Tim Maverick reports that on March 22, 60 Minutes ran a segment on the rare earth industry, covering how important rare earth metals are in our modern, technology-based world. Tiny and very powerful magnets made from rare earths are crucial to our consumer gadgets, renewable energy production, and the defense industry. The report was nice to see. But I would not base any investment decisions on it. You see, the report was notable not for the information that was included in the segment, but for how much was left out or simply ignored. For instance, we do not have to mine to get rare earths. Rare earths can be obtained from other minerals that we already process, and minerals that already exist can be recycled and repurposed. In other words, it was typical, mainstream media reporting.
China is not the villain. One point the story emphasized was that the United States is at the mercy of China when it comes to the supply of rare earth metals. China does control over 90 per cent of the market, but that is changing. You see, not long ago that number was more than 97 per cent. In other words, the Chinese monopoly position is fading.
60 Minutes harped on the possibility that China would play the geopolitics game and withhold rare earths from the United States, as it did with Japan a few years ago. Yes, China could do that. But the fact is, as pointed out by Roskill, a rapidly increasing proportion of Chinese rare earth supplies are now needed by its own domestic industries. Roskill estimates that more than 70 per cent of rare earth demand comes from within China itself. Clearly, it would be in the best interest of China to make sure there are enough rare earths for its own economy first.
Here is the video of the CBS Report on Rare Earth:
https://www.youtube.com/watch?v=N1HiX0HiAuo&feature=share
Copy and paste, of course.
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