The important commodities are caught up in the U.S.-China trade conflict
SYDNEY—An American chemicals company and an Australian miner want to build the first rare-earth minerals separation plant in the U.S. in years. Their aim is to shore up supplies of important commodities caught up in the U.S.-China trade conflict.
The proposal by Blue Line Corp. and Lynas Corp. LYC 14.43% illustrates how companies are growing increasingly worried by the trade rhetoric out of Washington and Beijing, while looking for opportunities to profit from tit-for-tat tariffs if they aren’t short-lived. The companies aim to build the plant in Hondo, Texas, near where Blue Line is based.
Production of rare earths is dominated by China, but some of the world’s biggest consumers are U.S. manufacturers of advanced technology such as electric vehicles, wind turbines and military equipment.
That explains why the U.S. has been reluctant to impose tariffs on Chinese rare-earths shipments, despite the escalating trade rift.
China, however, has put the rare-earths trade squarely in its sights. The U.S. ships ore from its only active mine, in Mountain Pass, Calif., to China for processing. Starting June 1, those shipments will be saddled with a 25% tariff. That is up from 10%, making the operation less profitable than before.
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