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Christopher Grove: How China Manipulates the Rare Earth Market to it’s Advantage

Christopher Grove, President and Director of Commerce Resources, returns to the show as an expert on the rare earth element market. Electric motors are just one of the many users of rare earth magnets. China accounts for 70% of mining production and 85% of global processing capacity may be attempting to accumulate various rare earth projects around the world, leading to suggestions of manipulation. After a September 2010 incident between a Chinese fishing vessel and Japanese coast guard ships, China retaliated by cutting off supply of metals to Japan, prompting foreign companies to set up manufacturing within China to take advantage of the metals; this consequently made China the world’s dominant magnet manufacturer.

The largest chip manufacturers are in Taiwan and, due to U.S. involvement, China is considering restricting exports of gallium and germanium; these two metals are key for semiconductor production. Despite no longer being able to internally source enough rare earth elements, China is still the largest processor, allowing them to become a net importer while maintaining their market position. Monazite, a mineral feedstock containing other key rare earth elements, is another area of interest for Christopher. With China being an enormous importer of mineral sands, slightly radioactive in nature, they take advantage of the fact that these sands aren’t being restricted like in other countries.

Christopher is excited to watch the increasing demand for niobium-oxide, a material useful in battery manufacturing. He also explains some extraction methods–such as the use of solvents–and how technology is improving in an effort to make the process cheaper, less dangerous, and more eco-friendly.

Time Stamp References:
0:00 – Introduction
0:32 – Rare Earth Markets
4:59 – Chinese Dominance
9:44 – Japanese Dispute
14:12 – Gallium & Germanium
16:39 – Other Market Factors
19:50 – Processing & Importing
22:10 – Monazite Mineral Sand
26:19 – Juniors & Economics
27:40 – Battery Manufacturing
30:42 – New Technology & Methods
36:10 – Concluding Thoughts
37:40 – Wrap Up

Talking Points From This Episode

  • China dominates the rare earth market and has shown a willingness to retaliate against other countries to maintain their position.
  • China imports large quantities of monazite from mineral sands, which are not as strictly regulated as in other countries.
  • New extraction methods make rare earth extraction cheaper, safer, and more environmentally friendly, and there is an increasing demand for niobium-oxide for battery production.

Guest Links:

Mr. Christopher Grove is President and Director of Commerce Resources since September 2014. Previously, he worked as Corporate Communications for Commerce since 2004 and has significant contacts within the financial communities in North America and Europe. Mr. Grove joined the Commerce Resource board in 2012 and has been active in representing the company abroad.

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