Chinese Rare Earths Producer Suspends Output 265
concealment writes "State-owned Baotou Steel Rare Earth (Group) Hi-tech Co. said in a statement released through the Shanghai Stock Exchange that it suspended production Tuesday to promote 'healthy development' of rare earths prices. It gave no indication when production would resume and phone calls to the company on Thursday were not answered. Beijing is tightening control over rare earths mining and exports to capture more of the profits that flow to Western makers of lightweight batteries and other products made of rare earths. China has about 30 percent of rare earths deposits but accounts for more than 90 percent of production. Beijing alarmed global manufacturers by imposing export quotas in 2009. It also is trying to force Chinese rare earths miners and processors to consolidate into a handful of government-controlled groups."
Re:Back to the stoneage (Score:5, Informative)
Or just re-open the closed rare earth mines in the US. Rare Earths are really not that "rare". The US closed it's most productive mines for environmental reasons and because it was cheaper to purchase from abroad. Same reason domestic oil production was reduced. Of course the US is now pumping approximately 10 million BPD and is expected to surpass Saudi Arabia in as little as 4 years using newer extraction methods is also something to look forward. China's economic forecasts have always been predicated on best case scenarios as well as their government making the optimum decisions every time but their government is no more immune to stupid decisions than any other government in the world.
Re:Trade war (Score:5, Informative)
I feel like you're missing a key issue in the discussion.
China controls ~90% of the rare earth refining capacity.
That's what's being reduced.
Why would the US want to sell or produce rare earths?
So that the USA isn't beholden to China's monopoly on refined rare earths.
Was that a trick question
Re:Thank you! Someone who actually had economics! (Score:2, Informative)
That's funny, because all of my economics books and professors always taught us it was an economic system, not a political one.
Re:not with a bang, but a little heard whimper. (Score:5, Informative)
Exactly right. There were something like three rare earth mines idled by China's effort to flood and capture the market. One of those started back up after China's last screw job to the world. If prices continue to rise, more will simply re-open with a relatively modest investment and in relatively small time frames.
Having a US supply is a good thing. It mean stability in the market, shorter delivery schedules, cheaper storage for manufacturers, and US jobs. Likely the those outside the US will see the advantage too.
Re:not with a bang, but a little heard whimper. (Score:2, Informative)
> If the price goes up, the private investor will have no problem raising the money.
They will have a problem, because they will know that the Chinese can drop the price at their leisure, undercutting them and bankrupting their investment.
Re:Outsourcing (Score:4, Informative)
The problem with midwest steel wasn't largely dumping (there was some, but it was a fairly small percentage of the market), it was the fact that most of the steel plants were 40+ years old with few updates and they were competing with more modern plants using more efficient techniques and more automation. Steel consumption also was on the decline, from 1982-2008 the US only consumed about 45M metric tons of steel per year, the same amount as we did in 1941 and about half what we did in 1972. Today we produce about as much steel as we did in 1974 but we do it with less than 1/3rd the workforce, modern mills just aren't as labor intensive as the old ones and while that's bad if you're a worker unable to find a replacement job at comparable wages it's good for the economy overall.
Re:not with a bang, but a little heard whimper. (Score:3, Informative)
umm... Obama said before being elected that he planned on make coal powered electricity so expensive they couldn't make a profit. The EPA has decided that Co2 is a pollutant and is imposing some of the most strict regulations on the use of coal that the US has seen.
This stuff isn't a secret, just use your google finger.