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> After several shutdowns and two bankruptcies due to low rare earth prices... It's important to contextualise this, it is probably the most important part of

by roenxi 2y ago

> After several shutdowns and two bankruptcies due to low rare earth prices... It's important to contextualise this, it is probably the most important part of the entire story. Rare earths aren't all that rare, they generally have a crustal abundance comparable to copper. The question of where rare earth mining & processing happens is mainly one of price. Or, accounting for second order effects, a question of environmental regulations.

bombcar 2y ago
And bankruptcies due to price are a common occurrence in the mining industry. I’ve done consulting work at a giant open pit copper mine the size of which cannot be described, sitting idle waiting for the price of cooper to climb above a benchmark.
- corimaith 2y ago
  Which is where tariffs come in to offset low price dumping. Inefficient, but it's better thought of as insurance premium on future geopolitical risk.
  - bushbaba 2y ago
    Or schemes similar to agriculture where the government buys excess production for price stability. Which is good for consumers and businesses alike.
    - lesuorac 2y ago
      To be clear, "price stability" in this case means a higher price compared to absence of government intervention. I'm all for a country subsidizing food to ensure sufficient domestic production but I am not for pretending it's good for a "price stability" reason. We are also well beyond sufficient domestic production. Our population has doubled in the past 50 years [1] while food production has tripled. We do not need agriculture subsides for sufficient domestic production. [1]: https://www.census.gov/data/tables/time-series/dec/popchange-data-text.html https://www.census.gov/data/tables/time-series/dec/popchange... [2]: https://www.usda.gov/about-usda/news/blog/look-agricultural-productivity-growth-united-states-1948-2017 https://www.usda.gov/about-usda/news/blog/look-agricultural-...
      - mschuster91 2y ago
        > I'm all for a country subsidizing food to ensure sufficient domestic production but I am not for pretending it's good for a "price stability" reason. Price stability itself is a valid goal. Yes, consumers may pay a liiiitle more for their eggs, milk or bread, but the price of the good can be relied upon which is very important for low-income households and their financial planning.
        vanattab 2y ago
        you must not be buying eggs lately
        mschuster91 2y ago
        I'm European, we don't hold chickens in such absurdly large farms as Americans, my eggs come from the farm next door...
        roenxi 2y ago
        Are you absolutely sure that low prices wouldn't be more important to low income families? It seems like low prices-low income is a better match than slightly high prices-low income. My understanding of the situation was that low income shoppers are typically extremely keen for a bargain and are quite happy to shop around. And on paper they can just pretend the price is higher than it really is if stability matters that much to their planning.
        mschuster91 2y ago
        See my reply to another person raising a similar question. Price discounts are a good thing for consumers, but what particularly sucks is over night price hikes for basic staples.
        KETHERCORTEX 2y ago
        > Yes, consumers may pay a liiiitle more for their eggs, milk or bread > very important for low-income households and their financial planning. Paying more is beneficial for low income households, I see. That looks like expert level mental gymnastics detached from the reality.
    - mschuster91 2y ago
      > Which is good for consumers and businesses alike. Only for domestic consumers. Foreign consumers? Not so much. A ton of the EU's excess butter and milk products for example ended up being donated to Africa and ruined local agriculture there that couldn't compete with free products. A similar story is playing out in Gaza where there hasn't ever been any incentive to build out domestic production of food because UNRWA brought in a loooot of food aid (which on top of that got looted and commercially re-sold by Hamas). Excess production is vital for any country, but it has to be kept at a moderate level and especially it must not be donated off in a way that threatens domestic production of the good in question.
- eightysixfour 2y ago
  Panama?
Animats 2y ago
Right. See this story about the 2015 rare earths glut.[1] That glut triggered one of the shutdowns of Mountain Pass. Owning the whole supply chain is a win because the price of magnet-ready alloy fluctuates less than the price of dirt with some rare earths mixed in. [1] https://www.forbes.com/sites/timtreadgold/2015/05/15/chinese-rare-earth-glut-triggers-a-price-collapse-and-environmental-crisis/ https://www.forbes.com/sites/timtreadgold/2015/05/15/chinese...

by roenxi 2y ago

bombcar 2y ago

And bankruptcies due to price are a common occurrence in the mining industry. I’ve done consulting work at a giant open pit copper mine the size of which cannot be described, sitting idle waiting for the price of cooper to climb above a benchmark.

corimaith 2y ago
Which is where tariffs come in to offset low price dumping. Inefficient, but it's better thought of as insurance premium on future geopolitical risk.
- bushbaba 2y ago
  Or schemes similar to agriculture where the government buys excess production for price stability. Which is good for consumers and businesses alike.
  - lesuorac 2y ago
    To be clear, "price stability" in this case means a higher price compared to absence of government intervention. I'm all for a country subsidizing food to ensure sufficient domestic production but I am not for pretending it's good for a "price stability" reason. We are also well beyond sufficient domestic production. Our population has doubled in the past 50 years [1] while food production has tripled. We do not need agriculture subsides for sufficient domestic production. [1]: https://www.census.gov/data/tables/time-series/dec/popchange-data-text.html https://www.census.gov/data/tables/time-series/dec/popchange... [2]: https://www.usda.gov/about-usda/news/blog/look-agricultural-productivity-growth-united-states-1948-2017 https://www.usda.gov/about-usda/news/blog/look-agricultural-...
    - mschuster91 2y ago
      > I'm all for a country subsidizing food to ensure sufficient domestic production but I am not for pretending it's good for a "price stability" reason. Price stability itself is a valid goal. Yes, consumers may pay a liiiitle more for their eggs, milk or bread, but the price of the good can be relied upon which is very important for low-income households and their financial planning.
      - vanattab 2y ago
        you must not be buying eggs lately
        mschuster91 2y ago
        I'm European, we don't hold chickens in such absurdly large farms as Americans, my eggs come from the farm next door...
      - roenxi 2y ago
        Are you absolutely sure that low prices wouldn't be more important to low income families? It seems like low prices-low income is a better match than slightly high prices-low income. My understanding of the situation was that low income shoppers are typically extremely keen for a bargain and are quite happy to shop around. And on paper they can just pretend the price is higher than it really is if stability matters that much to their planning.
        mschuster91 2y ago
        See my reply to another person raising a similar question. Price discounts are a good thing for consumers, but what particularly sucks is over night price hikes for basic staples.
      - KETHERCORTEX 2y ago
        > Yes, consumers may pay a liiiitle more for their eggs, milk or bread > very important for low-income households and their financial planning. Paying more is beneficial for low income households, I see. That looks like expert level mental gymnastics detached from the reality.
  - mschuster91 2y ago
    > Which is good for consumers and businesses alike. Only for domestic consumers. Foreign consumers? Not so much. A ton of the EU's excess butter and milk products for example ended up being donated to Africa and ruined local agriculture there that couldn't compete with free products. A similar story is playing out in Gaza where there hasn't ever been any incentive to build out domestic production of food because UNRWA brought in a loooot of food aid (which on top of that got looted and commercially re-sold by Hamas). Excess production is vital for any country, but it has to be kept at a moderate level and especially it must not be donated off in a way that threatens domestic production of the good in question.
eightysixfour 2y ago
Panama?

Animats 2y ago

Right. See this story about the 2015 rare earths glut.[1] That glut triggered one of the shutdowns of Mountain Pass. Owning the whole supply chain is a win because the price of magnet-ready alloy fluctuates less than the price of dirt with some rare earths mixed in. [1] https://www.forbes.com/sites/timtreadgold/2015/05/15/chinese-rare-earth-glut-triggers-a-price-collapse-and-environmental-crisis/ https://www.forbes.com/sites/timtreadgold/2015/05/15/chinese...