China's rare earths dominance in focus after it limits germanium and gallium exportsThe CEPR analysis can be read in conjunction with this Wikipedia entry which shows the WTO did rule against China in the Rare Earths Dispute:
It simply is not in anyone's interest to have China controlling the production of any mineral, including nickel as they are currently attempting to do through its investments in Indonesia. Nickel and rare earths are critical for that very reason and BSX has obviously positioned itself as a company that has attracted the interest of the Australian Government as a potential reliable partner to shore up supply of those minerals we and the US cannot do without going forward. It is very likely in my opinion that BSX will be considered for funding for both rare earths extraction and the nickel project in Vietnam by Export Finance Australia given the behaviour of China and danger it poses, it seeks to push competitors out of the market and dominate supply which would give it the ability to shut us out whenever it desires. They have a history of dropping the prices of rare earths to kill competition as demonstrated above and are now attempting to do the same with nickel. That is why I personally see BSX involvement in nickel and rare earths to be naturally complementary and should see the Company attract significant levels of finance and support from the Australian Government and potentially the US as well.
We have been assessed as a reliable partner IMO. This is expansion, going big. I understand your concerns about profit regarding China's ability to drop the price of rare earths to eliminate competition, they're doing it right now with both nickel and RE's, two sides of the same coin. Given the importance of critical minerals to national and economic security this won't be allowed to occur. BSX proposed role in the supply chain of RE's is simply as a miner. It doesn't intend to operate a refinery or conduct downstream processing so any off-take agreement would ensure profit and therefore cashflow, which could then be directed to building the nickel refinery. If BSX could secure finance to build the first train of the refinery and had cashflow from selling RE concentrate as well then the second train could be self financed. That's why it looks like a good option to me. Finance for the entire build of the refinery has yet to be secured and an opportunity has presented itself. It would be remiss of BSX to not take advantage of the interest shown in the Company by the Australian Government in its unique and firmly rooted position in Vietnam.
Yes, Vietnam would like to see downstream processing of RE's occur in-country and there would be a tax penalty likely applied to any shipment of concentrate to Dubbo unless negotiated away if that is something BSX proposes. If VTRE experiences ongoing obstacles it is likely going to be replaced or taken over. This shouldn't affect the role BSX is being looked at to occupy in the supply chain in my opinion. It has an established relationship with both the Vietnamese and Australian Governments, plant and equipment and a large, local workforce already in place in Vietnam. It is ASM with the technical experience and position in the global supply chain of refined RE's, albeit at a nascent stage, it is them who would likely be tapped to assist Vietnam with advancing it's RE refinery sector, BSX would have an off-take deal that ensures profit and cashflow for it's vital part in the chain and doesn't have to worry about the price of RE's being manipulated by China in my opinion.
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