Chinese RE Mines - General Discussion

[John]

So i am just putting this post here for all general discussion on Chinese RE mines.

Given they are either fully State owned or at least State controlled, I feel that most of the discussion can be put here.

Also I just want to be upfront. What the Chinese have done with their RE industry is AMAZING. Yeah there are concerns with ESG and geopolitics etc. But from a technological perspective....they have done an amazing job.

 

[Fundamental]

True, they have managed to recognise that they can control the end product by monopolising the raw materials. By operating a fully integrated and subsidised production chain, where all the profits are made and recovered in the final product. This enables them to falsify the true costs of production from the mine sites.

A fact that they deliberately broadcast in SMM today! " The Q1 report previously released by JL MAG Rare-Earth showed that in the first quarter of this year, the company achieved operating revenue of 1.754 billion yuan, up 14.19% YoY; " and "the sales of finished magnetic materials were approximately 6,024 mt", As SMM usually never posts company specific news, this exception suggests that they are sending a message to somebody ~ Donald or Elon perhaps.

JL MAG Rare-Earth: Delivered small batches of products in both the robotics and low-altitude aircraft sectors, with a capacity utilisation rate exceeding 90% in Q1 | SMM

news.metal.com

Do the sums a magnet is roughly 33% NdPr, so 6000t magnets = 2,000tNdPr and Y1.7B = US$236m.

So while the Chinese NdPr price from the mines is < US$60,000/t they manage to double it into almost US$120/t, simply by turning it into magnets. Which probably ends up being a hell of a lot more by the time it ends up in an EV drive motor.

As to amazing, let's not forget that they purchased most of the initial technology from Hitachi in 2008.

 

[John]

Yep...that is the benefit of owning the whole value chain. Just pick where you want to make your profit (mid and downstream)...and shut the rest of the world out of the upstream (miners/processors).

I note, that even with this pause in tariffs, the Heavy Rare Earth Elements.....are still not flowing to USA DoD related companies.....and this is a major issue for USA.

One workaround I came up with....the could just buy a bunch of wind turbine motors, melt them down and source the minerals that way. Massive costs...but a quick short term solution?

 

[Fundamental]

Yep...that is the benefit of owning the whole value chain. Just pick where you want to make your profit (mid and downstream)...and shut the rest of the world out of the upstream (miners/processors).

I note, that even with this pause in tariffs, the Heavy Rare Earth Elements.....are still not flowing to USA DoD related companies.....and this is a major issue for USA.

One workaround I came up with....the could just buy a bunch of wind turbine motors, melt them down and source the minerals that way. Massive costs...but a quick short term solution?

I did read a while ago that the US has about 8months of HREE's in Stock; Things might get very tight, but I don't think they will run out for Defense applications. s you say, they just need to recycle some of the older wind turbines or Submarines or DDG-51 destroyers which are now over 30 years old. That's one thing to be said about dumping old equipment into a 'bone yard' rather than sending it to Middle eastern scrap yards.

 

[Mumbles2025]

Yep...that is the benefit of owning the whole value chain. Just pick where you want to make your profit (mid and downstream)...and shut the rest of the world out of the upstream (miners/processors).

I note, that even with this pause in tariffs, the Heavy Rare Earth Elements.....are still not flowing to USA DoD related companies.....and this is a major issue for USA.

One workaround I came up with....the could just buy a bunch of wind turbine motors, melt them down and source the minerals that way. Massive costs...but a quick short term solution?

great idea, but you can only do that once, if at all. one of the reasons for the delay is that exporters need to ensure end of use certificates are guaranteed by the receiver., As with any export controls, before a subsequent permit is issues, the end of use certificate for the previous one needs to be given with the application. As Sth Korea were warned a few weeks ago, if it is found out that any controlled products are found to be used in weapons production, mo more permits will be given

 

[John]

great idea, but you can only do that once, if at all. one of the reasons for the delay is that exporters need to ensure end of use certificates are guaranteed by the receiver., As with any export controls, before a subsequent permit is issues, the end of use certificate for the previous one needs to be given with the application. As Sth Korea were warned a few weeks ago, if it is found out that any controlled products are found to be used in weapons production, mo more permits will be given

Daniel (one of our founders and CEO of REEx) just did this Q&A text format style interview....def worth a read.

https://rareearthexchanges.com/news...-chain-daniel-oconnor-interviews-dr-wei-meng/

Talks all about the China strategy....and he has modelled how it coudl all play out (using an extreme scenario - 100% cut off supply).