[seanmcdirmid]

> There also the processing, which is an industry China has monopolized through sustained investments over decades.

I don't think this is the right way to characterize it. China invested when other countries didn't, but they didn't monopolize the market, they have no moat beyond expertise and some tech advancement that could be replicated easily enough. The only moat they have is related perseverance and other countries simply not wanting to put the work in.

[hangonhn]

I think they do have a moat because they dominate the supply chain not just in the raw material and processing but also in some of the actual technical experience, i.e. the experience of running such processing facilities, and also a monopoly on making the equipment that you need to build such a facility. They put export controls on those equipment and restricted their citizens who work in the rare earths industry from traveling aboard.

Basically, if we want to replicate what they did, we will have to do it mostly from scratch -- Japan and Australia has done some of the work already so it's not totally from scratch. It's obviously not impossible but it could take almost a decade for us to do that.

That said, I don't think this should be enough for Japan to stop investing in EVs. If Japanese car makers are really worried about this then they can build their plants in the US and leverage any deal the US has with China on real earths. They've already starting importing Japanese cars made in India and the US back to Japan so that's an established practice. Then once they've secured their own supplies they can make the EVs in Japan too. I think OP's point about the suppliers have more merit as a reason why Japan might not want to develop EVs.

[fakedang]

I have worked with the Chinese REE industry, and we've often bumped heads and shared ideas together with them and I can confidently tell you, the Chinese don't use anything novel that has not been established in Western science already. What they do have is executing rarely-used techniques confidently at scale, but all of that is already often published in the West. The only reason the West hasn't done it is because these techniques are less profitable, and, surprise, the CCP actually forces processors to minimize ecological damage, which further bumps up the costs to the point only large-scale players can exist making such lower profits. You'll often find them using some obscure process alteration that was published minutely in the West.

As an addendum, companies in the REE Sinosphere are often encouraged by the CCP to exchange ideas with each other quite often, while Western companies often lock them behind proprietary patents and competition. While both systems have their pros and cons, the former allows for faster process proliferation (and a lower profit incentive for the innovator).

[youarentrightjr]

> the Chinese don't use anything novel that has not been established in Western science already

Like they say: in theory, theory and practice are the same; in practice, they aren't.

It's all well and good to have knowledge of the techniques, or to even have published or created them. But applying them successfully, working out all the kinks, and streamlining everything to become profitable doesn't happen overnight.

I have no doubt alternate sources can exist, but not without significant time and effort.

[rTX5CMRXIfFG]

I’m not sure that that aphorism is helpful, my experience with theory is that it includes time and effort considerations

[youarentrightjr]

> my experience with theory is that it includes time and effort considerations

I would never disagree with you here. But the point is that the time and effort you spend on theory doesn't translate to time and effort spent on practice.

[hangonhn]

What I mean is that since the peak of American REE in the 1970s and 1980s(?) a lot of the engineers who have working knowledge are retired. There's nothing theoretical we can't dig up but I think there will need to be a number of years for the US to catch up in terms of craft knowledge or "metis" (as Dan Wang likes to call it) and processing equipment and plants.

Maybe I'm wrong. I gained my knowledge second-hand/third-hand from books and podcasts so I would defer to you to your actual experience and observations about Chinese REE. What is your estimate on how long it would take the West to catch to at least supply some of the rare earth components and what the real barriers might be? Would love to hear your take on this.

Thanks for sharing your observations. I had no idea about the minutiae of that industry, i.e. the ecological control and its effects on the industry.

[fakedang]

No, you're right. China, and even India and Russia, also do not have the same talent problem of the West, in that there is an undersupply of engineers, especially in the geological, processing and chemical sectors. In the US, the average age of the chemical process engineer was touching 50 a few years back. The average age of a process safety engineer is well past 50. While Russia and India lose their technical talent to brain drain, the Chinese govt has done quite a lot in trying to reverse that.

The real barriers are talent and the regulation vs profit motive balance. What I mentioned in my previous comment was effectively an effect of the intersection of the two - you can't find novel ways of processing harmful substances without having the technical talent to find these out in the first place, nor without giving them a free reign after deprioritizing profit.

Let's take arsenic for instance, a substance that's a harmful byproduct arising out of most mining operations. We already have the technology in the West to lock away arsenic into glass, but a.) apart from the big ones, most companies are unaware of them, and b.) even if they were aware of it, the tech is a significant line item that shies investors and companies away from investing into it.

> What is your estimate on how long it would take the West to catch to at least supply some of the rare earth components and what the real barriers might be?

Never. Yes, there are a few companies still engaged in trying to secure REE supply (Glencore being the most notable), but due to Western regulatory and policy limbo, the answer is never. For this to change, you need regulators open to experimentations and a concerted effort by the government in trying to reestablish REE independence, both in extraction and in processing, but I have yet to see either happening. It's telling when frankly the US is the country in the West most likely to catch up still, but the gap is deeper than the Darien Gap .

[maxglute]

>they have no moat beyond expertise and some tech advancement that could be replicated easily enough

Moat is decades of process / tactic knowledge built by disproportionate amount of talent on geologic formations others didn't invest in. Right now they generate 15x mining graduates, university of mining tech alone enrolls more than all US mining programs combined. Then you throw all that into a mining city like Batou with 3 million people running vertically integrated operation. That's ecosystem scale with compounded advantages beyond "wanting" to put work in, it maybe scale on PRC has demonstrated ability to produce.

Between shallow kiddy pool and Mariana Trencth in terms of ease of replication, I wouldn't lean towards kiddy pool. I don't think "right way to characterize" their lead is "no moat" beyond... all the things that are actually, in fact very deep moats, as if any country can persevere their way to replicate decades of work and execute industrial policy of a 3 million large city dedicated to mining/rees.

I surmise, PRC will build out EUV (technical problem) and produce them at scale before west+co meaningfully tackles HREEs supply chain (technical and regulatory and industrial problem).

[eunos]

> they have no moat beyond expertise and some tech advancement that could be replicated easily enough

Incorrect, de facto, the only firms invested heavily in the rare earth refineries technology are Chinese for the last 20-30 years. Their moats are as deep as TSMC moats so to say.

[tmnvix]

> they have no moat beyond expertise and some tech advancement

See my sibling comment. Their moat is the scale and structure of their industry. Some parts of rare earth processing are dependent on that.