Rare earth shares soar amid threats from China

Rare earth shares soar amid threats from China


CHARLES: ECONOMIC THEORY THAT GUIDED AMERICAN STYLE CAPITALISM IS CENTERED ON COMPARATIVE ADVANTAGE. THAT IS NOT NECESSARILY BEING THE BEST BUT MOST EFFICIENT. WE’VE BEEN TOLD EVERYONE WINS WITH FREE TRADE AND CELEBRATE WHEN OTHER NATIONS PROVIDE CHEAPER VERSION OF STUFF WE COULD PRODUCE. I GENERALLY AGREE. THERE ARE VARIABLES TO THE LINE OF THINKING WE’RE LEARNING AGAIN TODAY THE HARD WAY. YEARS AGO THE UNITED STATES AND OTHER COUNTRIES STOPPED MINING RARE EARTH MATERIALS BECAUSE THEY WERE BEING PRODUCED CHEAPLY OUT OF CHINA. WELL THIS MORNING, TALK OF CHINA WEAPONIZING RARE EARTH MATERIALS TO HURT AMERICAN COMPANIES AND CONSUMERS AGAIN PROVES THERE ARE SEVERAL WAYS TO MEASURE OPPORTUNITY COSTS OR WHAT WE GIVE UP IN ANY TRADE RELATIONSHIP. THE CONCLUSION IS, THERE ARE GREATER BENEFITS TO SOCIETY THAN CHEAP STUFF, NAMELY OUR JOBS, PHYSICAL AND ECONOMIC SECURITY, AND OUR INDEPENDENCE. JOINING ME NOW TO DISCUSS, LUKE VENTURES MANAGING DIRECTOR GENE MUNSTER. GENE, ALL OF A SUDDEN RARE EARTH MATERIALS COULD BE WEAPONIZED BY THE CHINESE. BY THE WAY THEY DID THIS NOT TOO LONG AGO WITH JAPAN OVER A DISPUTE. SO IT WOULDN’T BE THE FIRST TIME.>>CHARLES IT WOULD NOT BE THE FIRST TIME. THIS IS THE OTHER EDGE OF THAT SWORD WHEN WE THINK ABOUT COMPARATIVE ADVANTAGE, SOMETHING THAT I TOO BELIEVE IS IMPORTANT FOR TRADE, EQUITY, AND FOR RAISING THE OVERALL STANDARD OF LIVING ACROSS THE GLOBE BUT THERE ARE SOME CONSEQUENCES. WHAT WE’RE SEEING FROM BEIJING TODAY IS A PERFECT EXAMPLE OF THAT. AND ULTIMATELY, THIS IS THE, MOST CURRENT LAYER IN THIS TRADE DISPUTE. ONE THAT IS GOING TO HAVE SOME CONSEQUENCES ON SOME COMPANIES OVER THE NEAR TERM, NOT NECESSARILY THE LONG TERM THOUGH. CHARLES: I WANT TO TALK TO BUT THE COMPANY SHORTLY, BUT TO THAT POINT, IT IS JUST, RIGHT NOW SAY PER — CONTINUE TO PUSH THE ENVELOPE ON THIS SORT OF STUFF. THEY RUN OUT OF THE CLOCK. SUPPLY CHAINS IF THEY MOVE, THEY’RE NOT COMING BACK. IF THEY FORCE US TO DO THING ACTUALLY EXPLORE OUR OWN RARE OTHERS THEY WILL NEVER BE ABLE TO HE WILL US ANYMORE — RARE OTHERS. THAT IS CALCULATED GAMBLE ON THEIR PART, ISN’T IT?>>THAT IS TYPICAL GAMBLEnd U.S.ING A CULTURE AS WE INCREASE TARIFFS OR CHINA INCREASES TARIFFS ON AG SS GOING TO CHINA, U.S. AGRICULTURE GOING NO CHINA. THE CHESS MATCH IS SIMILAR ON BOTH SIDES THIS IS CHINA’S LEVERAGE POINT HERE. AND A BIG ONE. THIS IS 80% OF RARE EARTH MATERIALS THAT THE U.S. LOSES, TECH INDUSTRY COMES FROM CHINA. I’M GLAD YOU POINTED OUT. THERE IS A DIFFERENCE BETWEEN RARE THAT’S RIGHT THESE ARE IN FACT ABUNDANT, OVER LONG TERM THE SUPPLY CURVE, THE U.S. WOULD BE ABLE TO FIND WAYS, WHETHER IT IS FROM OUTSIDE OF THE U.S., OTHER COUNTRIES. BUT I WANT TO QUICKLY EMPHASIZE SOMETHING RELATED TO THE TOPIC, CHARLES. I RECENTLY SPOKEN TO A FORMER U.S. TRADE OFFICIAL. TWO THINGS WERE CLEAR. ONE IT IS, DIFFICULT TO PREDICT HOW THIS PLAYS OUT. THAT WAS MOST CLEAR. THE SECOND PIECE IS THAT, WHAT CHINA AND U.S. CAN BOTH REPLACE IS SUPPLY SIDE. SO THE U.S. CAN FIND OTHER WAYS TO GET MINERALS. CHINA CAN FIND OTHER WAYS TO GET AGRICULTURE. ONE THING THAT CANNOT BE REPLACED, U.S. ECONOMY, CONSUMER, 5% OF THE GLOBE’S POPULATION, BUT 25% OF THE BUYING POWER. THAT ULTIMATELY IS A GREATER LEVERAGE POINT FOR THE U.S. IN THESE DISCUSSIONS. CHARLES: I AGREE 1000%. WHEN I HEAR FOLKS SUGGEST OTHERWISE, THAT CHINA WOULD SIMPLY FIND OTHER CUSTOMERS. I SCRATCH MY HEAD, WONDER, MAYBE IF THEY FOUND LIFE ON MARS. GENE, WE HAVE A MINUTE TO GO. A LOT OF PEOPLE THINK THE SEMICONDUCTORS ARE THE BEST WAY TO GAIN MARKETS AND ECONOMIES, PARTICULARLY GLOBAL ECONOMIES. SEMIS OBVIOUSLY THE EYE OF THE STORM GETTING HIT PRETTY GOOD. WHAT DO YOU THINK ABOUT THEM NEAR TERM?>>SO I THINK THEY’RE GOING TO CONTINUE TO BE UNDER PRESSURE. I THINK THAT, I WOULD AGREE WITH THAT. THEY’RE A GREAT BAROMETER JUST HEALTH OF DIFFERENT ECONOMIES ARE TRADING. ULTIMATELY AS I BELIEVE THAT LONGER TERM, ONCE WE GET THROUGH SOME OF THE TRADE DISPUTE, SEMIS WILL START TO MOVE HIGHER. SO NEAR TERM, CHARLES, TO ANSWER YOUR QUESTION, I DON’T SEE ANY REAL CATALYSTS TO OWN THESE. BESIDES NVIDIA. THAT’S ONE COMPANY I THINK HAS A PARTICULARLY GOOD POSITION. BUT LONGER TERM THEY CONTINUE TO

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About the Author: Oren Garnes

100 Comments

  1. While AMerica does have a huge market, the 25% tariff just made everything that much more expensive for everyone in America. Thanks Trump. Americans are proud to pay 25% increase in prices.

  2. Kasihan , Amerika menangis dan malu besar ternyata sangat mrmbutuh kan mineral langka buatan Tiongkok dan as lsgi cari jln agar jatuh perlan han , dan menyerah perang dagang pd kemauan Tiongkok, dan pura2 cuma butuh 80% mahsudnya 20 persen buat sendiri ngk tau nya seperti jepang 100 % dari negeri Tiongkok ,, di sini Tiongkok sdh menguasai Dunia, ha ha ha,,,,,

  3. Not sure what trade deal is about? US will not produce labor intensive things that they purchased from China. Americans are just be used by Trump, not mention they will also have to pay higher price on things now. American company will move to Mexico, or Brazil, or Canada, still that is not made in USA. The reason American companies import those things because it cheaper and cost effective, and that has nothing do with China.

  4. On the Trump's micro chips sales ban. It can only wake up Chinese, and they will accelerate the process of developing self-sufficient Micro chips industry. Yes, those may not be as good as US made, but it will at least sustain Chinese's national safety. Trump used his most powerful card too early, bad strategy.

  5. China is huge and growing fast. Using the PPP method of measurement China already has an economy bigger than that in the US. Soon by any measure China will have a bigger economy than the US. Trump thinks our current imports from China, about 3% of their output, gives us bargaining superiority. Except China can outwait Trump. The only way to restrain Chinese bad behavior is for the US to join forces with other countries to control them. But Trump is 109% selfish so he lacks the skills needed to form alliances. We just need to wait out Trump then get back to rational behavior, a giant alliance to force China to act like a good trade partner.

  6. won't be easy (in fact, will be a nightmare) to reassess and find another high quality supplier like china, and even worse if u.s. has to start building and operating its own rare earth minerals mines. i know as i am related to the IT sector and parts procurement/manufacturing. trump should not have abused his executive capacity to kidnap huawei's prez's daughter and to now ban huawei. a very rash, hypocritical, fatal mistake. (worst mistake since usa decided to go to war with 'little vietnam.') especially the 'spying' excuse has no evidence. usa itself is the worst menace in terms of spying, according to ed snowden. china is much more determined to now leap so much farther ahead as it will make everything it needs in-country/domestically, as china has the enviable status of possessing unlimited talent/manpower/materials/tech/money. china is deadly serious now in its intention to turn usa into a weak rival. (even global companies are now apprehensive about doing biz in usa, which is a far worse prospect for the usa than u.s./global companies moving from china to low-quality inexperienced manufacturing locales like india/philippines with lazy undisciplined workers, etc., lol.) the dragon is awakened, and all thanks to the three stooges (trump, bannon, bolton).

  7. With the help of EPA we should open up our own Rare Earth mines.
    We need to indemnify our miners from silly lawsuits from environmentalist!
    So what Rare Earth mining poisons the ground with radiation, its mined in poor states and should be happy with jobs!

  8. MAGA fellows – time to learn new lessons from others – especially China this time out!!
    MAGA fellows: don't dream white American supremacists always win and have glory after glory – don't play stupid.
    MAGA fellows: time has come to go to MAGA hibernation.
    MAGA fellows: time to throw away caps with MAGA into faeces bins.

  9. People have been losing the bet saying Trump has no good intentions but all other countries have learned that not only is Trump correct but the federal reserve won't lose either. China can't afford to sell off the US debt and the interest it makes. The tariffs just them and they believe it or not will have to even out the tariffs. It's not only a supply and demand thing (economics 101) but a monetary value structure.

  10. Where is the Trish debate with Xin? That’s a prefect projection of where the US and Chinese next generations represent.

    By the way, we have so many Trish in HK that we do not need them at all. We all speak English here but the difference is we do not know nothing but English.

  11. Globalization…. something the u.s. pushed, advertised, lead, and spread throughout the world after world war 2 when it emerged as the superpower. At the time, it was a fantastic idea to use third world's slave labor so corporations can cut cost, lower the price of the products so u.s. citizens could all realize their middle class dream while at the same time be able to have the sweatshops mass produce in order to sell these products throughout the world and gain a monopoly (think Coca Cola, Nike, etc). It was a great plan and it worked flawlessly. U.S. citizens benefited, U.S. corporations benefited MASSIVELY, and U.S. dominance in trade was established….. and now 30-40 decades later, in hindsight, "THE CHINESE ARE TAKING OUR JOBS! IT'S THEIR FAULT ALL OF OUR MANUFACTURING ARE NOW IN CHINA!" meanwhile neglecting all the luxury they enjoyed and taken for granted.

  12. The reason your rare earth company goes backrup is the pricing, another word if u uses the rare earth from your country, your product can not compete with the products who uses the rare earth from China in pricing! U MORON!

  13. Are you a three year old? Don't understand simple UK English? No chips to Chinese company No rare earth to US company. Simple as that. Why want to create a storm out of a tea cup. China says you America have your own rare earth, mine it and use it. America's rare earth is for American companies use, China's rare earth is for Chinese companies use. It is a win-win deal is it not? Sell higher price Japan and the rest of the world not happy. Sell low America not happy. So it is fair for China to tell all countries that has rare earth to mine it and use, don't depend on China. You Americans are spoiled brats. Sell too much to America not happy, don't sell also not happy.

  14. China to Canada, stop export your trash to me. Next is the Philippines and then Indonesia follow by Malaysia and then Africa. Hello ! Developed countries, all the developing and third world countries are not your trash bins OK.

  15. Donald Dumbass working his magic on the stock market. This is the guy who turned 468 million from his daddy into a negative 5 Billion in the 90's. Donald DumbFuck!

  16. Appeal to U.S. Senate For Intervention On The Massive Counterfeiting Boeing Flight Control parts. https://faaoversightextraordinaryairsafetythreat.wordpress.com/2019/04/04/appeal-to-u-s-senate-for-intervention-on-the-faa-inaction

  17. HAHAHA U.S BUYING POWER HAHAHA THE U.S. THINKS THEIR GOOD ECONOMY WILL LAST FOREVER. RECESSION IS COMING AND WE WILL SEE IF YOU STILL HAVE BUYING POWER. OTHER COUNTRIES HAVE BUYING POWER TOO THE U.S. IS NOT THE ONLY NATION THAT HAS BUY POWER. THE U.S ONLY DECEIVES ITSELF.L AND ITS DUMBFOUNDED ALLIES.

  18. It is glorious for the Americans to be st up id for they will then swallow every bs coming from Trump, Foxnews, CNN and NYT.

  19. so you mean others must treat you nice even after you treat others bad? America First? No, everyone is equal.

  20. If the US would legalize growing hemp the farmers can make more money growing that than soy beans.

  21. Is this hypocrisy or what? The perfect example of weaponizing trade is with US dollar or electronic chips

  22. We have a new technology, no water required, to separate the heavy mineral sands from the dry desert. But there is no processing facility in the US to ship the feed stock.

  23. Where is the clip of Trish Regan debating Liu Xin of "state run Chinese media"? I guess u guys don't upload stuff where your Murican cheerleader got pwned by an actual journalist speaking English as a second language…

  24. Severe war going to breakdown between China and US over South China sea.

    Only by war we can control China.
    War is in evitable.US will win. South China Sea will be freed from China.

  25. Daniel Craig once said: "If your kid is bullying my kid, and my kid has tried to tell your kid to stop, and your kid doesn't, my kid has been instructed to punch your kid in the face." someone has to stand up and punch the trump bully

  26. sanctions on Venezuelan and Iranian oil to cut down global oil supply to drive up demands and price. wonderful news if you have oil to sell. isn't threat of rare earth supply drives up price good for exporter?

  27. This would be good for china and america. Chinese overproduction of rare earth minerals is destroying the earth. LET CHINA AND AMERICA DEVELOP THE WORLD AS AMERICA DEVELOPED CHINA.

  28. short term pain long term gain says Trump. I dont think getting back more min wage jobs in the US is a gain. More US companies gonna have to close their doors which leads to a loss of middle class incomes for more min wage jobs. art of the bankrupt.

  29. This is a good thing it will push the U.S in more mineral processing and hopefully start making in house goods again

  30. 1, 140 Chinese tech companies and major universities were just added to the Commerce Department blacklist. This is one of the main reasons China is considering the Rare Earth restriction. This is way beyond Huawei or one or two other companies.

    2, US doesn't have the technology and capacity to process REE( Rare Earth Elements). It would take US up to 15 years to have a technology and capacity for refinery. according to a Department of Defense report and US Government Accountability Office report(GAO-10-617R Rare Earth Materials in the Defense Supply Chain https://www.gao.gov/new.items/d10617r.pdf ). After 15 years, maybe Huawei would be already developing 10G communication technology. There is also no bypass of this.

    3, Rare earth metal extraction needs specific technologies, China can do it efficiently based on years of R&D, China has dozens of PhDs specialized in rare earth which is the only country has the adequate number of people continuing to perfect the technology, minimize the pollution, etc., that's the reason they ship their halfway processed material to China to extract, same goes to the one in Malaysia, so rare earth is not rare, but the key is the technology to extract it.

    4, China supply is more than 80% of the global supply. Malaysia now has issues with their plant, so China's supply will be higher percentage even.

    5. Rare earth is 17 minerals. Some 'heavy rare earth' minerals are only in China, which is more important for industries than 'light rare earth'. There is no bypass of this. Many other countries 'heavy rare earth' mines are radioactive. China's mine is not.

    6. Rare earth mining is only economic when it is actually a by-product of other industry such as coal mining and iron mining. Go google how big is China's mining industry.

    Make your own judgement, if US could be independent next year or so…BTW, China is also one major shareholder of Mountain Pass

  31. America has rare earth metals. There is a rare earth metals mine in Utah that shut down because of economics. We can start it up again. I am sure that America has more rare earth metals. Lets mine it.

    Also, other countries have rare earth metals. Trade is trade, elelmental metals are elemental metals.

  32. hey Guys, I'm mining rare earth from Trish Regan's dark hole, its wet, dirty and oily but to make America Great Again, I volunteer to do it.  wish me luck

  33. Get out China products if they control high market percentage open up new supply chains and don't go back

  34. We Americans are always at our best when we're under pressure. Time to find a new way to work around those rare earth metals. When we find a new way, we'll be done with China.

  35. Next time the US President have a temper tantrum cause you did not buy enough of his eggs or golf-Clubs, he'll ban you from operating in his country and forcing other businesses to sanction you. National Security or National Governance? Smells like the start of Communism.

  36. Didn't Japan find a deposit of rare earth minerals off their coast that has a century worth of supply? Trump was there last week, lets get it from them.

  37. Surface mining (for the geologically lucky ones) versus (very) deep mining… tranlates into: Very low cost (sucessful export economy) vs. very high cost (unsucessful export economy).
    Same about products like oil (drilled for few $/barrel in Saudi Arabia vs. double digit costs when done by fracking/deep sea) – or Germans (love engineering) vs. others (loving pop culture).
    Buying power: Gross domestic product (purchasing power parity; GDP PPP): China 1st – USA 2nd (or actually 3rd, if comparing to European Union, i.e. 2nd highest GDP PPP in the world) > US American purchasing power keeps diminishing (example: 2 missing paychecks during shutdown > US middle class citizens unable to refuel their cars, pay kindergarden etc.). Automation and digitization accelerate this process.

  38. Americans love talking about independence and peace but they are the world biggest invaders and war like country. 🤦‍♂️

  39. Eight years from Fake President Obama Iran is the top. Because Obama & John Kerry middle the night they stealing US dollars send to Iran money laundering. But with President Donald Trump Iran is nothing they garbage!! Don't ever threaten President Trump!! About China Communist, we can never trust Communist China!! They stealing all our technology, cheating, lying, harassment American & all over the world! Every where Chines come will invaded land guarantee!! Obama & Crooked Hillary sold us out to China!!

  40. Not really a gamble. The US may be able to produce rare Earths but not efficiently. The US will definitely suffer big time.

  41. Chinese RE domestic consumption will be 70 % and the rest will be stockpiled……….No more export !

  42. ALL OF OUR YEARS WE LIVED BEAUTIFUL LIVES WITH OUR OWN PRODUCTION OF OUR PRODUCTS, BEFORE OUR STUPID LEADERS SENT AWAY OUR INDUSTRIES AND JOBS TO CHINA! WHEN WE HAVE OUR JOBS WE HAVE OUR MONEY TO SPEND ON OUR CLEAN AND MONITORED PRODUCTS!

  43. China is only doing this after Trump ran the executive order to ban chip and software export to Huawei. They are only responding to what US has done. They would not have ban rare earth exports had US not sabre rattled.

  44. It will result in the delivery of the F-35 aircraft to the country in order to book an exact F-35 aircraft in the future.

  45. the trainees are doing a good job of making the case that it's counterproductive for us to be engaging in free trade with China.essentially the Chinese are protecting their right to steal intellectual property when and where they feel like it.
    I think the u.s. really shouldfundamentally re-evaluate its relationship with China.

  46. America can refine it's own Rare Earth within 12 months, The world can't replace America's farmland.

  47. Currently, mining company Molycorp operates the only site in the United States that produces rare earth elements, according to ABC. Its Phoenix Project is located in California. Otherwise, the USGS recognizes Idaho, Montana, Alaska and Colorado as some of the locations of economically viable rare earth deposits.

    Molycorp (NYSE:MCP)

    With headquarters in Greenwood Village, Colorado, Molycorp claims to be one of the leading manufacturers of custom engineered rare earth and rare metal products in the world. The company produces materials from 13 different rare earths, plus yttrium, at a purity level of nearly 100 percent.

    Currently, Molycorp is operating the Project Phoenix at its Mountain Pass site in California, which is a rare earth resource and production facility. The project, an expansion and modernization of the Mountain Pass mine, is intended to transform the asset into a technologically advanced rare earth production facility.

  48. However, the extraction of these metals is extremely complex and harmful to the environment: For each deposit, a separate treatment plant must be built, in which the metals are washed with acid solutions from the ore – and which is only suitable for the ores of this one deposit. The development and construction of such a facility cost "at least a billion dollars

  49. America will have to go through a period of the DARK AGE. It will run out of rare earth before it can ram up its own production of rare earth. Even if America produces its own rare earth, America will be hampered by its limited supply.

  50. a stupid like you who doesn't know about finance or economics better be quiet.. okay?.. or else other people with same mentality as u will follow ur example..

  51. Hey Fox Business, where's the "debate" between Trish and Liu Xin of China Television??
    Too scared to show it here?

  52. There will be no shortage of rare earth in usa. Texas,California Montana Pennsylvania has plenty of rare earth they can be developed.may cost little more.but we need develop them .not buy them from china.canada also has them.

  53. US is a major threat to China sovereignty, security, economic, military, and political rights. Cut them off all together!

  54. BAN AS MANY CHINESE COMPANIES AND CAUSE AS MANY JOB LOSSES IN CHINA. THE PEOPLE WILL REVOLT AGAINST THE CCP AND OVERTHROW IT. ALSO WE MUST SPIKE OIL PRICES WITH A WAR IN IRAN SO THEY WILL BE HURT EVEN MORE. ALSO WHEN THEY DEVALUE THE YUAN IT WILL CAUSE MAJOR INFLATION THERE.

  55. (US + Con-Don + Pompeo) = Lie + Cheat + Steal = Zero Credibility
    👎👎

    US is a War Criminal Crooked Corrupt Evil Thief nation 👎💀👎

    Boycott all US products & services (especially FedEx) 👍🌞👍

  56. Trump: Fake news again. They aren't rare. We've got plenty of them in our treasury vault. All pure 24k.

  57. Trump: Fake news again. They aren't rare. We've got plenty of them in our treasury vault. All pure 24k.

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