China's dominance of the rare-earth minerals market gives it a huge advantage on the world amid the increasing reliance on magnet-making materials crucial to electric cars and wind turbines, important initiates being pushing by the left's China-friendly green agenda.
This runs the risk of furthering China's agenda to overtake the U.S. as the world's leading economic superpower, as China mines more than 70% of the rare earth materials and owns 90% of the magnet-making market, The Wall Street Journal reported.
"It will take two decades or tens and tens of billions of dollars to get even close to China," USA Rare Earth LLC CEO Pini Althaus told the Journal.
What does this mean for the battery-powered agenda in the U.S? More money from government in the way of subsidies to lift up the U.S. market in the sector, according to the report.
"For these minerals to go from a hole in the ground to an electric motor, you need vast skills and expertise, which barely exist out of China," Neo Performance Materials ULC CEO Constantine Karayannopoulos told the Journal.
"Many producers will find it difficult to compete head-to-head against China on price without some level of ongoing government assistance."
While progressives fight energy initiatives because of the environmental impact, there is considerable mining needed to prop up the green energy agenda, too, when it comes to the all-important magnet needed for electric cars and wind turbines, according to the report.
Rare Element Resources Ltd. has received a $22 million grant from the Energy Department to process rare earth materials but it's Wyoming permit application has been on hold for 8 years.
"It's not easy," CEO Randy Scott told the Journal, saying a regular supply of the materials is still another 6-9 years away because of the permitting, financing, and construction involved in mining.
As the environmentalist movement rose in the 1980s, the U.S. lost its grip on rare earth production and now the West maintains more restrictive mining regulations than China, particularly with regard to the radioactive materials sought for magnets.
And the costs due to the red tape doom businesses in the sector, experts say.
"Our other costs and our returns are all in that 10%, how can you survive doing this in the West?" England's Less Common Metals Ltd. Managing Director Ian Higgins told the Journal.
The rare-earth magnet is 20% cheaper from China than Europe, Eypex Corp.'s Clarence Martin told the Journal.
"It will be quite a while before a meaningful shift in our supply chain occurs," he concluded.
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