The Rare Metal War

A book by Gilluame Pitron

This book while addressing the rare metal industry specifically looks at the geo-political ramifications of the shifts taking place in the industry and the changes in the global power structure that are being precipitated by it.

The book starts by acknowledging the fact that the “Green Economy” is not green. Solar panels, wind turbines, and the batteries in electric cars would not be possible without the use of elements like Lithium, Cobalt, Dysprosium, Vanadium, Gadolinium, and many other metals that have unique properties.

They are not rare like in they cannot be found but rare in that you would have to mine 5 tons of ore to extract 100 Kgs of the material. This ensures that the energy required to produce them is huge. At the same time, treating such vast quantities of ore is highly polluting and requires vast quantities of water.

After the World Wars, the need for these elements was primarily for Defence purposes and the mining technology needed to produce these elements was in the hands of a handful of countries that were producing them in their backyards. In the 60s and the 70s, there was an increasing pushback against the production and mining in their regions because of the pollution that it caused. Entire waterways were destroyed. Lands were left unusable and unarable.

The US had to create the Environmental Protection Agency in response to this in 1970. Fortunately for the Americans, at the same time, the Chinese economy started opening up. The US, UK, France and Germany made this technology available to the Chinese so that the production could carry on unabated while moving the pollution to lands unseen.

With the shift in technology adoption amongst consumers in the late 90s and 2000s, the properties of these materials entered consumer technologies. The number of magnets that each one of us has around us is incredible and we are not even aware of it. Without Neodymium magnets, most modern electronics would not be possible.

The easy availability of these materials is at the heart of what is touted as the “green economy” which is meant to save capitalism rather than the planet.

A solar plant produces just as much of a carbon footprint as a coal plant. A wind farm uses 20 times the concrete as a thermal or nuclear plant. We are front-loading the carbon footprint and the so-called green transition is making the emissions worse rather than better. The amount of materials that need to be mined to make a single electric car is so high that the carbon footprint of mining the materials is the same as the carbon footprint of using a fossil fuel-powered car.

Despite having stated all these facts himself, the biggest problem that the author sees is that China has a stranglehold on all of these materials. They control 50% - 80% of the supply of many of these materials and a Chinese embargo on export can make the western economies writhe in pain much worse than the oil shock of the 1970s.

The fact that China is the only country with the capacity to produce a large number of solar panels and components for wind turbines all essential for the “Green Economy” also will help them win the war of perception across the world.

The advantage enjoyed by the Chinese vis-a-vis rare metals is an order of magnitude greater than that enjoyed by the Middle East vis-a-vis oil. China can become the superpower of the future just by maintaining a chokehold on the supply of these minerals.

The biggest Achilles heel of the F-35 program, a $4 Billion development program is that the company had to depend of Chinese supplied magnets in the plane and it was discovered to have been supplied by the Chinese late in the development process (due to misrepresentation by the intermediary). Such dependence can harm the military interest of the US in the event of a war.

His prescription - Let us open up mines in the West. If the West produces it, it will certainly do it in a manner that keeps pollution lower than the Chinese and it also solves the geo-political problem.