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China’s Rare Earth Threat Isn’t As Terrifying As They – Or We – Think

Reports are that China is considering using its “rare earth weapon” in the trade war with the United States. This weapon is in fact rather less of a terror than either they or we think. If they actually use it the end result will be – after a bit of chaos and disruption – that China no longer has the rare earth weapon.

After all, that is what did happen last time they tried this and yes, history does repeat itself just like a bad burger and onions.

The essential background here is that China does produce some 80% of the world’s rare earths. Interesting elements, 17 metals in all, we use bits and bobs of them to do interesting stuff. An MRI machine, for example, depends upon the magnetic properties – more specifically the piezo-magnetic – of lutetium. The whole process is to try to turn a change in a magnetic field into a stream of electrons that can then be painted onto a screen to produce an image. That trick being performed by a nice crystal of lutetium oxide. Grown just like we used to make those little copper sulphate crystals from a supersolution in O Level – GCSE now I suppose – chemistry classes. OK, they don’t actually drop a little cotton thread with a knot on the end to start it off into the solution but the basic principle is the same.

They’re also used in batteries, magnets, all sorts of other useful stuff. We like having them around. True, reporting all of this can be a little haphazard. The Mail, here, for example.

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Scandium. Found in aerospace alloys and cars’ xenon headlamps[/perfectpullquote]

Didn’t know about the xenon headlamps. Could be, sure. Although there was about a decade when I handled, as a broker, about 50% of the world’s usage of scandium. And at times 100% of the light bulb industry’s usage. Metal halide bulbs, certainly, but I’d not heard of specifically for xenon for cars. That could be me of course.

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Promethium. Found in luminous paint[/perfectpullquote]

I’d sorta doubt it, given that Promethium is radioactive. Oh, also, given that it’s radioactive we don’t get it from rare earth mines, even though it is a rare earth. We extract it from the wastes of nuclear reactors, it’s a product of the decay of larger atoms in those processes.

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Holmium. Used in mass spectrometers by hospitals and forensic scientists[/perfectpullquote]

Not so much, calibration lenses for spectrophotometers perhaps. I did once sell 1 kg of holmium oxide to the bloke who makes those. That was several year’s usage for him.

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Lutetium. Used in LED lightbulbs, oil refining and medical PET scans[/perfectpullquote]

As above, more in MRI than PET but still. Siemens used to have a factory in Texas that used about 95% of the world’s annual consumption.

The details are just those details of course. They’re fun, useful and interesting things these rare earths.

China produces a lot of them. And they’re threatening to not send them to us:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Markets hit by Chinese threat to block rare earths exports[/perfectpullquote]

This might not work as well as the Chinese think:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Sorry China, you may find your rare earth weapon is a blunt instrument against Trump[/perfectpullquote]

The thing being that the weapon doesn’t really work.

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]China’s Tried This Before Of Course
Another reason to think they’ll tread carefully is that China has tried this before, back in 2010. And as I pointed out back then – while it was still happening – it wasn’t going to work[/perfectpullquote]

That article is here. And it did get what would happen right – no, not what had happened, but what would.

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]If rare earths are so precious, why isn’t the United States working harder to collect them? The main reason is that, for these last 25 years, China has been supplying all we could eat at prices we were more than happy to pay. If Beijing wants to raise its prices and start using supplies as geopolitical bargaining chips, so what? The rest of the world will simply roll up its sleeves and ramp up production, and the monopoly will be broken.[/perfectpullquote]

As it was. Last time China tried this they started from the position of producing 95% of the world’s rare earths. They’re now down to 80% as a result of their trying to use this rare earth power. In the jargon China’s rare earth monopoly is not an exploitable monopoly.

We’d get some short term chaos, medium term disruption and 5 years down the line that monopoly wouldn’t exist any more. Not so terrifying, eh?

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2 years ago

Interesting that it didn’t work that way for OPEC. Presumably it’s the sheer quantity, plus the effective propaganda campaign against the use of home grown coal, oil, gas or uranium. There’s no doubt that every penny they’ve spent on the Greens has given them an excellent return.

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