It's not a secret that China has a near stranglehold on the world's supply of rare earth metals, but when President Obama spoke out against that country's control of the market today, the information probably spiked a bit on people's "is that true?" meters.

Speaking at the White House but with the support of both Japan (no surprise there) and the European Union, the President said that the U.S. is going to file something called a "request for consultations" with China at the World Trade Organization because China is limiting rare earth exports. This, of course, means that it is more difficult, more expensive or just plain impossible to make some parts for hybrids and other advanced vehicles (*ahem* batteries *ahem*) in the U.S. The president said that , "We want our companies building those products right here in America. But to do that, American manufacturers need to have access to rare earth materials, which China supplies. ... Being able to manufacture advanced batteries and hybrid cars in America is too important for us to stand by and do nothing."

Of course, there are other options. Potential rare earth supplies in Alaska or the Pacific Ocean could be accessed, for one. Also, if work to make electric motors like switched reluctance motors with no rare earth metals being undertaken by Toyota and a UK consortium led by Sevcon, among others, comes to fruition, disputes like this wouldn't be nearly as big a deal. But for now, it is, and it also happens to be an election year.


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    • 1 Second Ago
  • 56 Comments
      marcopolo
      • 2 Years Ago
      President Barak Obama The White House 1600 Pennsylvania Avenue, NW Washington, DC 20500 Dear Sir, RE: World's supply of rare earth metals Good news! Thanks to US and European ingenuity, the process of Rare Earth extraction can now be largely mechanised. This advance should greatly offset the advantage of cheap PRC labour. (Including the human rights issue of PRC forced labour camps). Advances in the process of lode extraction can also be now conducted on site, and allows for unconventional methods of transport from remote sites, ensuring even less disruption to the environment. But the best news, is you don't need to mine the pristine wilderness of Alaska bother about the dubious problems of extracts from the pacific sea bed, deal with pesky and unreliable Bolivians, etc.. No sir! Situated conveniently in the middle of the semi-arid Australian waste-lands, are deposits of rare earths equal or greater than the PRC ! But better be quick! The PRC has already resumed it's attempts to control this resource. The previous Australian government of " Deputy Sheriff " Howard, refused the PRC and PRC controlled hidden arms length companies, from control of Australia's Rare Earth resources , the current government is very keen to be popular with Beijing. (fortunately, the current government is exceedingly unpopular with Australian voters). But it's best to be safe, and secure US Rare Earth supplies, from a safe , and trusted ally. Now in return, could you please persuade GM to build the RHD Volt and export model 'Buick Ampera', at GM's Australian subsidiary, GM-Holden ? ( We know your cop's love our Caprice Patrol/Pursuit cars) ! Oh, and if it's not too much trouble, could you also give Henrick Fisker a call, and ask him to hurry up and build RHD Karma's (especially the sunset) . Signed Your Mate's, A Bunch of Blokes, Havin' a Beer and fixin' the problems of the World Front bar, The Ettamogah Hotel Mt Tom Price, Western Australia Australia. (drop by anytime y' passin')
        Grendal
        • 2 Years Ago
        @marcopolo
        So send it already. Nicely said.
        brotherkenny4
        • 2 Years Ago
        @marcopolo
        Stop pretending like there are any greedy americans or even australians that want to invest in capital intensive long payback period projects with low margins. There no longer exists in this time of publicly traded corporation with a vision for the next quarter only, the money for such an investment. All the money went into facebook and google.
          marcopolo
          • 2 Years Ago
          @brotherkenny4
          @brotherkenny4 I have no idea what you are ranting about! You've become incomprehensible, sort of like Gorr, without his eccentric charm!
      Ashton
      • 2 Years Ago
      To Obama: Stop whining/caring what the Chinese are doing, if we want/need rare earth minerals, then lets mine them. Same is true for oil & nat gas.
        2 Wheeled Menace
        • 2 Years Ago
        @Ashton
        Well said. Let China shoot themselves in the foot. We don't really need neodymium. Great magnet material, but not necessary in the age of induction motors. And we can get all the battery materials we need from Canada, Bolivia, and plenty other parts of the world. Start buying mines and stop whining. China knows what the hell we're doing. Our country needs to get off it's ass and start making he same power moves China has been making.
        brotherkenny4
        • 2 Years Ago
        @Ashton
        The problem is that no US company or even any other company will invest in capital intensive long term project with low return on investment. Everyone wants the fast payback. The Chinese on the other hand can determine where a possible strategic advantage exists and invest there, knowing that other industries will depend on that output. We want the quick payback and the easy money, not to actually have to work for a living.
      masteraq
      • 2 Years Ago
      "(*ahem* batteries *ahem*)" Sebastian is a bit confused. These minerals are used for magnets, not battery components.
        JP
        • 2 Years Ago
        @masteraq
        He's not the only one, I constantly see references to rare earth for batteries, which are not required for most lithium chemistry.
      Scambuster
      • 2 Years Ago
      @marcopolo: Now, the USA, is very big place, and on the whole, the inhabitants of the USA have the same hopes and aspirations as the reat of the peoples of the world. However, American-philes like you tend to overlook the negative aspects of the USA society, and government policies. Appeasing the Eagle, doesn't make for better relations, only makes the rulers in DC dispise PRC weakness. Fawning over USA policies and looking through rose-tinted glasses, only make life more difficult for those USA citizens who are risking persecution, and even death, in trying to bring progressive reform to USA society.
        marcopolo
        • 2 Years Ago
        @Scambuster
        @Scambuster Goodness, where did I see that before? You mean it took you all that time to think up that reply?
          Scambuster
          • 2 Years Ago
          @marcopolo
          @marcopolo: You need to address the issue rather than ad-hominem.
      Woody Becker
      • 2 Years Ago
      China has a lock on rare earth minerals? Hardly, the EPA has forced our mines to close and there is no prohibition in China. I guess whne we can all produce unobtanium we will be golden!
        DaveMart
        • 2 Years Ago
        @Woody Becker
        You can't flick a switch and bring rare earth mines online. Developing them and building the infrastructure needed such as ports and so on can take years. There is no absolute shortage of rare earths, and other production can certainly be opened up, but not quickly. Prices are also likely to be quite a bit higher, as the reason Chinese production wiped out the competition with low prices was not only lax environmental controls and cheap labour, but because most of their production was as a 'free' by product of other mining.
      Ele Truk
      • 2 Years Ago
      Yes, I thought it a bit ironic that while Obama is touting America's independence from foreign oil, he is promoting America's dependence on foreign rare earths. America had several rare earth mines, that closed because they couldn't compete with China's prices. Now that China is limiting production to drive up prices, maybe we can get those American mines running again.
        DarylMc
        • 2 Years Ago
        @Ele Truk
        It's hardly the case but be sure to let everyone in on the facts when rare earth imports exceed oil.
        DarylMc
        • 2 Years Ago
        @Ele Truk
        So even though people say China are holding the world to ransom with prices for rare earth materials you acknowledge there are plenty available in the USA? As far as I can tell there is no problem apart from the west wanting or perhaps demanding to exploit the cheap labour and lax environmental standards in China. And then in the next breath condemning human rights and environmental standards. If you are advocating starting up the US mines then I agree with you but I still can't see what the fuss is about.
      JakeY
      • 2 Years Ago
      Lithium ion batteries use no rare earth metals (yes, I checked the entire list of active and in-active materials in all the different types of lithium ion batteries and there is to not one rare earth element mentioned). Rare earths affect mainly the Nimh batteries used for hybrids. Plus it affects Permanent Magnet motors using neodymium magnets.
        2 Wheeled Menace
        • 2 Years Ago
        @JakeY
        SVX, have you heard of a company named Tesla? they make this motor that has no magnets.. i think it's called an induction motor.. oh yeah, and the performance seems pretty good.. 70 pounds and about the size of a watermelon, producing over 200hp.. ;) You may have heard about this company if you read a site called auto blog green.
          SVX pearlie
          • 2 Years Ago
          @2 Wheeled Menace
          Aren't those the morons who convert $100k into a giant metal brick?
          JakeY
          • 2 Years Ago
          @2 Wheeled Menace
          @SVX pearlie Nice straw man. It's actually the moron who didn't RTFM, but that's beside the point. Anyways, that doesn't change the fact that Tesla is using one of the most power dense and efficient motors in the industry. Yes, PM motors have higher peak efficiency than induction motors. But average efficiency falls between 80-90% which makes them essentially the same in efficiency. You aren't talking about a huge difference like that between a I4, a V6, a V8, etc.
        SVX pearlie
        • 2 Years Ago
        @JakeY
        The high efficiency motors require high-power rare earth magnets. Without the right motor, the best batteries in the world become worthless.
          Ele Truk
          • 2 Years Ago
          @SVX pearlie
          Actually, it's HIGHER efficiency motors require rare earth. But it's not a huge difference, the Tesla induction motor has average 88% (90% peak) efficiency, and a rare earth DC Brushless can be as high as 97%, but average very close to the Tesla - 80-90%
      Wrangler Unlimited
      • 2 Years Ago
      And did the Chinese laugh at Obama like they did when Timoty Giethner spoke to them. "Yesterday in China, a group of students at Peking University laughed aloud during a speech from Treasury Secretary Tim Geithner, during which he insisted the U.S. dollar was strong and that trillions of dollars of Chinese investments would not be unduly damaged by the economic crisis. "
      brotherkenny4
      • 2 Years Ago
      Bolivia, what a crock. Your talking lithium now, and bolivia will not make dime one on lithium. Lithium is not scarce or expensive or even the major cost of lithium batteries. The fear mongering around lithium is a hoax put forward by people who are ignorant of the facts. How will a facist/socialist country be able to compete in a world market of a commodity based product? The answer is they won't. And don't even get me started on the inefficient Cannucks.
      Scambuster
      • 2 Years Ago
      Chinese bashing is always popular during election year. Instead of fostering an domestic economy that encourages mining, industry, and manufacturing at home, the expedient politicians blame the Chinese. And the sad truth is that too many Americans are stupid enough to fall for the same rhetoric repeatedly.
        Arwokid
        • 2 Years Ago
        @Scambuster
        reply first check fact later? why dont u do some research first? http://www.theglobeandmail.com/report-on-business/rare-earth-metals-around-the-world/article2368222/?from=2368374 Notice the 50% decline in export quota this year.
        mylexicon
        • 2 Years Ago
        @Scambuster
        Learn about international currency exchange, and then tell us your thoughts on China. If anything, our government goes to great lengths to cover up the actual friction with China b/c we don't want to start a trade war or global uneasiness. The world is in this garbage situation b/c off the economic brinksmanship by both the US and China. The world knows who pegs and who doesn't. The world also knows which society has little trade discipline, particularly for oil.
        marcopolo
        • 2 Years Ago
        @Scambuster
        @Scambuster, Now, the PRC, is very big place, and on the whole, the inhabitants of the PRC have the same hopes and aspirations as the reat of the peoples of the world. However, Sino-philes like you tend to overlook the negative aspects of the PRC society, and government policies. Appeasing the Dragon, doesn't make for better relations, only makes the rulers in Beijing dispise US weakness. Fawning over PRC policies and looking through rose-tinted glasses, only make life more difficult for those PRC citizens who are risking persecution, and even death, in trying to bring progressive reform to PRC society.
        Grendal
        • 2 Years Ago
        @Scambuster
        China has a very different culture than the West. I'm generalizing, but it is perfectly acceptable to screw over the West (barbarians) in any way possible. And from their perspective, if you allow them to do it, then you proved how stupid and deserving you are for being screwed over. It's a cultural thing.
        SVX pearlie
        • 2 Years Ago
        @Scambuster
        If the OPEC countries suddenly decided to consume most of their oil domestically, they aren't forced to sell it. Same if the US were stupid enough to take our abundant supply of corn and turn it into alcohol by the most wasteful means possible. Oh, wait...
          JakeY
          • 2 Years Ago
          @SVX pearlie
          OPEC is different. They didn't set policies that gave them a virtual monopoly (95%) in the oil market, and when they "consume domestically," they aren't refining the oil and exporting the virtually all of the finished products outward (like China is doing with the rare earths and the electronics industry). Their official explanation of "protecting the environment" is BS because they are continuing to mine at the same rate, but just favoring their domestic industries instead (which then export finished products outward). If they really wanted to "protect the environment" and have "sustainable development," they would have restrictions on directly on mining and production, not exports. This looks to me like a typical case of protectionism.
          SVX pearlie
          • 2 Years Ago
          @SVX pearlie
          I fail to see how OPEC building their own refineries, and then selling gasoline instead of crude would be beyond their rights. It's their raw materials, and their choice to sell or not. Why should China be forced to sell low margin raw materials instead of higher margin product? it's not like factories appear overnight. If the US weren't asleep at the switch, we could have started mines when they started building factories.
        JakeY
        • 2 Years Ago
        @Scambuster
        China is continuing to mine rare earths while restraining exports, which goes against their WTO commitments. This has nothing to do with "Chinese bashing". Note that this statement by Obama is backed by both Japan and the EU, not solely by the US.
      • 2 Years Ago
      obama is a rare earth with no metal. Gotta hide behind the WTO? Grow a pair sir. We can easily get our way out of ANY mineral shortage, just get rid of the tree hugging bureaucrats. Roach motels always perform well. : )
      Eideard
      • 2 Years Ago
      Ele Truk is closest to reality here. "Close" being the operative word. Extractive industries like mining open and close mines almost on a whim depending upon how much of a mineral they control and market prices. They couldn't care less about national economies. There is no shortage of rare earth minerals. There is a shortage of production. China has decided they need to limit their export to aid their own industrial production long range. American investors and our government are up to about two quarters at a time. Artificial complaint defined by the sophistry of our politics and economy.
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