The stimulus and green jobs | 26 comments (26 topical, 0 editorial, 0 hidden)

Re: rare earth magnets (4.00 / 3)

There are other sources of rare earths but capital is required to develop them. Unless they are given an assurance of a market price adequate to service the debt they can't be developed. Likely only a sovereign govt. could provide such assurances, as the venture would be vulnerable to being sabotaged by the Chinese simply by selling rare earths at prices below the cost of production for the new mine. And a government guarantee would be labeled "Socialism!" We are hoist on the petard of our own economic ideology.

The USA could easily this problem by negotiating an agreement with China that either gets an agreement on the minimum prices at which China will sell rare earths or agreement to sell rare earths to the USA at the same price they are sold to Chinese companies and making access to the US export market contingent on that agreement. But that would be serving the national interest of the USA but not the corporate interests of the energy companies and the financial services companies involved in importing manufactured goods from China.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Nov 11th, 2009 at 12:42:38 AM EST
[ Parent ]

Re: rare earth magnets (none / 1)

Well, one could leave this to the market as well. If the Chinese block all exports the price will go up and capital will be available outside China. Sure, there is always a risk that China undercuts the price ot threatens to do so, but that doesn't make much sense as China isn't interested in exporting these minerals. That's the problem.

I'm also sure new miners could reach long time fixed price supply deals with the large consumers of rare earth minerals, which are crucial not mainly for wind power but for hitech armaments.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Wed Nov 11th, 2009 at 02:52:09 AM EST
[ Parent ]

Re: rare earth magnets (none / 0)

rare earth minerals...are crucial not mainly for wind power but for hitech armaments.

Well, I knew that iridium is often used as a "flashing" over metal parts used in electronics, as I used to purchase rotary switches with iridium flashings for audio console applications, and iridium is a rare earth, the one whose deposition at the boundary of the Cretaceous marked the extinction of the dinosaurs, of which my console was one. :-)

If they are important primarily to hitech armaments the production could be guaranteed by the US Government, but commercial products would still cost more than alternate products made with Chinese raw materials, not to mention virtually free labor. Plus any commercial use of "strategic" materials would involve the user with bureaucratic requirements, etc.

Others could better judge the likelihood of investments for rare earth mines being funded absent guarantees, but I would favor slapping an ~ 20% tariff on ANY product containing embargoed "strategic" materials. And while we are at it, phase in tariffs to cover the cost of providing health care and retirement benefits to Chinese workers. Were China to respond by dumping $US they would be hurting themselves and the Fed is already involved in massive QE anyway. What does another $2-3 trillion matter. It is fiat money anyway. Deal with consequences with new fiats. :-)

The US would have to pay more for domestically manufactured consumer goods but would have a vastly improved national accounts balance. The ones hurt would include those who bet on the "manufacture everything in China" strategy. All of the "Free Trade" "Globalization" bull shit has mostly been propaganda in the service of the financial sector. Time for an Industrial Policy worthy of the name that serves the interests of the average US citizen instead of the existing de-industrialization policy that serves the interests of a parasitical financial sector.

Chop! Chop! USA! USA! USA!

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Nov 11th, 2009 at 08:58:21 AM EST
[ Parent ]

Re: rare earth magnets (none / 1)

No, iridium is one of the platinum metals (along with osmium and platinum) but it is certainly rarely occuring.

by njh on Sat Nov 14th, 2009 at 08:56:27 PM EST
[ Parent ]

The stimulus and green jobs | 26 comments (26 topical, 0 editorial, 0 hidden)

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