3 days ago
Peter McGuire on rare earth, China's dominance & alternative suppliers
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, CEO-Australia,, says China's dominance in rare earth production, controlling 70% globally, raises concerns across industries from technology to defense. While US-China talks aim to ease supply tensions, countries like India, Australia, and Brazil are exploring domestic processing to counter China's humongous market share.A couple of things. First up, yes, its dominance is very significant and we cannot take our mind off that China accounts for roughly 70% of the world's production of rare earths. We all understand the implications and how they operate from the technologies, you have got headphones, you have got laptops, you have got smart watches, you name it, all of that side. Then, you have got the electric vehicle, then you have got more forms of technology from weaponry and from aircraft and all of those. So, not only manufacturing, and the impact that can have on the auto is a very hard one to speculate on quite simply because of the framework as far as discussions go. We all understand that China took this initiative after President Trump came very heavily down on them, going back about two months or so. In turn, their tit for tat strategy was to implement all of these issues as far as rare earth and the supply chain. We understand that America needs these for weaponry, all the way through to running its own administration and they are a critical part of the key building blocks for their defence industries. I am not sure whether it will be solved over the next 24 hours. One would hope so, but Scott Bessent, Treasury Secretary, is trying to get that on the is exactly right. When you control 90% of the market then that changes the framework as far as who is in charge is concerned and for many countries, this will be a wakeup call and over the next decade, countries certainly like India and other powerhouses across Asia are going to be very aggressive in their own processing as far as these minerals are has to look at the likes of Lynas and other rare earths that are doing it offshore. They were doing that in Malaysia, I am sure the US is going to take a very aggressive stance from a security standpoint and really ramp that up. Now, there are new production houses and manufacturers of these, one is in Nevada. Another one is opening in Texas. That is going to be a very solid output for the Trump administration over the next three to six months to get this underway.I think it is. Australia, Brazil and even India have massive land mass and that would be a path forward. You would have to think that if you have got the metals in the ground, the next step would be who is in charge of them? Have you done sales over the years? Is this going to be renegotiated? These factors are going to play out and that is what President Trump is leaning towards. There is talk about the Darwin Port in Australia. They want to renegotiate those sorts of deals where the Chinese are involved. This is real brinkmanship when it comes to geopolitics. It is going to be very hotly contested for many years to it could. Like any market, there is a dominant player. Not only dominant, but they own the market with 90% control, So, that is the first issue. One needs to look at that from their own security view. For every country that wants to be involved in rare earth –mining as well as production– the next point is whether they can look at strategic relationships and how they can foster those better relationships with other market that is all again about negotiation and looking for opportunity and one can leave the politicians and hopefully they have got the best interest at heart to be able to structure a deal that is beneficial not only for their country's security but more importantly for its people.
