The Chinese Are at It Again, Why This Trade War Is Different
Sometimes you just can't wrap your head around how things have gotten to the point that they have.
Don't worry, I'm not talking about COVID-19. With the media blasting that crisis to you from every angle, it's far too easy to lose sight of other things right now.
So today, we're delving into something that may have even more dire consequences for the U.S. if certain catalysts fall.
For the last few weeks, we've talked about the never-ending growth taking place in today's technology space.
But this idea isn't too radical, is it? We clamor for our gadgets and gizmos that make life easier to be smaller, better, faster, and more powerful.
A new Apple phone every two years.
Over 44 different models of electric vehicles available at your pleasure... and that's just in America.
You get the picture.
And make no mistake, it's this runaway demand for new tech is going to be incredibly profitable for the smart money.
No, I'm not talking about buying shares of Apple. Although that isn't a bad idea either.
I'm referring to small elite group players that have full control of the sector that fuels our eternal thirst for better tech.
Remember, the global strategic metals market is expected to more than double to $58 billion between now and 2025.
Without critical components like lithium, cobalt, nickel, and dozens of rare earth elements, you'd feel like we were living in the stone age.
"The Chinese are at it again."
That's what my colleague, Luke Burgess, told me this morning. Our conversation started off pleasant enough, and I'll confess that at first, I thought he had decided to go down the COVID-19 rabbit hole.
It didn't take long to catch up to speed.
And he certainly wasn't wrong.
Luke mentioned to you last Friday that the Chinese purchased the Mountain Pass Mine after Molycorp filed for bankruptcy back in 2015.
The U.S. government even signed off on the deal.
But to understand why this was such an incredibly bad move on our part, it's important to know why the Mountain Pass Mine has been so crucial for national security.
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Discovered back in 1949, the mine was brought to small-scale projection just a few years later by what would eventually turn into Molycorp.
Initially, it was utilized as a uranium deposit.
That soon changed, however, after they realized that it held valuable rare-earth minerals.
Over the next several decades, the Mountain Pass Mine played a critical role in supplying us with the rare-earth minerals that were so vital to today's technology.
In fact, the Mountain Pass Mine was the world's largest supplier of these rare earths.
Oh, how times have changed.
Once the mine went under in the early 2000s, our vulnerability grew as we came to rely more and more on foreign powers for those critical commodities.
You know how this story ends, with the Mountain Pass Mine now squarely controlled by the Chinese via Shenghe Resources.
Yet, this situation extends far beyond the various rare earth minerals.
The rise of the lithium-ion battery has not only presented us with an unprecedented opportunity for society to finally transition (safely) away from the traditional combustion engine.
Any realistic transition away from fossil fuels simply won't happen without the strategic metals that'll power tomorrow's tech.
Love him or hate him, President Trump has made it crystal clear that he wants to end that addiction to China for strategic metals.
As you read this now, a piece of legislation is making its way through Congress that is going to change how the U.S. deals with this crisis.
The plan is simple.
Develop America's vast mineral resources to eliminate our dependence on countries like China.
Now it's up to you, to take advantage of the opportunity that has quietly slid past the investment herd.
I strongly recommend you take just a few minutes out of your day and check this out.
I'll show you not only what Trump is doing to expand and secure our production of these strategic metals, but how individual investors like us can get our fair piece of the pie.
Until next time,
Keith Kohl
@KeithKohl1 on TwitterA true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations - all ahead of the mainstream media. For more on Keith, go to his editor's page.