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US, Europe Try To Break China's Hold On Rare Earths
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US, Europe Try To Break China's Hold On Rare Earths

Permanent & Electromagnets for Automation | AEC Magnetics

china mining aecThe U.S. and Europe are making new attempts to loosen China's tight grip on the world's rare earths market.  

In the United States, two U.S. congressmen introduced legislation offering tax incentives to offset the significant costs of mining and producing rare earth.  Senator Ted Cruz introduced similar legislation in May; both pieces of legislation are designed to reduce reliance on China rare earths.  China currently accounts for more than 80 percent of rare earths compounds and metals, which include crucial rare earth magnets.  Rare earth magnets are used in electric vehicles, smart phones, fighter jets, wind turbines and satellites.

china aec magnetsThe European Union announced plans to form a raw materials alliance by year's end with the goal of becoming less reliant on China for rare earths. The E.U. has become increasingly concerned about its dependence on China rare earths, especially given their importance in key industries like defence and green technology. 

The West is facing significant a uphill climb in creating alternate sources of rare earths production.  "The cost of creating alternate supply chains for rare earths is tremendous," said Bill Klaus, president of AEC Magnetics in Cincinnati, Ohio.  "Access to raw materials, the enormous environmental impact and creating a new infrastructure are all pretty significant hurdles, but is at least one U.S. company actively trying to solve the issue."

Bill Klaus AEC President DeskMr. Klaus is referring to MP Materials, the lone rare earths miner in the U.S.  While MP mines the materials, it ships them to China for final processing, since China is the only nation with refining capability, which still gives China major control of the rare earths market.  

"Because China basically is subsidized from mine to magnet, it has a price advantage as well as the luxury of holding and releasing product as it wishes according to supply and demand," said Klaus.  The E.U. and U.S. moves are attempts to level the playing field.  "U.S.A. Rare Earth is a new group also attempting to loosen our dependence on China rare earths," he said.  "They are developing the Round Top Mountain deposit in Texas.  These tax incentives, which cover mining, reclaiming and recycling of rare earths in the U.S., would definitely give them the support necessary to wrest some dependence on China for critical materials."

Rare earths are not rare.  The 17 elements that comprise rare earths are found most everywhere; however, mining and processing them is harsh on the environment and it is costly.  Because the world's demand for rare earths is increasing so much, the E.U., and the U.S., both say steps must be taken now to establish new channels, quickly.

fanny aec"AEC Magnetics was onoe of the very first companies to import magnets from China," said Mr. Klaus.  "We invested so much in finding, and establishing, excellent suppliers--suppliers that we can truly trust for quality, on-time delivery and the best pricing.  Few can make that claim, as the situation continuallly shifts in China.  The trust and goodwill we've built is incredibly important as the market changes, and we are very glad to offer this to our customers."  

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