Two key comments here. First - you are right, Mike, we 'Gave it away.' Or rather, we sold it. Second - China's actions on REs was a reasonable response to our own blocking actions on them. We picked the fight.
We must develop critical tech. and fund protective industries. But to blame/shame China for this failure is misplaced.
Michael, this is "Capital Market Hope," not "Industrial Physics."
I respect your deep knowledge of the auto sector, but you are falling for a classic System A Narrative: "We can bypass the Mine with the Scavenger."
In the ChinArb framework, EMAT isn't a "Point of Light"; it's a Thermodynamic Dead End.
1. The Entropy Trap (Scavenging vs. Extraction) You highlight EMAT’s "edge" as using E-scrap (recycling). Physics Check: Recycling is a High-Entropy process. Collecting, disassembling, and chemically separating millions of iPhones to get grams of Neodymium requires massive energy and logistics. System B (China/Baotou) operates a Low-Entropy process: They dig huge veins of ore and refine it in massive, integrated clusters. To believe EMAT can compete with Baotou is to believe that "Dumpster Diving" can compete with "Industrial Farming" on cost per calorie. It works in a slide deck; it fails on the P&L.
2. The Scale Hallucination Scaling from 660 tons (Korea) to 55,000 tons (US)? That is a Two Orders of Magnitude jump in a country with no skilled metallurgical workforce. China controls 99% of heavy rare earths (Dysprosium/Terbium) not because of "secrets," but because of The R.I.C.E. Protocol: They subsidized the pollution and the Capex for 30 years to build a moat. EMAT trading on NASDAQ doesn't pour concrete. It just prints shares.
3. The Kill Switch Let's assume EMAT actually reaches 55,000 tons. Beijing has a simple button: Price. They can drop the price of Neodymium magnets by 40% overnight (subsidized by state power).
System B absorbs the loss as "Strategic Defense."
EMAT (System A) goes bankrupt because it answers to quarterly earnings.
Michael, recycling is a nice "Green Story." But you cannot build a Tomahawk Missile supply chain on the hope that people recycle their old hard drives. This is not a solution; it is a simulation.
Great points, ChinArb. When Dunne looks, I do too. That guy is wicked smart. But I'm not particularly impressed with EMAT. Even assuming they find a niche market, the hurdles are overwhelming - which include the reasons you specify.
As well, a recycle-based supply-chain in the US seems wishful thinking logistically. Redwood in Nevada may have a chance, but unlike China where circular-economy is now a focus (anxiously anticipating how this is addressed in the 15th 5-Year Plan), the US is missing that boat presently.
Then again, this administration appears willing to do 'interesting' deals (MP Materials). As a Florida-based entity, perhaps a Mar-A-Lago membership is the key metric for success here.... ;).
Your insights regarding these critical processes and materials are as sharp as our country’s lack of foresight is dull. Hopefully, we will stop tripping over ourselves, soon.
Did you watch the testimony by Charles Parton to the House Special Committee on the CCP? He says Cellular Modules (CIMs or IoTs) are the next "Rare Earths" supply chain issue. China controls 70 percent of world supply currently and is pushing for a monopoly.
Strong breakdown. The Magnaquench sale in 1995 is one of those decisions that looks absurd in hindsight, selling 85% of guided missle magnet supply for the price of one F-35. I've seen companies make simillar short-term moves when quarterly earnings mattered more than long-term strategic control. EM&T's e-scrap feedstock angle is clever since it sidesteps the mining bottleneck, but scaling from 660 tons to 55,000 tons is gonna test wheather they can execute at industrial scale.
Two key comments here. First - you are right, Mike, we 'Gave it away.' Or rather, we sold it. Second - China's actions on REs was a reasonable response to our own blocking actions on them. We picked the fight.
We must develop critical tech. and fund protective industries. But to blame/shame China for this failure is misplaced.
Michael, this is "Capital Market Hope," not "Industrial Physics."
I respect your deep knowledge of the auto sector, but you are falling for a classic System A Narrative: "We can bypass the Mine with the Scavenger."
In the ChinArb framework, EMAT isn't a "Point of Light"; it's a Thermodynamic Dead End.
1. The Entropy Trap (Scavenging vs. Extraction) You highlight EMAT’s "edge" as using E-scrap (recycling). Physics Check: Recycling is a High-Entropy process. Collecting, disassembling, and chemically separating millions of iPhones to get grams of Neodymium requires massive energy and logistics. System B (China/Baotou) operates a Low-Entropy process: They dig huge veins of ore and refine it in massive, integrated clusters. To believe EMAT can compete with Baotou is to believe that "Dumpster Diving" can compete with "Industrial Farming" on cost per calorie. It works in a slide deck; it fails on the P&L.
2. The Scale Hallucination Scaling from 660 tons (Korea) to 55,000 tons (US)? That is a Two Orders of Magnitude jump in a country with no skilled metallurgical workforce. China controls 99% of heavy rare earths (Dysprosium/Terbium) not because of "secrets," but because of The R.I.C.E. Protocol: They subsidized the pollution and the Capex for 30 years to build a moat. EMAT trading on NASDAQ doesn't pour concrete. It just prints shares.
3. The Kill Switch Let's assume EMAT actually reaches 55,000 tons. Beijing has a simple button: Price. They can drop the price of Neodymium magnets by 40% overnight (subsidized by state power).
System B absorbs the loss as "Strategic Defense."
EMAT (System A) goes bankrupt because it answers to quarterly earnings.
Michael, recycling is a nice "Green Story." But you cannot build a Tomahawk Missile supply chain on the hope that people recycle their old hard drives. This is not a solution; it is a simulation.
Great points, ChinArb. When Dunne looks, I do too. That guy is wicked smart. But I'm not particularly impressed with EMAT. Even assuming they find a niche market, the hurdles are overwhelming - which include the reasons you specify.
As well, a recycle-based supply-chain in the US seems wishful thinking logistically. Redwood in Nevada may have a chance, but unlike China where circular-economy is now a focus (anxiously anticipating how this is addressed in the 15th 5-Year Plan), the US is missing that boat presently.
Then again, this administration appears willing to do 'interesting' deals (MP Materials). As a Florida-based entity, perhaps a Mar-A-Lago membership is the key metric for success here.... ;).
Mike,
Your insights regarding these critical processes and materials are as sharp as our country’s lack of foresight is dull. Hopefully, we will stop tripping over ourselves, soon.
Regards,
Jack Keebler
Did you watch the testimony by Charles Parton to the House Special Committee on the CCP? He says Cellular Modules (CIMs or IoTs) are the next "Rare Earths" supply chain issue. China controls 70 percent of world supply currently and is pushing for a monopoly.
Strong breakdown. The Magnaquench sale in 1995 is one of those decisions that looks absurd in hindsight, selling 85% of guided missle magnet supply for the price of one F-35. I've seen companies make simillar short-term moves when quarterly earnings mattered more than long-term strategic control. EM&T's e-scrap feedstock angle is clever since it sidesteps the mining bottleneck, but scaling from 660 tons to 55,000 tons is gonna test wheather they can execute at industrial scale.