The near-monopoly on the rare metals processing industry by China is becoming an increasingly obvious advantage in the Super-Power Trade-War, as the following article illustrates, the brewing US – Iran situation will add to China’s advantage. Note that “rare metals” aren’t all that rare or exclusively found in China, but China is the primary source due to cost and logistical factors. (If Trump has a will and a way, he need not necessarily rely on China!) MH
James Kennedy – AntiWar.com May 20, 2019
The outcome of a U.S. war with Iran is as predictable as the outcome of the 1997 blockbuster Titanic. The great ship of state ends up at the bottom of the ocean – everything else is just small drama.
The above is not a desperate cry for caution or pragmatism. It is based on the fact that our military is 100 percent reliant on China for critical technology metals, alloys, magnets, garnets and other post-oxide rare earth materials.
China relies on Iranian oil and has clearly signaled that it will defy US sanctions on Iran. China has also recently signaled that it is hunkering down for what may prove to be a protracted trade war.
A US war with Iran now will turn China’s already powerful rare earth trade-weapon into a terminal nuclear strike. Withholding these materials would not just neuter our military during a conflict, it would shut down every automobile and aircraft manufacturer in the US The shutdowns would extend to what remains of our electronics and green technology industries. It would be pink-slips from coast to coast. China would fill the global demand gap. In short, it would snuff out the few remaining embers of our already crippled economy.
If you are thinking that the US has “strategic stockpiles” of these materials – think again. The US sold off all of these materials in 1996. After repeated warnings Congress authorized the repurchase of a few rare earth oxides and dysprosium metal, none of which are directly useful to our defense industry. A 2016 Government Accounting Office report stated that these materials would need to pass through a value chain “outside the United States” before they could be utilized by our defense industry (read: China). In an earlier report the GAO estimated that it could take 15 years for the US to build a domestic rare earth value chain.
The combined global production of non-Chinese rare earth metals, alloys, magnets and other post-oxide materials represents less that 30 percent of Japan’s internal demand. Japan controls at least 95 percent of the world’s non-Chinese production. Japan is dependent on Iranian oil and will not shut down its economy to support our military adventurism with Iran.
To put things into fact-based historical perspective, the US nearly depleted its global inventory of “smart bombs”, one of many rare earth dependent weapon systems used by the US military and our NATO partners, shortly after initiating military action in Syria. Any US/Iran conflict would make the Syria action look like routine target practice. Once these weapons are used up they can only be replaced if China decides to sells us these critical materials.
The Syrian action suggest that even a limited action in Iran would fully deplete US weapons inventories in just a few months.
China is the only country in the world with the capacity to produce the materials required for our defense industry and our economy: there are no alternatives.
Consequently, China has considerable influence, if not control, over the ultimate outcome of this potential conflict, and it most certainly will be able to dictate the terms that end this trade dispute. This is our Titanic moment in history.
Is this Administration, Congress, our military commanders or the American public going to allow us to board the sinking ship of war with Iran?
Is our Nation’s self-destruction already written into the script?
James Kennedy (ThREEConsulting.com) is an internationally-recognized expert on critical materials and has advised the last two Administrations, Congress, the Pentagon, and various government agencies (USGS, GAO, CRS, etc). He has been an invited speaker to the United Nations (2014) and many national and international industry and scientific groups.