Here's why China's trade war threat to restrict rare earth minerals is so serious - CNBC

Miners are seen at the Bayan Obo mine containing rare earth minerals, in Inner Mongolia, China July 16, 2011.

Stringer | Reuters

Rare earth minerals are a suite of 17 elements mineable in the earth's crust, with names such as cerium, europium and lutetium. They are commonly used in everything from car motors and electronics to oil refining and clean diesel to many major weapons systems the U.S. relies on for national security, including lasers and radar.

About 35% of rare earth global reserves are in China, the most in the world, and the country is a mining machine, producing 120,000 metric tons or 70% of total rare earths in 2018, according to the United States Geological Survey. The U.S. pales in comparison as it mined 15,000 metric tons of rare earths in 2018 and has a total of 1.4 million metric tons of reserves, versus China's 44 million.

U.S. consumption of rare earth compounds and metals relies heavily on imports, which rose to $160 million in 2018, according to USGS. Eighty percent were from China. To make it worse, although other countries supply to the U.S. including Estonia (6%), France (3%) and Japan (3%), much of their materials were derived from mineral concentrates and chemical substances produced in China, according to Hui Shan, commodities analyst at Goldman Sachs.

"The U.S.' reliance on Chinese supply may be higher than the import breakdown data suggest on the surface," Shan said in a note on Wednesday.

Given U.S. dependence on Chinese supply, the threat of a restriction could hurt many industries including high-tech devices, automotives, clean energy and defense. An example is the element lanthanum.

"The glass industry is the largest consumer of rare earths. For example, lanthanum makes up as much as 50% of digital camera lenses, including cell phone cameras. Hybrid electric cars use significant amounts of lanthanum in its batteries – 10-15 kilograms per vehicle," said Michael Widmer, metals strategist at Bank of America Merrill Lynch, in a note.

"Dangerous interaction"

Rare earth materials are also crucial to the U.S. defense systems because of their usage in lasers, radar, sonar, night vision systems, missile guidance, jet engines, and even alloys for armored vehicles, all of which the U.S. relies upon for national security.

The Pentagon on Wednesday presented a report to Congress on rare earth minerals in an effort to reduce reliance on China. The move came after the Chinese newspaper People's Daily warned it would cut off the rare earth supply, saying "don't say we didn't warn you. "

In a 2018 report by the Department of Defense, China's domination of rare earth elements was highlighted as it shows "the potentially dangerous interaction between Chinese economic aggression guided by its strategic industrial policies and vulnerabilities and gaps in America's manufacturing and defense industrial base."

"China has strategically flooded the global market with rare earths at subsidized prices, driven out competitors, and deterred new market entrants," the report said.

Non-Chinese suppliers

While China remains a dominant player in the rare earth market, production outside of the country is also growing, which could provide the U.S. with some alternatives, according to Credit Suisse.

Non-Chinese production has grown to about 29% of the global production from just 3% in 2009, said Manish Nigam, Credit Suisse's equity analyst said in a note on Thursday.

"A U.S. facility is under a revival plan since last year, and the fully operational Australian/ Malaysian venture (Lynas) has a production capacity that is more than the entire demand of the U.S., though processing of some oxides still gets done in China," Nigam said.

The impact of an export ban would be somewhat diffused across different U.S. sectors and countries, Nigam said, noting that electric vehicles and clean energy would be impacted the most.

Still, any escalation at this point poses a threat to the market as stocks continue to suffer amid the tit-for-tat strategies in the trade war. The S&P 500 is down 5.4% in May, on track to post its first negative month of the year.

"The effect of China restricting its rare earth exports to the US could have a much larger impact on the broader market this time around because of the ongoing US-China trade war," said Goldman's Shan. "Investors probably would expect further retaliations from the US and risk assets such as copper could face even more headwinds than it is currently under."

— CNBC's John Schoen and Michael Bloom contributed reporting.

Let's block ads! (Why?)

https://www.cnbc.com/2019/05/30/heres-why-chinas-trade-war-threat-to-restrict-rare-earth-minerals-is-so-serious.html

2019-05-30 17:37:35Z
52780304998936

Here's why China's trade war threat to restrict rare earth minerals is so serious - CNBC

Miners are seen at the Bayan Obo mine containing rare earth minerals, in Inner Mongolia, China July 16, 2011.

Stringer | Reuters

Rare earth minerals are a suite of 17 elements mineable in the earth's crust, with names such as cerium, europium and lutetium. They are commonly used in everything from car motors and electronics to oil refining and clean diesel to many major weapons systems the U.S. relies on for national security, including lasers and radar.

About 35% of rare earth global reserves are in China, the most in the world, and the country is a mining machine, producing 120,000 metric tons or 70% of total rare earths in 2018, according to the United States Geological Survey. The U.S. pales in comparison as it mined 15,000 metric tons of rare earths in 2018 and has a total of 1.4 million metric tons of reserves, versus China's 44 million.

U.S. consumption of rare earth compounds and metals relies heavily on imports, which rose to $160 million in 2018, according to USGS. Eighty percent were from China. To make it worse, although other countries supply to the U.S. including Estonia (6%), France (3%) and Japan (3%), much of their materials were derived from mineral concentrates and chemical substances produced in China, according to Hui Shan, commodities analyst at Goldman Sachs.

"The U.S.' reliance on Chinese supply may be higher than the import breakdown data suggest on the surface," Shan said in a note on Wednesday.

Given U.S. dependence on Chinese supply, the threat of a restriction could hurt many industries including high-tech devices, automotives, clean energy and defense. An example is the element lanthanum.

"The glass industry is the largest consumer of rare earths. For example, lanthanum makes up as much as 50% of digital camera lenses, including cell phone cameras. Hybrid electric cars use significant amounts of lanthanum in its batteries – 10-15 kilograms per vehicle," said Michael Widmer, metals strategist at Bank of America Merrill Lynch, in a note.

"Dangerous interaction"

Rare earth materials are also crucial to the U.S. defense systems because of their usage in lasers, radar, sonar, night vision systems, missile guidance, jet engines, and even alloys for armored vehicles, all of which the U.S. relies upon for national security.

The Pentagon on Wednesday presented a report to Congress on rare earth minerals in an effort to reduce reliance on China. The move came after the Chinese newspaper People's Daily warned it would cut off the rare earth supply, saying "don't say we didn't warn you. "

In a 2018 report by the Department of Defense, China's domination of rare earth elements was highlighted as it shows "the potentially dangerous interaction between Chinese economic aggression guided by its strategic industrial policies and vulnerabilities and gaps in America's manufacturing and defense industrial base."

"China has strategically flooded the global market with rare earths at subsidized prices, driven out competitors, and deterred new market entrants," the report said.

Non-Chinese suppliers

While China remains a dominant player in the rare earth market, production outside of the country is also growing, which could provide the U.S. with some alternatives, according to Credit Suisse.

Non-Chinese production has grown to about 29% of the global production from just 3% in 2009, said Manish Nigam, Credit Suisse's equity analyst said in a note on Thursday.

"A U.S. facility is under a revival plan since last year, and the fully operational Australian/ Malaysian venture (Lynas) has a production capacity that is more than the entire demand of the U.S., though processing of some oxides still gets done in China," Nigam said.

The impact of an export ban would be somewhat diffused across different U.S. sectors and countries, Nigam said, noting that electric vehicles and clean energy would be impacted the most.

Still, any escalation at this point poses a threat to the market as stocks continue to suffer amid the tit-for-tat strategies in the trade war. The S&P 500 is down 5.4% in May, on track to post its first negative month of the year.

"The effect of China restricting its rare earth exports to the US could have a much larger impact on the broader market this time around because of the ongoing US-China trade war," said Goldman's Shan. "Investors probably would expect further retaliations from the US and risk assets such as copper could face even more headwinds than it is currently under."

— CNBC's John Schoen and Michael Bloom contributed reporting.

Let's block ads! (Why?)

https://www.cnbc.com/2019/05/30/heres-why-chinas-trade-war-threat-to-restrict-rare-earth-minerals-is-so-serious.html

2019-05-30 17:36:31Z
52780304998936

Julian Assange Misses Court Session Because Of Health Concerns - NPR

Enlarge this image

WikiLeaks founder Julian Assange, shown here earlier this month, is reportedly suffering from poor health. Jack Taylor/Getty Images hide caption

toggle caption

Jack Taylor/Getty Images

A lawyer for WikiLeaks founder Julian Assange told a U.K. court Thursday that he was too ill to appear via video link at an extradition hearing about possible transfer to the United States.

Lawyer Gareth Peirce told Westminster Magistrates' Court in London that Assange was "not very well." The United States is pursuing a range of criminal charges against Assange, including a violation of the Espionage Act.

WikiLeaks said in a statement that it has "grave concerns" about the state of Assange's health.

"Mr Assange's health had already significantly deteriorated after seven years inside the Ecuadorian embassy, under conditions that are incompatible with basic human rights," the group said.

"During the seven weeks in Belmarsh [prison] his health has continued to deteriorate and he has dramatically lost weight," the statement reads. "The decision of prison authorities to move him to the health ward speaks for itself." The group quotes a defense lawyer saying that "it was not possible to conduct a normal conversation with him" on May 24.

The judge, Emma Arbuthnot, has said that the next extradition hearing will take place on June 12. The Associated Press reports that she said it "may be moved to a court next to Belmarsh prison for convenience." The Westminster court and the prison are more than 11 miles apart.

Assange currently is serving a 50-week sentence in U.K. prison for skipping bail. He was arrested April 11 after he was pushed out of the Ecuadorian Embassy. Assange had lived there for seven years to avoid possible extradition to the U.S. or Sweden, where he is being investigated over rape accusations.

As NPR's Sasha Ingber has noted, Assange's defense team has concerns about whether he could receive a fair trial in the U.S. Assange previously had been indicted over an alleged conspiracy in which the WikiLeaks founder helped former U.S. Army intelligence analyst Chelsea Manning obtain classified government documents. A new indictment, released earlier this month, introduced 17 criminal counts.

Sweden recently announced it is reopening an investigation into sexual assault allegations against Assange. He has repeatedly denied the claim.

Let's block ads! (Why?)

https://www.npr.org/2019/05/30/728257932/julian-assange-misses-court-session-because-of-health-concerns

2019-05-30 15:56:00Z
52780304013013

If we can't challenge China, no one can, warns operator of only US mine for rare earth metals - CNBC

The only rare earth metals-producing mine in the U.S. is facing short-term refining challenges as the nation to looks to reduce its reliance on China for the materials due to the trade war.

China dominates the refining and mining of rare earth minerals, which are key to the making of everything from iPhones to rechargeable batteries to military weapons.

"We're it," James Litinsky, co-chairman of MP Materials, which owns the Mountain Pass mine, said Thursday on CNBC's "Squawk Box. " "If we can't be economic, there's no hope for the U.S. industry."

Mountain Pass, located in California, ships nearly 50,000 tons of rare earth concentrate to China each year for processing, according to a Reuters report.

"There's no refining capacity in the world outside of China," said Litinsky.

China has imposed a 25% tariff on rare earth imports during the trade war, making the operator of the Mountain Pass mine the only U.S. company affected by this specific retaliation.

Meanwhile, China threatened this week to cut off rare earth mineral sales to the U.S., after President Donald Trump blacklisted Chinese telecom giant Huawei. Speculation about payback first surfaced when Chinese President Xi Jinping visited rare earth mining and processing facilities during a domestic tour last week.

The Pentagon, according to Reuters, recently presented a report to Congress on the rare earths market and how to find alternative sources from China.

A move by Beijing to follow through on its threat would be a "major escalation" of the trade war, Ray Dalio, co-founder of the world's largest hedge fund, wrote in a LinkedIn post Wednesday. Bridgewater Associates' Dalio also called the materials a "critical import that American companies don't produce and need to get from China."

Litinsky estimated that Mountain Pass should be self-sufficient from China by next year and produce its own separated rare earth products.

But for now, Litinsky said, China is it when it comes to processing. "We're talking to the [U.S.] government and hoping they'll help us, but we're not counting on it."

— Reuters contributed to this report.

Let's block ads! (Why?)

https://www.cnbc.com/2019/05/30/if-we-cannot-challenge-china-no-one-can-warns-only-us-rare-earths-mine.html

2019-05-30 14:57:28Z
52780304998936

If we can't challenge China, no one can, warns operator of only US mine for rare earth metals - CNBC

The only rare earth metals-producing mine in the U.S. is facing short-term refining challenges as the nation to looks to reduce its reliance on China for the materials due to the trade war.

China dominates the refining and mining of rare earth minerals, which are key to the making of everything from iPhones to rechargeable batteries to military weapons.

"We're it," James Litinsky, co-chairman of MP Materials, which owns the Mountain Pass mine, said Thursday on CNBC's "Squawk Box. " "If we can't be economic, there's no hope for the U.S. industry."

Mountain Pass, located in California, ships nearly 50,000 tons of rare earth concentrate to China each year for processing, according to a Reuters report.

"There's no refining capacity in the world outside of China," said Litinsky.

China has imposed a 25% tariff on rare earth imports during the trade war, making the operator of the Mountain Pass mine the only U.S. company affected by this specific retaliation.

Meanwhile, China threatened this week to cut off rare earth mineral sales to the U.S., after President Donald Trump blacklisted Chinese telecom giant Huawei. Speculation about payback first surfaced when Chinese President Xi Jinping visited rare earth mining and processing facilities during a domestic tour last week.

The Pentagon, according to Reuters, recently presented a report to Congress on the rare earths market and how to find alternative sources from China.

A move by Beijing to follow through on its threat would be a "major escalation" of the trade war, Ray Dalio, co-founder of the world's largest hedge fund, wrote in a LinkedIn post Wednesday. Bridgewater Associates' Dalio also called the materials a "critical import that American companies don't produce and need to get from China."

Litinsky estimated that Mountain Pass should be self-sufficient from China by next year and produce its own separated rare earth products.

But for now, Litinsky said, China is it when it comes to processing. "We're talking to the [U.S.] government and hoping they'll help us, but we're not counting on it."

— Reuters contributed to this report.

Let's block ads! (Why?)

https://www.cnbc.com/2019/05/30/if-we-cannot-challenge-china-no-one-can-warns-only-us-rare-earths-mine.html

2019-05-30 14:56:56Z
52780304998936

Tourist Boats Crash In Hungary's Danube River; At Least 7 Dead, 21 Missing - NPR

Enlarge this image

The river cruise ship Viking Sigyn collided with a tourist boat carrying 33 South Koreans on the Danube River in Budapest, Hungary, leaving at least seven people dead. Bernadett Szabo/Reuters hide caption

toggle caption

Bernadett Szabo/Reuters

Divers and rescue workers are trying to find 21 people in the Danube River in Budapest, after their sightseeing boat collided with a river cruise ship Wednesday night, capsized and sank. At least seven people are dead, and seven more were rescued. The craft had been carrying a South Korean tour group.

The smaller boat had 35 people aboard — 33 tourists and a Hungarian crew of two. All seven of the dead are South Korean, Budapest police say.

The tourists' boat, called the Mermaid, capsized within seconds of colliding with the long and low Viking Sigyn cruise ship. The first emergency call didn't reach police until 10 minutes later, officials said at a news conference Thursday.

The Viking Sigyn is a four-deck ship with 95 staterooms, according to Viking River Cruises. Video from the scene shows the two vessels drew near each other as they approached the Margaret Bridge — and that the long ship's bow comes into contact with the smaller boat's rear quarter, sending it sideways.

YouTube

Police in Budapest say they're investigating the incident in the context of a criminal proceeding, adding that they will rely on experts to determine whether any wrongdoing or error played a role in the catastrophe.

The collision took place on a scenic, busy stretch of the Danube near the Hungarian Parliament Building and the Margaret Bridge. While some of the smaller boat's passengers were rescued, attempts to find more survivors or victims have been complicated by darkness, rain and strong currents.

Any survivors also would have to endure the river's cool water (currently around 60 degrees). The search for anyone who had been on the boat has now been extended far south of Budapest, officials said.

YouTube

The incident has left families in South Korea anxiously awaiting word about loved ones who were on the river trip. A six-old-girl who was traveling with her mother and grandparents is believed to be the youngest victim, according to South Korea's Yonhap news agency. In another case, a 31-year-old woman survived but her younger brother is missing, the agency says.

As the magnitude of the catastrophe reached South Korea, officials there mobilized to send help to Hungary.

"At an emergency meeting, President Moon Jae-in told officials to use all available diplomatic resources to expedite search and rescue efforts," NPR's Anthony Kuhn reports from Seoul. "Foreign minister Kang Kyung-hwa will head an interagency task force and travel to Hungary."

Budapest police say the sunken ship has been found and that they plan to raise it from the riverbed.

Let's block ads! (Why?)

https://www.npr.org/2019/05/30/728229142/tourist-boats-crash-in-hungarys-danube-river-at-least-7-dead

2019-05-30 13:19:00Z
52780305819671

Mount Everest climbers seen crushed together in new video as Nepal debates limiting permits - Fox News

A crush of climbers waiting to ascend the world's tallest summit can be seen in a new video amid the ongoing debate whether Nepal should limit permits to prevent dangerous overcrowding on the world's highest peak.

Eleven people have died so far this year on Mount Everest -- including nine in Nepal -- likely due to altitude sickness, which is caused by low amounts of oxygen at high elevation and can lead to headaches, vomiting, shortness of breath and mental confusion.

Nepal has issued permits to 381 people to climb Everest, which the government says is the greatest number ever.

MOUNT EVEREST DEATH SPIKE PROMPTING REVIEW OF 'ALL THE OLD LAWS,' NEPAL OFFICIAL SAYS

Video filed by Rohtash Khileri and posted to Instagram shows dozens of climbers as they wait in line before making their way towards the 29,035-foot peak.

"Waiting for climbing up," he wrote on the video that's attracted over 19,000 views.

Another video shows the jam of climbers further up as they await the turn to get to the summit.

"Every climber trying to climb up. Due to bad weather and more climbers is a jam," he wrote. "Waiting their turn to reach the summit, mountaineers."

Because of the altitude, climbers have just hours to reach the top before they are at risk of pulmonary edema, when the lungs fill with liquid causing respiratory failure. Mountaineers have described traffic jams caused by exhausted rookies in the "death zone," the final phase of the ascent from Camp Four at 26,240 feet to the 29,035-foot peak.

About half a dozen climbers died on Everest last week most while descending from the congested summit during only a few windows of good weather each May. (Nimsdai Project Possible via AP)

Renowned mountaineer Um Hong-gil of South Korea, who was honored by the Nepal government Wednesday at an event commemorating the 66th anniversary of the first ascent of Everest, said the number of climbers should be scaled back and only those with proper training and experience should be allowed.

"There should definitely be less permits issued and more experienced climbers on Everest," Um said.

EXPERT CLIMBER SAYS OVERCROWDING, INEXPERIENCE CAUSED INCREASE IN MOUNT EVEREST DEATHS

Expert mountaineer and speaker Alan Arnette, who has climbed Everest four times told "FOX & friends" on Wednesday that 2019 has been "a little bit of an anomaly but it wasn't unheard of" as a now-viral photo of hikers lining up to reach the iconic summit has highlighted the problem.

"The key factor this year was a limited number of days where the wind was low enough to be able to summit that contributed to the crowds,"  Arnette said. "That meant there were close to 800 people trying to go up in what last year was 11 straight days of suitable weather, and this year was only three."

Nepal's Mountaineering Association, an umbrella body of expedition operators, has said it would push the government to enact policies to "control the inexperienced climbers from attempting to scale Everest."

The association's president, Santa Bir Lama, told the Associated Press that government permits, which are often issued to climbers just days before their expeditions, should be issued months in advance to give climbers time to fully prepare.

In this May 22, 2019 photo, a long queue of mountain climbers line a path on Mount Everest just below camp four, in Nepal. (AP Photo/Rizza Alee)

While government officials have said there were no plans to cap permits, another official had a different response to the New York Times on Wednesday.

CLICK HERE FOR THE FOX NEWS APP

“Certainly there will be some change in the expedition sector,” Mira Acharya, a senior official with Nepal’s tourism department, told the newspaper. “We are discussing reforming some issues, including setting criteria for every Everest hopeful."

Fox News' Anna Hopkins and The Associated Press contributed to this report.

Let's block ads! (Why?)

https://www.foxnews.com/world/mount-everest-climbers-crushed-together-nepal-permit

2019-05-30 13:48:03Z
52780305694609