Kinas mineralkrig: expert analyserar det globala gensvaret | NTD NYHETER

Thomas, thank you so much for joining us. Thank you for having me. Well, as we've been seeing, stocks are going up and down with, you know, all the developments with rare earth, critical minerals. What even are these? Let's just first dive in. What is a rare earth? Rare earths are 17 different chemical elements that tend to co-occur together in subsoil, in different parts of the world. And the main problem is that unlike other elements that we can just simply mine, like copper or iron ore or gold, we tend to extract all of them together. And the biggest problem is how to separate those valuable ones from those that are less valuable. And that's the big problem for the industry. And then when it comes to critical minerals, there's a lot of minerals. So what makes a mineral critical? So certainly what doesn't make them critical is geology, because rare earths can be found in many places. What's critical is control and who controls the production and the extraction and the processing of these minerals. And there's one country that controls it. And that country is controlled by one party. And that party is controlled by one man. And therefore, that's pretty critical. I'll not get into all that, but first for, say, the average Joe on the street, why should they care? How do rare earth critical minerals play into everyday life, but also our military? It's very important because the main application for rare earths is in permanent magnets. Now you may say, why do I care about permanent magnets? Well, because about 60% of our electricity uses magnets, and 70% of those magnets use rare earths, which means that almost half of all the electricity that we use is dependent on rare earths, mostly because of electric motors that contain those. So imagine that someone could basically switch off half of our electricity. That affects all of us. Now, it's not going to happen for the existing infrastructure, but it also means that you cannot build anything new, whether it's infrastructure, industry, or of course, the military. How did we end up here where China has essentially monopolized this entire sector? What was China seeing? What did China do to become the dominant player here? So to get into this in detail, I'll have to send you to my book. But let me just very briefly say that probably it's our own fault that we didn't pay attention to the structure, economic structure imposed on China by the Chinese Communist Party. And that's a structure that's essentially Marxist. You have to control what they call means of production. So essentially different parts of the economy, which are critical, not only for national security, but for the economic control. And that has been done by operating in upstream sectors. The upstream sectors were never privatized, whether it's basic chemicals, mining and metals that concern us here, whether it's banking, telecom, oil and gas or power generation, that stayed in the hands of the state. And the state could therefore control input prices for areas which were more liberalized, especially in the 90s and early 2000s after China joined WTO. And so mining and metals were part of that scheme. And the second thing is that generally totalitarian regimes care a lot about metals. Because when you think about metals, you think about defense and potential kinetic conflict and so on. So they viewed these minerals as a strategic asset, whereas in the West, we view them as a commodity, something that we can trade. And on that note, what would be the solutions here? What are the next steps needed to start moving away from having all the eggs in that one basket? So I love music on vinyl. I'm going to sound like a broken record, but the record says capital market has to follow. We have to incentivize somehow by a tax system, by price floors and maybe reference prices, and then protect those reference prices with tariffs so that private capital really participates in rejuvenation of that sector. Because right now, this is not the case. Right now, unfortunately, it's still a very marginal piece. So our administration really cares a lot about artificial intelligence and critical minerals for good reason. Artificial intelligence dominates our equity market largely, right? The top seven companies that wouldn't exist suddenly, if you ask about Taiwan, wouldn't exist anymore if we lost access to foundries in Taiwan. These are the top seven companies, about a third of our capital market. Critical minerals, not represented there at all. Tiny companies, by comparison to the others, improving a little bit since last year. There's a little more attention to this, but less than 1% of S&P 500 is represented by mining companies. And it's such a critical industry. So we have to do something, as I said, maybe through the tax system, maybe through coordination with other countries to incentivize more investment into this space, and sooner rather than later. Well, Tomasz Nadrzawski, thank you so much for your time. Thank you for having me, Tiffany.