After the Biden administration issued new controls (though somewhat porous controls) on export of semiconductor technology to China, the Chinese government retaliated by banning the export to the United States of antimony, gallium, and germanium, as well as graphite (a form of carbon).
These are among many elements or minerals with important technological and strategic uses the global markets for which are dominated by China.
Chinese dominance of the global supplies of these substances gives force to the threat to cut off a foreign adversary’s access to them. On the other hand, all the minerals and elements the supplies of which China globally dominates can also be mined in places other than China. It’s all in the ground.
We will do it ourselves
With the departure of China from the U.S. market, it is now more profitable for non-Chinese firms to extract and process these substances, suddenly scarcer but still much in demand, for sale to the United States.
A step in this direction was reported by Reuters shortly after China imposed its ban (“Perpetua Resources, Sunshine Silver to explore antimony processing in Idaho,” December 9, 2024).
Perpetua Resources (Nasdaq: PPTA) (TSX:PPTA) said on Monday its Idaho unit has signed a non-binding agreement with private firm Sunshine Silver Mining & Refining to explore the processing of antimony, amid a brewing trade war between the US and China over critical minerals….
“Stibnite gold project is the only identified domestic reserve of antimony, and with final federal decisions expected in a matter of weeks, Perpetua is ready to work with US companies to help secure domestic production of antimony,” Perpetua CEO Jon Cherry said.
Perpetua said it and Sunshine Silver expect to cater to 40% of US domestic antimony demand.
From Wyoming (“China’s Ban On Rare Earth Exports Good News For Huge Wyoming Projects,” Cowboy StateDaily, December 3, 2024):
The leaders of Wyoming’s budding rare earth mining startups were feeling vindicated Tuesday after China announced a ban on exporting several critical minerals to the United States….
Wyoming also doesn’t have all its rare earth eggs in one basket. It has several projects already in the works.
The Halleck Creek project near Wheatland, for example, that Evers’ company is working to bring online, has the potential to be one of the largest rare earth deposits in the nation, if not the world….
Then there is also Ramaco Resources, which has an unconventional rare earth deposit estimated to be worth at least $37 billion.
Since then, the company has revised its estimates upward, from 800,000 tons of rare earths to more like 1.5 million tons.
While the Halleck Creek deposit doesn’t have any of the listed banned materials, Ramaco’s deposits include both gallium and germanium, both of which are among the more valuable rare earths.
When it comes to decoupling from China as supplier of crucial things, it is best not to wait for China to move first. Fortunately, though, the chance to earn big money concentrates the mind wonderfully.
