What the Hell Is That? Volume 4
I guess we should talk about the Pentagon expanding its investment into a rare earth metals company...
Editor's Note: I’m on vacation. But let’s go down the rabbit hole of mines, magnets, and geopolitical chess moves that make oil wars look quaint...
Dear Fellow Traveler:
What if the next war isn't fought over oil… but the periodic table?
A war that focuses on… America's need for rare earths… China's control over them… and the companies that could break the chokehold and make early investors a fortune.
Welcome to the world's most invisible monopoly…
It’s one that powers everything from your iPhone to F-35 fighter jets.
And one that will dominate international politics for the next few decades…
The Elements That Run Your Life
If you’re reading this on your phone, you're holding about 17 different rare earth elements.
Your smartphone contains neodymium for its speakers, dysprosium for vibration, europium for the red pixels on your screen, and terbium for the green ones.
If you're using an Apple computer, you're relying on rare earth metals like neodymium, praseodymium, and dysprosium in the magnets for the speakers, fans, and trackpad.
Other elements like europium and terbium are used in the display for color accuracy, while lanthanum is typically in the battery and glass components.
Yeah…
Strip away rare earths, and modern technology collapses.
No wind turbines. No electric car motors. No phones.
No precision-guided missiles. No MRI machines. No Apple computers.
The funny thing about all this is that rare earth elements aren't actually rare.
They're just incredibly difficult and environmentally destructive to extract.
China figured this out decades ago and quietly cornered the market while everyone else was distracted by oil.
Perhaps that’s why the U.S. is springing into action.
China Owns the Periodic Table
In the 1990s, China's leader Deng Xiaoping said…
"The Middle East has oil, China has rare earths."
The nation’s strategy would become brutal, yet simple.
China tolerates environmental destruction that other countries wouldn't accept.
That’s Communism for you…
China has slashed prices below production costs to bankrupt competitors. It was patient in waiting for Western mines to close.
And by 2010, they controlled 97% of this global production.
China's rare earth dominance isn't just about cheap labor.
Such environmental destruction would trigger revolutions in democratic countries.
For every ton of rare earths, miners generate 2,000 tons of toxic waste.
China's Bayan Obo mine has created a radioactive lake visible from space.
It’s technology great?
Western companies couldn't compete because Western governments wouldn't tolerate Chinese environmental standards. Oh… and we have a lot more lawyers.
A Wake-Up Call Nobody Remembers
You might not remember an event in 2010 that caught international attention.
I sure forgot…
Back then, Japan detained a Chinese fishing captain.
China's response wasn't diplomatic protests. They didn’t negotiate.
They just stopped shipping rare earths to Japan.
That was it…
Within weeks, Japanese tech giants faced production shutdowns.
Toyota couldn't build renewable batteries.
Sony couldn't make camera lenses.
China showed it could shut down the global economy without firing a shot.
They now control access to elements most people can't pronounce.
And this wasn't just economics or the rise of Chinese communism...
It was MASSIVE geopolitical leverage.
And they knew it…
The Military Nightmare
The problem is that we rely on a potential military antagonist…
Modern warfare now runs on rare earths.
An F-35 fighter jet contains 920 pounds of rare earth materials.
Each Virginia-class submarine needs 9,200 pounds.
We need these materials for munitions, radar systems, and night vision goggles.
The Pentagon's nightmare scenario is China announcing they're "temporarily suspending rare earth exports for environmental review.”
Any reason… they can just make it up… even if they don’t care about the environment.
No missiles fired.
Just empty shelves at defense contractors months later...
U.S. rare earth stockpiles would only last about 60 days in a conflict.
China Saw The Revolution
While Detroit built bigger SUVs, China secured materials for electric vehicle batteries.
Every Tesla, every electric bus in California, needs a ton of rare earths.
And it’s mostly Chinese rare earths.
The clean energy revolution handed China more leverage over Western economies.
Of course, I don’t really think that politicians cared.
They are either stupid or they’re getting paid (that’s just Occam’s Razor.)
The technology meant to reduce dependence on hostile oil regimes created dependence on a potentially hostile rare earth regime.
China's stranglehold is creating massive incentives for alternatives.
So What Now?
Here in America, politicians and investors are on the move…
Yesterday, Energy Secretary Chris Wright attended the opening of the very first rare earth mine in the United States in over seven decades. That comes after the U.S. discovered about $37 billion in rare earths in Wyoming last year.
Some believe that the U.S. could become the world leader. Still, it will require significant political will and the ability to prevent the ongoing legal battles that aim to halt mining operations, even after investments and companies have broken ground.
MP Materials reopened California's Mountain Pass mine with Pentagon backing.
Shares are up more than 50% in the last few days after the Pentagon took a bigger stake in the company.
Lynas Rare Earths operates the world's largest processing facility outside China.
When China restricted exports in 2019, Lynas’ stock tripled.
The recycling angle is equally compelling…
Rare earths are 100% recyclable.
Every old iPhone contains enough rare earths to build parts of a new one.
Companies like Urban Mining Corp are pioneering recovery from electronic waste, turning landfills into strategic materials.
That matters because every smartphone purchase funds Chinese rare earth dominance. Every electric vehicle sale strengthens their position.
This isn't trade…
It's economic hostage-taking mixed with the periodic table.
And it’s still the early innings…
Stay positive,
Garrett Baldwin
"Companies like Urban Mining Corp are pioneering recovery from electronic waste, turning landfills into strategic materials."
When I first started prospecting 20 years ago I read somewhere that 95% of the worlds known gold was in the ground still and 95 % of the worlds known silver is in the landfills.
I'm sure those numbers have changed but still an interesting concept...
There’s a 3rd option. Politicians can be both dumb and paid off. Virtually all actions taken by politicians are made to keep or gain power. Despite all claims, very few care about the people in their states.