the states.

Re:Smart but not nice (3, Insightful)

meddle99 (1946010) | about 2 years ago | (#40553089)

This is what happens when you present one fact and leave out the context. Most of the workers at the factory can't afford cars, and would probably drive them to work if they could. Are you suggesting that poverty is a good way to improve the environment?

Re:Smart but not nice (0)

Anonymous Coward | about 2 years ago | (#40552407)

China thinks ahead, but doesn't play nice.

They could be doing it not just for practical purposes but possibly for setting up a DeBeers of rare earth metals.

Except that rare earth metals are rare in name only.

Re:Smart but not nice (0)

Anonymous Coward | about 2 years ago | (#40552559)

That's right. If China keeps playing this game, they are going to get tariffs placed on their rare earth exports. This will allow mines throughout the world to compete.

The only reason there aren't many other rare earth mines around the world is because China produces them too cheaply.

Re:Smart but not nice (5, Interesting)

ShanghaiBill (739463) | about 2 years ago | (#40552715)

... setting up a DeBeers of rare earth metals.

Diamonds are valuable only because they are rare. If the DeBeers cartel fell apart, the value of diamonds could quickly collapse, because demand would likely go down with falling prices (the opposite of normal supply/demand). But rare earths are different, because they are actually useful. If they became more plentiful and the price started to decline, many alternative uses would open up, which would push demand back up, and provide price support. Rare earths are used in things like super-magnets, catalysts, specialty alloys, etc. These could be used much more widely if they were cheaper. There is very little risk of a price collapse.

 

Re:Smart but not nice (4, Informative)

Archangel Michael (180766) | about 2 years ago | (#40552897)

Diamonds aren't that rare. In fact, it is less expensive to create man made diamonds than it is to mine them. Diamonds are expensive because DeBeers has convinced women that they need a big fat expensive but utterly useless gem to get married. As for the manufactured diamonds, they are indistinguishable from real diamonds except for the fact that they are typically more "pure". DeBeers is now selling a machine that can tell the composition of diamonds and thus distinguish between natural vs man made diamonds, AND also verify if the diamonds are from their "legit" sources (no blood diamonds).

"Diamonds are a girls best friend" and "Diamonds are forever" indeed.

Re:Smart but not nice (0)

Anonymous Coward | about 2 years ago | (#40553167)

"Diamonds are a girls best friend" and "Diamonds are forever" indeed.
I agree with the point of your post, but wanted to point out that the song has a different meaning. It isn't that girls know diamonds --> marriage, but rather that, unlike a "kiss on the hand may be continental," a girl can keep the diamonds and cash out after the affair is over.

Re:Smart but not nice (1)

emilper (826945) | about 2 years ago | (#40553129)

China does not think ahead worth zilch, the "rare earths" are as rare as common dirt except in lower concentrations. China only has more productive deposits. I call that shooting yourself in the foot: the rare earths are already being replaced in some components, and the mines that closed when China started dumping are reopening.

What the hell (0, Offtopic)

Anonymous Coward | about 2 years ago | (#40552181)

When the hell did China find other Earths and why the hell haven't we found A Earth yet?

Re:What the hell (0, Offtopic)

GameboyRMH (1153867) | about 2 years ago | (#40552249)

America's poor science education in public schools. It's holding you back man.

Re:What the hell (2)

cockpitcomp (1575439) | about 2 years ago | (#40552339)

America has done well without ever having the best grades in math and science .

Re:What the hell (2, Insightful)

Archangel Michael (180766) | about 2 years ago | (#40552917)

America used to be a place where effort was rewarded with success, so the people who did well in Math and Science were rewarded. Now it is all about making things "fair" to all the various "groups".

Re:What the hell (-1)

Anonymous Coward | about 2 years ago | (#40553249)

No it's not about making "fair", USA is among the most unfair places of the world full of stupid people doing it to themselves being sold into the dreams of "future success", so they do everything but the actual "success". For a country where propaganda targeted towards their citizens is forbidden they sure live of it.

USA is not about "fair" that's for sure it's all about degeneration and egoism making a fool of one self for a little scrap money, selling out the most valuable for nothing. It's all about entertainment a most potent drug that takes you away from your daily miserable life into some make belief where the propaganda is ingrained even further into your slave wage life.

One might say USA is a land of dreamers, but that would be a all too romantic and a benevolent description of a bunch of losers, drugged down with drugs and anti-depressants, miserable people who like donkeys follow the carrot doing what their masters want without ever reaching the carrot but a few "celebrities" selling out for cheap to make an example for masses so that they continue to believe in the so called "dream".

USA with their "reality" soaps, propaganda and values that only people being indoctrinated into can adhere and follow are showing the rest of the world how this previously so great country has fallen of the pedestal of the shining beacon of freedom and possibilities onto the nations. But who knows, maybe it was never great just not so shameless and exposing for everyone to see the truth behind the mask of propaganda. One thing for sure, USA is great as selling dreams.

Re:What the hell (0)

Anonymous Coward | about 2 years ago | (#40552421)

Are you trying to set some record for most inane posts per hour? Shut the fuck up already.

Re:What the hell (-1)

Anonymous Coward | about 2 years ago | (#40553011)

WARNING: Eurotrash detected... Apparently your geography is not up to par, either. You must have been referring to the United States, because it's only cool for eurotrash-faggetry to make idiotic statements like this about the US. It's like me saying that you Europeans hate Jews because you produced Hitler.

PS: I live in Canada, asshole.

Re:What the hell (1)

meerling (1487879) | about 2 years ago | (#40552799)

Haha, old joke :)
(And I think you forgot a word between the 'A' and 'Earth'. Something like 'Regular' or 'Common'.)
Darn typos get the best of us, you and me included :)

Why shouldn't they? (5, Insightful)

Gothmolly (148874) | about 2 years ago | (#40552209)

The minerals are theirs; why shouldn't they keep them?

Re:Why shouldn't they? (2, Interesting)

jdastrup (1075795) | about 2 years ago | (#40552291)

Completely agree. Back in my day, if you wanted resources that another country had, you took over that land, even if it meant war. The problem with that is, if we did that today, the earth-worshipers would abruptly put a halt to any rare-earth mining on our newly acquired land. Oh well, never mind. Back to begging the Chinese for them.

Re:Why shouldn't they? (2, Insightful)

Anonymous Coward | about 2 years ago | (#40552435)

Did you. . .Did you just advocate war and environmental devastation?

Re:Why shouldn't they? (5, Funny)

fuzzyfuzzyfungus (1223518) | about 2 years ago | (#40552617)

I think that he managed to suggest that, even after starting a land war in Asia, those terrifying greenies with their incredible political power would still rank among his serious concerns... Impressive.

Re:Why shouldn't they? (3, Funny)

Anonymous Coward | about 2 years ago | (#40552875)

Two pieces of advice:
Never get involved in a land war in Asia.
Never go against a Sicilian when death is on the line.

Re:Why shouldn't they? (0)

Anonymous Coward | about 2 years ago | (#40552913)

Those damn environmentalists. How dare they stand in the way of me getting my electronic toys for cheap prices! Bastards! Don't they know we have a backup earth?

Re:Why shouldn't they? (5, Informative)

cockpitcomp (1575439) | about 2 years ago | (#40552365)

Because they agreed to free trade in return for open access to markets in the WTO.

Re:Why shouldn't they? (1)

garyoa1 (2067072) | about 2 years ago | (#40552493)

What's free trade got to do with it. That doesn't mean they have to sell everything they own. If that were the case then the "nuclear" countries would be forced to sell the bomb to other non nuclear countries.

Re:Why shouldn't they? (1)

Anonymous Coward | about 2 years ago | (#40552613)

Free trade means they can't give the stuff to Chinese companies at a discount. By limiting the exports, they increase the export price but not the domestic price. If they honestly just wanted to limit the ecological damage, they could just limit the total production and let the bidding start on all of it, but then their own businesses would also have to pay increased prices.

If they keep up the preferential treatment, there will be import duties on Chinese products and it will all be A-OK with the WTO.

Re:Why shouldn't they? (1)

meerling (1487879) | about 2 years ago | (#40552861)

From the number of lawsuits and things the WTO has engaged in or threatened over the years, I'm pretty sure that Stockpiling non-excess to jack up the prices is against their regulations. I suspect that's why the WTO is getting huffy at China right now.

Re:Why shouldn't they? (0)

Anonymous Coward | about 2 years ago | (#40552633)

Well if you know anything about contract law you sign a contract you agree to its terms. In this case with the WTO it means no government regulation can prevent companies from doing business/trade in the agreed upon industries.

http://www.wto.org/english/docs_e/legal_e/final_e.htm

Nuclear weapons aren't part of the WTO agreement. Nice try...

Re:Why shouldn't they? (0)

Anonymous Coward | about 2 years ago | (#40553057)

What's free trade got to do with it. That doesn't mean they have to sell everything they own.

No, it just means that if they are selling them, they have to sell them to anyone under the same terms.

(Hint: that is exactly what China is not doing.)

Re:Why shouldn't they? (4, Funny)

BMOC (2478408) | about 2 years ago | (#40552387)

US: I think you should share the rare earths, China. Is that so hard?
China: Well, no.
China: ...and yes. Now it comes to it, I don't feel like parting with it. It's mine, I found it. It came to me!
US: There's no need to get angry.
China: Well, if I'm angry, it's your fault.
China: ...it's mine... my own... my precious...
US: Precious? It's been called that before, but not by you.
China: Oh, what business is it of yours what I do with my own things?
US: I think you've played god with the international economy quite long enough.
China: You want it for yourself!
US: China! Do not take me for some conjuror of cheap tricks! I am not trying to rob you. I'm trying to help you.

Re:Why shouldn't they? (-1)

Anonymous Coward | about 2 years ago | (#40552625)

Note to readers: Parent is a reference to Lord of the Rings

Re:Why shouldn't they? (0)

Anonymous Coward | about 2 years ago | (#40553005)

Note to readers: Parent is a reference to Lord of the Rings

And if you're on Slashdot of all websites and need to have a Lord of the Rings reference pointed out to you, who are you and how did you get lost on your way to Farmville?

Re:Why shouldn't they? (1)

Anonymous Coward | about 2 years ago | (#40552951)

The US has its own precious. It is called intellectual property rights. "My movies and music, MINE! We must have thousand year copyright terms. Yesssss...."

Re:Why shouldn't they? (1)

virgnarus (1949790) | about 2 years ago | (#40553003)

This doesn't make sense. The US is neither old nor wise, and I certainly wouldn't have doubts about its intent on robbing, either.

And quite franky, sir, I find your stereotype towards the size and character of Chinese people offensive.

Wait...

Re:Why shouldn't they? (0)

Anonymous Coward | about 2 years ago | (#40552399)

The minerals are theirs; why shouldn't they keep them?

China is supposed to be a trading partner; a fact acknowledged every time China turns to the WTO when something displeases it. Now, if China wants to make exceptions and withhold certain valuable products, that's fine. We should then withhold valuable parts of our market. It's ours after all — why shouldn't we keep it?

Re:Why shouldn't they? (1)

alen (225700) | about 2 years ago | (#40552539)

the problem is that you need those rare earths to build almost every products we want. little things like catalytic converters for cars so we don't pollute our air. even if we built them in the USA we couldn't get the materials to build them.

Afghanistan has lots of these as well

Re:Why shouldn't they? (2)

Gr8Apes (679165) | about 2 years ago | (#40552557)

China is supposed to be a trading partner; a fact acknowledged every time China turns to the WTO when something displeases it. Now, if China wants to make exceptions and withhold certain valuable products, that's fine. We should then withhold valuable parts of our market. It's ours after all — why shouldn't we keep it?

That's called a trade war, and usually results in tariffs and embargoes, and generally decimates trade, which is what WTO and free trade agreements are about preventing.

Re:Why shouldn't they? (0)

Anonymous Coward | about 2 years ago | (#40552735)

So, prior to any response, it's not a trade war; China can shut down rare earth exports and that's just fine. Only if there is a response may we invoke the `trade war' boogeyman. Interesting.

The truth is we're already in a trade war and we're getting our asses kicked. Strange new phenomena [nytimes.com] have appeared as the consequences of China's mercantilism have tripped up political agendas. Domestic interests have begun to fight back [detroitnews.com] .

This particular pendulum has gone as far as it can to one side. It will now swing back and China will never again be able to take the US market for granted. This will occur despite your bleating `trade war.'

Re:Why shouldn't they? (1)

Anonymous Coward | about 2 years ago | (#40552457)

The problem is when they manipulate the market through mass sales. Keeping would be fine if they stayed like this forever BUT what happens when there is more competition? Are they gonna use their stockpile to destroy competing companies by unloading on the market only to limit export again to raise prices afterwards? That is the major danger we face.

Re:Why shouldn't they? (1)

tlhIngan (30335) | about 2 years ago | (#40553181)

The minerals are theirs; why shouldn't they keep them?

The problem is they entered into trade agreements. Which means that they get to sell stuff without tarriffs imposed, in exchange for the other country to sell stuff to them without tariffs.

These agreements may have included raw materials as well.

Not to say that it doesn't happen elsewhere (the US is notorious for imposing trade restrictions when it turns out that the agreed to free trade agreements mean some lobbying group is losing out).

Perhaps appeasement for business & China was b (5, Interesting)

sethstorm (512897) | about 2 years ago | (#40552225)

Even if it harms the businesses and the fellow travelers that aid and abet such a hostile regime, it is time that the world plays hardball on China.

Things like this are why Faustian deals of getting a pliant slave-labor workforce are always a bad idea. Trade is no excuse for appeasement.

Re:Perhaps appeasement for business & China wa (5, Insightful)

benjfowler (239527) | about 2 years ago | (#40552335)

They can't and won't. They're afraid of China.

The world will eventually regret not opposing the rise of China, because they will be bullies 100 times worse than the Americans at their worst, with the added bonus that the Chinese are fiercely xenophobic and have a massive chip on their shoulder from their "100 years of humiliation".

I'm looking forward to an age of oppression and tyranny under the boot of the Chinese Communist Party.

Re:Perhaps appeasement for business & China wa (1, Insightful)

k(wi)r(kipedia) (2648849) | about 2 years ago | (#40552803)

China has not had a history of projecting its occupation forces well beyond its borders. Sure, China has invaded Tibet and is threatening to do the same with Taiwan and some puny islands near the Philippines. But unlike the US and the old European empires, China has not sent its armed forces across continents to conquer people of vastly different cultures. And you can't talk about China's "100 years of humiliation" without taking into account fiercely pro-American Taiwan, political heirs to the government that the Communist Party kicked out of the mainland. The Communists have been in power only since 1949, well short of 100 years.

Re:Perhaps appeasement for business & China wa (1)

angel'o'sphere (80593) | about 2 years ago | (#40552883)

He was talking about the 100 years of suppression and conquering by britanny and the USA BEFORE WWII.

Re:Perhaps appeasement for business & China wa (1)

Anonymous Coward | about 2 years ago | (#40553223)

The Chinese also don't have the reputation of conquering the wives of foreigners from vastly different cultures. I'm sure it's just because the simply lack aggressive ambition and realize the immorality of such despicable acts, and not because they lack the proper resources.

Re:Perhaps appeasement for business & China wa (1)

timeOday (582209) | about 2 years ago | (#40553081)

It is simply too soon to say whether economic engagement with China just made it stronger without fundamentally changing it, or will result in major political reforms. We won't know until this "new" nation (now with a much more wealthy, worldly middle class) is put to the test of an economic shock or a period of stagnation. Citizens almost never agitate until they are hit in the pocketbook.

Hmmmm (4, Insightful)

Vinegar Joe (998110) | about 2 years ago | (#40552247)

So why isn't the WTO complaining about OPEC?

Re:Hmmmm (3, Insightful)

cpghost (719344) | about 2 years ago | (#40552299)

Why should it? OPEC are exporting their oil while China is withholding its Rare Earths from being exported. WTO could complain about OPEC if OPEC refused to export oil (which it doesn't), and if it had a near monopoly on it (which it doesn't either).

Re:Hmmmm (3, Interesting)

ColdWetDog (752185) | about 2 years ago | (#40552391)

The point being is that OPEC sets a ceiling on how much oil it pumps out each month. If you are interested in $2 / gallon gasoline, you want OPEC to produce flat out and, in fact, punch wells in every square foot of space you own.

If you're OPEC and trying to manage a non renewable resource, you don't want to do that. While OPEC isn't the only source of oil (and neither is China the only source of Rare Earths), they produce enough to partially control prices.

Same with China.

Buy cheap, sell dear.

Re:Hmmmm (0)

Anonymous Coward | about 2 years ago | (#40552301)

kinda has the word 'Cartel' in the name :/

Re:Hmmmm (1)

The Snowman (116231) | about 2 years ago | (#40552381)

kinda has the word 'Cartel' in the name :/

The words "Organization of the Petroleum Exporting Countries" do not include the word "cartel." Regardless, they are a cartel, and China is not in this case since it is a single entity. Cartels are made up of two or more entities.

Re:Hmmmm (0)

Anonymous Coward | about 2 years ago | (#40552685)

Saudi Arabia, Iraq, Iran, and Libya are not part of the WTO. There is all of your oil right there...

Re:Hmmmm (1)

w_dragon (1802458) | about 2 years ago | (#40552989)

Maybe because there's a subtle yet important distinction between reducing production and stockpiling? Either that or, as an AC pointed out, most of the important OPEC members aren't part of the WTO.

Wait (3, Funny)

SaroDarksbane (1784314) | about 2 years ago | (#40552295)

Just so I have this straight, China unfairly damages the US economy when they:

1. Trade low-cost goods with us.
2. Don't trade low-cost goods with us.

Those bastards! *shakes fist*

Re:Wait (5, Insightful)

i kan reed (749298) | about 2 years ago | (#40552543)

They sell low cost consumer goods by manipulating exchange rates.
They don't see low cost raw materials by manipulating supply.

Both sides function as pro-Chinese manufacturing, anti-US manufacturing.

Re:Wait (0)

Anonymous Coward | about 2 years ago | (#40552711)

And heaven forbid a large country should *ever* try and pull economic forces in their own favour...

Re:Wait (0)

Anonymous Coward | about 2 years ago | (#40552749)

They are smart.

Also..

We (our bought government) don't do anything because US multi-national manufacturing corporations profits from this handsomely.
We (our politicians and winger pundits) tell us its great cause we buy low cost goods saving us thousands (even though they are the same prices as before just now they dont have to pay high wage US workers and pocket the difference).

Re:Wait (1)

ceoyoyo (59147) | about 2 years ago | (#40552773)

Oh please. Keeping their exchange rate low just means China is selling the US stuff cheap (and lending the US money cheap). Boo hoo. If you don't like it, don't buy it. "Manipulating supply" just means not selling you stuff. If you don't like it, go mine your own. It's a little bit nasty if China waits until US mines get up to speed, then floods the market, but if that happens slap a duty on Chinese rare earth's and be done.

Re:Wait (2)

nedlohs (1335013) | about 2 years ago | (#40552909)

Stop selling them bonds and require trade be done in RMBs instead of USDs and there can be no manipulation. Oh wait, you guys like that side of the deal.

Re:Wait (1)

angel'o'sphere (80593) | about 2 years ago | (#40552921)

Defining an exchange rate makes goods not necessarily cheap. I assume if the chineese currency was traded freely the consumer goods would become even cheaper.

Re:Wait (1)

erroneus (253617) | about 2 years ago | (#40552579)

Different parties complaining on each side, of course. You see it everywhere you go. This is how politics work. It doesn't matter which side of any issue you take, there's money there for you.

Re:Wait (1)

Anonymous Coward | about 2 years ago | (#40552885)

Just so I have this straight, China unfairly damages the US economy when they:

1. Trade low-cost goods with us.
2. Don't trade low-cost goods with us.

Those bastards! *shakes fist*

More accurately:

1. Supply low-cost refined rare earth minerals to us.
2. Drive US suppliers out of business.
3. Restrict supplies and raise prices.

Re:Wait (0)

Anonymous Coward | about 2 years ago | (#40553191)

If your neighbor committed murder on Monday, and then committed murder again on a non-Monday, that doesn't mean we hypocritically accuse our neighbor of committing murder no matter what day of the week it is. China can do some things that are wrong, which may or may not result in higher prices, lower prices, or none at all. Legitimate complaints against China do not hinge on the two conditions you raised. Having said that, as long as China chooses to be a member of the WTO, they are bound by their fair trade rules.

Double Standard (4, Insightful)

Anonymous Coward | about 2 years ago | (#40552337)

I thought that this is what the Free Market is all about. Why do I have to hear my country's (USA) leaders complain ONLY when it doesn't benefit us? It's not like we're an impoverished nation. China can do whatever they want, and we can pay them for the resources or not buy them. It's not like we can't survive without them providing rare earth metals. So tired of the hypocritical whining ONLY when things don't go our way.

Re:Double Standard (0)

Anonymous Coward | about 2 years ago | (#40552485)

Politicians are elected to benefit their constituencies. Period. They're just doing what they're paid for.

Re:Double Standard (0)

Anonymous Coward | about 2 years ago | (#40553121)

The question then is who are their real constituencies?

Re:Double Standard (0)

Anonymous Coward | about 2 years ago | (#40552609)

But those materials belong to the US. Just because they happen to exist outside of US borders is irrelevant to the discussion. Remember it is might that makes right not law. Oh I know that otherwise is what's claimed but you only need to be able to separate in your mind thought from deed and you can easily see the truth of the matter.

Re:Double Standard (1)

berashith (222128) | about 2 years ago | (#40552619)

you are thinking very wrong. Every bit of your comment becomes incorrect the moment you decided to apply your own definition of "free market".

Re:Double Standard (0)

Anonymous Coward | about 2 years ago | (#40552843)

I don't know what media outlet you subscribe to to arrive at that sentiment. Free market refers to a market in which people can buy and sell whatever they please without government getting in the way. Free market does not mean governments are free to do whatever they want.

Secondly, "it's not like we can't survive without them providing rare earth metals" this is kind of not true because of the term "rare" in rare earth metals. Most of the high tech industries rely on a few key materials that are not widely found around the world. China is the leader in rare earth mining, and hence currently many industries are heavily dependent on those mines. It matters when China raises their price *unfairly* or even stops shipping them altogether. It's like depriving salt and vitamins to an inmate. They die.

Re:Double Standard (4, Insightful)

thrich81 (1357561) | about 2 years ago | (#40552953)

This is where the "free market" and "free trade" as practiced in the US now (everything done by private companies with short term profits above all) fails. When some entrepreneur tries to ramp up production of rare earths in the US, the Chinese will release enough of their stockpile to put him out of business, similar (but not exactly the same) as for solar panel production lately. The US should just close its market to Chinese produced goods which incorporate Chinese produced rare earths unless US manufacturers have the same access to the Chinese rare earths.

Re:Double Standard (0)

Anonymous Coward | about 2 years ago | (#40552985)

Starting to sound like a flag burner. You haven't been getting the memos have you.

Re:Double Standard (4, Insightful)

magarity (164372) | about 2 years ago | (#40553241)

I thought that this is what the Free Market is all about

There are always comments like this whenever articles about trade problems come up and I can never tell whether they're honestly in the dark about how free trade and markets work or if they're just snarky trolls.

The second sentence of the article clearly states that the Chinese government is buying up and stockpiling the material in question. Sometimes it's rare earths, sometimes some other material. Whatever the commodity, the definition of free market operations is that individual businesses buy and sell in competition with each other, When governments get involved then it stops being a free market to one degree or another .

Sure, the USA hardly has a model free market system due to regulatory oversight, taxation, subsidies, etc, but it is *relatively* free in comparison. The US government doesn't stockpile much and when it does, it's a rare case that it's trying to actively influence international markets. Mainly the US government just messes around with protectionist tarriffs with the international market and various subsidies for the domestic market but outright stockpiling to influence markets almost never happens. This stockpiling operation by the Chinese government is an extremely "up yours" move and thus all the fuss.

Meanwhile, if an individual non-governmental player decides to stockpile a resource as a competitive strategy against other players, that would be a free market action. Perhaps it's impossible to have free market operations in a country such as China where the government takes such a active role but that's a different problem. It's not a cause to make a snide remark about free markets.

Except we may have just as much (1)

Anonymous Coward | about 2 years ago | (#40552455)

In Nebraska.

http://www.washingtontimes.com/news/2011/aug/2/rush-for-rare-earth-may-create-nebraska-boomtown/

http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CFcQFjAB&url=http%3A%2F%2Fnews.yahoo.com%2Fhuge-rare-earth-minerals-deposit-springs-tiny-nebraska-032805893.html&ei=ULj1T9nJLaWL0QHyj9mQBw&usg=AFQjCNHG6D33wkRGwc0jTZnGsk2Mw0m0uQ&sig2=gSmPFTmoFxZNTwOsLRVOmA

http://www.geek.com/articles/news/tiny-village-in-nebraska-hides-worlds-largest-rare-earth-mineral-deposits-2011085/

Re:Except we may have just as much (1)

Brett Buck (811747) | about 2 years ago | (#40552701)

The problem being, of course, that there will be every possible obstacle put in the way of exploiting these resources. Just like oil.

Re:Except we may have just as much (3, Informative)

cheetah (9485) | about 2 years ago | (#40552755)

Yeah, but we also have environmental regulations that make it VERY difficult(costly) extract the Rare Earth Elements. It's these environmental regulations that is the only reason that China is the leading producer of these elements. Getting this stuff out of the ore is a rather nasty processes which is expensive to do in the US.

Also until recently it was not clear it was worth extracting these elements. I know that there was a large mine that used to produce much of the worlds supply in the 80's-90's located in California. They shutdown because of the regulations and the fact that they couldn't compete with the low cost of stuff coming out of China. At that time it wasn't clear that these elements were that vital. Long term this action will cause other countries to re-open old mines or start extraction of new deposits. Rare-Earth deposits aren't really that rare it's the concentration of these elements in the "ore" that are low which is why they are called "rare".

This action by the Chinese has only caused people to start looking for new deposits and different methods of extraction. Last I heard, the Californian mine is in the process of being re-opened and should start producing in 2013.

Great opportunity (0)

Anonymous Coward | about 2 years ago | (#40552499)

There's always this tiny die-hard faction that proposes mining asteroids, so let's start with making machines to filter sea water. Apparently there's pretty much every element you want dissolved in there. It should be a lot easier to set up some machinery right here on Earth with the backing of an entire oil-powered infrastructure than to set up non-existent technology in a total vacuum with nothing around.

Re:Great opportunity (1)

ceoyoyo (59147) | about 2 years ago | (#40552841)

Most asteroid mining plans involve mining asteroids for things that are valuable in space. It's possible you might drop a few things down to the surface as a bonus, but not as your main business.

Seawater mining is expensive because the stuff in seawater is very dilute, all mixed up together, and dissolved. Seawater mining isn't economical with current technology and prices, but it might be in the future. Asteroid mining isn't either, but might be in the future. When either one becomes economical, it will happen. One possible difference is that we're working on rocket technology, which will lower the cost of asteroid mining, in order to do other things.

Re:Great opportunity (1)

meerling (1487879) | about 2 years ago | (#40552997)

Our mineral/seawater separation techniques currently suck. It would be significantly cheaper for most materials to get them from asteroids than from seawater.

News reports are that there actually is a group right now that is planning on snagging some asteroid riches. I'll believe they are serious when they actually bring back a load of minerals.

Pretty much all this stuff is controlled by the market price and cost to extract dynamic.

Low cost, high risk (1)

jet_silver (27654) | about 2 years ago | (#40552667)

Dealing with suppliers or manufacturers of anything in China presents the possibility of low costs but adds risk. The reward/risk calculus is seriously out of whack these days: for example, a tremendous amount of world HDD capacity is located in Thailand, where floods can stop everyone's production. China's industral advancement is going to be short-lived unless they start treating contracts as binding instead of a general idea.

A responsible supply chain manager would second-source everything they bought in China except for plastic toys, shower curtains and flip-flops - and I'm not so sure about the toys because high lead or selenium (or both) levels have been found in Chinese toys.

Molycorp already on line (5, Informative)

Animats (122034) | about 2 years ago | (#40552795)

Molycorp, which owns a big rare earths mine at Mountain Pass, California, is back on line [molycorp.com] . That mine used to supply 100% of US demand, plus exports. It was shut down in 2002 due to cheaper rare earths from China. Now it's back.

Rare earths aren't that rare. They're just present in small concentrations. So mining produces huge volumes of waste for small amounts of product. The big rare earths mine in China is an environmental disaster area. The one in California had to comply with US and California regulations. At current rare earths prices, that's not a problem. (They do, however, ship some of the sludge to Nevada through a 20 mile pipeline. Really).

A year from now, rare earth supplies won't be a problem. Then people will be bitching about the Molycorp monopoly.

Re:Molycorp already on line (1)

Mr. Firewall (578517) | about 2 years ago | (#40553149)

Mod parent up. I've been waiting to see someone post some actual facts on this issue, and this (above) is the first I've seen.

FACT: China spent years dumping rare earths into the US market below their cost, which drove all of the US RE mines out of business.

FACT: Then China started cutting back on their exports. Voila! Prices go up!

Do you see where this goes? Hint: it has nothing to do with the environment. That's a smoke screen. It's all about dominating the world supply, and that's the only thing it's about.

China's problem is, of course, that the US rare earth deposits are still here, in the ground. And with prices going back up to where they should be, US corps are starting to re-open those mines.

One could easily speculate that China's "stockpiling" is so that they can again put US miners out of business with another round of dumping. However, that idea might be viewed by some as too cynical....

Fun fact: If you live in or near SoCal, you can go see this mine. It's right beside I-15 near the top of the hill near the Nipton exit (which IIRC is the last exit before entering Nevada). You can't see it very well from the freeway, but it's there.

Re:Molycorp already on line (4, Insightful)

WindBourne (631190) | about 2 years ago | (#40553285)

Molycorp went out first time because China was dumping and CA was after them to clean up (but mostly China's dumping).
Right now, it appears that China is building a large stockpile so that they can dump it on the market and destroy Molycorp.

Engineering Challange (1)

LifesABeach (234436) | about 2 years ago | (#40552889)

Create methodologies that ignroe the requirement for Rare Earths.

A mountain of wealth is worthless, if only one group has it.

Pump and dump? (3, Insightful)

erice (13380) | about 2 years ago | (#40553079)

Stockpiling does two things:

1) In the short term it limits supply, causing prices and profits to rise.
2) In the medium term, it gives the Chinese the means to flood the market, driving out new competitors and restoring their near monopoly.

Rinse, lather, repeat

Some will claim "Not a problem" (1)

WindBourne (631190) | about 2 years ago | (#40553207)

There are many on this site that will disregard China's actions on all of this. Or they will claim that China is taking these actions because the west is beating up China. Regardless, Molycorp is coming. But my guess is that China will dump on the market until Molycorp is dead.
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