Summary
1)Rare earth critical mineral crisis heating up as China Retaliates against Trump Tariffs.
2)Rare Earth Shortage could cripple tech giants such as Apple and Tesla.
3)Rare Earth ETF $REMX was over $100 during last rare earth crisis in 2011 now its under $15.
4)If Chinese cut off rare earths, prices could skyrocket in parabolic rise.
5)China Controls Rare Earth Sector which was invented in USA.
Over eight years ago I wrote about a crisis that could unfold in the United States related to rare earth imports from China. Remember the Chinese control the rare earth market. These rare earths are used in your phones, Ipads, and hybrid/electric vehicles. Just think of rare earths in all your advanced technologies which involve magnets like hard drives and speakers. Some think the rare earth boom has been and gone…but I think its coming back and it could be very soon.
In this article published back in September of 2011, I warned about a potential rare earth critical minerals crisis which could cripple the United States economy especially technology companies that use rare earths (REMX) such as Tesla (TSLA) and Apple (AAPL) when tensions with China flare up again.
China usurped the rare earth industry away from America back in the 1980’s when GM sold its magnet technology to the Chinese. No one cared back then as the metals were kind of obscure and the American Public cared more about Michael Jackson. But the Chinese knew that these metals would be the guts of the new mobile technology and defense systems.
I tried to get Obama to make an emergency executive act back during the Credit Crisis to boost jobs and develop a secure USA rare earth supply chain. All I heard was crickets.
Back then they ignored the fact that these metals are behind our top defense systems, guided missile programs and technologies the public is still unaware as its being kept top secret. For years I warned that America was becoming a client state of China as the elites sold our most advanced industries for pennies. As I said back then, “We are now on the verge of reaping the whirlwind resulting from our short sightedness on rare earths.”
The new administration under Trump has listened to a large segment of the population who know their businesses have been shutdown by the Chinese shrewd game of catering to the corporate elites. Those who have allowed our uranium and rare earth secrets to be sold over the past 30 years should be tried for possibly treason. Such a tragedy as we are now in such a weak position with the Chinese.
Our technology depends on rare earths and Trump should consider what I requested Obama to do almost 10 years ago to make an emergency executive order to fast track American rare earth and battery metal development.
China is shrewdly gaming us into positions of weakness and dependency. To ignore the global chess game being developed by China is close to an act of treason or at least malfeasance by our elected representatives. It is survival time on a national level.
Recently Lynas (LYSCF) one of the only publicly trade rare earth producers may be signaling to the market that America may be the place for rare earths as they are planning to build the first rare earth separation plant with an American Chemical company. I wrote years ago that Lynas should do that rather than build an expensive facility in Malaysia which has shown to be an unfriendly jurisdiction from an operating perspective. They have had a lot of local opposition in Malaysia. Glad they are finally listening to investors like me that said to invest in USA.
It is noteworthy that there was a huge presence of short sellers in rare earth and uranium stocks. Almost eight years ago we were almost ready to start rare earth production in the USA before the Chinese cut the prices dramatically. All development stopped and Molycorp went bankrupt as well as many of the junior developers. China with a single click destroyed the sector which was trying to get started and all the investors who had the foresight.
Remember China has a bullet on how to respond to Trump’s tariffs right now. All they have to do is restrict rare earth exports crippling the US Economy as they did 10 years ago.
Unfortunately, It may take 10-15 years now to restart industry. A lot of the American expertise from the 1950’s were around 10 years ago but now are way past retirement.
There is speculation that the Chinese are prepared to shut down rare earth exports in response to Trump. Share of the rare earth etf (REMX) were up yesterday on record volume as Bloomberg reported the President of China visited a rare earth facility to send clear message to Trump.
Investors should be prepared for Chinese retaliation with rare earths which could send prices soaring like it did in the past. The Chinese have warned the US that they have tools at their disposal to retaliate against Trump. That weapon of choice may be rare earths.
Remember the Rare earth ETF (REMX) hit a high above $100 back during the last crisis in 2011…now its trading under $15. No one remembers what happened 10 years ago but we do. The market has totally ignored rare earths until this week when we saw this record volume as sources are saying the Chinese may retaliate with rare earths. If they do get ready for the next bubble in rare earths which may even surpass the 2010 run.
Disclosure: I am/we are long REMX.