Name: House of Cards in Real Life: Rare Earth Elements
Uploaded: 2016-09-15T13:05:59.000Z
Duration: 20 min
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

Do they have any other business partnerships, other than the Rare Earth Refinery?

For an issue that was the storyline for the second season of "House of Cards," one of

the most popular shows among Hill staffers.

The refinery can't proceed while we're in a trade war.

We want you to kill it for good, and we want you to kill it today.

You'd think this would be something that we'd be more aware of.

The biggest uses of rare earths are for the electronics and auto industries.

We want our companies building those products right here in America. But to do that, American

manufacturers need to have access to rare earth materials, which China supplies.

In your phone, rare earth elements. Whole world runs on this.

Neodymium and Samarium help the Abrams tank navigate. They make up night-vision goggles

and radar systems. One US government report found element shortages have already delayed

Really, guys? You're going to build an entire military based on a mineral element that's

wholly controlled by China? I need a drink.

Lost in cable news reports and popular entertainment is the most important fact of the ongoing

rare earth crisis. The United States was once a world leader in harnessing rare earth technologies.

This leadership was not beaten by Chinese rare earth subsidies, nor lax environmental

How did China come to not just surpass the United States, but to dominate rare earths

so completely? This was a question addressed in a 2014 briefing to congressional staffers.

The full briefing was 80 minutes long. This 20-minute summary contains all the highlights.

If House of Cards moved this fast, it would have wrapped in a single season.

We're prepared to offer the 40-year lease on the Mei Mei Rare Earth Elements Refinery.

Your iPhone that you have in your pocket right now

has nine different rare earths in it. Toyota Prius, magnets and the batteries and

all the material additives, the lighting, the communication systems, the defense systems

and so forth, all of that uses rare earths.

As you might imagine, the world demand for rare earths is just only growing. Even though

the United States has a considerable supply of rare earths, we are largely dependent on

China for these critical metals. The United States holds about 13 percent of the world's

China, on the other hand, holds about 50 percent of the world's reserves, and China actually

accounts for about 95 percent of all rare earths production. About 91 percent of American

The rest of the rare earths are still coming out of China, but they come to us through

France. They come to us through Japan. In the end, it's all coming out of China.

Now, at NCPA, we agree with free trade among nations, and so we really have no problem

with depending on foreign nations for different goods and services. But in this instance,

there is a problem, because China threatens to use their dominance over rare earths as

a weapon in trade disputes. They've actually demonstrated this in a dispute that they had

several years ago with Japan. Imagine if that were to happen here in the United States.

China very soon will use 100 percent of the rare earths they produce. They will legitimately

be able to say, "We can't afford to export rare earths anymore. We use them all ourselves."

China's becoming more and more an internal consumer. If the 130,000 tons that are produced

a year, 100 million of those tons go back into China, they never get into the market.

At some point, China is going to keep all of their rare earths, and it's going to be

acceptable that they're going to do this. They'll be using all of it. When is that?

Why is Apple building the phones in China? Because they can procure the rare earths.

China has really, in a very clever way, inherited all the manufacturing.

One thing our congress is really good at is defending IP, right? You guys are proactive

there. You're going to find out that all of those rules and all those laws that we've

created, and all the mechanisms for enforcing it, are only going to play into China's hand.

China's used this monopoly to strip the world of their IP.

They don't design anything in China. They make companies come to China via rare earth

minerals and other industries, then they say, "If you're going to come here and you're going

to be part of our market, you must turn over your IP." When China signs a 10-year deal,

after that 10 years, they boot that company out and it goes to a Chinese company.

The CRS, the GAO and the Pentagon keep putting out reports going, "Oh, we're doing great.

We're making progress." They reference two mining companies that are mining rare earths.

They're taking the really good stuff that matters and they're shipping all that powder

to China, and China turns it into the magic. Now, do they own the company in China that

does that? Yes, so they tell everybody, "Hey, we're doing everything." But that's not really

We've had to get exemptions, a number of exemptions, so that we can import the rare earth materials

to configure this airplane. That's very unusual to get these exemptions, and we've got a lot

Our defense industry is 100 percent reliant on China. If they control the metal, the alloys,

the magnets and the [inaudible 05:15] garnets and components that go onto our military systems,

Today, we are announcing an indictment against five officers of the Chinese People's Liberation

Army for serious cyber-security breaches against six American victim companies.

When pieces of our equipment are manufactured in China, they have access to those specs.

If we spend a trillion dollars on the F-35, China spends a million dollars in China to

look at the blueprints. They caught up to us really quick.

The state-of-the-art defense technology is dependent upon someone we're competing with.

We can live without the cell phones, as inconvenient as that would be, but you can't live without

The US used to lead the world. We owned all the IP, all the technologies, extraction processes,

all the metallurgy. The Chinese government was coveting this company called Magnequench,

what had the best IP portfolio for rare earths in the world. Deng Xiaoping's direct family

members on the down-low said to GM, "You want to build an auto manufacturing facility in

A government-sponsored process to capture all of the technology. If we aren't willing

to fight to get it back, we're left as an extractive economy with basically commodity

sales, which, I'll tell you, is a pretty skinny business.

You take your ore and you crush that and you dissolve it, and then you use a very, very

complicated process. It's probably even more complicated than enriching uranium. That's

how hard this is. That's how you get those little powders. But those little powders are

You give that powder to Martin Marietta or to Boeing, it's not like they can throw it

on an airplane. They can't do anything with it. They take $4 billion in pixie dust, and

they turn it into $7 trillion in high-value, high-growth, high-margin value-added goods.