On December 15, 2023, the Wall Street Journal published a special commentary about the unusual obstacles that U.S. and Western companies have encountered in trying to break China's grip on rare earth magnet manufacturing.
On the Pinduoduo website, you can buy 30 powerful magnet pieces from China for just $2 and can be used for a variety of different purposes. Why are magnets so cheap in China?
According to reports, two-thirds of the world's rare earth production comes from China, which accounts for 85% of the world's rare earth ore processing capacity and more than 90% of the world's magnet manufacturing capacity.
The production of rare earth magnets is essential for smartphones and electric vehicles, as well as for jet fighters and wind turbines. In order to wean themselves off China, the United States and other Western countries want to build a supply chain that excludes China, and now it seems to be difficult.
In fact, rare earths are not scarce, and many countries in the world have rare earth mines. For example, there is a large rare earth mine near Las Vegas, near Highway 15 to Los Angeles, which has been abandoned for a long time because it cannot compete with China, and then re-mined, but the ore needs to be transported to China for refining and processing, because the United States is too expensive to refine and process.
For example, in mined rare earth ores, different types of rare earths are mixed together and need to be separated. Outside of China, only a handful of companies can do this, and in the U.S., none of them can do large-scale rare earth separation.
The reality now is that the United States and Australia are able to mine rare earths, but not to process them on a large scale. Malaysia can process ore, but not magnets. Japan is able to produce magnets, but there are no rare earth minerals.
China has dominated every step of the rare earth magnet manufacturing process for decades. China is the only country that has the ability to mass-produce rare earth magnets from start to finish, and it is already far ahead in terms of processing and refining technology.
In other words, if the United States and other Western countries want to build a supply chain without China, they must stitch together the supply links scattered between multiple countries, which brings many new problems.
For example, in May this year, a company in Australia signed an agreement with a small company in northern Vietnam to buy rare earth materials, planning to ship these oxides to its plant in South Korea, where they can be converted into metals for use in magnets. In October, the founder of the Vietnamese company was arrested locally on suspicion of financial fraud related to the illegal purchase of rare earths, disrupting the supply chain. This shows how tricky it can be to stitch supply chains between different jurisdictions.
Another example is the mineral sands of a rare earth bonanza in Georgia, USA, which contain radioactive elements and must be transported to another state for filtration before being shipped to Estonia for processing.
Even more bizarre is the fact that an Australian company's rare earth mine contains a lot of 6-inch long lizards that resemble earthworms, and local ecologists have asked the company to allow 10 years before mining to gradually remove these lizards from the mining area where they live.
(Author: Ksliu, a well-known American current affairs commentator; contributed and revised: Xiao Zhifu, special researcher of Kunlun Ce Research Institute; source: Kunlun Ce Network [authorized compilation and distribution], reproduced from the Baidu account of "Lao Fuzi Grocery Store", revised and released; picture provided by Ksliu, invaded and deleted)