Raja Krishnamoorthi on China's Predatory Rare Earth Strategy and Alternatives

China's Rare Earth Strategy

• 🎯 China's CCP is accused of using a playbook similar to OPEC's oil embargo, but with a twist: a licensing system that requires customers to share sensitive information and intellectual property.
• 💡 This strategy is exemplified by the pricing of NDPR oxide, essential for super magnets, where China slashed prices below its own production cost ($49/kg vs $50/kg) after discussing pricing.
• ⚠️ The CCP has also targeted Samarium, used in critical weapon systems like the F-35 and Tomahawk missiles, selling it below production cost ($9.91/kg vs $11/kg) to eliminate competition.
• 📈 A memo from the Chinese Commerce Ministry explicitly states that transaction prices for magnet exports are often lower than production costs, confirming a strategy of predatory pricing.

The Impact of Predatory Pricing

• 📉 The CCP's strategy of overproducing and underpricing aims to kill competitors and then weaponize the resulting monopoly in critical minerals.
• 💥 This tactic leaves the US vulnerable to dependence and potential disruption, as seen with the 1973 oil embargo.

Developing Alternatives to Rare Earths

• 💡 Mining and processing more rare earths in America is part of the solution, but developing alternatives is also crucial.
• 🚀 Rare earth-free magnets, such as those using iron nitride technology, offer a potential alternative that could be cheaper and stronger than traditional rare earth magnets.
• 🔬 This alternative technology was developed by Professor Jingpang Wong at a federally funded lab in the US, highlighting the importance of welcoming global talent, including from China, and supporting domestic research.
• 🔑 Breaking China's stranglehold requires an all-hands-on-deck approach, including innovation, talent, and reducing dependence on the CCP.