China Orders Three Rare Earths Mines to Halt Production

China has ordered three rare earth minerals (REM) mines in the Jiangxi province to cease production by the end of the year.

Read the story from Mineweb here: Eastern China rare earth mines ordered to stop production

As readers of The More You Dig, you know these mine closures are not unexpected and further testament to the growing demand for the U.S. to produce its own domestic minerals resources. The U.S. is currently 100% reliant on foreign countries for 18 critical minerals, and until recently, rare earths was one of them. Even with the reopening of the Mountain Pass Mine in California, the U.S. remains 97% import reliant for rare earths.

We are entering a period of resource nationalism where many countries, led by China, are asserting control over natural resources located within their country. Unlike the Arab oil embargo of the early 70’s, countries like China are using resource nationalism not to control the market or the market price for a given commodity, but to attract long term manufacturing jobs. Manufacturing require minerals. Manufacturing concerns require a stable and affordable supply of metals and minerals. In a nut shell, resource nationalism says, “if you want our minerals, locate your manufacturing facility in our country.”

This is most evident and transparent in China with rare earth minerals. China currently controls 97% of global rare earth production. China has announced that it is cutting back on rare earth exports in favor of internal consumption. Rare earths are required not only in wind turbines and hybrid vehicles, but also in defense systems and dozens of consumer products like flat screen TV’s, computer monitors, and energy saving CFL light bulbs. China is telling these manufacturing concerns that they have a choice. They can hope to obtain the rare earths they need in the global market place at the global commodity price, or they can relocate their manufacturing facility in China and be guaranteed a supply of rare earths at a discount. China has been very transparent in this policy because first and foremost they want to create manufacturing jobs.

If the United States is going to compete in this global mineral environment fueled by resource nationalism, it must adopt policies that guarantee access to lands with mineral deposits, must provide a competitive tax regime, and must reduce permitting delays. We should be embarrassed that we rank last among the twenty-five largest mineral producing countries in terms of permitting delays. The fact that a country with a mineral resource base as rich as the United States attracts only 8% of world-wide exploration spending should be a call to action.

Contact your Senator or Congressman; tell them you want more domestic mineral production for our economic and national security and that American mining is the answer to providing the mineral resources and jobs we need to restart our economy.

The More You Dig – It All Starts with Mining.

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