Last weekend, Democrat US Senator Chuck Schumer of NY made headlines with his comments on a recent plan to fund a wind farm in Texas, using Federal stimulus money to pay for Chinese-built wind turbines. Rare metals commentator and analyst Jack Lifton has posted a new article on the subject, called “The Rare Earth Crisis of 2009 – Part 2: The Green Wind Blows From China“.
Jack asks the questions: “why are the components being made in China? Can we do anything to cause them to be made in the USA?“. He goes on to discuss the opacity of Chinese rare earth mining companies in terms of true cost structures, and how virtual all rare earth permanent magnets used in large scale wind turbines, probably originated in China.
Jack goes on to say:
These are the current consequences of the non-production of any but trivial amounts of the rare earths outside of China, combined with the economic thinking of America’s business and government elites; the former want to maximize profit at any cost, the latter want revenue from the taxes on those profits.
The rest of Jack’s article talks about the issues of investing in hard rock mining, and rare earth mining in particular, in order to exploit the significant natural resources available to us in the USA and Canada. he says that:
Chinese and Japanese companies are now looking at these North American resources for the benefits of the economies of their home countries. They can only do this so long as North America does not any longer have a domestic supply chain to refine, produce metals and alloys, produce components, and assemble those components into end use products.
The article is a good primer on the present problems facing this industry, and how they could impact rare earth permanent magnet supply in the future. You can read Jack’s article here.