Greg Klein reports that the appeal to Western markets is obvious, an advanced, low-cost rare earths project in a friendly jurisdiction. So even before the recent military build-up in the South China Sea, Commerce Resources experienced an increase in American requests for concentrate samples from its northern Quebec Ashram deposit. With the U.S. Navy now challenging Chinese territorial aggression, the confrontation seems to pit two superpowers against each other. But what does that really indicate?
It is actually one lonely small old Russian-built carrier against three U.S. Nimitz-class supercarriers, Commerce president Chris Grove points out. So when Beijing says it is going to take off the gloves, I think they are referring to trade. That brings to mind the Senkaku incident, a much smaller 2010 confrontation in the same region that prompted China to cut off rare-earths exports to Japan, sending global supply chains into turmoil and prices soaring. A possible Senkaku redux is one of a number of aspects to a global paradigm shift that Grove sees coming, to the benefit of Western industry in general and Ashram in particular.
The U.S. might easily outgun China, but China produces about 90% of the world rare earths. They are essential to several defense needs, a fact that really drives certain people in the U.S. absolutely apoplectic, says Grove.
While Westerners have struggled to compete with China on costs, prices mean little to the U.S. Department of Defense, which last year began putting money behind potential domestic processors, Grove says. That support complements a multi-faceted advantage that the West is gaining over China, he explains. The latter country struggles with rising labor costs and the need to finally address its environmental woes. Meanwhile Western countries offset their labor costs with technological innovation and maintain the world highest environmental standards.
REE usage continues to grow at a pace well above global GDP growth.
Read on.
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