Continued from Part One.
Graeme Irvine, writing in Rare Metal Blog, ascribes an overarching political motive to the current moves: “The problem is that non-Chinese HREE supply doesn’t exist at present. With Lynas suffering delays in Malaysia, and Molycorp deficient in heavy rare earths, plus any World Trade Organisation complaint taking up to two years to reach a resolution, it’s hard to see quite what is gained by pressing ahead with the filing. The cynic in me suggests it is timed to the upcoming US November election.”
Irvine’s conclusion is that “it might be wiser for America and Europe and Japan to come up with some acceptable way of crash funding some viable North American based, EU based, and non-Chinese Asian based heavy REE supply and REE refineries.”
This may well be a sound argument, but we here at MetalMiner would have to respond with, “Easier said than done.”
As my colleague Stuart wrote in a recent two-part series, “Certainly demand has suffered as the rapidly escalating prices spurred innovation in reducing the percentage of rare earth metals in specialist applications. With supply still constrained, this process is unlikely to be reversed; consumers are acutely aware that even with the ramp-up of Molycorp’s Mountain Pass facility adding supply of light rare earths, heavy rare earths may be reliant on the Chinese for many years to come.”
Oh Yeah, and Kind of Another Big Deal
…Maybe not a huge deal in terms of moving global markets, but certainly disconcerting as far as supply chain quality control goes: the Chicago Tribune broke news recently that Chinese-made steel castings known as journal bearing housings — sourced by Bombardier Transportation from Sifang Foundry in Qingdao for use in Chicago’s new 5000-series mass-transit train cars — is faulty and could have led to breaks and subsequent derailings.
So, while Bombardier’s quality control checks can be questioned (it was the Chicago Transit Authority, not Bombardier, that found the “blew the whistle” on the faulty parts), we chalk up another strike against China.
According to the Tribune report, CTA officials noted that if one or more of the eight housings (located next to the wheels on each car) were to break, “the risk of derailment would be extremely high.” Transit inspectors also found evidence of cosmetic fixes to cover up shoddy workmanship, and X-ray evidence of holes in the castings caused by air bubbles created by the manufacturing process.
This investigation points to the larger domestic issues of supply-chain slowdown (Bombardier was forced to halt production on the 5000-series for the CTA) and how the Buy America laws are bent on such collaborations between private contractors and municipal agencies.